• Tara Lagu, Harlan M Krumholz, Kumar Dharmarajan, Chohreh Partovian, Nancy Kim, Purav S Mody, Shu-Xia Li, Kelly M Strait, and Peter K Lindenauer.
• Center for Quality of Care Research, Baystate Medical Center, Springfield, MA 01199, USA. lagutc@gmail.com
• J Hosp Med. 2013 Jul 1; 8 (7): 373379373-9.

BackgroundBecause relative value unit (RVU)-based costs vary across hospitals, it is difficult to use them to compare hospital utilization.ObjectiveTo compare estimates of hospital utilization using RVU-based costs and standardized costs.DesignRetrospective cohort.Setting And PatientsYears 2009 to 2010 heart failure hospitalizations in a large, detailed hospital billing database that contains an itemized log of costs incurred during hospitalization.InterventionWe assigned every item in the database with a standardized cost that was consistent for that item across all hospitals.MeasurementsStandardized costs of hospitalization versus RVU-based costs of hospitalization.ResultsWe identified 234 hospitals with 165,647 heart failure hospitalizations. We observed variation in the RVU-based cost for a uniform "basket of goods" (10th percentile cost $1,552; 90th percentile cost of $3,967). The interquartile ratio (Q75/Q25) of the RVU-based costs of a hospitalization was 1.35 but fell to 1.26 after costs were standardized, suggesting that the use of standardized costs can reduce the "noise" due to differences in overhead and other fixed costs. Forty-six (20%) hospitals had reported costs of hospitalizations exceeding standardized costs (indicating that reported costs inflated apparent utilization); 42 hospitals (17%) had reported costs that were less than standardized costs (indicating that reported costs underestimated utilization).ConclusionsStandardized costs are a novel method for comparing utilization across hospitals and reduce variation observed with RVU-based costs. They have the potential to help hospitals understand how they use resources compared to their peers and will facilitate research comparing the effectiveness of higher and lower utilization.© 2013 Society of Hospital Medicine.

11 keywords...

hide…