Understanding High-Cost Episodes in Healthcare


More than half of all high resource patients are prescribed 10 or more prescription drugs.

Researchers in Ontario conducted a large retrospective cohort study to look at the characteristics of individuals and episodes that drive healthcare spending.

In part, they found that for high resource patients (HRPs), inpatient settings incurred the most costs, planned surgical procedures triggered the most acute care episodes, and post-admission events bore the highest median cost per episode.

The focus of their study, published this month in PLoS ONE, was inspired by a literature review indicating that a minority of the general population drives most healthcare costs. The top 5% of users by spend account for 50% of all healthcare costs, according to current estimates.

Because the literature identified hospital care as the primary driver of spending among HRPs, investigators wanted to look at the nature of these acute episodes and calculate all of the cumulative healthcare expenses related to them.

In the context of pressures to control costs and provide value-based care, the authors believed that a clearer picture of high resource individuals, their demographic characteristics, and healthcare needs was required to inform policy decisions and plan designs.

Person-Centered Episodes of Healthcare

Most studies categorize spending by care setting or payer, but this one took an unusual approach. It looked at person-centered episodes of care (PCE). The intent was to paint a comprehensive picture of an individual’s acute care need and the cascade of all subsequent healthcare interventions needed to stabilize or resolve the initial concern.

Investigators defined a PCE to begin with an acute care admission and continue until the individual was living in the community without health system contact for 30 days. All subsequent care settings, providers, and services related to the initial acute care admission were included in the calculation of PCE costs.

This methodology allowed them to look at how costs were associated with acute events beyond the acute care setting, and any characteristics the high resource patients may have in common.

From April 1, 2010, to March 31, 2011, data from the public health system database identified a cohort of 587,982 individuals in the highest fifth percentile of annual expenditures living in the community as of April 1, 2010. Because a PCE begins with an acute care admission, in some cases, one individual had more than one PCE during the study period.

Building upon US research published by Conway et al in 2010 (using a 2007 dataset), this study put PCEs into the following categories: (1) pregnancy; (2) low birth weight and other perinatal/congenital conditions; (3) post-admission events; (4) trauma, accidents, injuries, and poisonings; (5) mental illness and addictions; (6) ambulatory care sensitive conditions; (7) cancer; (8) acute planned surgical; (9) acute planned medical; (10) acute unplanned surgical; (11) acute unplanned medical; and (12) other causes.

Prescription Drug Use in High Resource Patients

Slightly more than half of all HRPs (52.1%) were aged 65 and older. There were slightly more females (53.5%) in the HRP cohort, and a large majority of HRPs (89.5%) lived in an urban environment.

Not surprisingly, researchers found a significant morbidity burden and high rates of prescription use within this HRP population. More than 58% of the cohort had 8+ comorbid conditions, and less than 1% had no pre-existing comorbid condition.

Almost 55% of HRPs were prescribed 10 or more different drugs.

Almost 12% of HRPs received palliative care during the study period, and 9% of individuals died.

Among the cohort of 587,982 HRP individuals, 697,059 PCEs accounted for nearly 70% of spending. Over 82% of individuals had at least one PCE within the year.

The most common PCEs were acute planned surgical (35.2%), acute unplanned medical (21%), and post-admission events (10.8%). Significant portions of post-admission events involved complications with procedures (11.3%) and complications with orthopedic devices (4.9%).

Even though post-admission events were not highest in volume, they were expensive and accounted for the largest proportion of PCE-related costs (23.1%), followed by acute unplanned medical (21.1%) and acute planned surgical (16%).

Interestingly, the categories trauma, accidents, injuries, and poisonings and mental illness and addictions were low volume (5.9% and 3.9% of PCEs, respectively) but high cost (10.1% and 10.8% of PCE spend, respectively).

Inpatient acute and inpatient rehabilitation settings incurred the largest proportion of PCE spending.

Almost all PCEs in this study included contact with a specialist physician, 79.2% involved a primary care physician, and 46.6% involved an emergency room visit.

Patient-Focused Funding Models

Authors concluded that these observations can be applied to cost-saving measures, episode-based payment formulas, and quality monitoring. With a better understanding of high resource patient profiles, they said, interventions and policies can be more strategically targeted. For example, these insights could inform the future development of patient-focused funding models.

They added that with high median costs per episode, mental health diagnoses like depression and dementia should be actively managed, as should the risk of falls among seniors (fracture of femur was one of the top contributors to the high-cost trauma and accident category).

Authors suggested that next steps in research and policy could focus on the PCE categories that are most modifiable and sensitive to targeted interventions.

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