Potential Cost Savings of Decreasing Inappropriate Level of Care Assignments

Background: Currently, patients admitted to the hospital are assigned specific levels of care such as intermediate intensive care or acute care. Differences among care at these levels largely differ through nursing ratio as well as frequency of nursing assessment. Costs per day for patients at different levels of care differ significantly as well. Little is currently known regarding the impact of health care costs with inappropriate assignments of level of care.

Methods: We obtained data on inpatient case volumes by service for the 2017 fiscal year through the hospital database. During a two week period, we performed level of care audits on 1,741 charts at Stanford University Hospital, a 444-bed academic center through electronic medical record review. We calculated percentage opportunity for cost savings for patients on non-cardiac services on intermediate level of care who met criteria for acute care based on case management review (InterQual® Level of Care Criteria 2017.2). Using volume of intermediate care days as well as a $513 cost difference per day between intermediate care and acute care, we calculated potential cost savings if all patients were assigned an appropriate level of care. Subgroup analysis were performed for the three non-cardiac services with highest volume of intermediate care days (general medicine, bone marrow transplant, and neurosurgery).

Results: Out of 120,770 total inpatient days in the 2017 fiscal year, 36,380 were intermediate care inpatient days (30.12%). Among 1,741 level of care audits, opportunity for decreasing inappropriate level of care ranged from 32.8% to 60% across non-cardiac specialties with an average of 46.72+/-8.50%. For the three services with highest utilization of intermediate level of care, opportunities for cost savings were 59.86+/-12.40% for general medicine, 23.01+/-12.86% for bone marrow transplant, and 36.38+/-11.91% for neurosurgery. Potential cost savings over the course of one year were calculated to be 8.50+/-1.59 million dollars for all non-cardiac services and 2.58+/-0.51 million dollars for general medicine, 0.81+/-0.43 million dollars for bone marrow transplant and 0.45+/-0.05 million dollars for neurosurgery.

Conclusions: Potential cost savings of designating appropriate level of care for patients admitted inpatient could be as high 8.5 million dollars over the course of one year.