Hospital Finances

Take The Money Or Take The Quality Metric?

Yesterday, I was faced with a philosophical dilemma: is it better for the hospital to get paid more for a hospital admission or to have a better score on publicly reported quality outcomes?

Heroin overdose is an epidemic in Ohio (see the post: Found Down With A Needle In The Arm). At issue was a patient transferred to our hospital two days ago from a smaller hospital in Southern Ohio after an out-of-hospital cardiopulmonary arrest following a heroin overdose. He was found apneic and pulseless. The EMS personnel did CPR and managed to get his heart started but by then, he had sustained severe anoxic brain injury. He was intubated and on a mechanical ventilator. He had shock liver and acute kidney failure. On admission to our hospital, he was suspected of being brain dead but the hospitalist needed to wait until the following day for a physician credentialed in brain death determination to assess the patient.

So, the issue was, do we admit him to the ICU as a regular hospital admission or do we put him in observation status? In a previous post, Moon Over Medicare Or Mooned By Medicare?, I laid out the differences in regular admission status versus observation status. The bottom line is that the hospital gets paid a lot more if a patient is in regular admission status than if they are in observation status; a patient in observation status is considered to be an outpatient rather than an inpatient and is anticipated to be in the hospital for < 2 midnights. For a patient being admitted to the ICU after a cardiac arrest who is in acute respiratory failure, acute liver failure, and acute renal failure, normally, this would be a slam-dunk regular hospital admission. The DRG associated with this admission would pay the hospital pretty well. But, you can also make the argument that since the patient was suspected of being brain dead, he could also be in observation status since life support would be discontinued the following day if he is truly determined to be brain dead.

On the other hand, if he is in regular admission status, he counts against our hospital’s publicly reported inpatient mortality rate but if he is an outpatient in observation status, his death would not count against our inpatient mortality rate.

Last year, our hospital finished with an inpatient mortality index of 0.54. This was the second to the lowest mortality rate of all academic hospitals in the United States and we are incredibly proud of it. This year, however, we have seen our mortality index creep up and for the month of December, it was greater than 1.0. In drilling down into our hospital deaths this year, the only thing different is that we have been taking more hospital transfers this year, that is, patients admitted to another hospital and then transferred to our hospital for a higher level of care. In fact, hospital transfers account for 3% of all of our hospital admissions but account for 24% of all of our hospital deaths.

We like hospital transfers because these patients have diagnoses that put them into higher-paying DRG classifications and they tend to have a lot of co-morbidities that amplify the DRG and get the hospital paid even more. But these transfers come with a cost of a higher likelihood of dying in the hospital.

Yesterday, I had to make the decision: should we put the patient in regular admission status and get paid more but take a hit on our mortality rate? Or should we put him in observation status and get paid considerably less but not have his death count against our inpatient mortality rate? I spoke with a number of people in our hospital. Some recommended taking the money and the mortality hit. Others recommended avoiding the mortality and take the financial hit.

So last night I made my decision before we pronounced him brain dead.

What would you have done?

February 16, 2017

By James Allen, MD

I am a Professor Emeritus of Internal Medicine at the Ohio State University and former Medical Director of Ohio State University East Hospital