University of Iowa Hospital and Clinics can lower readmission and SNF costs to optimize total cost of care for Hip and Knee Replacement and get to benchmark

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By: Neha Thomas  May. 28, 2020

Dexur’s analysis of the total cost of care for Hip & Knee Replacement for the top-ranked hospitals in Southeast Iowa revealed that University of Iowa Hospital & Clinics can lower its costs and get to benchmark by reducing its readmissions and SNF discharge rate. Utilizing Medicare claims between April 2016 to March 2019, the study tracked the patient journey from the date of admission for 90 days, including the index hospitalizations, rehospitalization, home health, nursing home, and ED costs. Apart from helping patients make appropriate treatment choices, Cost of Care data also helps local ACOs like Genesis Accountable Care Organization, LLC make appropriate referrals choices. The analysis was risk-adjusted and was done at the DRG level (specifically DRG 470: Major Joint Replacement or Reattachment of Lower Extremity Without Major Complication Or Comorbidity (MCC)) to adjust for complications and comorbidities.

University of Iowa Hospital & Clinics’ total cost of care for Hip & Knee replacement over a 90-day episode was $20,194. This exceeds the region benchmark of $14,579 by almost 33%. The average cost of care in the area is lower than the state average of $15,380, while exceeding the national average of $18,458. The index hospitalization cost was $14,440, accounting for almost 72% of the total cost of care.

Notably, the top-surgeons who performed Hip & Knee Replacement surgeries at Community Regional Medical Center for the lowest costs include:

  1. CHARLES R CLARK
  2. JOHN J CALLAGHAN
  3. TIMOTHY SCOTT BROWN

Ways in which University of Iowa Hospital & Clinics can Lower the Total Cost of Care

University of Iowa Hospital & Clinics’ 30-Day readmission rate was 5.06%, marginally higher than the area median 4.36%. The average rehospitalization cost per hospitalization was at an average of $2,225 while the average rehospitalization cost per rehospitalization was $18,252. The latter was over 33% higher than the regional benchmark. Further lowering the rate of readmissions and optimizing the costs involved in rehospitalization, can help in significantly reducing the total cost of care.

The average nursing home cost per hospitalization when a nursing home is involved was $13,359, nearly 29% higher than the regional benchmark of $9,976. University of Iowa Hospital & Clinics’ top nursing home partners for Hip & Knee Replacement for the period of study were:

Low-cost SNFs that Community Regional Medical Center can partner with to reduce their Nursing Home costs include:

The Skilled Nursing Facility (SNF) discharge rate was 19.42% which is marginally higher than the Southeast Iowa benchmark of 16.48%, as well as Iowa (19.09%) standard. It is, however, noticeably less than the national average (22.47%). Alternatively, the hospital can reduce the total cost by either aiming for a higher home discharge rate or by referring more patients to home health agencies (HHA). The average cost per hospitalization for HHAs is nearly 4 times lesser than the average cost per hospitalization for nursing homes.

The average home health cost per hospitalization when a home health agency is involved was $3,291, only marginally higher than the regional median of $3,054. University of Iowa Hospital & Clinics’ top home health partners for Hip & Knee Replacement for the period of study were:

The home health cost can be further reduced by exploring more cost-efficient home health agencies such as Mercy Home Health Care, North Liberty, IA.

The home health agency discharge rate was 2.53%, which is significantly lesser than the regional benchmark, as well as the state (11.17%), and national (38.76%) standards. While referring more patients to a home health agency helps in reducing the total cost of care, achieving a higher home discharge rate can further reduce it.

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The detailed cost of care report of the top 5 hospitals in Southeast Iowa with the lowest cost of care for Hip & Knee Replacement (DRG 470), including the following data :

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