Cost Analysis of the Faint and Fall Clinic: A New Model in Health-care Delivery

¹ERIC LUND, MBA, ²NATALIE A. SANDERS, DO, ³MICHELE BRIGNOLE, MD and ⁴MOHAMED H. HAMDAN, MD, MBA

¹Financial Planning & Decision Support, University of Utah Health Care, Salt Lake City, UT, USA
²Division of Geriatrics, University of Utah, Salt Lake City, UT, USA
³Department of Cardiology and Arrhythmologic Centre, Ospedali del Tigullio, Lavagna, Italy
⁴Division of Cardiovascular Medicine, University of Wisconsin School of Medicine and Public Health, Madison, WI, USA

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ABSTRACT.  Aims: The Faint and Fall Clinic (FFC) at the University of Utah offers a multidisciplinary, guideline-driven approach to prompt diagnosis and treatment of patients presenting with faint or fall. We have recently shown that the standardized approach used in the FFC resulted in a higher rate of diagnosis and a decrease in the utilization of costly tests when compared with the conventional approach. The purpose of this study was to evaluate the financial performance of the FFC during its first year of operation. Methods and results: Operating margin was defined as payments less direct expenses. Contribution margin was defined as operating margin less administrative and support costs. A total of 486 patients were seen, with more than half covered by Medicare. Excluding all laboratory tests, a total of 1,790 procedures and tests were performed. The total charges and payments were $3,645,900 and $1,615,400 respectively with a reimbursement rate averaging at 44.3%. The total direct costs and administrative supports were $1,046,000 and $105,830 totaling $1,151,830. The operating and contribution margins averaged 35.2% and 28.7%, respectively. Conclusions: In conclusion, the FFC provides a novel approach to patients with faint and fall that not only improves outcome but also appears to be profitable.

The authors report no conflicts of interest for the published content.
Manuscript received March 4, 2013, Final version accepted April 18, 2013.

Address correspondence to: Mohamed H. Hamdan, MD, FACC, MBA, FHRS, Professor of Medicine, Chief of Cardiovascular Medicine, University of Wisconsin School of Medicine and Public Health, Division of Cardiovascular Medicine, H4/534 CSC, 3248 Clinical Science Center, 600 Highland Ave, Madison, WI 53792. E-mail: mhamdan@medicine.wisc.edu

Introduction

Fainting spells are very frequent in the general population resulting in high direct and indirect social costs. Patients who experience an episode of faint see on average three physicians over an extended period of time before a definitive diagnosis is made. Approximately 1–1.5% of referrals to the emergency department visits are for faint; of these, ≈40% are hospitalized. Hospitalization costs account for ≈75% of the total costs. ¹ Despite extensive evaluations, the rate of unexplained diagnosis for fainting spells is 42–52% when assessed in non-standardized clinical practice settings. ^2–4 Falls in elderly people are even a greater health-care problem accounting for two-thirds of deaths from unintentional injuries. It is estimated that approximately 40% of those over the age of 65 living at home in the United States will experience a fall at least once a year resulting in over 400,000 hospitalizations. ⁵ The causes of falls are many, highlighting the need for comprehensive evaluation. Many falls are actually fainting spells in disguise due to amnesia and lack of witnesses. Both fainting and falling are independently associated with increased morbidity and mortality and significant health-care cost. In a recent study published from the University of Utah, the average payments received per faint and fall patient evaluations were $2,517 and $3,200 respectively, resulting in an estimated yearly cost equal to $90,901,958 and $351,959,040, respectively. ⁶

The Faint and Fall Clinic (FFC) is a unique service offered at University of Utah Health Care to assist emergency doctors, primary care physicians, and other health-care practitioners in the evaluation of patients with fainting spells or fall. The first clinic of its kind, the FFC offers a multidisciplinary, guideline-driven approach to prompt diagnosis and treatment of patients presenting with faint or fall. A recent study, evaluating the outcome of patients seen in the FFC revealed a higher rate of diagnosis and a decrease in the utilization of costly tests when compared with the conventional approach. ⁷

The purpose of this study was to evaluate the various aspects of the FFC financial performance during its first year of operation (December 1 2010 to November 30 2011). This included visit volumes, demographics, payer mix, revenue and expenses in terms of payments (payer costs), and direct costs (costs of providing care).

Methods

Patients and visits volumes

Patients were identified by “completed” visits to the FFC through the scheduling system during the period of December 2010 to November 2011. New clinic visit volumes are a count of unique medical record numbers (MRNs). Return clinic visits are a count of contact serial numbers (CSNs). The total clinic visits reconcile to scheduling data. Hospital encounters or visits are a unique count of hospital account records. A MRN can have multiple hospital account records if the patient returns to the hospital or clinic systems several times. A hospital account record can have multiple CSNs if the patient visited more than one area during their visit. For example, a CSN is generated for a visit to the FFC and another CSN is generated if the patient goes to a radiology clinic during the same encounter.

Downstream revenue and data sources

Downstream visits included ambulatory clinic visits, ambulatory procedures, or inpatient admissions that occurred after a patient's visit to the FFC. Downstream visits were identified by a patient’s MRN and hospital service. Specific hospital services were identified as relevant to the patient population, meaning only certain types of patient activity were included in the downstream revenue. These hospital services included 1) Cardiovascular, 2) Radiology, 3) Neurology, 4) Geriatrics, 5) Pulmonary, and 6) Sleep Wake Services.

The primary data sources used in the analysis included 1) University of Utah Medical Group electronic scheduling and physician utilization data, 2) University of Utah Health Care (UUHC) cost allocation system, and 3) UUHC department operating statements. Some accounts or visits were excluded from the analysis because of inconsistency or missing data and are noted where applicable.

Charges, payments, direct and indirect costs

Charges represented all technical charges billed during a patient encounter. This included all laboratory tests, radiology, and other ancillary services billed. Professional fees and collections were not included in the analysis. Payments represented actual dollars received from the patient and third-party payers. An expected payment methodology was used on open accounts based on the primary payer and age of the account. Direct costs represented costs incurred as a result of direct patient care. The costs were allocated using a proprietary methodology and internal technologies based on utilization activity by department and costs posted to the general ledger. Note direct costs also included “direct-indirect” costs, which represented indirect costs paid by a direct patient care cost center (e.g., clinic manager salaries).

Administrative and support costs used directly by the FFC were included in the analysis. Examples of administrative and support costs included mid-level salary support, marketing support, and physician work RVU (wRVU) incentive support provided by the hospital to the Department of Medicine.

Operating and contribution margins

Operating margin was defined as payments less direct expenses. Contribution margin was defined as operating margin less administrative and support costs. Hospital overhead costs were not included in the analysis. Margin percent was defined as operating or contribution margin divided by payments. These calculations represented the percentage of payments left over to cover overhead and reinvestment costs. Patient profitability is at the hospital account record level, which represents the entire encounter.

Results

Patient cohort

<1?tlsb=.015w?>A total of 486 patients were seen in the FFC during the study period. The mean age was 58 years. Sixty-two percent were women and 49% were above the age of 65 years. Excluding null values or bad data (n = 29), approximately 93.7% of patients who presented to the FFC were from Utah, and 98.5% originated in the intermountain west region. The majority of the Utah patients (77.1%) were an average of 30 miles from their FFC appointment. Approximately 22.9% of patients were from over 30 miles away. The average distance for all Utah patients was 29.8 miles.

Number of visits and health-payer mix

The scheduling data originally reported 921 completed visits. However, an error recorded 29 visits (CSNs) as unique. The error occurred because a separate CSN was created to record a clinic procedure that occurred on the same day as the new patient visit. Adjusting for this error leaves 892 unique visits: 486 new visits and 406 return visits. Visit volumes were on an upward trend on a non-seasonally adjusted basis as seen in Figure 1 . For billing, there were 32 accounts that were not billed or did not have costs allocated to them leaving a total of 860 visits with the complete billing information. Medicare covered more than half of the outpatient visits with another quarter covered by Commercial Managed Care. A summary of the payer mix for both the FFC visits and the downstream visits is provided in Table 1 .

Number of procedures

A total of 977 procedures were performed in the FFC. Electrocardiograms (n = 400), echocardiograms (n = 251), and tilt table tests (n = 164) represented the majority of procedures performed. In addition to the tests performed in the FFC, 813 tests were performed after the day of the initial visit, excluding all laboratory tests. These procedures were referred to as “Downstream Procedures” since they were performed after the day of the initial visit. They included primarily 431 cardiology procedures and 338 radiologic procedures.

Charges, payments, and costs

The total charges and payments were $3,645,900 and $1,615,400 respectively with a reimbursement rate averaging at 44.3%. The total direct costs and administrative supports were $1,046,000 and $105,830 totaling $1,151,830. A summary of the total payments and reimbursement percent, total direct, administrative, and support costs is provided in Table 2 .

Operating and contribution margins

The total operating margins for the FFC and downstream work were $114,800 (20.5%) and $454,600 (43.0%) respectively, averaging $569,400 (35.2%). The total contribution margin was $463,570 (28.7%). A summary of the operating and contributing margins is provided in Table 2 .

Discussion

The main findings from this study are 1) FFC attracted 486 new patients in the first year of operation with 49% above the age of 65 years, 2) around 50% of the payer mix was from Medicare with another quarter covered by Commercial Managed Care, 3) 977 procedures were performed in the FFC itself with another 813 procedures performed downstream excluding all laboratory testing, 4) the operating and contribution margins were 35.2% and 28.7% respectively, 5) after deducting all direct and indirect costs except for the facility cost, the profit during its first year of operation was $463,570.

Previous studies

To our knowledge, the FFC at the University of Utah is first of its kind. However, many centers in Europe and North America have been established to address the problem of syncope and falls in elderly people.

In the United States, the estimated annual cost for syncope management as derived from the Medicare database was $2.4 billion with a mean cost of $5,400 per hospitalization. ⁸ In Italy, a standardized approach to syncope resulted in a 17% decrease in hospitalization rate, 11% shorter hospital stay, and 24% fewer tests than the conventional approach. ⁹ As a result, the cost per diagnosis was reduced by 29%, the equivalent of €513 ($650; currency exchange at time of data collection).

While fall prevention programs targeting high-risk populations have been shown to reduce recurrent fall rates and decrease risk factors for falls, demonstrating cost-effectiveness of these interventions has been more difficult. ^10–12 A recent study concluded that a national falls prevention program targeting high-risk fallers would potentially reduce the annual health-care costs paid by Medicare. ¹³ Similarly, an analysis of 15 studies concluded that interventions aimed at high-risk fallers have the potential to be cost-effective or cost saving compared with usual practice. However, when economic evaluation was measured from a societal perspective taking into account health-care costs, informal costs to families, and costs in other areas such as medical devices and home modifications, a Dutch study found no cost difference among a group of high-risk fallers assigned to usual care compared with those assigned to a multifactorial fall evaluation and treatment plan after 12 months of follow-up. ¹⁴ Using recurrent falls as the primary outcome measure of cost, Hendriks et al. ¹⁵ also concluded that a multidisciplinary fall prevention program offered no cost benefit over usual care. In summary, because the proposed national fall prevention program is not in place and the studies available on current fall prevention programs are heterogeneous in relation to intervention design, populations targeted, follow-up period, and outcomes variables used to measure cost, it is not possible to directly compare the available studies with each other or to make firm conclusions regarding the cost-effectiveness of interventions to reduce falls. ¹³

In the current manuscript, it was not our intent to analyze the effect of the FFC on cost per diagnosis as it relates to health payers. In a previous study, we demonstrated that the rate of diagnosis at 45 days was greater in patients seen at the FFC when compared to the conventional appraoch (57% versus 45% in the total population, p = 0.09; 57% versus 39% in the outpatient subgroups, p = 0.02). ⁷ In addition, the number of tests or consultations associated with additional charges was significantly lower when compared to the conventional approach (1.9±1.0 versus 2.6±1.2, p = 0.001). In the present manuscript, our goal was to share the revenue and expenses associated with the establishment of a FFC as it relates to a third party, namely the hospital. Given the novelty of this clinic, no direct comparisons could be made with other clinics. Our data indicate that in addition to the previously demonstrated improvement in rate of diagnosis and reduction in total tests utilized, the FFC is also a profitable business entity to the hospital. By adding value to patient care, the FFC attracted 486 new patients in the first year of operation with a total profit of $463,570.

Limitations

Hospital overhead was not included in the analysis and thus a direct measure of net profit is not available. The analysis instead focused on the costs related to direct patient care and overhead costs of the FFC clinic. At our institution, the FFC utilized a total of 890 square feet of previously constructed clinic space. With an estimated annual expense of around $50,000, the FFC would still have yielded a net profit exceeding $400,000 annually. We have excluded professional revenues and expenses. These exclusions were done on purpose based on the fact that the department of medicine at the University of Utah collects all professional revenue and pays the physicians’ salaries. As such both revenues and expenses associated with physicians hiring were excluded. The methods used for cost allocation and capturing downstream revenue are likely to differ at other facilities; however, it is our hope that our data would still be useful to other hospitals.

Conclusion

The FFC provides a new service to patients presenting with fainting spells or falls. Based on the 1-year performance of the FFC at University of Utah, it appears that the FFC is a profitable venture for hospitals.

References

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