SPS Plenary Session | May 22, 2019, 9:15 am | Lia Lowrie, MD
Attendees on the final morning of the 2019 SPS Annual Conference were treated to an insightful plenary session by past SPS President Lia Lowrie, MD, Division Director of Pediatric Critical Care and Medical Director of Patient Safety and Quality at Cardinal Glennon Children’s Hospital in St. Louis. Operating from the established framework that pediatric healthcare systems often involve redundancy in the provision of safe, effective peri-procedural care by sedation services and anesthesiology services, Dr. Lowrie was tasked with comparing costs associated with the respective services delivering that care.
Because of a federal mandate for hospitals to disclose to patients the charges associated with studies and procedures, obtaining such a cost comparison may at first glance seem quite simple, but as Dr. Lowrie explained and summarized, charges are not synonymous with costs, and costs are variably defined and analyzed. Translation: performance of a comparative cost analysis is a more complex undertaking than may be anticipated.
Dr. Lowrie introduced a number of methods employed by healthcare institutions in performing cost analysis:
- Activity-based cost systems analyze financial data and workload reports from the activity of a specific center to produce cost for a specific unit. Such an approach is not particularly generalizable from one center to another, is often proprietary and thus confidential and unavailable to consumers, and yields a non-standard cost assignment.
- Charge-based cost systems assign cost via proxy in which charges or reimbursement per activity unit constitute the basis for cost determination. This method is utilized by the Center for Medicare & Medicaid Services.
- Gross costing is an approach that assigns cost via a formula in which an estimated unit cost is multiplied by a utilization metric. For instance, cost may be defined by the average reimbursement for a DRG (diagnosis-related group).
- Micro-costing is an approach to cost determination that seeks to measure directly use of all resources (time, supplies, personnel, equipment, space) involved in a treatment or workflow. Although there are difficulties in applying fixed and indirect costs and the focus is specific to the particular medical center, the micro-costing output is probably the most accurate, albeit resource-intensive to execute.
Dr. Lowrie dedicated the bulk of her presentation to a micro-costing analysis of care in a procedural sedation unit context compared to that in a general anesthesia context, unpacking a couple of common scenarios from her own institution translatable to sedation/anesthesia services of other institutions:
Example 1) MRI in same site with sedation service vs anesthesiology service
In strict financial terms, the anesthesiology workflow is more expensive than that of the sedation service. Although there is no differential in site cost between the two services in this example, the anesthesia equipment and anesthesiology personnel are more costly, and the total procedure time is longer on average when compared to these aspects of the sedation service. If, however, a “sedation failure” occurs, due to triage/patient selection error or other unanticipated patient-specific factors, and a patient must be referred and re-scheduled with anesthesiology, further costs—some difficult to measure—must be considered: additional costs associated with anesthesiology service, the parents’ additional loss of wages due to missing additional work, the emotional burden on the family, patient/parent dissatisfaction, and the potential for negative downstream impacts on the medical center in general and the service line in particular.
Example 2) Botulinum toxin injection by Orthopedics in different settings: the procedural sedation unit with sedation service vs operating room with anesthesiology
In this scenario, all aspects of the cost analysis on the peri-procedural care are more expensive in the OR context. Additional costs to consider include dissatisfaction by parents/patients due to increased complexity of OR workflow, longer OR wait times, increased post-op nausea/vomiting associated with inhalational anesthesia as well as inefficient use of anesthesiology time and expertise and OR occupancy for a brief painful procedure accomplishable in a procedural sedation unit.
Ultimately, Dr. Lowrie communicated the wisdom that no singular model is perfect for every patient and procedure. Siloed care models are expensive and perpetuate unnecessary redundancy in the system, often contributing to inefficiency and suboptimal resource utilization. For complex patients or procedures, it is more efficient to utilize a more complex strategy (anesthesiology), whereas in less complicated, standard-risk scenarios, a sedation service may be the best means to optimize care. Dr. Lowrie championed non-siloed approaches to efficient care as cost-effective to individual, to hospital, and to population.
Quality in healthcare and pediatric sedation involves safe, effective, efficient and timely, equitable, patient-/family-centered strategies, and value increases when quality is optimized and costs are contained. Dr. Lowrie was realistic in acknowledging that siloed care models, while more expensive, often persist due to considerable start-up costs of new sites/programs/personnel, especially when established processes are successful (safe, effective) even if not most efficient, patient-centered, and cost-effective. As reimbursement models evolve to become more value based, the differences in cost of sedation/anesthesia care will matter more and more, and Dr. Lowrie commended micro-cost analysis as a means of ensuring quality and value as the determinants of care.
The overarching take-home benefit of this plenary session was better than a simple, “a sedation service is better,” or, “stick with anesthesiology,” pronouncement. A renewed call to maintain an emphasis on quality and value with a practical approach to analyze cost and hold services accountable serves the best interest of patients, providers, and the responsible sustainability of the system in general.