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How we calculated hospitals’ ER admission rates

California Watch analyzed state data to determine admission rates at Prime Healthcare Services hospitals. Here’s how we crunched the numbers:

Annual patient admission rates

We looked at the 49.5 million cases of people who had a face-to-face encounter with a health provider in an emergency room from 2005 through 2009 and the 7.4 million of those who were admitted to hospital care via the emergency room.

For each year and hospital, we calculated the admission rates by dividing the number of people who were admitted by the total number of people who were seen in the emergency room. We broke down groups of patients by payer, looking at Medicare patients 65 and older as a group, and also looking at insured and uninsured patients.

We used emergency room and inpatient discharge data from the Office of Statewide Health Planning and Development. We followed a methodology similar to that used by the federal Agency for Healthcare Research and Quality. That equation looks like this:

Admission rate = (People admitted via the ER by payer)/(People admitted via the ER by payer + People by payer who were seen in the ER but not admitted)

Alvarado Hospital in San Diego was not in this analysis because Prime bought it in late 2010, and we have data only through 2009.

Before Prime/after Prime admission rates

We looked at all the emergency room encounters and admissions from the emergency room from 2005 through 2009. We set a place marker in the data at the point at which Prime took over each hospital so we could see a “before” and “after” picture. For each hospital, we calculated a “before” and an “after” admission rate, as well as an average for all the hospitals.

For this analysis, we were unable to calculate the “before” rates at Desert Valley Hospital and Chino Valley Medical Center because they were in the chain before 2005, the oldest year of data that we analyzed. Again, Alvarado was not in this analysis because Prime bought it in late 2010, and we have data only through 2009.

Estimate of how much Prime earned as a result of above-average admission rates

For each year from 2005, we looked at how many more Medicare fee-for-service patients Prime admitted beyond how many it would have admitted at the state-average admission rate. For each year and each hospital, we looked at the amount of net inpatient revenue that Prime received for each traditional Medicare patient discharge, according to the Office of Statewide Health Planning and Development.

We multiplied that revenue figure by the number of “extra” patients who were admitted each year at each hospital. For each hospital for each year, we also looked at how much the chain would have earned had it treated each “extra” patient on an outpatient, or observation, basis. We subtracted that sum from the total.

We accounted for the fact that Prime owned some hospitals for only part of a year, looking only at patients admitted under Prime’s watch.

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