Term Paper

Comparison of Health Care Outcomes in Nevada for the 2008 to Corresponding National

Statistics

HCA 416: Management & Information System

Professor Sandhya Shimoga

Spring 2018

Tracy Nguyen

015437784
 Table of Contents

I. Introduction ............................................................................................................................. 2

I. Comparison of State Average Statistics to National Averages ............................................... 3

1. Average Length of Stay ....................................................................................................... 3

2. Cost per Discharge ............................................................................................................... 4

3. Cost per Day ........................................................................................................................ 5

II. Analysis of Top 5 DRGs ......................................................................................................... 6

1. Top Five DRGs by Discharge for Nevada by Discharge ..................................................... 6

2. Top five DRGs by Discharge at the National Level ............................................................ 7

III. Top Five DRGs by ALOS ................................................................................................... 8

1. Top Five DRGs by ALOS for Nevada ................................................................................. 8

2. Top five DRGs by ALOS National ...................................................................................... 9

IV. Conclusion ......................................................................................................................... 10

V. References ............................................................................................................................. 11

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 I. Introduction

In this report, I have analyzed and compared data from hospitals in the state of Nevada to

the national hospital average and provided recommendations on how to improve Nevada’s

outcomes. I have looked at the costs per discharge and costs per day and compared those two

variables to the average length of stay. In addition, I have also looked at the top five diagnosis

related groups by discharges and average length of stay. I am hoping to find the reasons as to

why Nevada’s average length of stay results in such high numbers in costs per discharge and

costs per day compared to the national hospital averages.

The state of Nevada has approximately a total of 2,705,845 people with approximately

50.3% male persons and approximately 49.7% female persons. The median house hold income is

$52,800 with 15% of the population below the poverty level. Of the population, 13.9% are 65

years and older, 66% are between the ages of 15 and 64, and 20% are between the ages of under

5 and 14. There are 28.2% people that are of Hispanic Origins, 8.9% people who are Asian or

Pacific Islander, 1.1% people who are American Indian, Eskimo, or Aleut, 8.5% people who are

Black, and 53.3% people who are White. Nevada has behavioral health services both inpatient

and outpatient services, chronic disease prevention and health promotion programs such as

Women’s Health Connection and Diabetes Prevention and Control. The state offers community

clinical outreach events and offers a program to vaccinate children (NHSP,2018).

As a financial analyst, I want to make sure all of Nevada’s hospitals are efficient and

effective in caring for all patients medically and financially. It has come to my attention that

Nevada’s hospitals are charging patients very high amounts for staying at Nevada’s hospitals

compared to the national’s numbers yet, Nevada’s patients are staying less days in the hospital

compared to the national’s. I hope after viewing this report, we can make some financial changes

to Nevada’s hospitals on the patients’ best interest.

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 I. Comparison of State Average Statistics to National Averages

1. Average Length of Stay

Average Length of Stay

Year State Discharges Cost Days ALOS Percent Difference
2008 National 39,443,048.36 $942,313,224,634.84 181,258,949.40 5.364525122 10%
2008 NV 271,082.00 $8,045,678,967.00 1,141,982.03 4.891721305

Nevada vs. National Average Length of Stay 2008

5.40

5.30

5.20

5.10
Days

5.00

4.90

4.80

4.70

4.60
National NV

Average length of stay is defined as the average number of days patients stay in hospitals.

From the bar graph and the data table, you can see that Nevada has a less amount of average

length of stays compared to the national average. The reason being could be due to that fact that

Nevada’s hospitals are able to avoid patient harm while also being efficient and effective of

keeping high quality while treating patients. This means less healthcare acquired conditions and

always following patient safety indicators resulting in patients’ becoming healthier quicker

(HealthCatalyst, 2018). With a low average length of stay, Nevada’s hospitals are able to reduce

work times on the staff and serve more patients in the community. Based on the reasons for the

reduce length of stays compared to the national average, it is good to see that Nevada’s hospitals

are putting in great effort in reducing length of stays while also keeping patients healthy.

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 2. Cost per Discharge

Cost per Discharges

Year State Discharges Cost Days Cost per Discharge Percent Difference
2008 National 39,443,048.36 $942,313,224,634.84 181,258,949.40 $33,921.49 11%
2008 NV 271,082.00 $8,045,678,967.00 1,141,982.03 $38,314.71

Nevada Vs. National Cost per Discharge 2008

$39,000
$38,314.71
$38,000

$37,000

$36,000
Cost

$35,000
$33,921.49
$34,000

$33,000

$32,000

$31,000
National NV

Cost per discharge is defined as the cost of each inpatient stay. It is the total inpatient

operating expenses over the total inpatient discharges (Merhar, 2014). Compared to the

national’s average, Nevada’s hospitals have a higher cost per discharge. Nevada’s average cost

per discharge is $38,314.71 while the national average is $33,921.49. High costs per discharge is

a result from the number of supply items used for patient care. Supplies consists of technological

services such as CT scans, private rooms, and specific charges from certain units. This seems to

suggest that Nevada’s hospitals are using high numbers of supplies to care for the patients and

possibly unnecessary amounts of supplies. Using many supplies might be a result as to why the

average length of stay is lower in Nevada than the national though. If this is true, the 11%

difference of cost per discharge is too high for only a 10% difference of the average length of

stay.

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 3. Cost per Day

Cost per Day

Year State Discharges Cost Days Cost per Day Percent Difference
2008 National 39,443,048.36 $942,313,224,634.84 181,258,949.40 $6,340.32 22%
2008 NV 271,082.00 $8,045,678,967.00 1,141,982.03 $8,166.32

Nevada vs. National Costs per Day 2008

$9,000 $8,166.32
$8,000
$7,000 $6,340.32
$6,000
$5,000
Cost

$4,000
$3,000
$2,000
$1,000
$0
National NV

Cost per day is defined as the service given to the patient in an entire workday. Again,

like the cost per discharges, cost per day is effective by the services and supplies given to the

patients (Merhar 2014). We can see that Nevada’s hospitals’ cost per day is $8,166.32 while the

national’s is $6,340.32. The large amount of money that Nevada’s hospitals charges patients can

be a result of the shorter average length of stay as stated for Cost per Discharge. The increased

amount of money though, can also be a result of the rewarding system to medical providers, fee-

for-service. This system pays health providers through reimbursements for conducting health

tests on patients, giving procedures, or having more patient visits. If this is the reason why

Nevada’s cost per day is higher than the national’s average, then there needs to be some

improvements the hospitals in Nevada should make to stop this fraud. On the other hand, if the

increase cost per day is related to the diagnosis related groups that is given at the hospitals in

Nevada, then the improvements would not be needed. It would just mean there are more people

with severe sicknesses in Nevada.

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 II. Analysis of Top 5 DRGs

1. Top Five DRGs by Discharge for Nevada by Discharge

Top 5 DRGs by Discharge for Nevada 2008

Year State Code Discharges Days Diagnosis Related Group Description
2008 NV 391 26,227 44,725 Normal newborn
2008 NV 373 21,112 34,490 Vaginal delivery w/o complicating diagnoses
2008 NV 371 8,986 28,340 Cesarean section w/o CC
2008 NV 143 8,350 13,650 Chest pain
2008 NV 89 5,788 27,762 Simple pneumonia & pleurisy age >17 w CC

Top 5 DRGs by Discharge for Nevada

2008
8.21%
Normal newborn
11.85%
Vaginal delivery w/o
37.22% complicating diagnoses
Cesarean section w/o CC
12.75%
Chest pain

Simple pneumonia & pleurisy

age >17 w CC
29.96%

The top five DRGs by total discharges for Nevada from greatest to least are normal newborn,

vaginal delivery without complicating diagnoses, cesarean section without CC, chest pain, and

simple pneumonia and pleurisy with CC for patients ages 17 and up. The pie chart shows the top

five DRGs by total discharges for Nevada. You can visually see which DRG had more

discharges by percentage. The percentage is just the total of the top five DRGs and not all the

DRGs in the hospitals in Nevada.

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 2. Top five DRGs by Discharge at the National Level

Top 5 DRGs by Discharge for National 2008

Year State Code Discharges Days Diagnosis Related Group Description
2008 National 391 3178034.221 6665974.264 Normal newborn
2008 National 373 2443410.583 5134665.559 Vaginal delivery w/o complicating diagnoses
2008 National 430 1019821.103 8798659.049 Psychoses
2008 National 371 1012445.025 3379335.713 Cesarean section w/o CC
2008 National 127 991056.8855 4845758.51 Heart failure & shock

Top 5 DRGs by Discharge for National

2008
11.46% Normal newborn

11.71% Vaginal delivery w/o

36.76% complicating diagnoses
Psychoses

11.80% Cesarean section w/o CC

Heart failure & shock

28.26%

The top five DRGs by total discharges nationally are normal newborn, vaginal delivery

without complicating diagnoses, psychoses, cesarean section without CC and heart failure and

shock. The common top five DRGs among Nevada and nationally are normal newborn, vaginal

delivery without complicating diagnoses, and cesarean section without CC. Nevada also has

chest pain and simple pneumonia and pleurisy with CC for patients ages 17 and up. For the

DRGs that are similar between Nevada and nationally, they also have a close percentage to each

other as well. Normal newborn for national is 36.76% and 37.22% for Nevada. Vaginal delivery

without complicating diagnoses for national is 28.26% and 29.96% for Nevada. Cesarean section

without CC for national is 11.71% and 12.75% for Nevada. Overall, Nevada has the slightly

higher percentages for the common DRGs which might have some effect on the higher cost per

discharge and cost per day.

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 III. Top Five DRGs by ALOS

1. Top Five DRGs by ALOS for Nevada

Top 5 DRGs by ALOS for Nevada 2008

Year State Code Days Discharges ALOS Diagnosis Related Group Description
Extreme immaturity or respiratory
2008 NV 386 25885 736 35.17 distress syndrome, neonate
Full thickness burn w skin graft or
2008 NV 506 356 15 23.73 inhal inj w cc or sig trauma
Acute leukemia w/o major O.R.
2008 NV 473 2348 128 18.34 procedure age >17
2008 NV 488 274 15 18.27 HIV w extensive O.R. procedure
2008 NV 387 13754 780 17.63 Prematurity w major problems

Top 5 DRGs by ALOS for Nevada 2008

40.00
35.17
35.00

30.00
23.73
25.00
Days

20.00 18.34 18.27 17.63

15.00

10.00

5.00

0.00
Extreme Full thickness Acute leukemia HIV w extensive Prematurity w
immaturity or burn w skin graft w/o major O.R. O.R. procedure major problems
respiratory or inhal inj w cc or procedure age
distress sig trauma >17
syndrome,
neonate

The top five DRGs by ALOS for Nevada from greatest to least are extreme immaturity or

respiratory distress syndrome, neonate; full thickness burn with skin graft or inhale injection CC

or sig trauma; acute leukemia without major O.R. procedure for ages 17 and up; HIV with

extensive O.R procedure; and prematurity with major problems.

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 2. Top five DRGs by ALOS National

Top 5 DRGs by ALOS for National 2008

Year State Code Discharges Days ALOS Diagnosis Related Group Description
Trach w mv 96+ hrs or pdx exc face,
2008 National 541 60630.5122 2583798 42.62 mouth & neck diag w maj o.r.
2008 National 103 2759.61003 94329.91 34.18 Heart transplant
Extreme immaturity or respiratory
2008 National 386 92192.3848 3050062 33.08 distress syndrome, neonate
Trach w mv 96+ hrs or pdx exc face,
2008 National 542 47607.1466 1524718 32.03 mouth & neck diag w/o maj o.r.
Extensive 3rd degree burns w skin
2008 National 504 1000.24901 31606.67 31.60 graft (after Oct 1, 2004)

Top 5 DRGs by ALOS for National 2008

42.62
45.00
40.00 34.18 33.08 32.03 31.60
35.00
30.00
Days

25.00
20.00
15.00
10.00
5.00
0.00
Trach w mv 96+ Heart transplant Extreme Trach w mv 96+ Extensive 3rd
hrs or pdx exc immaturity or hrs or pdx exc degree burns w
face, mouth & respiratory face, mouth & skin graft (after
neck diag w maj distress neck diag w/o Oct 1, 2004)
o.r. syndrome, maj o.r.
neonate

The top five DRGs by ALOS for national from greatest to least are trach with mv 96+

hrs. or pdx exc face, mouth and neck diagnosis with major o.r.; heart transplant; extreme

immaturity or respiratory distress syndrome, neonate; trach with mc 96+ hrs or pdx exc face,

mouth and neck diagnosis without major o.r.; and extensive 3rd degree burns with skin graft

(after Oct. 1, 2004). The similar top five DRGs by ALOS for national and Nevada is extreme

immaturity or respiratory distress syndrome, neonate. Based on that DRG, the national ALOS is

33.08 days while Nevada is 35.17 days. Overall, national has longer ALOS days for the top five

DRGs ranging from 43 to 31 days while Nevada ALOS days ranges from 36 to 17 days for the

top five DRGS.

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 IV. Conclusion

Overall, the state of Nevada has a lower average length of stay than the national average

but a higher cost per discharge and cost per day than the national average. As a financial analyst,

I believe the hospitals in Nevada are overcharging patients for staying at the hospital. The

national average for cost per discharge, $33,921.49, and cost per day, $6,340.32, is significantly

lower than Nevada, $38,314.71 for cost per discharge and $8,166.32 for cost per day, but

Nevada’s average length of stay, 4.891721305 days, is not significantly lower than the national

average, 5.364525122 days. The percent difference for average length of stay is 10%, 11% for

cost per discharge, and 22% for cost per day. The DRGs by discharge are mostly similar between

Nevada and nationally so the argument that Nevada has more severe medical conditions cannot

be used. To potentially alleviate this problem of overcharging the patients in Nevada, a rewards

program could be implemented to encourage healthcare providers to stop giving extra or

unnecessary procedures and/or supplies. Another idea is to conduct an annual compliance check

to make sure healthcare providers are not giving extra or unnecessary procedures and/or supplies.

The data provided in this report helped visualize the difference between Nevada and nationally

and made comparing and contrasting similarities and differences easier. The data provided in this

report helped me conclude the problem Nevada is facing and what solutions can be used to

alleviate the problem.

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 V. References

Briston, R. J. (1981). Introduction to Financial accounting. Introduction to Accountancy and

Finance,1-76. doi:10.1007/978-1-349-16515-5_1

Fauntleroy, G. (2012, August 29). Rising Cost of Inpatient Care Linked to Medical Devices and

Supplies. Retrieved April 21, 2018, from http://www.cfah.org/hbns/2012/rising-cost-of-

inpatient-care-linked-to-medical-devices-and-supplies

HealthCatalyst. (2018). Patient-Centered LOS Reduction Initiative Improves Outcomes, Saves

Costs. Retrieved April 21, 2018, from

https://www.healthcatalyst.com/success_stories/reducing-length-of-stay-in-hospital

Merhar, C. (2014, May 9). 7 Reasons for Rising Health Care Costs. Retrieved April 21, 2018,

from https://www.peoplekeep.com/blog/seven-reasons-for-rising-health-care-costs

Nevada Division of Public and Behavioral Health (DPBH). (2017, October 12). Retrieved April

21, 2018, from http://dpbh.nv.gov/Programs/Programs/

Nevada Health Statistics Portal (NHSP). (2018). A Nevada Division of Public and Behavioral

Health Data System. Retrieved April 21, 2018, from

http://statistics.health.nv.gov/demographics

Nevada Hospital Association. (2018). Compare Hospital Measures. Retrieved April 21, 2018,

from http://www.nvhospitalquality.net/

Patient Safety Indicators Overview. (2018). Retrieved April 21, 2018, from

hhhhhhhttp://www.qualityindicators.ahrq.gov/modules/psi_overview.aspx

Sandoval, B., Phinney, C. L., Whitley, R., & DiMuro, J. (2017). Center for Substance Abuse

Prevention. Encyclopedia of Substance Abuse Prevention, Treatment, & Recovery,1-62.

doi:10.4135/9781412964500.n60

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