Could distance be a proxy for severity-of-illness? A comparison of hospital costs in distant and local patients.

H. Gilbert Welch · Eric Berg Larson · W. Pete Welch

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Healthcare Policy and Management Healthcare Quality and Management Emergency and Acute Care Studies

Abstract

OBJECTIVE: We test the hypothesis that hospital costs, after adjusting for DRG mix, are higher in distant patients than in local patients. DATA SOURCES AND STUDY SETTING: Data were obtained from the Washington State Commission Hospital Abstract Reporting System (CHARS) and included all patients discharged from 15 metropolitan hospitals in the state of Washington during fiscal year 1987 (N = 181,072). STUDY DESIGN: Distant patients were initially defined as those patients residing outside a 15-mile radius of the hospital from which they were discharged; all other patients were considered local. Distance was determined using the patient's residence zip code. Hospital charge, calculated for all patients regardless of payer, served as a proxy for cost and was adjusted using the DRG weight. PRINCIPAL FINDINGS: Average charge (adjusted for DRG weight) was higher for distant patients in all but two hospitals. Overall adjusted charge for distant patients was 15 percent higher (p < .001). This finding persisted when different distances were used to dichotomize distant and local patients. When the 20 most common DRGs were examined individually, little charge difference was found in surgical DRGs that require tertiary center services (tertiary DRGs) and in those DRGs with both moderate and predictable resource use (routine DRGs); the charge difference seemed most prominent in those DRGs with a wide array of possible resource use (heterogeneous DRGs). CONCLUSIONS: Results suggest that patients traveling long distances use more resources and incur higher hospital charges than local patients. This is not accounted for in prospective payment. We postulate that distance might serve in part as a proxy for severity-of-illness.

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References

1982The Distinction Between Cost and Charges 1983Distance and the utilization of health facilities in rural Nigeria 1981DRG Creep 1985Interhospital Differences in Severity of Illness 1984Spatial patterns of hospital utilization: the impact of distance and time.1987Refining Case-Mix Adjustment 1986Reliability and Validity of the Severity of Illness Index 1984The Severity of Illness Index as a severity adjustment to diagnosis-related groups.

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2005The Effects of Geography and Spatial Behavior on Health Care Utilization among the Residents of a Rural Region 2006Illness severity and propensity to travel along the urban–rural continuum

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