Two ways for estimating program volume are presented:

Using Total Hospital Admissions

Using DRG Data

Using Total Hospital Admissions

The first step in conducting financial analyses of a palliative care program is to estimate program volume (e.g., annual number of admissions). An estimate of program volume uses available hospital statistics such as total hospital admissions or admissions for specific types of patients (e.g., disease categories, select DRGs, admissions with LOS >10 days).

Knowing that the average hospital death rate is 2.5% and that approximately 50% of palliative care patients die in the hospital, program volume can be estimated using the annual number of admissions in your hospital. The average hospital length of stay (LOS) along with some assumptions concerning the palliative care program, also allows the team to estimate the palliative care program’s LOS, total patient days and average daily census. The process for these calculations is shown below. Using the Total Admissions PC Volume-LOS-Daily Census downloadable spreadsheet will assist the PC team with these analyses.

Ask hospital finance staff for the overall number of hospital admissions and average LOS for the latest 12-month period or calendar year:

1. Apply 5% estimate (see chart below) to total admissions to determine volume of patients that would benefit from palliative care services. In the example, 800 admissions could be referred to the program annually.

2. By assuming a 20% referral or “capture rate” for Year 1 and applying it to the potential annual volume of 800 admissions who would be palliative care appropriate, the team estimates a volume of 160 palliative care referrals in Year 1.

3. The planning team can also estimate for the palliative care program (see chart below): the average LOS, total annual patient days and average daily census. The team must know the hospital’s average LOS; in this example it is 6 days. Since the majority of palliative care patients have more complex conditions, the team assumes average LOS in the palliative care program will be 2 days longer (i.e., 8 days).

4. Referrals to the palliative care program are unlikely to be made prior to the 3rd day of admission, so the team subtracts 3 days to estimate the “Impact Days” – that is the average number of days in the palliative care program. In this case the team estimates 5.0 Impact Days. Reasonable estimates for Impact Days can range from 3.6 - 5.7 days (about 4.5 days on average).

5. By multiplying the estimated number of referrals to the program by the average program LOS, the team determines the total annual patient days in the program (Impact Days). When Impact Days are divided by 365 days, this provides an estimate of the program's average daily census.

6. A census of 2.19 patients per day has implications for estimating staffing needs.

Using DRG Data

Examining specific patient segments within the hospital population can also serve as a basis for estimating program volume, LOS and daily census. This section presents an analysis using DRG data from patients who died in the hospital assuming they would be prime candidates for palliative care interventions. The downloadable DRG Analyses spreadsheet can assist with the following analyses.

1. Request that the admissions for the previous 12 months be “filtered” to include only those patients with a discharge status of “mortality” and LOS greater than 2 days – and then separate this subgroup by DRG.

2. For each DRG request:

• Total Admissions
• Cost per admission or total annual cost per DRG.
• Average LOS per admission.

3. Rank the DRGs in descending order by one or more measure -- number of admissions, cost per admission, or average LOS per admission. The Chart below shows hypothetical data ranked by cost per case.

4. Choose approximately 20 of the highest ranked DRGs based on either frequency, costs, LOS, or need for palliative care from a clinical perspective.

5. For these top ranked DRGs now request all admissions with a LOS greater than 2 days, regardless of discharge status.

6. The total number of admissions for these selected DRGs represents an annual estimate of the number of patients who could benefit from palliative care. The average LOS for these patients reflects their hospital LOS without a palliative care intervention.

Using the same logic that was applied to “Total Hospital Admissions,” and the same spreadsheet (Estimating Program Volume, LOS and Daily Census Using Total Admissions) the team can now estimate program volume, LOS and patient census as shown below.