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Changing costs of treating COVID patients for hospitals [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by G.T. LaBorde, CEO of IllumiCare, to discuss their analysis of the changing costs of treating COVID patients in hospitals.  

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Highlights of this episode include:

  • Background on IllumiCare’s analysis on the changing costs of treating COVID patients.
  • How the cost of treatment decreased from a shift in the utilization of expensive drugs.
  • Why medications such as anticoagulants are used the most to treat COVID patients.
  • How the cost of medicine and length of stay has changed over the course of the pandemic.
  • And more…  

Mike Passanante: Hi, this is Mike Passanante and welcome back to the award-winning Hospital Finance Podcast®. If you enjoy the podcast I invite you to head up to Apple Podcasts, rate us five stars, and leave a positive review. This will help new listeners in the health care space find the show. And with that, we’ll move on to today’s show. IllumiCare recently released an analysis that looked at the changing costs of treating COVID patients in hospitals. To share the findings of this analysis, I’m joined by G.T. LaBorde, CEO of IllumiCare. G.T., welcome back to the show.

G.T. LaBorde: Michael, thank you. Good to be back.

Mike: G.T., why don’t you tell us a little bit about IllumiCare, for those in our audience who may not be familiar with your firm.

G.T.: Sure. IllumiCare is in the business of helping health systems drive value-based care. We basically use hospitals own medication, daily medication, cost, wholesale acquisition cost, as well as lab and radiology costs, from their own cost accounting system to ascribe a cost to every clinical order to make those costs kind of transparent to providers in real-time when they’re ordering things, to sort of profile the behavior of different physicians of the same type so that we can see variation in the way they behave and aspects of that variation that drive unnecessary realization and unnecessary cost. And then have sort of a point-of-care interventional tool, we call the Smart Ribbon, that nudges physicians when they’ve sort of misbehaved in that way, if you will, with kind of clinical financial decision support, if you will, at a point-of-care. So doing all that stuff gives us access to real-time data feeds from a number of customers and allows us sort of a macro view when there are massive new macro trends in healthcare kind of like COVID has been.

Mike: So let’s dive into the analysis that you did here. What exactly were you looking at, in this analysis?

G.T.: We looked at health systems that were geographically dispersed across the country. Together, they represented several million encounters with those health systems. Of those, there were something like 350,000 or so COVID tests that were done. And so we zeroed in on, who were patients that were testing positive with COVID that had had an interaction or encounter with the health system on either an inpatient ambulatory or ED? What percentage of those were inpatients? So what percentage got admitted? What DRGs did they fall into? What were their lengths of stay? And what were the cost and drugs used to treat, etc.? And we looked at these over three different time slices. Basically, we started with kind of what I’ll call the early days, March 12th to May 28th. We then kind of took another look in the sort of a middle period, between March 12th and July 10th. So we expanded from May to July in that analysis. And most recently, we looked from August 4th until October 2nd, which I’ll refer to as kind of the most latest period. So it was fascinating to see how some of these things were changing over time.

Mike: That’s great. And we’re going to dive into a lot of the details, but what were some of the headlines, G.T.? What were the key findings in the report?

G.T.: Well, from a high level, some of the things that jumped out at me are the percentage of tests that were positive was increasing for these health systems. The percentage of people who were COVID positive that were inpatients were increasing. Length of stay was decreasing. Cost was going down pretty dramatically because of a shift in the utilization of some of the very expensive drugs used to treat them. And kind of the one asterisk next to that is remdesivir which– there was sort of a supply of that that was made available without cost. Eventually, that supply is going to run out and it’s going to be an expensive drug when used to treat. So I think that’s kind of the high-level summary of it, but happy to get into some of the details.

Mike: Yes. So let’s take a look at the dynamics surrounding medications because you did quite a bit of analysis there. What did you find?

G.T.: Some of the things that jumped out on the medications that were used to treat just the inpatients who were COVID positive, anticoagulants were number one in sort of the most frequently used drug. So if you looked at, as a percentage of patients that received a drug, anticoagulants were always number one except for in the most recent period. The number one ranking switched to ulcer drugs, interestingly enough. So pantoprazole is given to 27% of patients and famotidine, which is Pepcid, basically, is given to 25% of patients. And it’s fascinating because both of these drugs are– they’re sort of a mini-story, we think. This is the data, and what I’m about to tell you is sort of our speculation of what that data may mean, but throughout these various periods, we’ve seen the utilization of different drugs sort of rise and wane. Famously, hydroxyquinoline was really big. I’m sorry, hydroxychloroquine was really big, and in the early period something like 28 and a half percent of patients got that initially, and it doesn’t even exist in our data. We can’t even find patients really getting it. So it’s fascinating because I think these ulcer drugs may be a similar symptom where there is empirical data. Looking backwards perhaps epidemiologically, we see that patients on certain other medications tend to have better outcomes. And really without any kind of prospective controlled study, clinicians are still gravitating to these drugs that just– it’s like, “Well, these are cheap drugs. They have very low risk and side effects. What the heck? It looks like there’s some association. Let’s try it.” Right? So there’s really been this kind of massive experimentation where we don’t 100% understand this disease, and we don’t really know exactly how to clinically treat it yet. And we still see just a lot of experimentation and drugs that have some empiric support and are cheaper and safer and it’s like, “Let’s just try it.” So those are examples of that. I’ll also just kind of say a couple of comments on kind of the drugs du jour. So dexamethasone, a steroid, is given to about 15% of patients in the most recent period, and about six and a half percent of patients are getting remdesivir in this dataset. So still, we think are kind of– some of our better to drugs– and, of course, there’s some argument about whether remdesivir is really that efficacious, but that’s sort of what we see in kind of the drugs du jour that you hear in the news.

Mike: So let’s look at another angle of your analysis because you looked at length of stay. How has that been impacted by COVID?

G.T.: Actually, Michael, I wanted to add– I’m sorry I forgot to add one thing that your listeners might think of interest. And that’s with the cost of medicine. So in the two prior periods, the number one drug in cost– so if you just said, among the patients who are COVID positive in total dollars spent, what drug are we spending the most money on? In the earlier period and the middle period that drug was a drug called tocilizumab. It’s sort of an anti-cytokine storm, IL-6 inhibitor drug, and it’s super expensive. It’s about $2,400 per patient who gets it. That’s how much money is spent on that drug. But it was even only used in those earlier periods on about four and a half percent of patients. So it was the drug that consumed the most amount of dollars but was only consumed by four and a half percent of patients. It has since dropped to about number nine on the ranking of spend. It’s still the same price, but it does come down, and it’s only really used at about 1.1% of patients. So we sort of speculate that maybe it is sort of maybe in people’s COVID protocols because it’s so expensive they’ve really kind of tightened down when it’s appropriate to use that drug. Yale had put something out saying maybe we should use it more frequently earlier on, but that clearly doesn’t seem to be the trend overall. Interestingly, lastly, the number one drug in terms of overall cost today is vancomycin. And we held cost constant throughout this analysis so that we could really be looking at differences in utilization. But about the same percentage of patients are getting vancomycin, about 15% or so. But the spend per patient has gone up pretty radically from 120 to 339 to 734 in those three time periods. So I mean we can only sort of speculate. Vancomycin is usually part of the substance protocol, and perhaps as such, as protocols are getting initiated earlier in the length of stay and therefore each patient is consuming more bank which is sort of driving that cost. But that has caused it to be the number one spend in terms of medications.

Mike: Great points, G.T., I’m glad you rounded back on those.

G.T.: Okay. So you asked about length of stay?

Mike: I was going to say, you did just mention length of stay. So why don’t we talk about that, because I think you found some interesting things there too.

G.T.: So that has seen a pretty nice reduction. In the early days, in the patients that are COVID positive, the average length of stay was about nine days, and that has come down to about seven days. So across the various periods, it’s seen a steady reduction. The non-COVID patients, also in the hospital, have stayed about the same, about five and a half days across this dataset in average length of stay. Now one of the things I thought that was interesting, patients who are COVID positive can actually be found in almost every DRG in our client hospitals or in this dataset. And it’s because there are a lot of people who are positive that really aren’t in the hospital for COVID. They just happen to be COVID positive but they’re in the hospital for another reason. So a COVID positive patient doesn’t necessarily mean a patient who is in the hospital primarily to treat that disease. So we then narrowed it down and looked at, well, what are the DRGs where most COVID patients fall? And it’s primarily respiratory DRGs with complications, comorbidities. And the sepsis DRGs are the kind of five or six where they seem to conglomerate. And if I compare the average length of stay, say, the most frequent is DRG 177, the average length of stay of patients without COVID in that DRG is pretty much the same as patients with COVID in that DRG. So it’s about seven days either way. So while we think of COVID as this devastating disease, and we hear a lot of these sort of train wreck stories of people staying for months, really when you look across this whole dataset, the data’s telling me across a bunch of patients on average, COVID patients have a sort of length of stay that’s very similar to other complicated pneumonia cases, pneumonia cases with comorbidities.

Mike: Well, that’s at least some good news going forward here. Certainly interested in your thoughts on what you think the implications are of everything we just talked about here?

G.T.: Yeah. I mean overall costs have gone down. So just if I look at the med and lab and radiology spend– we focus on those three things because we feel like physicians control those things– it’s gone from about $3,800 down to $1,930 per admission. So overall, it appears that hospitals are getting more efficient at treating COVID patients, that costs overall are coming down, length of stay overall is coming down, and that’s to their great credit of just learning from how to better care for these patients. But we haven’t figured it out. And we see that in kind of the experimentation, like these ulcer drugs and some others. That there’s still some fine-tuning going on about the best way to clinically treat these patients. The most worrisome trends in this data are that the percentage of test positive are going up and the percentage of patients who are positive admitted, are going up. And so we hope that that trend doesn’t continue and that we can see hopefully that will reverse, and we’ll have less pressure on our health systems with fewer patients. But we’ll have to see.

Mike: Great insights, G.T. If someone wanted to find out more about IllumiCare, where can they go?

G.T.: A lot of this data– so we actually put a lot of this data on our website. You can actually interact with it and drill into each DRG and each drug and see the utilization. I’ve put all the data from the most recent period, so your listeners could interact with it if they like. It’s available on our website at Illumicare, which is, is where you would find all this data.

Mike: G.T. LaBorde, thanks so much for coming back to the podcast today and sharing with us this very interesting analysis that you’ve done at your firm around COVID.

G.T.: Great to be with you, Michael.

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