Insights

A best seller: Medicare & You

Medicare & You book — Medicare’s 2025 handbook.

It’s a book few healthcare analysts see unless they are Medicare eligible. Each year, generally in late September or early October, Medicare publishes “Medicare & You” a handbook to help beneficiaries navigate their Medicare coverage.

Given the complexities, it’s a surprisingly well done publication with generally easy to understand, clear explanations. When the material becomes too involved, Medicare often includes pointers to where more information can be found. Continue reading “A best seller: Medicare & You”

What does “cost” mean?

The concept of “cost” seems easy enough. Few things in healthcare are ever simple, and cost is one of those. In a hospital setting, there are at least three different ways to define “cost”:

For the hospital, it is the cost of providing the service. This usually includes operational cost as well as allocated overhead and capital costs.
For a payer, it often is the amount of the reimbursement or the payment to the hospital.
For a patient, “cost” might be the hospital’s billed charge amount after any discounts.

In The Princess Bride Inigo Montoya says, “You keep saying that word. I do not think it means what you think it means.”

Each version of “cost” will produce different amounts for any given service. If a research paper or publication does not define “cost” or how it is calculated be wary. What you think the metric means might not be what you think.

Meaningless statistics

Read enough research papers and sooner or later you’ll come across some astounding, and meaningless, statistics.

Consider this one: “Approximately 75% of the admissions occurred during weekdays…”

Well, duh. Five divided by seven = 71.4%.

Not a remarkable observation at all. It’s likely there is some variance by day of the week. That might have been a more enlightening statistic.

Length of stay remains a challenge

Becker’s Hospital CFO Report recently published an interesting list about hospital lengths of stay, Here’s an excerpt:

Managing a count of days involves much more than meets the eye…

Estimates for the average LOS vary. In 2023, an analysis of 4,405 U.S. hospitals from Definitive showed an average LOS of 4.5 days. South Dakota and Utah had the lowest average at 3.3 days while Maryland and Washington, D.C., had the highest average LOS at 6.1 days and 6.5 days, respectively.

If a 425-bed hospital lowered its average LOS by one day from 6 to 5 days, it could save $20 million in operating expenses over one year and gain about $20 million in additional margin by expanding its capacity to admit more patients, assuming an average margin of $4,500 per admission, according to Kaufman Hall.

Full list is here.

Standard deviation and choices

Standard deviation.

There are three schools of thoughts about standard deviation.

Those who don’t know what it is and are happier for it.
Those who are ready to pull out stats program and merrily calculate away.
Those who buried the memory from a long-ago stats class and only vaguely remember the concept.

Continue reading “Standard deviation and choices”