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Bellevue Hospital Center
Bellevue, the nation's oldest public hospital, pilot tested statistical analysis that has shown positive early results in reducing hospitalizations for complex patients.

Healthcare Market Profile: New York-Northern New Jersey-Long Island

Data-driven: Statistical analysis could help curb hospitalizations

By Melanie Evans
Posted: July 25, 2011 - 12:01 am ET

New York City holds many distinctions, among them its cuisine and prominence in the history of U.S. finance and baseball. One other claim is far less desirable as pressure builds to slow health spending and curb the nation's deficits. The city accounts for the majority of Medicaid expenses in its home state, where the safety net insurer outspends, per enrollee, nearly every other state.

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Now the New York City Health and Hospitals Corp., owned by the city, is testing whether a combination of statistical analysis and careful intervention can curb spending for those patients most likely to return to the hospital again and again.

The system, with a grant from the state, has deployed social workers and case managers at three of its 11 hospitals to help coordinate medical care and multiple services outside the hospital for patients at high risk of frequent admissions.

“A lot of what we do isn't healthcare, but it does influence their health and the way they seek care,” says Dr. Maria Raven, an emergency medicine and internal medicine assistant professor for the New York University School of Medicine, who is leading the effort.

The Health and Hospitals Corp. is one of six locations funded under a state effort to curb spending and improve medical care for the most costly patients: those chronically ill, homeless or nearly so, without social support and often addicted, mentally ill or both.

“These patients are high-need patients,” says Dr. Ross Wilson, corporate chief medical officer for the Health and Hospitals Corp., “but if we can improve the clinical and nonclinical service, we can improve their health, their well-being, their productivity, as well as reducing their clinical costs.”

New York's Medicaid program spends more per enrollee than any other state except one, show the most recent figures from the Urban Institute and Kaiser Commission on Medicaid and the Uninsured. The state paid out $8,450 per enrollee in 2007 compared with $3,168 in California, the state with the lowest spending per enrollee that year.

One-fifth of Medicaid enrollees account for three-quarters of costs, according to New York state, which jointly finances the health insurer with the federal government. And like the federal government, the Great Recession added significant strain to state finances.

Raven says she is cautiously optimistic the pilot project will lower costs, based on early results, and the program appears to make a difference for highly disenfranchised patients engaged in the program.

“Right now, by and large, the healthcare system isn't set up to meet their needs in a comprehensive way,” she says.

To find such patients, the project turned to an algorithm piloted at Bellevue Hospital Center, the nation's oldest public hospital and Health and Hospitals Corp.'s second-largest hospital. Bellevue's early test results suggest help with housing, transportation and patient advocacy can help reduce hospitalization for complex and costly patients. (The National Health Service in the U.K. also uses a version of the algorithm.)

That early effort, led by Raven and begun in November 2007, included 19 men admitted to Bellevue 64 times the prior year. Almost all were homeless or at risk of being so and used alcohol, opiates, cocaine or some combination.

Patients received cellphones to contact case managers and hospital staff worked with an independent housing agency to find homes for the patients. Case managers acted as advocates at treatment and housing centers, started a support group, and spent hours talking to patients each month.

A year later, hospitalizations fell by more than one-third, an average of 1.6 admissions per patient. Medicaid costs for the group fell by an average of $16,383 per patient, even as the patients' outpatient Medicaid costs increased an average of $474 during the period. Only a fraction of the savings ($269 per patient) stemmed from a drop in emergency room visits. Not all stayed out of the hospital. Four landed in the hospital more often than before.

Fewer hospitalizations amounted to Medicaid savings of $5,080 per patient after expenses, which Raven says could increase with the economy of scale from a larger effort with more patients. Nor do the savings reflect a projected increase in costs for patients had no intervention occurred, she says. Prior to the care coordination effort, Medicaid spent an average of $42,996 per patient.

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