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Essential and Expensive

Elyas Bakhtiari, for HealthLeaders Media, February 5, 2009
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Patient demand for intensive care services continues to rise—but ICUs cost a ton of money. Here's how some providers are making intensive care worth their financial while.

The origins of intensive care medicine supposedly date back to Florence Nightingale, who in 1854 left with a group of volunteers for the Crimean War, where, by separating soldiers for treatment based on the severity of their wounds, she was able to focus on critical cases and reduce the mortality rate from 40% to 2%.

Today's intensive care units are some of the most expensive, and often most sophisticated, areas of modern hospitals. But the same basic principle—allocating resources wisely to improve the quality of the most critically ill patients—remains the key to ICU success. Unfortunately, it's easier said than done.

Most ICUs operate on a 2:1, or even 1:1, nurse-to-patient ratio, compared to 5:1 or higher on the medical floors. Although ICU patients account typically for only 10% to 15% of inpatient beds, they are responsible for up to 30% of acute-care hospital costs. More than $180 billion is spent on critical care in the United States each year.

"The two most expensive parts of the hospital basically are the operating room and ICU, and where it is not done efficiently, intensive care ends up costing the hospital a lot of money," says Tom Rainey, MD, president of the healthcare quality consultant firm CriticalMed, Inc., in Bethesda, MD.

The high costs of intensive care can be daunting at a time when hospitals are forced to make some tough financial choices due to a troubled economy and shrinking margins. But demand for these services will likely only increase as nursing and physician shortages, as well as an aging U.S. population, make delivery more difficult. Ultimately, the financials of intensive care are inextricably tied to the quality and efficiency of how that care is delivered. For hospitals that successfully improve delivery, the savings can total in the millions, and critical care can be viewed as a service line worth investing in rather than solely as a loss-leader.

Success Key No. 1: Close Your ICU
Probably the most significant development in intensive care delivery in the past few years has been the intensivist model, which relies on board-certified critical care specialists to staff and manage hospital ICUs. ICUs were traditionally described as "open" units, meaning any physician in virtually any field could admit and care for a patient. Although many hospitals still operate this way, the industry has come to prefer closed ICUs—where intensivists or other physicians are the primary care agents and ultimately responsible for all medical decision-making.

The closed model, particularly when staffed by intensivists—the two terms are not completely interchangeable, but often go hand in hand—addresses some of the quality and cost problems that arise when various doctors are treating patients without centralized management or clinical decision-making.

"What has evolved is an understanding that intensive care and patients who are critically ill require attention and management 24 hours a day. But medical care has historically been episodic, and the evolution of the intensivist has brought a new level of reliability, proven better outcomes, and [reduced] cost and waste," says Rainey, who is also former president for the Society of Critical Care Medicine.

Because intensivists are trained specifically in critical care, the intensivist model can reduce some of the variation in quality and result in better decision-making when it comes to resource utilization, admissions, and daily care. That's why the Leapfrog Group has included the intensivist model as one of its four major safety practices—and why the Institute for Healthcare Improvement encourages its adoption.

But there's a financial advantage, as well. Significant cost savings accompany improvements in utilization and quality. Physicians in closed ICUs tend to make faster, better decisions so the patients who don't belong in the ICU are triaged beforehand rather than after a costly, unnecessary stay. This type of improved resource management alone can save a 12-bed ICU unit nearly $1 million annually, Rainey estimates. The Society of Critical Care Medicine puts the total potential annual hospital cost savings at $13 million, when quality factors, such as a 14% absolute risk reduction in mortality, are factored in.

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