The value of early discharge: Dispelling some myths

The value of early discharge: dispelling some myths

Anthony scott* a, Alan Shiell”, Michael George Farnworth b

Health Policy 26 (1993) 81-91

“Centre for Health Economics Research and Evaluation, Department of Community Medicine, University of Sydney at Westmead Hospital, Westmead, NS W 2145, Australia ‘Department of Economics, Mch4aster University, Hamilton, Ontario, Canada

(Accepted 31 July 1993)

Abstract

Our objective in this paper is to assess the value of early discharge schemes following the economic evaluation of three such schemes in New South Wales, Australia. An early discharge programme for obstetric patients, a fractured hip management programme and a continuing community cancer care programme were evaluated. The results of the economic evaluation of these schemes are discussed in the light of four commonly held beliefs about the value of early discharge: that early discharge schemes succeed in reducing length of stay, that early discharge schemes save money, that the welfare of patients is not reduced by early discharge and that early discharge schemes are cost-effective. The caution expressed by previous authors about the perceived advantages of early discharge schemes is still warranted.

Key words: Early discharge; Economic evaluation; Length of stay; Cost-effectiveness

1. Introduction

Average length of stay in acute care hospitals has been reduced in most OECD countries. Between 1970 and 1987, the average length of stay in acute care facilities fell by 53% in France, 28% in Germany, 12% in the United States and 33% in Australia. Overall, the average reduction in length of stay in the OECD was 32% [l]. However, real health care expenditures continue to rise. Reductions in length of hospital stay have been brought about by changes in clinical practice, improved tech- nology, changes in the way hospitals are reimbursed and the introduction of manag-

* Corresponding author.

0168-8510/93/$06.00 0 1993 Elsevier Scientific Publishers Ireland Ltd. All rights reserved. SSDI 0168-8510(93)00579-P

82 A. Scott et al. /Health Policy 26 (1993) 81-91

ed care initiatives and day surgery. Pressure to contain hospital budgets and increase patient admissions has resulted in further reductions in length of stay.

However, reductions in length of stay need not be as beneficial as is commonly thought. Writing over 10 years ago, Jonsson and Lindgren [2] identified live common fallacies that characterised the debate surrounding the value of earlier discharge. These were:

(a) that a reduction of 1 day in the length of stay meant a cost saving equal to the average cost of 1 day in hospital;

(b) that a reduction in length of stay meant that the waiting list could be reduced;

(c) that length of stay could be reduced without any corresponding increase in costs in the primary care sector;

(d) that length of hospital stay could be reduced without increasing the care input or the welfare loss of the patient’s family and friends; and

(e) that length of stay could be reduced without causing any loss in welfare to the patient.

After reviewing the evidence on reductions in length of stay, Jonsson and Lind- gren concluded that previous evaluations of early discharge schemes had tended to underestimate the social costs of reductions in hospital length of stay and to overestimate the savings, such that the overall advantages of the shorter time spent in hospital were exaggerated.

As with most other OECD countries, pressure is being placed on hospitals in Australia to reduce length of stay in order to improve their efficiency. One initiative to reduce length of stay in Australia was the Medicare Incentive Package (MIP). This was introduced in 1988/89 to provide enhancement funding for state health departments to establish schemes that would improve the efficiency of the public hospital system. These aimed to provide more cost-effective treatment by substi- tuting alternative forms of post-acute care for hospital care. Three early discharge schemes were set up in the Western Sydney area with funding from the MIP. These were obstetric early discharge, a fractured hip management programme and a continuing community cancer care programme.

A condition of funding was that the cost-effectiveness of the schemes be subject to evaluation. This allowed us to reconsider Jonsson and Lindgren’s conclusions. For the purposes of this article, the live fallacies identified by Jonsson and Lindgren have been revised into four commonly held beliefs. These are: that early discharge schemes succeed in reducing length of stay, that early discharge schemes save money, that the welfare of patients is not reduced by early discharge, and finally, that early discharge schemes are cost-effective.

In the following section, the three schemes that were evaluated in the Western Sydney Area Health Service are described and the methods and results of the evaluations are summarised. The results are then discussed more fully with reference to the four beliefs outlined above.

2. The MIP evaluations

A summary of the three evaluations is shown in Table 1. Obstetric early discharge

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schemes were evaluated at three hospitals [3-51. Mothers without medical complications were offered the choice of conventional hospital stay or early discharge with domiciliary support. Those who chose early discharge were sent home within 3 days of the baby’s birth. Postnatal care at home for the first week after birth was provided by midwives based in the Domiciliary Midwifery Programme (DMP) at each hospital, who visited mothers and infants daily or twice daily as required. Women without medical complications who chose not to take early discharge received conventional care which included no routine home visits.

The evaluation involved a prospective comparison of two groups of women: those who chose early discharge and those who did not. In terms of their medical condi- tions, the women in each group were similar. However, the self-selected nature of the groups may have introduced a bias, the implications of which are discussed below. The study included a comparison of length of stay, costs falling on the hospital and on the wider community, and client satisfaction.

Overall, the average length of stay of women who chose early discharge was 2.3 days lower than that of women who chose to remain in hospital. However, the value of hospital resources released as a result, even under favourable assumptions, was not sufficient to offset the costs of the domiciliary midwifery support. Client satisfaction was high among both groups and was more positive among mothers who chose early discharge. The time costs of relatives and friends increased as a result of early discharge.

The two groups of women were self-selected and therefore were different in certain respects. Women who chose to stay in hospital were more likely to be first-time mothers, to have less confidence in their ability as mothers in the postnatal period and to have lower expectations about their health following the birth of the baby, than women who chose early discharge. Among experienced mothers, those with little support at home were more likely to opt for the longer hospital stay.

The second initiative was the fractured hip management programme (FHMP). This used a multidisciplinary team approach in the care of elderly patients with hip fracture. The aim was to reduce delays before surgery, to provide specialist geriatric medical supervision and to encourage early post-operative mobility with planned discharge and rehabilitation provided in the patient’s normal (home) environment. The team included a nurse co-ordinator, a physiotherapist, an occupational thera- pist, a social worker and orthopaedic and geriatric medical staff.

The evaluation took the form of a before-and-after study and compared a cohort of patients who were treated before the introduction of the programme with a cohort of patients who were treated after its introduction [6]. The two groups were similar in all respects apart from pre-admission residency. In the before-group a greater proportion of patients had been living in a nursing home at the time of their fracture. Length of stay, hospital costs, mortality at discharge and at 12 months post- discharge, and readmissions for post-operative complications were compared.

On average, length of stay was 8 days shorter in the programme group, costs per episode of care were substantially lower and there was no increase in readmission rates or mortality.

The third scheme was the continuing community cancer care or ‘AC programme. This aimed to provide cancer and palliative care patients and their carers with in-

A. Scoit et al. /Health Policy 26 (1993) 81-91 85

creased domiciliary support, in order to reduce hospital admissions and length of stay and to improve quality of life for patients and carers. There were several aspects to the programme: the operation of a day centre, the provision of an after-hours and weekend domiciliary nursing service, home care services, and a consultative medical service. The evaluation focussed on the after-hours nursing service, which was expected to reduce hospital admissions and length of stay by better management of symptoms in the patient’s own home. This supplemented existing community nursing by providing support outside normal working hours. Patients were referred initially to their local community health service and were then registered with the after-hours nursing service if appropriate.

The evaluation also adopted a ‘before and after’ study design and compared a cohort of patients treated before the programme was introduced with a matched cohort of patients treated after the programme was introduced [7]. The number of bed-days spent in hospital during the last 90 days of each patient’s life was compared for each group. Carer satisfaction with 4C was also analysed, and the cost of 4C evaluated.

Neither the proportion of patients admitted to hospital during the last 90 days of life, nor the number of days each person spent in hospital once admitted, were different in the two groups of patients. There was some redirection of patients away from expensive tertiary facilities into less expensive district hospitals and hospices, but this was not sufficient to offset the additional costs of the after-hours nursing service. Carer satisfaction was high but could not be compared with satisfaction with care before the introduction of 4C.

In summary, the results of the three evaluations are mixed. The FHMP appears to have been successful both in reducing length of stay and improving the cost- effectiveness of the geriatric orthopaedic service. The obstetrics early discharge programme succeeded in reducing length of stay but not to such an extent that the value of the resources it released offset its costs. The 4C programme did not reduce hospital utilisation. The cost-effectiveness of both the obstetrics scheme and the 4C programme therefore depends as much on the impact each had on outcomes.

The implications of the work by Jonsson and Lindgren suggest the need to look more closely at the results of evaluations of early discharge schemes to see if the conclusions drawn from such studies erroneously perpetuate the widely held myths about the value of early discharge.

3. The myths of early discharge

3.1. Early discharge schemes succeed in reducing length of hospital stay

In two of the studies, lengths of stay fell following the introduction of the early discharge scheme. The 4C programme had no significant effects on hospital utilisation. However, closer examination of the scheme showed that a major reason for its failure to reduce hospital admissions and stays was a deficiency in programme design. For legal reasons, the after-hours nursing service had inadequate access to pain-killing drugs, so that alterations to prescriptions had to wait until the following


day for medical authorisation. This shortcoming was addressed, but not in time to affect the results of the evaluation.

Obviously, the structural features of a programme must be adequate to ensure that it succeeds in meeting its objectives. However, evaluating the performance of an early discharge scheme must go beyond showing that lengths of stay fell following its introduction. It is also necessary to be able to attribute that fall to the scheme.

Both the FHMP and the obstetrics programme suffered from faults in study design that made it difficult to attribute the complete change in length of stay to the early discharge scheme. In the obstetrics scheme, the two groups of women were self- selected and were therefore not directly comparable. More first-time mothers opted for conventional hospital stay. If first-time mothers have longer lengths of stay than experienced mothers, then the average length of stay of this group would be higher than would otherwise be the case. The reduction in length of stay attributed to the programme would then be exaggerated by differences in patient mix. This bias did not significantly influence the results.

Lengths of stay have also been falling over time for reasons not associated with early discharge schemes [8]. In the FHMP, the ‘before and after’ study design made it difficult to distinguish the effect of the programme on the reduction in length of stay from that which would have occurred anyway as part of the secular trend. The case management approach in the FHMP resulted in patients having earlier surgery. This also contributed to the overall reduction in length of stay of 8 days.

3.2. Early discharge schemes save money

Common to each of the programmes was the attempt to reduce hospital lengths of stay by replacing hospital-days with domiciliary support. In general, therefore, an assessment of the net cost of early discharge schemes should consider the value of hospital resources released by reductions in length of stay as well as the additional costs of the community programmes. Computing the costs of the domiciliary element of early discharge schemes will usually present few conceptual problems, though the logistics of gathering the information may be complex. The difficulties arise in estimating the value of the hospital bed-days released and in computing the costs incurred by families and carers.

As Jonsson and Lindgren noted, the financial savings achieved by reducing lengths of stay and closing beds are unlikely to equal the average cost of the bed. First, the bed-days released towards the end of each patient’s stay are usually cheaper. Second, in the short run, fixed and semi-fixed costs such as capital costs and the costs of hospital administration, energy consumption and, most importantly, staffing cannot be saved at the same rate as bed-days are released. Only in the long run, when new hospital facilities would otherwise need to be built, can financial savings in staff, equipment and buildings be realised. New facilities will require fewer beds for the same number and type of patients, and will therefore be smaller in scale. In the interim, hospital expenditure is likely to increase as both the hospital service and its domiciliary counterpart are funded in tandem.

The problem of cost is not just one of financial expenditures. In economic terms, the value of the resources (the freed bed-days) released by the early discharge

A. Scott et al. /Health Policy 26 (1993) 81-91 87

schemes depends on the alternative uses to which they can be put. For the purposes of the evaluations reported here, it was assumed that the freed beds would be used by other patients with similar needs, an assumption that seemed reasonable given the existence of waiting lists, and a local population growing faster than the number of hospital beds. The average cost of the resources associated with each bed-day can then be used as a proxy for its economic value. However, there may be several alternative uses to which the freed resources could be directed, each of which would have a different economic value. The assumption is only valid, therefore, if patients who are equally likely to benefit from hospitalisation as those who are discharged early are admitted to the freed beds.

In addition to the costs incurred by hospitals and community agencies, early discharge may impose costs on patients or their relatives. Most notable among these costs is the additional burden of looking after someone who is discharged earlier than would otherwise be the case, and perhaps in a more dependent state [9].

3.3. The welfare of clients is not reduced by early discharge

For each of the three schemes evaluated, reviews of the literature suggested that client satisfaction and health status following early discharge were likely to be at least equivalent to those achieved by standard care. The results of the evaluations tend to support this literature. Satisfaction with both the obstetrics and the 4C programmes was high, and mortality and morbidity following hip fracture was no higher with early discharge.

Thus, it would seem that the early discharge schemes considered here did not reduce conventional measures of patient welfare (satisfaction and health status). However, there are other facets of care that may be important to clients and that increase their welfare. One of the most important of these in the context of this paper was the extension of choice that the obstetrics programme and the 4C programme provided.

The existence of choice may not always lead to increases in welfare. Some people may prefer to leave such decisions to the professionals involved, because they are too anxious, out of respect for their professional knowledge, or to avoid feelings of regret should a risky choice turn out wrong [lo]. Where patients actively want in- volvement, the opportunity to exercise informed choice about the care they receive must increase their welfare, if only because no-one need choose an option that would make him or her any less well off.

In the obstetrics programme, women were given a choice over the location of their postnatal care. The results suggested that women did choose on the basis of their own perceived needs. Mothers lacking in confidence, wanting professional help (or at least reassurance), or with little home support chose to stay in hospital.

Experienced mothers with supportive partners or families chose to go home early. Most mothers, irrespective of the choice they made, expressed a high level of satisfaction with the care they received. However, it is not known if mothers would be as highly satisfied if they were not offered the choice and autonomy.

Similarly, the 4C programme provided an out-of-hours nursing service to patients to utilise as they needed. The service met an option demand in which the availability


of the service, independent of its use, was valued. Simply the knowledge that someone was available at the end of the telephone to offer advice and practical assistance should it be required was a source of comfort to the carers.

This raises several issues. First, to what extent should certain dimensions of welfare such as satisfaction, patient choice or option demand be considered legiti- mate outcomes of the service? Second, such effects are unlikely to be picked up by conventional measures of outcome. Therefore, the content validity of the instruments used in the evaluation must be assured. Third, the value of such dimensions of outcome, relative to changes in health and to changes in cost, needs to be ascer- tained in order to consider the cost-effectiveness of health programmes. Finally, the distribution of costs and benefits needs to be considered. The costs of the obstetrics early discharge scheme, for example, were not borne by the beneficiaries. Each woman’s choice of location of postnatal care might have been influenced by personal costs, but was not constrained by the health-care costs involved in making that choice available.

3.4. Early discharge schemes are cost-effective

The cost-effectiveness of early discharge schemes depends on the comparison of opportunity costs and benefits. Obviously, the costs of early discharge may be higher than, lower than, or equal to, the costs of conventional hospital care. Similarly, the outcomes may be better, worse or no different (Table 2). If the costs of early discharge are no more than conventional care, and outcomes are better, then early discharge is obviously cost-effective. Similarly, if the outcomes are no better but the costs are higher than conventional care, then early discharge is not cost-effective. Problems arise if, as is most likely, the more expensive option is also the more effective. A value judgement, which lies beyond the scope of cost-effectiveness analysis, must then be made. Is the value of the improvement in client welfare worth the extra cost? Alternatively, is the value of the cost savings to be secured by adopting the cheaper option sufficient to offset the reduction in welfare that results? The role of economic evaluation in this case is to make explicit the nature of the decision involved. It informs rather than replaces decision making.

Table 2 Decision rules for judging cost-effectiveness

Change in benefits Change in opportunity cost

Increased No change Decreased

Increased No change Decreased

? r/ / x E I/

x X ?

Key: I/, new intervention is more cost-effective than the status quo, and should be adopted; x, new intervention is less cost-effective than the status quo, and should not be adopted; I, new intervention is as cost-effective as the status quo; either can be adopted; ?, no conclusion can be made.

A. Scott et al. /Heahh Policy 26 (1993) 81-91 89

Of the programmes evaluated here, only the FHMP fell into either of those categories in which the result was clear-cut. The FHMP succeeded in releasing resources valued more highly than its costs and did so without reducing outcomes in any obvious way. The improved options that the obstetrics and 4C programmes provided make it highly likely that the welfare of women who wanted to be involved in choice of postnatal care, and of carers of patients in the terminal stages of illness, was improved by the early discharge schemes. However, both programmes involved additional costs, and so each falls into the top left-hand box of Table 2.

The mechanism by which each scheme reduces length of stay is also of importance when assessing its cost-effectiveness. Lengths of stay can be reduced either by better internal organisation of existing resources or by investment in additional resources in the form of community care. This raises questions about whether the cost- effectiveness of sub-elements of the programme may be different.

Investment in additional domiciliary support was deemed essential in the obstetrics scheme in order to reduce lengths of stay without jeopardising health outcome. However, the question of how much domiciliary support would be necessary was not addressed by those implementing the programme. The average number of postnatal visits per mother varied across the three sites from 4.3 to 6 visits. Some of this varia- tion could be explained by differences in the needs of mothers. The remainder arose because of spare capacity in the domiciliary midwifery service. The marginal effectiveness of the fifth and sixth visits is unlikely to be as great as the first or second.

In contrast, an important part of the FHMP’s success in reducing length of stay was better organisation of resources within the hospital. The FHMP programme had a substantial effect on length of stay, but 20% of the reduction was achieved by reducing delays between admission to hospital and surgery. This was brought about by the identification of a nurse co-ordinator who adopted a ‘case-management’ role 1111.

Similarly, the cost-effectiveness of the programme may be different according to the sub-group of patients. For example, patients in the FHMP were classified by their dependency (defined by pre-admission residence). Of the 6.4 days’ reduction in length of stay after surgery, 20% was attributable to the most dependent group and 80% was attributable to the least dependent group. Thus, a programme that serves a population of relatively dependent clients will not achieve the level of savings demonstrated here.

4. Conclusion

The factual status of four commonly held beliefs about the value of early discharge schemes, first questioned by Jonsson and Lindgren, has been reassessed. These beliefs were that early discharge schemes succeed in reducing length of stay, that early discharge schemes save money, that the welfare of patients is not reduced and that early discharge schemes are cost-effective. Evaluations of three schemes in Western Sydney were used to examine whether the caution expressed by Jonsson and Lind- gren about the value of such schemes is still warranted.

The main conclusion is that the scepticism expressed by Jonsson and Lindgren of the perceived advantages of early discharge schemes is still justified. Since they first


wrote about the subject 13 years ago, the myths about the value of early discharge schemes have been difficult to dispel in the minds of health care planners [12]. Early discharge schemes have been, and continue to be, proposed as a way in which hospital costs can be reduced. However, the experience in Western Sydney suggests that this is rarely the case. Costs were shifted onto community programmes, and the value of resources released by early discharge schemes was not always sufficient to offset the costs of such schemes.

In addition, two further conclusions can be drawn. First, the evaluation of early discharge schemes is complex. The study design has to be correct in order to attribute effects to cause, the objectives of the schemes need to be specified in order to identify the relevant dimensions of outcome, the evaluation instruments need to be validated and comprehensive and the importance of sub-group and sub- programme analysis needs to be considered.

Secondly, the effectiveness of early discharge schemes goes beyond their impact on health. In both the obstetrics scheme and the 4C programme, traditional health outcomes were left unaffected. The additional costs of the schemes, therefore, suggest that neither was cost-effective. However, both increased the options available to their respective users and undoubtedly improved their welfare as a result. It may be that the improvement in welfare that resulted was not sufficient to offset the extra costs of the schemes. These questions were beyond the scope of the economic appraisal. What is clear is that the value of early discharge schemes goes beyond the impact they have on expenditure.

5. Acknowledgments

These evaluations were funded by the NSW Department of Health through the Western Sydney Area Health Service under the Medicare Incentive Package. The help of the staff involved in each scheme is gratefully acknowledged. In particular we thank Prof. R. Kefford, Prof. S. Nade, Dr. M. Price, Ms. J. Madeline and Ms. S. Psaila. Assistance with study design, data collection and comments on various drafts is also gratefully acknowledged from colleagues at the Centre for Health Economics Research and Evaluation and the Department of Community Medicine at Westmead Hospital, in particular Ms. S. Cameron, Ms. P. Kenny, Ms. M. King and Prof. D.J. Newell. Thanks also go to Michael Aristides for the 4C evaluation. All the usual disclaimers apply, and all opinions expressed in this paper and any remaining errors are the sole responsibility of the authors.

6. References

1 Poullier, J.P. and Sandier, S., OECD Health Data: a Software Package for the International Com- parison of Health Care Systems: User’s Manual, Version 1.01. OECD/CREDES, Paris, 1991.

2 Jonsson, B. and Lindgren, B., Five common fallacies in estimating the economic gains of early discharge, Social Science and Medicine, 14 (1980) 27-33.

3 Scott, A., A cost analysis of early discharge and domiciliary visits versus standard hospital care for low risk obstetric clients, Australian Journal of Public Health, in press.

4 Kenny, P.. King, M., Cameron, S. and Shiell, A.. Satisfaction with postnatal care: the choice of home or hospital, Midwifery, 9 (1993) 146-153.

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Shiell, A., Cameron, S., Kenny, P. and King, M., A mother’s choice: the reasons women choose hospital stay over early discharge, Health and Social Care in the Community, 9 (1993) 146-153. Farnworth, M. and Kenny, P., An Economic Evaluation of a Fractured Hip Management Program. Discussion Paper 8, Centre for Health Economics Research and Evaluation, Department of Com- munity Medicine, Westmead Hospital, Westmead, NSW, 1992. Aristides, M., Shiell, A., Hall, J., Cameron, S. and Madeline, J., Out of hours: An Evaluation of Continuing Community Cancer Care Program in Western Sydney, Discussion Paper 20, Centre for Health Economics Research and Evaluation, Department of Community Medicine, Westmead Hos- pital, Westmead, NSW, 1992. Clavarino, L. and Gibberd, R., New South Wales hospital separations, 1979-1988/89 and projec- tions for 2001, New South Wales Health Services Research Group, University of Newcastle, Newcastle, 1990. Harrison, A.J. and Quarmby, D.A., The value of time. In R. Layard (Ed.). Cost-Benefit Analysis. Penguin, 1972. Ryan, M., The Economic Theory of Agency in Health Care: Lessons from Non-economists for Economists, Discussion Paper 03192. Health Economics Research Unit, University of Aberdeen. Aberdeen, 1992. Shiell, A., Farnworth, M.G. and Kenny P., The role of the clinical nurse coordinator in the provision of cost-effective orthopaedic services for the elderly, Journal of Advanced Nursing, 18 (1993) 1424-1428. Schwartz, W.B. and Mendelson, D.N., Hospital cost containment in the 1980s: hard lessons learned and prospects for the 1990s. New England Journal of Medicine, 324 (1991) 1037-1042.

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The value of early discharge: Dispelling some myths