Analyzing inpatient hospital duration and intensity: a methodology.

As a complement to a number of existing cost-containment programs, Blue Cross of Maryland developed a length of stay (LOS) review process for its members. The method is based on the premise that the utilization of hospital inpatient services varies along two major dimensions--service duration (expressed in days of hospital stay) and service intensity (expressed as the proportion of ancillary service charges to total charges). Composed of seven steps, the method statistically analyzes the relationship between LOS and ancillary service charges as a proportion of total charges for selected diagnoses. The attempt to monitor two dimensions of inpatient care simultaneously is a departure from existing utilization review methods. Besides a detailed description of each step in this methodology, this article presents preliminary findings from a pilot study conducted in eight Baltimore hospitals.