Identification and assessment of a comprehensive set of structural factors associated with hospital costs in Switzerland.

Structural factors can influence hospital costs beyond case-mix differences. However, accepted measures on how to distinguish hospitals with regard to cost-related organizational and regional differences are lacking in Switzerland. Therefore, the objective of this study was to identify and assess a comprehensive set of hospital attributes in relation to average case-mix adjusted costs of hospitals. Using detailed hospital and patient-level data enriched with regional information, we derived a list of 23 cost predictors, examined how they are associated with costs, each other, and with different hospital types, and identified principal components within them. Our results showed that attributes describing size, complexity, and teaching-intensity of hospitals (number of beds, discharges, departments, and rate of residents) were positively related to costs and showed the largest values in university (i.e., academic teaching) and central general hospitals. Attributes related to rarity and financial risk of patient mix (ratio of rare DRGs, ratio of children, and expected loss potential based on DRG mix) were positively associated with costs and showed the largest values in children's and university hospitals. Attributes characterizing the provision of essential healthcare functions in the service area (ratio of emergency/ ambulance admissions, admissions during weekends/ nights, and admissions from nursing homes) were positively related to costs and showed the largest values in central and regional general hospitals. Regional attributes describing the location of hospitals in large agglomerations (in contrast to smaller agglomerations and rural areas) were positively associated with costs and showed the largest values in university hospitals. Furthermore, the four principal components identified within the hospital attributes fully explained the observed cost variations across different hospital types. These uncovered relationships may serve as a foundation for objectifying discussions about cost-related heterogeneity in Swiss hospitals and support policymakers to include structural characteristics into cost benchmarking and hospital reimbursement.

Hospital-based health systems 20 years later: A taxonomy for policy research and analysis.

OBJECTIVE: Building on the original taxonomy of hospital-based health systems from 20 years ago, we develop a new taxonomy to inform emerging public policy and practice developments. DATA SOURCES: The 2016 American Hospital Association's (AHA) Annual Survey; the 2016 IQVIA Healthcare Organizations and Systems (HCOS) database; and the 2017-2018 National Survey of Healthcare Organizations and Systems (NSHOS). STUDY DESIGN: Cluster analysis of the 2016 AHA Annual Survey data to derive measures of differentiation, centralization, and integration to create categories or types of hospital-based health systems. DATA COLLECTION: Principal components factor analysis with varimax rotation generating the factors used in the cluster algorithms. PRINCIPAL FINDINGS: Among the four cluster types, 54% (N = 202) of systems are decentralized (-0.35) and relatively less differentiated (-0.37); 23% of systems (N = 85) are highly differentiated (1.28) but relatively decentralized (-0.29); 15% (N = 57) are highly centralized (2.04) and highly differentiated (0.65); and approximately 9 percent (N = 33) are least differentiated (-1.35) and most decentralized (-0.64). Despite differences in calculation, the Highly Centralized, Highly Differentiated System Cluster and the Undifferentiated, Decentralized System Cluster were similar to those identified 20 years ago. The other two system clusters contained similarities as well as differences from those 20 years ago. Overall, 82 percent of the systems remain relatively decentralized suggesting they operate largely as holding companies allowing autonomy to individual hospitals operating within the system. CONCLUSIONS: The new taxonomy of hospital-based health systems bears similarities as well as differences from 20 years ago. Important applications of the taxonomy for addressing current challenges facing the healthcare system, such as the transition to value-based payment models, continued consolidation, and the growing importance of the social determinants of health, are highlighted.

Cost Minimization Analysis of a Teledermatology Triage System in a Managed Care Setting.

Importance: Teledermatology (TD) enables remote triage and management of dermatology patients. Previous analyses of TD systems have demonstrated improved access to care but an inconsistent fiscal impact. Objective: To compare the organizationwide cost of managing newly referred dermatology patients within a TD triage system vs a conventional dermatology care model at the Zuckerberg San Francisco General Hospital and Trauma Center (hereafter referred to as the ZSFG) in California. Design, Setting, and Participants: A retrospective cost minimization analysis was conducted of 2098 patients referred to the dermatology department at the ZSFG between June 1 and December 31, 2017. Intervention: Implementation of the TD triage system in January 2015. Main Outcomes and Measures: The main outcome was mean cost to the health care organization to manage newly referred dermatology patients with or without TD triage. To estimate costs, decision-tree models were constructed to characterize possible care paths with TD triage and within a conventional dermatology care model. Costs associated with primary care visits, dermatology visits, and TD visits were then applied to the decision-tree models to estimate the mean cost of managing patients following each care path for 6 months. The mean cost for each visit type incorporated personnel costs, with the mean cost per TD consultation also incorporating software implementation and maintenance costs. Finally, ZSFG patient data were applied within the models to evaluate branch probabilities, enabling calculation of mean cost per patient within each model. Results: The analysis captured 2098 patients (1154 men [55.0%]; mean [SD] age, 53.4 [16.8] years), with 1099 (52.4%) having Medi-Cal insurance and 879 (41.9%) identifying as non-White. In the decision-tree model with TD triage, the mean (SD) cost per patient to the health care organization was $559.84 ($319.29). In the decision-tree model for conventional dermatology care, the mean (SD) cost per patient was $699.96 ($390.24). Therefore, the TD model demonstrated a statistically significant mean (SE) cost savings of $140.12 ($11.01) per patient. Given an annual dermatology referral volume of 3150 patients, the analysis estimates an annual savings of $441 378. Conclusions and Relevance: Implementation of a TD triage system within the dermatology department at the ZSFG was associated with cost savings, suggesting that managed health care settings may experience significant cost savings from using TD to triage and manage patients.

Strategic management in local hospital markets: service duplication or service differentiation.

BACKGROUND: The purpose of this study is to assess the influences of market structure on hospitals' strategic decision to duplicate or differentiate services and to assess the relationship of duplication and differentiation to hospital performance. This study is different from previous research because it examines how a hospital decides which services to be duplicated or differentiated in a dyadic relationship embedded in a complex competitive network. METHODS: We use Linear Structural Equations (LISREL) to simultaneously estimate the relationships among market structure, duplicated and differentiated services, and performance. All non-federal, general acute hospitals in urban counties in the United States with more than one hospital are included in the sample (n = 1726). Forty-two high-tech services are selected for the study. Data are compiled from the American Hospital Association Annual Survey of Hospitals, Area Resource File, and CMS cost report files. State data from HealthLeaders-InterStudy for 2015 are also used. RESULTS: The findings provide support that hospitals duplicate and differentiate services relative to rivals in a local market. Size asymmetry between hospitals is related to both service duplication (negatively) and service differentiation (positively). With greater size asymmetry, a hospital utilizes its valuable resources for its own advantage to thwart competition from rivals by differentiating more high-tech services and reducing service duplication. Geographic distance is positively related to service duplication, with duplication increasing as distance between hospitals increases. Market competition is associated with lower service duplication. Both service differentiation and service duplication are associated with lower market share, higher costs, and lower profits. CONCLUSIONS: The findings underscore the role of market structure as a check and balance on the provision of high-tech services. Hospital management should consider cutting back some services that are oversupplied and/or unprofitable and analyze the supply and demand in the market to avoid overdoing both service duplication and service differentiation.

Brazilian hospitals' performance: an assessment of the unified health system (SUS).

This paper assesses the economic efficiency of Brazilian general hospitals that provide inpatient care for the Unified Health System (SUS). We combined data envelopment analysis (DEA) and spatial analysis to identify predominant clusters, measure hospital inefficiency and analyze the spatial pattern of inefficiency throughout the country. Our findings pointed to a high level of hospital inefficiency, mostly associated with small size and distributed across all Brazilian states. Many of these hospitals could increase production and reduce inputs to achieve higher efficiency standards. These findings suggest room for optimization, but inequalities in access and the matching of demand and supply must be carefully considered in any attempt to reorganize the hospital system in Brazil.

Care of Pediatric High-Cost Hospitalizations Across Hospital Types.

BACKGROUND: High-cost hospitalizations (HCHs) account for a substantial proportion of pediatric health care expenditures. We aimed to (1) describe the distribution of pediatric HCHs across hospital types caring for children and (2) compare characteristics of pediatric HCHs by hospital type. METHODS: Cross-sectional analysis of all pediatric hospitalizations in the 2012 Kids' Inpatient Database. HCHs were defined as costs >$40 000 (94th percentile). Hospitals were categorized as children's, small general, and large general. RESULTS: Approximately 166 000 HCHs were responsible for 50.8% of aggregate hospital costs ($18.1 of $35.7 billion) and were mostly at children's hospitals (65%). Children with an HCH were largely neonates (45%), had public insurance (50%), and had ≥1 chronic condition (74%). A total of 131 children's hospitals cared for a median of 559 HCHs per hospital (interquartile range [IQR]: 355-1153) compared to 76 HCHs per hospital (IQR: 32-151) at 397 large general hospitals and 5 HCHs per hospital (IQR: 2-22) at 3581 small general hospitals. The median annual aggregate cost for HCHs was $60 million (IQR: $36-$135) per children's hospital compared to $6.6 million (IQR: $2-$15) per large general hospital and $300 000 (IQR: $116 000-$1.5 million) per small general hospital. HCHs from children's hospitals encompassed nearly 5 times as many unique clinical conditions as large general hospitals and >30 times as many as small general hospitals. CONCLUSIONS: Children's hospitals cared for a disproportionate volume, cost, and diversity of HCHs compared to general hospitals. Future studies should characterize the factors driving cost, resources, and reimbursement practices for HCH to ensure the long-term financial viability of the pediatric health care system.

All-payer Spending on Common Hospital-based Services in California.

BACKGROUND: Hospital-based care accounts for one third of US health spending or over $1 trillion annually, yet a detailed all-payer assessment of what services contribute to this spending is not available. STUDY DESIGN: Cross-sectional and longitudinal evaluation of hospital financial statements from acute-care general hospitals in California between fiscal years 2007 and 2016. The amounts spent on 41 different revenue centers were included. The primary outcome was state-level and hospital-level spending for each revenue center including decomposing growth trends into changes in volume and prices. RESULTS: The analysis included 2941 annual financial statements from 331 hospitals. Between 2007 and 2016, total spending across all centers increased 66.6% from $43.7B to $72.9B. Five centers-surgery and recovery, drugs sold to patients, acute medical/surgical floor, the clinical laboratory, and emergency services-accounted for over 50% of total spending in 2016. Overall spending growths ranged from 1.1%/y (acute pediatrics) to 17.9%/y (observation). Other revenue centers with large increases in spending included emergency services (164.7%), clinics (on-site 114.5%, satellite 129.7%), anesthesia (119.6%), echocardiography (114.4%), and computed tomography (100.8%). Most services had volume growths within ±2%/y, although there were exceptions (eg, observation hours increased 10.0%/y). Prices grew fastest for echocardiograms (10.5%/y), cardiac catheterization (9.7%/y), therapeutic radiology (8.0%/y), and emergency visits (7.5%/y). In general, median prices for services in 2016 were larger than Medicare allowed amounts. CONCLUSIONS: Overall hospital-based spending increased 66.6% between 2007 and 2016 in California, but there was wide variation in spending growth across revenue centers. Understanding this variation-including the relative contributions of volumes and prices-can guide efforts to curb excessive health care spending and optimize resource dedication to current and future patient care needs.

Do independent treatment centers offer more value than general hospitals? The case of cataract care.

OBJECTIVE: To identify differences between independent treatment centers (ITCs) and general hospitals (GHs) regarding costs, quality of care, and efficiency. DATA SOURCES: Anonymous claims data (2013-2015) were used. We also obtained quality indicators from a semipublic platform. STUDY DESIGN: This study uses a comparative multilevel analysis, controlling for case mix, to evaluate the performance of ITCs and GHs for patients diagnosed with cataract. DATA COLLECTION: Reimbursement claims were extracted from existing claims databases of the largest Dutch health insurer. Quality indicators were obtained by external agencies through a mixed-mode survey. PRINCIPAL FINDINGS: There are no stark differences in complexity of cases for cataract care. ITCs seem to perform surgeries more frequently per care pathway, but conduct a lower number of health care activities per surgical claim. Total average costs are lower in ITCs compared with GHs, but when adjusted for case mix, the differences in costs are lower. The findings with the adjusted quality differences suggest that ITCs outperform GHs on patient satisfaction, but patients' outcomes are similar. CONCLUSION: This finding supports the postulation-based on the focus factory theory-that ITCs can provide more value for cataract care than GHs.

Should Hospital Emergency Departments Be Used as Revenue Streams Despite Needs to Curb Overutilization?

This case asks how a hospital should balance patients' health needs with its financial bottom line regarding emergency department utilization. Should hospitals engage in proactive population health initiatives if they result in decreased revenue from their emergency departments? Which values should guide their thinking about this question? Drawing upon emerging legal and moral consensus about hospitals' obligations to their surrounding communities, this commentary argues that treating emergency departments purely as revenue streams violates both legal and moral standards.

Cure for increasing health care costs: The Bernhoven case as driver of new standards of appropriate care.

Containing costs is a major challenge in health care. Cost and quality are often seen as trade-offs, but high quality and low costs can go hand-in-hand as waste exists in unnecessary and unfounded care. In the Netherlands, two healthcare insurers and a hospital collaborate to improve quality of care and decrease healthcare costs. Their aim is to reduce unnecessary care by shifting the business model and culture from a focus on volume to a focus on quality. Key drivers to support this are taking time for integrated diagnosis ('first time right'), the right care at the right place and shared decision making between doctor and patient. Conditions to realize this are 1) contract innovation between the hospital and insurers to move away from fee-for-service reimbursement, 2) a culture change within the organization with emphasis on collaboration and empowerment of medical leadership and physicians to change daily practice, and 3) a reorganization of the hospital organization structure from a large number of medical departments to four business units related to the fundamental underlying patient need (acute care, solution shop, intervention unit and chronic care). Results from this whole-system-approach experiment show it is possible to provide better care (as experienced by patients) with lower volumes (16% lower DRG claims after 3 years) and provides valuable lessons for further healthcare reform.

Are cost differences between specialist and general hospitals compensated by the prospective payment system?

Prospective payment systems fund hospitals based on a fixed-price regime that does not directly distinguish between specialist and general hospitals. We investigate whether current prospective payments in England compensate for differences in costs between specialist orthopaedic hospitals and trauma and orthopaedics departments in general hospitals. We employ reference cost data for a sample of hospitals providing services in the trauma and orthopaedics specialty. Our regression results suggest that specialist orthopaedic hospitals have on average 13% lower profit margins. Under the assumption of break-even for the average trauma and orthopaedics department, two of the three specialist orthopaedic hospitals appear to make a loss on their activity. The same holds true for 33% of departments in our sample. Patient age and severity are the main drivers of such differences.

Financial implications of laparoscopic hot gallbladder service in a nontertiary District General Hospital.

INTRODUCTION: The service of providing index admission laparoscopic cholecystectomy (IALC), as recommended by NIC guidelines, often falls short in nontertiary centres because of a combination of limited resources and financial constraints. METHODS: This retrospective study in a single-centre District General Hospital included 50 patients, eligible to undergo IALC, and calculated potential savings from performing IALC on the day of admission by considering admission tariffs, bed, and operating costs. RESULTS: The IALC was provided in 19 patients (38%), with a mean delay from admission to operation of (median) 3 days. Mean surplus tariff was £1421 and £1571 in IALC and non-IALC groups, respectively. Performing immediate IALC (on the day of admission) for acute cholecystitis (AC) is predicted to increase mean surplus tariff to £2132 per patient, raising total predicted annual surplus by £53 000. Immediate IALC is also predicted to reduce waiting time for day-case LC by freeing up 53 day-case slots, attracting additional £95 600 annually, along with freeing up many inpatient bed days. CONCLUSIONS: This study demonstrates that reduction of preoperative stay in AC by expediting operations in every eligible patient promises significant surplus revenue. Additional advantages include reducing inpatient bed days and freeing up operating lists that are otherwise taken up by patients for interval cholecystectomy.

Centralized care for acute pancreatitis significantly improves outcomes.

AIMS: In this observational study, we investigated whether specialized care improves outcomes for acute pancreatitis (AP). METHODS: Consecutive patients admitted to two university hospitals with AP were enrolled in this study between 1 January 2016 and 31 December 2016 (Center A: specialized center; Center B: general hospital). Data on demographic characteristics and AP etiology, severity, mortality and quality of care (enteral nutrition and antibiotic use) were extracted from the Hungarian Acute Pancreatitis Registry. An independent sample t-test, Mann-Whitney test, chi-squared test or Fisher's test were used for statistical analyses. Costs of care were calculated and compared in the two models of care. RESULTS: There were 355 patients enrolled, 195 patients in the specialized center (Center A) and 160 patients in the general hospital (Center B). There was no difference in mean age (57.02 +/-17.16 vs. 57.31 +/-16.50 P=0.872) and sex ratio (56% males vs. 57% males, P=0.837) between centres, allowing a comparison without selection bias. Center A had lower mortality (n=2, 1.03% vs. n=16, 6.25%, p=0.007), more patients received enteral feeding (n=179, 91.8%, vs. n=36, 22.5%, p<0.001) and fewer patients were treated with antibiotics (n=85, 43.6% vs. n=123, 76.9%, p=0.001). In Center A the median length of hospitalization was shorter (Me 6, IQR 5-9 vs. Me 8, IQR 6-11, p=0.02) and the costs of care were by 25% lower. CONCLUSION: Our data suggests that treatment of AP in specialized centers reduces mortality, length of hospitalization and thus might reduce the costs.

Dehospitalisation at a general hospital in Minas Gerais: challenges and prospects. / A desospitalização em um hospital público geral de Minas Gerais: desafios e possibilidades.

OBJECTIVE: To analyse the dehospitalisation process at a general public hospital in Minas Gerais, Brazil, from the perspective of managers, health workers, users and their families. METHODS: This is a qualitative, exploratory, descriptive study based on the principles of methodological and theoretical dialectics. The participants were 24 hospital health workers and 15 companions of users going through the process of dehospitalisation. Data were collected from April to June 2015 using semi-structured interviews and a field journal records and subsequently subjected to content analysis. RESULTS: Analysis of the empirical material led to the construction of the following categories: Dehospitalisation: viewpoint of the institution and Family organisation for the dehospitalisation process. CONCLUSION: The study reveals a deficiency in the implementation, systematisation, internal reorganisation and continuity of care after dehospitalisation. Current dehospitalisation strategies do not favour comprehensiveness and continuity of home care.

Reducing complications and overall healthcare costs of hip fracture management: a retrospective study on the application of a Diagnostic Therapeutic Pathway in the Cosenza General Hospital.

BACKGROUND: Diagnostic Therapeutic Pathways (DTPs) are multidisciplinary plans designed by each healthcare organization for a specific category of patients to reduce the variability of professional behaviors and to ensure greater safety and better overall healthcare outcomes. Hip fractures are a frequent traumatic injury, particularly in the elderly, and DTPs recommend early surgical intervention, often not done due to organizational challenges and bureaucracy. Medical conditions suggesting a delay are not frequent, however long waiting times not only increase the risk of complications and mortality, but also increase the number of diagnostic test and physician consultations. This study tried to understand the benefits of performing surgical intervention within 48 hours in terms of cost savings, reduction of complications and better overall outcomes. We performed statistical analyses on data gathered from 130 patients submitted to DTPs, and we evaluated the benefits obtained by operating within 48 hours in terms of resource saving (number of physician consultations, hospitalization days, etc.), reduction in complications reported in the literature. METHODS: About 40% of clinical records of femoral fractures from 2015 at the Cosenza General Hospital were used in our statistical analysis taking into account independent variables such as age, sex,surgery waiting times and ASA (e.g. American Society of Anesthesiologists) score. Additionally, dependent variables such as: the type of complications during the hospital stay (e.g. infections, delirium, etc), days of hospitalization, and number of physician consultations were considered. RESULTS: The average waiting time for surgical intervention was 5.48 days (132 hr). Patients with ASA score of 4 had a greater chance of complications (p-value 0.03), whereas patients operated within 48 hours avoided complications, and spent fewer days in the hospital. The ASA score value correlated positively with the number of physician consultation, as the ASA score increased in number, so did the number of physician consultations. Moreover, each additional day of waiting increased the possibility of physician consultation by approximately 13. CONCLUSION: The lack of available hospital beds and staff shortages are the main reasons for the delay in performing surgery, this situation does not allow an efficient treatment and timely release of patients from the healthcare system. Therefore, there is an important need to implement standardized orthopedic and geriatric pathways (DTPs), inspired by the collaboration between healthcare system management, orthopedic and geriatric specialists, and physical therapists, to drive shorter days of hospitalization and better overall patient health outcome by performing surgery as soon as possible.

Cost of hospitalizations for older adults at one IMSS regional general hospital / Costos por hospitalización de adultos mayores en un hospital general regional del IMSS

Background: Population aging has a direct impact on the increasing demand of health services and on medical care costs. The objective was to carry out a cost analysis of health care costs in older adults in a regional general hospital of the Instituto Mexicano del Seguro Social. Methods: A calculation of the costs was done based on a retrospective collection of health care data. Unit prices were used to estimate costs. These were reported in 2016 Mexican pesos. A cost analysis was carried out by means of a regression model. Explanatory variables were sex, age and comorbidity level, the latter measured by using the Charlson index. Results: The average cost of all the 509 patients was 34 769 Mexican pesos (SD = 2869 pesos). Age variable explains the costs; however, sex and comorbidity variables were not significant. Cost predictions with the statistical model show differences mainly by age. In the case of females, the model predicts greater costs compared with those of males. Costs for older adults of 85 years or more were greater than those for the group of younger people (75-84). Conclusion: The hospitalization costs estimated are high and they differ according to the age group. We suggest to make further research in order to know the factors associated with high hospital costs for this age group.

Introducción: el envejecimiento tiene como consecuencia el aumento de la demanda de servicios y los costos de la atención médica. El objetivo fue realizar un análisis de costos de la atención médica en población adulta mayor en un hospital general regional del Instituto Mexicano del Seguro Social. Métodos: se realizó la estimación de costos por medio de la recolección retrospectiva de bienes y servicios. Los precios unitarios oficiales fueron usados para valorar los costos. Los costos se reportan en pesos de 2016. Se realizó un análisis de costos por medio de un modelo de regresión. Las variables explicativas fueron la edad, el sexo y el nivel de comorbilidad medido por el índice de Charlson. Resultados: el costo promedio para 509 pacientes fue de 34 769 pesos mexicanos (DE = 2869 pesos). La variable de edad explica los costos pero las de sexo y nivel de comorbilidad no fueron significativas. Las predicciones de costos con el modelo estadístico muestran diferencias entre grupos de edad principalmente. Los costos promedio fueron más altos para mujeres que para hombres. Los costos para mayores de 85 años fueron superiores que para los del grupo de 75-84 años. Conclusiones: los costos estimados por hospitalizaciones son elevados y son distintos por nivel de edad. Se sugiere investigar más sobre los factores que pueden explicar el crecimiento de los costos de hospitalización.

A Proactive Behavioral Health Service Model to Address Use of Constant Observation in a General Hospital.

In hospitals, use of constant observation (CO) causes significant economic burden without demonstrated reduction in adverse events. A novel quality improvement (QI) project was developed to reduce use of CO by integrating proactive behavioral health management of all patients requiring CO in a general hospital. Specific nonpharmacologic and pharmacologic interventions used in this project, which included 491 patients, are discussed. Data collected were compared with data from a baseline period before project implementation. The average monthly cost of observers was reduced by 33%, and length of stay was reduced 15% without increased complications. Using QI to develop proactive and consistent involvement of a designated behavioral health team and potentially reproducible care protocols for patients requiring CO resulted in improvement in quality, reduction in cost, and enhanced behavioral health integration in the general hospital.

A widening gap? Static and dynamic performance differences between specialist and general hospitals.

This paper develops and tests a dynamic model of hospital focus. It does so by tracing the performance trajectories of specialist and general hospitals to identify whether a performance gap exists and whether it widens or shrinks over time. Our longitudinal analyses of all hospital organizations within the English National Health Service (NHS) reveal not only a notable performance gap between specialist and general hospitals in particular with regards to patient satisfaction that widens over time, but also the emergence of a gap especially with regards to hospital staff job satisfaction. These findings reflect the considerable potential of specialization as a means to enhance hospital effectiveness. However, they also alert health policy makers to the threat of a widening performance gap between specialist and general hospitals with potential negative repercussions at the patient and health system level.

Evaluation of the value of team-based psychiatric consultation in a general hospital setting.

Background With the increase use of pay for performance in healthcare, 30-day readmissions after discharges are critically important. Objective A team-based psychiatric consultation approach was tested in an inpatient hospital setting. This is the first study that examines 30-day readmission rate with this approach. Methods In this quality improvement study, 164 patients received a team-based psychiatric consultation that included daily meetings during the weekdays between psychiatrists and hospitalists and 436 received care of treatment-as-usual or traditional consultation-liaison services. Results Overall 30-day readmission rate was not significantly different between intervention and nonintervention groups. However, in subgroups with high risk of mortality or severe illness, the intervention group had a 0% 30-day readmission rate for both high risk of mortality and severe illness subgroups, while the nonintervention group's readmission rate was 5% for high risk of mortality group and 3% for severely ill patients. Annual hospital cost saving is estimated between a quarter million and 1.5 million dollars for these subgroups. Conclusion The team-based psychiatric consultation approach demonstrated the potential for substantial cost savings in providing care for patients with high risk of mortality and severe illness. Thus, this intervention may be very useful in caring for patients with complex chronic conditions.