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The Total Cost Index TCI for provider groups is calculated using case-mix adjusted Episode Treatment Groups (ETGs), which includes hospital, professional, ancillary and pharmacy costs. Several factors are considered to ensure a complete and fair analysis:
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Episode Treatment Groups: ETGs group together similar illnesses, such as chronic bronchitis. ETGs are further refined by analyzing complications, the presence of other illnesses, the age of a patient and particular surgeries that indicate a "sicker" patient.
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Case Mix Adjustment: This factor takes into account the severity of cases treated by a provider. For example, costs would be expected to be higher when treating someone with uncontrolled diabetes compared to someone whose diabetes is controlled by diet and exercise. The method assigns each case into one of five categories indicating level of need for healthcare resources and, therefore, expected level of cost.
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Outliers: Extreme cases – also known as outliers – are excluded so that very high costs from a very severe illness or treatment do not bias the calculations. Likewise, very low costs are excluded. For hospital care, outliers are identified by the length of stay for a specific diagnosis. For primary or specialty care, outliers are identified by a computer program that analyzes professional and pharmacy claims. Further outlier logic is applied to address the entire cost of the case, and an upper limit is applied to identify additional outliers.
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Attribution: Cost ratings are calculated for the medical group in which a provider practices or for a hospital overall. Cost ratings are not specific to the provider, nor are they specific for a condition, service or procedure. Clinic cost ratings reflect the rating for the medical group to which the clinic belongs. Separate cost ratings are calculated for primary care, cardiology, ENT and orthopedics. Thus, some clinics may have multiple cost ratings.
Cost information on providers outside of the HealthPartners local region is limited to select hospitals. These cost ratings are based on the hospital's billed charges, which do not take into account negotiated discounts with HealthPartners.
Finally, for hospital cost, the analysis includes costs between October 2006 and September 2007. For primary and specialty care, the cost analysis includes costs between October 2005 and September 2007. All costs are then adjusted to reflect a provider's 2008 prices according to their contract with HealthPartners. The analysis is based on members in commercial products (not Medicare or Medicaid).
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