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Understanding value and how it relates to EMS costs
EMS should utilize a data-driven approach to value management that considers both quality and costs
Value is a commonly used term, but has several definitions. The definition we are going to focus on is an economic definition. Simply stated, value is about what you received for what you paid. From this perspective, value can be measured. We can often quantify what we received and we can often quantify what we paid.
In EMS, we can quantify what was received by our community using standardized clinical quality measures, like the survival rate of out-of-hospital cardiac arrest patients (with presumed cardiac etiologies, witnessed onsets and presenting in shockable rhythms). We might also look at process quality measures like the percent of S-T elevation myocardial infarction (STEMI) cases that received a stent within 90 minutes of the EMS first medical contact time.
Measuring EMS cost and value
What it cost our communities to get that level of clinical performance can be measured in dollars. If we have to itemize the cost for every element of the care provided on each case and then total it all up, that would get complicated very quickly. Or, we might approach this from a higher level and consider the annual cost per capita for EMS. This annual EMS cost can be calculated from the total EMS billing revenues collected plus the tax dollars that went into the EMS system. Divide that by the population and you end up with an annual EMS cost per capita.
To quantify our measurement of value, we use the value equation. It allows us to simultaneously consider the combined impact of cost and quality. In other words, it lets us measure what we received in comparison to what we paid. Our quality measure is placed into the numerator and the cost is in the denominator. Let’s use the value equation in some examples.
Value = Quality
Somewhere County (a fictional community) provided $20,300,000 in 2016 to fund their EMS system. Some of that money comes from billing revenue from Somewhere County EMS’ ambulance transports and some comes in the form of budget allocations from local tax dollars to the fire department for non-transport medical first response service and to the 911 communications center for call taking, dispatch and emergency medical dispatch services. With a population of 546,827, that translates into an annual EMS cost per capita of $37.12.
Somewhere County’s EMS system tracks its survival rate from out-of-hospital cardiac arrest using CARES. The most commonly used case type for benchmarking are those arrests with a presumed cardiac etiology, a witnessed onset and presenting in a shockable rhythm. For those cases, Somewhere County had a 38.3 percent survival rate in 2016.
Plugging those numbers into the value equation, we divide 38.3 by 37.12 and get a value quotient of 1.03.
Value = 1.03 = 38.30% Survival Rate
$37.12 EMS cost per capita
The next year, the cost per capita went down to $32.81 and the survival rate was down very slightly to 36.85. That yields a value quotient of 1.12. Even though they had a small decrease in survival, their value quotient actually improved.
Value = 1.12 = 36.85% Survival Rate
$32.81 EMS cost per capita
Healthcare is placing more and more emphasis on value. It will be important for EMS and systems of care to begin considering not just their clinical quality results, but also consider what it cost to get those results – and then measure their combined impact using the value equation. In that manner, you can have a data driven approach to value management that considers both quality and costs.
Some additional discussion and examples on the value equation and how it can be applied to EMS and systems of care are available here:
- CSI Vlog: Systems Concepts – Part 3: Quality Cost and Value
- The EMS Value Quotient: Looking at the Combined Effects of Costs and Quality. This article took a slightly different approach to the calculation by using the survival rate as a fraction (e.g., 0.50) rather than a percentage (e.g., 50 percent). However, the principle remains the same. This shows why a standardized approach and definitions are needed.