Inpatient Bed Demand Ridgewood Planning Boardmods.ridgewoodnj.net/...Valley_Bed_Testimony_042913... · beds at The Valley Hospital (TVH) exceeds the 451 beds for which TVH currently

Inpatient Bed Demand – Ridgewood Planning Board

April 29, 2013

John Downes, MBA, LEED AP

Principal

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Teams of professionals collaborating to solve challenging problems

Assigned task

• Prepare an inpatient bed need analysis

OVERVIEW INPATIENT DEMAND CALCULATIONS SUMMARY

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Conclusions


• Based on the most recently available data, the future demand for beds at The Valley Hospital (TVH) exceeds the 451 beds for which TVH currently has capacity.

• Without the opening of HUMC-North, with 128 beds on the former site of Pascack Valley Hospital (PVH), The Valley Hospital (TVH) would have a need for 485 inpatient beds, which exceeds the 451 beds for which TVH currently has capacity.

• With the opening of HUMC-North, the number of discharges at TVH may be impacted, with the result being that TVH will have a need for 452 beds if it lost the 1,800 discharges it gained from the PVH area when PVH closed.

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Basis for conclusions

• The overall market, while generally stable in population, is anticipated to grow older.

• Significant increases in the elderly population are anticipated to increase inpatient utilization.


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INPATIENT DEMAND CALCULATIONS

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Methodology

• Inpatient bed demand is a function of:

• Population served

• Utilization

• Discharges

• Average Length of Stay (ALOS)

• Market Share


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Patient Origin

• In order to determine the service area, we have incorporated the definition from the government’s “Stark II” regulations. Stark II defines the primary service area as the lowest number of contiguous postal ZIP codes from which the hospital draws its inpatients

• TVH Service area (2012) consists of 537,081 people.

• 75% of Valley Hospital’s discharges originate from this service area.

• 25% of Valley Hospital’s discharges originate from outside the service area.


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Population

• Population is expected to remain relatively flat, but continue to get older, with the 65+ age cohort expected to grow by 10.8% in the next five years alone.


Total Service

Area

2012

Estimate

2017

Projection

Absolute

Change

00-17 129,243 126,274 (2,969) -2.3% 0.0%

18-44 173,069 169,384 (3,685) -2.1% 0.0%

45-64 154,887 157,353 2,466 1.6% 22.2%

65+ 79,882 88,522 8,640 10.8% 77.8%

Total 537,081 541,533 4,452 0.8% 100.0%

Source: Truven Health Analytics

Percent Change Share of Growth

2012-2017 Change

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Utilization

• We must incorporate the population and its demographic characteristics to project future demand.

• Utilization represents the number of discharges in a given area.

• In our analysis, we compare the current and projected “utilization” of The Valley Hospital service area with other regions.

• For projections, we incorporated data from Truven Health Analytics

• To identify regions for utilization comparisons, we utilized the Dartmouth Atlas of Healthcare


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About the sources

• Truven Health Analytics

• Formerly Thomson Reuters Healthcare

• Draw from State and Federal data sources for historical volumes

• Model changes in demographics, insurance coverage, and utilization

• Incorporate the impact of healthcare reform

• Project future utilization

• Dartmouth Atlas of Healthcare

• Has focused on documenting variations in medical resources across the country

• Breaks the country into 3,436 Hospital Service Areas (HSA)

• HSA is a collection of ZIP codes where residents receive most of their hospitalizations from the hospitals in the area. Most HSAs contain only one hospital.

• Variations in utilization of inpatient resources can be evaluated by HSA


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Utilization = Discharges / Population


Current 2012 use rates based on Truven Healthcare Analytics population and discharge estimates by Dartmouth Hospital Service Area (HSA) Excludes Normal Newborns and Neonatology

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Utilization

• Significant variation in utilization (discharges / 1,000 pop) exists throughout the area when evaluated by Hospital Service Area.

• Medicare aged patients use healthcare resources approximately three times much more intensively than the general population.

• The Medicare age cohort makes up the vast majority of all population growth in the TVH service area (77.8% of total growth)

Source: Truven Health Analytics for Total, Dartmouth Atlas of Healthcare for Medicare


RegionTotal

D/C per 1,000

Medicare

D/C per 1,000

Ratio (Medicare:Total

D/C per 1,000)

United States 92.1 315.9 3.4

New Jersey 117.8 327.9 2.8

Ridgewood HSA 100.9 295.5 2.9

Hackensack HSA 105.7 319.7 3.0

Paramus HSA 120.0 319.2 2.7

Paterson HSA 119.5 341.0 2.9

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• Truven Health Analytics is projecting an annual increase of 0.95% in inpatient utilization (excluding neonatology and normal newborns) within the Valley Service area. By 2027, Truven projections anticipate a discharge per 1,000 rate of 116.4 for the TVH service area.

Utilization



TVH MarketTotal D/C per 1,000

(less normal newborns / neonatology)

2011/12 rate (State data) 100.5

2017 rate (calculated) 105.9



annual growth rate (Truven) 0.95%

total 15.5 year growth rate 15.8%


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• Using state data obtained through Truven for Q3 and Q4 in 2011, and Q1 and Q2 in 2012, the total 75% service area had 53,997 discharges, accounting for 293,026 inpatient days, exclusive of neonatology and normal newborns.

• 2011/2012 blended data was used because New York and Pennsylvania have not yet released full 2012 data to Truven.

Utilization



Total TVH Market

Days 293,026

Discharges 53,997

Average Length of Stay (ALOS) - market 5.43

Average Length of Stay (ALOS) - TVH 4.64

Valley Discharges from Market 19,278

Valley Market Share 35.7%

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Demand Model – Methodology

• Divide total population by 1,000

• Multiply by discharges per 1,000 ratio to get market discharges

• Multiply result by the Valley ALOS to get total market days

• Multiply by Valley market share to get Valley days

• Divide by 365 to get Average Daily Census (ADC)

• Divide by 80% to get Bed Demand

• Market Bed Demand divided by 75% (service area) minus market bed demand to get in-migration demand

• Add market demand and in-migration demand to get total demand


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discharges/

1,000

Market

Share

In

Migration

Total

Need

35.7% 25% @ TVH

New Jersey (2012 annualized) 117.8 359 120 479

TVH Market (2012 annualized) 100.5 307 102 409

beds required

Existing

Demand Model – Existing


• Given no change in population, utilization rate, ALOS or market share, at 80% occupancy, TVH inpatient demand (excluding neonatology and normal newborns) is 409 beds.

Assumptions

537,081 Total Market Population (2012) 293,026 Total Market Days (2012)

53,997 Total Market Discharges (2012) 5.43 Market ALOS (2012)

4.64 Valley ALOS (2012)

80% Occupancy Level

35.7% Market Share %

25.0% Inmigration %Existing

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discharges/

1,000

Market

Share

In

Migration

Total

Need

35.7% 25% @ TVH



TVH Market (2027 Truven Projection) 116.4 364 121 485

beds required

Existing

Demand Model – Future


• Given 2027 population projections, current utilization rate, Valley ALOS and market share, at 80% occupancy, TVH inpatient demand (excluding neonatology and normal newborns) is 419 beds.

• Using Truven Health Analytics projected 2027 utilization, which assumes impact of an aging population, TVH demand would be 485 beds.

Assumptions

550,548 Total Market Population (2027) 4.64 ALOS 80% Occupancy Level

25% Inmigration %

35.7% Market Share %

25.0% Inmigration %Existing

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Impact of opening HUMC – North


• In both 2011 and 2012 The Valley Hospital (TVH) drew approximately 4,000 discharges per year from the 14 towns considered the HUMC-North service area.

• In 2006, prior to PVH’s closure, The Valley Hospital was still drawing 2,255 inpatient discharges from that service area.

Town Name Zip Code 2006

pre-PVH closure

2011 2012

Closter 07624 25 75 75

Emerson 07630 205 418 345

Harrington Park 07640 58 66 37

Hillsdale 07642 251 490 425

Montvale 07645 224 299 306

Northvale/Rockleigh 07647 43 127 125

Norwood 07648 23 68 74

Park Ridge 07656 292 713 623

Washington Township 07676 369 555 453

Westwood/Old Tappan/River Vale 07675 557 1,082 1,125

Woodcliff Lake 07677 208 402 388

Total TVH Discharges From PV Service Area - 2,255 4,295 3,976

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Impact of opening HUMC – North


• Such a loss, assuming the growth in projected market utilization anticipated by the 2027 Truven Health Analytics data, would still necessitate the need for 452 beds to serve The Valley Hospital’s patients.

• We have modeled the potential loss of the 1,800 discharges gained by TVH as compared to the 2006 Valley Hospital volumes drawn from the PVH service area pre-closure.

discharges/

1,000

Market

Share

In

Migration

Total

Need

33.3% 25% @ TVH



TVH Market (2027 Truven Projection) 116.4 339 113 452

1,800 d/c loss

beds required

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SUMMARY

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Conclusions


• Based on the most recently available data, the future demand for beds at The Valley Hospital (TVH) exceeds the 451 beds for which TVH currently has capacity.

• Without the opening of HUMC-North, with 128 beds on the former site of Pascack Valley Hospital (PVH), The Valley Hospital (TVH) would have a need for 485 inpatient beds, which exceeds the 451 beds for which TVH currently has capacity.

• With the opening of HUMC-North, the number of discharges at TVH may be impacted, with the result being that TVH will have a need for 452 beds if it lost the 1,800 discharges it gained from the PVH area when PVH closed.

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APPENDIX

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Methodology

• Existing TVH Demand (2012)

• 537,081 / 1,000 = 537.081

• 537.081 x 100.5 discharges per 1,000 ratio = 53,997 market discharges

• 53,997 x 4.64 Valley ALOS = 250,793 market days

• 250,793 x 35.7% (Valley Market Share) = 89,538 Valley days

• 89,538 divided by 365 = 245.3 average daily census (ADC)

• 245.3 (ADC) / 80% occupancy = 306.6 market bed demand

• (306.6 / 75%) – 306.6 = 102.2 in-migration bed demand

• 306.6 + 102.2 = 408.8 total beds required

APPENDIX

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Methodology

• Future TVH Demand (2027)

• 550,548 / 1,000 = 550.548








APPENDIX

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Methodology

• Future TVH Demand (2027) with HUMC – North

• 550,548 / 1,000 = 550.548








APPENDIX

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Letter from State of New Jersey Department of Health

APPENDIX

Documents

Inpatient Bed Demand Ridgewood Planning Boardmods.ridgewoodnj.net/...Valley_Bed_Testimony_042913... · beds at The Valley Hospital (TVH) exceeds the 451 beds for which TVH currently