CG 2 Emergency department

CG 2.1 Scope

CG 2.1.1 This Costing guideline outlines an approach to cost Emergency Department (ED) encounter activity.

CG 2.1.2 This Costing guideline also provides practical steps and examples to guide staff on the patient costing process for this activity.

Emergency department scope

CG 2.1.3 Emergency department is a department which may comprise Short Stay Admitted Units, Clinical Decision Units, Short Stay Medical Assessment Units, and Emergency Management Units.

CG 2.1.4 Expenses for such collocated units are associated to admitted products and not to products that are defined as ED products.

CG 2.1.5 Expenses that are associated to products will include all services provided in the period from a patient’s presentation to their departure from the ED including all ancillary services ordered for the patient during that period.

CG 2.2 Objective

CG 2.2.1 The objective of this Costing guideline is to guide costing practitioners through the end to end steps required to ensure that all ED activity and expenses which contribute to the day to day production of final ED products are included in the patient costing process to determine the full cost of production.

CG 2.3 Costing guideline

Step 1: Stakeholder Identification and Service Scale and Scope

CG 2.3.1 Costing practitioners should meet with the appropriate stakeholders within the ED and Finance Department to identify both the expenses and activity related to the ED. Stakeholders may include the Medical Director of Emergency Services (or local equivalent), the Nursing Manager for Emergency Services and the ED Cost Centre Manager.

CG 2.3.2 The agenda for this meeting should include an overview of the operation of the ED (for example, ED status level, cubicle numbers and if it includes a Short Stay Admitted Unit). This information is required to understand the configuration of the ED. These insights should enable further detail to be gathered such as the expenses reported within and across the ED, and the associated activity within its configuration.

Step 2: Align Expense to the Emergency Department and Define Overhead and Direct Expenses, including Overhead Allocation Methods

CG 2.3.3 Costing practitioners should work with ED stakeholders to define which expenses within the ED relate to ED products.

CG 2.3.4 From a practical sense, this will require the costing practitioner to identify all cost centre/s in the general ledger that map to ED products. It will also require the costing practitioner to transfer out any expenses in the ED that relate to other products. Examples include:

  • expenses for admitted products - Short Stay Admitted Units, Clinical Decision Units, Short Stay Medical Assessment Units, and Emergency Management Units (where expenses for these Units is mapped to the defined ED cost centres);
  • Teaching and Training expenses associated with the ED (e.g., weekly meetings for Junior doctors led by a senior ED clinician).
  • call outs of ED physicians to other clinical areas (e.g., critical care wards).

CG 2.3.5 Costing practitioners should also work with ED stakeholders to define and agree on the methods and assumptions to be used to estimate the transfer of expenses to other products (for example, staff rosters, timesheets and/or other relevant data such as MET calls).

CG 2.3.6 Costing practitioners should use stakeholder insights to guide them in moving the appropriate expense into the ED final cost centre and other relevant final cost centres (for example from the general ED cost centre to the cost centre related to the SSU).

CG 2.3.7 Costing practitioners should seek to access staff rosters to understand the level of rotations of residents and junior staff to the Emergency Department. This information can be used to demonstrate the medical resources used to support Emergency Department patients from other hospital units as these expenditures are held outside the Emergency Department cost centre.

CG 2.3.8 This approach enables the cost practitioner to consider the medical resource costs for Emergency Department patients are represented not only by Emergency Department medical staff (where expenses are held within Emergency Department cost centres), but the activity for medical staff rostered to critical care where associated expenses are held outside Emergency Department cost centres.

CG 2.3.9 Record Expense Alignment Decisions – Costing practitioners should utilise the costing system or another medium to record:

  • the classification of ED expense into the ED final cost centre and other final cost centres;
  • the stakeholders participating in meetings;
  • the date of the meeting; and
  • a date for future review of ED expense alignment.

Step 3: Perform Quality Assurance Checks on Emergency Department Feeder System Data

CG 2.3.10 Ideally, the ED feeder system will (where possible) include some or all of the following fields:

  • the patient’s unique identifier;
  • the patient unique episode identifier;
  • unit code (for example, ED);
  • the date/time of service;
  • triage category;
  • any measure of acuity
  • Clinical interaction or resource consumption or intensity
  • the time into and out of the unit; and
  • other patient demographic factors such as sex and age.

CG 2.3.11 Costing practitioners should perform quality assurance checks on the ED file prior to the costing process. For example, checks should be made on the date of service (to test reliability to remove error dates, check time into and out of the unit, and ensure dates are relevant to the period being costed). If ED duration is used as a cost driver, checks should be performed to ensure that the time out of the unit does not occur before the time into the unit.

Step 4: Creating and mapping Emergency Department Costing Products or Intermediate Products

CG 2.3.12 Costing practitioners should use date/time, patient ED location and/or diagnosis for intermediate product creation. This should be appropriately reflected in the costing system. Please note that triage should only be used for product creation where other options are not available.

CG 2.3.13 Once this product code is created, costing practitioners will be required to map this in the costing system to the ED final cost centre. The ED feeder system may also include unit codes, such as SSU, that need to be mapped to the SSU final cost centre. In this case, costing practitioners should create a product for example ‘SSU’ and map this product to the SSU cost department in the costing system.

CG 2.3.14 It is generally recognised that ED costs comprise approximately 70% of staff (nursing and medical) costs and staffing profiles can vary according to the location staff are assigned within the ED (such as general cubicles, resuscitation treatment areas and SSU).

CG 2.3.15 Costing practitioners should work with ED stakeholders to also consider staff profiles as a means of understanding the work flow within the ED for various patient cohorts and understand where a standard staffing rate per hour by location, modified by the triage and disposition of the patient can be used to inform the cost allocation process.

Step 5: Apply Relative Value Units

CG 2.3.16 Costing practitioners should obtain agreement from within their hospital (or jurisdiction) as to the agreed methodology for RVU creation.

CG 2.3.17 Whilst the most common methodology for allocating ED expenses to encounter activity is to create products for ED based on the triage category assigned to the encounter activity, costing practitioners should consider RVUs that consider or combine the location of patient within the ED such as general cubicles, resuscitation treatment areas and SSUs with patient diagnosis.

CG 2.3.18 These RVUs can then be mapped to the appropriate intermediate product which may be based on Triage or a combination of location and diagnosis.

CG 2.3.19 However, costing practitioners should also give context to the type of encounter they are seeking to cost before applying their costing methodology. For example, time in and time out of an ED alone, may not be the best indicator of resource use and relative encounter cost. There may be instances where a patient with high acuity spends little time within the ED, but consumes a number of resources (medical supplies and alike) given their complexity, whilst lower acuity patients stay within the ED for longer periods for observational purposes. In this example the costing practitioner should seek a cost outcome where the higher acuity encounter demonstrates a higher cost than the low acuity encounter, irrespective of their time in the ED, given they are likely to be complex and consume a number of ED resources in a short period of time. Costing practitioners should consider these types of workflows when determining the creation and attachment of an RVU.

Step 6: Create intermediate product costs in final cost centres

CG 2.3.20 Two allocation processes are performed

  • When overhead costs are allocated to the Production Cost Centre (using an appropriate allocation statistic)
  • When the Production Cost Centre costs (overhead and direct) are allocated to the intermediate products.

Step 7: Match Intermediate Products and their Costs to Emergency Department Encounter

CG 2.3.21 ED encounters will consume resources from other hospital departments, such as imaging, pathology, pharmacy, and allied health on their journey of care and these should be attached to ED encounter as these resources contribute to the cost of production. Costing practitioners must ensure that services from other departments provided to ED patients are matched appropriately to the ED encounter

Step 8: Report costs

CG 2.3.22 Costing practitioners should then perform the required steps to consolidate and report costs at encounter level

Step 9: Cost data review with Emergency Department Stakeholders

CG 2.3.23 Costing practitioners should meet with their relevant ED stakeholders to report on the costs calculated.

CG 2.3.24 Cost data should be reviewed for, amongst other checks, cost relativity per triage category and resource completeness per episode to determine if the cost data captures resources that have been provided at encounter level.