DRGs, costs, and outcome for plastic surgical patients

The purpose of this study was to analyze hospital cost, resource utilization, and outcome by age for a large group of hospitalized plastic surgical patients using the DRG format. Hospital cost per patient for all plastic surgical admissions (both inpatient and potentially ambulatory patients) treated (N = 1632) at an academic medical center increased with age and peaked for plastic surgical patients 75 to 80 years of age ($11,585 per patient). Although DRG payment would have produced an aggregate profit of $2,404,854, older plastic surgical patients (65 years of age and above) generally produced losses. Older plastic surgical patients demonstrated a longer hospital length of stay, a greater severity of illness, a higher percent of outliers, and a greater mortality than younger plastic surgical patients. In addition, older plastic surgical patients had higher clinical resource utilization based on a number of clinical parameters such as emergency admission, SICU utilization, need for blood transfusions, and need for plasma product infusions. This study suggests that the current DRG reimbursement methodology may be inequitable vis-à-vis the older plastic surgical patient. As additional pressures encourage the performance of more ambulatory procedures (previously performed as inpatients), our profit margins may decline and possibly affect our ability to provide quality plastic surgical care.     

Impact of Mental Health Visits on Healthcare Cost in Patients with Diabetes and Comorbid Mental Health Disorders

Purpose

To assess the impact of mental health visits (MHV) on the cost of care for Veterans with diabetes and comorbid mental health conditions.

Methods

A national cohort of 120,852 Veterans with diabetes and at least one mental health diagnosis (i.e., substance abuse, depression or psychoses) in 2002 was followed through 2006. Outcomes were pharmacy, inpatient and outpatient costs in 2012 dollars.

Results

Least-square covariate adjusted estimates from the joint model of total VA costs of the number of MHV using December 31, 2012 value dollars indicate that relative to those with fewer MHV, those with 3+ MHV had the lowest mean inpatient cost ($21,406), but the highest mean outpatient and pharmacy cost ($9,727 and $2,015, respectively). If all Veterans who received zero MHV actually received 3+ MHV, we estimate through simulated scenarios that between $32,272,329 and $181,460,247 in inpatient costs would be saved. However, these savings would be offset by additional expenditures of between $1,166,017,547 and $1,166,224,787 in outpatient costs and between $151,604,683 and $161,439,632 in pharmacy costs.

Conclusions

Among Veterans with diabetes and comorbid mental disorders having three or more mental health visits is associated with marginally decreased inpatient cost, but these potential savings seem to be offset by increased outpatient and pharmacy costs.     

Hospital at home for patients with acute exacerbations of chronic obstructive pulmonary disease: systematic review of evidence

Objectives To evaluate the efficacy of hospital at home schemes compared with inpatient care in patients with acute exacerbations of chronic obstructive pulmonary disease (COPD).Design A systematic review of randomised controlled trials.Main outcome measure Mortality and readmission to hospital.Results Seven trials with 754 patients were included in the review. Hospital readmission and mortality were not significantly different when hospital at home schemes were compared with inpatient care (relative risk 0.89, 95% confidence interval 0.72 to 1.12, and 0.61, 0.36 to 1.05, respectively). However, compared with inpatient care, hospital at home schemes were associated with substantial cost savings as well as freeing up hospital inpatient beds.Conclusions Hospital at home schemes can be safely used to care for patients with acute exacerbations of COPD who would otherwise be admitted to hospital. Clinicians should consider this form of management, especially as there is increasing pressure for inpatient beds in the United Kingdom.     

Community care for patients with schizophrenia one year after hospital discharge.

OBJECTIVES--To document the circumstances and care of patients with schizophrenia who had recently been discharged from local psychiatric inpatient services, and to establish the extent to which misgivings about community care might be justified. DESIGN--Cross sectional surveys with review of case notes. Follow up interviews with questionnaires administered one year after discharge. SETTING--Two inner London districts (West Lambeth and Lewisham) with high levels of social deprivation and at different stages of developing community services. PATIENTS--90 and 50 patients in the two services respectively, aged 18 to 65, who satisfied the Research Diagnostic Criteria for schizophrenia and who were discharged from inpatient services. MAIN OUTCOME MEASURES--Diagnosis elicited by present state examination, global social disability rating, use of services during the three months before interview. RESULTS--89 of the 140 patients (64%) had been ill for five or more years, yet few were former long stay inpatients. 55% (50/91; 95% confidence interval 45% to 65%) of those interviewed had current psychotic mental states and 22% (27/124; 16% to 31%) were functioning socially at very poor or severely maladjusted levels. 86% (107/124) were unemployed. The majority of patients had seen a mental health or social service professional, yet only 16% (20/124) were in specialised accomodation (excluding hospitals) and only 23% (17/73) of those eligible had used day care. Small numbers of people had experienced homelessness (two) or imprisonment (four over six months). CONCLUSIONS--Many schizophrenic patients leaving local psychiatric inpatient care have active symptomatology and profound social disabilities. Community care was characterised by high rates of contact with service professionals but little supported accommodation or day activity. This group of clients may require dedicated provision, which would actively encourage them to use services protected from the demands of those with less severe illness.     

Prospective pricing and DRGs.

In the Congenital Heart Program at San Diego Children''s Hospital, alterations in medical practice have reduced costs without impairing quality or access. Pediatric cardiac catheterization was done in 483 consecutive elective patients without overnight hospital stay. Hospital readmission was required in one patient for psoas tendinitis. Avoiding overnight hospital stay minimized attendant risks of hospital care, lessened psychosocial trauma and reduced the average hospital bill by $493 (29%). Hospital stay was also reduced for elective surgical correction of congenital heart disease on a case-by-case basis. Review of 151 consecutive cases (1978 through 1982) showed a decrease in both preoperative days in hospital and postoperative days in an intensive care unit. The duration of the postoperative stay was shortened from 6.8 days in 1978-1979 to 4.4 days in 1982 (P <.05). No increase in morbidity and no mortality resulted from the shortened perioperative hospital stay. Financial savings from this process averaged $991 per procedure.Diagnostic tests were reassessed and many precatheterization laboratory tests were eliminated. Without change in new patients seen or surgical volume, the use of cardiac catheterization decreased from 241 procedures in 1981 to 161 in 1982 and the number of operations without catheterization increased (11 to 22, 1981 to 1982). No increase in surgical morbidity or mortality was found comparing those diagnosed only by echocardiography with those who had preoperative cardiac catheterization. The decrease of 80 catheterizations in one year resulted in a savings of $188,800.True cost containment (reducing cost without reducing quality) can be accomplished in congenital heart programs. Similar cost containments in other disciplines may also be achieved.     

Safety and efficacy in an accredited outpatient plastic surgery facility: a review of 5316 consecutive cases

Advances in medicine have improved the delivery of health care, making it more technologically superior than ever and, at the same time, more complex. Nowhere is this more evident than in the surgical arena. Plastic surgeons are able to perform procedures safely in office-based facilities that were once reserved only for hospital operating rooms or ambulatory surgery centers. Performing procedures in the office is a convenience to both the surgeon and the patient. Some groups have challenged that performing plastic surgery procedures in an office-based facility compromises patient safety. Our study was done to determine whether outcomes are adversely affected by performing plastic surgery procedures in an accredited outpatient surgical center. A retrospective review was performed on 5316 consecutive cases completed between 1995 and 2000 at Dallas Day Surgical Center, Dallas, Texas, an outpatient surgical facility. Most cases were cosmetic procedures. All cases were analyzed for any potential morbidity or mortality. Complications requiring a return to the operating room were determined, as were infection rates. Events leading to inpatient hospitalization were also included. During this 6-year period, 35 complications (0.7 percent) and no deaths were reported. Most complications were secondary to hematoma formation (77 percent). The postoperative infection rate for patients requiring a return to the operating room was 0.11 percent. Seven patients required inpatient hospitalization following their procedure secondary to arrhythmias, angina, and pulmonary emboli. Patient safety must take precedence over cost and convenience. Any monetary savings or time gained is quickly lost if safety is compromised and complications are incurred. The safety profile of the outpatient facility must meet and even exceed that of the traditional hospital-based or ambulatory care facility. After reviewing our experience over the last 6 years that indicated few complications and no deaths, we continue to support the judicious use of accredited outpatient surgical facilities by board-certified plastic surgeons in the management of plastic surgery patients.     

不同支付方式住院费用分析

目的:分析住院患者不同支付方式下住院费用差异,为建立合理的医疗费用控制体制提供参考依据。方法:对某院2007~2009年的住院患者的住院天数、年龄、住院费用、性别及支付方式进行分析。结果:年龄、性别和支付方式是影响住院费用的重要因素。至2009年医保患者人群多于自费患者人群,医保患者人数涨幅明显;男性患者多于女性患者;住院费用随着年龄的增长而增加。结论:继续推广城镇职工基本医疗保险,为60岁以上人群制定更有针对性的政策。     

Distribution of NHS funds between fundholding and non-fundholding practices.

OBJECTIVES--To estimate the amount spent on specific hospital care by health agencies in 1993-4 and compare it with the resources allocated to patients registered with fundholding practices for the same type of care. To investigate whether fundholding practices and health agencies pay different amounts for inpatient care. DESIGN--Examination of hospital episode statistics, 1991 census data, and family health services authority and health agency records. SETTING--Health agencies and fundholding practices in the former North West Thames Regional Health Authority. MAIN OUTCOME MEASURES--Amount per capita allocated to inpatient and outpatient care for patients registered with fundholding and non-fundholding practices. Average specialty cost per finished consultant episode for health agencies and fundholding practices. RESULTS--The ratio of per capita funding for patients in non-fundholding practices to those in fundholding practices ranged from 59% to 87% for inpatient and day case care and from 36% to 106% for outpatient care. Average specialty costs per episode were similar for fundholding practices and health agencies. CONCLUSIONS--Fundholding practices seem to have been funded more generously than non-fundholding practices in North West Thames.     

Day hospital rehabilitation--effectiveness and cost in the elderly: a randomised controlled trial.

The effectiveness and cost of day hospital care in rehabilitation were studied in a randomised controlled trial in 120 elderly patients who were assessed at referral and six weeks and five months later in activities of daily living skills and mood. Day hospital patients were compared with a control group, who were managed as they would have been before the availability of day hospital care. Day hospital patients showed a significant improvement in performance of activities of daily living at six weeks but not at five months; however, they had a sustained improvement in mood. The cost of day hospital rehabilitation was one third greater than that of rehabilitation by alternative means. In its current form the geriatric day hospital is not a cheap alternative to other means of rehabilitation. Expensive components of the day hospital should be critically re-examined and renewed emphasis placed on sufficient inpatient beds, domiciliary services, and day care centres.     

The return on investment of a Medicaid tobacco cessation program in Massachusetts

Background and Objective

A high proportion of low-income people insured by the Medicaid program smoke. Earlier research concerning a comprehensive tobacco cessation program implemented by the state of Massachusetts indicated that it was successful in reducing smoking prevalence and those who received tobacco cessation benefits had lower rates of in-patient admissions for cardiovascular conditions, including acute myocardial infarction, coronary atherosclerosis and non-specific chest pain. This study estimates the costs of the tobacco cessation benefit and the short-term Medicaid savings attributable to the aversion of inpatient hospitalization for cardiovascular conditions.

Methods

A cost-benefit analysis approach was used to estimate the program''s return on investment. Administrative data were used to compute annual cost per participant. Data from the 2002–2008 Medical Expenditure Panel Survey and from the Behavioral Risk Factor Surveillance Surveys were used to estimate the costs of hospital inpatient admissions by Medicaid smokers. These were combined with earlier estimates of the rate of reduction in cardiovascular hospital admissions attributable to the tobacco cessation program to calculate the return on investment.

Findings

Administrative data indicated that program costs including pharmacotherapy, counseling and outreach costs about $183 per program participant (2010 $). We estimated inpatient savings per participant of $571 (range $549 to $583). Every $1 in program costs was associated with $3.12 (range $3.00 to $3.25) in medical savings, for a $2.12 (range $2.00 to $2.25) return on investment to the Medicaid program for every dollar spent.

Conclusions

These results suggest that an investment in comprehensive tobacco cessation services may result in substantial savings for Medicaid programs. Further federal and state policy actions to promote and cover comprehensive tobacco cessation services in Medicaid may be a cost-effective approach to improve health outcomes for low-income populations.     

Avoiding hospital admission through provision of hospital care at home: a systematic review and meta-analysis of individual patient data

Background

Avoidance of admission through provision of hospital care at home is a scheme whereby health care professionals provide active treatment in the patient''s home for a condition that would otherwise require inpatient treatment in an acute care hospital. We sought to compare the effectiveness of this method of caring for patients with that type of in-hospital care.

Methods

We searched the MEDLINE, EMBASE, CINAHL and EconLit databases and the Cochrane Effective Practice and Organisation of Care Group register from the earliest date in each database until January 2008. We included randomized controlled trials that evaluated a service providing an alternative to admission to an acute care hospital. We excluded trials in which the program did not offer a substitute for inpatient care. We performed meta-analyses for trials for which the study populations had similar characteristics and for which common outcomes had been measured.

Results

We included 10 randomized trials (with a total of 1327 patients) in our systematic review. Seven of these trials (with a total of 969 patients) were deemed eligible for meta-analysis of individual patient data, but we were able to obtain data for only 5 of these trials (with a total of 844 patients [87%]). There was no significant difference in mortality at 3 months for patients who received hospital care at home (adjusted hazard ratio [HR] 0.77, 95% confidence interval [CI] 0.54–1.09, p = 0.15). However, at 6 months, mortality was significantly lower for these patients (adjusted HR 0.62, 95% CI 0.45–0.87, p = 0.005). Admissions to hospital were greater, but not significantly so, for patients receiving hospital care at home (adjusted HR 1.49, 95% CI 0.96–2.33, p = 0.08). Patients receiving hospital care at home reported greater satisfaction than those receiving inpatient care. These programs were less expensive than admission to an acute care hospital ward when the analysis was restricted to treatment actually received and when the costs of informal care were excluded.

Interpretation

For selected patients, avoiding admission through provision of hospital care at home yielded similar outcomes to inpatient care, at a similar or lower cost.In many countries, programs in which hospital care is provided in the patient''s own home continue to be a popular response to the increasing demand for acute care hospital beds. Patients who received care through such programs, after assessment in the community by their primary care physician or in the emergency department, may avoid admission to an acute care ward. Alternatively, patients may be discharged early from hospital to receive hospital care at home. We have conducted a parallel systematic review and meta-analysis of individual patient data related to hospital care at home for patients who have received early discharge, which we will report separately. Recently, the emphasis has been on avoiding admission to hospital, which reflects the relatively limited gain from discharging patients early after a stay in hospital, given the universal trend for shorter lengths of stay in hospital.The types of patients receiving hospital care at home differ among schemes, as does the use of technology. Some schemes are designed to care for patients with specific conditions, such as chronic obstructive pulmonary disease, or to provide specific skills, such as parenteral nutrition. However, many schemes for the provision of hospital care at home lack such clear functions and have an “open door” policy covering a wide range of conditions. These schemes may build on existing community resources, or they may operate as hospital outreach services, with hospital staff making home visits. In particular, “hospital-at-home” programs are defined by the provision, in patients'' own homes and for a limited period, of a specific service that requires active participation by health care professionals. The care tends to be multidisciplinary and may include technical services, such as intravenous services.Cutting costs by avoiding admission to hospital altogether is the central goal of such schemes. Other perceived benefits include reducing the risk of adverse events associated with time in hospital¹ and the potential benefit of receiving rehabilitation in the home environment. However, it is not known if patients covered by a policy of avoiding admission through the provision of hospital care at home have health outcomes better than or equivalent to those of patients who receive inpatient hospital care. Furthermore, it is not known if the provision of hospital care at home results in a reduction or an increase in costs to the health service. We conducted a systematic review and meta-analysis, using individual patient data and published data, to determine the effectiveness and cost of managing care of patients through the provision of hospital care at home relative to inpatient hospital care. The meta-analysis of individual patient data allowed us to investigate whether the strategies were associated with key events happening after different periods of time, rather than simply whether or not those events occurred.     

Outpatient cleft lip repair

The emphasis on cost reduction and increased efficiency in health care delivery has prompted an increase in outpatient (ambulatory) surgical procedures. A retrospective review of the perioperative management of patients undergoing cleft lip repair at two urban tertiary pediatric hospitals was performed to assess the safety of outpatient cleft lip repair. The hospital database at Childrens Hospital Los Angeles was searched to find all patients who had been operated on for cleft lip repair during calendar years 1999 and 2000. Two groups were identified from Childrens Hospital Los Angeles: the outpatient cleft lip repair group (patients discharged the same day as the operation; n = 91) and the inpatient cleft lip repair group (n = 14). A data set was acquired from the Royal Children's Hospital in Melbourne, Australia, using the same criteria, for fiscal years 1998 to 2000 (n = 50). All patients from Royal Children's Hospital had operations as inpatients. Parameters considered for each group were age, sex, race, ethnicity, length of hospital stay, preexisting medical conditions or diagnoses, complications, and readmissions or presentation to the emergency department within 4 weeks of operation. The Childrens Hospital Los Angeles outpatient group had three readmissions that were considered to be complications of the operation. The Childrens Hospital Los Angeles inpatient group had one readmission attributable to a complication. The Royal Children's Hospital group also had one readmission for a complication. There was no significant difference in the complication rate of the Childrens Hospital Los Angeles outpatient group and the Royal Children's Hospital group (p > 0.05). There was also no significant difference in the complication rate of both of the Childrens Hospital Los Angeles groups compared with the Royal Children's Hospital group (p > 0.05). This study indicates that cleft lip repair performed in an outpatient setting may be a safe alternative to the inpatient operation. Certain preexisting medical conditions, however, may dictate the need for inpatient hospitalization after repair.     

Direct cost associated with acquired brain injury in Ontario

ABSTRACT: BACKGROUND: Acquired Brain Injury (ABI) from traumatic and non traumatic causes is a leading cause of disability worldwide yet there is limited research summarizing the health system economic burden associated with ABI. The objective of this study was to determine the direct cost of publicly funded health care services from the initial hospitalization to three years post-injury for individuals with traumatic (TBI) and non-traumatic brain injury (nTBI) in Ontario Canada. METHODS: A population-based cohort of patients discharged from acute hospital with an ABI code in any diagnosis position in 2004 through 2007 in Ontario was identified from administrative data. Publicly funded health care utilization was obtained from several Ontario administrative healthcare databases. Patients were stratified according to traumatic and non-traumatic causes of brain injury and whether or not they were discharged to an inpatient rehabilitation center. Health system costs were calculated across a continuum of institutional and community settings for up to three years after initial discharge. The continuum of settings included acute care emergency departments inpatient rehabilitation (IR) complex continuing care home care services and physician visits. All costs were calculated retrospectively assuming the government payer's perspective. RESULTS: Direct medical costs in an ABI population are substantial with mean cost in the first year post-injury per TBI and nTBI patient being $32132 and $38018 respectively. Among both TBI and nTBI patients those discharged to IR had significantly higher treatment costs than those not discharged to IR across all institutional and community settings. This tendency remained during the entire three-year follow-up period. Annual medical costs of patients hospitalized with a brain injury in Ontario in the first follow-up year were approximately $120.7 million for TBI and $368.7 million for nTBI. Acute care cost accounted for 46-65 % of the total treatment cost in the first year overwhelming all other cost components. CONCLUSIONS: The main finding of this study is that direct medical costs in ABI population are substantial and vary considerably by the injury cause. Although most expenses occur in the first follow-up year ABI patients continue to use variety of medical services in the second and third year with emphasis shifting over time from acute care and inpatient rehabilitation towards homecare physician services and long-term institutional care. More research is needed to capture economic costs for ABI patients not admitted to acute care.     

Cost analysis of early discharge after hip fracture.

OBJECTIVE--To ascertain the economic impact of an early discharge scheme for hip fracture patients. DESIGN--Population based study comparing costs of care for patients who had "hospital at home" as an option for rehabilitation and those who had no early discharge service available in their area of residence. SETTING--District hospital orthopaedic and rehabilitation wards and community hospital at home scheme. PATIENTS--1104 consecutively admitted patients with fractured neck of femur. 24 patients from outside the district were excluded. MAIN OUTCOME MEASURES--Cost per patient episode and number of bed days spent in hospital. RESULTS--Patients with the hospital at home option spent significantly less time as inpatients (mean of 32.5 v 41.7 days; p < 0.001). Those patients who were discharged early spent a mean of 11.5 days under hospital at home care. The total direct cost to the health service was significantly less for those patients with access to early discharge than those with no early discharge option (4884 pounds v 5606 pounds; p = 0.048). CONCLUSIONS--About 40% of patients with fractured neck of femur are suitable for early discharge to a scheme such as hospital at home. The availability of such a scheme leads to lower direct costs of rehabilitative care despite higher readmission costs. These savings accrue largely from shorter stays in orthopaedic and geriatric wards.     

Psychiatrically hospitalized children: a critical review

The high cost of inpatient hospitalization and the rise in the number of private psychiatric beds for children and adolescents prompt several questions about who is using these services. To examine these issues, a review focusing on the use of psychiatric inpatient services by children was undertaken. The history of inpatient care of children is briefly outlined, recent public policies contributing to the rise in the number of psychiatric beds are considered, and findings from available studies are reviewed. We conclude that the data base is inadequate to draw many conclusions about who is using child psychiatric inpatient services. There appear, however, to be important differences in use of inpatient services according to age and perhaps by institutional type and geographic region. Suggestions for future research and some of the social policy implications are discussed as well.     

Diagnostic dilatation and curettage: is it used appropriately?

OBJECTIVE--To determine patterns of use of dilatation and curettage in Britain as compared with those in the United States; to examine variations in utilisation rates within one regional health authority. DESIGN--Analysis of routinely collected hospital inpatient statistics. SETTING--Statistics for England, Scotland, and the United States; local statistics for Oxford region. SUBJECTS--All inpatient episodes in which dilatation and curettage was performed but excluding those related to pregnancy. RESULTS--Dilatation and curettage rates remained stable in Britain between 1977 and 1990, whereas in the United States they declined dramatically. In 1989-90 the rate was 71.1 per 10,000 women in England as compared with only 10.8 per 10,000 in America. In 1989, 6936 women underwent diagnostic dilatation and curettage in the Oxford region, making it the most common elective operation. A total of 2726 (39%) of these women were under 40. There was a more than twofold variation in usage of the procedure among district health authorities within the region and even greater variation in rates in women under 40. The proportion of patients treated as day cases in the district general hospitals ranged from 22% to 82%. CONCLUSIONS--Dilatation and curettage may frequently be used inappropriately. The considerable variations in usage of dilatation and curettage internationally and nationally indicate differences in clinical perception of its appropriateness. This makes it suitable for audit. In developing guidelines it will be important to agree on the most appropriate patients and the relative merits of alternative methods of endometrial sampling. Probably this could result in considerable cost savings at no risk and possibly some benefit to patients.     

不同支付方式住院费用分析

目的：分析住院患者不同支付方式下住院费用差异,为建立合理的医疗费用控制体制提供参考依据。方法：对某院2007~2009年的住院患者的住院天数、年龄、住院费用、性别及支付方式进行分析。结果：年龄、性别和支付方式是影响住院费用的重要因素。至2009年医保患者人群多于自费患者人群,医保患者人数涨幅明显;男性患者多于女性患者;住院费用随着年龄的增长而增加。结论：继续推广城镇职工基本医疗保险,为60岁以上人群制定更有针对性的政策。     

Part-time hospitalization programs: the neglected field of community psychiatry.

Part-time hospitalization for persons with psychiatric disorders is underdeveloped, underutilized and often poorly understood, but should be encouraged in view of the unsatisfactory living conditions of patients discharged from hospital who still require care, the reductions in psychiatric impatient populations and numbers of beds, the increasing costs of health services and the current fiscal restraints. Day and night hospitals can provide an alternative to inpatient or outpatient treatment, rehabilitation for the long-term patient or treatment for the patient in transition from inpatient to outpatient status. The day hospital can also provide a diagnostic setting. Such programs help preserve the patient''s position in the family and the community, minimize the ill effects of hospitalization, and lower capital and operating costs of the psychiatric services. Awareness by medical and paramedical services of the value of these programs would increase their utilization. Shifting the emphasis of administrative and fiscal policies from inpatient to part-time hospitalization programs is also required.     

Bayesian profiling for cost with zeros to decompose total cost into probability of cost and mean nonzero cost

Cost of health care can vary substantially across hospitals, centers, or providers. Data from electronic health records provide information for studying patterns of cost variation and identifying high or low cost centers. Cost data often include zero values when patients receive no care, and joint two-part models have been developed for clustered cost data with zeros. Standard methods for center comparisons, sometimes called profiling, can use these methods to incorporate zero values into total cost. However, zero costs also provide opportunities to further examine sources of cost variation and outliers. For example, a hospital may have high (or low) cost due to frequency of nonzero cost, amount of nonzero cost, or a combination of those. We give methods for decomposing hospital differences in total cost with zeros into components for probability of use (i.e., of nonzero cost) and for cost of use (mean of nonzero cost). The components multiply to total cost and quantify components on the same easily interpreted multiplicative scales. The methods are based on Bayesian hierarchical models and counterfactual arguments, with Markov chain Monte Carlo estimation. We used simulated data to illustrate use, interpretation, and visualization of the methods in diverse situations, and applied the methods to 30,024 patients at 57 US Veterans Administration hospitals to characterize outlier hospitals in one year cost of inpatient care following a cardiac procedure. Twenty eight percent of patients had zero cost. These methods are useful in providing insight into cost variation and outliers for planning future studies or interventions.