Projects: Healthcare Management Analytics Lab

The Neonatal Intensive Care Unit (NICU) at University of Chicago Medicine (UCM), which has historically been one of the most profitable and prestigious departments in the hospital, is facing an unprecedented budget crisis. In 2014 Illinois Medicaid changed its reimbursement policy from a per diem basis to a fixed payment regardless of length of stay. Thus, beyond a certain length of stay each patient potentially becomes a profit loss, and with lengths of stay varying from days to months this poses a significant management challenge. To maintain profitability without compromising quality of care, it is critical for UCM to better understand how costs evolve over the duration of care as patient severity of illness changes. The goal of this project is to identify the drivers of NICU profitability based on patient characteristics, so that UCM will be better able to target interventions to improve profitability and maintain its position as a preeminent neonatal provider.

The project will utilize six years of individual-level clinical, administrative, and financial data. While data on all-payers will be utilized, the project will focus on infants covered by IL Medicaid (approximately 60% of their patient population). You will first perform a retrospective cost, reimbursement, and length-of-stay analysis using a combination of static and dynamically evolving patient characteristics and clinical dispositions. You will then combine these elements to formulate a profit model, and use it to calculate break-even lengths of stay and optimal patient characteristics for various cohorts of neonates.

In this project, you will have the opportunity to combine financial and statistical models, to manipulate large healthcare data, to understand in detail Medicaid reimbursement policies, and of course, to provide critical information to benefit the NICU at UCM. While the project focuses on neonates, the issues you will study are relevant well beyond the NICU and extend in generality to the underlying profit drivers of inpatient hospitals across the U.S.