Epidemiology/Health Services/Psychosocial Research

O R I G I N A L A R T I C L E

Determining an Episode of Care Using

Claims Data
Diabetic foot ulcer
SHILPA S. MEHTA, PHARMD HENRY A. GLICK, PHD patient management decisions, the length of
SHINOBU SUZUKI, MA KEVIN A. SCHULMAN, MD, MBA an episode must be defined empirically in
real-world settings of clinical practice.
We have previously described a method
for constructing an episode of care using
administrative data available to most health
OBJECTIVE — Amid changes in the organization and financing of health care, health care care plans (10). We now apply this method-
decision makers are increasingly interested in episodes of care. We sought to determine an ology to the assessment of episodes of care
episode of care for diabetic foot ulcer using an administrative claims database. for a complication that occurs in patients
with diabetes: diabetic foot ulcer.
RESEARCH DESIGN AND METHODS — We used 1993–1995 claims data to assess
resource utilization for privately insured patients with diabetic foot ulcers. Over a 26-week
period, we determined the episode length by comparing differences in average daily charges RESEARCH DESIGN AND
and proportion of patients with charges before and after foot ulcer diagnosis. All 13 weeks METHODS — Diabetic foot ulcer is a
before diagnosis were used to calculate baseline values. Significance was determined by CIs, complication of diabetes that is well known
which were calculated by a nonparametric bootstrap technique. Costs associated with the and potentially quite costly. In addition,
episode were also calculated. A sensitivity analysis using weeks with highest and lowest val- because it is fairly acute in nature, it is an
ues as baseline was also conducted. ideal complication to study with retro-
spective claims database analyses: acute
RESULTS — Based on average daily charges, the episode of care for diabetic foot ulcer was complications are less likely to lead to
5 weeks. Using proportion of patients with charges, the episode was longer than 13 weeks. The selection between health plans and transi-
cost for an episode of care ranged from $900 to $2,600. In the sensitivity analyses, episodes of
care ranged from 1 to 13 weeks.
tion between administrative data sets.
We used claims data from a privately
CONCLUSIONS — Episodes of care can be defined by the period beginning with increased insured diabetic patient population to iden-
resource consumption and ending when resource consumption returns to baseline levels. With tify an episode of care for diabetic foot ulcer.
the growth of managed care and disease management programs, episode-of-care analysis may We defined an episode of care as the num-
have an increasingly important role in health care provision and delivery. ber of weeks of increased resource utiliza-
tion following an initial diagnosis of diabetic
Diabetes Care 22:1110–1115, 1999 foot ulcer. With this data set, we conducted
analyses using two measures of resource
utilization, average daily charges and pro-
mid changes in the organization and management programs and can assess the portion of patients with charges, to verify

A financing of health care, physicians

and health care decision makers are
becoming increasingly interested in epi-
sodes of care for patients with diabetes. As
costs and outcomes of alternative treatment
strategies for the management of patients
with diabetes.
The theoretical framework for assessing
our estimates of the length of the episodes.
This first step was used to determine the
length of the episode. Further analyses can
be conducted to evaluate the patterns of
defined in the literature, an episode of care episodes of care has been well developed in care and the intensity of services that
is the period initiated by patient presenta- the literature (1,5–9); however, the method- patients receive during the episode once
tion with a diagnosis of a clinical condition ology has rarely been applied to patients the length of the episode is defined. Our
and concluded when the condition is with diabetes. Furthermore, most episodes main analysis is based on episodes deter-
resolved (1–4). With knowledge of the time of illness that have been defined in the lit- mined using differences in charges, before
course of an illness, physicians can develop erature have had arbitrary time horizons and after an index diagnosis of foot ulcer.
case management protocols and disease (10). If episode-of-care analysis is to inform
Study population
Potential subjects for this study were dia-
betic patients enrolled in more than 200
From the Clinical Economics Research Unit (S.S.M., S.S., K.S.), Georgetown University Medical Center, Wash-
ington, DC; and the Division of General Internal Medicine (H.A.G.), University of Pennsylvania, Philadelphia. fee-for-service private insurance plans
Address correspondence and reprint requests to Kevin A. Schulman, MD, MBA, Georgetown University throughout the U.S. from 1993 to 1995
Medical Center, 2233 Wisconsin Ave. NW, Suite 440, Washington, DC 20007. E-mail: schulmak@gunet. (data were compiled by MedStat). Diabetic
georgetown.edu. patients were identified on the basis of
Received for publication 5 November 1998 and accepted in revised form 24 March 1999.
Abbreviations: ICD-9-CM, International Classification of Diseases, Ninth Revision, Clinical Modification. medical and pharmacy claims consistent
A table elsewhere in this issue shows conventional and Système International (SI) units and conversion with the diagnosis of diabetes. For our
factors for many substances. analysis, we further identified patients by

1110 DIABETES CARE, VOLUME 22, NUMBER 7, JULY 1999


the presence of International Classification of
Diseases, Ninth Revision, Clinical Modifica -
tion (ICD-9-CM) codes for diabetic foot
ulcer during a physician or hospital visit in
their claims record. It has been well docu-
mented in the literature that there is
tremendous variability in the diagnostic
codes used to identify the same illness
(11). To account for this variability, we
opted to include several different codes
for diabetic foot ulcer so as to be as com-
prehensive in our assessment as possible.
We used the following ICD-9-CM codes to
identify diabetic foot ulcers for our analysis:
250.80–250.89, 707.1, 250.70–250.73,
680.60, 680.70, 680.90, 681.1, 681.9,
682.6, 682.7, and 682.9. We then divided
the foot ulcer population into subgroups
according to ICD-9-CM codes 250.7x
(250.70–250.73), 250.8x (250.80–250.89),
707.1, and 68x.x (680.60, 680.70,
680.90, 681.1, 681.9, 682.6, 682.7,
682.9). Our algorithm for identifying
patients with foot ulcers was not verified
by medical chart documentation since we
did not have access to patient-level data.
Data
Data were available for charges and corre-
sponding dates of service for all acute inpa-
tient procedures and medical charges,
outpatient physician visits, outpatient pro-
cedures and medical charges, and date,
type, and length for prescriptions obtained
on an outpatient basis. Dressings, pros-
thetic/orthotic devices, and home health
care services were included in the outpa-
tient charge data provided that the particu-
lar health plan covered these items and
they were billed for. What we refer to as
charges are actually the amounts deemed
reimbursable by the insurance plans,
including copayments and deductibles.
Service and charge data were extracted for
a period 13 weeks before and 13 weeks
after the diagnosis of diabetic foot ulcer (the
index diagnosis). Patients who had indi-
vidual charges .$50,000 for a single ser-
vice item were excluded from our analysis.
We chose a 13-week time before and after
the index for our analysis to ensure that we
were not observing a continuing episode of
care from a prior diagnosis and that we
observed the end of the episode of care. We
further restricted the sample by requiring
that patients have drug claims data for the
period that we observed.
For a diagnosis of diabetic foot ulcer
to serve as an index diagnosis, the patient
was required to have continuous claims
DIABETES CARE, VOLUME 22, NUMBER 7, JULY 1999
data throughout the 26-week period. In
addition, patients had to be free of addi-
tional foot ulcer diagnosis during the 13-
week baseline period before the index.
When hospital diagnoses were used to
identify an index event, only primary
diagnoses were considered.
Charges and dates were available for
individual services received during a hos-
pitalization. Provider charges and inpatient
service charges were assigned to the date of
service. For prescription medications, the
total charge was divided by the number of
days of therapy, and this average daily
charge was assigned to each day. Average
daily charges were calculated for the base-
line period and for each week after the
index diagnosis.
Analysis
Patient characteristics. Descriptive sta-
tistics for the samples with foot ulcer are
reported for the entire sample and the
ICD-9-CM subgroups. F tests and x2 tests
were used to assess if the four subgroups
for foot ulcers were statistically different;
t tests employing a Bonferroni normaliza-
tion (referred to as a Bonferroni t test)
were used to make pairwise comparisons
for the mean age among the subgroups.
Episode of care. We determined the length
of an episode of care by evaluating differ-
ences in average daily charges and propor-
tions of patients with charges in the weeks
before and after the index diagnosis. An
episode was considered to end when there
was no longer a significant difference in
resource use between the periods before
and after the diagnosis. Significance was
determined by CIs around the difference
that did not include zero. CIs were esti-
mated using a nonparametric bootstrap
technique. Separate episode lengths were
calculated for all diabetic foot ulcers and for
diabetic foot ulcer subgroups.
For some conditions, diagnosis codes
for the condition may be recorded in close
proximity to the time when work-up and
therapy is initiated, and for other condi-
tions, diagnostic evaluation or treatment
may be initiated well before the appropriate
diagnosis is made and recorded (1). For
example, a patient may receive presump-
tive treatment for an infection before cul-
ture results, and a final diagnosis, are
obtained. The need to define the beginning
of an episode by the date of initial presen-
tation or treatment rather than the date of
diagnosis has been called “updating” (1). In
an attempt to determine whether the date
Mehta and Associates
of diagnosis was associated with the initia-
tion of the episode, we compared the aver-
age daily charge and the proportion of
patients with charges in the week before the
index diagnosis with the average daily
charge and the proportion of patients with
charges in the weeks further preceding the
index diagnosis. If significant differences
were observed between these weeks, we
reassigned the index date based on these
results to the date 7 days before the diag-
nosis date and based all of our calculations
on this updated index (i.e., 13 weeks before
and after the new date).
Average daily charge. We compared the
average inpatient, outpatient, and prescrip-
tion medication charges for the days before
the index diagnosis to the average daily
charges for the weeks after the index diag-
nosis. For each patient, we calculated the
average daily charge for the period before
the index diagnosis by summing all charges
in this period and dividing by 91 days. For
charges after the index diagnosis, we calcu-
lated a separate average daily charge (total
weekly charges/7 days) for each week. This
aggregation was developed to account for
potential bias resulting from high resource
consumption on a particular day.
We report the mean difference in aver-
age daily charges between each week after
the initiation of the episode and the weeks
before the initiation of the episode, as well
as the 95 and 99% CIs around the mean.
Proportion of patients with charges. We
also calculated the difference between the
average proportion of patients having
charges for the period before the index and
the average proportion of patients having
charges in each of the 13 weeks after the
diagnosis. The average proportion of patients
with charges before the index was calculated
by dividing the number of patients with
charges in each week by the total number of
patients and taking the average of the weekly
proportions over the 13-week period. For
weeks after the index diagnosis, we calcu-
lated the proportion of patients with charges
by dividing the number of patients with
charges for each week by the total number of
patients. We report the weekly difference in
proportions as well as the 95 and 99% CIs
for the differences in the proportions.
Cost analysis. Incremental costs attribut-
able to the episode were calculated by mul-
tiplying the difference in the average daily
charges before and after the index diag-
noses by 7 (i.e., weekly charges = difference
in average daily charges 3 7) and summing
the total weekly charges over the duration
1111
Determining an episode of care using claims data

Table 1—Demographic characteristics of patients with diabetic foot ulcer from $25 to $148, $148 being the post-
index week 1 average daily charge. The
Diabetic foot ulcer distribution of charges for this sample was
All 250.8x 250.7 707.1 68x.x
consistently skewed to the right (i.e., the
mean was greater than the median). A non-
n 5,149 725 251 752 3,421 parametric bootstrap technique was used
Age (mean ± SD) 51.1 ± 12.1 50.3 ± 13.1 55.9 ± 9.5 54.5 ± 9.1 50.2 ± 12.5 to create CIs for differences from baseline in
Sex (%) average daily charges (Fig. 1). The average
M 46.5 51.7 53.0 47.5 44.7 daily charges for weeks after the index foot
F 53.5 48.3 47.0 52.5 55.3 ulcer remained greater than the average
daily charge for the baseline period through
week 12. The lower limit of the CI around
of the episodes. Incremental costs were cal- patients with charges in the week before this difference was .$0 through week 8 for
culated for the overall foot ulcer population the index diagnosis compared with the the 95% CI and through week 5 for the
and for each subgroup. All costs were cal- average daily charge and the proportion of 99% CI. Figure 2 reports the probability
culated in 1995 dollars. patients with charges in the preceding that the difference between average daily
Sensitivity analysis. Average charges per weeks. The lower limit of the 95 and 99% charges at baseline and after the index foot
week and the proportion of patients with CIs for both measures of resource utiliza- ulcer was between $0 and $400. For exam-
charges varied at different times in the tion was .0. Thus, we updated the analy- ple, there was a 50% probability that the
period before the index date. Thus, to sis by shifting the index dates back by difference in average daily charges between
account for these differences, we repeated 1 week before the first index diagnosis. We week 1 after the index date and the baseline
the analysis using the weeks with the high- did this to capture the true beginning of period exceeded $200.
est and the lowest values as baseline to cal- the disease based on the increased resource Proportion of patients with charges. The
culate the differences in average charges utilization in the week preceding the index proportion of patients with charges in the
and the average proportion of patients with diagnosis (1). Thus, 1 week before the weeks before the index diagnosis ranged
charges instead of using all 13 weeks of the appearance of the diagnosis code was from 0.51 to 0.63, whereas the proportion
actual baseline period. noted as the index date. of patients with charges in the weeks after
the index diagnosis ranged from 0.65 to
RESULTS Episode of care 0.78. Results from the bootstrap technique
Average daily charge. The mean charges showed that the difference between the
Patient characteristics during the weeks before the index ranged average proportion of patients with charges
The initial population for diabetic foot ulcer from $19 to $38, while the mean charges after the index date and the baseline
consisted of 5,321 patients. Some 97 during the weeks after the index ranged period remained positive through week 13
patients who subsequently developed osteo-
myelitis and 30 patients who had single-
service charges exceeding $50,000 were
excluded. Forty-five patients who had only
a secondary diagnosis of diabetic foot ulcer
were also excluded. The final sample
included 5,149 patients with an index
diagnosis of foot ulcer.
The mean ages and the sex distribu-
tions are reported in Table 1 for the overall
foot ulcer sample and the four ICD-9-CM
code subgroups. There was a statistically
significant difference in mean age across the
four subgroups of foot ulcers (P , 0.0001).
Bonferroni t tests of differences between
the means indicated that the pairwise dif-
ferences in mean ages for 250.7x and 707.1
and for 68x.x and 250.8x were not statisti-
cally significant at the 0.05 level, but the
differences were significant for all other
pairs. There was a statistically significant
difference in the sex distribution across the
four subgroups (P = 0.001).

Index analysis Figure 1—CIs for differences in average daily allowed charges from baseline: results from bootstrap
There were significant differences in the analysis. The circle shows the mean incremental daily allowed charges, the thick line shows the 95% CI
average daily charge and the proportion of around the mean, and the thin line shows the 99% CI around the mean.

1112 DIABETES CARE, VOLUME 22, NUMBER 7, JULY 1999


Figure 2—Probability of the incremental average daily allowed charges for weeks 1–4. The x-axis
shows the dollar amount for the incremental average daily allowed charges, and the y-axis shows the
probability associated with the dollar amount for each week.
(Fig. 3). The lower limit of both the 95 and
99% CIs was also .0 through week 13.
Foot ulcer subgroups
For the foot ulcer subgroups, the results of
the bootstrap analysis showed that the
episode of care ranged from 1 week up to
10 weeks using average daily charges as the
measure of resource utilization. The foot
ulcer subgroup 250.7x had the shortest
episode duration, whereas the subgroup
707.1 had the longest duration. For pro-
portion of patients with charges, episode
length was consistently .13 weeks for all
subgroups (Table 2).
Cost analysis
Costs were stratified by four ICD-9-CM
classifications. The incremental cost of an
episode of care for foot ulcer ranged from
,$864 to $2,600 (Table 2). The incre-
mental costs represent the additional costs
attributable to the episode of illness over
the usual care costs for these patients. The
707.1 subgroup had the highest cost for an
episode, whereas the 250.7x subgroup had
the lowest-cost episode. This finding is
consistent with the duration of the
episodes. In addition, the median was con-
sistently less than the mean charges, indi-
cating that the cost data are skewed.
To make a more meaningful compari-
son of the incremental costs across the
DIABETES CARE, VOLUME 22, NUMBER 7, JULY 1999
four subgroups of foot ulcers, average per-
week incremental costs for episodes were
calculated for each of the four subgroups.
The average per-week incremental costs
among subgroups were statistically differ-
ent from one another (P , 0.0001), and
Figure 3—CIs for differences in proportions from baseline: results from bootstrap analysis. The circle
shows the mean difference in proportions, the thick line shows the 95% CI around the mean, and the
thin line shows the 99% CI around the mean.
Mehta and Associates
the Bonferroni t tests indicated that the
difference in means resulting from all
pairwise comparisons were statistically
significant at 0.05, with the exception of
707.1 and 68x.x.
Sensitivity analysis
We assessed the impact of substituting
weeks with the highest and lowest values as
the baseline period on our results. We did
this using both measures of resource uti-
lization, average daily charges and propor-
tion of patients with charges. We compared
resource use after the index foot ulcer diag-
nosis using these new baseline values.
For the entire sample, the episode was
.13 weeks using the lowest value of the
average daily charges and proportions,
whereas the episode was 1 week using the
highest value of average daily charges. The
episode was 12 weeks according to the 95%
CI and 11 weeks according to the 99% CI
using the highest value of the average pro-
portions. This same relationship was also
found for the foot ulcer subgroups.
Our sensitivity analyses indicate that
our results are highly sensitive to the base-
line period chosen. In any given week, a
diabetic patient could incur high or low
cost or have more or less visits than are typ-
ical. Thus, averaging costs or proportions
over the baseline period (compared with
averaging the costs or proportions over a
1113
Determining an episode of care using claims data

Table 2—Estimated duration of episodes and total costs for diabetic foot ulcer assigned a preliminary diagnosis other than
diabetic foot ulcer while they were being
Total cost ($) evaluated and received a confirmed diag-
nosis only after treatment had begun. For
n Duration (weeks) Mean ± SD Median
example, a diabetic patient may be initially
DFU (overall) 5,149 diagnosed with cellulitis for a painful foot.
Charge Later, further diagnostic evaluation deter-
95% CI 8 1,674 ± 7,566 240 mines that the patient actually has a dia-
99% CI 5 1,534 ± 6,095 189 betic foot ulcer. To compensate for these
Proportion coding practices, we adjusted the index
95% CI .13* — — date by shifting it back 1 week. This pattern
99% CI .13 — — of coding of the index diagnosis is a finding
250.8x 725 that may be encountered when construct-
Charge ing disease episodes using administrative
95% CI 4 2,019 ± 6,224 259 data (1). If one fails to consider appropri-
99% CI 2 1,637 ± 4,532 201 ately shifting the start date of the episode
Proportion (updating), the beginning of the episode
95% CI .13 — — would be the date the diagnosis was estab-
99% CI .13 — — lished and the prior diagnosis would
250.7x 251 appear to be a separate, unrelated episode.
Charge Updating is a well-established and impor-
95% CI 1 864 ± 3,415 82 tant methodologic concept in episode-of-
99% CI 1 864 ± 3,415 82 care literature and is required for accurate
Proportion assessment of resource utilization for an
95% CI .13 — — episode of care (1).
99% CI .13 — — Administrative claims data are limited
707.1 752 by the lack of clinical detail included in
Charge administrative claims forms, the unreliabil-
95% CI 10 2,565 ± 10,139 351 ity of clinical coding by physicians or med-
99% CI 4 1,512 ± 5,422 167 ical records personnel, and the limited
Proportion generalizability of longitudinal administra-
95% CI .13 — — tive data sets (12). In one study, up to 50%
99% CI .13 — — of the diagnosis codes found in databases
68x.x 3,421 could not be verified by medical chart
Charge review for diabetes, urinary tract infection,
95% CI 5 1,368 ± 5,819 177 and sore throat (13). Further, we could not
99% CI 3 1,204 ± 4,722 144 validate our chosen codes for foot ulcer
Proportion since we did not have access to patient-level
95% CI .13 — — data. Thus, our diagnostic codes may have
99% CI .13 — — a higher level of sensitivity than specificity.
Total costs are in 1995 dollars. *Total costs are undefined for episode length exceeding 13 weeks. In this analysis, it is important to note
that resource utilization from all health care
providers and all interactions with the
health care system that patients had during
week) leads to a more stable estimate of the when using the average daily charge mea- their episode of care are captured. Future
episode of care for patients with foot ulcers. sure versus the proportion of patients with analysis of this kind may evaluate the rela-
charges as our measure of resource utiliza- tionship between practitioner type and
CONCLUSIONS — Episode-of-care tion. The longer episode of care found episode duration and cost. In addition,
analysis using claims data is a useful using proportion of patients with charges is future analysis could evaluate episode
method for determining the duration of consistent with other studies using this duration and cost over several years to
episodic clinical conditions. Calculations methodology (10) and may be because the determine if changing practice patterns or
of such durations may inform treatment proportion of patients with charges is a introduction of new technology or treat-
algorithms or end-point assessment for more sensitive measure of resource utiliza- ment affects the cost and length of an
clinical trials. In this study, we presented an tion than average daily charges, thus episode of care for diabetic foot ulcers.
empirical approach for determining the lengthening the episode of care. Our analysis demonstrates that an
length of an episode of care. We demonstrate For patients with foot ulcers in our episode of care for specific clinical condi-
this methodology with the clinical condition sample, average daily charges in the week tions associated with diabetes, diabetic
of diabetic foot ulcer. before diagnosis were significantly greater foot ulcers, can be defined by the period
We found the episode of care for dia- than overall baseline average charges. This beginning with increased resource con-
betic foot ulcers to be shorter in duration implies that these patients may have been sumption and ending when resource

1114 DIABETES CARE, VOLUME 22, NUMBER 7, JULY 1999


consumption returns to baseline levels.
Episodes of care for patients with these
conditions range from 1 to 13 weeks in
duration and from ,$900 to $2,600 in
incremental cost per episode. This type of
analysis may have an increasingly impor-
tant role in the assessment of health care
provision and delivery.
Acknowledgments — Funded in part by an
unrestricted educational grant from Novartis
Pharmaceuticals.
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