This document summarizes catheterization metrics, procedures, costs, charges, and reimbursement for a 300 bed teaching hospital using the DirectVision catheterization system. It finds that using DirectVision for 10 procedures per month generates $1,940 in direct incremental gain each month or $23,276 per year from additional charges and professional fees, despite $2,660 in additional costs per month. Physicians and mid-levels can bill for their DirectVision services. The analysis only considers direct financial impacts and not total costs of patient care.

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A B C D
CAUTI Source: Medicare Hospital Compare
A. Number of infections per year 25 Reported by hospital to CMS
B. Predicted # of infections per year 14.605 Based on infections reported to NHSN from 1/2006–12/2008.
C. Standardized Infection Ratio (A/B) 1.712
SIR baseline = 1. If the SIR is less than 1, then the hospital reported fewer infections
than predicted from the baseline data of 2006-2008. If the SIR is more than 1, then
there were more infections reported than predicted.
CAUTI SIR RATE LOWER IS BETTER
A. Hospital Score 1.712
SIR adjusts for differences between hospitals. E.g., a hospital with a large burn unit
(where patients are more prone to acquire infections) cannot be directly compared to a
facility without a burn unit.
B. State Rate 1.272 Providers with a SIR higher than 1 typically need stronger HAI prevention initiatives.
C. Hospital CAUTI Ratio (A/B) 1.346 CAUTI plus CLABSI scores comprise 65% of the HAC score
Medicare Net Patient Revenue 58,674,169$ AHD: Profile Page
1% potential penalty (586,742)$ Penalty for hospitals that rank in lowest-performing 25% re: HAC
Catheter Indwelling Days 6,541 https://data.medicare.gov/data/hospital-compare
Patient Beds 334
PAYOR MIX BY GROSS REVENUE AHD = American Hospital Directory
Medicare/Medicaid 28% AHD: Profile page. (Medicare + Medicaid) / Total Revenue
Commercial 72% AHD: Profile page. Other / Total Revenue
Total 100%
COST TO CHARGE RATIOS
Nursing Units 16.94% AHD: (Depts. Tab) Overall Cost/Charge Ratio Section
Emergency room 30.75% AHD: (Depts. Tab) Outpatient Service Center Cost/Charge Ratio
Operating room 22.14% AHD: (Depts.Tab) Ancillary Service Center Section. Cost/Charge Ratio
AVERAGE REIMBURSEMENT Inpatient Outpatient
% of commercial charges paid under fixed rate method 50% 50%
Average payment rate for % of charge payment method 65% 70% % of charges paid by private carriers - % of charge method
ED Physician (hospital employee) - commercial 75% Private carrier reimbursement for professional fee
CPT 52000/-52 $509.76 Facility Fee (National rate)
Professional Fee 52000/-52 $124.52 Professional Fee (National rate)
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A B C D
INPATIENT CATHETERIZATION METRICS
Total discharges per year 8,641 AHD: Profile page
Inpatients catheterized (routine & DUC) Assume 20%,
divide by 2 to include male patients only 10.0% Safe Practices for Better Healthcare 2010 Update, National Quality Forum (15-25%)
Patients catheterized per month (routine & DUC) 72 10% of total inpatient discharges per year/12
Percent which are DUC - 10% 7 Expected range is 15-25% for DUCs
DirectVision® placements of DUCs 80%
DirectVision placements per month 6
EMERGENCY DEPARTMENT CATHETERIZATION METRICS
ER patients not admitted 9,300 68% AHD: Profile page - Estimated patient volumes
ER patients admitted 4,400 32% AHD: Profile page - Estimated patient volumes
Total ER patients 13,700 100%
% of patients catheterized (routine & DUC) 5.0% 10% of total ER patients; divide by 2 to include just male patients
Patients catheterized per month (routine & DUC) 57 Total ER patients * 5% /12
Percent which are DUC - 8% 5
DirectVision® placements of DUCs 80% 80% of DUCs will use DirectVision
DirectVision placements per month 4
DIRECTVISION® PROCEDURES PER MONTH HOUSEWIDE
Inpatient Outpatient
Performed in ER (pt. admitted) 2.0 2.0
Performed in nursing units 3.0
Performed in OR 3.0
Total DirectVision placements housewide 10
DIRECTVISION® PROCEDURES PER PROVIDER TYPE
Nurses & Cath Techs 3 3 Assume nurses/techs will perform 50% of all DirectVision procedures
Mid-Levels (PAs, CNPs) 1.3 1.3 Assume mid-levels will perform 25% of all DirectVision procedures
Physicians 1.3 1.3 Assume physicians will perform 25% of all DirectVision procedures
DIRECTVISION® PROFESSIONAL FEE BY PROVIDER TYPE Medicare Commercial
52000 (Cystoscopy) $124.52 $337.50 Chargemaster E9*Model Assumptions C24
Nurses & Cath Techs $0.00 $0.00 DirectVision used by nurses/techs, the hospital receives no professional fee
Mid-Levels (PAs, CNPs) $105.84 $286.88 DirectVision used by mid-levels - hospital receives 85% of the professional fee
Physicians $124.52 $337.50 DirectVision used by physicians - hospital receives 100% of the professional fee
JOINT COMMISSION DATA
Range of costs for each nosocomial UTI 1,200$ $2,700 www.jointcommission.org/assets/1/18/r3_report_issue_2_9_22_11_final.pdf
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A B C D E F G
Cost and charge per procedure - ER & Nursing Units
Item REV code HCPCS List Price
Charge
(example) Markup Notes
Catheter 0272 none $88 $264 300% Industry average markup
Kit 0272 none $36 $108 300%
Visual guide 0272 none $120 $360 300% reusable, cost is $3,000, assume 25 times use
Equipment $22 $0 Include$22,000 cost of system; assume 1000 uses
Procedure charge 0450 (ER); 0239
(bedside)
52000 outpt.; null for
inpt. $0 $450
Priced by each hospital relative to similar procedures
Total $266 $1,182
Cost and charge per procedure - OR
Item REV code HCPCS List Price Charge (example) Markup Notes
Catheter 0272 none $88 $264 300%
Kit 0272 none $36 $108 300%
Visual guide 0272 none $120 $360 300% reusable, cost is $3,000, assume 25 uses
Equipment $22 $0 Include$22,000 cost of system; assume 1000 uses
Procedure charge* 0360 $0 $750 Priced by each hospital relative to similar procedures
$266 $1,482
CHARGEMASTER
*Depends upon hospital's OR charge structure; assume $750 for 15 min OR time; charges are approximate
Codes & charges are suggestions only and are not intended to replace the hospital's review of codes & charges
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A B C D E F G H
DIRECTVISION®PLACEMENTS 8 2 10 120
FINANCIAL ANALYSIS
Incremental chargemaster
# of
patients Inpatient
# of
patients Outpatient Total/Mo. 1 year total
Direct impact = incremental net gain/loss from use of DirectVision®. Does not reflect reimbursement and costs of total patient
care, but only reimbursement and costs from use of DirectVision®
Procedure in ER 2 $2,364 2.0 $2,364 $4,728 $56,736 Inpatient: ChargemasterE10 * Model AssumptionsB45; Outpatient: ChargemasterE10 * Model AssumptionsC45
Procedure in nursing units 3 $3,546 0 $0 $3,546 $42,552 Inpatient: ChargemasterE10 * Model AssumptionsB46; Outpatient: ChargemasterE10 * Model AssumptionsC46
Procedure in operating room 3 $4,446 0 $0 $4,446 $53,352 Inpatient: ChargemasterE18* Model AssumptionsB47; Outpatient: ChargemasterE18 * Model AssumptionsC47
Total charges $10,356 $2,364 $12,720 $152,640
Incremental cost
# of
patients Inpatient
# of
patients Outpatient Total/Mo. 1 Year Total
Procedure in ER 2 $532 2.0 $532 $1,064 $12,768 Inpatient: ChargemasterD10* Model AssumptionsB45; Outpatient: ChargemasterD10 * Model AssumptionsC45
Procedure in nursing units 3 $798 0 $0 $798 $9,576 Inpatient: ChargemasterD10* Model AssumptionsB46; Outpatient: ChargemasterD10 * Model AssumptionsC46
Procedure in operating room 3 $798 0 $0 $798 $9,576 Inpatient: ChargemasterD18* Model AssumptionsB47; Outpatient: ChargemasterD18 * Model AssumptionsC47
Total cost $2,128 $532 $2,660 $31,920
Incremental reimbursement Inpatient Outpatient Total/Mo. 1 Year Total
Medicare/Medicaid $0 $285 $285 $3,426 Outpatient = Model Assumptions C45*Model Assumptions B15 * Model Assumptions C25 (Facility FEE)
Commercial - fixed rate $0 $0 $0 $0 Incremental reimbursement = $0
Commercial - % of charges $2,423 $596 $3,019 $36,228
Inpatient: FindingsC7*ModelAssumptions B16 * (1-Model Assumptions B23) * Model Assumptions B24; Outpatient:
FindingsD7*ModelAssumptionsB16 * (1-Model Assumptions C23) * Model Assumptions C24
Total reimbursement per month $2,423 $881 $3,304 $39,654
Physician and Mid-Level Reimbursement Catheter techs and Nurses performing the DirectVision ® procedure may NOT bill for their services
Medicare/Medicaid Inpatient Outpatient Total/Mo. 1 Year Total Physicians and mid-levels performing the DirectVision® procedure may bill for their professional services.
Nurses & Cath Techs 3 $0 3 $0 $3 $30
Inpatient: Model Assumptions B55 * Model Assumptions B15*Model Assumptions B50; Outpatient: Model
Assumptions B55 * Model Assumptions B15*Model Assumptions C50
Mid-Levels 1.25 $37 1.3 $37 $75 $904
Inpatient: Model Assumptions B56 * Model Assumptions B15*Model Assumptions B51; Outpatient: Model
Assumptions B56 * Model Assumptions B15*Model Assumptions C51
Physicians 1.25 $44 1.3 $44 $88 $1,061
Inpatient: Model Assumptions B57 * Model Assumptions B15*Model Assumptions B52; Outpatient: Model
Assumptions B56 * Model Assumptions B15*Model Assumptions C52
Commercial
# of
patients Inpatient
# of
patients Outpatient
Nurses & Cath Techs 3 $0 3 $0 $3 $30
Inpatient: Model Assumptions C55 * Model Assumptions B16*Model Assumptions B50; Outpatient: Model
Assumptions C55 * Model Assumptions B16*Model Assumptions C50
Mid-Levels 1.25 $258 1.3 $258 $518 $6,212
Inpatient: Model Assumptions C56 * Model Assumptions B16*Model Assumptions B51; Outpatient: Model
Assumptions C56 * Model Assumptions B16*Model Assumptions C51
Physicians 1.25 $304 1.3 $304 $609 $7,305
Inpatient: Model Assumptions C57 * Model Assumptions B16*Model Assumptions B52; Outpatient: Model
Assumptions C57 * Model Assumptions B16*Model Assumptions *C52
Total Professional Fee $643 $643 $1,295 $15,542
TOTAL DIRECT GAIN/(LOSS) Inpatient Outpatient Total/Mo. 1 Year Total
$938 $992 $1,940 $23,276 Inpatient: D15-D11+D20 Outpatient: E15-E11+E20.
# of
patients
# of
patients
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Tax Status Not For Profit
Income Monthly 1,940$
Income Annual 23,276$
Tax Impact 0%
4.00% Discount rate Upfront Costs Price Each # of Units Total
Gross After Tax Discounted Purchase Price System 22,000$ 1 22,000$
Upfront Cost -$30,480 -$30,480 1 box 14 Fr. Catheters (10) 88$ 10 880$
Year 1 Benefit $23,276 $23,276 $21,520 1 box 18 Fr. Catheters (10) 88$ 10 880$
Year 2 Benefit $23,276 $23,276 $20,692 2 boxes of kits 36$ 20 720$
Year 3 Benefit $23,276 $23,276 $19,896 2 Visual Guides 3,000$ 2 6,000$
-29% TOTAL 30,480$
25%
47%
Payback Calculation:
4.00% Discount rate 0 -$30,480 -$30,480 0.00
Gross After Tax Discounted 1 $21,520 -$8,960 1.00
Upfront Cost -$30,480 -$30,480 2 $20,692 $11,731 0.43
Year 1 Benefit $23,276 $23,276 $21,520 3 $19,896 $31,627 0.00
Year 2 Benefit $23,276 $23,276 $20,692 Payback Period (Years) 1.43
Year 3 Benefit $23,276 $23,276 $19,896
($9,412)
$8,983
$25,990
IRR - DIRECT IMPACT
IRR after 2 Years
IRR after 3 Years
NPV after Year 3
IRR after 1 Year
NPV after Year 1
NPV after Year 2
NPV - DIRECT IMPACT
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-29%
25%
47%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
60%
1 2 3
InternalRateofReturn(IRR)
Year
Internal Rate of Return (IRR)
DirectVision®

7. (c) Singh Advisors, LLC 2015 NPV - DIRECT
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($9,412)
$8,983
$25,990
($15,000)
($10,000)
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
1 2 3
NETPRESENTVALUE
YEAR
NET PRESENT VALUE
DirectVision®

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A B C D E F G H I J K
HAC SCORE HAC PENALTY FOR FY 2015 1% HAC PENALTY
7.350 58,674,169$ (586,742)$
CAUTI AND CATHETERIZATION DATA
A. Number of
infections per
year
B. Predicted #
of infections
per year
C.
Standardized
Infection Ratio
(A/B)
State Rate CAUTI SCORE REPORTED BY HOSPITAL TO CMS (2012) - ICU ONLY
25 14.605 1.712 1.272 1.346 Cost/CAUTI Cost Per year
Low -$1,200 -$30,000 No payment for HOSPITAL-ACQUIRED CAUTI
High -$2,700 -$67,500 No payment for HOSPITAL-ACQUIRED CAUTI
Net Gain/Loss -$616,742
INFORMATION ON ICD-9 DIAGNOSES RELATED TO CAUTI AND CATHETERIZATION
Primary
Diagnoses
Secondary
Diagnoses
ICD-9 788.20 (Retention of Urine) 0 90
ICD-9 599.71 (Gross Hematuria) 0 0
ICD-9 038.9 (Septicemia NOS) 59 16
48 318
ICD-9 DIAGNOSIS
599.0 Urin tract infection NOS
NET MEDICARE REVENUE
YES
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