The changing climate of medical practice. The physician rebellion.
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Biomedical subjects
Publications and source records attributed to J E Kralewski.
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The development of competitive markets for health services as a cost containment strategy and the attendant shift to the provision of services through large-scale organizations are having a profound effect on academic health sciences centers. At the University of Minnesota, where this transition is firmly in place, the teaching programs based at the University of Minnesota Hospital and Clinic are threatened as health maintenance organizations and similar provider systems restrict referrals to these institutions and limit lengths of stay. Moreover, large-scale provider organizations are becoming more influential in determining the content of the training programs. The University of Minnesota Health Sciences Center is attempting to improve its competitive position in health care delivery and reshape its teaching programs to reflect this new environment through strategic planning.
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This study of 247 medical group practices explores the structural characteristics of these emerging organizational forms. As size and complexity of services increase, group practices tend to increase the number of hierarchical levels of authority and become more formal and bureaucratic. Complexity of services was found to have more influence on the formation of subdivisions, while size was more influential in terms of levels of administration. Large group practices, and especially large multispecialty groups, appear to engage in a highly organized corporate style of medical practice. In these organizations, important professional decisions are shifted from the clinician to the administrator.
The performance of contract-managed (CM) hospitals is compared to that of a set of internally managed hospitals matched on a variety of hospital and market area characteristics. The performance of the study hospitals was similar to that of the matches in the years before the onset of contract management. Among 12 performance indicators, only occupancy rates differed significantly in the two samples in the years before contract management. Occupancy rates were lower on average in the hospitals which later became contract managed. During the 3 years following the onset of contract management, the CM hospitals showed no improvement in productive efficiency but did show changes in the way services were priced. The ratio of gross patient revenue to total expense increased significantly in the CM hospitals relative to their matches. This increase also appears to be associated with an increase in net profits in the CM hospitals relative to their matches.
Almost all states have enacted legislation, that allows pharmacists to substitute drug products when filling prescriptions. We studied the effects of competition in the drugstore service area on the use of less costly drug products and the pricing of prescriptions under the drug-product-selection law in Minnesota. In 38 drugstores in the Minneapolis-St. Paul area, rates of substitution of generic or less-costly brands and prescription prices were analyzed according to the degree of competition in the drugstore's service area, as measured by the pharmacists' perceptions and the number of competing drugstores within a 1-mile radius. Although higher levels of competition were associated with increased use of generic drugs for prescriptions written generically, competition did not appear to affect either dispensing patterns for prescriptions written for brand-name products or the retail prices of brand-name or generic products. These findings do not support the hypothesis that competition reduces prescription-drug prices through improved selection of drug products at the retail pharmacy level.
With nearly a quarter of the population enrolled in Health Maintenance Organizations (HMOs) the Mineapolis/St. Paul metropolitan area provides a unique opportunity for studies dealing with the effects of prepaid health plans on the health care marketplace. This study explores one aspect of that market; discounts obtained by HMOs for hospital inpatient service. Using information gathered from structured interviews with the 7 HMOs and 30 hospitals in the Twin Cities area, the study addressed three areas of inquiry: (1) the nature of discount contracts between hospitals and HMOs, (2) the roles played by each party in initiating the contracts, and (3) factors influencing the establishment of the contracts. While each of the HMOs was found to have at least one hospital contract under which they received inpatient services for other than full-billed charges, the amount of the discount was not substantial in the majority of cases. Other factors such as hospital location and ability to provide a full range of services appear to be as important as financial discounts when HMOs select a hospital for inpatient services. It appears that hospitals played the lead role in initiating hospital/HMO contracts during the formative HMO years, but this initiative shifted to the HMOs as they gained market shares and bargaining power. Hospitals and HMOs agree that the most important factor influencing hospital willingness to consider discount contracts was and still is the surplus bed availability in the area. This surplus of beds has been exacerbated by a continued decline in hospital utilization. These conditions coupled with increased HMO market shares has recently resulted in intensified contract negotiations and further discounts for inpatient services.
Although HMOs very often obtain discounts for hospital services, there is little evidence that they create price competition among hospitals. Location and the availability of services and specialists, rather than price, appear to be the most important factors in the selection of hospitals by HMOs.
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During the past five years, contract management of nonprofit hospitals by for-profit corporations has increased markedly. However, while a number of studies have been conducted on investor-owned hospitals and proprietary hospital systems, contract-managed hospitals have not been evaluated systematically. This paper reports a pilot study which compares a sample of 32 nonprofit hospitals under management contracts with matched hospitals uneder traditional in-house management. Although few major differences were found between the study hospitals, the findings indicate that contract-managed hospitals tend to offer a somewhat broader range of services, especially in the outpatient area, younger, more highly educated administrators, and show lower cost per patient stay largely due to somewhat lower employee-to-bed and payroll-to-total expense ratios and shorter lengths of stay.
The author wrote the following article after returning from a visit to the Soviet Union as a member of an HEW delegation. It identifies some of the underlying political and economic considerations that influenced health policy in the Soviet Union and comments on how the health system underpins the political system. The author also identifies some of the challenges being faced by the Soviet health system as consumer expectations increase, and how those challenges are causing the Soviets to ask many of the same questions currently being asked in the U.S. health system.
Several aspects of the program in health administration that was established in 1968 by the faculty of the University of Colorado School of Medicine are described. Based on the premise that knowledge about the organization and the delivery of health services had not kept pace with the advances made in the scientific foundations of medicine, the program was designed to provide training in management, accounting, economics, medical care organization, quantitative methods, and in the other skills required for health administration. The results of a survey to identify the extent to which the program's graduates have fulfilled the original objectives are presented, including a description of the graduate's backgrounds and current job situations. The lessons learned from five year's experience teaching health administration within a medical school are also reviewed.
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