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PubMed1995

The British health care reforms, the American health care revolution, and purchaser/provider contracts.

The health care systems of the United States and the United Kingdom are changing rapidly. After the Thatcher government's 1989 white paper, the formerly unified British National Health Service (NHS) was split into purchaser and provider sides, with the NHS District Health Authorities becoming purchasers, and the NHS hospitals, now reconstructed as independent NHS trusts, becoming providers. The U.S. health care system, driven by market forces rather than government fiat, has been moving rapidly toward integration, with increasingly formalized purchaser and provider relationships. Contracts are found at the purchaser/provider interface in both systems. We reviewed American and British purchaser/provider contracts. The contracts address similar issues but often take disparate approaches. These dissimilarities illuminate the profound, continuing differences between the two systems. They also, however, offer possibilities to transfer contracting "technology" between the two contracting cultures.

Competitive Bidding↗
PubMed1986

Identifying incremental cost in HMO/PPO bid evaluation.

While hospitals are implementing case-mix accounting systems, they also may be negotiating prices with health maintenance organizations (HMOs) and preferred provider organizations (PPOs). To aid decision makers in their evaluation of HMO/PPO bids, a matrix that projects the bottom-line effect of various rate and volume options may be useful. Identifying incremental cost--the additional cost incurred if one patient day were added--is the key to this type of matrix analysis. Knowing incremental cost, financial managers can project the effect of a potential loss of current patient volume if a bid is rejected, as well as the effect of a potential shift of patients to HMO/PPO status if a bid is accepted. Although the incremental per diem cost is of chief importance in evaluating bid alternatives, other factors, such as the hospital's potential for growth, opportunity to increase its competitive position, and the impact on community relations and on the medical staff, also must be considered.

Accounting↗
PubMed1987

Using an RFP approach for hospital collection services.

Hospitals are increasingly looking for outside help in collecting their delinquent accounts. Some institutions have found it beneficial to use a bidding process to obtain collection services from third-party collectors. The request for proposals (RFP) approach to bidding is a detailed method that is often recommended for hospitals to use. The RFP approach outlines the hospital's goals as well as requires bidders to develop techniques to accomplish those goals the hospital has set. Although the RFP approach is more time consuming than other bidding methods, hospitals will find it more beneficial for their needs.

Accounting↗