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Employer-sponsored health insurance: pressing problems, incremental changes.

Despite large premium increases, employers made only modest changes to health benefits in the past two years. By increasing copayments and deductibles and changing their pharmacy benefits, employers shifted costs to those who use services. Employers recognize these changes as short-term fixes, but most have not developed strategies for the future. Although interested in "defined-contribution" benefits, employers do not agree about what this entails and have no plans for moving to defined contributions in the near future. While dramatic changes in health benefits are unlikely in the short term, policymakers may want to watch for future erosions in health coverage.

Consumer Behavior↗

Why employer-sponsored insurance coverage changed, 1997-2003.

Four and a half million Americans gained employer-sponsored health insurance coverage during 1997-2001, while nearly nine million lost coverage in the ensuing economic downturn (2001-2003), after population growth was accounted for. Macroeconomic trends affecting employment, job quality, and incomes drove most of the coverage changes, although key factors varied during the two periods. Take-up rates affected coverage, mostly reflecting the interaction of premium cost trends and labor-market tightness, but take-up also was influenced by the implementation of the State Children's Health Insurance Program (SCHIP) during 1997-2001. Coverage among low-income people was most affected by economic conditions and premium costs.

Adult↗

Employment-based health insurance: past, present, and future.

We review the rise, stabilization, and decline of employment-based insurance; discuss its transformation from quasi-social insurance to a system based on actuarial principles; and suggest that the presence of Medicare and Medicaid has weakened political pressure for universal coverage. We highlight employment-based insurance's flaws: high administrative costs, inequitable sharing of costs, inability to cover large segments of the population, contribution to labor-management strife, and the inability of employers to act collectively to make health care more cost-effective. We conclude with scenarios for possible trajectories: employment-based insurance flourishes, continues to erode, or is replaced by a more comprehensive system.

Cost Allocation↗

Clinical aspects of therapeutic substitution.

A variety of problems are associated with the operation, quality, costs, and benefits of therapeutic substitution programmes. Adequate communication of procedures, events, and failures are essential features of a safe therapeutic substitution policy. However, case reports of suboptimal therapy and differences in pharmacological profiles of related agents indicate the potential for clinical nonequivalence even between similar drugs of a class. Suboptimal or failed therapy associated with such nonequivalence may offset savings in drug costs resulting from therapeutic substitution. Thus, consultation on behalf of each patient is necessary for optimal therapy and maximum cost savings. Currently, there are no data on the interchangeability of specific agents of a class and the effects of therapeutic substitution on overall treatment costs. Thus, the health and economic outcomes of therapeutic substitution policies are unknown.

Clinical Protocols↗

Medicare payment policy and the controversy over hospital cost shifting.

This article examines (i) the background and debate over cost shifting; (ii) hospitals as business institutions that often shift the financial responsibility for their costs in the form of differential pricing; and (iii) how the cost-shifting debate affects and is affected by Medicare. The aim is to gain a better understanding of how changes in reimbursement by large government health insurance programmes affect hospital behaviour. The article argues that the controversy over cost shifting is becoming an increasingly important issue for hospitals in the US and their ability (or willingness) to provide uncompensated charity care. The issue has also become very important for workers and their dependants. This is because workers have shouldered the largest portion of the dramatic growth in healthcare costs that have occurred in the US in recent years, due in large part to increased cost shifting (or 'sharing of financial responsibility') from their employers.

Cost Allocation↗

Fiscal crisis in a therapeutic community.

Financial problems beset many service delivery agencies involved in the treatment and prevention of addiction. In this paper we review the history of a therapeutic community which initially thrived and then began to decline as monetary support diminished. We focus on the communication patterns during the treatment center's existence and illustrate changes in these patterns which are indicative of the "health" of the organization. The explanation of the rise and fall of the private, nonprofit organization is couched in contemporary organization theory--i.e., we treat the therapeutic community as a unit in a system of service-delivery organizations. Research procedures are outlined to facilitate replication.

Communication↗

Principles of unit charging.

Unfortunately, training medical photographers and artists does not include finance management, but in the 'cost effective' atmosphere of both NHS and universities today we must learn to approach the subject in a manner likely to satisfy our financial masters. The experience gained in introducing a unit cost system and using it for 17 years will be reviewed but more importantly, as the system has been adopted and adapted by so many, the benefits of using such a system and changing to concur with current financial thinking will also be discussed. Are we in such a Korner as we might think?

Accounting↗

Cost accounting in a surgical unit in a teaching hospital--a pilot study.

INTRODUCTION: Economic constraints remain one of the major limitations on the quality of health care even in industrialised countries. Improvement of quality will require optimising facilities within available resources. Our objective was to determine costs of surgery and to identify areas where cost reduction is possible. PATIENTS AND METHODS: 80 patients undergoing routine major and intermediate surgery during a period of 6 months were selected at random. All consumables used and procedures carried out were documented. A unit cost was assigned to each of these. Costing was based on 3 main categories: preoperative (investigations, blood product related costs), operative (anaesthetic charges, consumables and theatre charges) and post-operative (investigations, consumables, hospital stay). Theatre charges included two components: fixed (consumables) and variable (dependent on time per operation). RESULTS: The indirect costs (e.g. administration costs, 'hotel' costs), accounted for 30%, of the total and were lower than similar costs in industrialised nations. The largest contributory factors (median, range) towards total cost were, basic hospital charges (30%; 15 to 63%); theatre charges fixed (23%; 6 to 35%) and variable (14%; 8 to 27%); and anaesthetic charges (15%; 1 to 36%). CONCLUSION: Cost reduction in patients undergoing surgery should focus on decreasing hospital stay, operating theatre time and anaesthetic expenditure. Although definite measures can be suggested from the study, further studies on these variables are necessary to optimise cost effectiveness of surgical units.

Accounting↗

The economic burden of anxiety disorders in the 1990s.

BACKGROUND: We assess the annual economic burden of anxiety disorders in the United States from a societal perspective. METHOD: Using data from the National Comorbidity Study, we applied multivariate regression techniques to calculate the costs associated with anxiety disorders, after adjusting for demographic characteristics and the presence of comorbid psychiatric conditions. Based on additional data, in part from a large managed care organization, we estimated a human capital model of the societal cost of anxiety disorders. RESULTS: We estimated the annual cost of anxiety disorders to be approximately $42.3 billion in 1990 in the United States, or $1542 per sufferer. This comprises $23.0 billion (or 54% of the total cost) in nonpsychiatric medical treatment costs, S13.3 billion (31%) in psychiatric treatment costs, $4.1 billion (10%) in indirect workplace costs, $1.2 billion (3%) in mortality costs, and $0.8 billion (2%) in prescription pharmaceutical costs. Of the $256 in workplace costs per anxious worker, 88% is attributable to lost productivity while at work as opposed to absenteeism. Posttraumatic stress disorder and panic disorder are the anxiety disorders found to have the highest rates of service use. Other than simple phobia, all anxiety disorders analyzed are associated with impairment in workplace performance. CONCLUSION: Anxiety disorders impose a substantial cost on society, much of which may be avoidable with more widespread awareness, recognition, and appropriate early intervention.

Adolescent↗

The distinction between cost and charges.

The literature on economic efficiency in providing hospital services has been growing recently. Often such literature examines the costs of providing services at varying volumes of treatments per location per year. However, instead of measuring cost directly, these studies use patient bills (charges) aa a proxy for cost. Charges may bear little resemblance to economic cost, and use of charges as a proxy for economic cost may lead researchers to draw unwarranted conclusions about economic efficiency. Because of the differences between economic cost, accounting cost, and charges to the patient, actual resource consumption should be used as a measure of cost.

Cost Allocation↗

Restructuring hospital costs to improve solvency and prevent bankruptcy.

The authors present a framework, derived from successful experience with an actual hospital turnaround, for helping hospital management to restructure costs quickly and strategically under the pressure of losses. The framework isolates structurally inefficient hospital overheads into four distinct categories and prescribes very different corrective actions for each of them. Application of the framework to bankruptcy is also discussed.

Cost Allocation↗

State and federal reimbursement for home nutrition support.

Dietitians offer valuable services to home care agencies and their clients. In order to begin or continue providing such services agencies must be assured of adequate coverage. Since dietary and nutrition services are not covered, as such, under Medicare, agencies should consult with fiscal intermediaries, carriers, and home care accountants on billing and cost-allocation methods.

Humans↗