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An economist finds that compromised negotiation postures, payment disparities and potentially escalated government buying power may be too high a price to pay for cost reductions achieved through a "competitive" system.
Researchers are gathering evidence that as health maintenance organizations increase market share, they act as a brake on a community's rising medical costs. In other words, competitive pressures from HMOs have a 'spillover effect' on the free-for-service sector, according to the author of one study. Meanwhile, a study of hospitals in California attributed more than $1 billion in savings in one year to the influence of HMOs on the market.
One benefit plan shares costs with employees by increasing deductibles. But the plan also allows employees to share in the savings it creates.
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Empirical evidence is provided concerning the impact of Public Law 98-21 on the operation of United States hospitals. The Box-Jenkins autoregressive integrated moving average model was used to analyze the impact of the law on efficiency and cost containment practices over a 24-year time period. Four cost containment variables and three efficiency variables were studied. Public Law 98-21 was the intervention and 1984 was the intervention year in which to evaluate impact assessment. Children's hospitals were used as a control group. Results of the research indicated no impact on cost containment practices and a significant impact on efficiency of hospital operations.
In the United States, when the cost-containment paradigm shifted from regulation to competition, all-payer hospital ratesetting went out of favor. After reviewing the published literature and supplementing the existing literature with more current information, the author concludes that all-payer ratesetting is able to meet its multiple objectives of cost containment, reduction of the amount of cost shifting, improvement of access to the uninsured, and increased productivity. At the same time, all-payer ratesetting has not stifled the diffusion of competitive health care systems or new technology, and any impact on length of stay, admissions, and quality of care is small, if it exists at all.
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Informed price setting in private psychiatric hospitals is based on many factors, including accounting cost, economic cost, mission, long-term plans, and competition. Because no single cost accounting method yields the "right" price without the input of judgment and the consideration of other factors, several appropriate and useful methods of cost accounting should be considered. And because various approaches to price setting carry varying degrees of risk, informed price setting must evaluate them all.
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Policymakers are searching everywhere for examples of how best to reform the nation's health care system. A major reform model from an unexpected quarter--the U.S. military--is making great strides forward and contains many of the ingredients in the national reform debate: global budgeting, pooled-payer funding, private industry competition, managed care, prevention, and reallocation of resources.
For nearly a century, federal lawmakers have debated the pros and cons of national health insurance. Despite surges of interest, a consensus for such action does not exist. With political camps divided a "hybrid" solution is needed. Such a plan would involve both the government and the private sector, featuring a single payer system, creation of a basic benefit package, voluntary incentives to purchase insurance that gradually move to a mandatory system, and a progressively financed public program to cover those who fall through the cracks. Presidential leadership will be necessary to gain action.
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Six "general truths" form our economic foundation for Patient Focused restructuring. They address the level and timing of the costs and savings associated with implementing Patient Focused Care. They have not always been anticipated nor welcomed by hospitals pursuing Patient Focused Care, but they have always appeared on those doorsteps just the same. This first edition of DOLLARS AND SENSE shares this foundation with you as the stepping stone to further exploration of the economic aspects of Patient Focused restructuring. This foundation establishes the general "rules of the game" by which your own Patient Focused Care program will be played. Know these rules and you will have within your control the ability to bend and stretch them to suit your particular needs and to maximize the financial gains your hospital achieves through Patient Focused restructuring.