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Why multihospital systems will continue to grow.

The limitations of federal and state spending on health care indicate difficult times are ahead for hospitals. Rising costs are challenging their continued existence. Construction and renovation, for example, are normally not feasible in light of the present economic situation. To meet this financial challenge, Multi-Institutional Arrangements ( MIAs ) are proliferating. This phenomenon, which is particularly prevalent in the Southern United States, seems to be increasing geometrically, principally because many of the officials who operate hospitals see such an affiliation as an answer to their serious fiscal problems. Faced with myriad financial problems resulting from overcommitment , hospital boards are looking for a way out of the quagmire . While the boards do not want to give up control of the hospital to an outside group, they are beginning to realize that it may be the price that must be paid for fiscal solvency (i.e., keeping the hospital open to serve the public). Hospital boards usually are favorably impressed by the promised benefits accruing from association with a MIA.

Financial Management↗

Hospital financing in Belgium: recent changes and future options.

A new mode of financing hospital operating costs has been gradually introduced in Belgium since 1982. It is a 'prospective pricing' system. Each hospital is assigned a budget envelope at the beginning of the fiscal year. This budget is calculated on a per diem basis. A portion of the budget is variable in function of the number of patient days. The annual budget of each hospital is determined by comparing its performance with the one of a reference group of similar hospitals. Since the introduction of the new mode of financing the financial situation of the Belgian hospitals has improved markedly. Moreover, the hospital expenditures of the health insurance scheme are under control: in 1984 and 1985 these expenditures increased at a lower rate than inflation. The continued increase of other medical expenditures, however, indicates that the principles of this new financing system should be extended to the medico-technical departments.

Belgium↗

Incentives for cost-effective behavior: a Dutch experience.

In 1983 the Dutch government introduced a system of hospital budgeting in the Netherlands to contain the increase in health care costs. The budgets were fixed at the real costs in 1983 after an assessment of these costs. A distinction is made between external budgets, which is allocation of resources by external institutions, and internal budgets, which is the allocation within the organization. External budgets should be global; internal budgets should be specific. The influence of the budgeting process on the situation and attitude of physicians is analysed. The budgeting process influences the administration as more and better data are needed to involve heads of departments and physicians in the budgeting process. Specifications of the data in departments, specialisms, and patients seems necessary. The budget process also has its impact on the hospital organization, notably on the position of the physicians and the medical staff, for it tends to integrate them more completely into the organization. There may be a difference between 'the gate specialists' and the specialist heads of service departments. Budget responsibility will be given to all specialists. Finally, the budgeting process affects the quality of patient care. With limited resources, it is necessary to link quality with efficiency in allocating resources. It will probably be necessary to provide more coordination between hospital budgets and specialists' fees. In the future more capitation and salary elements will be brought into the fee system for physicians.

Budgets↗

Stimulating cost effective behavior in hospitals.

Types of influence on the delivery of medical care are divided into monetary and other. These incentives effect care at the system, hospital, care team, physician and patient levels. Selected examples, primarily from the USA, are discussed.

Cost-Benefit Analysis↗

Prospects for using DRGs in Swedish hospitals.

Overall cost-containment seems satisfactory in Swedish health care. Health care's share of the Gross Domestic Product (GDP) has thus decreased from 9.7% to 9.1% between the years 1982 and 1986. A recent study indicates, however, a decreasing productivity, measured by traditional output measures. It may be argued that these measures are not adequate as they do not reflect the changing patterns of medical technology, case-mix and quality. The Swedish Planning and Rationalization Institute of the Health and Social Services (Spri) has started a project which aims at evaluating whether the Diagnosis Related Group (DRGs) could be used for planning, budgeting and follow-up in the Swedish health care system. The interest in these matters is at present great in Sweden. The feasibility and adequacy of DRGs in the Swedish context are being tested using more than 500,000 discharges from 6 counties. All the necessary variables for DRG assignment are already routinely collected in the Swedish discharge abstracts. In a comparison with an American database concerning individual DRGs, Swedish and American lengths of stay correlate rather well (r = 0.83). There is a difference in the number of diagnoses on each discharge record in the two databases. On average 1.4 diagnosis codes are used for each patient in the Swedish hospital sample compared to 2.8 codes in the United States database. This may indicate a systematic difference in coding practice of complications and co-morbidities.

Accounting↗

Hospital funding constraints: strategic and tactical decision responses to sustained moderate levels of crisis in six Canadian hospitals.

This article reports on a study to ascertain the strategic and tactical responses of policy decision-makers in six Ontario hospitals to moderate levels of 'underfunding' by the provincial government over a 5 year period. The study provides a preliminary test of several theoretical ideas in the current literature on organizational decline. Findings support the hypothesized importance of the decision-makers' subjective interpretation of the causes for cutbacks, and the common initial tendency to 'blame inward' and cut costs through efficiency measures. It also illustrates how prolonged underfunding can bring about a shift in response from one based on techno-economic rationality to political bargaining.

Canada↗

Buying and leasing real estate for veterinary hospitals.

The major factors to be considered in the real estate purchase decision are the interest rate, the depreciation schedule, the property appreciation, the income tax impact, and the impact of paying a principal payment as part of the real estate mortgage. All these factors must be compared with the costs of leasing.

Animals↗

Clinical nutrition management position: responsibilities and skill development strategies.

OBJECTIVE: To determine the duties of clinical nutrition managers, the factors associated with the performance of the duties, the job specifications for the position, and the skill development strategies used by clinical nutrition managers. DESIGN: Clinical nutrition managers from 700 randomly selected, acute-care hospitals in the United States (with 300 or more beds) received a survey questionnaire. Respondents were asked to indicate performance or nonperformance, perceived importance, and methods used to develop skills for 54 duties related to clinical nutrition management. We requested additional information about position requirements, position characteristics, and demographic information. STATISTICAL ANALYSES PERFORMED: An 82% response rate with 67% usable responses (n = 472) was achieved. Frequencies for performance and nonperformance, mean importance, and frequencies for methods of skill development were determined for each duty. chi 2 Analysis with P < .10 was used to determine if an association existed between performance of a duty and time allotted to the position, number of personnel supervised, and type of personnel supervised. RESULTS: This study validated 46 of the duties as responsibilities of practicing clinical nutrition manager. Three duties not validated were related to financial management. The duty performed least often was conducting research/investigative studies. The number and type of personnel supervised was found to influence performance of duties, but time allotted to position was not an influence. The major strategies used for skill development were continuing education, networking, work experience in clinical dietetics, work experience in management dietetics, and their present job. APPLICATIONS: These results can be used by clinical nutrition managers to assess the characteristics of their current position and develop a plan for enhancing their scope of responsibility. The identification of duties actually performed by clinical nutrition managers can also be used to develop standards of practice with performance indicators and recommended thresholds. Information regarding the skill development strategies of clinical nutrition managers can be used by practitioners to enhance their current skills and knowledge and by others to prepare for career opportunities in clinical nutrition management.

Administrative Personnel↗

Changes in the American health care system: crisis in the clinical laboratory.

American medicine is undergoing unprecedented changes, and the resulting distortions are affecting the economics, organization and operations of all clinical laboratories. Professionals who work in these laboratories are facing administrative and economic pressures to reduce costs, to increase productivity, and to comply with proliferating new statutes and regulations. The medical 'cottage industry' in which the patient was the focus of the medical professionals' attention and endeavours is being replaced by the corporate management of many health care activities in which financial profits are being given first priority. Medical facilities, including clinical laboratories, are being bought and sold, being consolidated, or simply being closed. The clinical laboratories may be at the vortex of the maelstrom affecting American medicine. Cost pressures are encouraging further automation and retraining of laboratory staffs. If the leaders in laboratory medicine are unable to accomplish the necessary tasks to meet the new challenges, there inevitably is a non-medical, non-scientific financial manager at hand who is willing to define the changes and the desired outcome. Because of the rapidity of the changes taking place, it is not possible to predict with any confidence the modifications that will achieve a permanent status or the degree to which medical professionals will remain masters of their fates. The evolving health care system will become less costly, more technologically advanced, and a more challenging system in which to work.

Autoanalysis↗

Sale and leaseback by Canadian hospitals: theory and practice.

Currently in Canada, between $3 and $4 billion of assets are financed annually through various forms of leasing, with the sale and leaseback transaction as the common vehicle for larger value asset financing. Financial theory of sale and leaseback is applied to Canadian hospitals with illustrations of the structure and process of sale and leaseback in practice. The moratorium on sale and leaseback transactions recently imposed by the federal and Ontario governments is also covered.

Canada↗

Weighting case mix groups: the fatal flaw in resource intensity weights.

Resource Intensity Weights (RIWs) for Case Mix Groups (CMGs) are calculated using American Diagnosis Related Group (DRG) weights and Canadian average-length-of-stay data. However, this calculation does not actually "Canadianize" DRG weights; it only serves to randomize them. This article demonstrates the lack of the all-important relationship between RIWs and CMG costs by using simplified graphical examples. Notwithstanding the deficiencies of RIWs, the concept of weighted CMGs is fundamentally sound. Accordingly, until MIS-level reporting is widely implemented and a sufficiently large and reliable domestic database has been accumulated, it may not be entirely inappropriate for Canadian health care institutions to use unadulterated American DRGs for case mix analysis and fiscal planning.

Canada↗

Hospital cost shifting.

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Blue Cross Blue Shield Insurance Plans↗