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Medical technology management: bridging the gap between theory and practice.

New medical technologies that offer to improve upon or completely replace existing ones are continuously appearing. These technologies are forcing healthcare policymakers to consistently evaluate new treatment options. However, emerging medical technology has been viewed as a significant factor in increasing the cost of healthcare. The abundance of new medical alternatives, combined with scarcity of resources, has led to priority setting, rationing, and the need for further technology management and assessment. Economic evaluation of medical technologies is a system of analysis within the framework of health technology assessment to formally compare the costs and consequences of alternative healthcare interventions. EEMT can be used by many healthcare entities, including national policymakers, manufacturers, payers and providers, as a tool to aid in resource allocation decisions. In this paper we discuss the historical evolution and potential of EEMT, the practical limitations hindering more extensive implementation of these types of studies, current efforts at improvement, and the ethical issues influencing ongoing development. The Medical Technologies Administration in Israel's Ministry of Health is given as an example of an entity that has succeeded in practically implementing EEMT to optimize healthcare resource allocation.

Biomedical Technology↗

Case-mix groups for VA hospital-based home care.

The purpose of this study is to group hospital-based home care (HBHC) patients homogeneously by their characteristics with respect to cost of care to develop alternative case mix methods for management and reimbursement (allocation) purposes. Six Veterans Affairs (VA) HBHC programs in Fiscal Year (FY) 1986 that maximized patient, program, and regional variation were selected, all of which agreed to participate. All HBHC patients active in each program on October 1, 1987, in addition to all new admissions through September 30, 1988 (FY88), comprised the sample of 874 unique patients. Statistical methods include the use of classification and regression trees (CART software: Statistical Software; Lafayette, CA), analysis of variance, and multiple linear regression techniques. The resulting algorithm is a three-factor model that explains 20% of the cost variance (R2 = 20%, with a cross validation R2 of 12%). Similar classifications such as the RUG-II, which is utilized for VA nursing home and intermediate care, the VA outpatient resource allocation model, and the RUG-HHC, utilized in some states for reimbursing home health care in the private sector, explained less of the cost variance and, therefore, are less adequate for VA home care resource allocation.

Aftercare↗

Cost of illness studies: no aid to decision making: Reply to Shiell et al. (Health Policy, 8 (1987) 317-323).

Efficient resource allocation in health care requires adequate techniques of collective decision making. In a recent article Shiell, Gerard and Donaldson (Health Policy 8 (1987) 317-323) claim that cost of illness studies only confuse, mask and mislead, while cost-benefit analysis provides the relevant framework for decisions in health care. We do not agree with their naive approach to decision making in health care. In comparing the two alternative methods, their respective importance for decision making becomes apparent. None of the two techniques may be considered as the one and only means to ultimately solving the problem of efficient resource allocation in health care. Yet, both techniques can provide relevant information on which policy makers can base their decisions in health care.

Cost-Benefit Analysis↗

Preliminary development of two predictive models for DNR patients in intensive care.

The purpose of this study was to identify which variables are the best predictors of a do-not-resuscitate (DNR) classification and develop a model to predict the nursing care required by DNR patients in the ICU. Data collected on DNR and non-DNR patients included nursing care requirements, severity of illness, resource allocation and sociodemographic characteristics. One model identified the best predictors of a DNR classification in intensive care as the origin of admission and the severity of illness score on the day of admission to intensive care. The second model identified the best predictors of nursing care requirements for DNR patients in intensive care as the number of days spent in intensive care prior to the DNR order, the average daily resource allocation points after the DNR order, and the severity of illness score on the day the DNR order was designated.

Aged↗

Cost analysis of the basic package, resource utilisation and financing of health services at Halley Stott Health Centre and Umbumbulu Clinic in KwaZulu-Natal.

OBJECTIVES: A cost analysis study compared the package of health services, costs, resource utilisation (drugs and staff) and financing mechanisms at Halley Stott Health Centre and Umbumbulu Clinic with those of other primary care providers in KwaZulu-Natal. Options identified were used to improve efficiency, resource allocations and financing of health services in KwaZulu-Natal. DESIGN/OUTCOME MEASURES: The direct accounting method was used to calculate unit costs for the following cost centres--paediatrics and adult curative consultations, antenatal/postnatal care, family planning, the under-5s clinic and the mobile services. Staff efficiency was assessed using the Centre for Health Policy method based on workload estimates, while the International Network for the Rational Use of Drugs indicators were used to assess the efficiency of drug usage. RESULTS: There was considerable variation in the package of services provided at all the health facilities; the average costs ranged from R5.94 to R134.76 and the unit costs ranged from R29.30 to R161.92 for curative care. The bulk of the resources (64-73%) were spent on personnel costs, providing mainly curative care. Under-utilisation of antenatal care, the under-5s clinic and paediatric consultations were reflected in reduced time utilisation and lower levels of staff efficiency, while family planning services were over-utilised, which reflected a relative staff shortage. The components of health services provided at the two health facilities exceeded those recommended by the World Bank. CONCLUSIONS: Cost analysis has the potential to quantify staff and drug efficiency, facilitate resource allocation and improve health service efficiency. Defining the package of health services for each province contributes to the development of the nationally agreed basic package of health services, and enables managers and policy-makers to choose different options rationally, control costs, shift resources and achieve equity.

Community Health Centers↗

Alternatives to the QALY measure for economic evaluations.

Economic analyses (i.e., analyses that are concerned primarily with questions of resource allocation) are becoming more common in health care in general and care of cancer patients in particular. The most commonly used measure for the valuation of outcome in such analyses is the QALY (quality-adjusted life-years), which combines qualitative (i.e., quality of life) and quantitative (i.e., survival) aspects of the outcome into one dimension. Using economics (i.e., the discipline) as the mode of thinking to help solve problems of resource allocation in health, this paper describes a framework to evaluate the appropriateness of use of a measure of outcome in the context of an economic evaluation. This framework will be used to critically appraise the use of the QALY measure and of two alternative measures, HYE (healthy years equivalent) and WTP (willingness to pay), in economic evaluations of health care interventions. The paper also describes a practical tool that can be used to measure individuals' WTP in the context of public decision making. This tool involves modifying the decision board, a tool develop (originally in the cancer area) to help clinicians present information to patients. The intent is to show that the use of a theoretically superior measure of outcome need not always be empirically restrictive.

Algorithms↗

Objectivity in priority setting tools in reproductive health: context and the DALY.

The Disability Adjusted Life-Year (DALY) heralded a new age in the development of an evidence base for priority setting and resource allocation. The DALY was intended to represent sound measurement of the incidence and prevalence of conditions in a process by which burden of disease would be determined, health conditions prioritised and interventions evaluated. However, in the reification of objectivity, sight was lost of critical aspects of health and disease, namely that they are not independent of the context in which they occur. This is powerfully illustrated by many reproductive health conditions. Priority setting and resource allocation exercises need to take into account both objective measures and contextually relevant factors. Based on comparative data that highlights the effect of the development gradient on the burden of disease, this paper discusses the implications of context in the assessment of population health and priority setting, with a focus on reproductive health.

Cost of Illness↗

Paradoxes of French accreditation.

The accreditation system introduced into the French healthcare system in 1996 has five particular characteristics: (1) it is mandatory for all healthcare establishments; (2) it is performed by an independent government agency; (3) surveyors have to report all instances of non-compliance with safety regulations; (4) the accreditation report is delivered to regional administrative authorities and a summary is made available to the public; and (5) regional administrative authorities can use the information contained in the accreditation report to revise hospital budgets. These give rise to a number of paradoxes: (1) the fact that accreditation is mandatory lends itself to ambiguity and likens the process to an inspection; (2) the fact that decision makers can use the information contained in the accreditation report for resource allocation can incite establishments to adopt strategic behaviours aimed merely at complying with the accreditation manual; and (3) there is a tendency for establishments to reduce quality processes to nothing more than the completion of accreditation and to focus efforts on standardizing practices and resolving safety issues to the detriment of organizational development. All accreditation systems must be aware of these paradoxes and decide on the level of government involvement and the relationship between accreditation and resource allocation. With time, accreditation in France could benefit from both a professionally driven system and from the increased amount of freedom to focus on quality improvement which is necessary for organizational development.

Accreditation↗

NZDep91: A New Zealand index of deprivation.

In New Zealand, existing area-based indices of deprivation were inadequate because of lack of theoretical underpinning and use of comparatively large areas resulting in masking of variation within them. There is growing demand for small area based indices of deprivation for the purposes of resource allocation, research, and community advocacy. This paper describes a new Census-based index of deprivation based on the smallest possible geographical areas using existing Census boundaries. The index uses deprivation variables selected according to established theory, and derived from the 1991 New Zealand Census. Ten age and gender standardised variables were combined using principal components analysis. Each variable is a standardised proportion of people in a small area with a lack of a defined material or social resource. Age/gender standardisation is important to avoid confounding and to improve the performance of indices in resource allocation formulae. The index correlates highly with mortality, hospital discharges, lung cancer registrations and childhood immunisation status.

Adolescent↗

Escaping from the dual organization: physician self-governance.

This article discusses a way of coping, in a time of limited resources, with the dual organization problem in hospitals. First, the historical roots of the dual organization problem are analysed. It is ascertained that the power structure within the hospital crucially depends on the socioeconomic circumstances and the state of medical knowledge. Since the health care systems of most industrialized countries are in transition from a stage of rapid expansion into a stage of consolidation, new problems arise which cannot be adequately handled within the context of the dual organization structure. The crux of the dual organization problem lies in the separation of the related responsibilities for resource allocation and patient care. Most proposals to solve this problem try to develop models of shared authority, which may be elegant in theory but often raise tremendous problems when implemented in practice. A straightforward solution would be the reunion of both responsibilities under one head, the physician-executive. It is argued that in a situation of limited funds for medical care, patients, physicians as well as administrators will be best off when physicians become primarily responsible for the resource allocation within the hospital. Some empirical evidence for this supposition is discussed. Finally, attention is paid to the prerequisites for, and implementation of, physician self-governance.

Europe↗

Is the cost of herbicide resistance expressed in the breakdown of the relationships between characters? A case study using synthetic-auxin-resistant Arabidopsis thaliana mutants.

A mutation endowing herbicide resistance is often found to induce a parallel morphological or fitness penalty. To test whether such 'cost' of resistance to herbicides is expressed through lower resource acquisition, changes in resource allocation, or both, is of ecological significance. Here, we analysed 12 morphological traits in 900 plants covering three herbicide resistance mutations at genes AUX1 , AXR1 and AXR2 in the model species Arabidopsis thaliana . Comparing these 2,4-D herbicide-resistant homozygous (RR) and heterozygous (RS) plants to homozygous susceptible (SS) plants, this analysis estimates the dominance level of the resistance allele on morphology. We also demonstrated that the herbicide resistance cost was primarily expressed as a change in resource acquisition (62.1-94% of the analysed traits). Although AUX1 , AXR1 and AXR2 genes act in the same metabolic pathway of auxin response, each resistance factor was found to have its own unique signature in the way the cost was expressed. Furthermore, no link was observed between the absolute fitness penalty and the respective modifications of resource acquisition and/or resource allocation in the resistant plants. These results and their implications for herbicide resistance spread and establishment are discussed.

Arabidopsis↗

QALYS and long-term care for elderly people in the UK: scales for assessment of quality of life.

QALYs have developed in the UK as a tool for comparing the outcome of health care procedures in a single index over time. This tool can then be used, along with information on costs of procedures, in decision-making about health service resource allocation. It is shown that the attributes of disability and distress, on which QALYs are presently based in the UK, are insensitive to changes in the health status of elderly people in long-term care when compared to other measures of quality of life which are frequently used in studies of older people. Thus, if the use of QALYs increases, they should be based on attributes appropriate to the groups studied, otherwise certain groups may be discriminated against in health service resource allocation owing to the use of an insensitive measure of outcome.

Aged↗

Sexual dimorphism and intercohort variation in reindeer calf antler length is associated with density and weather.

We analysed intercohort variability of live weight and antler length of 5,123 reindeer calves. We further assessed the influence of climate and density on the interannual variation in antler length, and discussed sex-specific resource allocation and response to climate variability. Antler length varied significantly among years and between sexes, with interaction between year and sex. Body weight and antler length were highly positively correlated, showed similar intercohort variability, and had a strong allometrical link, suggesting that antler length could be an equally reliable measure of calf condition as live weight. We found a relative measure of antler length (i.e. antler length corrected for the allometric effect of body mass) to be positively influenced by increasing density and May-June precipitation, and also decreasing May-June temperature. We attributed the effect of early summer weather to its influence on forage availability and quality as well as the level of parasitic insect harassment. Gender difference in both the allometric exponents and the interannual variability suggest that young males and females may have different tactics for relative resource allocation towards growth of antlers as compared to body mass. Because antlers are costly to produce, they may be an honest signal of individual quality for both sexes. However, we found gender-specific allometry, as female calves more than males appear to prioritize their antler growth over body mass, especially when resources are limited. Thus, our results suggest that environmental variation may influence the extent of sexual dimorphism in antler length.

Animals↗

Doctors and rationing: the end of the honor system.

Physicians have traditionally held that to participate in "rationing" or resource allocation would betray their duty to advocate for everything possible for the patient. However, the record of physician behavior belies that, indicating instead that they have always rationed health care and their own time and services. Physician resistance to calls for "rationing" today appears to be based more on the nature of the process and on the fact that this process is being taken out of the hands of physicians. If American medicine does not rethink its own stance and develop not only a stronger resource allocation ethic but also a means of implementing it, it is unlikely that physicians will continue as the guardians of the quality of care and patient service.

Cost Control↗

[Patient classification system: identification of the patient care profile at hospitalization units of the UH-USP].

This exploratory-descriptive study aimed to identify the patient care profile at the Hospitalization Units of the University Hospital-USP to support human resource allocation, to evaluate the nursing staff and to ground decision-making processes on nursing care organization and planning. In order to get to know the patients' care complexity profile, the patient classification instrument was used, developed and established at the Medical Clinic Unit of the UH-USP since 1990. The study results allowed us to evaluate the adequacy of the classification system used and provided information on the patients' care profile and the work load at each Hospitalization Unit, thus, supporting management decisions on human resource allocation, care planning and service organization in view of clients' demands.

Hospitalization↗

Morbidity variation and RAWP.

STUDY OBJECTIVE: Resource allocations from the central government to the English health regions are determined by population levels adjusted by relative standardised mortality ratios (SMRs). The White Paper Working for Patients proposes that allocations should in future be based on capitation adjusted by some other measures of health. The aim of this paper was to investigate the effect of using morbidity data in the weighting algorithm instead of relative SMRs. DESIGN: Morbidity data were obtained from the Health and Lifestyle Survey, 1986. Three different measures of self reported morbidity were used (Long Standing Illness, Any Declared Condition, Any Handicap). Population weightings were calculated by national average bed use for these conditions and again for SMRs. SETTING: This was a national survey using data from all the English health regions. MAIN RESULTS: All three measures of morbidity showed a wider variation between regions than SMRs, and the weighted populations showed a correspondingly wide variation (approximately double that obtained when using SMRs). CONCLUSION: The weighting of populations will be crucial in determining resource allocations to budget holders, whether in the hospital or primary care sector. However without a prior agreement on what counts as "need", the choice of these alternative measures will be arbitrary.

Health Care Rationing↗

Three perspectives on physical therapist managerial work.

BACKGROUND AND PURPOSE: The nature of managerial work in the commercial sector has not been studied since the 1970s, and little is known about the work of managers in the health care sector. In this study, the perceived importance of managerial role and skill categories among 3 groups of physical therapists were studied to better understand the work priorities of physical therapist managers. SUBJECTS: Two groups of subjects were physical therapist managers in hospitals or private practices. A third group consisted of faculty members in professional physical therapist education programs. METHODS: Respondents (n=343) rated the importance of 75 managerial activities. Responses related to 16 predetermined work categories were placed in rank order by group. A multivariate analysis of variance (MANOVA) was used to identify differences among groups. RESULTS: All groups identified communication, financial control, entrepreneur, resource allocator, and leader as the 5 most important categories and rated technical expert and figurehead as least important. The MANOVA showed differences between faculty members and private practice managers in 15 work categories, between hospital-based managers and private practice managers in 9 categories, and between faculty members and hospital-based managers in 8 categories. DISCUSSION AND CONCLUSION: Work setting appears to have an impact on level of importance placed on managerial work categories. The strongest candidates for "universal" physical therapist managerial work categories were communication, financial control, and resource allocator.

Health Care Sector↗

The relationship between mortality and two indicators of morbidity.

The Resource Allocation Working Party concluded that standardised mortality ratios are the best available indicators of geographical variations in morbidity. In this paper we give the results of a statistical analysis of the relationship between mortality and two indicators of morbidity, obtained from the 1971 census, for three age groups. The level of aggregation in the data is comparable with that at district or area level. Strong linear relationships are obtained, suggesting that it is reasonable to use mortality data in the RAWP formulae in applications at area of district level. However, this method of resource allocation should not be used in isolation from planning. A possible solution which reduces conflict between the two approaches is to incorporate mortality data in the planning indicators used to establish relative need and, in addition, to take due account of established patterns of service and local circumstances.

Adolescent↗