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PubMed1999

Cost and price in the NHS: the importance of monetary value in the decision-making framework--the case of purchasing renal replacement therapy.

This paper examines the role of cost, price and health economic evaluation in the National Health Service as demonstrated by reference to renal replacement therapy for patients with end-stage renal failure. In particular, it aims to highlight the problems with monetary value and to illustrate how it may be manipulated by legitimate techniques to produce varying outcome values which may be misleading and thereby distort the healthcare decision-making process. The paper argues for standardization of costing methods and health economic evaluation to enable meaningful intra- and inter-hospital comparisons to be made.

Contract Services↗
PubMed2006

Addressing resource allocation issues in recommendations from clinical practice guideline panels: suggestions from an American College of Chest Physicians task force.

Most panels that develop clinical practice guidelines are poorly equipped to address resource allocation or cost issues associated with management options. This risks neglect, arbitrariness, lack of transparency, and methodological flaws in consideration of resource allocation. We provide recommendations for guideline panels to promote greater transparency and rigor. We suggest focusing on resource allocation issues for only a limited number of recommendations and provide criteria for selecting those in which economic considerations are likely to influence the direction or strength of the recommendation. Panels should involve a health economist to assist with the systematic review and critical interpretation of relevant economic analyses. They should carefully define the intended audience and may consider issuing alternative recommendations when available resources vary widely across target clinical settings. Targeting a limited number of recommendations for the consideration of resource allocation issues, and ensuring methodologically high-quality review, will best serve guideline panels, and the health-care providers and patients they hope to assist.

Advisory Committees↗
PubMed1995

Utilization management in Alberta's new funding environment.

Although physicians have the greatest influence on the resource utilization of hospital patients, Canadian hospitals have not been too successful in bringing physicians into the resource planning and decision-making processes. This is because most hospitals have been unable to provide the information needed by physicians to participate in resource management in a meaningful way. With the introduction of a new system in the Canadian Province of Alberta that fundamentally changes the way hospitals are funded, it has become even more important to involve medical staffs in the utilization management process. This article describes the new funding system and highlights some of the ways in which Wetaskiwin Health Care Centre has leveraged information technology to support the utilization management process in this new environment.

Alberta↗
PubMed1992

Covering the costs of care in neonatal intensive care units.

The continued rise of health care costs, despite private and governmental control efforts, has sustained cost containment as a central issue for health care researchers and policy makers. In keeping with these concerns, the Florida Health Care Cost Containment Board conducted a study of neonatal intensive care units (NICUs) in Florida to ascertain the costs, charges, and net revenues associated with NICU services in individual hospitals, to document cost shifting and cross-subsidization as a means of financing NICU care for indigent populations, and to assess the fiscal impact of NICUs in state-sponsored vs non-state-sponsored Regional Perinatal Intensive Care Center hospitals providing NICU care. Hospitals in the state-sponsored program reported a loss of approximately $16.5 million in contrast to the non-state-sponsored hospitals, which reported a gain of $1 million. Payment being generated by private-pay patients amounted to almost 60% of total revenues but constituted less than one third of the costs in state-sponsored hospitals, indicating a high level of cost shifting. Government support of state-sponsored NICUs, while substantial, has been insufficient; increasing constraints on this funding source would likely worsen the deficit and increase the necessity of cost shifting.

Ancillary Services, Hospital↗
PubMed1994

[Costs of intensive care in The Netherlands].

OBJECTIVE: To estimate the comprehensive costs of intensive care units in general and university hospitals. DESIGN: Cost analysis. SETTING: Nine Dutch hospitals. METHOD: The costs of the ICUs were estimated on the basis of data from the internal accounting systems of the nine hospitals. Allocation keys were used to allocate the costs of other departments to those of the respective ICUs. RESULTS: The average costs of an ICU in a general hospital were Dfl. 527,000 per bed and Dfl. 2260 per patient day. Corresponding figures for a university hospital were Dfl. 771,000 and Dfl. 2530, respectively. Combined ICUs (i.e. intensive and medium care) cost Dfl. 430,000 and Dfl. 1130, respectively. The total costs of intensive care in the Netherlands for 1990 were estimated at Dfl. 1209 million, about 2.5% of total health care costs.

Cost of Illness↗
PubMed1993

The cost and efficiency of public and private health care facilities in Ogun State, Nigeria.

During the 1980s, Nigeria faced difficult economic conditions resulting in a severely constrained budget for public health services. To assess more carefully the costs and efficiency of the public and private health sectors, the Federal Ministry of Health in Nigeria undertook a comprehensive survey of health care facilities in Ogun State in 1987, the analysis of which is presented in this study. The findings suggest that there is potential to increase service delivery within existing budgets by more cost-effective allocation of inputs. Many public and private providers are not operating a full technical capacity. It also appears that public facilities are not using cost-minimizing combinations of high and low-level health workers, in particular, too many low-level staff are being used to support high-level workers. The cost analysis indicates that there are short-run increasing returns to scale for inpatient and nearly constant returns to scale for outpatient services. Economies of scope for joint production of inpatient and outpatient services are not being realized. A major implication of such analysis is that improved resource allocation decisions heavily depend on the existence of information systems at the health facility level which carefully integrate financial information with other appropriate and adequate measures of service inputs, health care quality, facility utilization and ultimately health status.

Budgets↗
PubMed1980

The planner as public health resource allocator: post-Proposition 13 county health services in California and the role of the HSAs in budget review and public hearings.

Immediately following adoption of Proposition 13 in California in June of 1978, the state legislature adopted a Bail-Out program which included procedures for monitoring the detrimental effects of disproportionate reductions in public health, inpatient and outpatient county budgets. For a variety of reasons, the methodology and procedures employed failed to reveal the adverse effects of Proposition 13 on health services. This paper deals with the actual and potential role of health systems agencies (HSAs) in monitoring such effects, commenting in public hearings on budget review and, in general, playing a policy analysis role that links local government with the citizenry on the one hand and the state government on the other. In addition to identifying the weakness of the State's monitoring effort in identifying negative effects in program analysis and staffing reductions, the findings point out the limited role of HSAs. Specific recommendations are offered for improvement of HSA involvement in future resource allocation planning in California and the United States as a whole.

California↗
PubMed2005

Current costing models: are they suitable for allocating health resources? The example of fall injury prevention in Australia.

The example of fall injury among older people is used to define and illustrate how current Australian systems for allocation of health resources perform for funding emerging public health issues. While the examples are Australian, the allocation and priority setting methods are common in the health sector in all developed western nations. With an ageing population the number of falls injuries in Australia and the cost of treatment will rise dramatically over the next 20-50 years. Current methods of allocating funds within the health system are not well suited to meeting this coming epidemic. The information requirements for cost-benefit and cost-effectiveness measures cannot be met. Marginal approaches to health funding are likely to continue to fund already well-funded treatment or politically driven prevention processes and to miss the opportunity for new prevention initiatives in areas that do not have a high political profile. Fall injury is one of many emerging areas that struggle to make claims for funding because the critical mass of intervention and evidence of its impact is not available. The beneficiaries of allocation failure may be those who treat the disease burden that could have been easily prevented. Changes to allocation mechanisms, data systems and new initiative funding practices are required to ensure that preventative strategies are able to compete on an equal footing with treatment approaches for mainstream health funding.

Accidental Falls↗
PubMed2000

Can cost shifting continue in a price competitive environment?

Both Medicare and Medicaid are reducing payments to hospitals, and there is widespread concern that hospitals may respond by increasing prices to privately insured patients. Theoretical models of hospital behaviour have ambiguous predictions as to whether, and under what circumstances, hospitals will shift costs to private payers. This paper extends previous theoretical models and then tests empirically using data from California for the 1983-1991 period, a time of increasingly intense price competition. Hospitals did increase their prices to private payers in response to reductions in Medicare rates; they had far smaller and generally insignificant responses to changes in Medicaid reimbursement. Hospital ownership and the competitiveness of the hospital market both affected this behaviour, but there was no significant change over time. The results suggest the need to broaden our models of hospital behaviour to 'embed' them in their local markets.

California↗
PubMed2004

A simulation model of hospital management based on cost accounting analysis according to disease.

Since a little before 2000, hospital cost accounting has been increasingly performed at Japanese national university hospitals. At Kumamoto University Hospital, for instance, departmental costs have been analyzed since 2000. And, since 2003, the cost balance has been obtained according to certain diseases for the preparation of Diagnosis-Related Groups and Prospective Payment System. On the basis of these experiences, we have constructed a simulation model of hospital management. This program has worked correctly at repeated trials and with satisfactory speed. Although there has been room for improvement of detailed accounts and cost accounting engine, the basic model has proved satisfactory. We have constructed a hospital management model based on the financial data of an existing hospital. We will later improve this program from the viewpoint of construction and using more various data of hospital management. A prospective outlook may be obtained for the practical application of this hospital management model.

Accounting↗
PubMed1998

Preventing fatal diseases increases healthcare costs: cause elimination life table approach.

OBJECTIVES: To examine whether elimination of fatal diseases will increase healthcare costs. DESIGN: Mortality data from vital statistics combined with healthcare spending in a cause elimination life table. Costs were allocated to specific diseases through the various healthcare registers. SETTING AND SUBJECTS: The population of the Netherlands, 1988. MAIN OUTCOME MEASURES: Healthcare costs of a synthetic life table cohort, expressed as life time expected costs. RESULTS: The life time expected healthcare costs for 1988 in the Netherlands were 56,600 Pounds for men and 80,900 Pounds for women. Elimination of fatal diseases--such as coronary heart disease, cancer, or chronic obstructive lung disease--increases healthcare costs. Major savings will be achieved only by elimination of non-fatal disease--such as musculoskeletal diseases and mental disorders. CONCLUSION: The aim of prevention is to spare people from avoidable misery and death not to save money on the healthcare system. In countries with low mortality, elimination of fatal diseases by successful prevention increases healthcare spending because of the medical expenses during added life years.

Accidents↗
PubMed1997

How fetal cocaine exposure increases neonatal hospital costs.

OBJECTIVE: Our goals were to document hospital costs associated with prenatal cocaine exposure in an understudied population-women using rural county public health units who had minimal access to drug rehabilitation and whose cocaine of choice was crack with little other illicit drug use- and to explore why increased costs occur in an effort to identify cost-reduction strategies. METHODS: We identified a sample of cocaine-exposed infants who were computer-matched to a control group with no history or evidence of cocaine exposure. Matching was performed one-to-one on the variables of maternal race, age, parity, time of entry into prenatal care, and alcohol and nicotine use. There were 327 live births, for whom 311 were correctly classified as to their prenatal cocaine use and had billing and medical records available for review (156 exposed, 155 nonexposed). RESULTS: Hospital charges were positively correlated with length of stay. Cocaine-exposed infants had an across-the-board increase in utilization of hospital resources as well as higher hospital charges and longer lengths of stay. Cocaine-exposed infants were significantly younger in gestational age and lower in birth weight. Significantly more cocaine-exposed infants were admitted to the neonatal intensive care unit, had more social and family problems delaying discharge, and received more septic work-ups. In addition, of those infants urine-screened for cocaine at delivery, 92% were screened secondary to a maternal history of prenatal use. CONCLUSIONS: Cost-reduction strategies should be aimed at measures that reduce length of stay by addressing problems identified prenatally as an outpatient before delivery and by influencing objective decision-making regarding the need for medical interventions with the infant after birth.

Birth Weight↗
PubMed1994

The integrated inpatient management model's clinical management information system.

The rising cost of health care has increased the call for cost control. The pressing need to control cost, coupled with the increase in managed care and prospective payment, has placed new urgency on administrators and clinicians to work collaboratively in providing efficient and effective care. We have developed the Integrated Inpatient Management Model (IIMM) to assist in this collaborative effort. We describe the IIMM's clinical information system that provides decision support to both administrators and clinicians. This clinical information system is the information backbone for the development and monitoring of practice guidelines or critical pathways. An integrated information system of this type is essential if hospitals are to prosper during the next decade.

Ancillary Services, Hospital↗
PubMedDate not supplied

An information system model for negotiating capitation contracts.

Capitation contracts require health care organizations to negotiate on a much more sophisticated and risky level. Understanding whether a capitation contract will allow a hospital to remain financially viable while providing quality care requires estimating the number of patients to be served, the amount and types of services to be offered, and the cost to provide them. This article presents an information system model designed to assist a large hospital, not only in determining true patient cost, but also in aggregating the cost information in different ways, such as conducting a case-mix analysis, to perform a more informed quote analysis for capitated contracts.

Academic Medical Centers↗
PubMed2000

Emergency medicine versus primary care: a case study of three prevalent, costly, and non-emergent diagnoses at a community teaching hospital.

The high cost of emergency department (ED) care is often viewed as an area for achieving cost savings through reduced utilization for inappropriate conditions. The implementation of outpatient prospective payment for Medicare ED patients heightens scrutiny of costs and utilization in the ED versus primary care settings. Data from hospital clinical records, financial records, and a provider survey was used to develop a costing methodology and complete a comparative analysis of the cost of care for three diagnoses by setting. Total costs were significantly higher in the ED due primarily to differences in ancillary tests and prescription drugs ordered.

Accounting↗