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The development of the resource management initiative on the basis of credible accurate information systems would lead to a change from the existing arbitrary resource allocation method of hospital funding to true budget determination on a direct line management basis. Contracts for hospital services would be irrelevant and the professional relationships between doctors and patients would be retained.
This study is devoted to the study of rate-setting and cost price of fifteen radiological and endoscopic examinations in gastroenterology as based on monographic studies. In rate-setting the costs are the examinations actually performed in the department. In contrast, the cost price allocated to include only the expenses incurred by each examination and not those related to the time running between them. Both estimations converge when rooms and equipment are used maximally. Our results show that the amounts reimbursed by the Social Security system were always lower than those obtained from monographic studies, except for two radiological examinations for which expenses were adequate. However when cost prices are considered, all reimbursements would have to be increased for endoscopic examinations, but for Radiography, only those of cholangiography, cholecystography and small bowel barium series should be adjusted.
Complex national factors went into the development of key policies of the federal prospective payment system, and the effects of these policies varied in different parts of the country. One state particularly affected by these changes, and for the most part in a positive way, was New York. This paper focuses on the Medicare PPS policy changes and their impact nationally. An analysis of the experience of New York state, which had been under a stringent hospital cost containment system before PPS, provides a laboratory to understand how key federal policies affected different types of hospitals in that state as well as nationally.
BACKGROUND: Decision-makers would benefit from being able to plan and evaluate mental health care interventions or programmes on the basis of costs and consequences that are measured in the same unit of measurement (money being the most convenient). Monetized quantification of the consequences of alternative interventions could be subsequently incorporated into cost-benefit allocation decisions. AIM: This paper provides an overview of the policy and research context within which willingness-to-pay survey techniques are located, together with a review of the main approaches used to date. We also highlight key issues in the application of these techniques and indicate areas of mental health research and policy that could benefit from their introduction. METHOD: Willingness-to-pay survey techniques are reviewed, and issues concerning their validity and application in the context of cost-benefit analyses of mental health policies are discussed. DISCUSSION: Different survey methods are available for generating willingness-to-pay data, the most common being the contingent valuation approach. An assessment of the validity of data generated by these alternative techniques is vital in order to ensure that they are consistent with the notion of economic preferences and values. IMPLICATIONS: The generation of valid and meaningful data on the monetized value of mental health outcomes would provide decision-makers with an improved evidence-based framework for resource allocation.
The dismal stock-market returns of the past few years compel hospitals to examine their investment policies. The asset-allocation decisions of hospital CFOs and trustees generally are based on market trends. Some of their key concerns include volatility of investment returns, lack of internal resources for investment support, trustee and committee fiduciary and investment education, and retaining experienced investment advisory services.
Time and resources spent on physician recruitment are investments that hospitals often overlook. While they may allocate resources for recruitment, many hospitals fail to analyze the value of recruitment dollars spent. By developing a physician search plan, however, a hospital can evaluate market demand for physicians, review ways to reduce physician turnover, and calculate a hospital's return on recruitment investments.
Most if not all social policies entail redistribution of scarce public resources from central government to regional and local authorities, to individual citizens or non-government agencies. Governments use a wide variety of instruments to allocate public funds, including direct state provision of subsidies and goods and services, setting budgets at different levels, and regulation of social insurance schemes. Most industrialised countries have developed budget models based on implicit or explicit allocation criteria. Governments usually start by determining global budgets for an entire category of public spending and then specifying the amounts allocated for categories of spending, and next, the budgets for individual agencies. Within such a 'cascading' model, the lower level budgets may be more controversial than the global budgets, as they directly affect the amounts available to individual actors in the system, e.g. hospitals or health insurance agencies. Setting budgets not only shifts decision-making authority but also financial risks from the central government to decentralised actors. The introduction of the prospective budgeting model for the Dutch sickness funds illustrates why determining budgets is not merely a matter of choosing objective allocation criteria, but also, of interaction between state and stakeholders. In the typical Dutch neocorporatist policy arena, where organised interests share responsibilities with government for the shaping and implementation of social policies, the health insurance agencies actively participated in the development of the budget model.
Health regions in Canada are responsible for meeting the needs of local populations with limited resources. However, relatively little attention has been given to this within-region resource allocation problem. An economic approach to needs assessment, namely program budgeting and marginal analysis, may be of benefit. Its potential for use in Canada is examined, in particular with examples from two Alberta health regions, the Calgary Regional Health Authority and the Chinook Health Region.
The increasing complexity of health care systems in Europe, the financial limits of the public sector one hand, and a political consensus in favour of equal accessibility to services on the other, are at the origin of a widening gap between "individual" ethics (i.e. of health care professionals) and societal ethics. An additional conflict is that between equal accessibility and operational and distributive efficiency.
OBJECTIVE: To assess from a health sector perspective the incremental cost-effectiveness of cognitive behavioural therapy (CBT) and selective serotonin reuptake inhibitors (SSRIs) for the treatment of major depressive disorder (MDD) in children and adolescents, compared to "current practice". METHOD: The health benefit is measured as a reduction in disability-adjusted life years (DALYs), based on effect size calculations from meta-analysis of randomised controlled trials. An assessment on second stage filter criteria ("equity", "strength of evidence", "feasibility" and "acceptability to stakeholders") is also undertaken to incorporate additional factors that impact on resource allocation decisions. Costs and benefits are tracked for the duration of a new episode of MDD arising in eligible children (age 6-17 years) in the Australian population in the year 2000. Simulation-modelling techniques are used to present a 95% uncertainty interval (UI) around the cost-effectiveness ratios. RESULTS: Compared to current practice, CBT by public psychologists is the most cost-effective intervention for MDD in children and adolescents at A$9000 per DALY saved (95% UI A$3900 to A$24 000). SSRIs and CBT by other providers are less cost-effective but likely to be less than A$50 000 per DALY saved (> 80% chance). CBT is more effective than SSRIs in children and adolescents, resulting in a greater total health benefit (DALYs saved) than could be achieved with SSRIs. Issues that require attention for the CBT intervention include equity concerns, ensuring an adequate workforce, funding arrangements and acceptability to various stakeholders. CONCLUSIONS: Cognitive behavioural therapy provided by a public psychologist is the most effective and cost-effective option for the first-line treatment of MDD in children and adolescents. However, this option is not currently accessible by all patients and will require change in policy to allow more widespread uptake. It will also require "start-up" costs and attention to ensuring an adequate workforce.
OBJECTIVE: To assess from a health sector perspective the incremental cost-effectiveness of interventions for generalized anxiety disorder (cognitive behavioural therapy [CBT] and serotonin and noradrenaline reuptake inhibitors [SNRIs]) and panic disorder (CBT, selective serotonin reuptake inhibitors [SSRIs] and tricyclic antidepressants [TCAs]). METHOD: The health benefit is measured as a reduction in disability-adjusted life years (DALYs), based on effect size calculations from meta-analyses of randomised controlled trials. An assessment on second stage filter criteria ("equity", "strength of evidence", "feasibility" and "acceptability to stakeholders") is also undertaken to incorporate additional factors that impact on resource allocation decisions. Costs and benefits are calculated for a period of one year for the eligible population (prevalent cases of generalized anxiety disorder/panic disorder identified in the National Survey of Mental Health and Wellbeing, extrapolated to the Australian population in the year 2000 for those aged 18 years and older). Simulation modelling techniques are used to present 95% uncertainty intervals (UI) around the incremental cost-effectiveness ratios (ICERs). RESULTS: Compared to current practice, CBT by a psychologist on a public salary is the most cost-effective intervention for both generalized anxiety disorder (A$6900/DALY saved; 95% UI A$4000 to A$12 000) and panic disorder (A$6800/DALY saved; 95% UI A$2900 to A$15 000). Cognitive behavioural therapy results in a greater total health benefit than the drug interventions for both anxiety disorders, although equity and feasibility concerns for CBT interventions are also greater. CONCLUSIONS: Cognitive behavioural therapy is the most effective and cost-effective intervention for generalized anxiety disorder and panic disorder. However, its implementation would require policy change to enable more widespread access to a sufficient number of trained therapists for the treatment of anxiety disorders.
Behind every major resource-allocation decision a company makes lies some calculation of what that move is worth. So it is not surprising that valuation is the financial analytical skill general managers want to learn more than any other. Managers whose formal training is more than a few years old, however, are likely to have learned approaches that are becoming obsolete. What do generalists need in an updated valuation tool kit? In the 1970s, discounted-cash-flow analysis (DCF) emerged as best practice for valuing corporate assets. And one version of DCF-using the weighted-average cost of capital (WACC)-became the standard. Over the years, WACC has been used by most companies as a one-size-fits-all valuation tool. Today the WACC standard is insufficient. Improvements in computers and new theoretical insights have given rise to tools that outperform WACC in the three basic types of valuation problems managers face. Timothy Luehrman presents an overview of the three tools, explaining how they work and when to use them. For valuing operations, the DCF methodology of adjusted present value allows managers to break a problem into pieces that make managerial sense. For valuing opportunities, option pricing captures the contingent nature of investments in areas such as R&D and marketing. And for valuing ownership claims, the tool of equity cash flows helps managers value their company's stake in a joint venture, a strategic alliance, or an investment that uses project financing.
This study assesses six states' allocation decisions for funds from tobacco settlement agreements, using information from newspaper articles and other public sources. State allocation decisions were diverse; substantial shares were allocated to areas other than tobacco control and health, including capital projects and budget shortfalls. The allocations did not reflect the stated goals of the lawsuits leading to the settlements. This outcome reflects a lack of strong advocacy from public health interest groups, an unreliable public constituency for tobacco control, and inconsistent support from state executive and legislative branches, all combined with sizable budget deficits that provided competing uses for settlement funds.
Much that has been written about the concept, operation, and performance of HMOs--their use of resources compared with other health service systems--masks the real differences among HMOs themselves. Investigation of autonomous units within a unified HMO program shows a surprising diversity. Analytic formulations drawn from long-term and large-scale research fail to account for variations in staffing, budgeting, rate setting, and expansion when applied to institutional research. Judgment of intangibles remains a key aspect of most major decisions.
Beginning in 1989, Harbor View Mercy Hospital, a freestanding psychiatric facility in Fort Smith, AR, saw a flattening of growth in inpatient days and declines in discharges. In addition to decreasing admissions, it faces the problems of decreasing reimbursement, the need to provide more services with fewer resources, and greater government regulations. The greatest problem is inadequate reimbursement. Psychiatric hospitals fare worse than their acute care counterparts under both Medicaid and Medicare. To fulfill its mission to serve those in need, Harbor View has allocated 43 percent of its revenue budget this year to cover charity care, bad debt, etc. Ron Summerhill, the hospital's chief administrative officer, predicts a slowdown in the growth and profitability of psychiatric services in both the for-profit and not-for-profit sectors. But he is combating this trend by increasing use of managed care arrangements, diversifying, offering more outpatient services, and advocating for change in the reimbursement situation.
BACKGROUND: Chronic hepatitis C (CHC) is a major health problem in Puerto Rico (PR). More than 50% of the population is insured by a government-sponsored managed care system that does not cover treatment for CHC. Lack of access to treatment will result in an increase in end-stage liver disease with its high socioeconomic impact in the future. In an attempt to identify strategies for the treatment of CHC in the publicly insured population, the PR Health Department and the University of Puerto Rico (UPR) Gastroenterology (GI) Division have developed a pilot clinic for the evaluation and treatment of CHC. METHODS: UPR and the PR Health Department negotiated a fee per patient to include all medical care and follow-up laboratories. Viral studies were covered by a grant to the Health Department. Medications were bought at a discount price by the government and dispensed at a government pharmacy. The Health Department allocated funds for 200 patients with government insurance. A dedicated clinic was established at the UPR, staffed by an internist under the supervision of the GI faculty. Patients with a positive HCVab were referred to this clinic. The public insurance covered the CBC, liver tests, metabolic panel, TSH, HBsAg, HIV, ultrasound and liver biopsy, which were required prior to evaluation for possible treatment. In the initial visit, patients underwent a medical evaluation, including assessment of suitability for therapy and counseling. Those deemed to be candidates who still needed a liver biopsy had it performed by the GI staff. Genotype and viral titers were ordered after the decision on treatment had been made. The clinic physician prescribed pegylated interferon and ribavirin, which were dispensed by the government pharmacy. Instruction on proper drug administration was given. Clinic visits were scheduled for 1, 3, 6 and 12 months but also allowed on demand. Laboratory tests were done at the clinic and reviewed by the physician expediently to monitor for toxicity. Any medical problems or treatment for complications of therapy were covered by the primary insurer. Viral load was repeated at 12 weeks to discontinue therapy in those unlikely to respond. The budget per patient for medical visits and laboratory tests was dollars 1,500.00, HCV RNA titers plus genotype costs dollars 200.00, and HCV qualitative RNA costs dollars 123.00 RESULTS: 405 patients have been referred between February 2002 and April 2003 (the number was increased at adjust for no-shows and those not treated). 30% are female, the major risk factor is IVDU, and 80% are unemployed. 101 have started treatment and 48 are awaiting biopsy. A support group has been established at the clinic. CONCLUSIONS: The treatment for CHC in practice is not only costly but also resource consuming. Most gastroenterologists in our community refer these patients for treatment. The establishment of a dedicated clinic with a primary physician supervised by the specialists reduces costs and facilitates caring for a larger number of patients. The volume of services allows for negotiation of medical, laboratory and drug costs. In allocating funds for this project, the PR Health Department recognized the importance in reducing the potential spread in the community by treating infected patients as well as reducing the future medical and socioeconomic burden of end-stage liver disease. Although the outcome of this project is still unseen, we believe that this model may serve to establish other clinics for the treatment of CHC at lower costs with the same effectiveness.
A household survey of 230 episodes of infant and child illness in rural Haiti was analyzed to identify sociocultural and environmental factors that determine allocation of family resources for health care. The analysis tested the hypothesis that expenditures of time and money would vary according to expectations about the prognosis for the disease in question, the age and sex of the child, the household composition and family structure, and seasonal fluctuations in weather and financial resources. The results show that these factors are significant predictors of resource allocation, although they do not always produce the kind of influence that was hypothesized. The findings emphasize the importance of cultural and ecological variables, as well as of purely medical and economic factors, in understanding family response to illness. The importance of nonmonetary resources (such as the free time available to adult family members) in that response is also indicated. The study has methodological and practical implications for Haiti and other areas.
Energetically demanding migrations may impact the resources available for reproductive trait development and activity, and hence favour evolution of new investment strategies for remaining resources. We conducted a large-scale experiment to evaluate the proximate cost of migration on male reproductive investment in chinook salmon (Oncorhynchus tshawytscha) and contemporary evolution of reproductive allocation. Experimentally induced differences in migratory costs (17 km inland and 17 m elevation vs. 100 km and 430 m) influenced dorsal hump size and upper jaw length, two traits influencing male mating success that are developed during migration. Longer migration also reduced tissue energy reserves available for competition and length of breeding life. Corresponding shifts in the balance between natural and sexual selection appear to have been responsible for heritable population divergence in secondary sexual trait investment, in approximately 26 generations, following colonization of spawning sites with different migratory demands.