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PubMed1982

Budgeting and controllable cost variances. The case of multiple diagnoses, multiple services, and multiple resources.

This paper examines an unfavorable cost variance in an institution which employs multiple resources to provide stay specific and ancillary services to patients presenting multiple diagnoses. It partitions the difference between actual and expected costs into components that are the responsibility of an identifiable individual or group of individuals. The analysis demonstrates that the components comprising an unfavorable cost variance are attributable to factor prices, the use of real resources, the mix of patients, and the composition of care provided by the institution. In addition, the interactive effects of these factors are also identified.

Budgets↗
PubMed1987

Accounting for cross boundary flows.

RAWP (Resource Allocation Working Party) allows for cross boundary flows by adjusting regional or district health authorities' (DHAs) targets at an average specialty cost. The previous paper in this series examined problems for an inner city district health authority arising from RAWP cross boundary flow adjustment. This paper examines the likely importance of these and other problems for the National Health Service as a whole. Cross charging has been proposed as an alternative method of funding flows. District health authorities would receive an allocation equivalent to their RAWP target and then all non-emergency flows would be agreed between the authorities where patients live and competing authorities offering treatment at previously negotiated charges based on local estimates of each type of case. The problem of cost estimation is usually cited as a difficulty with this proposed reform, but this paper also discusses other important issues that tend to be neglected.

Cost Allocation↗
PubMed1995

Economic issues and the management of benign prostatic hyperplasia.

Enormous financial resources are expended worldwide on the treatment of the urologic complications and symptoms induced by benign prostatic hyperplasia (BPH). Even for its surgical management, where the best data exist, current international accounting of these expenditures remains very poorly documented. On February 8, 1994, the Department of Health and Human Services of the US government released clinical guidelines for the diagnosis and management of BPH. Imaging of the upper urinary tract as a routine diagnostic procedure is not recommended in these guidelines unless a comorbidity indicating its need exists. Diagnostic cystoscopy to assist in the decision of the need to treat is not recommended. Adherence to these two principles along with adherence to the strategies of management presented in the guidelines and discussed herein has the potential of achieving profound financial savings without impairing quality of care worldwide.

Cost Control↗
PubMed1996

The containment of cost of health care.

The cost of health care services has become increasingly important to society. Although hospital physicians are traditionally not involved in cost calculation and cost containment, they bear the consequences of budget restrictions. Since 1987, the reimbursement for clinical laboratories in Belgian hospitals has changed towards an envelope based system. Clinical biologists became aware that new resources can only be obtained mainly through cost reductions. But to contain cost, one must understand how it is generated. Activity based costing (ABC) is a new technique developed for strategic management in the industry. By analyzing the cost of all activities involved in the production process, this technique is very well suited to calculate cost in service organizations like medical departments. Using the principles of ABC, we performed a detailed analysis of the cost of a microbiology laboratory, determining the full cost as well as the proportion of each cost sorts (materials, labor, ...) for each laboratory test. This analysis illustrates that cost can effectively be calculated in a hospital department and guide doctors in the evaluation of alternative medical techniques, investments in automation, and the decision on medical priorities. In our opinion, cost containment of hospital care must start from within each medical department. Responsibility and participation of physicians in the discussion on budget allocation are essential in the process of cost containment of the hospital health care.

Belgium↗
PubMed1997

Costing pathology services: a practical approach to a difficult problem.

Recent developments in funding healthcare have created a need to know the cost of each input into a patient episode of care. In most cases pathology departments will be faced with a complex costing problem in their efforts to meet this need, owing to the diversity of investigations performed and the variation in cost between the least and the most expensive investigations. Most methods for costing pathology services are resource intensive, from the point of view both of the initial set up and of maintenance of the data. They often require a level of financial detail that may not be available. The model described in this paper will accept crude financial data and can be refined as better data become available. In our hands the model has yielded useful information and has raised the awareness of staff to the cost of the work they perform. Although the model has been applied to an analysis of pathology costs, the principles are transferable to other areas which have a wide range of "products" for which individual costs may be difficult to identify.

Costs and Cost Analysis↗
PubMed1980

Trends in medical care costs. Do HMOs lower the rate of growth?

Total medical care expenses are generally lower for HMO enrollees than for comparable persons with other coverage. However, a rarely addressed question is whether HMO enrollees also experience a slower rate of growth in costs. This paper examines data from several sources (Federal Employees Health Benefits Program, California State Employees, and Kaiser-Oregon) to compare trends in utilization and costs for HMO enrollees and comparison groups over periods of up to twenty-five years. Total costs can be decomposed into cost per unit of service and the number of units, or utilization of services. Trends over time in cost per unit of service (e.g., per hospital patient day) in HMOs are generally comparable to national trends, as are measures of factor inputs (e.g., physician office visits per physician per year). Trends in utilization, such as hospital days per 1,000 enrollees, show slight reductions for HMO enrollees relative to persons with conventional coverage. Therefore, the rate of growth in total costs (including out-of-pocket expenses) is only slightly lower for persons in HMOs. While HMOs may offer lower costs at any point in time, they have not been able to substantially alter the national patterns of medical care inflation and increasing resource use.

Age Factors↗
PubMed1998

Direct costs of transient ischemic attacks: a hospital-based study of resource use during the first year after transient ischemic attacks in Denmark.

BACKGROUND AND PURPOSE: Knowledge of costs of health care and social services for patients who have transient ischemic attacks (TIAs) is scarce. This study investigates the resource use and estimates direct costs during the first year after a TIA. METHODS: All patients admitted to a university hospital in Copenhagen, Denmark, because of TIA during 12 months in 1994-1995 were included in a database. The patients were followed until 1 year after admission, and data on resource use during and after the hospital stay were collected prospectively at interviews. RESULTS: The cost of the hospital stay had a mean of DKr 10100 (US $1800), and the cost of health care and social services after discharge had a mean of DKr 8800 (US $1600). CONCLUSIONS: The total cost of health care and social services during the first year after a TIA had a mean of DKr 18800. The hospital stay and the services after discharge each made up half of the total direct cost.

Adult↗
PubMed2000

Cost analysis of different protocols for imaging a patient with acute flank pain.

The aim of this study was to analyse the costs of different diagnostic approaches to patients with acute flank pain. Four different diagnostic approaches were considered: (a) spiral CT without contrast medium (CM); (b) plain film, ultrasonography (US) and intravenous urography (IVU)--the latter procedure is used in our department in cases still unsolved following the former investigations (28% in our experience); (c) plain film, US and spiral CT without CM (as an alternative to IVU in 28% of cases); and (d) IVU. The cost of each procedure in a university hospital was calculated, following analysis of the differential costs of each investigation (equipment, depreciation and maintenance costs, related materials and services, radiologists, radiographers, nurses) and their common costs (auxiliary personnel and indirect internal costs). Finally, we calculated the full cost of each procedure and applied it to the different diagnostic approaches. The full cost of each approach was: (a) spiral CT without CM = 74 Euro; (b) plain film, US and IVU (28%) = 66.89 Euro; (c) plain film, US and spiral CT without CM (28%) = 64.93 Euro; (d) IVU = 80.90 Euro. Intravenous urography alone or in unsolved cases is not to be considered because it provides higher costs and worse diagnostic results, whereas X-ray dose to patient is almost equal between IVU and spiral CT. Spiral CT integrated to plain film and US in unsolved cases could be preferred because of lower cost and dose to patient, though reaching a diagnostic conclusion may take longer than an immediate spiral CT.

Acute Disease↗
PubMed2001

Indirect costs, cost-utility variations and the funding of paediatric cochlear implantation.

OBJECTIVE: To demonstrate the existence of variations in cost-utility associated with indirect costs in paediatric cochlear implantation; to illustrate the implications of this for purchasing decisions and; to posit a potential solution to anomalies in purchasing that may otherwise result when services are publicly funded. METHODS: Data was taken from published sources on the cost of implantation, outcomes measured in terms of quality adjusted life years (QALY) and in savings in education costs associated with paediatric cochlear implantation. Cost-utility ratios across education authorities were calculated using a single centre's implantation costs. RESULTS: Variations in savings across education authorities show that the cost per QALY gain associated with paediatric cochlear implantation can vary between approximately $12,000 and $18,000 assuming an exchange rate of $1.45 = 1 pound sterling for the same implant centre. These variations have the potential to produce situations in which less efficient implant centres are preferred by purchasers over more efficient ones or in which candidates with poorer outcomes are selected for funding over candidates with superior outcomes. It is important that savings associated with education be taken into consideration in evaluations intended to inform purchasing decisions regarding implantation. Equally it is important that potentially anomalous decisions be avoided if evaluations are to remain credible. It is argued that this may be achievable if public funding for implantation is determined at a national level and ring-fenced i.e. devoted exclusively to use in cochlear implantation.

Child↗
PubMedDate not supplied

Burden of coronary heart disease on the Iranian oil industry (1999-2000).

To estimate the direct cost of coronary heart disease (CHD) to the Iranian oil industry, we calculated the cost of essential services for 1253 CHD patients admitted to the National Iranian Oil Corporation (NIOC) Central Hospital. The direct cost of CHD at the Hospital was 10940 million rials (US$ 1 = 8000 rials), or 8.7 million rials per patient. The direct cost of CHD to the Iranian oil industry was estimated at 22 770 million rials. Working days lost to workers hospitalized for CHD amounted to 62 832. The heavy burden of CHD on the Iranian oil industry necessitates the introduction of an industry-wide prevention programme.

Absenteeism↗
PubMed1999

Measuring the indirect and direct costs of acute otitis media.

OBJECTIVES: To test a method of measuring the related cost of acute otitis media (AOM) and to provide a preliminary calculation of the indirect and directs costs associated with a single, medically treated episode of AOM. DESIGN: The Otitis Media Diary was used to measure indirect and direct costs associated with AOM in a prospective cohort study. Measured values included the parental time spent in otitis-specific child care and the number and type of medications used. A previously developed economic model was used to calculate the monetary costs associated with the value of caregiver time and the total opportunity cost of AOM. SETTING: The pediatric clinic of Madigan Army Medical Center, Tacoma, Wash. PATIENTS: A cohort of 25 children (12 with AOM and 13 controls) aged 1 to 3 years. MAIN OUTCOME MEASURES: Caregiver time and medication use. RESULTS: The total cost attributable to AOM in the 3-month period following diagnosis was $1330.58 (95% confidence interval, $1008.75-$1652.43), with the majority of that cost stemming from the indirect, rather than direct, costs of illness. After conservative estimates of unmeasured expenses, such as clinic visits and transportation, were accounted for, indirect costs, accrued primarily by parental time, accounted for nearly 90% (95% confidence interval, 87.1%-92.3%) of the total 3-month cost associated with AOM and its medical treatment. The cost items of the Otitis Media Diary were also highly correlated with each other and with other measures of clinical and functional health status. CONCLUSIONS: Otitis Media Diary measures of parental time and medication use appear to provide a more accurate means of calculating the real social costs attributable to the AOM disease process in this cost-effectiveness analysis.

Acute Disease↗
PubMed2005

Indirect cost assessment in patients with rheumatoid arthritis (RA): comparison of data from the health economic patient questionnaire HEQ-RA and insurance claims data.

OBJECTIVE: To render information on the accuracy of patient-reported indirect cost data compared with payer-derived data of the real indirect costs on a patient-by-patient basis concerning disease-related productivity losses in rheumatoid arthritis (RA). METHODS: The assessment of indirect cost data was part of a clinical, multicenter, randomized RA trial. A total of 234 patients of working age with a diagnosis of RA (according to 1987 American College of Rheumatology criteria) were recruited. Demographics of the cohort were mean age 53 years, mean disease duration 8 years, 76% were women, and all had membership in the regional statutory health insurance plan. Every 3 months corresponding indirect cost data were derived for the cohort from a health economic questionnaire for cost assessment in patients with RA and the payer's database over a period of 18 months. Comparative statistical analyses were performed between patient-reported and insurance claims data. RESULTS: The mean annual productivity losses due to sick leave amounted to 14 and 17 days per patient (questionnaire versus payer data), and productivity losses due to work disability amounted to 3 days (both); monetary valuation renders overall costs of 1,240 and 1,590, respectively. The difference of 17% in overall productivity losses is not significant. Comparison of productivity losses reveals a strong correlation of r = 0.83 in those due to sick leave and of kappa = 0.84 in those due to work disability between questionnaire and payer data. CONCLUSION: The comparison of questionnaire and payer data shows that RA patients report their productivity losses adequately. Indirect cost assessment should therefore be included in further RA trials and observational studies.

Adolescent↗
PubMedDate not supplied

The costs of prevention.

A prevention program is cost-effective if it yields more health benefits than do alternative uses of health care resources. Some prevention programs meet this standard: either they actually save more health care resources than they utilize, or their net costs per healthy year of life gained are lower than those of alternatives such as curative or palliative medicine. Other prevention programs, however, are less cost-effective than are medical treatments for the same disease. One lesson for public policy is that generalizations about the cost-effectiveness of "prevention" are unwise. Another lesson is that prevention programs should not be subjected to a higher standard than other health programs: they should not be expected to save money, but they should be expected to yield improved health at a reasonable price.

Costs and Cost Analysis↗
PubMed1999

[The costs of hip-fracture in Germany: a prospective evaluation].

OBJECTIVE: To assess the direct and indirect costs of hip fracture in dependence of postoperative care setting. STUDY DESIGN: Prospective cohort study. METHODS: 227 consecutive patients in three hospitals (city, town, and small town) presenting with hip fracture. For 177 patients there was follow-up regarding post-operative care-setting. During follow-up the cost of the remaining patient at 1, 3, 6 month were recorded and afterwards adjusted to the distribution of the initial cohort. To obtain information on patient characteristics, assessment during hospital stay and follow up have been performed. RESULTS: There was a relevant difference in costs depending on the care setting after hip fracture. The nursing home - nursing home, community - community, and community - nursing home resulted in total costs at 6 month of 17,701 DM, 27,102 DM and 54, 503 DM, respectively (average: 24,508 DM). Nursing home costs contributed significantly to the differences between groups. Valid and predictive measures could not be established in first analysis of performed assessments. CONCLUSION: Due to the high incidence of hip fractures (100,000/y) indirect costs play a major role in the economic impact of this illness. The analysis of the effectiveness of interventions has to take into account these costs to achieve adequate conclusions.

Aged↗
PubMed1998

Laparoscopic or open fundoplication? A complete cost analysis.

BACKGROUND: As part of a prospective observational trial, we set out to determine the direct and indirect costs of an open versus a laparoscopic fundoplication for chronic gastroesophageal reflux disease (GERD). METHODS: Two groups of patients, each comprising 28 subjects, were studied. RESULTS: All patients received a functioning fundoplication that did not require any additional therapy. Because 19 and 12 patients in the open and laparoscopy groups, respectively, were employed in the work force, we were able to assess the costs due to loss of production. The mean operating time was similar for both groups, but postoperative stay differed significantly; though it amounted to 8 days for the open group, it was only 2 days for the laparoscopy group. Postoperative sick leave was 29.9 days in the open and 9.9 in the laparoscopy group (p < 0.05). The costs of the operations were 18,363 SEK for laparoscopy and 12,856 SEK for conventional fundoplication. On the other hand, the cost for hospital stay amounted to 35,488 SEK in the open group but was only 25,571 SEK for those undergoing laparoscopy. When we add outpatient visits, endoscopies, and other medical expenses, the total direct costs in the laparoscopy group come to 27,693 SEK, as compared to 37,482 SEK for the open fundoplication. The indirect medical costs, which were dominated by loss of production (36,732 versus 12,126 SEK), came to 37,126 and 12,595 SEK in the open and laparoscopy groups, respectively. CONCLUSIONS: The total community-based costs for the open and laparoscopic operations for chronic GERD amounted to 74,608 and 40,289 SEK, respectively. Thus, we would recommend the laparoscopic procedure in most cases.

Adult↗
PubMed1986

Opportunities for improving the cost-effectiveness of antihypertensive treatment.

Hypertension is an extremely important public health problem, both medically and economically. The cost burden of treatment may significantly compromise care for the individual patient, while in aggregate the direct costs of antihypertensive treatment in the United States approach $8 billion a year. Improved insurance coverage and efforts to control the costs of antihypertensive treatment are needed. Efforts to reduce the costs of care, with minimal or no reduction in its quality, should focus on the following: limiting treatment to patients with sustained diastolic hypertension; improving the efficiency of the delivery process; and emphasizing "low-cost prescribing strategies." The uncertainty that remains over the risk-benefit ratio of pharmacologic treatment for patients with very mild hypertension (90 to 94 mm Hg diastolic) raises additional questions. Even if treatment of mild hypertension is effective, it is without doubt less cost-effective than treatment of moderate and severe hypertension. Is this cost worthwhile? Such trade-offs of cost and benefits will increasingly have to be confronted in the face of limited health care resources.

Antihypertensive Agents↗
PubMed1988

Direct medical costs of disease and gastrointestinal side effects during treatment for arthritis.

We conducted a study to determine the costs of caring for patients with arthritis. Data were obtained from the Medicaid Management Information System (MMIS) of Washington, DC. A retrospective analysis was undertaken of all direct medical costs related to individual Medicaid recipients who obtained treatment for arthritis. First, all data were adjusted for patient compliance with nonsteroidal anti-inflammatory drugs (NSAIDs). Second, we determined the actual expenditure of treating arthritis. Last, the medical costs of treating adverse gastrointestinal side effects were examined. There was a linear relationship between compliance and pharmaceutical dose schedule per diem. Treatment costs per quarter were $145; 54 percent of the cost was for NSAIDs with the remainder equally divided between physician and hospital costs. Approximately 25 percent of the population experienced NSAID-related gastrointestinal side effects that required further medical care. The per-quarter mean cost of treating these adverse gastrointestinal drug reactions was $66 per person, which added nearly 46 percent to the per-quarter mean cost of treatment. The total cost of treating patients with arthritis therefore averaged $211 per quarter. Nearly one third of overall cost went to provide medical care to the 25 percent of the population who experienced adverse reactions, and slightly more than two thirds went towards treating the disease itself. Overall costs of treating adverse drug reactions were accounted for by pharmaceuticals (about 42 percent), usually the histamine (H2)-receptor antagonist cimetidine, rare but expensive inpatient hospital care (about 38 percent) and physician visits (about 20 percent).

Aged↗