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Do eye hospitals have a role in our future?

Eye hospitals, originally founded to care for the poor, have developed into academic centers and tertiary "hospitals of last resort." Inexorable economic pressures, especially price competition, are likely to close many of them, particularly those which are marginal in quality or management. Survival of the remainder may further depend on their ability to adapt to a rapidly changing environment and to fulfill, better than anyone else, the special mission of basic and clinical research and training. Society must be convinced that some of these complex, highly differentiated, relatively expensive eye hospitals are significant national resources, serve the public welfare, and are worth preserving.

Cost Allocation↗

Efficiency and administrative costs in primary care.

We use a formal model to examine the implications of endogenous managerial effort for the interpretation and estimation of efficiency in health care organisations. The model is applied to investigate the doubling of the cost of administering primary care in England in real terms between 1989/1990 and 1994/1995. The main cost determinant was the number of general practitioners (GPs), and there were economies of scale but not of scope. Fund-holding had a positive but small effect on administrative costs, so that the recent abolition of fund-holding may do little to reduce primary care administrative costs. After allowing for changes in the numbers of primary care practitioners, the quality of primary care and the extent of fund-holding, most of the increase in costs was unexplained, and may reflect additional but unmeasured increases in the administrative burden associated with the 1990 reforms. There was little variation in relative efficiency across areas.

Cost Allocation↗

Physician opportunity costs in physician practice cost functions.

Estimation of cost functions for physician firms is problematic because many physicians are self-employed, and the marginal opportunity cost of physician labor is not observed. In this paper, we show how to recover marginal costs and conventional measures of economies of scale from cost functions that condition on the amount of physician labor input. In addition, we introduce the new concepts of marginal nonphysician input costs and 'behavioral' economies of scale, which reflect the structure of costs when physician labor input moves along a utility-maximizing expansion path. Our results could be useful in the design of resource-based physician fee schedules.

Cost Allocation↗

Medicare's DRG-weights in a European environment: the Spanish experience.

Hospital payment systems are being changed to mixed systems, composed of case-mix categories and structure indicators. The Health Care Financing Administration's Diagnosis-Related-Groups (HCFA's DRG-weights are used in Catalonia as Prospective Payment System (PPS)-instruments for hospital inpatient reimbursement. The Catalonian and Spanish health systems, however, are very different from the US health environment. The aim of this study is to determine whether the HCFA's DRG-weights fit the special characteristics of a European environment. To do this, cost-based weights, determined from information from the cost accounting system of two public hospitals in Barcelona, are compared with Medicare-weights. A total of 35 262 discharges representing 12 794 million pesetas are analyzed. Medicare-weights do not differ globally from cost-based-weights and the adjusted correlation weighted least squares regression between the two weight-scales is 95%. There are, however, systematic deviations in six DRG-groupings. The most important deviations are concentrated in Ambulatory Surgery categories, in DRGs in which prostheses are used, and in specialties excluded from several PPSs because of extreme variables in treatment intensity. In conclusion, Medicare-weights can be used to pay hospital output in European environment but they should be adjusted to avoid systematic deviations.

Accounting↗

Managed care and emergency medicine: conflicts, federal law, and California legislation.

The traditional use of the American ED, one of unrestricted access by patients and payment for services by insurers, is being questioned in this era of health care reform. Both primary care physicians and managed care organizations have questioned the use of the ED by patients without obvious problems of an emergency nature. We attempt to address this issue from the emergency medicine and managed care perspectives.

California↗

Risk informed resource allocation policy: safety can save costs.

During economic doldrums, decision making on investments for safety is even more difficult than it already is when funds are abundant. This paper attempts to offer some guidance. After stating the present challenge to prevention of losses in the process industries, the systematic approach of quantified risk assessment is briefly reviewed and improvements in the methodology are mentioned. In addition, attention is given to the use of a risk matrix to survey a plant and to derive a plan of action. Subsequently, the reduction of risk is reviewed. Measures for prevention, protection, and mitigation are discussed. The organization of safety has become at least as important as technical safety of equipment and standards. It is reflected in the introduction of a safety management system. Furthermore, the design process in a pro-active approach is described and the concept of inherent safety is briefly addressed. The concept of Layer of Protection Analysis is explained and also the reason why it is relevant to provide a cost-benefit analysis. Finally, after comments regarding the cost of accidents, the basics of costing and profitability are summarized and a way is suggested to apply this approach to risk-reducing measures. An example is provided on how a selection can be made from a number of alternatives.

Cost Savings↗

Ear advantage and attention: an ERP study of auditory cued attention.

The neurophysiological manifestations of left ear advantage to tonal stimuli and its interaction with attention have rarely been studied. Cued attention is a behavioral paradigm to assess the behavioral benefits and costs of allocating attention. In this task a cue predicts the location of a subsequent target to which the subject responds. In most cases the cue correctly predicts the target (valid cues) but at times it does not (invalid cues). Cued attention is a spatial paradigm with stimuli presented to either side. The objectives of this study were: (1) to find the neurophysiological correlates of the ear advantage phenomenon and (2) to assess the interaction of the stimulated side (right vs. left ear advantage) with attention, in a cued attention task. Significant effects on event-related potentials (ERPs) in the cued attention task indicated left ear and right hemisphere advantage. Effects were mostly confined to the right hemisphere. The results indicate interactions among left ear advantage, attention and dominant hand utilization. Ear advantage and attention may involve the same neural mechanisms. In spite of the left ear advantage effect on ERP components, hand dominance determines the final behavioral results (reaction times).

Acoustic Stimulation↗

Organization of personnel and resources for airway management in the hospital and office environment.

Good airway management depends on a system that emphasizes teamwork to expedite care and minimize errors. By understanding the accreditation and licensing requirements, appropriate personnel and equipment can be allocated along cost effective guidelines. Newer techniques for management of the difficult airway, such as the laryngeal mask airway (LMA; LMA North America, San Diego, CA) and flexible fiberoptic bronchoscope, provide alternatives to the emergency cricothyrotomy. A program of continuous quality improvement and clinical guidelines will enhance patient care and suggest intelligent use of airway resources.

Airway Obstruction↗

The attitudes of Ontario hospitals toward transitional funding: response to a survey.

A survey of hospital administrators throughout Ontario was conducted to determine their views about the strengths and weaknesses of the new Transitional Funding system, especially as it existed between Phase One and Phase Two when many changes were taking place. The basic findings of the survey are presented. The authors go on to explore some of the answers and determine whether the hospital's responses were influenced by their participation in the process and whether they were "winners" or "losers" as a result of the changes. This type of information should be useful to policy makers in Ontario as they modify the overall hospital financial system, and also be useful to policy makers outside the province who are contemplating making such changes.

Attitude of Health Personnel↗

Resource utilization groups (RUGs): defining chronic care, rehabilitation and nursing home case mix in Canada.

The two major purposes of this study were: (1) to evaluate Resource Utilization Groups (RUGs III) as a unified method for classifying all residential, chronic care and rehabilitation patients at the St. Joseph's Health Centre, London, and (2) to compare the potential funding implications of RUGs and other patient/resident classification systems. RUGs were used to classify a total of 336 patients/residents in residential, extended care, chronic care and rehabilitation beds at the Health Centre. Patients were also concurrently classified according to the Alberta Long Term Care Classification System and the Medicus Long Term Care System. Results show that RUGs provide relatively more credit for higher acuity patients than do the Alberta or Medicus systems. If used as a basis for funding, chronic care and rehabilitation hospitals would be entitled to more funding (relative to residential/nursing homes) under RUGs than under the other two patient classification mechanisms.

Chronic Disease↗

Alberta's Acute Care Funding Project.

Alberta initiated the Acute Care Funding Project (ACFP) in 1988, a new hospital funding system that institutes case mix budgeting adjustments to the global budget so that hospitals can be treated more equitably. The initiative is a significant departure in principle from the former method of funding. The ACFP is summarized and critiqued, and focuses on the inpatient side of the picture. The various elements of the project are discussed, such as the hospital performance index, the hospital performance measure, the Refined Diagnostic Related Group, case weights, typical and outlier cases, and the costing mechanisms. Since its implementation, the ACFP has undergone substantial changes; these are discussed, as well as some of the problems that still need to be addressed. Overall, the system offers incentives to reduce length of stay and to increase the efficiency with which inpatient care is provided.

Alberta↗

Hospital reimbursement in Alberta: outcomes management is on the way.

The Alberta government has initiated a process to alter fundamentally the way it pays hospitals. As with most provinces, Alberta has been paying hospitals for what they spend. The new Alberta model will initially pay hospitals for what they do and ultimately will pay hospitals for what they ought to do; that is, for the outcomes that should be achieved. This article describes the initial step of what is expected to be a lengthy journey. The principles underlying the model are: it should be a prospective case-based system; there should be performance linkages between types of hospitals; severity should be incorporated into the model; and cost or cost proxies should be used where possible in weight development and clinical concerns, both nursing and medical, should be addressed. For the past two years funding adjustments have been made on the basis of the calculation of a Hospital Performance Index (HPI). The HPI is the average predicted cost per case divided by the unweighted average actual cost per case. The HPI is intended as an interim measure only. Ultimately, the system will evolve into a true prospective case-based system with volume controlled via role statements and linked to clinical outcomes.

Alberta↗

Case mix management education in a Canadian hospital.

The Sunnybrook Health Science Centre's matrix organization model includes a traditional departmental structure, a strategic program-based structure and a case management-based structure--the Clinical Unit structure. The Clinical Unit structure allows the centre to give responsibility for the management of case mix and volume to decentralized Clinical Unit teams, each of which manages its own budget. To train physicians and nurses in their respective roles of Medical Unit directors and Nursing Unit directors, Sunnybrook designed unique short courses on financial management and budgeting, and case-costing and case mix management. This paper discusses how these courses were organized, details their contents and explains how they fit into Sunnybrook's program of decentralized management.

Cost Allocation↗

True costs of air medical vs. ground ambulance systems.

The economic model created in this paper replaces the existing University of Massachusetts Medical Center's New England Life Flight (NELF) helicopter ambulance service with a ground ambulance system to investigate comparative costs. The model is based on a less than 30-minute response time to the patient, similar medical team staffing and equal service area. The annual budgetary cost of the replacement ground network is $3,804,000 while the helicopter ambulance costs are $1,686,500 (based on 1991 dollars). The cost per patient transported is $4,475 for the ground system and $2,811 for the helicopter system. The comparison finds that the commonly held notion that condemns helicopters as an excessively expensive technology for patient transport is incorrect. Future research to address intermediate alternatives using similar analytical technology assessment techniques is recommended.

Aircraft↗

Practice management for academic dermatology departments.

Practice management in the academic medical center (AMC) is different than in other environments. Practice is only a part of the practitioner's mission within an AMC. Practice revenue will be subject to a tax or overhead by both the school and the department. Contract and practice guidelines cannot be tailored to the needs of the dermatology practice, because contracts and guidelines are negotiated globally for all of the practices within the AMC. Personnel, on which the practice depends, may report to hospitals and clinics rather than to the practice's management. Even control of the practice's manager may be diluted by a dual or "dotted line" reporting relationship between the department manager and the school practice manager. Although more constraints exist within the AMC, there are some strategic and operational choices that affect a practice's success. Among these are: (1) selection of services offered; (2) creation of satellites; (3) stimulation of faculty effort; (4) enhancement of faculty billing knowledge; and (5) creation of a "tie" between staff and the practice.

Academic Medical Centers↗

High cost nosocomial infections.

The average charge per patient due to nosocomial infection for 215 nosocomial infections in 183 study patients was $693. These cost, however, were concentrated in very few patients; 5% of patients accounted for nearly one-third of total charges. The 10% of patients with highest nosocomial infection cost were patients on Medical or Surgical services; these services were utilized in 71% of patients with nosocomial infection and accounted for 86% of the attributable charges. Among the 22 most costly infections, 17 occurred in surgical wounds and lower respiratory tract. Although these sites accounted for 46% of the infections, they resulted in 77% of the total nosocomial infection charges. Patients with a primary diagnosis of injury had particularly costly infections. Combined analysis of these variables revealed two groups for whom nosocomial infections were especially costly: surgical patients who acquired wound infections after injuries, and medical patients with lower respiratory infections.

Cost Allocation↗

Time costs associated with cervical cancer screening.

OBJECTIVES: Time costs borne by women when undergoing cervical cancer screening have rarely been elucidated, although such costs may pose substantial barriers to care. The purpose of this project was to quantify the opportunity costs associated with cervical cancer screening in young women attending Planned Parenthood Clinics. METHODS: We conducted a self-report survey of 105 women from six clinics to measure travel, waiting, and exam times associated with cervical cancer screening. Respondents recorded their time of arrival and departure, length of time in the waiting room, age, income level, and hours per week they worked outside of the home. Time costs were valued three ways: through self-reported hourly wage, age- and gender-adjusted minimum earnings, and national age- and gender-adjusted hourly wages. RESULTS: Respondents were on average 24 years old, worked 29 hours per week outside the home, and earned less than $20,000 per year. Mean time for one-way travel was 18.7 minutes; waiting room time was 16.9 minutes; and exam time was 50.8 minutes. Time costs were estimated to be $14.08 per visit based upon the self-reported hourly wage; $16.46 per visit based upon age- and gender-adjusted minimum earnings; and $19.63 per visit based upon age- and gender-adjusted national wage rates. CONCLUSIONS: Time costs associated with cervical cancer screening represent an important opportunity cost and should be considered in studies attempting to identify barriers to screening adherence. Our results indicate that time costs accounted for up to 25% of cervical cancer screening costs. Time costs should be identified, measured, valued, and included in cost-effectiveness analyses of cervical cancer screening.

Adult↗