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Quality--a natural incentive for working together.

Agencies must work together to present a united front in advancing home care as a major player in the new health care arena. Improving the industry from the ground up through both cooperation and competition using Total Quality Management substantiates the claim that home care is the way to go for the '90s.

Consumer Behavior↗

Hospital pricing: cost shifting and competition.

The issue of cost shifting has taken on enormous policy implications. It is estimated that unsponsored and undercompensated hospital costs--one measure of cost shifting--has totaled $21.5 billion in 1991. The health services research literature indicates that hospitals set different prices for different payers. However, the empirical evidence on hospitals' ability to raise prices to one payer to make up for unsponsored care or lower payments by other payers is mixed at best. No study has concluded that hospitals have raised prices to fully adjust for such actions. The extent of cost shifting is limited by the market. When a hospital has market power, it is able to set prices above marginal costs. However, when a buyer has enough patient/subscribers and a willingness to direct them to particular providers based on price considerations, hospitals have less flexibility in raising prices above costs. Thus, the extent of cost shifting is limited by the market. Cost shifting is not as easy as it may have been in the past because the nature of hospital and insurer competition has changed radically in the last decade. While hospital quality, services, and amenities still matter, some buyers are increasingly concerned about the price they pay. Evidence from studies of PPO and HMO negotiations with hospitals suggests that hospitals' market power is eroding, at least in some areas. In areas with relatively few hospital competitors and little PPO or HMO activity, Medicaid and Medicare price reductions and uncompensated care burdens will be partially absorbed by higher prices paid by private payers. In more price sensitive markets and in markets in which prices to private payers have risen to those commensurate with the market power of local hospitals, such cost shifting will not occur. A market-based approach in hospital pricing requires an explicit policy for the uninsured. In a competitive market, a hospital that traditionally cared for the uninsured by spending some of its profits on them will be unable to do so, at least to the same extent as it did in the past. Increased competition in health care without consideration of the uninsured will decrease the uninsured's access to care.

Contract Services↗

The recovery of Bay State Health Care.

Blue Cross and Blue Shield of Massachusetts acquired Bay State Health Care after the HMO's tumultuous downturn. The case study described herein provides a useful lesson in the moves that must be made, particularly in an era of health care consolidation and intensive competition, to maintain health plan stability and reinforce its position in the marketplace.

Blue Cross Blue Shield Insurance Plans↗

Reforming health care in The Netherlands.

Health reforms in The Netherlands have been introduced into a very different environment but with similar aims: efficient, effective, high quality care that addresses the needs of individual patients. Anne-Marie te Maarssen and Richard Janssen outline progress so far.

Economic Competition↗

Health plans and providers: how new partnerships are evolving in a volatile environment.

As the fee-for-service health system dwindles, organized provider structures and mutually beneficial relationships are forming between providers and payers. Providers and payers--united by shared goals of efficiency and effectiveness of care--are beginning to work together to identify and achieve their financial and quality objectives. In this article, the author discusses the evolution of these relationships in health care delivery, addresses the challenges of integration, and reveals the winners in this new delivery system.

Capitation Fee↗

Scheduling: if your RIS cannot, perhaps your HIS can.

As the services radiology departments provide have proliferated--new modalities, additional procedures--the scheduling process has become more complex. Radiology departments have been criticized by referring physicians and their staff for difficulties they encounter when scheduling patients for procedures. In light of managed care and increased competition for outpatient services, scheduling systems should be designed with the referring physician's office as the prime customer. Vanderbilt University Medical Center (VUMC) has devised a collaborative, hospital-wide system for scheduling. The same system is used by The Vanderbilt Clinics, which refer a significant number of outpatient procedures to VUMC. The radiology department has tailored the system to its technical requirements, and clinic staff members can access the system directly to schedule patient appointments. Minor adjustments were made during implementation of the process. Now, appointments are made efficiently by the clinic staff, and other systems, such as the film library, are benefiting from better information and organization. VUMC has changed the scheduling process of the radiology department to reach the customers who actually promote the radiology practice. Communication between the department and the clinics has improved and a spirit of teamwork is growing.

Appointments and Schedules↗