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The 1990s offer both substantial challenges and opportunities for those involved in the delivery of health care. Increasing costs must be managed to ensure that the health of both Americans and America's economy are maintained. Managed care offers the brightest hope for effectively controlling costs while increasing the quality of care.
This paper describes the organizational structure and the economic impact of blood donation and transfusion in Greece and discusses some alternative aspects of its financing and its costing policy. The cost of blood transfusion is rising in Greece and amounts to nearly 15 billion drachmas per year due to the constant increase in demand and consequently, the price of each unit of blood. The production and distribution of blood on national scale involves meeting the demand for 500.000 units. Blood is mostly given by the friends and relatives of patients (55%) and by voluntary blood donation (30%). Approximately 50% of the blood produced is used in surgery, 20% for cases of beta-thalassaemia, 10% for emergencies and 20% for internal medicine cases. The blood transfusion system is totally funded by the state budget and the value to users is free of charge. The way in which blood is collected and processed differs from one geographical area to another and the unit cost depends on the size of the department concerned, ranging from 60-150 $. The need to control costs and restrain expenditure, in conjunction with guarantees of sufficiency and quality, makes it essential that measures should be taken to introduce economies of scale and encourage competition among blood providers, for increased production, components preparation and rational usage of blood. The introduction of a costing policy becomes necessary in this effort to achieve cost-containment techniques.
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Managed Care has been developed in the United States as a strategy over the failure of the insurance system in controlling costs and utilisation. It works through a model which incorporates financing and delivery of services, with the control of health-care providers, facilities and services, as well as programmes like quality assurance and utilisation review, to achieve its goal of providing adequate care at an affordable price. In economic terms, that is to manage demand through the control of supply. In Singapore, the National Trade Union Congress (NTUC) has launched the pilot large-scale managed care plan in 1994. It is not recommended in this article that the entire managed care model be transplanted into Singapore, but some of the principles could be used to improve our healthcare system. Applicability of the managed care concept must be viewed with the peculiar health system in Singapore such as the already existing low-cost and easily accessible primary care service. More time would also be required to prepare the health-care professionals as well as the public for this new health-care venture.
Workers' compensation reform efforts respond to the competing interests of business, labor and insurers. Early reforms expanded programs in response to inadequate benefits and coverage while in the 1980s and 1990s states responded to increasing costs by tightening fee schedules, limiting physician choice, restricting eligibility,lowering benefits, and integrating managed care into workers' compensation. Although managed care has resulted in significant medical savings, the cost of workers' compensation is again rapidly increasing in some states, where workers' compensation legislation is again at the center of debate. Increasing the use of treatment guidelines, placing limitations on use of services, developing more objective criteria for determining level of disability, and streamlining dispute resolutions have been offered as solutions. Controlling costs alone, however, cannot solve other problems of workers' compensation. Future reform efforts will need to focus not only on the costs of the system but also its inclusiveness and support of the workers and their families it was intended to protect.
BACKGROUND: Public perception depicts surgical cost control and quality of care as polar opposites. We describe a program led by practicing surgeons that demonstrates that quality can be maintained, and often improved, while substantial cost reductions are realized. METHODS: A set of evidence-based protocols was developed, revised, and followed for 42 procedures in general, otolaryngologic, urologic, and orthopedic surgery. Each protocol consists of surgeon-initiated guidelines on operative indications, preoperative testing, preadmission planning, length of stay, resource utilization, convalescence, and pharmacy services. Information was collected for 24 months from July 1998 to July 2000 by 62 surgeons in Kentucky and Indiana. Data were obtained for 4302 cases, among them colonoscopy (1145), esophagogastroduodenoscopy (714), laparoscopic cholecystectomy (418), endoscopic retrograde cholangiopancreatography (235), and laparoscopic fundoplication (87). RESULTS: Specific cost reductions occurred in laparoscopic cholecystectomy by limiting the administration of perioperative antibiotics. Sixty-seven percent of patients did not receive antibiotics. Outpatient cholecystectomy was the norm (60%), due primarily to preadmission planning through discussion with the patients and their family. Interestingly, when surgeons were educated on the costs of certain instruments and medications, their practices changed. The avoidance of a particular postoperative antiemetic, which was more than tenfold more expensive than other choices, was rapidly adopted by all surgeons when the costs were discovered. One participating teaching hospital used its own financial data and predicted that if all surgeons at their facility followed the protocols and had similar results, a savings of dollar 1.1 million per quarter would be obtained.
The public continues to demand improved health care at affordable costs. It appears that this public pressure will force health maintenance organizations (HMOs) and other health care providers to face their toughest days in the years to come. They will need to find solutions to resolve this "quality and cost" problem. One method that is likely to have the ability to improve quality of care and control costs is physician profiling. That is, data related to a physician's care or outcomes can be collected and compared with profiles of various populations, for example, other similar providers in a relatively close geographical proximity. This article examines the issues involved in physician profiling, including the characteristics of profiling systems and the direct and indirect benefits of having such a system. Further, the article uses an actual HMO example to discuss considerations that administrators should make when choosing a physician profiling system.
Regulatory and reimbursement policies in the health care industry have generally been developed on the assumption that a trade-off exists between quality enhancement and cost control. In this study of 494 proprietary, nonprofit, and government nursing home facilities in New York State, I examined the relationship between quality and costs while controlling for facility characteristics and resident characteristics. I found that although the capital-intensive aspects of patient care quality make a significant impact on costs, the labor-intensive aspects of patient care quality do not. I discuss the policy implications of these findings.
The Iowa Managed Substance Abuse Care Plan (IMSACP) used a behavioral health care organization to manage expenditures for treatment of alcohol and drug dependence financed through Medicaid, block grants, and state appropriations but maintained relatively distinct eligibility and benefit structures for Medicaid-eligible individuals. Medicaid claims, encounters, and eligibility files were reviewed for 2 years before and 3 year after implementation of IMSACP to evaluate changes in access, utilization, and expenditures. The rate of substance abuse treatment doubled, use of inpatient hospital services decreased, and residential and outpatient services increased. Direct care costs decreased, while total expenditures held steady. The Iowa experience suggests that a well-planned initiative can control costs and improve access and utilization.
There are various reasons why physicians order laboratory tests. Earlier studies have shown that in many cases test-ordering behavior lacks efficiency, resulting in excessive laboratory utilization. Throughout the years various attempts have been made to improve this situation. This review, based on the literature of the past 20 years, gives a survey of interventions and their effectiveness. Various types of education are discussed: general, cost-control oriented and education by means of guidelines, protocols, decision support systems, and feedback (on test ordering or cost). The discussion addresses the quality and apparent restrictions of the studies, and provides possible causes of the widely varying, but mostly low success rates. The long-term effectiveness of interventions aiming at better laboratory ordering is rather unfavorable.
Many believe that the changing economic environment might have dramatic effects on the quality or quantity of graduate medical training, yet the evidence is scant. This article assesses the impact of economic factors on the number of residency positions offered by teaching hospitals in surgery, in medicine, in pathology, and in the hospital as a whole. It first outlines in a nontechnical way the policy and empirical implications of an economic approach to residency training. The empirical analysis then compares results from three separate data sets, using both hospitalwide and department-specific information. The article closes by using the estimates to attempt an assessment of the likely impact of cost control and increased competition on training opportunities.
This paper suggests that the Federal Employees Health Benefits Program (FEHBP) is perhaps a model for Medicare reform. First, we introduce the FEHBP and describe important features, such as the method for determining the government's premium contribution. Second, we examine the cost performance of the FEHBP program, and conclude that the FEHBP has out-performed private health insurance programs and Medicare in its ability to control costs. Third, we discuss the problem of adverse selection in the FEHBP. We conclude that the FEHBP has experienced some selection problems, but not enough to prevent it from offering a wide variety of choices without standardized benefits or direct risk adjustment. For a demonstration of competitive pricing in Medicare, the fourth section compares the FEHBP to two models of Medicare reform: "FEHBP for Medicare," proposed by Butler and Moffit; and the "Denver design."
BACKGROUND: Because of overcrowding and cost-control efforts, emergency departments are under pressure to refer patients with nonacute conditions to other settings. However, no validated systematic methods exist for safely performing such referrals. OBJECTIVE: To determine the effects on health status and access to care of systematically referring patients with nonacute conditions to next-day primary care. DESIGN: Randomized, controlled trial. SETTING: An emergency department in a public hospital. PATIENTS: 156 adults who used the emergency department on weekdays from 7:00 a.m. to 3:00 p.m. and met criteria for deferred care. The criteria applied to three symptom complexes that account for 33% of U.S. emergency department visits by adults. INTERVENTION: Next-day care at the study site's primary care center or usual same-day care. MEASUREMENTS: Self-reported health status and use of health services during 1-week follow-up. RESULTS: Patients assigned to next-day care did not demonstrate clinically important disadvantages in health status or physician visits compared with usual care patients. In each group, more than 95% of patients were evaluated at least once by a physician, 4% sought health services after their initial evaluation, and no patients were hospitalized or died. At follow-up, both groups reported improved health status and fewer days in bed or with disability, although the deferred care group reported less improvement on all three measures. The 95% CIs were sufficiently narrow to exclude a clinically significant difference in self-reported health status. However, the possibility of 1 additional day in bed or with disability in the deferred care group could not be excluded. CONCLUSIONS: Clinically detailed standardized screening criteria can safely identify patients at public hospital emergency departments for referral to next-day care. However, larger studies are needed to assess the possibility of adverse effects.
Progress in cancer research in the 1980s has led to predictions of a technologic explosion in the 1990s. Yet, with this progress there has been a groundswell of protest at the rapidly escalating costs of health care. More than $600 billion was spent on health care in 1989 and estimates of $1.5 trillion are made for the year 2000. Repeated attempts at cost containment have failed. It has been suggested that only by retarding technologic advances will we be able to control costs. Many observers believe that rationing of health care is the only solution, but new technology not only improves cancer care, it often decreases cost. It is not rational to retard advances that may later reduce costs, nor is it humane to retard advances that improve care, even if they cost more. In identifying priorities we should begin with the principle that treatments be restricted to clinical trials unless they have been demonstrated to prolong survival or improve the quality of life. If the payers reimburse procedures in an investigative setting, they will be on firm ground when they deny support for those same procedures outside an investigative setting. This is both an ethical and a fiscally responsible position for the third parties to take. It will not be easy for the profession or for the payers to deal with these problems. Public education and patient education will be key elements of any solution. Shifting the blame from politician to payer to professional will only make the problems worse.
OBJECTIVE: To assess cost and cost-effectiveness of immunization reminder/recall systems in the private sector. METHODS: A manual postcard system (mail) was compared with a computer-based telephone system (autodialer) and control. Costs included time costs and the cost of equipment and supplies. The cost per child and the incremental cost of the intervention relative to control were computed. Cost-effectiveness ratios were computed for return visits and for immunizations delivered. RESULTS: The average cost per child was $2.28 for the mail group and $1.47 for the autodialer group. The incremental visit cost relative to the control was higher for the mail group ($9.52) than for the autodialer group ($3.48). The autodialer was more cost-effective in delivering immunizations: $4. 06 per extra immunization (autodialer) versus $12.82 (mail). CONCLUSIONS: Excluding start-up costs, the autodialer system was most cost-effective. Including autodialer equipment costs, the autodialer system is more cost-effective only for larger practices.
OBJECTIVE: To compare network and group model physician attitudes toward prescription drug cost containment strategies. DESIGN: Mailed survey with two reminders for non-respondents. SETTING: Mixed model (network and group) HMO in metropolitan Washington, DC. MAIN OUTCOME MEASURE: Response on agreement scale to questions regarding receptivity to drug cost containment strategies. PARTICIPANTS: All primary care providers (N = 311) affiliated with the George Washington University Health Plan. The response rate was 78% (N = 243). RESULTS: Almost all clinicians believed that education and feedback were appropriate methods to control costs in an HMO. Network physicians were significantly less likely to agree with more intrusive administrative interventions. Both groups generally believed that patient expectations often dictate more costly prescribing than is necessary. CONCLUSIONS: Managed care physicians were generally amenable to cooperative behavior change strategies (i.e., education and feedback) and often opposed to mandated administrative or incentive approaches, especially physicians from the network setting. It remains to be seen whether use of cooperative methods to promote cost-conscious physician behavior can result in substantial savings.
As Oregon moved its Medicaid services into the managed care plan, mental health goals were similar to those on the physical health side--cost control, expansion of services, and increased flexibility.