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PubMed2002

[Quality of medical database to valorize the DRG model by ISA cost indicators].

BACKGROUND: The use of the French version of the DRG model is focused on cost allocation, based on the case-mix system and the use a weight called ISA (Synthetic Index of Activity) for each DRG. However, this administrative database is becoming more and more used by both researchers and health policy makers for health planning and benchmarking. In France, data abstraction and coding of medical records is done by physicians. The objective of this study was to determine the accuracy of a database of the discharge summaries used for DRGs and to compare consequences of inappropriate coding on budget estimation and risk adjustment. METHODS: Samples of discharge summaries from six cardiology units were recoded by trained physicians in data abstracting and coding. Comparison between initial and recoded diagnoses (errors on main diagnosis or on comorbidities) used by the DRG system algorithm, and the original and final case-mix were performed. The before and after abstracted data were stratified and compared by principal diagnosis (myocardial infarction or congestive heart failure) and discharge status (dead or alive). MAIN RESULTS: Comorbidities were underreported by physicians of cardiology units compared to reabstracted data (mean number of secondary diagnoses per summary: 2.1 vs. 3.6, p<0.001), especially those which had a minimal impact on the DRG classification. In spite of a 15% rate of wrong DRGs, there was no significant difference in the total amount of ISA after data reviewing. Underreporting of comorbidities is more important for medical records of dead patients at discharge but, without significant effect on rate of change in DRG and amount of ISA. CONCLUSION: Discharge summaries used in the French DRGs system consistently underestimate the presence of comorbid conditions, which has direct implications for policy-makers comparing performance between hospital units. Both clinical practitioners and policy makers should be aware of this bias when assessing patient's quality of care or performing health planning through discharge summaries.

Age Factors↗
PubMed2006

Genotype and environment determine allocation to and costs of resistance in quaking aspen.

Although genetic variability and resource availability both influence plant chemical composition, little is known about how these factors interact to modulate costs of resistance, expressed as negative correlations between growth and defense. We evaluated genotype x environment effects on foliar chemistry and growth of quaking aspen (Populus tremuloides) by growing multiple aspen genotypes under variable conditions of light and soil nutrient availability in a common garden. Foliage was analyzed for levels of nitrogen, phenolic glycosides and condensed tannins. Bioassays of leaf quality were conducted with fourth-stadium gypsy moth (Lymantria dispar) larvae. Results revealed strong effects of plant genotype, light availability and nutrient availability; the importance of each factor depended upon compound type. For example, tannin concentrations differed little among genotypes and across nutrient regimes under low light conditions, but markedly so under high light conditions. Phenolic glycoside concentrations, in contrast, were largely determined by genotype. Variation in phenolic glycoside concentrations among genotypes was the most important factor affecting gypsy moth performance. Gypsy moth biomass and development time were negatively and positively correlated, respectively, with phenolic glycoside levels. Allocation to phenolic glycosides appeared to be costly in terms of growth, but only under resource-limiting conditions. Context-dependent trade-offs help to explain why costs of allocation to resistance are often difficult to demonstrate.

Animals↗
PubMed1999

Distribution of variable vs fixed costs of hospital care.

CONTEXT: Most strategies proposed to control the rising cost of health care are aimed at reducing medical resource consumption rates. These approaches may be limited in effectiveness because of the relatively low variable cost of medical care. Variable costs (for medication and supplies) are saved if a facility does not provide a service while fixed costs (for salaried labor, buildings, and equipment) are not saved over the short term when a health care facility reduces service. OBJECTIVE: To determine the relative variable and fixed costs of inpatient and outpatient care for a large urban public teaching hospital. DESIGN: Cost analysis. SETTING: A large urban public teaching hospital. MAIN OUTCOME MEASURES: All expenditures for the institution during 1993 and for each service were categorized as either variable or fixed. Fixed costs included capital expenditures, employee salaries and benefits, building maintenance, and utilities. Variable costs included health care worker supplies, patient care supplies, diagnostic and therapeutic supplies, and medications. RESULTS: In 1993, the hospital had nearly 114000 emergency department visits, 40000 hospital admissions, 240000 inpatient days, and more than 500000 outpatient clinic visits. The total budget for 1993 was $429.2 million, of which $360.3 million (84%) was fixed and $68.8 million (16%) was variable. Overall, 31.5% of total costs were for support expenses such as utilities, employee benefits, and housekeeping salaries, and 52.4% included direct costs of salary for service center personnel who provide services to individual patients. CONCLUSIONS: The majority of cost in providing hospital service is related to buildings, equipment, salaried labor, and overhead, which are fixed over the short term. The high fixed costs emphasize the importance of adjusting fixed costs to patient consumption to maintain efficiency.

Chicago↗
PubMed1998

Volume responses to Medicare payment reductions with multiple payers: a test of the McGuire-Pauly model.

The effects of changing financial incentives on physician's practice behaviour have long been of interest to researchers and policy makers. We test a model of physician volume response within the context of multiple payers developed by Thomas McGuire and Mark Pauly. A panel data set covering discharges from about 200 hospitals in the US over 45 months is used to carry out the empirical investigation. A fixed-effect model with generalized least squares and instrumental variable specifications is used to compute empirical evidence of volume responses from eight specialties experiencing varying degrees of Medicare payment reductions following the implementation of Omnibus Budget Reconciliation Acts of 1989 and 1990. The empirical findings are compared with McGuire and Pauly's simulated predictions. We note that in examining physician responses to Medicare payment reductions in the context of a multi-payer environment, it becomes evident that only fixing one payer's reimbursement policy is at best a partial solution to cost containment. We echo observations made by other analysts that physician responses to payment changes can be quite complex. Physicians do not all respond to payment reduction in the same way.

Budgets↗
PubMed2002

A general model of the impact of absenteeism on employers and employees.

Most studies on the indirect costs of an illness and the cost effectiveness of a medical intervention or employer-sponsored wellness program assume that the value of reducing the number of days employees miss from work due to illness is the wage rate. This paper presents a general model to examine the magnitude and incidence of costs associated with absenteeism under alternative assumptions regarding the size of the firm, the production function, the nature of the firm's product, and the competitiveness of the labor market. We conclude that the cost of lost work time can be substantially higher than the wage when perfect substitutes are not available to replace absent workers and there is team production or a penalty associated with not meeting an output target. In the long run, workers are likely to bear much of the incidence of the costs associated with absenteeism, and therefore be the likely beneficiaries of any reduction in absenteeism.

Absenteeism↗
PubMedDate not supplied

The cost of treatment for child pneumonias and meningitis in the Northern Areas of Pakistan.

Pneumonia, meningitis, and sepsis place a significant economic burden on health care systems, particularly in developing countries. This study estimates treatment costs for these diseases in health facilities in the Northern Areas of Pakistan. Health facility resources are organized by categories--including salaries, capital costs, utilities, overhead, maintenance and supplies--and quantified using activity-based costing (ABC) techniques. The average cost of treatment for an outpatient case of child pneumonia is dollar 13.44. For hospitalized care, the health system spent an average of dollar 71 per episode for pneumonia, dollar 235 for severe pneumonia, and dollar 2,043 for meningitis. These costs provide important background information for the potential introduction of the conjugate Haemophilus influenzae type b (Hib) and Streptococcus pneumoniae vaccines in Pakistan.

Ambulatory Care↗
PubMed1981

Estimating hospital costs by diagnosis for population-based analysis.

Knowledge of cost or charge for a discharge with a specified diagnosis to a given hospital is a prerequisite for population-based analysis of acute hospital utilization. As this information is not usually available directly for all discharges of residents of a geographical area, estimates are required. We compared alternative estimates derived from the data being assembled in many states--from hospital discharge data systems and routine cost and statistical reports. The independent variables were the name of the hospital, its total inpatient costs, and the diagnosis and length of stay for each discharge. We verified our estimates with data from Maine, for which charges were also available for many discharges. The estimate that used all three of the variables from the discharge data bank was most accurate. It explained 77.3 percent of the variability in hospital average charges per case for eight representative diagnoses. A simpler estimate, not requiring knowledge of diagnosis, proved almost as accurate. This estimate, defined as the product of cost per day for a hospital times length of stay for a case, explained 76.1 percent of the variability in individual charges per case, and 91.9 percent of the variability in average cost per case. Thus, per capita expenditures on hospital care for any diagnosis, and for inpatient care in total, can be estimated reliably by combining information from discharge data banks with routinely reported hospital per diem costs.

Catchment Area, Health↗
PubMed1981

Health care costs of medical patients at an urban care center.

Many cost containment strategies advocate that physicians should use fewer or less costly resources. In order to place these strategies in perspective, components of charges (costs) for medical patients at an urban center were examined to ascertain their contribution to the total health care bill. Contributions to total costs by location of service were: inpatient, 77.9%; outpatient, 17.1%; emergency room, 5.0%. Contributions by cost category were: facility charge, 52.8%; tests, 25.6%; pharmaceuticals, 11.0%. A goal to reduce total costs by 5% would require reducing pharmaceuticals by 45.4% or tests by 19.5%. In contrast, the same goal could be accomplished by reducing hospitalization by only 6.4%. If a strategy increased ambulatory costs by 5%, but resulted in a 7.5% decrease in hospitalization, the total health care costs would still decrease by 5%. Thus, rather than using fewer and less costly resources, physicians are encouraged to use more resources in ambulatory care to prevent morbidity requiring hospitalization.

Academic Medical Centers↗
PubMed1977

The application of diagnostic specific cost profiles to cost and reimbursement control in hospitals.

A system has been developed to generate hospital budgets based on the types of patients served. Several hundred classes of patients are defined according to clinical attributes such as diagnoses and surgical procedures, and for each class a profile of resources consumed is determined. The class definitions are based both on homogeneity of patient care processes as well as resource consumption. These profiles are expressed as revenues generated by charging departments and as costs both direct and indirect for all services. A methodology has been developed to associate all indirect costs with their source for each service included in the profile. From a forecast of patient load by class, budgets can be computed from the cost profiles and revenues determined from the charging profiles. Further analysis thus can include the effect of changes in case mix as well as changes in patient care processes. The effect on revenues of different reimbursement mechanisms can also be projected as a function of the case mix. The system is currently being implemented for demonstration and evaluation of the Yale-New Haven Hospital.

Budgets↗
PubMed2007

[Project "Partnership"--university surgical departments and hospitals for basic and regular medical care. Directing cooperation for the future].

Over the last 20 years, urgently needed changes in the German health care system have forced hospitals to make a flexible adjustment to rising costs and the single handed, almost unmanageable dynamics of technical innovation in medicine. The partnership between the Salem Hospital and the Heidelberg University Hospital represents a pioneering management concept for the future. The alliance between a university surgical department with a basic peripheral hospital provides large advantages to patients, staff, hospitals and cost carriers.

Cost Allocation↗
PubMed1987

A network interdiction model for hospital infection control.

A decision support system for evaluating measures against hospital infections is presented in this paper. Algorithms for optimal interdiction of the infection network are formulated and their applicability is discussed. Implications of the approach for classifying measures, allocating costs and benefits, and analyzing the costs of infections are described. The method has been applied in several general hospitals in Athens, Greece.

Algorithms↗
PubMed1995

Assessment of effects and costs of information systems.

Insight into the effects and costs of information systems is becoming increasingly important. A key problem is to provide evidence which is transportable among sites. Transportability demands agreement on how to carry out assessment of information systems. In the VISTA study, three Dutch hospitals developed together an evaluation protocol for the assessment of the effects and costs of the nursing information system VISION. This protocol is based on a quasy-experimental study design allowing filtering for non-VISION influences. The protocol also included a uniform cost model. Based on a cost calculation for the three hospitals, the costs for hospital-wide implementation of VISION in a 445- and 800-bed hospital were extrapolated. VISTA is considered as a trial for application of one evaluation protocol at various sites. It is recommended to extend this national trial to a multi-national one, for instance by applying the cost model more broadly.

Computer Systems↗
PubMed1985

An analysis of the cost of providing ancillary services to skilled nursing facility patients in New York State.

Currently, nursing homes can arrange for the provision of ancillary services either by providing the services directly, purchasing the services through contracts and fees, or by outside billings, in which the services are supplied by other providers who then bill Medicaid directly. Frequently, some combination of these three modes of provision is used for each ancillary service. The purpose of this study is to explore ancillary costs in a sample of nursing homes and to determine, to the extent possible, the most cost-efficient means of providing selected ancillary services (physical therapy, radiology and medical staff services). Prior to examining the impact of the mode of provision on cost levels, other facility and patient characteristics that might justifiably affect costs are identified and adjusted for. The results demonstrate that outside billing or purchasing services can be much less expensive than providing the services directly. It is suggested that all ancillary services (outside billings as well as services provided directly through contracts and fees) be included when facility-to-facility cost comparisons are made. This approach should serve as an incentive for nursing homes to seek the most cost-efficient means of providing ancillary services.

Cost Allocation↗
PubMedDate not supplied

Human productivity in space and systems costs.

Human productivity during assembly operations in-orbit is dependent on limits set by fatigue, metabolic rates, learning, and assembly techniques. In order to quantify these effects, tests were conducted in the NASA MSFC Neutral Buoyancy Simulator, in the NASA KC-135 in parabolic flight, and in space with the EASE program during the Shuttle Atlantis mission 61-B . A separate program attempted to relate productivity to system costs. Because of the surprisingly high productivity which had been demonstrated in orbit, it was shown that assembly operations would have only a small effect on system costs at the present level of launch costs. The results of these continuing studies have been reported in a recent paper. They will be briefly summarized here and the results updated to include additional cost elements and to examine the effects of reductions in transportation costs, resulting from advances in technology and from increased demand, on system costs. It is shown that, as launch costs are reduced, the assembly costs could become an increasingly important component of the total system costs.

Cost Allocation↗
PubMed1982

Hospital 'profits': the effects of reimbursement policies.

This paper provides a theoretical and empirical analysis of the effect of cost-based reimbursement (CBR) on hospital costs and charges. It takes issue with previous analyses which have treated CBR as paying economic costs plus a mark-up, and have concluded that the mark-up is too small to significantly distort hospital decision-making. The basic thesis here is that if reimbursement is based on costs, accounting costs become a price to cost-paying patients, and will be optimized to maximize revenue. A hospital serving both cost and charge-paying (private) patients can set two price schedules. Accounting profits (ratio of charges to costs) are not a measure of economic profit but of relative prices to these two groups of patients. In the absence of constraints from regulation or patient co-payment, the optimum level of accounting costs would be infinite. In practice, the Medicare reimbursement formula links allowable costs to charges received from charge-paying patients. This formula creates incentives for the hospital to raise charges above the single-price, profit-maximizing monopoly level. This inflationary effect of the Medicare formula does not presuppose that Medicare pays less than full cost. The empirical analysis of hospital laboratory costs and charges generally supports the predictions; for other departments, the conclusions are consistent but more tentative because of data limitations. Overall, evidence suggests minimal cross-subsidy between cost and charge-paying patients. Comparisons of cost and charge levels in for-profit, voluntary non-profit and government hospitals are presented, but it is emphasized that inferences about relative efficiency and profitability cannot be drawn from accounting data, given the incentives created by CBR.

Accounting↗
PubMed1985

Cost-shifting under cost reimbursement and prospective payment.

Cost-shifting is seen as a three-way phenomenon involving hospital interests as well as those of government and private patients. Without economies of scale, private patients are indifferent to government policies unless underpayment leads to hospital bankruptcy. In the presence of economies of scale, private patients benefit from reductions in government payment under either cost reimbursement or prospective payment. Their interest in a shift to prospective payment depends upon the hospital's location on its cost curve. Hospitals benefit from increases in payment rates in all cases, but benefit from a shift to prospective payment only if operating in a region of declining average costs. The conventional view of cost-shifting is inconsistent with profit maximization and may be inappropriate for many voluntary hospitals as well.

Cost Allocation↗
PubMed1988

Pricing by non-profit institutions. The case of hospital cost-shifting.

This paper shows that a hospital whose objective function includes output as well as profits may raise price to private paying patients in response to cuts in the price it receives for Madicaid or Medicaid patients. Evidence is presented to show that hospitals in Illinois 'cost-shifted' in this manner in response to substantial reductions in Medicaid payments in the early 1980s. As private sector pricing becomes more competitive, however, the ability and willingness of hospitals to cost-shift will wane.

Cost Allocation↗