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Legal thoughts on the implications of cost-reducing guidelines for the quality of health care.

Health care expenditures in European countries are increasing. Many cost containment mechanisms have been developed, one of which is the introduction of clinical practice guidelines in binding legislation. In developing recent patients' rights laws, many legislators refer to practice guidelines when specifying the right to quality in health care. The courts often follow this example. Initially, practice guidelines were used to improve the quality of care. Recently, their potential to reduce costs is being discovered by policy makers and compliance with the cost-controlling guidelines is mandatory and subject to financial sanctions. This article will question the impact of the 'new generation' guidelines aimed at reducing health care costs and their impact on the quality of care, in particular. The authors will analyse whether a physician, in case of a conflict with a patient, who claims that his right to quality care has been violated, can defend himself in court by stating that he complied with 'financially' inspired guidelines, especially now that non-compliance with these guidelines is sanctioned.

Belgium↗

It's time to enlarge the cost containment picture.

The Manager of Benefits Cost Containment at Warner-Lambert is keenly aware that inefficiencies in the health care delivery system can undermine any single company's efforts to control costs. She advocates wider-ranging employer action than has thus far generally occurred to manage health care costs and describes how Warner-Lambert has gone beyond purely internal strategies in several areas.

Cost Control↗

Financial effect of clinical decisions: case study of a dialysis center.

The purpose of this study was to specify the financial effect of clinical decisions in a dialysis center. A consecutive sample of 14,343 outpatient hemodialysis treatments (OHD), 16,111 continuous ambulatory peritoneal dialysis (CAPD), and 4,513 chronic cycler-assisted peritoneal dialysis (CCPD) days of treatment was analyzed. An activity-based cost calculation method was applied to the analysis of alternative treatments (service bundles). The weekly cost of OHD was higher ($338 versus $241/$242), and the contribution margin (reimbursement minus total cost) of CAPD/CCPD was much greater ($.48 versus $148/$147 per patient week). Clinical decision-making had an influence on less than 6.8% of OHD and 45.4%/46.6% of CAPD/CCPD related expenses. In comparison to activity-based cost calculation, conventional methods overestimated the overhead expense of CAPD by 3-48%. This study documented that most cost control opportunities reside in the usual process of care and less can be influenced by a direct interference with the patient-physician contacts. Paying for 1 week of renal replacement (capitation) could simplify the process of reimbursement and cost tracking.

Ambulatory Care Facilities↗

[Design and use of patient pathways in general surgery].

BACKGROUND: Clinical pathways are a new initiative intended to reduce costs while maintaining or even improving the quality of care. Based on treatment guidelines, patient pathways display an optimal sequence of staff actions in the preoperative, operative, and postoperative in- and outpatient treatment. METHODS: In this study, patient pathways were developed for selected elective general surgical disease entities following a new modular approach. All elements of care and their direct costs to the hospital were identified. Multidisciplinary teams of physicians, nurses, and administrative staff constructed and implemented the patient pathways. RESULTS: In the 1-year pilot phase, we developed and implemented 7 pathways with 16 subpathways: open herniorrhaphy, laparoscopic cholecystectomy and fundoplication, thyroidectomy, surgical treatment of diverticulitis and colon carcinoma and kidney transplantation. CONCLUSIONS: Patient pathways combine the management of care, hospital processes, and costs in a new integrated concept. Patient pathways streamline and standardize care, facilitate communication, and contribute to cost control efforts.

Cholecystectomy, Laparoscopic↗

Survival through productivity improvement.

There are dozens of additional case studies as well as success stories. The number of ways in which the information can be presented is limited only by the creativity of the user. In order of importance, the three principles remain 1. Convert all data to ratios. 2. Study emerging trends in the way the ratio changes over time. 3. Compare changes over time as well as static ratios to an outside source. To begin this program one needs to see what information is available at a particular hospital. If no other acceptable statistic is available use adjusted patient days. It is important that a productivity tracking system not be delayed until a system for statistical reporting is developed. It is also important to keep the system simple. Productivity monitoring is difficult because it requires a new perspective. We are used to using historical data and unique characteristics of a hospital in the budget process. Productivity gains require a detached perspective. Often only an outsider can identify some examples of overstaffing. The process is difficult, but it is not complicated. Productivity experts tell us we can produce a service faster, cheaper, or better, but not all three. Health care quality control ensures a better service. A standard cost accounting system for the health care industry may provide a less expensive service through better cost control. Productivity--the ratio of work output to resource input (health care costs)--can be increased. To make productivity improvement work the users must take the view of the entire institution rather than that of a department. Productivity measuring is necessary to ensure the survival of hospitals. This process could have saved many of the hospitals that were forced to close, and it could improve the financial health of many hospitals today.

Budgets↗

Randomized controlled trial of cost reductions from a health education program: the California Public Employees' Retirement System (PERS) study.

Purpose. This study evaluated the cost trend reduction from a health promotion program. Design. A randomized 12-month trial comparing claims data was conducted. Additional studies, utilizing quasi-experimental designs, analyzed changes in health habits and changes in costs estimated by self-report. Subjects. All active California Public Employees' Retirement System (PERS) employees (21,170), non-Medicare eligible retirees (8,316), and retirees with Medical Supplement coverage (25,416) administered by Blue Shield of California were included. Intervention. The program consisted of mailed health risk assessments at six- or 12-month intervals, with individualized reports and recommendation letters sent to participants emphasizing and encouraging change, self-management materials emphasizing self-care when appropriate, and quarterly newsletters. Passive participants received printed materials only. Measures. Health risks were based upon self-report; summary scores were computed by modified Framingham algorithms. Self-report cost data were estimated from reported doctor visits, hospital days, and days sick or confined to home. Claims data were those paid by Blue Shield of California. Results. The program was associated with: 1) reduction in health risk scores at 12 months, (p less than .001), 2) reduction of subject reported medical utilization from baseline (p less than .05), and 3) decrease in claims cost growth relative to controls (p=.03). Annual claims costs were approximately $3.2 to $8.0 million less than expected had costs for the experimental participants increased at the same rate as the control group. Discussion. Results suggest that appropriately designed health promotion programs can reduce health risks and at the same time reduce the medical care claims cost trend.

Age Factors↗

Reduction in antibiotic costs by restricting use of an oral cephalosporin.

Antibiotic cost control programs are important; however, they may be difficult to implement if they include intensive involvement of infectious diseases specialists. In a large municipal hospital, review of antibiotic cost data indicated that 31 percent of the total antibiotic expenditure was for an oral cephalosporin, cephalexin. The requirement that an antibiotic justification form be completed did not decrease use of the drug. However, the requirement that the prescribing physician telephone an infectious diseases specialist resulted in marked restriction of the oral cephalosporin and was accompanied by a 29 percent reduction (adjusted for inflation) in total antibiotic costs. Since comparatively few telephone requests were made and since the decision process to use an oral cephalosporin is comparatively simple, marked reduction in antibiotic costs was achieved with relatively little effort by the infectious disease expert.

Anti-Bacterial Agents↗

Capital equipment budgeting: changing an art to a science.

In today's integrated healthcare environment, one component of financial management remains antiquated in many facilities--the budgeting process for capital equipment. Many institutions budget for capital equipment based upon individual departmental wish lists and hopeful dreams. These highly inefficient practices are being replaced with automated systems that create departmental data exchanges, utilization analyses, life-cycle cost justifications and enterprise-wide budget roll-ups. This article shows how automated capital budgeting systems help reduce capital spending by identifying utilization trends, providing for demand matching, and maintaining cost control data which enable the financial manager or asset steward to analyze and justify appropriate acquisitions.

Budgets↗

State of the state's health care.

California leaders tell us what's right and what's wrong with our health care system. While consensus on health care reform is far from being reached, all agree that universal access, cost control and preventive services must be part of any health reform plan.

California↗

Serve Our Seniors, Inc.--a demonstration program for proposed California menu guidelines for senior nutrition. California Department of Aging.

Revised menu guidelines, written by the California Department of Aging (CDA) for senior nutrition programs, were tested by Serve Our Seniors, Inc. in a demonstration program from January '91 through June '92. Results showed improved nutrient value of the meals through increasing fiber, and decreasing sugar and fat. New menus were accepted by senior participants with little resistance. Project food costs increased 4%. Guidelines were used in a variety of project kitchens, with minimal staff training. Limited storage was a problem. Vendors were encouraged to identify appropriate foods and control costs.

Aged↗

Hospital financial condition under state rate regulatory programs.

This article examines the impact that state rate regulatory programs have had on the financial position of hospitals. The findings indicate that state rate regulatory programs have had a negative influence on hospital financial position. State rate regulatory programs, as well as Medicare with its system of prospectively determined prices, should consider the possible impact of their decisions on hospital financial viability. Cost control should not be the only concern in public policy decisions of this type.

Analysis of Variance↗

Medicaid 1915(c) home and community-based services waivers: a national survey of eligibility criteria, caps, and waiting lists.

With 43 states reporting budget deficits in 2002, there is increasing interest in the cost controls methods that state governments use on the 229 Medicaid home and community-based services (HCBS) waiver programs which, in 2001, provided services to more than 830,000 persons and cost more than $14.2 billion. This paper reports findings from a national survey of all waiver programs regarding cost containment strategies used in 2002. Responses from 76 percent of all waivers show that 57 percent used some type of financial cap, 33 percent used more restrictive financial eligibility criteria than for institutional services, and the vast majority of states limited the number of waiver slots available. Overall, the waiver programs reported that 157,640 persons were on waiting lists in 2002. These findings provide an important basis for comparison between states because the use of these strategies may restrict individuals' choice of services and result in unnecessary institutionalization.

Adult↗

Key steps in the strategic analysis of a dental practice.

As dentistry is becoming increasingly competitive, dentists must focus more on strategic analysis. This paper lays out seven initial steps that are the foundation of strategic analysis. It introduces and describes the use of service-customer matrices and location-proximity maps as tools in competitive positioning. The paper also contains a brief overview of the role of differentiation and cost-control in determining key success factors for dental practices.

Catchment Area, Health↗

Risk alignment in health care quality and financing: optimizing value.

How should health care best consolidate rational cost control while preserving and enhancing quality? That is, how can a system best optimize value? A limitation of many current health management modalities may be that the power to control health spending has been expropriated from physician providers, while they are still fully responsible for quality. Assigning responsibility without authority is a significant predicament. There are growing indications that well-organized, well-managed groups of high quality physicians may be able to directly manage both types of risk-quality and financial. The best way to optimize responsibility and authority, and to control financial and quality risks, is to place such responsibility and authority within the same entity.

Consumer Behavior↗

Care management and technology enhance care delivery.

Many health care delivery organizations have experienced a flattening in the rate of their ability to decrease health care costs. Providers--if they are willing to take responsibility for care management and make appropriate investments to support the initiatives--are the logical party to take responsibility for improving care and cost control. Taking responsibility for care management, however, requires the tactical deployment of information technology to enhance care management. This article outlines what is required for information technology to improve care and cut costs.

Case Management↗