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Does the patient's payer matter in hospital patient safety?: a study of urban hospitals.

BACKGROUND: Previous studies have documented that hospitals decrease costs in response to reimbursement cutbacks. However, research concerning how this may affect quality of care has produced mixed results. Until recently, the ability to study changes in patient safety and payment has been limited. OBJECTIVE: The objective of the study was to determine whether changes in 4 hospital patient safety indicator (PSI) rates are related to changes in the generosity of payers over time. DATA AND METHODS: Study data are drawn from 1995-2000 hospital discharges in 11 states in the Agency for Healthcare Research and Quality Healthcare Cost and Utilization Project State Inpatient Database. Following the same organizations over time, we estimate hospital fixed-effects regression models of the association of payer-specific time and post Balanced Budget Act (BBA) payment changes with risk-adjusted hospital PSI rates controlling for patient, organizational, and market characteristics. Four PSIs relevant to a large number of patients and hospitals that reflect general care processes are studied. RESULTS: The time trend during 1995-2000 is consistently significantly positive for private and Medicare hospital PSI rates. Thus, after controlling for patient characteristics and organizational and market factors, performance worsened. The trend is less consistent for Medicaid and does not exist for self-pay hospital PSI rates. After adjusting for multiple comparisons, we also find that the Medicare trend is fairly consistently higher than that of the other payers. In contrast, there is a less consistent BBA effect, especially for Medicare.

Financing, Personal↗

Hospital economics of the hospitalist.

OBJECTIVE: To determine the economic impact on the hospital of a hospitalist program and to develop insights into the relative economic importance of variables such as reductions in mean length of stay and cost, improvements in throughput (patients discharged per unit time), payer methods of reimbursement, and the cost of the hospitalist program. DATA SOURCES: The primary data source was Tufts-New England Medical Center in Boston. Patient demographics, utilization, cost, and revenue data were obtained from the hospital's cost accounting system and medical records. STUDY DESIGN: The hospitalist admitted and managed all patients during a six-week period on the general medical unit of Tufts-New England Medical Center. Reimbursement, cost, length of stay, and throughput outcomes during this period were contrasted with patients admitted to the unit in the same period in the prior year, in the preceding period, and in the following period. PRINCIPAL FINDINGS: The hospitalist group compared with the control group demonstrated: length of stay reduced to 2.19 days from 3.45 days (p<.001); total hospital costs per admission reduced to 1,775 dollars from 2,332 dollars (p<.001); costs per day increased to 811 dollars from 679 dollars (p<.001); no differences for readmission within 30 days of discharge to extended care facilities. The hospital's expected incremental profitability with the hospitalist was -1.44 dollars per admission excluding incremental throughput effects, and it was most sensitive to changes in the ratio of per diem to case rate reimbursement. Incremental throughput with the hospitalist was estimated at 266 patients annually with an associated incremental profitability of 1.3 million dollars. CONCLUSION: Hospital interventions designed to reduce length of stay, such as the hospitalist, should be evaluated in terms of cost, throughput, and reimbursement effects. Excluding throughput effects, the hospitalist program was not economically viable due to the influence of per diem reimbursement. Throughput improvements occasioned by the hospitalist program with high baseline occupancy levels are substantial and tend to favor a hospitalist program.

Bed Occupancy↗

Effects of proprietary management in general hospital psychiatric units.

The rapid increase in the number of proprietary psychiatric hospitals during the last 15 years has drawn criticism from those concerned about the impact of the profit motive on the quality of patient care. This study assessed changes in the structure and quality of care on 13 acute care psychiatric units before and after a single outside proprietary firm was hired to manage the units. The study found significant improvements in many areas after the change; they included higher occupancy rates, higher staffing levels, more hours of staff inservice training, higher collections-to-billings ratios, and improved program structure and process as measured by Joint Commission on Accreditation of Hospitals criteria. No changes were found in the length of stay or diagnostic mix of patients. The findings indicate that program quality and profit are not necessarily incompatible, but the author cautions against making generalizations to other situations based on the small study sample.

Bed Occupancy↗

Preadmission screening: an efficacy study.

The effectiveness of hospital social work preadmission screening and assessment is compared with postadmission screening and assessment. Outcome variables include length of stay, readmission rates, posthospital home management, resource attainment, and satisfaction with hospital services. The patients screened postadmission were assessed within forty-eight hours of admission, while the patients screened preadmission were assessed one to two weeks prior to admission. Telephone follow-up was conducted with both groups. Preadmission patients reported better home management and attained more resources. Patients' satisfaction with hospital care was inversely related to the need for more resources in the post-hospital period.

Aged↗

Revenue enhancement through total quality management/continuous quality improvement (TQM/CQI) in outpatient coding and billing.

To survive and thrive, rural hospitals are seeking enhanced revenues. This study focuses on outpatient laboratory and radiology coding and billing accuracy in a nonrandom sample of seven rural hospitals in a Western state. Information was gathered on (1) procedures incorrectly coded, (2) potential revenue increases from correct coding and billing, (3) barriers to implementing changes, and (4) perceived audit value. The identified major source of potential revenue enhancement was increased fees from private payers. Correct coding and billing to Medicare and Medicaid offered the potential of additional revenue. Participating administrators appreciated the validation of coding and billing practices and identification of potential enhanced revenues. Five of seven hospitals (71.4%) selectively implemented recommended changes. Complete compliance with recommended changes was limited by barriers of tradition, competition, and reimbursement, which must be overcome to realize successful implementation. Joint Commission on Accreditation of Healthcare Organization's (JCAHO) new Total Quality Management/Continuous Quality Improvement (TQM/CQI) emphasis provides an opportunity for revenue enhancement through coding/billing assessments and interdepartmental focus and coordination.

American Hospital Association↗

What will become of the medical mecca? Health care spending in Massachusetts.

Massachusetts has been called a "medical mecca." It has also been called the world's most expensive health care market. This paper concludes that claims of excess costs in Massachusetts are overstated. Massachusetts hospitals have lower inpatient costs than peer institutions in other states, yet the state's concentration of academic hospitals tilts the system toward higher spending. In markets like Massachusetts, there is growing pressure to demonstrate tangible benefits to justify the additional costs of academic health centers (AHCs). Applying new information technologies to proactively manage patients with expensive chronic illnesses is a critical area for future collaboration between payers and AHCs.

Academic Medical Centers↗

Critical issues in hospital antitrust law.

Antitrust litigation involving hospitals is common. This paper describes recent developments and underlying issues in antitrust law with respect to hospital-hospital relations, hospital-physician relations, and hospital-payer relations. A key unanswered question in each of these areas is how government regulation and public purchasing affect competitive markets for hospital services.

Antitrust Laws↗

Hospital length of stay in the United States and Japan: a case study of myocardial infarction patients.

Patients in Japan stay in the hospital significantly longer than those in the United States. This study investigates factors that may account for the difference from a sociocultural perspective. In an intensive case study on patients with uncomplicated acute myocardial infarction at a university hospital in Japan and its U.S. counterpart, the authors collected data from interviews with patients, their families, physicians, and other medical professionals and from medical, nursing, and billing records. Patients with comparable medical conditions were studied; U.S. patients stayed in the hospital for 8.8 days on average, Japanese patients for 25.0 days. The average total charge of hospitalization was 2.3 times higher in the United States than in Japan. Although length of stay is determined mainly by physicians' clinical judgment and by health care system factors, patients and their family members often actively participate in decision-making about discharge dates. This case study approach revealed how different health care systems manifest themselves in the individual patient's course of illness, which cannot be examined by macro-level comparison of nations' health care systems.

Adult↗

Restrictive reimbursement policies and uncompensated care in California hospitals, 1981-1986.

To examine the effect of restrictive state, federal, and private hospital reimbursement policies in California, we examined trends in uncompensated care and other deductions from hospital revenues from 1981 to 1986. During a period when the number of uninsured in California increased substantially, uncompensated care grew, but not as rapidly as other deductions from revenue, especially Medi-Cal and private-sector contractual allowances. A trend toward redistribution of uncompensated care from public to private hospitals reversed. Voluntary teaching hospitals, whose Medi-Cal and private-sector contractual allowances grew rapidly, recently reported a decline in uncompensated care. As reimbursement pressures increase, private hospitals may resist pressures to provide uncompensated care, increasing the burden on public institutions and perhaps limiting the access of indigents to quality care.

California↗

Transitional funding: changing Ontario's global budgeting system.

In 1988, Ontario introduced transitional funding, a collaborative process between the Ministry of Health and the hospitals to modify Ontario's global budgeting system. The goals are to achieve greater equity; encourage hospital efficiency, and promote a shift from inpatient to outpatient services. To implement these goals, inpatient care is being measured in terms of case-mix groups, i.e., a classification system comparable to the diagnosis-related groups. However, since there is no patient level cost data, cost weights are being derived from patient-level data from New York State. Transitional funding draws attention to both positive and negative aspects of global budgeting.

Budgets↗

Hospital financing reform and case-mix measurement: an international review.

A review of reforms in the financing of hospital services in eight European countries and Australia reveals a commitment to a common objective of relating resource use to hospital workload by means of a standardized case-mix framework in the pursuit of greater efficiency. While this objective is also shared with the U.S. prospective payment system (PPS), it is noteworthy that the majority of countries reviewed favor a global budgeting approach to financing hospital services. Ongoing evaluation of these reforms should facilitate an assessment of the merits of case-mix adjusted global budgeting relative to the patient-based alternative.

Australia↗

Competing for private patient revenue.

The opportunity to maximise revenue from private patients is now available to NHS hospitals. A survey of UGMs found that most felt they could compete with private hospitals but identified a number of obstacles. David Jones analyses the survey.

Attitude of Health Personnel↗