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PubMed1994

An examination of winners and losers under Medicare's prospective payment system.

Through case studies of 10 matched pairs of winner and loser hospitals under the Medicare prospective payment system (PPS), specific characteristics and management actions were identified that are related to strong financial performance. Because other payers are increasingly adopting PPS-like cost control incentives and because managed care is fundamental to the national health care reform debate, the successful strategies identified in this article may be of increasing importance to hospital managers.

Cost Control↗
PubMed1989

Restructuring the Federal Employees Health Benefits Program: the private sector option.

The Federal Employees Health Benefits Program (FEHBP) needs to contain its costs. This paper recommends reforms of FEHBP that would substantially lower costs. As a first step, FEHBP should offer each employee a high and low option from a single conventional carrier, plus several HMO alternatives. FEHBP's practice of offering employees a choice of conventional carriers is virtually unheard of in the private sector. Cost control is more likely when carriers compete for employment groups rather than for individual employees. In addition, my analysis suggests that FEHBP should self-insure, competitively select third-party administrators (TPAs), one for each region of the country, aggressively manage program costs through preadmission certification and DRGs, and allow Medicare-eligible annuitants to enroll in Medicare HMOs and receive the government contribution. All of these reforms have been successfully implemented elsewhere, either by private employers or state or federal governments. These reforms would yield savings of at least $500 million annually for taxpayers and additional savings for federal employees.

Cost Control↗
PubMed1992

Competitive strategy for successful hospital management.

This study examined financial and operating data for approximately 1,000 U.S. hospitals categorized by Medicare as "large urban" to determine critical relationships between business strategy and financial performance. Cost control was found to be the most important factor influencing financial performance. Other factors of importance included market share, diversification, and financing policy.

Cost Control↗
PubMed1995

Munificent environments, management control, and the cost of rural hospital care.

Rural hospitals have been threatened by declining revenues. Control over costs will be necessary to help these hospitals survive. Investigation of the determinants of hospital costs in Iowa reveals that costs are primarily caused by environmental factors, rather than variables over which managers have control. Furthermore, efforts by policy makers to improve hospital efficiency by stimulating competition among hospitals may have been ineffective, since the level of competition was not found to be associated with hospital production costs.

Catchment Area, Health↗
PubMed1995

Washington State Health Services Act: implementing comprehensive health care reform.

In 1993, Washington State enacted the Health Services Act of 1993 (HSA) to guarantee universal access to health care through an employer mandate, with caps on premiums as the primary cost-control mechanism. The HSA represents the Nation's first formal experiment with managed competition. This article reports the results of a case study of the HSA's implementation. The study concludes that the Washington State initiative can be replicated in other States, but that implementation is complex, requires sustained public education, and requires cooperation from the Federal Government through program waivers. A major implementation challenge is to facilitate competition and minimize regulation.

Competitive Medical Plans↗
PubMed1990

Potential for nonnarcotic analgesics to save personnel costs associated with controlling injectable morphine and meperidine.

The personnel costs associated with handling injectable morphine and meperidine in five hospitals were determined, and the potential savings from using a non-controlled analgesic as an alternative were estimated. Five distinctly different U.S. hospitals were selected for study. Tasks involved in the acquisition, distribution, and preparation of injectable doses of morphine and meperidine were identified, and data on the personnel time required to complete each task were collected. Personnel costs were calculated on the basis of per minute wage rates, and costs that could be avoided if injectable morphine and meperidine were replaced by a nonnarcotic analgesic were estimated by determining the relevance of each task to the use of a noncontrolled injectable agent. The total personnel cost of controlling morphine and meperidine ranged from $0.55 to $0.93 per dose; the weighted average cost was $0.64 per dose. The savings that could be realized by replacing injectable morphine and meperidine with a noncontrolled injectable analgesic ranged from $0.13 to $0.36 per dose; the weighted average avoidable cost was $0.23 per dose. Eliminating the need to control these medications might not result in savings in dollar terms but would free health-care workers to perform other tasks. If costs are interpreted in terms of lost opportunities, such savings are real. The use of a nonnarcotic injectable analgesic in place of injectable morphine and meperidine could save approximately $0.23 in personnel costs per dose at the study hospitals.

Analgesics↗
PubMed2005

Acute care restructuring in Newfoundland and Labrador: the history and impact on expenditure.

OBJECTIVES: To document the history of regionalization and its effects on the Newfoundland and Labrador acute care health system, and to describe changes in acute care expenditure in the St John's region where hospital redesign, closure and aggregation occurred in relation to other regions not exposed to aggregation. METHODS: Interviews were conducted with senior health officials. Transcripts and other reports were reviewed. Financial data were abstracted from audited general ledger statements received from the Ministry of Health. RESULTS: Regionalization achieved its objectives of hospital aggregation in St John's. The average number of full-time equivalent employees increased slightly by 2% (5304-5416). In some regions, integration of services was delayed because of conflict and resistance to change. There was some disparity between the Provincial Government's objectives for cost control and the CEOs' perceptions of economies of scale. Between 1995/96 and 2002/03, total expenditures for the St John's region and the other five regional hospitals increased by 46% and 54%, respectively; total personal income of the population and government revenues increased by only 18% and 16%, respectively. CONCLUSIONS: Regionalization in Newfoundland and Labrador facilitated aggregation of hospitals, but did not control the number of front-line workers and, consequently, total acute care expenditure. Expenditure increased significantly between 1995 and 2002, at a rate which exceeded the increase in government revenues. The government's ability to pay for acute care will not be achieved unless employee costs are controlled or provincial income increases.

Health Care Reform↗
PubMedDate not supplied

Perspectives of nursing executives regarding ethical-economic issues.

The authors grapple with the very real issue of how to allocate scarce health care resources while trying to hold down costs, especially in the face of changing federal and managed care reimbursement realities. Nurse executives (NEs) were surveyed in an attempt to discover their perspectives on a number of related ethical-economic issues. The NEs' responses to the entire "ethical-economic" survey were contrasted with answers offered to the same tool earlier by staff RNs. Among the questions raised was the impact of cost controls on staffing patterns. Not surprisingly, the staff nurses reported perceiving that budget cuts had a greater negative impact on staff positions and the quality of patient care than the nurse executives reported. Both groups were in favor of taxpayers covering a greater part of the cost of medically indigent care. When asked if they would be willing to pay higher taxes themselves, slightly less than half of the nurse executives answered in the affirmative while only 17% of the staff nurses indicated a similar willingness.

Adult↗
PubMed1994

Using global budgets in the United States.

This article discusses the range of possibilities regarding how global budgets for health care spending might be used in the U.S. and the global budget designs that provide the most and least cost control. The article is a condensation of one chapter of the author's recently published special report, Getting Ready for Global Budgets.

Budgets↗
PubMed2003

Health care costs associated with posttraumatic stress disorder symptoms in women.

BACKGROUND: Posttraumatic stress disorder (PTSD) is a prevalent disorder that has been associated with elevated rates of medically unexplained physical symptoms, significant functional impairment, and high health care use. However, little is known about actual health care costs associated with PTSD. METHODS: We administered the PTSD Checklist (PCL) to 1225 female members of a metropolitan health maintenance organization and validated the instrument using a structured PTSD interview in a subset of 268 women. Participants were classified into 3 groups by PCL score: low (<30), moderate (30-44), and high (> or =45). By using the cost accounting system of the health maintenance organization, we examined differences between the groups with respect to total and component health care costs, controlling for chronic medical illness and other forms of psychological distress. RESULTS: The total unadjusted mean +/- SD annual health care costs were 3060 US dollars +/- 6381 US dollars (median, 1283 US dollars) for the high PCL score group, 1779 US dollars +/- 3008 US dollars (median, 829 US dollars) for the moderate PCL score group, and 1646 US dollars +/- 5156 US dollars (median, 609 US dollars) for the low PCL score group. After adjusting for depression, chronic medical disease, and demographic factors, women with high PCL scores had a significantly greater odds of having nonzero health care costs compared with women with low PCL scores (odds ratio, 13.14; 95% confidence interval, 1.70-101.19). Compared with women in the low PCL score group, those in the moderate PCL score group had, on average, a 38% increase in adjusted total annual median costs, and those in the high PCL score group had a 104% increase. CONCLUSIONS: Women with PTSD symptoms in this study had significantly higher total and component health care costs, even after controlling for depression, chronic medical illness, and demographic differences. These findings are similar to those found in studies of costs related to major depression and suggest that instituting health services interventions to improve recognition and treatment of PTSD in primary and specialty care clinics may be a cost-effective approach for lowering the prevalence of this disorder.

Adolescent↗
PubMed1980

Cost of hypertension control at the workplace.

A cost analysis of hypertension treatment at the workplace indicates that average patient cost in 1978 was $194.77. The distribution of cost is: clinical personnel, 26.7%; administrative personnel, 26.7%; drugs, 23.9%; laboratory, 3.4%; clinical supplies, 1.1%; general supplies and other operating expenses, 8.7%; equipment use, 1.0%; and rent, 2.6%. This aggregate cost is well below that reported for care provided in private practice and hospital outpatient department settings. The study further indicates that the constant dollar cost of care declines over the first three of four years and begins to stabilize at the fourth year. During the initial three-year period drug costs rise, but fewer revisits are required to attain and maintain blood pressure control. Drug utilization and the number of revisits per year stabilize at the fourth year.

Costs and Cost Analysis↗
PubMed1994

Defining the health care product to ensure quality and manage costs.

The frenzy of health care reform activity now led by the Clinton Administration's American Health Security Act of 1993 might end in the worst of all possible outcomes: a new government entitlement program financed by business and a global budget. Unbridled entitlement could drive utilization of benefits to the maximum and, with a budget cap, guarantee rationing. So far, the administration has talked about expanding access and controlling costs--not about the health care product. Given the threat that change poses for vested interests, time will undoubtedly lapse before final implementation of a new system. Unless physicians involved in health management seize the opportunity during this window of opportunity to help shape the future of health care delivery, the likelihood of preserving the U.S. health care delivery system as we know it will be dim indeed.

Cost Control↗
PubMed1990

Employer management of employee health plans.

Current trends in employer management of health-care plans are summarized, and the role of managed care is emphasized. Employers realize that employees perceive health-care plans as an important benefit and that attractive benefit plans will help in recruiting and retaining employees. At the same time, companies are faced with the need to find new ways in which to curtail the rising cost of health-benefit plans, which often constitute their largest and most uncontrollable budget item. Such techniques as more effective claims administration, plan design changes, plan financing arrangements, education of employees, and increased employee cost sharing are among the cost-containment actions that employers are implementing. Managed-care networks including health maintenance organizations are often viewed as the ultimate cost-containment model; however, the effectiveness of these evolving arrangements must be rigorously evaluated on the basis of appropriate performance criteria and documentation of achievement. Faced with cost-containment pressures, employers are taking a more assertive and informed role in health-plan purchasing decisions. The future course of health-care delivery will depend in large part on the response of corporate management to the challenge of ensuring that their employees receive quality health care at controllable costs.

Cost Control↗
PubMedDate not supplied

Evolving practices of medical equipment. Management following FDA inspections.

This paper outlines one hospital's response to the changing needs for: quality of care; risk management; cost control; and regulatory agency requirements. All recall, update, and product safety alerts are now routed to the office of The Director of Materials Management. The director notifies the appropriate department manager, who must reply in writing. The Clinical Engineering Department maintains a historical data file for medical equipment, which includes service costs information. New purchasing forms and terms have been developed for use in purchasing equipment and service. Maintenance of accurate historical data for medical devices begins at purchase, and continues to installation and through ongoing service. This requires the cooperation of the manufacturer, the service vendor, and the clinical department using the device. Because technology management can improve the quality of care and reduce risk, it is worth doing and can also reduce costs.

Capital Expenditures↗
PubMed2003

The development of prescribing incentive schemes in primary care: a longitudinal survey.

Primary Care Groups and Trusts in England (Primary Care Organisations, or PCOs) are required to operate a prescribing incentive scheme. Little is known about their development since their inception in 1999. We surveyed incentive schemes in London and the South-East NHS Regions in the two consecutive years since 1999. Most of the changes to the incentives and prescribing indicators favoured improvements in prescribing quality, rather than cost control. Quality improvements may be hampered in those PCOs offering financial rewards to underspent general practices that fail to achieve any prescribing quality targets.

Cost Control↗
PubMed1999

Lying for patients: physician deception of third-party payers.

BACKGROUND: Some physicians may resort to deception to secure third-party payer approval for patient procedures. Related physician attitudes, including willingness to use deception, are not well understood. OBJECTIVE: To determine physician willingness to deceive a third-party payer and physician attitudes toward deception of third-party payers. METHODS: A cross-sectional mailed survey was used to evaluate physician willingness to use deception in 6 vignettes of varying clinical severity: coronary bypass surgery, arterial revascularization, intravenous pain medication and nutrition, screening mammography, emergent psychiatric referral, and cosmetic rhinoplasty. We evaluated 169 board-certified internists randomly selected from 4 high- and 4 low-managed care penetration metropolitan markets nationwide for willingness to use deception in each vignette. RESULTS: Physicians were willing to use deception in the coronary bypass surgery (57.7%), arterial revascularization (56.2%), intravenous pain medication and nutrition (47.5%), screening mammography (34.8%), and emergent psychiatric referral (32.1%) vignettes. There was little willingness to use deception for cosmetic rhinoplasty (2.5%). Rates were highest for physicians practicing in predominantly managed care markets, for clinically severe vignettes, and for physicians spending less time in clinical practice. Physician ratings of the justifiability of deception varied by perspective and vignette. CONCLUSIONS: Many physicians sanction the use of deception to secure third-party payers' approval of medically indicated care. Such deception may reflect a tension between the traditional ethic of patient advocacy and the new ethic of cost control that restricts patient and physician choice in the use of limited resources.

Analgesics↗
PubMed2004

Medical savings accounts in a universal system: wishful thinking meets evidence.

Medical savings accounts (MSAs) and similar approaches based on flowing reimbursements through individuals/consumers rather than providers are unsuited for systems with universal coverage. Data from Manitoba, Canada reveal that, because expenditures for physician and hospital services are highly skewed in all age groups, MSAs would substantially increase both public expenditures and out-of-pocket costs for the most ill. The empirical distribution of health expenditures limits the potential impact of many current 'demand-based' approaches to cost control. Because most of the population is relatively healthy and uses few hospital and physician services, inducing the general population to spend less will not yield substantial savings.

Cost Control↗