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Health care reform initiatives, addressing the three fundamental objectives of access, quality, and cost control, will serve to reorient health care from a facility-based to a coverage-based orientation. New Jersey physicians need to think about the changes in health care policy.
Health care costs in the United States are placing businesses in a competitive disadvantage in the international market. Health Care is now the third highest cost category in US corporations after salaries and raw materials. Alternative Health Care delivery systems in the form of managed care have become popular mechanism to promote cost control. A critical element in most managed care programs is a limitation of freedom of choice of provider. As a result, physicians are being deliberately excluded from some managed care plans. Legislation called "Any Willing Provider Statutes" is being enacted in many areas to prohibit such actions. The authors outline the advantages and disadvantages of such legislation and discuss the economic implications for hospitals and the private practice of medicine. They also examine the impact "any willing provider" legislation will have on patient care and detail how this legislation involves who is going to control the practice of medicine in the years ahead. An examination of the American model should assist others involved with health care planning and regulating medical practice.
Volume, costs and content of medical care depend on professional and public expectations. The UK National Health Service (NHS) removed price barriers to access, so depressed expectations became an important factor in cost control. In USA, professional control of care business inflated expectations and costs. Managed care in the NHS failed to rationalize care because managers seem even less trustworthy than clinicians as arbiters of rational expectations in contexts of underfunding. Rational expectations depend on restored trust, mutual and managerial respect for expertise of both clinicians and patients, and transcendence of the provider-consumer model for value production in medical care.
This paper updates our 1977 study of health insurance competition. We find that insurers are now far more willing to compete by controlling costs. Large consumer copayments and insurer utilization controls, once deemed politically infeasible, have become commonplace. HMOs and especially PPOs are booming. Blue Shield and Blue Cross market share and market power are declining. We discuss why the insurance market has changed and conclude with thoughts on the future.
Discuss cost management and performance improvement with any manager at an acute care hospital and you will hear several consistent themes: Quality improvement (QI) has not produced the anticipated results on a timely basis; Focused cost reduction efforts have at best provided short-term benefits; and The organization needs to be more nimble, more responsive to the marketplace. If your hospital is wrestling with these issues, take some comfort in knowing that you are not alone. In general, the same problems are being experienced by long-term care facilities, group practices, practice plans, and most other provider organizations. However, all is not doom and gloom. A common-sense, easy-to-understand solution to the cost control problem can be implemented if an organization is disciplined and can exercise patience and diligence in implementation. Business Process Redesign (BPR), a performance improvement strategy and tactic that has been successfully deployed throughout private industry, can solve the problem. If undertaken correctly, BPR links the best concepts and principles of quality improvement, operations analysis, and focused cost reduction with an organization's strategic planning efforts. BPR results in the establishment of cost management initiatives that are consistent with the organization's long term goals. This article takes a closer look at the merits of BPR in a changing healthcare environment.
BACKGROUND: Transurethral resection of prostate (TURP) is among the top 10 surgical conditions that account for hospital admission in Victoria. Bed utilization for TURP is an increasing concern in current times. This paper describes trends in length of stay (LOS) and identifies predictors of LOS for TURP in Victoria. METHODS: Trends in TURP were studied using ICD-9-CM coded Victorian hospital morbidity data from public hospitals from 1987/88 to 1994/95. Detailed morbidity data from the same source for the financial year 1995/96 were used to study predictors of LOS by logistic regression. RESULTS: Length of stay decreased significantly between 1987 and 1995 from 10.6 to 6.1 days. The strongest predictor of increased LOS was admission through the emergency room (odds ratio (OR) 14.7; 95% confidence interval (CI) 11.8-18.3). Other significant predictors were older age, lower socio-economic status, presence of comorbid conditions, occurrence of procedural morbidity, and hospital type and location. CONCLUSIONS: The trend in decreasing LOS may be explained by increasingly efficient bed management in hospitals who are faced with an increasing need for cost control. Advances in surgical techniques and peri-operative care have also contributed to the decrease in LOS. Other factors that influence LOS can be divided into three categories: intrinsic patient factors, such as co-morbid conditions; procedure-specific factors such as peri-operative morbidity; and intrinsic hospital factors relating to capacity and resources. Such determinants of LOS may be of value to policy makers when considering the effective application of newer methods for treatment of benign prostatic hyperplasia.
More than a quarter of the rapid growth in physician expenditures since the advent of the Medicare program can be ascribed to greater service intensity, generally through unpackaging of physician services, procedure inflation, and the involvement of multiple physicians. One way to achieve effective cost control is to restrain prices and the number of services simultaneously through redefining the payment unit from a narrow procedure to a comprehensive package of services. In this paper, we explore five means of packaging physician services: collapsed procedure, office visit, special procedure, ambulatory condition, and inpatient condition packages. While three packages hold promise for reining in the costs of physician services in the Medicare program, two raise important policy considerations that would have to be addressed before they could be given further consideration.
BACKGROUND: The obstetrics/gynecology department of York Hospital (York Health System, York, Pennsylvania) initiated a program to improve the processes of care and control costs for common women's and newborns' health care services. Twelve clinical policies were established between June 1993 and February 1995. CONDUCTING THE QUALITY IMPROVEMENT (QI) PROJECTS: Using the plan-do-check-act (PDCA) improvement cycle method, the QI group established clinical pathways for high-volume conditions or procedures known to have low rates of complications and clinical guidelines for those conditions or procedures not requiring coordinated efforts of a group of health care professionals. EXAMPLE--PYELONEPHRITIS IN PREGNANCY: The literature had indicated that the prevalence of pyelonephritis can be decreased by identifying and treating asymptomatic bacteriuria early in prenatal care. After the validity of the clinical policy was demonstrated in the resident service, the policy was extended to all private obstetric practices. Dissemination of the finding that most of the admissions for pyelonephritis were for referred patients (for whom we had no control over prenatal care) or for patients referred by private physicians who were not yet following the guidelines quickly led to complete compliance by our obstetricians and other health care providers referring patients to the York Health System. RESULTS: The 12 clinical policies resulted in the elimination of 113 admissions and 5,595 inpatient days and in the reduction of the cost of patient care by $1,306,214 for the years 1994-1995 and 1995-1996 combined, without apparent adverse effects on patient health. CONCLUSION: A voluntary clinical policies program can change the culture of a department and lead to cost-effectiveness and better quality of patient care.
The author presents the main features of the organization of the French health care system, revealing an important mixture of public and private actors and institutions and a large number of political restraints that oppose resistance to privatization. In spite of traditional references to "liberal medicine" and recurrent debates opposing public and private intervention, neither the doctors nor the political decision makers have really supported the few projects that have been proposed for privatization or liberalization of health care. On the contrary, the cost-control policy introduced growing State intervention and new management methods into the health care sector, whose actors were not used to it. The privatization and liberalization debates appear as a rhetoric necessary to accommodate these difficult changes.
Mental health cost containment in the United States has evolved from fragmented utilization review and discounted pricing programs in the 1980s to comprehensive mental health managed care programs in the 1990s, in which the network managing the care takes on financial risks associated with price and utilization for all mental health services provided to an enrolled population. While the earlier programs did not control costs to any significant degree, the newer forms of managed mental health are showing substantial reductions in cost, primarily through the reduction in use of in-patient services. Based on these encouraging but very preliminary results, state Medicaid programs have increasingly embraced managed care for both medical and mental health services for eligible low-income populations. However, little has been systematically evaluated with respect to the effects of aggressive mental health care management upon quality of care, functional outcomes or patient satisfaction. In addition, substantial new investment in merged clinical and financial information systems raises the entry cost significantly for managed care providers.
OBJECTIVE: With the advent of hospital payment by diagnosis-related group (DRG), length of stay (LOS) has become a major issue in hospital efforts to control costs. Because the Columbia-Presbyterian Medical Center (CPMC) has had above-average LOSs for many DRGs, the authors tested the hypothesis that a computer-generated informational message directed to physicians would shorten LOS. DESIGN: Randomized clinical trial with the patient as the unit of randomization. SETTING AND STUDY POPULATION: From June 1991 to April 1993, at CPMC in New York, 7,109 patient admissions were randomly assigned to an intervention (informational message) group and 6,990 to a control (no message) group. INTERVENTION: A message giving the average LOS for the patient's admission or provisional DRG, as assigned by hospital utilization review, and the current LOS, in days, was included in the main menu for review of test results in the hospital's clinical information system, available at all nursing stations in the hospital. MAIN OUTCOME MEASURE: Hospital LOS. RESULTS: The median LOS for study patients was 7 days. After adjustment for covariates including age, sex, payor, patient care unit, and time trends, the mean LOS in the intervention group was 3.2% shorter than that in the control group (p = 0.022). CONCLUSION: Computer-generated patient-specific LOS information directed to physicians was associated with a reduction in hospital LOS.
Germany created the first national health insurance scheme, and its turbulent history has carried many lessons for all other countries. Health care financing--like all social security financing--redistributes wealth and inevitably is caught up in class politics. Cost-sharing by patients is not a neutral device in social engineering to improve efficiency, but it is a gambit in distributive politics. Health care involves the wealth and power of the doctors, and they become militant and successful forces in social politics. The forces for higher spending are stronger than the forces for restraint. Only exceptional political will be government can control costs.
This article describes state Medicaid nursing facility reimbursement methods and rates in 1979-1997, using data derived from telephone surveys of state Medicaid reimbursement. The 1980s saw shifts toward prospective methodology. The late 1980s and early 1990s were characterized by adoption of casemix methods. The early 1990s also saw fewer changes in methodology with a hiatus in the mid-1990s followed recently by renewed changes to methodology. Medicaid per diem rates have increased faster than inflation but less rapidly than general health costs. The repeal of the Boren Amendment may now allow states to institute greater cost controls or moratoria on rate increases. Despite states' tendencies to follow one another's examples, Medicaid reimbursement remains diverse nationally, with wide differences in policies and rates.
This paper outlines a practical and pragmatic approach to containing mental health costs, especially when caring for Medicaid recipients. The role of psychiatrists as primary care gatekeepers in the managed care system is also discussed. We conclude that a single-payor system seems to be the best alternative for timely and quality mental health care, and that early detection via education and screening for families predisposed to substance abuse/mental illness is also beneficial in controlling costs.
Rising costs and the need to increase patient satisfaction are driving hospitals to restructure care delivery. At one hospital, housekeeping, food service and nurse technician duties are combined to form one nurse-extender role: the Patient Service Partner (PSP). Findings about patient and nurse satisfaction before and after implementation show that nurses agreed that the PSP program improved patient care delivery and helped control costs. Patients reported the same or higher rating of satisfaction with various aspects of their hospitalization. Call lights were answered more quickly and attitudes of personnel answering the lights were more positive. Nurses are finding more time for patient education and documentation.
The high cost per patient of hematopoietic cell transplantation (HCT) causes this therapy to be the focus of much controversy, given the competing societal demands to provide all possible therapy to preserve life while simultaneously limiting global health care expenditures. Treatment and eligibility decisions for HCT often are heavily scrutinized by both governmental and private payers and not simply determined by physicians, facility providers, and the patient. In an effort to control costs, payers have administrative infrastructure to review resource utilization by these patients. Additionally payers have developed payment methodologies, usually in the form of a case rate payment structure, that place facilities and physician providers of HCT at financial risk for adverse patient financial outcomes in an effort to promote optimal utilization and selection of patients for HCT. As providers enter into such financial risk arrangements with payers, the providers need to understand the true cost of care and be able to identify predictable and unpredictable outlier risks for the financial consequences of medical complications. HCT providers try to protect themselves from excessive financial risk by having different payment rates for different types of transplant, eg, autologous versus HLA or genotypically matched related versus HLA mismatched transplants. Because at certain times in the HCT process risk is more unpredictable, HCT providers require different payment system strategies for the different time periods of care such as evaluation, pre-transplant disease management, harvesting, and cell processing, as well as short- and long-term follow-up. Involvement by clinicians is essential for this process to be done well, especially given the rapid changes technological innovation brings to HCT. Constant dialogue and interaction between providers and payers on these difficult financial issues with HCT is essential to preserve patient access to this potentially lifesaving therapy.
Despite agreement about problems with the health care system, there is disagreement about the remedy. Like most health care reform debates, this article focuses on financing methods rather than service delivery. Reform strategies are intentionally oversimplified into four categories: employer-based or "play or pay"; single-payer and modifications, such as expanding Medicaid or Medicare; market competition; and managed competition, which appears to be favored by the Clinton administration. Cost-control mechanisms and insurance reforms are applicable to all four financing methods. Reform is inevitable. The challenge for nurses is to understand reform issues and then influence policymakers to initiate reforms that make essential medical and preventive services universally available.
BACKGROUND AND OBJECTIVE: Cost control is becoming an increasingly important consideration for clinicians when planning how to provide the best treatment for anaemic cancer patients. Administration of erythropoiesis stimulating agents (epoetin alpha, epoetin beta and darbepoetin alpha) has become the standard of care for treatment of anaemia in cancer patients. However, only limited information is available on the economic comparability of epoetin alpha, epoetin beta and darbepoetin alpha, and thus this study was conducted to compare cost per patient of each of these agents for anaemic cancer patients. METHODS: All prescriptions of the agents over 1 year were analysed by two Austrian regional public health insurance associations and cost per patient for each agent was calculated from invoicing data. Data from the two regions were combined to obtain total mean drug costs per patient per year. RESULTS AND DISCUSSION: Analyses showed significantly lower costs for epoetin alpha ( 2,743.27 euros) than for darbepoetin alpha (3,627.98 euros ) or epoetin beta ( 3,292.28 euros): epoetin alpha vs. darbepoetin alpha (P < 0.0001); epoetin beta vs. darbepoetin alpha (P = 0.0001); epoetin alpha vs. epoetin beta (P = 0.0009). As costs of the three agents in Austria are identical for therapeutically equivalent doses, the higher cost of darbepoetin alpha was believed to be due mainly to longer treatment duration to target haemoglobin level. CONCLUSION: The finding of a cost difference favouring epoetin alpha over darbepoetin alpha suggests the need for prospective randomized studies comparing efficacy and cost effectiveness of all three agents to obtain more definitive data.