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After years of steady growth, winds of restraint blowing on prescription-drug industry.

Tough fiscal times are forcing cutbaks in many areas of health care, and the prescription-drug industry is no exception. The Pharmaceutical Manufacturers Association of Canada says Canada's brand-name drug companies face two major hurdles: restricted market access, as drug formularies limit the number of new drugs, and restricted price increases, as allowed by the Patented Medicine Prices Review Board and provincial formularies. The Canadian Drug Manufacturers Association, which represents Canada's generic-drug industry, says its message to physicians is that generic products are important agents of cost control and that the health care community is more aware of this than it once was. "If you don't maximize your savings while you can," cautions the association's Brenda Drinkwalter, "you'll never be able to afford the high-priced drugs of tomorrow".

Cost Control↗

Nursing department strategy, planning, and performance in rural hospitals.

Do strategic planning and nursing department strategies explain major differences in hospital performance? Answers to this question surfaced in a study of nursing directors of rural New Mexico hospitals. The results indicate that managerial strategies, cost-control strategies, and strategic planning by the nursing department explain differences in net income and operating margin. These results imply that nursing directors can take an active role in influencing the strategic direction and fiscal achievements of rural hospitals.

Analysis of Variance↗

Health policy. Managed care--just ask US.

Managed care in the US reduces use of health services and hospital admissions. Concerns that cost control could jeopardize quality are widespread. But there is no significant evidence to suggest that this is the case. Managed care produces low patient satisfaction ratings. The US evidence on managed care has little direct relevance to the UK, but elements of it might be usefully tested here.

Cost Control↗

The strategic behavior of U.S. rural hospitals: a longitudinal and path model examination.

This article explores the relationships among rural hospital strategic behavior (market power and cost control strategies), environmental and organizational characteristics, and the influence these have on the financial performance of rural hospitals in the United States. The study finds that only market power strategies and organizational characteristics (ownership and size) exhibit significant impacts on rural hospital financial performance.

Causality↗

Physicians' Plan for a healthy Minnesota. The MMA proposal for health care reform. The report of the Minnesota Medical Association Health Care Reform Task Force.

The health care system in the United States, according to some, is on the verge of imploding. The rapidly rising cost of services is causing more and more Minnesotans to forego needed care. At the same time, the increasing costs are placing additional pressure on families, businesses, and state and local government budgets. The Minnesota Medical Association's (MMA) Health Care Reform Task Force has proposed a bold new approach that seeks to ensure affordable health care for all Minnesotans. The proposal is a roadmap to provide all Minnesotans with affordable insurance for essential health care services. In creating this plan, the task force strove to achieve three common reform goals: expand access to care, improve quality, and control costs. To achieve those ends, it has proposed a model built on four key features: (1) A strong public health system, (2) A reformed insurance market that delivers universal coverage, (3) A reformed health care delivery market that creates incentives for increasing value, (4) Systems that fully support the delivery of high-quality care. The task force believes that these elements will provide the foundation for a system that serves everyone and allows Minnesotans to purchase better health care at a relatively lower price. Why health care reform again? The average annual cost of health care for an average Minnesota household is about 11,000 dollars--an amount that's projected to double by 2010, if current trends continue. Real wages are not growing fast enough to absorb such cost increases. If unabated, these trends portend a reduction in access to and quality of care, and a heavier economic burden on individuals, employers, and the government. Furthermore, Minnesota and the United States are not getting the best value for their health care dollars. The United States spends 50 percent more per capita than any other country on health care but lags far behind other countries in the health measures of its population.

Advisory Committees↗

Availability of health data: requirements and solutions.

There is an increasing recognition of the importance of the health data available for the corporate healthcare system model with the electronic patient record as the central unit of the healthcare information systems. There is also increasing recognition of the importance of developing simple international standards for record components, including clinical and administrative requirements. Aspects of security and confidentiality have to be reviewed in detail. The advantages of having health data available when and where it is required will modify healthcare delivery and support cost control with economies of scale and sharing of resources. The infrastructure necessary to make this model a reality is being developed through different international initiatives, which have to be integrated and co-ordinated to have common disaster planning strategies and better funding alternatives.

Computer Communication Networks↗

Putting people first: health care our families can afford.

With U.S. health care costs expected to reach 16.4 percent of the gross national product by the year 2000, the nation can no longer afford not to have a national health care plan. The reciprocal problems of cost control and access to health insurance can be addressed by implementing health expenditures targets and market reform guaranteeing coverage, reforming health care insurance, improving our primary care delivery system, and improving health education. Such a program will enable America to have the confidence and productivity necessary to achieve global economic leadership.

Cost Control↗

Setting limits through global budgeting: hospital cost containment in Rhode Island.

In 1974, hospitals in Rhode Island have participated in annual negotiations with state officials and representatives from Blue Cross to determine the allowed increase in statewide hospital costs (the "Maxicap") for the next fiscal year, based on projected increases in hospitals' revenues, changes in patient volume and operating expenses. Individual hospital budgets may be above or below the Maxicap as long as the total increase in hospital costs for all hospitals in the state does not exceed the negotiated amount. At a time when regulatory solutions are increasingly under fire, continued support for Rhode Island's approach to hospital cost containment from third party payers, providers and public officials stands in stark contrast to other states where rate setting was either dismantled or discredited as a cost control strategy. A negotiated global cap on hospital expenditures offers an alternative to formula-based state rate-setting methodologies which could be incorporated as part of an all-payer reimbursement methodology or as an incremental step towards more comprehensive reform.

Blue Cross Blue Shield Insurance Plans↗

Structuring effective IDS-AMC affiliations.

IDSs able to incorporate academic medical centers (AMCs) into their organizations can realize several benefits, including access to a broad spectrum of specialty services and clinical resources that can be used to develop clinical protocols and reduce variations in care delivery practices across the system. Before pursuing such a strategy, however, IDSs also must be ready to assume the challenges associated with managing AMCs. To effectively incorporate an AMC, an IDS will need to undertake cost-control initiatives within the AMC, implement an enterprisewide information system, and transform the AMC's culture to reflect a team-oriented, community-focused approach. Most importantly, the enterprisewide information system should provide a means to seamlessly integrate the AMC into the larger organization.

Academic Medical Centers↗

Current and future directions for hospital and physician reimbursement. Effect on the academic medical center.

Profound changes are occurring in the health care system, including a surfeit of physicians, cost containment, and competition. This article addresses the effects of these changes on the academic medical center. It recommends that the faculty of the future will be of two types--clinician-teachers and researcher-teachers--and outlines the qualifications of these faculties. It recommends a proper reward system for clinician-teachers, the reintroduction of part-time faculties, and careful retrenchment in medical school class size and house staff. It calls for teaching hospitals to improve their physical plants and control costs by phasing out programs that are not cost-effective. Universities should consider divesting themselves of university-owned teaching hospitals. Most importantly, local, state, and federal governments and the public must develop a more supportive attitude toward the needs of medical education.

Academic Medical Centers↗

Risk adjustment and risk selection on the sickness fund insurance market in five European countries.

From the mid-1990s citizens in Belgium, Germany, Israel, the Netherlands and Switzerland have a guaranteed periodic choice among risk-bearing sickness funds, who are responsible for purchasing their care or providing them with medical care. The rationale of this arrangement is to stimulate the sickness funds to improve efficiency in health care production and to respond to consumers' preferences. To achieve solidarity, all five countries have implemented a system of risk-adjusted premium subsidies (or risk equalization across risk groups), along with strict regulation of the consumers' direct premium contribution to their sickness fund. In this article we present a conceptual framework for understanding risk adjustment and comparing the systems in the five countries. We conclude that in the case of imperfect risk adjustment-as is the case in all five countries in the year 2001-the sickness funds have financial incentives for risk selection, which may threaten solidarity, efficiency, quality of care and consumer satisfaction. We expect that without substantial improvements in the risk adjustment formulae, risk selection will increase in all five countries. The issue is particularly serious in Germany and Switzerland. We strongly recommend therefore that policy makers in the five countries give top priority to the improvement of the system of risk adjustment. That would enhance solidarity, cost-control, efficiency and client satisfaction in a system of competing, risk-bearing sickness funds.

Capitation Fee↗

The economics of prostate cancer screening.

The introduction of prostate-specific antigen (PSA) testing for use in the early detection of prostate cancer has led to controversy regarding the appropriateness of prostate cancer screening and any subsequent treatment. Much of this controversy arises from concern over the increased health-care costs that may result from widespread screening. As cost control becomes a dominant concern in today's health-care system, practitioners must decide whether the expense of screening and resulting treatment is worth the expenditure of its limited health-care system, practitioners must decide whether the expense of screening and resulting treatment is worth the expenditure of its limited health-care resources. This review first discusses the effects that widespread PSA screening would have on health-care costs. The benefits that will be realized by the expenditure of these additional health-care dollars are much more difficult to quantify. Decision analysis models have been used to evaluate the effectiveness of prostate cancer screening and treatment and have found little or no benefit. The current review illustrates how assumptions used to construct these models influence their results. The authors present a quantitative analysis of the costs and benefits of prostate cancer screening and treatment. This type of analysis demonstrates that prostate cancer screening and treatment may be a very cost-effective health-care intervention. Although men 50 to 70 years old will potentially benefit the most from PSA screening, this benefit will not be realized until they are in their seventh or eight decade of life. Society must decide if the years of life saved in these men warrants the use of its limited health-care resources. This decision will be easier when randomized, controlled trials are available to quantify the costs and benefits of PSA screening.

Cost Control↗

Protecting patients as costs are cut.

In today's managed healthcare era, cost-control measures that encourage underutilization of resources create fears that patients will receive less care than their conditions, injuries, or illnesses warrant. Patients need protection now that the rules have changed. Traditionally, patients have relied on direct caregivers to put their patients first. As individuals, caregivers want to be patient advocates; however, changes in the healthcare environment make it difficult for them to maintain their advocacy role. Clinical decision support criteria that are contained in a resource management program can help providers and payers maintain a balance between cost containment and healthcare quality.

Cost Control↗

Needed: cooperation to create a health care data bank.

Only the best possible utilization of existing data collection systems and the cooperative development of more comprehensive systems will enable participants in health care delivery to control the vast bulk of health care data and thereby make more rational efforts to control industry costs and quality. Relief from the threat of antitrust action would facilitate such necessary cooperative efforts.

Cost Control↗

Insurance. New conditions, new challenges.

Almost daily developments in market conditions, cost controls and awareness, and the systems used to deliver insurance products have created a new challenge for associations interested in offering maximum benefits to their memberships. This article is the first of a series to discuss the impact of these changes on association programs from the viewpoint of the association itself, the members, and the association executive.

Cost Control↗

Optimum sample size determination in stratified case-control studies with cost considerations.

We investigate sample size determination for Cochran's test for stratified case-control studies when samples of cases and controls are allocated to maximize the asymptotic efficiency of Cochran's test subject to fixed total cost with cost per control varying by strata. We consider two situations typical of strata-matched case-control studies: when one samples both cases and controls and when cases are given and one samples controls. In each situation we develop and study an asymptotic method for finding the sample size required for a specific power under the optimum allocation proposed by Nam and Fears. Also, for the second situation, we investigate an asymptotic method for determining the common ratio, k, in one-to-k strata-matched case-control studies without cost consideration for a given power. When cases are given, neither the optimum nor the standard control sample sizes appear in a closed form; we present numerical methods for calculating these sample sizes and illustrate them with examples. We find the reduction in total cost obtained under the optimum allocation compared to standard allocation more pronounced as the differences in stratum-specific costs of sampling controls increase.

Adult↗

Designing for reduced operating costs in a maternity unit.

Operating costs of hospitals make great demands on resources. This paper describes the possibility of using the methodology of linear systems to find ways for designing for reduced operating costs in a maternity unit in England. The organizational framework of the United Kingdom National Health Service, and its capital planning processes are outlined. Capital cost control methods used in building English hospitals are explained and then the early stages of an experiment in which the step response of an injection of capital to a capital building project are described. The project itself is in a maternity unit. Maternity has been chosen because it is particularly suitable for this kind of experiment having a relatively well defined input and output, and well established indicators of clinical outcome. It is hoped that insight into the step response will shed light on new ways of designing for reduced operating costs.

Capital Expenditures↗