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Medicare's financial problems are rooted in the program's history--from the initial cost-estimating process through successive legislative and administrative actions to control costs. Even more important has been the persistence of several implicit national health care policies, and these are unlikely to change. Frequent readjustments of financing provisions may become a necessity.
The U.S. Food and Drug Administration is increasing its emphasis and participation in international harmonization activities. Forces that have led the agency in this direction include increased trade, the multinational nature of the pharmaceutical industry, trade agreements such as NAFTA and the new GATT World Trade Organization agreement, European activism, and pressures on the industry to control costs. These pressures include intense competition and health care reimbursement controls. The centerpiece of FDA's harmonization initiatives in the pharmaceuticals area is ICH. ICH is the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use. FDA also works with the World Health Organization and other international organizations to set standards for health care products.
OBJECTIVES: To assess whether blood pressure control in primary care could be improved with the use of patient held targets and self monitoring in a practice setting, and to assess the impact of these on health behaviours, anxiety, prescribed antihypertensive drugs, patients' preferences, and costs. DESIGN: Randomised controlled trial. SETTING: Eight general practices in south Birmingham. PARTICIPANTS: 441 people receiving treatment in primary care for hypertension but not controlled below the target of < 140/85 mm Hg. INTERVENTIONS: Patients in the intervention group received treatment targets along with facilities to measure their own blood pressure at their general practice; they were also asked to visit their general practitioner or practice nurse if their blood pressure was repeatedly above the target level. Patients in the control group received usual care (blood pressure monitoring by their practice). MAIN OUTCOME MEASURES PRIMARY OUTCOME: change in systolic blood pressure at six months and one year in both intervention and control groups. SECONDARY OUTCOMES: change in health behaviours, anxiety, prescribed antihypertensive drugs, patients' preferences of method of blood pressure monitoring, and costs. RESULTS: 400 (91%) patients attended follow up at one year. Systolic blood pressure in the intervention group had significantly reduced after six months (mean difference 4.3 mm Hg (95% confidence interval 0.8 mm Hg to 7.9 mm Hg)) but not after one year (mean difference 2.7 mm Hg (- 1.2 mm Hg to 6.6 mm Hg)). No overall difference was found in diastolic blood pressure, anxiety, health behaviours, or number of prescribed drugs. Patients who self monitored lost more weight than controls (as evidenced by a drop in body mass index), rated self monitoring above monitoring by a doctor or nurse, and consulted less often. Overall, self monitoring did not cost significantly more than usual care (251 pounds sterling (437 dollars; 364 euros) (95% confidence interval 233 pounds sterling to 275 pounds sterling) versus 240 pounds sterling (217 pounds sterling to 263 pounds sterling). CONCLUSIONS: Practice based self monitoring resulted in small but significant improvements of blood pressure at six months, which were not sustained after a year. Self monitoring was well received by patients, anxiety did not increase, and there was no appreciable additional cost. Practice based self monitoring is feasible and results in blood pressure control that is similar to that in usual care.
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The dominant managed care model in the USA is the individual practice association (IPA), in which physicians in separate practices contract with a health plan. One alternative model, the capitated multispecialty group practice (CMGP), has some distinct advantages: (i) the best randomized trial comparing a health management organization (HMO) with indemnity insurance showed equivalent health outcomes for a prepaid group-practice model HMO, with about a 40% saving in cost, mostly from lower hospital utilization. There is no comparable evidence for IPA-style HMO's; (ii) most managed care plans control costs through 'gatekeeper' primary care physicians or capitated payment. Strong financial disincentives to care, applied to small practices, lead to a significant risk of withholding needed care. Large capitated groups diffuse the risk among hundreds or thousands of physicians; (iii) small practices also lack the financial resources and expertise to develop information systems, continuous quality improvement programs, and other means of improving efficiency. Larger groups can integrate specialty and primary care, laboratory, pharmacy, information technology and other services, to improve quality and cost-effectiveness, while maintaining physician control of the process; (iv) in urban California, HMO enrollment in six large capitated groups increased by 91% from 1990 to 1994. Hospital utilization for these groups was less than half the USA average; (v) because it is self-insured, the CMGP could contract directly with purchasers, eliminating the need for the insurance intermediary. The CGMP offers an ethical, effective alternative that maintains the primacy of the physician in health care: physician-managed care.
Conventional studies point to the spiraling cost of hospital services as the principal, if not the only, cause of escalating hospital expenditures; but using the AHA's Hospital Intensity Index to obtain a measure of the "real" volume of services provided by the industry opens up a whole new perspective--a perspective that gives attention to the role played by increased demand for services, as opposed to mere cost control.
As prospective pay systems are created, many sources of home care information are being considered. This study examines items on the HCFA Form 485 for their ability to accurately predict home healthcare costs. The researchers deduced that the current information available on the HCFA Form 485 was not useful in anticipating, planning for, and, ultimately, controlling costs.
Molecular diagnosis is the detection of pathogenic mutations in DNA and RNA samples prepared from at-risk patients. Principles underlying DNA-based diagnosis originate from localization and identification of genes responsible for human disease and the characterization of pathogenic mutations; new diagnostic tests are in constant development. Indications for testing include diagnosis, carrier risk revision, prenatal diagnosis, presymptomatic diagnosis, and population screening. The majority of DNA diagnoses are performed in a reference laboratory in which the referring physician, rather that the patient, is the client of the laboratory. Thus, the role of the genetic counselor in a reference laboratory is quite different from traditional clinical practice. As with all clinical laboratory tests, molecular diagnostics are interpreted within the context of the patient's overall clinical presentation and are overlaid with regulatory programs of quality assurance, quality improvement, and quality control. The greatest challenges facing the clinical laboratory are genetic heterogeneity, cost control, regulatory and patent compliance, technology transfer, and the genetic education of the referring physician.
BACKGROUND: By early 1994, 38 states had invested in data collection, analysis, and dissemination on the use, cost, effectiveness, and performance of hospitals. States use these data to control costs, encourage prudent purchasing, monitor effectiveness and outcomes of health care, guide health policy, and promote informed decision making. Experience in several states suggests that public release of hospital-specific data influences hospital performance. ISSUES: The value of state data organizations' databases to address issues of quality and accountability can be strengthened by ensuring the stability and growth of statewide health information systems, supporting research on information dissemination techniques, and promoting comparisons among hospitals. CONCLUSIONS: Information to measure provider performance must be placed in the public domain--to help ensure prudent and cost-effective health care purchasing and to give providers comparable information for improvement of care. State-level health databases are an essential component of the information infrastructure needed to support health reform.
BACKGROUND: Many perceive emergency department (ED) overuse as an important cause of high medical care costs in the United States. Managed care plans and politicians have seen constraints on ED use as an important element of cost control. METHODS: We measured ED-associated and other medical care costs, using the recently released 1987 National Medical Expenditure Survey of approximately 35,000 persons in 14,000 households representative of the US civilian, noninstitutionalized population. RESULTS: In 1987, total ED expenditures were $8.9 billion, or 1.9% of national health expenditures. People with health insurance represented 86% of the population and accounted for 88% of ED spending. The uninsured paid 47% of ED costs themselves; free care covered only 10%. For the uninsured, the cost of hospitalization initiated by ED visits totaled $3.3 billion, including $1.1 billion in free care. Whites accounted for 75% of total ED costs. The ED costs of poor and near-poor individuals accounted for only 0.47% of national health costs. CONCLUSIONS: ED use accounts for a small share of US medical care costs, and cost shifting to the insured to cover free ED care for the uninsured is modest. Constraining ED use cannot generate substantial cost savings but may penalize minorities and the poor, who receive much of their outpatient care in EDs.
Switzerland is the first European country where health maintenance organizations (HMOs) characterised by capitation (per capita lumpsum) and gatekeeping were implemented according to the HMO staff model known in the USA. The development of managed health care in Switzerland relies on the belief that adequate economic incentives and competition result in cost reduction and high quality health care. Whether this is true or not--in any case the deregulation of legally accepted forms of health insurance and managed care result in profound changes in the Swiss health care system. Observations are made by using expert interviews and analysis of documents. The implementation of managed care induces socio-cultural changes of the medical profession which are as profound as the induced economic changes. We discuss conflicts of interests among physicians using four main dimensions of conflict: (1) control, (2) monopolization, (3) valuation, and (4) specialization. In the HMOs we observe pronounced conflicts of the physicians' role. The changes of the physicians' role in HMOs is on the one hand the result of new duties. On the other hand it expresses strategies of coping with the role conflict between the main clinical duties and the new obligation to control cost and to monitor treatment via gatekeeping. In HMOs the teamwork of doctors and the quality control of care promotes the satisfaction of physicians with their work, however, it can also have dysfunctional effects.
Improved computer technology and imperatives for cost control have made the use of "average of normals" (AVON) procedure an attractive alternative to the more expensive standard quality control programs for clinical laboratory assay monitoring. The authors report the use of a version of the AVON procedure to resolve assay discrepancies with CO2 determination that the traditional quality control program appeared incapable of detecting. Their study suggests that the mean of patients within the reference interval (RI) is a sensitive indicator of accuracy, whereas the percentage of patients within RI is a good indicator of random imprecision.
Numerous studies have demonstrated that a well-designed clinical pathway is an effective means of sustaining quality while controlling costs in the management of certain disease entities. We evaluated the impact that cost and medical quality have on the implementation of a clinical pathway for laparoscopy-assisted vaginal hysterectomy (LAVH). This retrospective study involved a sample of 124 patients who underwent LAVH in a medical center in central Taiwan. Patients were divided into two groups on the basis of whether they received treatment before or after implementation of the LAVH clinical pathway. The preclinical pathway group was comprised of 40 patients who underwent LAVH before clinical pathway implementation (May-December 1997). The clinical pathway group included 84 patients who underwent LAVH after implementation of the clinical pathway (January 1998-March 1999). In order to study the impact of the LAVH clinical pathway, patient characteristics were controlled by multiple linear regression. The results showed a significant reduction in cost, average length of hospital stay, and average duration of surgery and anesthesia (p < 0.01). Dependent nominal variables for clinical indicators like postoperative intravenous fluid and injection of antibiotics 48 h after surgery, and complications were analyzed by a logistic regression model. The results noted better control of antibiotic intravenous injection 48 h after surgery in the clinical pathway group (p = 0.03). The other indicators included delay of operation day, blood transfusion, patient mortality, and patients readmitted within 2 weeks. There was one operation day delay and one readmission within 2 weeks of discharge in the preclinical pathway group. Based on our results, the implementation of a clinical pathway for LAVH contains cost while maintaining quality of care, especially when the medical fees are paid under the case payment system.
For many hospitals, performance reporting is the most important and valuable function of a cost management system. Performance reporting provides hospitals--or any organization, for that matter--with an enhanced ability to reduce and control costs and monitor profitability. By periodically comparing strategic and operational plans with actual results, managers are provided with measurements of their performance for the aspects of the organization they control. The following is an excerpt from the book, Cost Management for Hospitals. This section deals with product-line performance reporting and the variances that measure the effects different factors have on performance.
A growing popular movement besieges a health policy status quo near financial as well as moral bankruptcy. A single-payer, Canadian-style national health program would assure universal, egalitarian coverage; democratic, rather than corporate, control of key policy choices; financing based on ability to pay; and cost controls that spare needed care as well as health workers' standard of living. Despite a misinformation campaign (generously funded by insurance and pharmaceutical firms) that slanders the Canadian experience, most Americans favor a national health program. The public health community should fight for no less.
OBJECTIVE: To determine the impact of a clinical pathway for elective infrarenal aortic reconstruction on outcome, resource utilization, and cost in a university medical center. SUMMARY BACKGROUND DATA: Clinical pathways have been reported to control costs, reduce resource utilization, and maintain or improve the quality of patient care, although their use during elective aortic reconstructions remains unresolved. METHODS: A clinical pathway was developed for elective infrarenal aortic reconstructions by a multidisciplinary group comprised of representatives from each involved service. The prepathway practice and costs were analyzed and an efficient, cost-effective practice with specific outcome measures was defined. The impact of the pathway was determined by retrospective comparison of outcome, resource utilization, and cost (total and direct variable) between the pathway patients (PATH, n = 45) and a prepathway control group (PRE, n = 20). RESULTS: There were no significant differences in the patient demographics, comorbid conditions, operative indications, or type of reconstruction between the groups. There were no operative deaths and the overall complication rate (PRE, 35% vs. PATH, 34%) was similar. The pathway resulted in significant decreases in the total length of stay and preoperative length of stay and a trend toward a significant decrease (p = 0.08) in the intensive care length of stay for the admission during which the operation was performed. The pathway also resulted in significant decreases in both direct variable and total hospital costs for this admission, as well as a significant decrease in the overall direct variable and total hospital costs for the operative admission and the preoperative evaluation (< or =30 days before operative admission). Despite these reductions, the discharge disposition, 30-day readmissions, and number of postoperative clinic visits within 90 days of discharge were not different. CONCLUSIONS: Implementation of a clinical pathway for elective infrarenal aortic reconstructions dramatically decreased resource utilization and hospital costs without affecting the quality of patient care and did not appear to shift the costs to another setting.
The study provides estimates of the cost of various malaria control measures in an area of North-Central Province of Sri Lanka where the disease is endemic. We assumed that each measure was equally effective. In these terms, impregnating privately purchased bednets with insecticide was estimated to cost Rs 48 (US(40.87) per individual protected per year, less than half the cost of spraying houses with residual insecticides. Larviciding of vector breeding sites and especially the elimination of breeding habitats by flushing streams through seasonal release of water from upstream reservoirs was estimated to be cheaper than other preventive measures (Rs 27 (US$ 0.49) and Rs 13 (US$ 0.24) per individual protected, respectively). Inclusion of both operational and capital costs of treatment indicates that the most cost-effective intervention for the government was a centrally located hospital with a relatively large catchment area (Rs 71 (US$ 1.29) per malaria case treated). Mobile clinics (Rs 153 (US$ 2.78) per malaria case treated) and a village treatment centre (Rs 112 (US$ 2.04)) per malaria case treated) were more expensive options for the government, but were considerably cheaper for households than the traditional hospital facilities. This information can guide health planners and government decision-makers in choosing the most appropriate combination of curative and preventive measures to control malaria. However, the option that is cheapest for the government may not be so for the householders, and further studies are needed to estimate the effectiveness of the various preventive measures.
The impact of quality control procedures on the workload and the cost of the clinical laboratory during the last decade is explored. Quality control procedures are shown to represent a relatively constant share of test procedures for acute care admissions. The effect of automation on quality control testing in the laboratory has been to reduce the workload units per quality control test and thus to reduce the relative share of total laboratory costs incurred by quality control. The need to assess changes in the cost of quality control testing against any change in quality of laboratory output is emphasized.