Hospital diversification strategy.

To determine the impact of health system restructuring on the levels of hospital diversification and operating ratio this article analyzed 94 teaching hospitals and 94 community hospitals during the period 2008-2013. The 47 teaching hospitals are matched with 47 other teaching hospitals experiencing the same financial market position in 2008, but with different levels of preference for risk and diversification in their strategic plan. Covariates in the analysis included levels of hospital competition and the degree of local government planning (for example, highly regulated in New York, in contrast to Texas). Moreover, 47 nonteaching community hospitals are matched with 47 other community hospitals in 2008, having varying manager preferences for service-line diversification and risk. Diversification and operating ratio are modeled in a two-stage least squares (TSLS) framework as jointly dependent. Institutional diversification is found to yield better financial position, and the better operating profits provide the firm the wherewithal to diversify. Some services are in a growth phase, like bariatric weight-loss surgery and sleep disorder clinics. Hospital managers' preferences for risk/return potential were considered. An institution life cycle hypothesis is advanced to explain hospital behavior: boom and bust, diversification, and divestiture, occasionally leading to closure or merger.

Electronic health records lifecycle cost.

We have overestimated the ability of electronic health records (EHR) systems to enhance efficiency by eliminating transcription and the need to physically pull charts. Hospital managers typically underestimate the costs of upgrade fees and support. To avoid this problem, hospitals must develop a full total cost of ownership (TCO) analysis to independently forecast total lifecycle costs for EHR information technology. Vendor information must be checked for validity and a milestone payment schedule must be devised to pay for results (outcomes) not promises. Vendors vary widely in their capacity to set up a fully functional inpatient-outpatient EHR system. Documentation programming will help to control hospital costs while enhancing service quality and staff morale. This study presents cost analysis from 62 hospitals in 16 cities during the period 2012-2013.

The total cost of EHR ownership.

Consider total cost of ownership, not just initial cost of acquisition and annual maintenance, when reviewing electronic health record (EHR) system bids. Support costs--a key part of total cost of ownership--include FTEs dedicated to the system. The long-term costs of an EHR system can vary dramatically (up to 200 percent) depending on which system is selected.

Health information technology impact on productivity.

Managers work to achieve the greatest output for the least input effort, better balancing all factors of delivery to achieve the most with the smallest resource effort. Documentation of actual health information technology (HIT) cost savings has been elusive. Information technology and linear programming help to control hospital costs without harming service quality or staff morale. This study presents production function results from a study of hospital output during the period 2008-2011. The results suggest that productivity varies widely among the 58 hospitals as a function of staffing patterns, methods of organization, and the degree of reliance on information support systems. Financial incentives help to enhance productivity. Incentive pay for staff based on actual productivity gains is associated with improved productivity. HIT can enhance the marginal value product of nurses and staff, so that they concentrate their workday around patient care activities. The implementation of electronic health records (EHR) was associated with a 1.6 percent improvement in productivity.

Hospital specialization: product-line planning during the market reformation.

Rational expectations theory dictates that firms respond to shifts in the demand function as a result of substantial reforms in the insurance marketplace. Federal health reform has enhanced the benefits of specialization. Hospital product-line specialization trends are studied using multiple regression analysis for the period 2001-2010. The observed 32.8 percent rise in specialization was associated with a 9.8 percent decline in unit cost per admission. The number of specialized hospitals has grown by 174 percent in the past decade. Other hospitals are getting more specialized by reducing their product lines. Specialization has been highest in competitive West Coast markets and lowest in the rate-regulated states (New York and Massachusetts). Hospitals have less incentive to contain costs by decreasing the array of services offered in stringent rate-setting states. The term "underspecialization" is advanced to capture the inability of some hospitals to selectively prune out product lines in order to specialize. Such hospitals spread resources so thinly that many good departments suffer. Unit cost per case (DRG-adjusted) is higher in the less specialized hospitals.

Hospital costs and specialization: benefits of limiting the number of product lines.

Trends in hospital specialization are studied using multiple regression analysis for the period 1999-2008. The observed 31.3 percent rise in specialization was associated with a 9.5 percent decline in unit cost per admission. The number of specialized hospitals has grown by 149 percent in the past decade. Other hospitals are getting more specialized by reducing their product lines. Specialization has been highest in competitive West Coast markets and lowest in the rate-regulated states (New York and Massachusetts). Hospitals have less incentive to contain costs by decreasing the array of services offered in stringent rate-setting states. The term "underspecialization" is advanced to capture the inability of some hospitals to selectively prune out product lines in order to specialize. Such hospitals spread resources so thin that many good departments suffer. Unit cost per case (DRG-adjusted) is higher in the less specialized hospitals.

Diversification in the hospital industry.

An institution life cycle hypothesis is advanced to explain hospital behavior: boom and bust, diversification and divestiture, occasionally leading to closure or merger. Hospital diversification and its impact on the operating ratio are studied for 172 hospitals during the period 2002-2007. Diversification and operating ratio are modeled in a two-stage least squares (TSLS) framework as being jointly dependant. Institutional diversification is found to yield better financial position, and the better operating profits allow the institution the wherewithal to diversify. The impact of external government planning and hospital competition is also measured. Some services are in a growth phase, like bariatric weight loss surgery and sleep disorder clinics. Management's attitude concerning risk and reward is considered.

Hospital nurse productivity enhancement.

Nurse staffing patterns have come under increased scrutiny as hospital managers attempt to control costs without harming service quality or staff morale. This study presents production function results from a study of nurse output from 2002 to 2005. The results suggest that productivity varies widely among the 39 hospitals as a function of staffing patterns, methods of organization, and the degree of reliance on nurse extender technicians. Nurse extenders can enhance the marginal value product of the most educated nurses as the RNs concentrate their workday around patient care activities. The results suggest that nurse extenders free RNs from the burden of nonnursing tasks. Incentive pay for nurses based on productivity gains is associated with enhanced productivity. One should get the greatest output for the least input effort, better balancing all factors of service delivery to achieve the most with the smallest resource effort.

Cost containment for the public health.

The U.S. health care system has major problems with respect to patient access and cost control. Trimming excess hospital expenses and expanding public health activities are cost effective. By budgeting well, with global budgets set for the high cost sectors, the United States might emerge with lower tax hikes, a healthier population, better facilities, and enhanced access to service. Nations with global budgets have better health statistics, and lower costs, compared to the United States. With global budgets, these countries employ 75 to 85 percent fewer employees in administration and regulation, but patient satisfaction is almost double the rate in the United States. Implement a global budget for health care, or substantially raise taxes, is the basic choice faced in this country. Key words: global budget control cost containment.

Hospital diversification.

Hospital diversification and its impact on the operating ratio are studied for 168 hospitals during the period from 1999 to 2004. Diversification and the operating ratio are modeled in a two-stage least squares (TSLS) framework as being jointly dependent. Institutional diversification is found to yield a better financial position, and the better operating ratio allows the institution the wherewithal to diversify. The impact of external government planning and hospital competition are also measured. An institution lifecycle hypothesis is advanced to explain hospital behavior: boom and bust, diversification and divestiture, occasionally leading to closure or merger. Management's attitude concerning risk and reward is considered.

Reducing litigation costs through better patient communication.

The most common cause of malpractice suits is failed communication with the patients and their families. Explore ways that better communication could lead to fewer malpractice claims and allow health care organizations to reduce litigation costs.

The impact of nurse training funds on the supply of nurses.

The number of nurses per capita in the United States increased over 100 percent during the period 1972-1983, owing largely to funds made available through the Nurse Training Act (NTA). Due to federal and state donor fatigue, from 1984-2003 nurses per capita only increased 79 percent. We studied the subsidy effect of the NTA by type of program (baccalaureate, associate, and diploma) and by type of school (public and private) using a fixed-effects analysis-of-covariance model that pooled time-series cross-sectional data from 537 schools over the three decades 1974-2003. We found that the estimated impact of the federal funds ranged from 39,600 dollars to 48,900 dollars per nurse educated. We discuss whether this marginal price per additional nurse trained is a "good buy" as a government program in the context of other current nurse labor market issues.

Hospital nurse productivity.

Nurse staffing patterns have come under increased scrutiny as hospital managers attempt to control costs without harming service quality or staff morale. This study presents production function results from a study of nurse output during the period 1997-2000. The results suggest that productivity varies widely among hospitals as a function of staffing patterns, methods of organization, and the degree of reliance on nurse extender (NE) technicians. NEs can enhance the marginal value product of the most educated nurses as the registered nurses (RNs) concentrate their workday around patient care activities. The results suggest that nurse extenders free RNs from the burden of nonnursing tasks.

Overcrowding and fiscal pressures in emergency medicine.

Emergency departments in America are disappearing at an alarming rate. Those that remain face a daily ordeal of overcrowding and budgetary shortfalls. The reasons for this phenomenon include changes in reimbursement rates by managed care organizations, the nationwide reduction of hospital beds, the nursing shortage, a more acute patient mix, and a general deterioration of the healthcare safety net. Another reason--more vital today than ever before--is the uncompensated integration of EDs into governmental disaster planning and response. Despite their importance to society, the emergency department is the first to be cut. Emergency departments are much more than the nation's last line of defense for the medically indigent; they are the frontline caregivers to all of us, providing care during our most vulnerable times: emergencies and disasters.