Reported Variation in Hospital Billing Quality.

This study examines how US hospitals perform on billing quality measures, including legal actions taken by a hospital to collect medical debt, the timeliness of sending patients an itemized billing statement, and patient access to a qualified billing representative.

Luck of the draw: Role of chance in the assignment of medicare readmissions penalties.

Pay-for-performance programs are one strategy used by health plans to improve the efficiency and quality of care delivered to beneficiaries. Under such programs, providers are often compared against their peers in order to win bonuses or face penalties in payment. Yet luck has the potential to affect performance assessment through randomness in the sorting of patients among providers or through random events during the evaluation period. To investigate the impact luck can have on the assessment of performance, we investigated its role in assigning penalties under Medicare's Hospital Readmissions Reduction Policy (HRRP), a program that penalizes hospitals with excess readmissions. We performed simulations that estimated program hospitals' 2015 readmission penalties in 1,000 different hypothetical fiscal years. These hypothetical fiscal years were created by: (a) randomly varying which patients were admitted to each hospital and (b) randomly varying the readmission status of discharged patients. We found significant differences in penalty sizes and probability of penalty across hypothetical fiscal years, signifying the importance of luck in readmission performance under the HRRP. Nearly all of the impact from luck arose from events occurring after hospital discharge. Luck played a smaller role in determining penalties for hospitals with more beds, teaching hospitals, and safety-net hospitals.

Financial Profit in Medicine: A Position Paper From the American College of Physicians.

The steady growth of corporate interest and influence in the health care sector over the past few decades has created a more business-oriented health care system in the United States, helping to spur for-profit and private equity investment. Proponents say that this trend makes the health care system more efficient, encourages innovation, and provides financial stability to ensure access and improve care. Critics counter that such moves favor profit over care and erode the patient-physician relationship. American College of Physicians (ACP) underscores that physicians are permitted to earn a reasonable income as long as they are fulfilling their fiduciary responsibility to provide high-quality, appropriate care within the guardrails of medical professionalism and ethics. In this position paper, ACP considers the effect of mergers, integration, private equity investment, nonprofit hospital requirements, and conversions from nonprofit to for-profit status on patients, physicians, and the health care system.

Cost of postoperative complications: How to avoid calculation errors.

Postoperative complications (PC) are a basic health outcome, but no surgery service in the world records and/or audits the PC associated with all the surgical procedures it performs. Most studies that have assessed the cost of PC suffer from poor quality and a lack of transparency and consistency. The payment system in place often rewards the volume of services provided rather than the quality of patients' clinical outcomes. Without a thorough registration of PC, the economic costs involved cannot be determined. An accurate, reliable appraisal would help identify areas for investment in order to reduce the incidence of PC, improve surgical results, and bring down the economic costs. This article describes how to quantify and classify PC using the Clavien-Dindo classification and the comprehensive complication index, discusses the perspectives from which economic evaluations are performed and the minimum postoperative follow-up established, and makes various recommendations. The availability of accurate and impartially audited data on PC will help reduce their incidence and bring down costs. Patients, the health authorities, and society as a whole are sure to benefit.

Patient Engagement Functionalities in U.S. Hospitals: Is Early Adoption Associated With Financial Performance?

EXECUTIVE SUMMARY: U.S. hospitals are in various stages in their adoption of health information technology (HIT) with patient engagement functionalities. The Health Information Technology for Economic and Clinical Health Act of 2009 allocated $30 billion to incentivize the adoption and use of HIT. This study aims to identify hospital characteristics of early patient engagement functionality adoption and compare the financial performance of groups of hospitals that offer these functionalities according to Rogers' adopter categories. The combined data from the American Hospital Association Annual Survey and Information Technology Supplement, Centers for Medicare & Medicaid cost reports, and Health Resources & Services Administration Area Health Resource Files from 2008 to 2013 yielded a sample of 696 unique acute care hospitals. Three adopter categories-early adopters, early majority, and late majority-were created. Generalized estimating equations were used to examine the financial performance (operating margin, return on assets, total margin, operating expenses, revenue per inpatient day) across the adopter types. Compared to early adopter hospitals, operating margins were lower for early majority hospitals (ß = -.407, p < .05) and late majority hospitals (ß = -.608, p < .05). Moreover, compared to early adopter hospitals, late majority hospitals exhibited significantly lower operating revenue (ß = -.087, p < .01) and operating expenses (ß = -.064, p < .01) per inpatient day. No significant relationships were observed when comparing these groups based on total margin and return on assets. Hospital administrators should consider the positive financial outcomes associated with early adoption of patient engagement functionalities in the decision-making process.

The Effect of the Magnet Recognition Signal on Hospital Financial Performance.

EXECUTIVE SUMMARY: The objective of this study was to investigate the effect of the Magnet Recognition (MR) signal on hospital financial performance. MR is a quality designation granted by the American Nurses Credentialing Center (ANCC). Growing evidence shows that MR hospitals are associated with various interrelated positive outcomes that have been theorized to affect hospital financial performance.In this study, which covered the period from 2000 to 2010, we applied a pre-post research design using a longitudinal, unbalanced panel of MR hospitals and hospitals that had never received MR designation located in urban areas in the United States. We obtained data for this analysis from Medicare's Hospital Cost Report Information System, the American Hospital Association Annual Survey Database, the Health Resources & Services Administration's Area Resource File, and the ANCC website. Propensity score matching was used to construct the final study sample. We then applied a difference-in-difference model with hospital fixed effects to the matched hospital sample to test the effect of the MR signal, while controlling for both hospital and market characteristics.According to signaling theory, signals aim to reduce the imbalance of information between two parties, such as patients and providers. The MR signal was found to have a significant positive effect on hospital financial performance. These findings support claims in the literature that the nonfinancial benefits resulting from MR lead to improved financial performance. In the current healthcare environment in which reimbursement is increasingly tied to delivery of quality care, healthcare executives may be encouraged to pursue MR to help hospitals maintain their financial viability while improving quality of care.

Comparisons of hospital output in Canada: national and international perspectives.

Current cost-based approach in measuring health care output does not allow decomposition of health care expenditure into price and output components. In this paper we propose an episode-based direction measurement method which closely resembles the concept of output in the system of national accounts. Using data from the Canadian Institute for Health Information, we calculate a quality unadjusted output index of the Canadian hospital sector for the periods 1996-2005. The result shows that total output increases at an average annual growth rate of 1.49%. We expect that with the quality adjustment the actual rate is higher. This is in contrast with the long-held assumption that health care productivity growth is zero. Our results provide key information on the ongoing health care policy debate.

Waterless Hand Rub Versus Traditional Hand Scrub Methods for Preventing the Surgical Site Infection in Orthopedic Surgery.

MINI: Fourteen hundred consecutive patients were investigated for evaluating the utility of waterless hand rub before orthopaedic surgery. The risk in the surgical site infection incidence was the same, but costs of liquids used for hand hygiene were cheaper and the hand hygiene time was shorter for waterless protocol, compared with traditional hand scrub. STUDY DESIGN: A retrospective cohort study with prospectively collected data. OBJECTIVE: The aim of this study was to compare SSI incidences, the cost of hand hygiene agents, and hand hygiene time between the traditional hand scrub and the waterless hand rub protocols before orthopedic surgery. SUMMARY OF BACKGROUND DATA: Surgical site infections (SSI) prolong hospitalization and are a leading nosocomial cause of morbidity and a source of excess cost. Recently, a waterless hand rub protocol comprising alcohol based chlorhexidine gluconate for use before surgery was developed, but no studies have yet examined its utility in orthopedic surgery. METHODS: Fourteen hundred consecutive patients who underwent orthopedic surgery (spine, joint replacement, hand, and trauma surgeries) in our hospital since April 1, 2012 were included. A total of 712 cases underwent following traditional hand scrub between April 1, 2012 and April 30, 2013 and 688 cases underwent following waterless hand rub between June 1, 2013 and April 30, 2014. We compared SSI incidences within all and each subcategory between two hand hygiene protocols. All patients were screened for SSI within 1 year after surgery. We compared the cost of hand hygiene agents and hand hygiene time between two groups. RESULTS: The SSI incidences were 1.3% (9 of 712) following the traditional protocol (2 deep and 7 superficial infections) and 1.1% (8 of 688) following the waterless protocol (all superficial infections). There were no significant differences between the two groups. The costs of liquids used for one hand hygiene were about $2 for traditional hand scrub and less than $1 for waterless hand rub. The mean hand hygiene time was 264 seconds with the traditional protocol and 160 seconds with the waterless protocol. CONCLUSION: Waterless hand rub with an alcohol based chlorhexidine gluconate solution can be a safe, quick, and cost-effective alternative to traditional hand scrub. LEVEL OF EVIDENCE: 3.

Paying hospitals for quality: can we buy better care?

Economic theory predicts that changing financial rewards will change behaviour. This is valid in terms of service use; higher costs reduce health care use. It should follow that paying more for quality should improve quality; however, the research evidence thus far is equivocal, particularly in terms of better health outcomes. One reason is that "financial incentives" encompass a range of payment types and sizes of reward. The design of financial incentives should take into account the desired change and the context of existing payment structures, as well as other strategies for improving quality; further, financial incentives should be fair in rewarding effort. Financial incentives may have unintended consequences, including rewarding hospitals for selecting patients with lower risks, diverting attention from the overall patient population to specific conditions, gaming, and "crowding out" or displacing intrinsic motivation. Managers and clinicians can only respond to financial incentives if they have the data, tools and skills to effect changes. Australia should not adopt widespread use of financial incentives for improving quality in health care without careful consideration of their design and context, the potential for unintended effects (particularly beyond their immediate targets), and evaluation of outcomes. The relative cost-effectiveness of financial incentives compared with, or in concert with, other strategies should also be considered.

Does electronic health record use improve hospital financial performance? Evidence from panel data.

PURPOSE: The aim of this study was to examine the impact of electronic health record (EHR) adoption on hospital financial performance. METHODOLOGY/APPROACH: We constructed a longitudinal panel using data from the three secondary sources: (a) the 2007-2010 American Hospital Association (AHA) Annual Survey, (b) the 2007-2010 AHA Annual Survey Information Technology Supplement, and (c) the 2007-2011 Medicare Cost Reports from Centers for Medicare and Medicaid Services. Because potential financial benefits attributable to EHR adoption may take some time to accrue, we ran regressions with lags of 1 and 2 years that included hospital and year fixed effects to examine the relationship between the level of EHR adoption and three hospital financial performance measures. FINDINGS: A change in the level of EHR adoption was not associated with changes in operating margin or return on assets within hospitals. However, total margin was significantly improved, after 2 years, in hospitals that moved from no EHR to having a comprehensive EHR in all areas of their hospital (ß = 0.030, p < .034). On the other hand, hospitals that increased their level of EHR adoption but did not achieve hospital-wide comprehensive adoption did not experience changes in any financial performance measures examined. PRACTICE IMPLICATIONS: The improvements in total margin, as opposed to operating margin, are likely due to hospital incentive payments under the Health Information Technology for Economic and Clinical Health Act that are reflected in nonpatient revenues and therefore show up in total margin calculations. Thus, after 2 years of EHR adoption, hospital financial performance is observed to improve based only on meaningful use incentive payments. More research will be needed to determine whether EHR adoption impacts financial performance on a longer time horizon.

Conceptual errors in the CMS refusal to make socioeconomic adjustments in readmission and other quality measures.

The Centers for Medicaid & Medicare Services has made a policy decision that socioeconomic factors should not be adjusted for in its various quality measures and point both to arguments made by the National Quality Forum and to analysis of the distributions of quality results to support this view. We present counterarguments to this viewpoint and use the results reported by the Centers for Medicaid & Medicare Services to support its position to demonstrate that adjustments are necessary. We further argue that the incentives for providers to improve performance would not be weakened by including socioeconomic factor adjustments.