Hospital Supply Expenses: An Important Ingredient in Health Services Research.

The purpose of this article is to shed light on hospital supply expenses, which form the second largest expense category after payroll and hold more promise for improving cost-efficiency compared to payroll. However, limited research has rigorously scrutinized this cost category, and it is rarely given specific consideration across cost-focused studies in health services publications. After reviewing previously cited estimates, we examine and independently validate supply expense data (collected by the American Hospital Association) for over 3,500 U.S. hospitals. We find supply expenses to make up 15% of total hospital expenses, on average, but as high as 30% or 40% in hospitals with a high case-mix index, such as surgery-intensive hospitals. Future research can use supply expense data to better understand hospital strategies that aim to manage costs, such as systemization, physician-hospital arrangements, and value-based purchasing.

Association Between Medicare's Mandatory Hospital Value-Based Purchasing Program and Cost Inefficiency.

BACKGROUND: The Patient Protection and Affordable Care Act instituted pay-for-performance programs, including Hospital Value-Based Purchasing (HVBP), designed to encourage hospital quality and efficiency. OBJECTIVE AND METHOD: While these programs have been evaluated with respect to their implications for care quality and financial viability, this is the first study to assess the relationship between hospitals' cost inefficiency and their participation in the programs. We estimate a translog specification of a stochastic cost frontier with controls for participation in the HVBP program and clinical and outcome quality for California hospitals for 2012-2015. RESULTS: The program-participation indicators' parameters imply that participants were more cost inefficient than their peers. Further, the estimated coefficients for summary process of care quality indexes for three health conditions (acute myocardial infarction, pneumonia, and heart failure) suggest that higher quality scores are associated with increased operating costs. CONCLUSION: The estimated coefficients for the outcome quality variables suggest that future determination of HVBP payment adjustments, which will depend solely on mortality rates as measures of clinical care quality, may not only be aligned with increasing healthcare quality but also reducing healthcare costs.

Fail to prepare and you can prepare to fail: the experience of financing path changes in teaching hospitals in Iran.

BACKGROUND: In 1995, teaching and public hospitals that are affiliated with the ministry of health and medical education (MOHME) in Iran were granted financial self-sufficiency to practice contract-based relations with insurance organizations. The so-called "hospital autonomy" policy involved giving authority to the insurance organizations to purchase health services. The policy aimed at improving hospitals' performance, hoping to reduce government's costs. However, the policy was never implemented as intended. This was because most participating hospitals gave up to implement autonomous financing and took other financing pathways. This paper analyses the reasons for the gap between the intended policy and its execution. The lessons learned from this analysis can inform, we envisage, the implementation of similar initiatives in other settings. METHODS: We conducted semi-structured interviews with 28 national and 13 regional health policy experts. We also gathered a comprehensive and purposeful set of related documents and analyzed their content. The qualitative data were analyzed by thematic inductive-deductive approach. RESULTS: We found a number of prerequisites and requirements that were not prepared prior to the implementing hospital autonomy policy and categorized them into policy content (sources of funds for the policy), implementation context (organization of insurance organizations, medical tariffs, hospitals' organization, feasibility of policy implementation, actors and stakeholders' support), and implementation approach (implementation method, blanket approach to the implementation and timing of implementation). These characteristics resulted in unsuitable platform for policy implementation and eventually led to policy failure. CONCLUSIONS: Autonomy of teaching hospitals and their exclusive financing through insurance organizations did not achieve the desired goals of purchaser-provider split in Iran. Unless contextual preparations are in place, hospital autonomy will not succeed and problematic financial relations between service providers and patients in autonomous hospitals may not be ceased as a result.

Smarter procurement could save NHS millions each year.

A campaign that could save the NHS millions through procuring medical supplies more efficiently has been launched.

Orthopedic Implant Value Drivers: A Qualitative Survey Study of Hospital Purchasing Administrators.

Osteoarthritis (OA) is a chronic, degenerative disease that is highly prevalent in the population, yet the factors that affect purchasing decisions related to this condition are poorly understood. A questionnaire was developed and administered to hospital executives across North America to determine the factors that affect purchasing decisions related to OA. Thirty-four individuals participated in the survey. Clinical evidence and cost effectiveness were deemed to be the most important factors in the process of making purchasing decisions. The most important considerations for adopting new technology were whether there was sufficient evidence in the literature, followed by thoughts of key opinion leaders, and cost of intervention/device. Ongoing research is still needed, but the current study allowed us to identify some trends in the data, providing new insight on how hospital purchasing decisions are made, which could have an immediate impact on those currently involved with making these decisions.