Are cost advantages from a modern Indian hospital transferable to the United States?

BACKGROUND: Multiple modern Indian hospitals operate at very low cost while meeting US-equivalent quality accreditation standards. Though US hospitals face intensifying pressure to lower their cost, including proposals to extend Medicare payment rates to all admissions, the transferability of Indian hospitals' cost advantages to US peers remains unclear. METHODS: Using time-driven activity-based costing methods, we estimate the average cost of personnel and space for an elective coronary artery bypass graft (CABG) surgery at two American hospitals and one Indian hospital (NH). All three hospitals are Joint Commission accredited and have reputations for use of modern performance management methods. Our case study applies several analytic steps to distinguish transferable from non-transferable sources of NH's cost savings. RESULTS: After removing non-transferable sources of efficiency, NH's residual cost advantage primarily rests on shifting tasks to less-credentialed and/or less-experienced personnel who are supervised by highly-skilled personnel when perceived risk of complications is low. NH's high annual CABG volume facilitates such supervised work "downshifting." The study is subject to limitations inherent in case studies, does not account for the younger age of NH's patients, or capture savings attributable to NH's negligible frequency of re-admission or post-acute care facility placement. CONCLUSIONS: Most transferable bases for a modern Indian hospital's cost advantage would require more flexible American states' hospital and health professional licensing regulations, greater family participation in inpatient care, and stronger support by hospital executives and clinicians for substantially lowering the cost of care via regionalization of complex surgeries and weekend use of costly operating rooms.

Time-driven activity-based costing of multivessel coronary artery bypass grafting across national boundaries to identify improvement opportunities: study protocol.

INTRODUCTION: Coronary artery bypass graft (CABG) surgery is a well-established, commonly performed treatment for coronary artery disease--a disease that affects over 10% of US adults and is a major cause of morbidity and mortality. In 2005, the mean cost for a CABG procedure among Medicare beneficiaries in the USA was $32, 201 ± $23,059. The same operation reportedly costs less than $2000 to produce in India. The goals of the proposed study are to (1) identify the difference in the costs incurred to perform CABG surgery by three Joint Commission accredited hospitals with reputations for high quality and efficiency and (2) characterise the opportunity to reduce the cost of performing CABG surgery. METHODS AND ANALYSIS: We use time-driven activity-based costing (TDABC) to quantify the hospitals' costs of producing elective, multivessel CABG. TDABC estimates the costs of a given clinical service by combining information about the process of patient care delivery (specifically, the time and quantity of labour and non-labour resources utilised to perform each activity) with the unit cost of each resource used to provide the care. Resource utilisation was estimated by constructing CABG process maps for each site based on observation of care and staff interviews. Unit costs were calculated as a capacity cost rate, measured as a $/min, for each resource consumed in CABG production. Multiplying together the unit costs and resource quantities and summing across all resources used will produce the average cost of CABG production at each site. We will conclude by conducting a variance analysis of labour costs to reveal opportunities to bend the cost curve for CABG production in the USA. ETHICS AND DISSEMINATION: All our methods were exempted from review by the Stanford Institutional Review Board. Results will be published in peer-reviewed journals and presented at scientific meetings.

The promise--and peril--of integrated cost systems.

Recent advances in managerial accounting have helped executives get the information they need to make good strategic decisions. But today's enterprise resource planning systems promise even greater benefits--the chance to integrate activity-based costing, operational-control, and financial reporting systems. But managers need to approach integration very thoughtfully, or they could end up with a system that drives decision making in the wrong direction. Operational-control and ABC systems have fundamentally different purposes. Their requirements for accuracy, timeliness, and aggregation are so different that no single, fully integrated approach can be adequate for both purposes. If an integrated system used real-time cost data instead of standard rates in its ABC subsystem, for example, the result would be dangerously distorted messages about individual product profitability--and that's precisely the problem ABC systems were originally designed to address. Proper linkage and feedback between the two systems is possible, however. Through activity-based budgeting, the ABC system is linked directly to operations control: managers can determine the supply and practical capacity of resources in forthcoming periods. Linking operational control to ABC is also possible. The activity-based portion of an operational control system collects information that, while it mustn't be fed directly into the activity-based strategic cost system, can be extremely useful once it's been properly analyzed. Finally, ABC and operational control can be linked to financial reporting to generate cost of goods sold and inventory valuations--but again, with precautions.

The National Cancer Institute audit of the National Surgical Adjuvant Breast and Bowel Project Protocol B-06.

BACKGROUND: The National Surgical Adjuvant Breast and Bowel Project (NSABP) Protocol B-06, a clinical trial sponsored by the National Cancer Institute (NCI), has provided evidence of the value of lumpectomy and breast irradiation for treating women with breast cancer in an early stage. Publicity generated by the discovery that the study included fraudulent data on patients enrolled by St. Luc Hospital in Montreal aroused concern about the overall accuracy of the data and conclusions. To address this concern, the NCI conducted an audit of other participating institutions. METHODS: In 1994, data on 1554 of the 1809 randomized patients (85.9 percent) enrolled by centers other than St. Luc Hospital were audited at 37 clinical sites in North America. The audit included data on eligibility, survival, disease-free survival, the length of time to a recurrence of cancer in the ipsilateral breast, and documentation of signed informed consent. RESULTS: End points were assessed for all 1554 patients, and eligibility was assessed for 1507 patients; 47 patients were excluded because their forms were not complete or not returned. A total of 1429 patients had their eligibility status verified. Of a total of 7770 data points examined with respect to the number of positive nodes at base line, treatment characteristics, first events (excluding death), recurrence of cancer in the ipsilateral breast, and survival, 7577 (97.5 percent) were verified, 123 (1.6 percent) could not be verified, and 70 (0.9 percent) were discrepant with the NSABP file. Of the 1554 patients, 1340 (86.2 percent) had all audited items (including eligibility) verified, 69 (4.4 percent) had at least one discrepant item, and 113 (7.3 percent) had at least one unverified item (as a result of missing or incomplete data); 32 (2.1 percent) were not assessed for eligibility but had no other discrepant or unverifiable items. Written informed consent was documented for 1098 patients before surgery and 210 after surgery; no date appeared on the signed form for 137. The informed-consent status was not verified for 71 patients and could not be determined for 38. The rates of verification of end-point data and documentation of written informed consent were similar among the total-mastectomy group, the lumpectomy group, and the group treated by lumpectomy and breast irradiation. CONCLUSIONS: The audit confirms the adequacy of the data on which the reanalysis of Protocol B-06 and the results after 12 years of follow-up are based.

Is it safe to go to work anymore?

Violence occurs with increasing frequency in all types of workplaces, and employers may end up paying the price for it. Employers do have some responsibility to protect both workers and clients but employers can reduce risks by preparing preventive strategies.

The balanced scorecard--measures that drive performance.

Frustrated by the inadequacies of traditional performance measurement systems, some managers have abandoned financial measures like return on equity and earnings per share. "Make operational improvements and the numbers will follow," the argument goes. But managers do not want to choose between financial and operational measures. Executives want a balanced presentation of measures that allow them to view the company from several perspectives simultaneously. During a year-long research project with 12 companies at the leading edge of performance measurement, the authors developed a "balanced scorecard," a new performance measurement system that gives top managers a fast but comprehensive view of the business. The balanced scorecard includes financial measures that tell the results of actions already taken. And it complements those financial measures with three sets of operational measures having to do with customer satisfaction, internal processes, and the organization's ability to learn and improve--the activities that drive future financial performance. Managers can create a balanced scorecard by translating their company's strategy and mission statements into specific goals and measures. To create the part of the scorecard that focuses on the customer perspective, for example, executives at Electronic Circuits Inc. established general goals for customer performance: get standard products to market sooner, improve customers' time-to-market, become customers' supplier of choice through partnerships, and develop innovative products tailored to customer needs. Managers translated these elements of strategy into four specific goals and identified a measure for each.

The spatial distribution of urban pharmacies.

Pharmacists are thought to play a central role in providing information and advice on health to lower income and other socially disadvantaged groups. However, recent evidence suggests that social biases exist in the spatial distribution of urban pharmacies. Such biases would severely limit the accessibility of the poor and the nonwhite to pharmacy services. To test the general nature of this evidence, we used multiple regression techniques to assess the simultaneous influence of several ecological and socioeconomic variables on the location of pharmacies in Pittsburgh and Omaha. After controlling for the influence of physicians, hospitals, commercial activity, population, and other variables thought to affect pharmacy location, we were unable to detect any evidence of a direct association between pharmacy location and the socioeconomic or demographic (other than total population) characteristics of areas in either city.