Hospital Taxes, Medicaid Supplemental Payments, and State Budgets.

The federal Medicaid statute provides states an incentive to tax hospitals (even otherwise tax-exempt ones) as a means of raising revenue and then leverage federal matching funds by returning at least some of the tax back to the hospitals in the form of Medicaid supplemental payments. The potential for supplemental payments is attractive to hospitals, especially those struggling to recoup the costs of treating Medicaid and uninsured patients, and has resulted in political support from hospitals for states to create hospital "taxes" in name only-hospitals and states both end up with more money than they did when they started because of the federal match. When state officials begin to perceive, however, that nonprofit hospitals may be serving private rather than public interests, they are able to use these hospital taxes as a way to incrementally chip away at the historic governmental support provided through tax exemption by redirecting the revenue raised from the hospital tax to general fund purposes rather than Medicaid supplemental payments. This article looks at how states have been using hospital taxes and supplemental payments to balance state budgets and whether this practice is consistent with the Medicaid program objectives that make the taxes politically feasible.

The medical arms race and its impact in Chinese hospitals: implications for health regulation and planning.

The rapid diffusion of medical technologies is widely recognized as a key driver of healthcare cost escalation. The excessive duplication of technologies gives rise to the so-called medical arms race. Conventional wisdom tends to explain this phenomenon by external reimbursement mechanisms and hospitals' competitive strategies, but has largely neglected the role played by health regulations that may also affect hospitals' technology adoption decisions. This study sheds new light on the medical arms race with evidence from China, which has witnessed an unprecedented expansion of big tertiary hospitals and a keen pursuit of expensive medical technologies. Chinese hospitals aggressively pursue high-tech medical equipment as an opportunistic reaction to the peculiar health regulatory environment. By analysing a panel dataset collected from Shenzhen City, this study reveals a series of important impacts of the medical arms race in Chinese public hospitals. High-tech medical equipment is found to lead to an increase in hospital revenues and patient volumes, but no significant impact is noted on unit costs. While high-tech medical equipment is associated with a discernible improvement in clinical outcomes, no contribution to hospitals' operational efficiency is noted. These findings are interpreted in the context of the broader health regulatory framework and China's public hospital reforms.

Healthiness of Food and Beverages for Sale at Two Public Hospitals in New South Wales, Australia.

(1) Background: Our aim was to conduct objective, baseline food environment audits of two major western Sydney public hospitals and compare them to recently revised state nutritional guidelines. (2) Methods: A cross-sectional assessment was conducted (June-July2017) across 14 fixed food outlets and 70 vending machines in two hospitals using an audit tool designed to assess the guideline's key food environment parameters of availability, placement, and promotion of 'Everyday' (healthy) and 'Occasional' (less healthy) products. (3) Results: Availability: Overall, Everyday products made up 51% and 44% of all products available at the two hospitals. Only 1/14(7%) fixed outlets and 16/70(23%) vending machines met the guideline's availability benchmarks of ≥75% Everyday food and beverages. Proportion of Everyday products differed among different types of food outlets (café, cafeteria, convenience stores). Placement: On average, food outlets did not meet recommendations of limiting Occasional products in prominent positions, with checkout areas and countertops displaying over 60% Occasional items. Promotion: Over two-thirds of meal deals at both hospitals included Occasional products. (4) Conclusion: Baseline audit results show that substantial improvements in availability, placement, and promotion can be made at these public hospitals to meet the nutrition guidelines. Audits of other NSW hospitals using the developed tool are needed to investigate similarities and differences in food environment between sites. These findings highlight the need for ongoing tracking to inform whether the revised guidelines are leading to improved food environments in health facilities.

Preparing for the introduction of hospital autonomy in Laos: an assessment of current situation and suggestions for policy-making.

The National Assembly of Lao People's Democratic Republic (Laos) approved the Health Sector Reform Strategy in 2012, which called for an assessment as to whether Laos should introduce hospital autonomy, and if so, in which ways. The purpose of this study is to assess the status quo of hospital governance in Laos and propose policy suggestions for hospital autonomy in the country. We formulated an analytic framework for hospital autonomy based on previous work by other researchers, collected qualitative data through key informant interviews and focus group discussions, and also performed secondary data analysis. Public hospitals in Laos enjoyed some informal autonomy with little accountability and Laos is facing key challenges of hospital governance. As a result, introducing hospital autonomy in Laos could bring risks, benefits and debates. Before Laos decides on granting autonomy to its public hospitals, we strongly suggest that the government do pilot in selected public hospitals with well-regulated governance framework first and conduct rigorous evaluations to examine whether the granted autonomy leads to the intended social goals of equity, quality, efficiency and sustainability. We recommend residual claimants should be monitored by the government and by the society with open and transparent approach, and active measures should be taken to improve performance and ensure social functions. The study findings may also provide some suggestions for low- and middle-income countries, which are contemplating the introduction of hospital autonomy in the public sector. Copyright © 2015 John Wiley & Sons, Ltd.

Corporate governance in Czech hospitals after the transformation.

BACKGROUND: This contribution is a response to the current issue of corporate governance in hospitals in the Czech Republic, which draw a significant portion of funds from public health insurance. This not only has a significant impact on the economic efficiency of hospitals, but ultimately affects the whole system of healthcare provision in the Czech Republic. Therefore, the effectiveness of the corporate governance of hospitals might affect the fiscal stability of the health system and, indirectly, health policy for the whole country. OBJECTIVES: The main objective of this paper is to evaluate the success of the transformation in connection with the performance of corporate governance in hospitals in the Czech Republic. Specifically, there was an examination of the management differences in various types of hospitals, which differed in their ownership structure and legal form. METHODOLOGY/APPROACH: A sample of 100 hospitals was investigated in 2009, i.e., immediately after the transformation had been completed, and then three years later in 2012. With regard to the different public support of individual hospitals, the operating subsidies were removed from the economic results of the corporations in the sample. The adjusted economic results were first of all examined in relationship to the type of hospital (according to owner and legal form), and then in relation to its size, the size of the supervisory board and the education level of the senior hospital manager. A multiple median regression was used for the evaluation. FINDINGS: One of the basic findings was the fact that the hospital's legal form had no influence on economic results. Successful management in the form of adjusted economic results is only associated with the private type of facility ownership. From the perspective of our concept of corporate governance other factors were under observation: the size of the hospital, the size of the supervisory board and the medical qualifications of the senior manager had no statistically verifiable influence on the efficiency of the hospital management, though we did record certain developments as a result of the transformation process. The economic results that were reported were significantly distorted by the operating subsidies from the founder. PRACTICAL IMPLICATIONS: The results can be used immediately on several practical levels: on the macro level as part of the state's formulation of health policy, particularly in the optimization of the structure of healthcare providers, as well as for the completion of reforms in legal forms and hospital founders, and on the micro level as part of the effective administration and governance of hospitals through corporate governance regardless of the form of ownership.

[Technical efficiency of traditional hospitals and public enterprises in Andalusia (Spain)]. / Eficiencia técnica de los hospitales públicos y de las empresas públicas hospitalarias de Andalucía.

OBJECTIVE: To assess the technical efficiency of traditional public hospitals without their own legal identity and subject to administrative law, and that of public enterprise hospitals, with their own legal identities and partly governed by private law, all of them belonging to the taxypayer-funded health system of Andalusia during the period 2005 -2008. METHODS: The study included the 32 publicly-owned hospitals in Andalusia during the period 2005-2008. The method consisted of two stages. In the first stage, the indices of technical efficiency of the hospitals were calculated using Data Envelopment Analysis, and the change in total factor productivity was estimated using the Malmquist index. The results were compared according to perceived quality, and a sensitivity analysis was conducted through an auxiliary model and bootstrapping. In the second stage, a bivariate analysis was performed between hospital efficiency and organization type. RESULTS: Public enterprises were more efficient than traditional hospitals (on average by over 10%) in each of the study years. Nevertheless, a process of convergence was observed between the two types of organizations because, while the efficiency of traditional hospitals increased slightly (by 0.50%) over the study period, the performance of public enterprises declined by over 2%. DISCUSSION: The possible reasons for the greater efficiency of public enterprises include their greater budgetary and employment flexibility. However, the convergence process observed points to a process of mutual learning that is not necessarily efficient.

Marketing to Develop the Premier Medical Brand in the Huaihai Economic Zone.

Based on the practices at Xuzhou Central Hospital, the authors analyzed the improvements in the healthcare quality and economic efficiency after implementing a brand marketing strategy. Using methods including questionnaires and business controlling means, we summarized that the improvements to the healthcare quality and economic efficiency after strategies were implemented in the areas of network, reputation, academic research, and public welfare. After the implementation of a brand marketing campaign, the medical service quality and brand reputation have been greatly improved. Meanwhile, a central hospital group was formed and gradually became the central healthcare provider in the Huaihai Economic Zone. The new marketing facilitated the drastic increase of medical service and brand reputation.

Control costs, enhance quality, and increase revenue in three top general public hospitals in Beijing, China.

BACKGROUND: With market-oriented economic and health-care reform, public hospitals in China have received unprecedented pressures from governmental regulations, public opinions, and financial demands. To adapt the changing environment and keep pace of modernizing healthcare delivery system, public hospitals in China are expanding clinical services and improving delivery efficiency, while controlling costs. Recent experiences are valuable lessons for guiding future healthcare reform. Here we carefully study three teaching hospitals, to exemplify their experiences during this period. METHODS: We performed a systematic analysis on hospitalization costs, health-care quality and delivery efficiencies from 2006 to 2010 in three teaching hospitals in Beijing, China. The analysis measured temporal changes of inpatient cost per stay (CPS), cost per day (CPD), inpatient mortality rate (IMR), and length of stay (LOS), using a generalized additive model. FINDINGS: There were 651,559 hospitalizations during the period analyzed. Averaged CPS was stable over time, while averaged CPD steadily increased by 41.7% (P<0.001), from CNY 1,531 in 2006 to CNY 2,169 in 2010. The increasing CPD seemed synchronous with the steady rising of the national annual income per capita. Surgical cost was the main contributor to the temporal change of CPD, while medicine and examination costs tended to be stable over time. From 2006 and 2010, IMR decreased by 36%, while LOS reduced by 25%. Increasing hospitalizations with higher costs, along with an overall stable CPS, reduced IMR, and shorter LOS, appear to be the major characteristics of these three hospitals at present. INTERPRETATIONS: These three teaching hospitals have gained some success in controlling costs, improving cares, adopting modern medical technologies, and increasing hospital revenues. Effective hospital governance and physicians' professional capacity plus government regulations and supervisions may have played a role. However, purely market-oriented health-care reform could also misguide future healthcare reform.

Reforming reimbursement of public hospitals in Greece during the economic crisis: Implementation of a DRG system.

OBJECTIVES: Until recently, in-patient NHS hospital care in Greece was reimbursed via an anachronistic and under-priced retrospective per diem system, which has been held primarily responsible for continuous budget deficits. The purpose of this paper is to present the efforts of the Ministry of Health (MoH) to implement a new DRG-based payment system. METHODS: As in many countries, the decision was to adopt a patient classification from abroad and to refine it for use in Greece with national data. Pricing was achieved with a combination of activity-based costing with data from selected Greek hospitals, and "imported" cost weights. Data collection, IT support and monitoring are provided via ESY.net, a web-based facility developed and implemented by the MoH. RESULTS: After an initial pilot testing of the classification in 20 hospitals, complete DRG reimbursement data was reported by 113 hospitals (85% of total) for the fourth quarter of 2011. The recorded monthly increase in patient discharges billed with the new system and in revenue implies increasing adaptability by the hospitals. However, the unfavorable inlier vs. outlier distribution of discharges and revenue observed in some health regions signifies the need for corrective actions. CONCLUSIONS: The importance of this reimbursement reform is discussed in light of the current crisis faced by the Greek economy. There is yet much to be done and many projects are currently in progress to support this effort; however the first cost containment results are encouraging.

The hidden cost of private health insurance in Australia.

The provision of health services in Australia currently is primarily financed by a unique interaction of public and private insurers. This commentary looks at a loophole in this framework, namely that private insurers have to date been able to avoid funding healthcare for some of their policy holders, as it is not a requirement to use private insurance when treatment occurs in Australian public hospitals.