Options to Extend Medicare's Trust Fund: Lessons From Japan's Statutory Health Insurance.

Medicare's Hospital Trust Fund is projected to become insolvent sometime during 2028 and there will be insufficient funds to cover the costs of beneficiaries' care if reforms are not made before then. Many options have been proposed on ways to extend the trust fund's solvency. Some proposals focus on controlling costs and other proposals include options for raising revenues. A fresh perspective on this policy dilemma may arise by considering Japan's statutory health insurance (SHI) and its financing mechanisms. Japan could be a useful model because it has an older population and it is facing similar fiscal challenges before Medicare. Japan could offer some useful perspectives from its cost containment efforts to extend Medicare's solvency.

Vertical integration in healthcare: What does literature say about improvements on quality, access, efficiency, and costs containment?

INTRODUCTION: Vertical integration models involve integrating services from different levels of care (e.g., primary care, acute care, post-acute care). Therefore, one of their main objectives is to increase continuity of care, potentially improving outcomes like efficiency, quality, and access or even enabling cost containment. OBJECTIVES: This study conducts a literature review and aims at contributing to the contentious discussion regarding the effects of vertical integration reforms in terms of efficiency, costs containment, quality, and access. METHODS: We performed a systematic search of the literature published until February 2020. The articles respecting the conceptual framework were included in an exhaustive analysis to study the impact of vertical integration on costs, prices of care, efficiency, quality, and access. RESULTS: A sample of 64 papers resulted from the screening process. The impact of vertical integration on costs and prices of care appears to be negative. Decreases in technical efficiency upon vertical integration are practically out of the question. Nevertheless, there is no substantial inclination to visualise a positive influence. The same happens with the quality of care. Regarding access, the lack of available articles on this outcome limits conjectures. CONCLUSIONS: In summary, it is not clear yet whether vertically integrated healthcare providers positively impact the overall delivery care system. Nevertheless, the recent growing trend in the number of studies suggests a promising future on the analysis of this topic.

Cost analysis of laparoscopic appendectomy in a large integrated healthcare system.

INTRODUCTION: Healthcare expenditure is on the rise placing greater emphasis on operational excellence, cost containment, and high quality of care. Significant variation is seen in operating room (OR) costs with common surgical procedures such as laparoscopic appendectomy. Surgeons can influence cost through the selection of instrumentation for common surgical procedures such as laparoscopic appendectomy. We aimed to quantify the cost of laparoscopic appendectomy in our healthcare system and compare cost variations to operative times and outcomes. METHODS AND PROCEDURES: We performed a retrospective review of laparoscopic appendectomies in a large regional healthcare system during one-year period (2018). Operating room supply costs and procedure durations were obtained for each hospital. The American College of Surgeons National Surgical Quality Improvement Program (NSQIP) outcomes and demographics were compared to the costs for each hospital. RESULTS: A total of 4757 laparoscopic appendectomies were performed at 20 hospitals (27 to 522 per hospital) by 233 surgeons. The average supply cost per case ranged from $650 to $1067. Individual surgeon cost ranged from $197 to $1181. The average operative time was 41 min (range 33 to 60 min). There was no association between lower cost and longer operative time. The patient demographics and comorbidities were similar between sites. There were no significant differences in postoperative complications between high- and low-cost centers. The items with the greatest increase in cost were single-use energy devices (SUD) and endoscopic stapler. We estimate that a saving of over $417 per case is possible by avoiding the use of energy devices and may be as high as $ 984 by adding selective use of staplers. These modifications would result in an annual savings of $1 million for our health system and more than $ 125 million nationwide. CONCLUSION: Performing laparoscopic appendectomy with reusable instruments and finding alternatives to expensive energy devices and staplers can significantly decrease costs and does not increase operative time or postoperative complications.

Analysis of the Household and Health Care System Expenditures in Bulgaria.

Health care systems worldwide are experiencing tremendous financial pressure because of the introduction of new targeted health technologies and medicines. This study aims to analyze and compare public and household healthcare expenditures in Bulgaria during the period 2015-2019, as well as present the major cost-containment measures implied by the government and their probable influence on the overall health care cost. Regulatory analysis of the endorsed cost-containment measures, budget analysis of public and household health care expenditures, and their extrapolations were performed. The regulatory analysis reveals that a large number of measures are introduced and valid until January 2021, considering pharmaceuticals, medical devices, and negotiations between the National Health Insurance Fund (NHIF) and Marketing authorization holders (MAHs). NHIF costs due to pharmaceuticals, food supplements, and medical devices are rising from 2015 to 2019. The overall health expenditures average per household and the average per person also grow in this period. The cost extrapolation reveals that an increase in 3-year periods is expected. Despite the implementation of variety of cost-containment measures in Bulgaria, such as HTA, ERP, discounts, and annual negotiations, The National Health Insurance Fund's (NHIF) spending on pharmaceuticals continues to rise in recent years, and further increases are expected in the next 3 years. The average expenditure per household and per person also increased, which confirms the global trend of rising medicine and outpatient services value.

The Growth of Integrated Care Models in Urology.

With heightened awareness of health care outcomes and efficiencies and reimbursement-based metrics, it is ever more important that urologists consider the effects of integrated care models on physicians/staff/clinics fulfillment and patient outcomes, and whether and how to optimally implement these models within their unique practice settings. Despite growing evidence that integrating care improves outcomes, uncertainty persists regarding which approach is most efficient and achievable in terms of specialty considerations and financial resources. In this article, we discuss strategies for integrating urologic care and its impact on current and future health care delivery.

Different impacts of the zero-markup drug policy on county general and traditional Chinese medicine hospitals: evidence from Shandong province, China.

BACKGROUND: As a key part of the new round of health reform, the zero-markup drug policy (ZMDP) removed the profit margins of drug sales at public health care facilities, and had some effects to the operation of these institutions. This study aims to assess whether the ZMDP has different impacts between county general and traditional Chinese medicine (TCM) hospitals. METHODS: We obtained longitudinal data from all county general and TCM hospitals of Shandong province in 2007-2017. We used difference-in-difference (DID) method to identify the overall and dynamic effects of the ZMDP. RESULTS: On average, after the implementation of the ZMDP, the share of revenue from medicine sales reduced by 16.47 and 10.42%, the revenue from medicine sales reduced by 24.04 and 11.58%, in county general and TCM hospitals, respectively. The gross revenue reduced by 5.07% in county general hospitals. The number of annual outpatient visits reduced by 11.22% in county TCM hospitals. Government subsidies increased by 199.22 and 89.3% in county general and TCM hospitals, respectively. The ZMDP reform was not significantly associated with the revenue and expenditure surplus, the number of annual outpatient visits and the number of annual inpatient visits in county general hospitals, the gross revenue, the revenue and expenditure surplus and the number of annual inpatient visits in county TCM hospitals. In terms of dynamic effects, the share of revenue from medicine sales, revenue from medicine sales, and gross revenue decreased by 20.20, 32.58 and 6.08% respectively, and up to 28.53, 63.89 and 17.94% after adoption, while government subsidies increased by around 170 to 200% in county general hospitals. The number of annual outpatient visits decreased by 9.70% and up to 18.84% in county TCM hospitals. CONCLUSION: The ZMDP achieved its some initial goals of removing the profits from western medicines in county hospitals' revenue without disrupting the normal operation, and had different impacts between county general and TCM hospitals. Meanwhile, some unintended consequences were also recognized through the analysis, such as the decline of the utilization of the TCM.

Breast cancer treatment pathway improvement using time-driven activity-based costing.

Time-driven activity-based costing (TDABC) is increasingly used to establish more accurate and time-dependent costs for complex health care pathways. We propose to extend this approach to detect the specific improvements (eg, lean methods) that can be introduced into a care process. We analyzed a care trajectory in radiation oncology for breast cancer patients at major Canadian urban hospital. This approach allowed us to identify the activities and resource groups related to the execution of each activity, and to estimate the execution time for each. Based on the model, we were able to extract financial data with which we could evaluate process costs. The total cost of the care trajectory was $2383.82 for 2015 to 2016. Out of a total of 1389 trajectories, only 268 were completed. The implementation of TDABC gives users a clearer idea of costs and encourages managers to understand how they break down over the course of a care trajectory. Once these costs are understood, decisions can be made regarding resource allocation and waste elimination, enabling lean methods to be implemented. The result is better reorganization of work by allocating resources differently, optimizing the care trajectory, and thereby reducing its costs.

The status of health economic evaluation within decision making in Austria.

BACKGROUND: Given limited resources compared to the demand for them, spending resources efficiently is important. Key methods applied for supporting efficient resource allocation are health economic evaluations. METHODS: Based on secondary literature, we analyze international challenges for using two types of economic evaluations-cost-effectiveness analysis and cost-utility analysis-in reimbursement decisions and reflect on them for the Austrian case. RESULTS: The main challenges with the application of economic evaluations are related to the methods, the decision-making culture, and the respective system. The challenges also apply to the Austrian Bismarck system, where almost no formal requirements for using economic evaluations exist, except on a case-by-case basis. Resource allocation in Austria hence occurs, for the most part, implicitly. CONCLUSION: One way forward towards more explicit efficiency considerations may be to consider more descriptive study types and foster capacity building, standardization of methods and presentation of results, and a mandatory detailed guideline.

Cost minimization comparison of oral UFT/leucovorin versus 5-fluorouracil/leucovorin as adjuvant therapy for colorectal cancer in Taiwan.

AIM: Oral uracil-tegafur/leucovorin (UFT/LV) and intravenous 5-fluorouracil (FU)/LV are common adjuvant therapies for Stages II and III colorectal cancer. This study aims to determine the most cost-effective treatment alternative between UFT/LV and 5-FU/LV in Stages II and III colorectal cancer from Taiwan's National Health Insurance perspective. PATIENTS & METHODS: The costs were referenced directly from the National Health Insurance reimbursement price. Chemotherapy regimen considered for the cost analysis calculation was adapted from NSABP-C-06 study, and, a time saving calculation was also included. In addition, we compare the treatment outcome. RESULT: A total cost saving of US$3620.80-$3709.16 per patient per treatment was achieved with the UFT/LV treatment. UFT/LV provides the comparable outcome to 5-FU/LV. CONCLUSION: UFT/LV was the more cost-effective treatment as adjuvant chemotherapy.

Easy cuts, easy rebound: Drug expenditures with massive price cuts in Korea.

BACKGROUNDS: Since 2012, the Korean government has introduced 46.5% price cut for off-patent medicines in order to reign everescalating drug expenditure. This study sought to appraise the impact of the price cut measure (in the context of Korean National Health Insurance system). METHODS: We employed Korean National Health Insurance database from January 2007 until December 2016 for 120 month period. An interrupted time series analysis with segmented regression analysis was conducted to estimate the impact of price cut on overall drug spending. RESULTS: Drug spending significantly dropped with the price cut by 186.22 billlion Korean Won (KRW) (p < 0.0001) and the trend after the price cut has also significantly decreased by 1.33 billion KRW (p = 0.002). However, it was predicted that total expenditures showed an increasing trend and bounced back to the original level. Quantity prescribed had no significance with the price cut. Unit price had a substantial drop (ß = -41.68, p < 0.0001) with the price-cut, but the trend after the intervention has increased (ß = 0.16, p = 0.656) with no significance. CONCLUSIONS: Although the price cut has successfully countered the everescalating pharmaceutical expenditures in Korea, the impact was temporary. A lack of demand-side measures resulted in an ineffectiveness and unsustainability of policy effect. Thus, more aggressive demand-side measures should be introduced in the Korean context,and both the demand and supply-sides should be balanced.

Do cost containment policies save money and influence physicians' prescribing behavior? Lessons from South Korea's drug policy for diabetes medication.

OBJECTIVE: We evaluate the effects of drug price reduction policy on pharmaceutical expenditure and prescription patterns in diabetes medication. DESIGN: An interrupted time series study design using generalized estimating equations. SETTING: This study used National Health Insurance claim data from 2010 to 2013. PARTICIPANTS: A total of 68 127 diabetes patients and 12 465 hospitals. INTERVENTION(S): The drug price reduction policy. MAIN OUTCOME MEASURES: The primary outcome is pharmaceutical expenditure and prescription rate. To evaluate changes in prescription rate, we measured prescription rates such a brand-name drug and drug price reduction rate. RESULTS: Although the drug price reduction policy associated with decreased pharmaceutical expenditure (-13.22%, P < 0.0001), the trend (-0.01%, P = 0.9201) did not change significantly compared with the pre-intervention period. In addition, the trends in the monthly prescription rate of brand-name drugs decreased (-0.14%, P = 0.0091), while the immediate change was an increase (5.72%, P < 0.0001). Regardless of the drug reduction rate, the prescription rate after the introduction of the drug price reduction policy decreased compared with the pre-intervention period, and this decline was significant for reduction rates of 0% (-2.74%, P < 0.0001) and 10% (-0.13%, P = 0.0018). CONCLUSIONS: Our results provide evidence of the effects of the drug price reduction policy on pharmaceutical expenditure and prescription patterns. This policy did not affect the prescribing behavior of healthcare providers and did not increase the use of drugs not subject to this policy. Although this study did not observe changes in the cost of pharmaceuticals after the introduction of the drug price reduction policy, further research is needed on the long-term changes in such costs.

The impact of global budget on the diffusion of innovations: the example of positron emission tomography in Taiwan.

BACKGROUND: The essence of global budget is to set a cap on the total national health insurance expenditure for a year, which is one form of prospective payment systems. It has always been argued that prospective payment, such as global budgeting, will deter the development of high-tech services in the healthcare industry. The objectives of this study are to explore the impact of global budgeting on the diffusion of high tech equipment in terms of utilization by using Positron Emission Tomography (PET) as an example. METHODS: The study population is the hospitals in Taiwan. We tried to compare the diffusion patterns of Computed Tomography (CT), Magnetic Resonance Imaging (MRI) and PET scanners among these hospitals by analyzing the National Health Insurance (NHI) Database from 1997 to 2010. RESULTS: From 2004 to 2010, 79,380 PET scans in total were performed under the NHI scheme. By the year 2010, the annual reimbursed scans have reached 19,700. The volume curve of cumulative PET services resembles an S diffusion curve with the R2 at 0.95. The results indicated the growth of cumulative PET service volume does correspond with the innovation diffusion model. The cumulative utilizations of CT, MRI and PET demonstrate good correlation with no significant difference in their growth rates. CONCLUSIONS: Therefore, we can infer that even though PET was reimbursed after the implementation of global budgeting, its diffusion was not deterred by this cost containment measure when compared with CT and MRI in the same time span after the inauguration of the NHI.

Value and Payment in Sleep Medicine.

ABSTRACT: Value, like beauty, exists in the eye of the beholder. This article places the value of clinical sleep medicine services in historical context and presents a vision for the value-based sleep of the future. First, the history of value and payment in sleep medicine is reviewed from the early days of the field, to innovative disruption, to the widespread adoption of home sleep apnea testing. Next, the importance of economic perspective is discussed, with emphasis on cost containment and cost-shifting between payers, employers, providers, and patients. Specific recommendations are made for sleep medicine providers and the field at large to maximize the perceived value of sleep. Finally, alternate payment models and value-based care are presented, with an eye toward the future for clinical service providers as well as integrated health delivery networks.

Drug Policy in Estonia.

The aim of this article was to present a general overview of the health care system as well as pricing and reimbursement environment in Estonia. In Estonia the main stakeholders in the pharmaceutical sector are the Ministry of Social Affairs, the State Agency of Medicine, and the Estonian Health Insurance Fund. The national health insurance scheme is public, and approximately 95% of the population is covered by it. It is a social insurance, and universal and equal access to health care based on national health insurance is granted. The Estonian Health Insurance Fund is financed from social taxes and state budget and is responsible for the reimbursement of pharmaceuticals in the hospital setting. It acts as an advisory body to the Ministry of Social Affairs on the process of reimbursement regarding cost effectiveness. Pharmaceutical products' reimbursement dossiers submission and decisions are dealt with on the state level. Health technology assessment analyses are required by the authorities and the Baltic Guidelines for Economic Evaluations of Pharmaceuticals have to be followed. The reimbursement lists are positive lists only, and the criteria upon which reimbursement decisions are based are officially defined. Revisions of reimbursement are performed depending on the need and they are based on the prices of reference countries.

Financing the Primary Care Behavioral Health Model.

The PCBH model of integrated care blends behavioral health professionals into the primary care team, thereby enhancing the scope of primary care and expanding the range of services provided to the patient. Despite promising evidence in support of the model and a growing number of advocates and practitioners of PCBH integration, current reimbursement policies are not always favorable. As the nation's healthcare system transitions to value-based payment models, new financing strategies are emerging which will further support the viability of PCBH integration. This article provides an overview of the infrastructure necessary to support PCBH practice; reviews the current PCBH funding landscape; discusses how emerging trends in healthcare financing are impacting the model; and provides a vision for the viability of the PCBH model within the value-based financing of our healthcare system in the future.

Assessing the effect of standardized cost systems on financial performance. A difference-in-differences approach for hospitals according to their technological level.

Promoting the improvement of standardized cost systems (CS) is one of the measures available to health policy makers for the purpose of improving efficiency in hospitals over the long-term. Nevertheless, very few studies evaluate the relationship between alternative CS and the costs really incurred. We use data from 242 hospitals of the Spanish National Health Service (NHS) between 2010 and 2013 in order to explore the determinants of the cost per adjusted patient day, using a difference-in-differences approach where the treatment is the implementation of an advanced CS. We also investigate if the association between advanced CS and unit cost is different depending upon the technological level of the hospital. Results show that hospitals with more advanced CS contained their costs better. However, the latter effect of advanced CS is lower in hospitals with a greater endowment of high technology. Results suggest that health authorities should support the development of CS, particularly in high-tech hospitals, which are usually larger and more complex hospitals that tend to accumulate a greater portion of NHS hospital sector expenditure.

Impact of Provider Competition under Global Budgeting on the Use of Cesarean Delivery.

OBJECTIVE: To examine the impact of provider competition under global budgeting on the use of cesarean delivery in Taiwan. DATA SOURCES/STUDY SETTING: (1) Quarterly inpatient claims data of all clinics and hospitals with birth-related expenses from 2000 to 2008; (2) file of health facilities' basic characteristics; and (3) regional quarterly point values (price conversion index) for clinics and hospitals, respectively, from the fourth quarter in 1999 to the third quarter in 2008, from the Statistics of the National Health Insurance Administration. STUDY DESIGN: Panel data of quarterly facility-level cesarean delivery rates with provider characteristics, birth volumes, and regional point values are analyzed with the fractional response model to examine the effect of external price changes on provider behavior in birth delivery services. PRINCIPAL FINDINGS: The decline in de facto prices of health services as a result of noncooperative competition under global budgeting is associated with an increase in cesarean delivery rates, with a high degree of response heterogeneity across different types of provider facilities. CONCLUSIONS: While global budgeting is an effective cost containment tool, intensified financial pressures may lead to unintended consequences of compromised quality due to a shift in provider practice in pursuit of financial rewards.