Costs associated with resource utilization during the palliative phase of care: a Canadian perspective.

OBJECTIVE: This study aimed to evaluate prospectively the resource utilization and related costs during the palliative phase of care in five regions across Canada. SUBJECTS: A cohort of 248 patients registered in a palliative care program and their main informal caregivers were consecutively recruited. RESEARCH DESIGN: A prospective research design with repeated measures was adopted. Interviews were conducted at two-week intervals until the patient s passing or up to a maximum of 6 months. MEASURES: The survey questions prompted participants to provide information on the types and number of goods and services they used, and who paid for these goods and services. RESULTS: The largest cost component for study participants was inpatient hospital care stays, followed by home care and informal caregiving time. In regard to cost sharing, the public health care system (PHCS), the family, and not-for-profit organizations (NFPO) sustained respectively 71.3%, 26.6%, and 1.6% of the mean total cost per patient. CONCLUSION: Such results provide a comprehensive picture of costs related to palliative care in Canada, by specifying the cost sharing between the PHCS, the family, and NFPO.

Hospital ownership and performance: evidence from stroke and cardiac treatment in Taiwan.

This paper compares program expenditure and treatment quality of stroke and cardiac patients between 1997 and 2000 across hospitals of various ownership types in Taiwan. Because Taiwan implemented national health insurance in 1995, the analysis is immune from problems arising from the complex setting of the U.S. health care market, such as segmentation of insurance status or multiple payers. Because patients may select admitted hospitals based on their observed and unobserved characteristics, we employ instrument variable (IV) estimation to account for the endogeneity of ownership status. Results of IV estimation find that patients admitted to non-profit hospitals receive better quality care, either measured by 1- or 12-month mortality rates. In terms of treatment expenditure, our results indicate no difference between non-profits and for-profits index admission expenditures, and at most 10% higher long-term expenditure for patients admitted to non-profits than to for-profits.

Behavioral differences between public and private not-for-profit hospitals in the Italian National Health Service.

In this paper we attempt to identify behavioral differences between public and private not-for-profit hospitals, by exploiting the introduction of the DRG-based payment system in the Italian NHS during the second half of the 1990s. We estimate the technical efficiency of a sample of hospitals for the period 1995-2000 considering an output distance function, and adopting both parametric (COLS and SF) and nonparametric (DEA) approaches. Our results show a convergence of mean efficiency scores between not-for-profit and public hospitals, and seem to suggest that differences in economic performances between competing ownership forms are more the result of the institutional settings in which they operate than the effect of the incentive structures embedded in the different proprietary forms. We also observe a decline in technical efficiency, probably due to policies aimed at reducing hospitalization rates.

Accounting and reimbursement schemes for inpatient care in France.

The new French case-mix system of hospital payment was adopted in 2004 for public hospitals and in March 2005 for private-for-profit hospitals. Implementing this reform requires a period of transition but the challenges ahead can already be predicted. Prices will have to change before this mode of reimbursement can have any real impact. This requires producing more detailed hospital cost data and using fine measuring tools such as the cost accounting method developed for use in this context. This article describes and analyses the main tools and methods selected to implement the new French prospective payment system.

Putting on a clinic in Va. Carilion, a not-for-profit hospital system based in Roanoke, is taking a $100 million risk to become a physician-run venture.

Carilion Health System needs to change or die, according to its leaders, so the Roanoke, Va., organization is converting from a typical not-for-profit system into a physician-run clinic. The switch is an extreme version of an industrywide push to employ doctors. James Thweatt Jr., left, of rival Lewis-Gale, says his hospital joined the trend when it hired 80 specialists from a failing local clinic.

A review of state legislation and a state legislator survey related to not-for-profit hospital tax exemption and health care for the indigent.

This study examines recent states' legislation related to the not-for-profit (NFP) hospital tax exemption and care to the uninsured and underinsured, and compares these legislative provisions to a past survey of state legislators' opinions about appropriate criteria for the NFP hospital tax exemption. To be tax-exempt, hospitals need to provide services that benefit the community. The problem lies in the ambiguous nature of the community benefits standard and the type of information required for compliance with the standard. As a consequence, NFP hospital tax-exemption challenges have occurred across the nation, resulting most recently in a federal class action lawsuit against NFP hospitals across several states. Empirical research has examined whether the NFP hospital tax exemption is justified based on the amount of community benefits and charitable care provided, without examining the type of policy alternatives that might be proposed by legislators who are responsible to change and create tax-exemption regulations. This article surveys state legislators and examines state legislation. The survey reveals that legislators from states with tax-exempt challenge activity focus more narrowly on the provision of charitable care and that state legislators consider quantitative information to be as important as qualitative information for the tax-exemption decision. Essentially, the survey predicts that state legislation would focus primarily on charitable care policy and indigent care guidelines, which is confirmed by the review of recent state legislation; however, there is still much variation in tax-exemption legislation between states. More standardization is needed to address the needs of indigent patients equitably.

Formulary decision-making about cephalosporins with similar therapeutic uses.

The various costs and intangible factors that enter into formulary decisions in an era of increasingly frequent drug product shortages that can adversely affect patient care and increase treatment costs are described. Pharmacy administration at Carolinas HealthCare System analyzed the costs associated with making a formulary switch from the third-generation cephalosporin ceftriaxone to cefotaxime, which recently became available in generic form and has a similar spectrum of antimicrobial activity and therapeutic uses. Hard dollar costs for purchasing drugs and the supplies needed to administer them; soft dollar costs for staff time spent acquiring, preparing, and administering doses; and intangible factors were considered. A reliable supply of drug product from the manufacturer was an important intangible factor because of frequent drug shortages in the past few years and the adverse effect on patient care and the increased soft dollar costs associated with these shortages. Administrators at Carolinas HealthCare System decided not to make the proposed formulary change after weighing the many factors and costs.

The funding of private hospitals in Australia.

Private hospitals are an essential component of Australia's complex mix of public and private health funding and provision. Private hospitals account for 34.3 per cent of all hospital separations, and over half (56.2%) of all same-day separations. The revenue (funding) of the sector approached $4 billion by 1998/99, and as a result of its recent rapid growth capital expenditure in the sector was nearly $550 million in the same year. Private casemix of private hospitals is distinctive, and characterised by a high proportion of surgical procedures in general (48.1 per cent), and more than a majority of all services in such areas as rehabilitation, orthopaedics (shoulder, knee, spinal fusion, and hand surgery), alcohol disorders, same day colonoscopy and sleep disorders. This chapter synthesizes data from a multitude of sources to produce a comprehensive picture of Australia's private hospital sector and its funding. It examines the funding (revenue) sources of private hospitals, and considers how and why private hospitals approach the issue of funding from a different perspective than their public sector colleagues. To illustrate how Australian private hospitals approach revenue (funding) strategically, a series of indicative types of hospitals is explored.

Organizational economics and health care markets.

As health policy emphasizes the use of private sector mechanisms to pursue public sector goals, health services research needs to develop stronger conceptual frameworks for the interpretation of empirical studies of health care markets and organizations. Organizational relationships should not be interpreted exclusively in terms of competition among providers of similar services but also in terms of relationships among providers of substitute and complementary services and in terms of upstream suppliers and downstream distributors. This article illustrates the potential applicability of transactions cost economics, agency theory, and organizational economics more broadly to horizontal and vertical markets in health care. Examples are derived from organizational integration between physicians and hospitals and organizational conversions from nonprofit to for-profit ownership.

Capital structure strategy in health care systems.

The capital structures (the relative use of debt and equity to support assets) of leading health care systems are viewed as a strategic component of their financial plans. While not-for-profit hospitals as a group have maintained nearly constant levels of debt over the past decade, investor-owned hospitals and a group of leading health care systems have reduced their relative use of debt. Chief financial officers indicated that in addition to reducing debt because of less favorable reimbursement incentives, there was a focus on maintaining high bond ratings. Debt levels have not been reduced as sharply in these health care systems as they have in investor-owned hospitals, in part due to the use of debt to support investments in financial markets. Because these health care systems do not have easy access to equity, high bond ratings and solid investment earnings are central to their capital structure policies of preserving access to debt markets.

Sources of project financing in health care systems.

Through discussions with chief financial officers of leading health care systems, insights are offered on preferences for project financing and development efforts. Data from these same systems provide at least anecdotal evidence in support of pecking-order theory.

Cash management in health care systems.

Cash is one of the most precious assets held by health systems. This article presents results of discussions on cash management and investment policies at a dozen major not-for-profit health systems. Health system data indicate that cash holdings have increased dramatically since 1993, mostly due to investment earnings. Discussions with chief financial officers of these health systems reveal that cash holdings are significant, that decisions about cash balances are strategic, and that most systems aim to increase cash balances to levels that permit access to capital markets on more favorable terms.