Referral patterns and implementation costs of the Partners in Recovery initiative in Gippsland: learnings for the National Disability Insurance Scheme.

OBJECTIVE:: The purpose of this paper is to provide some learnings for the NDIS from the referral pattern and cost of implementing the Partners in Recovery initiative of Gippsland. METHOD:: Information on referral areas made for each consumer was collated from support facilitators. Cost estimates were determined using budget estimates, administrative costs and a literature review and are reported from a government perspective. RESULTS:: Sixty-three per cent of all referrals were made to organisations that provided multiple types of services. Thirty-one per cent were to Mental Health Community Support Services. Eighteen per cent of referrals were made to clinical mental health services. The total cost of providing the service for a consumer per year (set-up and ongoing) was estimated to be AUD$15,755 and the ongoing cost per year was estimated to be AUD$13,434. The cost of doing nothing is likely to cost more in the longer term, with poor mental health outcomes such as hospital admission, unemployment benefits, prison, homelessness and psychiatric residential care. CONCLUSIONS:: Supporting recovery in persons with Severe and Persistent Mental Illness is likely to be economically more beneficial than not doing so. Recovery can be better supported when frequently utilised services are co-located. These might be some learnings for the NDIS.

How much do hospitals cost shift? A review of the evidence.

CONTEXT: Hospital cost shifting--charging private payers more in response to shortfalls in public payments--has long been part of the debate over health care policy. Despite the abundance of theoretical and empirical literature on the subject, it has not been critically reviewed and interpreted since Morrisey did so nearly fifteen years ago. Much has changed since then, in both empirical technique and the health care landscape. This article examines the theoretical and empirical literature on cost shifting since 1996, synthesizes the predominant findings, suggests their implications for the future of health care costs, and puts them in the current policy context. METHODS: The relevant literature was identified by database search. Papers describing policies were considered first, since policy shapes the health care market in which cost shifting may or may not occur. Theoretical works were examined second, as theory provides hypotheses and structure for empirical work. The empirical literature was analyzed last in the context of the policy environment and in light of theoretical implications for appropriate econometric specification. FINDINGS: Most of the analyses and commentary based on descriptive, industry-wide hospital payment-to-cost margins by payer provide a false impression that cost shifting is a large and pervasive phenomenon. More careful theoretical and empirical examinations suggest that cost shifting can and has occurred, but usually at a relatively low rate. Margin changes also are strongly influenced by the evolution of hospital and health plan market structures and changes in underlying costs. CONCLUSIONS: Policymakers should view with a degree of skepticism most hospital and insurance industry claims of inevitable, large-scale cost shifting. Although some cost shifting may result from changes in public payment policy, it is just one of many possible effects. Moreover, changes in the balance of market power between hospitals and health care plans also significantly affect private prices. Since they may increase hospitals' market power, provisions of the new health reform law that may encourage greater provider integration and consolidation should be implemented with caution.

The use of source apportionment for air quality management and health assessments.

Receptor modeling is the application of data analysis methods to elicit information on the sources of air pollutants. Typically, it employs methods of solving the mixture resolution problem using chemical composition data for airborne particulate matter (PM) samples. In such cases, the outcome is the identification of the pollution source types and estimates of the contribution of each source type to the observed concentrations. Receptor modeling also involves efforts to identify the locations of the sources through the use of local meteorology or ensembles of air parcel back trajectories. Compositional data were collected in a number of monitoring programs. The U.S. Environmental Protection Agency deployed a network of urban airborne PM samplers to provide PM(2.5) composition data for urban centers across the United States. In addition, advanced monitoring methods were deployed at "supersites." These data show the differences in composition in different part of the country and were also used to identify and apportion the particle sources. These results were used to (1)develop effective and efficient air quality management plans and (2) refine emission inventories for input into deterministic models to predict changes in air quality as the result of the implementation of various management plans. The apportionments also serve as exposure estimates for health effects models to identify those components of the PM that are most closely related to observed adverse health effects. Although current regulations target total airborne mass concentrations, such health effects results might result in targeting those sources that are most likely linked to adverse health effects and thus produce the maximum health benefit.

Financial protection of households against health shocks in Greece during the economic crisis.

BACKGROUND: Harsh funding cutbacks along with measures shifting cost to patients have been implemented in the Greek health system in recent years. Our objective was to investigate the evolution of financial protection of Greek households against out-of-pocket payments (OOPP) during the economic crisis. METHODS: National representative data of 33,091 households were derived from the Household Budget Surveys for the period 2008-2015. Financial protection was assessed by applying the approaches of catastrophic (CHE) and impoverishing OOPP. The determinants of CHE and impoverishment were examined using binary logistic regressions. RESULTS: OOPP dropped by 23.5% in real values between 2008 and 2015, though their share in households' budget rose from 6.9% to 7.8%, with an increasing trend since 2012. These outcomes were driven by significant increases in medical products (20.2%) and inpatient (63%) OOPP, while outpatient expenses decreased considerably (-62%). Both incidence and overshoot of CHE were significantly exacerbated. The additional burden was distributed progressively, hence, financial risk inequalities decreased. Food poverty increased, but its incidence still remains at very low levels. Both incidence and intensity of relative poverty increased considerably in real terms. The poverty impact of OOPP is aggravating following 2012, and 1.9% of individuals were impoverished due to OOPP in 2015. Households of higher size, lower expenditure quintile, in urban areas, without disabled, elderly or young children members, and with younger or retired, better-educated breadwinners were significantly less vulnerable to CHE. Households in the lower-middle expenditure quintile, in rural regions, and with elderly members were facing higher risk, while wealthier families exhibited a considerable lower likelihood of impoverishment. CONCLUSIONS: The expansion of reliance of healthcare funding on OOPP has increased the financial risk and hardship of Greek households, which may disrupt their living conditions and create barriers to healthcare access. Cost-sharing policies should recognise the different social protection needs of households.

Cost drivers and resource allocation in military health care systems.

This study illustrates the feasibility of incorporating technical efficiency considerations in the funding of military hospitals and identifies the primary drivers for hospital costs. Secondary data collected for 24 U.S.-based Army hospitals and medical centers for the years 2001 to 2003 are the basis for this analysis. Technical efficiency was measured by using data envelopment analysis; subsequently, efficiency estimates were included in logarithmic-linear cost models that specified cost as a function of volume, complexity, efficiency, time, and facility type. These logarithmic-linear models were compared against stochastic frontier analysis models. A parsimonious, three-variable, logarithmic-linear model composed of volume, complexity, and efficiency variables exhibited a strong linear relationship with observed costs (R(2) = 0.98). This model also proved reliable in forecasting (R(2) = 0.96). Based on our analysis, as much as $120 million might be reallocated to improve the United States-based Army hospital performance evaluated in this study.

[Case allocation of extensive operations on head and neck within the German DRG system 2004-2007: what is the net result of the continued developments in case allocation?]. / Analyse der Abbildungsqualität grosser operativer Eingriffe an Kopf und Hals in den G-DRG-Systemen 2004-2007: Was hat die Weiterentwicklung der Fallpauschalen gebracht?

BACKGROUND: When the German DRG system was implemented there was some doubt about whether patients with extensive head and neck surgery would be properly accounted for. Significant efforts have therefore been invested in analysis and case allocation of those in this group. The object of this study was to investigate whether the changes within the German DRG system have led to improved case allocation. METHODS: Cost data received from 25 ENT departments on 518 prospective documented cases of extensive head and neck surgery were compared with data from the German institute dealing with remuneration in hospitals (InEK). Statistical measures used by InEK were used to analyse the quality of the overall system and the homogeneity of the individual case groups. RESULTS: The reduction of variance of inlier costs improved by about 107.3% from the 2004 version to the 2007 version of the German DRG system. The average coefficient of cost homogeneity rose by about 9.7% in the same period. Case mix index and DRG revenues were redistributed from less extensive to the more complex operations. Hospitals with large numbers of extensive operations and university hospitals will gain most benefit from this development. CONCLUSION: Appropriate case allocation of extensive operations on the head and neck has been improved by the continued development of the German DRG system culminating in the 2007 version. Further adjustments will be needed in the future.

Who bears the cost of 'informal mhealth'? Health-workers' mobile phone practices and associated political-moral economies of care in Ghana and Malawi.

Africa's recent communications 'revolution' has generated optimism that using mobile phones for health (mhealth) can help bridge healthcare gaps, particularly for rural, hard-to-reach populations. However, while scale-up of mhealth pilots remains limited, health-workers across the continent possess mobile phones. This article draws on interviews from Ghana and Malawi to ask whether/how health-workers are using their phones informally and with what consequences. Health-workers were found to use personal mobile phones for a wide range of purposes: obtaining help in emergencies; communicating with patients/colleagues; facilitating community-based care, patient monitoring and medication adherence; obtaining clinical advice/information and managing logistics. However, the costs were being borne by the health-workers themselves, particularly by those at the lower echelons, in rural communities, often on minimal stipends/salaries, who are required to 'care' even at substantial personal cost. Although there is significant potential for 'informal mhealth' to improve (rural) healthcare, there is a risk that the associated moral and political economies of care will reinforce existing socioeconomic and geographic inequalities.

Cost of Care for the Initial Management of Ovarian Cancer.

OBJECTIVE: To examine the cost of care during the first year after a diagnosis of ovarian cancer, estimate the sources of cost, and explore the out-of-pocket costs. METHODS: We performed a retrospective cohort study of women with ovarian cancer diagnosed from 2009 to 2012 who underwent both surgery and adjuvant chemotherapy using the Truven Health MarketScan database. This database is comprised of patients covered by commercial insurance sponsored by more than 100 employers in the United States. Medical expenditures, including physician reimbursement, for a 12-month period beginning on the date of surgery were estimated. All payments were examined, including out-of-pocket costs for patients. Payments were divided into expenditures for inpatient care, outpatient care (including chemotherapy), and outpatient drug costs. The 12-month treatment period was divided into three phases: surgery to 30 days (operative period), 1-6 months (adjuvant therapy), and 6-12 months after surgery. The primary outcome was the overall cost of care within the first year of diagnosis of ovarian cancer; secondary outcomes included assessment of factors associated with cost. RESULTS: A total of 26,548 women with ovarian cancer who underwent surgery were identified. After exclusion of patients with incomplete insurance enrollment or coverage, those who did not undergo chemotherapy, and those with capitated plans, our cohort consisted of 5,031 women. The median total medical expenditures per patient during the first year after the index procedure were $93,632 (interquartile range $62,319-140,140). Inpatient services accounted for $30,708 (interquartile range $20,102-51,107; 37.8%) in expenditures, outpatient services $52,700 (interquartile range $31,210-83,206; 58.3%), and outpatient drug costs $1,814 (interquartile range $603-4,402; 3.8%). The median out-of-pocket expense was $2,988 (interquartile range $1,649-5,088). This included $1,509 (interquartile range $705-2,878) for outpatient services, $589 (interquartile range $3-1,715) for inpatient services, and $351 (interquartile range $149-656) for outpatient drug costs. CONCLUSION: The average cost of care for women with ovarian cancer in the first year after surgery is approximately $100,000. Patients bear approximately 3% of these costs in the form of out-of-pocket expenses.

Did Project Liberty displace community-based medicaid services in New York?

OBJECTIVE: This study analyzed how the introduction of Project Liberty services after the September 11, 2001, terrorist attacks affected agencies' provision of community-based Medicaid mental health services in the New York metropolitan area. METHODS: Provision of Medicaid mental health services was tracked between January 2000 and June 2003 for provider agencies participating in Project Liberty (N=164) and for a comparison group of mental health provider agencies that did not participate in this program (N=94). RESULTS: Overall, participation in Project Liberty did not significantly affect the volume of Medicaid services provided. However, for agencies with one site, a statistically significant difference was seen; compared with agencies in the comparison group, agencies that participated in Project Liberty claimed a mean+/-SE decrease of $4.66+/-3.57 less in Medicaid services per month per Project Liberty visit. CONCLUSIONS: Project Liberty permitted rapid expansion of the total volume of services provided by community-based organizations without interfering with the provision of traditional services, although a modest effect was seen for smaller agencies. Although the results do not imply that "supply side" planning for disaster needs would not improve system response, they do imply that implementation of flexible "demand side" financing can call forth a large volume of new services rapidly and without interfering with other community services.

The cost of hospital care in Canada: a comparison of two alternatives.

This article compares resource intensity weight costs with case costs for selected patient groups at St. Paul's Hospital, British Columbia. Analysis found that average case costs for surgical patients were 23.9% higher than their resource intensity weight costs, whereas case costs for non-surgical patients were 14.8% lower. Average case costs for patients receiving surgical implants were 32.8% higher than resource intensity weight costs. For patients receiving internal defibrillators average case costs were three times higher.

Instituting a routine varicella vaccination program in Canada: an economic evaluation.

BACKGROUND: After licensing of a varicella vaccine in Canada in 1998, Health Canada commissioned a study to evaluate options for a vaccination program. The evaluation of a program of vaccination of 12-month-old children, with and without a catch-up program for susceptible 12-year-olds, is presented here. METHODS: An economic model was developed simulating the expected experience, with and without vaccination, of cohorts of children susceptible to varicella. The cohorts were simulated for 70 years, and infection and complication rates were calculated along with the attendant costs, with an assumed vaccine cost of $60. RESULTS: With an 85% coverage rate vaccination is expected to reduce the number of chickenpox cases by approximately two-thirds and varicella-related complications by up to 75%. The overall costs of varicella are expected to drop by >$4 million (1998 Canadian dollars) per 100,000 eligible vaccinees, but costs to the health care system are expected to increase by >$2 million. From the health care system perspective, vaccination would cost approximately $42 per discounted case avoided. INTERPRETATION: Routine varicella vaccination would likely substantially reduce the overall costs of managing chickenpox but would result in an increase in health care expenditures. These findings are consistent with evaluations in other countries.

Practice revenue and cost distribution for ophthalmology, 1988 to 1993.

As opthalmologists need to better manage their practices, information regarding distribution of practice costs becomes more relevant. In this study, we compare revenues and costs from published sources to determine changes over time and across surveys. We also evaluate the reliability and validity of these statistics. Data were obtained from the Health Care Financing Administration (for 1988), the American Medical Association (for 1988, 1990, 1992, and 1993), and the Medical Group Management Association (for 1988, 1990, 1992, and 1993) and were compared across years and surveys. We found large differences among the surveys in both dollar amounts and percentages of total revenue for some of the reported cost categories. Analysis of the data over time showed less of a decline in physician earnings than expected, although there were large increases in the category "other costs." We found considerable divergence among the statistical results. Opthalmologists, public policymakers, and managed care organizations must exercise great caution in interpreting such data and in applying their findings to individual ophthalmic practices and practitioners.

Improved allocation of costs through analysis of variation in data: planning of laboratory studies.

BACKGROUND: When developing a new laboratory test for study of human diseases, it is important to identify and control internal and external sources of variation that affect test results. It is also imperative that the precision of the test not only meets pre-established requirements and not exceed allowable total error, but also that these objectives are reached without undue expenditure of either time or financial resources. METHODS: This study applies statistical principles in designing a cost-effective experimental approach for determining the analytical precision of a new test. This approach applies the statistical concept of variance components to the problem of balancing a pre-established level of analytical precision against expenses incurred in achieving this precision. RESULTS: We demonstrated (1) estimation of variance components, (2) use of these estimates for improving allocation of costs within the experiment, and (3) use of these estimates for determining the optimal number of replicate measurements. CONCLUSIONS: Although elimination of all sources of variation that can affect laboratory test results is unlikely, the application of analysis of variance (ANOVA) statistical techniques can lead to a cost-effective allocation of resources for estimating the precision of a laboratory test.

A model of capitation.

This paper presents a theoretical model of capitation contracts. The consumer's ex ante choice of medical plan is derived under flexible assumptions about provider-patient decision-making. The optimal medical plan is shown to combine full insurance with a provider payment system that is a mixture of capitation and partial reimbursement of provider costs. This solution strongly parallels the 'mixed payment' system derived by Ellis and McGuire (1986, 1990) in the context of prospective payment, though the optimal medical plan derived below may in fact be preferred to that solution in a world with endogenous admissions.

Efficiency and administrative costs in primary care.

We use a formal model to examine the implications of endogenous managerial effort for the interpretation and estimation of efficiency in health care organisations. The model is applied to investigate the doubling of the cost of administering primary care in England in real terms between 1989/1990 and 1994/1995. The main cost determinant was the number of general practitioners (GPs), and there were economies of scale but not of scope. Fund-holding had a positive but small effect on administrative costs, so that the recent abolition of fund-holding may do little to reduce primary care administrative costs. After allowing for changes in the numbers of primary care practitioners, the quality of primary care and the extent of fund-holding, most of the increase in costs was unexplained, and may reflect additional but unmeasured increases in the administrative burden associated with the 1990 reforms. There was little variation in relative efficiency across areas.

Payment source and the cost of hospital care: evidence from a multiproduct cost function with multiple payers.

This study investigates the capacity of hospitals to vary the intensity of their services based on patients' expected sources of payment. While the concept of price discrimination by hospitals based on payer generosity ("cost-shifting") has been discussed extensively, the notion that hospitals can adjust payer-specific marginal costs to reflect differences in reimbursement policies has not been studied in depth. To examine this issue. this analysis employs a multiproduct cost function with hospital outputs defined as admissions by payment source, controlling for the distribution and severity of illness ("casemix") for each payer. Marginal costs of casemix-adjusted discharges are obtained and compared for Medicare, Medicaid, Private Payers, and a residual category that includes uncompensated care. We find that indeed, payer-specific marginal costs generally reflect payer generosity.

Estimating the indirect costs of teaching.

Medicare's Prospective Payment System pays teaching hospitals using a regression coefficient in a log-log cost function. Previous literature showed that this coefficient is sensitive to the covariates included in the function, but specified teaching intensity as the logarithm of one plus the intern and resident-to-bed ratio. Provided the true relationship is log-log, adding one biases the coefficient substantially but not predicted cost. In a re-specified equation that makes this bias negligible, the coefficient is not nearly as sensitive to the inclusion of other covariates. Because further issues remain to be explored, it is premature to use our results for policy purposes.

Why did employee health insurance contributions rise?

We explore the causes of the dramatic rise in employee contributions to health insurance over the past two decades. In 1982, 44% of those who were covered by their employer-provided health insurance had their costs fully financed by their employer, but by 1998 this had fallen to 28%. We discuss the theory of why employers might shift premiums to their employees, and empirically model the role of four factors suggested by the theory. We find that there was a large impact of falling tax rates, rising eligibility for insurance through the Medicaid system, rising medical costs, and increased managed care penetration. Overall, this set of factors can explain more than one-half of the rise in employee premiums over the 1982-1996 period.

Cost allocation patterns between hospital inpatient and outpatient departments.

OBJECTIVE: This study examines changes in hospitals' cost allocation patterns between inpatient and outpatient departments in response to the implementation of the prospective payment system. DATA SOURCES AND STUDY SETTINGS: The analysis was carried out using data for 3,961 hospitals obtained from the Medicare Cost Reports and from the American Hospital Association for the years 1984 through 1988. STUDY DESIGN: A total operating cost function was estimated on the two outputs of discharges and outpatient visits. The estimation results were instrumental in disaggregating costs into inpatient and outpatient components. This was done cross-sectionally for each of the five years. PRINCIPAL FINDINGS: Comparison of this cost breakdown with that of hospital revenue provides evidence of distinct patterns in which nonteaching, rural, and small hospitals increasingly allocated greater costs to outpatient departments than did large, urban, and teaching hospitals. CONCLUSIONS: The results suggest that small rural hospitals turned to the outpatient side in the face of tough economic challenges over the period of study. Because differences in cost allocation patterns occur by particular hospital category, analyses that rely on accounting cost or revenue data in order to identify cost differences among those same categories may come to erroneous conclusions. In particular, because teaching hospitals apportion costs more heavily on the inpatient side, cost allocation differences cause upward bias in the PPS medical education adjustment.