Fenestrated endovascular aneurysm repair is financially viable at a high-volume medical center with positive hospital contribution margins and physician payment.

OBJECTIVE: To examine hospital finances and physician payment associated with fenestrated endovascular aneurysm repair (FEVAR) for complex aortic disease at a high-volume center and to compare the costs and reimbursements for FEVAR with open repair, and their trends over time. METHODS: Clinical and financial data were collected retrospectively from electronic medical and administrative records. Data for each patient included inpatient and outpatient encounters 3 months before and 12 months after the primary aneurysm operation. RESULTS: Between 2007 and 2017, 157 and 71 patients were treated with physician-modified endograft (PMEG) and Cook Zenith Fenestrated (ZFEN) repair, respectively. Twenty-one patients who were evaluated for FEVAR underwent open repair instead. The 228 FEVAR patients provided a total positive contribution margin (reimbursements minus direct costs) of $2.65 million. The index encounter (the primary aneurysm operation and hospitalization) accounted for the majority (90.6%) of the total contribution margin. The largest component (50.3%) of direct cost for FEVAR from the index encounter was implant/graft expenses. The average direct costs for FEVAR and for open repair from the index encounter were $34,688 and $35,020, respectively. The average contribution margins for FEVAR and for open repair were approximately $10,548 and $21,349, respectively, attributable to differences in reimbursement. The average direct cost for FEVAR trended down over time as cumulative experience increased. Average reimbursement for FEVAR increased after Centers for Medicare and Medicaid Services approved payments with the Investigational Device Exemption (IDE) trial for PMEG in 2011, and a new technology add-on payment for ZFEN in 2012. These factors transitioned the average contribution margin from negative to positive in 2012. The average physician payments for PMEG increased from $128 to $5848 after the start of the IDE trial. The average physician payments for ZFEN and for open repair between 2011 and 2017 were $7597 and $7781, respectively. CONCLUSIONS: FEVAR can be performed at a high-volume medical center with positive contribution margins and with comparable physician payments to open repair. At this institution, hospital reimbursement and physician payments improved for PMEG with participation in an IDE trial, while hospital direct costs decreased for both PMEG and ZFEN with accumulated experience.

Do hospitals respond to decreasing prices by supplying more services?

Regulated prices are common in markets for medical care. We estimate the effect of changes in regulated reimbursement prices on volume of hospital care based on a reform of hospital financing in Germany. Uniquely, this reform changed the overall level of reimbursement-with increasing prices for some hospitals and decreasing prices for others-without directly affecting the relative prices for different groups of patients or types of treatment. Based on administrative data, we find that hospitals react to increasing prices by decreasing the service supply and to decreasing prices by increasing the service supply. Moreover, we find some evidence that volume changes for hospitals with different price changes are nonlinear. We interpret our findings as evidence for a negative income effect of prices on volume of care.

Predictive Hiring to Maintain Excellence in Patient Care.

OBJECTIVE: The purpose of this research study was to design and pilot a predictive hiring model to improve the hospital's operational vacancy rate and reduce premium pay expenses. BACKGROUND: According to Purcell, the average nursing turnover rate is at 18.2%, and the new-graduate nurse turnover rate is higher at 35%. With turnover rates high for nurses, the importance of recruiting, hiring, and training the new nurse needs to be completed as soon as possible. Often, a nurse manager cannot interview and hire into a position until it is vacated. Premium pay including overtime is typically used to cover the time from the position being vacated until the next nurse is trained. METHODS: This was a pretest/posttest design with a predictive hiring model intervention. The intervention was a 3-pronged approach that consisted of a strategy for recruiting graduate nurses, hiring to operation vacancy rates, and utilizing a predictive hiring method. Operational vacancy is a calculation to determine if a department has the right amount of hired labor available to work scheduled shifts without having to routinely rely on agency nurses and/or premium pay. These are people ready to work. RESULTS: The hospital significantly decreased premium pay and eliminated the use of agency nurses by implementing a predictive hiring model tailored to the department's operational vacancy. CONCLUSIONS: A predictive model is a useful vehicle in assisting nurse managers to plan and replace positions more quickly. The model needs continued testing to support application beyond the testing site.

Conditional Financing of Drugs in the Netherlands: Past, Present, and Future-Results From Stakeholder Interviews.

BACKGROUND: Conditional financing (CF) of hospital drugs was implemented in the Netherlands as a form of managed entry agreements between 2006 and 2012. CF was a 4-year process comprising 3 stages: initial health technology assessment of the drug (T = 0), conduct of outcomes research studies, and reassessment of the drug (T = 4). OBJECTIVES: To analyze stakeholder experiences in implementing CF in practice. METHODS: Public and private stakeholders were approached for participation in stakeholder interviews through standardized email invitations. An interview guide was developed to guide discussions that covered the following topics: perceived aims of CF, functioning of CF, impact of CF, and conclusions and future perspectives. Extensive summaries were generated for each interview and subsequently used for directed content analysis. RESULTS: Thirty stakeholders were interviewed. Differences emerged among the stakeholders on the perceived aims of CF. Conversely, there was some agreement among stakeholders on the shortcomings in the functioning of CF, the positive impact of CF on the Dutch healthcare setting, and improvement points for CF. CONCLUSIONS: Despite stakeholders' belief that CF either did not meet its aims or only partially did so, there was agreement on the need for new policy to address the same aims of CF in the future. Nevertheless, stakeholders diverged on whether CF should be improved on the basis of learnings identified and reintroduced into practice or replaced with new policy schemes.

Doing well by doing good: Evaluating the influence of patient safety performance on hospital financial outcomes.

BACKGROUND: As financial pressures on hospitals increase because of changing reimbursement structures and heightened focus on quality and value, the association between patient safety performance and financial outcomes remains unclear. PURPOSE: The purpose of this study is to investigate if hospitals with higher patient safety performance are associated with higher levels of profitability than those with lower safety performance. METHODOLOGY/APPROACH: Using multinomial logistic regression, we analyzed data from the spring 2014 Leapfrog Hospital Safety Score and the 2014 American Hospital Association to determine the association between Leapfrog Hospital Safety Score performance and three dimensions of organizational profitability: operating margin, net patient revenue, and operating income. RESULTS: Our findings suggest that improved hospital safety scores are associated with a relative risk of being in the top versus bottom quartile of financial performance: 5.41 times greater (p < .001) for operating margin, 10.98 times greater (p < .001) for net patient revenue, and 4.03 times greater (p < .001) for operating income. PRACTICE IMPLICATIONS: Our findings suggest that improved patient safety performance, as evaluated within the Leapfrog Hospital Safety Score, is associated with improved financial performance at the hospital level. Targeted focus on patient safety may allow hospitals to improve financial performance, maximize scarce resources, and generate additional capital to continue to positively evolve care.

Hospitals' use of hospitalists: Implications for financial performance.

BACKGROUND: Hospitalists, or physicians specializing in hospital-based practice, have grown significantly since they were first introduced in the United States in the mid-1990s. Prior studies on the impact of hospitalists have focused on costs and length of stay. However, there is dearth of research exploring the relationship between hospitals' use of hospitalists and organizational performance. PURPOSE: Using a national longitudinal sample of acute care hospitals operating in the United States between 2007 and 2014, this study explores the impact of hospitalists staffing intensity on hospitals' financial performance. METHODOLOGY: Data sources for this study included the American Hospital Association Annual Survey, the Area Health Resources File, and the Centers for Medicare & Medicaid Services' costs reports and Case Mix Index files. Data were analyzed using a panel design with facility and year fixed effects regression. RESULTS: Results showed that hospitals that switched from not using hospitalists to using a high hospitalist staffing intensity had both increased patient revenues and higher operating costs per adjusted patient day. However, the higher operating costs from high hospitalist staffing intensity were offset by increased patient revenues, resulting in a marginally significant increase in operating profitability (p < .1). PRACTICE IMPLICATIONS: These findings suggest that the rise in the use of hospitalists may be fueled by financial incentives such as increased revenues and profitability in addition to other drivers of adoption.

Point-of-Care Ultrasound Work Flow Innovation: Impact on Documentation and Billing.

OBJECTIVES: To evaluate the impact that an innovative automated ultrasound (US) work flow, which allows for bedside performance of examination documentation and order placement, has on point-of-care US billing compared to ordering US examinations through an electronic medical record. METHODS: We conducted a retrospective review of point-of-care US billing data (March 2014-February 2016) for adult and pediatric emergency departments with an emergency medicine residency and a US fellowship. An innovative work flow with the ability to automate US billing and selectively transfer the images and reports for patient care examinations to an electronic medical record and picture archiving and communication system using the QPath US work flow solution (Telexy Healthcare, Maple Ridge, British Columbia, Canada) was implemented. The total number of examinations billed and percent increase in technical and professional revenue, excluding examinations performed by US fellows, before and after implementation of the automated work flow innovation were determined. RESULTS: After implementation of our automated US work flow process, the number of patient care US examinations billed increased significantly due to completing documentation and immediate billing determination at the bedside. The increase in percent billing relative to total examinations was noted in both technical (32% to 61%; P < .0001) and professional (37% to 65%; P < .0001) billing components. In addition, there was a net increase in technical and professional fee revenue to 96% and 78%, respectively. CONCLUSIONS: The implementation of an innovative automated work flow to include bedside point-of-care US documentation, order placement, and the automated transfer of images and reports led to a significant increase in US billing revenue, documentation, and compliance.

Hospital ownership, decisions on supervisory board characteristics, and financial performance.

BACKGROUND: Dynamic and complex transformations in the hospital market increase the relevance of good corporate governance. However, hospital performance and the characteristics of supervisory boards differ depending on ownership. The question therefore arises whether hospital owners can influence performance by addressing supervisory board characteristics. PURPOSE: The objective of this study is to explain differences in the financial performance of hospitals with regard to ownership by studying the size and composition of supervisory boards. METHODOLOGY: The AMADEUS database was used to collect information on hospital financial performance in 2009 and 2010. Business and quality reports, hospital websites, and data from health insurer were used to obtain information on hospital and board characteristics. The resulting sample consisted of 175 German hospital corporations. We utilized ANOVA and regression analysis to test a mediation hypothesis that investigated whether decisions regarding board size and composition were associated with financial performance and could explain performance differences. FINDINGS: Financial performance and board size and composition depend on ownership. An increase in board size and greater politician participation were negatively associated with all five tested measures of financial performance. Furthermore, an increase in physician participation was positively associated with one dimension of financial performance, whereas one negative relationship was identified for nurse and economist participation. For clerics, no associations were found. PRACTICE IMPLICATIONS: Decisions concerning board size and composition are important as they relate to hospital financial performance. We contribute to existing research by showing that, in addition to board size and physician participation, the participation of other professionals can also influence financial performance.

A Performance Analysis of Long-term Acute-Care Hospitals Owned by Large, Multistate Investor-Owned Companies.

This study provides a descriptive assessment of the operating performance of for-profit long-term acute-care hospitals owned by multistate, investor-owned companies (large FP LTCHs) compared with FP LTCHs owned by smaller FP companies (small FP LTCHs) and nonprofit LTCHs (NP LTCHs). The study used the Centers for Medicare & Medicaid Services cost report data for 290 LTCHs from 2010 through 2012 to compare the financial performance of large and small FP LTCHs and NP LTCHs. The study found that the median operating profit margin for large FP LTCHs was 8.06%, which was twice as high as that of the small FP LTCHs and NP LTCHs (4.78% and 2.80%, respectively). Larger size, serving a greater proportion of private pay and more complex patients and incurring lower operating expenses, including salary expenses, may account for the higher operating margin of the large FP LTCHs.

Performing well in financial management and quality of care: evidence from hospital process measures for treatment of cardiovascular disease.

BACKGROUND: Fiscal constraints faced by U.S. hospitals as a result of the recent economic downturn are leading to business practices that reduce costs and improve financial and operational efficiency in hospitals. There naturally arises the question of how this finance-driven management culture could affect the quality of care. This paper attempts to determine whether the process measures of treatment quality are correlated with hospital financial performance. METHODS: Panel study of hospital care quality and financial condition between 2005 and 2010 for cardiovascular disease treatment at acute care hospitals in the United States. Process measures for condition-specific treatment of heart attack and heart failure and hospital-level financial condition ratios were collected from the CMS databases of Hospital Compare and Cost Reports. RESULTS: There is a statistically significant relationship between hospital financial performance and quality of care. Hospital profitability, financial leverage, asset liquidity, operating efficiency, and costs appear to be important factors of health care quality. In general, public hospitals provide lower quality care than their nonprofit counterparts, and urban hospitals report better quality score than those located in rural areas. Specifically, the first-difference regression results indicate that the quality of treatment for cardiovascular patients rises in the year following an increase in hospital profitability, financial leverage, and labor costs. CONCLUSIONS: The results suggest that, when a hospital made more profit, had the capacity to finance investment using debt, paid higher wages presumably to attract more skilled nurses, its quality of care would generally improve. While the pursuit of profit induces hospitals to enhance both quantity and quality of services they offer, the lack of financial strength may result in a lower standard of health care services, implying the importance of monitoring the quality of care among those hospitals with poor financial health.

[Nonnative guidelines for allocating human resources in child and adolescent psychiatry using average values under convergence conditions instead of price determination - analysis of the data of university hospitals in Germany concerning the costs of calculating day and minute values according to Psych-PV and PEPP-System]. / Normative Vorgaben zum Personaleinsatz in der Kinder- und Jugendpsychiatrie statt Preisfindung anhand von Mittelwerten unter Konvergenzbedingungen.

OBJECTIVE: Despite substantial opposition in the practical field, based on an amendment to the Hospital Financing Act (KHG). the so-called PEPP-System was introduced in child and adolescent psychiatry as a new calculation model. The 2-year moratorium, combined with the rescheduling of the repeal of the psychiatry personnel regulation (Psych-PV) and a convergence phase, provided the German Federal Ministry of Health with additional time to enter a structured dialogue with professional associations. Especially the perspective concerning the regulatory framework is presently unclear. METHOD: In light of this debate, this article provides calculations to illustrate the transformation of the previous personnel regulation into the PEPP-System by means of the data of §21 KHEntgG stemming from the 22 university hospitals of child and adolescent psychiatry and psychotherapy in Germany. In 2013 there was a total of 7,712 cases and 263,694 calculation days. In order to identify a necessary basic reimbursement value th1\t would guarantee a constant quality of patient care, the authors utilize outcomes, cost structures, calculation days, and minute values for individual professional groups according to both systems (Psych-PV and PEPP) based on data from 2013 and the InEK' s analysis of the calculation datasets. CONCLUSIONS: The authors propose a normative agreement on the basic reimbursement value between 270 and 285 EUR. This takes into account the concentration phenomenon and the expansion of services that has occurred since the introduction of the Psych-PV system. Such a normative agreement on structural quality could provide a verifiable framework for the allocation of human resources corresponding to the previous regulations of Psych-PV.

Implementation of a novel point-of-care ultrasound billing and reimbursement program: fiscal impact.

OBJECTIVES: The aim of this study was to determine the fiscal impact of implementation of a novel emergency department (ED) point-of-care (POC) ultrasound billing and reimbursement program. METHODS: This was a single-center retrospective study at an academic medical center. A novel POC ultrasound billing protocol was implemented using the Q-path Web-based image archival system. Patient care ultrasound examination reports were completed and signed electronically online by faculty using Q-path. A notification was automatically sent to ED coders from Q-path to bill the scans. ED coders billed the professional fees for scans on a daily basis and also notified hospital coders to bill for facility fees. A fiscal analysis was performed at the end of the year after implementing the new billing protocol, and a before-and-after comparison was conducted. RESULTS: After implementation of the new billing program, there was a 45% increase in the ED faculty participation in billing for patient care examinations (30%-75%). The number of ultrasound examinations billed increased 5.1-fold (4449 vs 857) during the post implementation period. The total units billed increased from previous year for professional services to 4157 from 649 and facility services to 3266 from 516. During the post implementation period, the facility fees revenue increased 7-fold and professional fees revenue increased 6.34-fold. After deducting the capital costs and ongoing operational costs from approximate collections, the net profits gained by our ED ultrasound program was approximately $350000. CONCLUSIONS: Within 1 year of inception, our novel POC ultrasound billing and reimbursement program generated significant revenue through ultrasound billing.

Accelerating the ROI of EHRs.

Three key strategies can enable an organization to achieve the greatest possible value from electronic health records (EHRs): Meaningful use should be combined with a value realization strategy to ensure that the EHR does more than automate the paper record. Healthcare leaders should work to align IT tools with new business models, care delivery frameworks, and operating processes. Business and clinical goals and desired benefits should drive EHR value realization.

Nonoperating revenue and hospital financial performance: do hospitals rely on income from nonpatient care activities to offset losses on patient care?

BACKGROUND: For many years, hospitals have relied on nonpatient care activities to complement patient care revenues and strengthen financial performance. For hospitals that lose money on patient care, nonpatient care revenues may mean the difference between net income and loss. Little is known currently, however, about whether nonpatient care revenues allow hospitals with negative patient care margins to offset their losses. PURPOSE: The aims of this study are (a) to examine whether hospitals rely on income from nonpatient care activities to offset losses on patient care and (b) to identify characteristics of hospitals that are able to offset such losses. DATA AND METHODS: Data for this study came from the state of California. The sample consisted of not-for-profit and investor-owned short-term general acute care hospitals for the years 2003-2007. Descriptive statistics were used to compare hospitals with negative patient care margins that were able to offset patient care losses to hospitals that were unable to do so. FINDINGS: Between 2003 and 2007, approximately 40% of study hospitals lost money on patient care. Of these, only 25% relied on nonpatient care income to offset losses. Hospitals that were able to offset patient care losses tended to be larger, not-for-profit organizations that were able to generate substantial shares of their total revenues from nonpatient care activities, in particular, charitable donations and financial investments. PRACTICE IMPLICATIONS: Despite claims that income from nonpatient care activities frequently allows hospitals to offset patient care losses, this study showed that only a small proportion of hospitals were able to do so. The financial viability of hospitals with negative patient care margins will thus depend on their ability to (a) deliver high-quality care profitably, (b) derive income from other operating activities, and (c) generate income from financial investments and engage in active development efforts to increase donations and gifts.

Finance theory and hospital cash balances.

Competing financial theories have been offered to understand hospitals' cash holding with scant recent evidence. Using data from a national sample of 608 not-for-profit hospitals, we find support for the trade-off theory which posits targeted cash balances. We do not find support for the financial hierarchy theory which posits a preference for use of cash to pay for capital investments. Findings apply to holdings of cash and marketable securities, but not board-designated funds where no model provided meaningful explanatory power.

How the choice of issuing authority affects hospital debt financing costs.

All other things being equal, bonds issued by statewide authorities have lower yields than bonds issued by local authorities. However, lower yields may be offset by higher issuance costs for statewide authorities, as reflected in the true interest cost. Higher issuance costs may provide benefits for investors and for issuing hospitals.

A framework for managing risk-based managed care contracts.

To prepare for managing risk-based contracts with payers and other purchasers, providers should: Identify operational, competitive, and financial risks associated with the relevant patient populations. Improve organizational abilities related to patient care management, which is the key to managing operational risk. Address the competitive risks that can ensue when traditional lines of demarcation between providers and payers are crossed. Adopt strategies and tactics to manage financial risk, beyond buying malpractice and stop-loss insurance.

Workers' compensation--the other self-insured liability.

Self-insured healthcare entities should take the following steps to understand, report, and control their exposure to workers' compensation losses: Focus on safety and risk management. Maintain a proper retention. Create'skin in the game" through an allocation. Benchmark the program's performance. Perform frequent analyses and obtain second opinions.

Challenges for the German Health Care System.

The German Health Care System (GHCS) faces many challenges among which an aging population and economic problems are just a few. The GHCS traditionally emphasised equity, universal coverage, ready access, free choice, high numbers of providers and technological equipment; however, real competition among health-care providers and insurance companies is lacking. Mainly in response to demographic changes and economic challenges, health-care reforms have focused on cost containment and to a lesser degree also quality issues. In contrast, generational accounting, priorisation and rationing issues have thus far been completely neglected. The paper discusses three important areas of health care in Germany, namely the funding process, hospital management and ambulatory care, with a focus on cost control mechanisms and quality improving measures as the variables of interest. Health Information Technology (HIT) has been identified as an important quality improvement tool. Health Indicators have been introduced as possible instruments for the priorisation debate.

The impact of HCA's 2006 leveraged buyout on hospital performance.

Leveraged buyout (LBO) arrangements are a reorganization strategy whereby a firm assumes a substantial amount of debt to buy back its publicly held stock to become privately held. LBOs offer a firm several advantages and have the potential to increase efficiency. In the past 20 years, several healthcare firms have engaged in LBOs, but the literature on performance changes in healthcare organizations as a result of an LBO is limited. In this article, we report on a study that examined the performance of Hospital Corporation of America (HCA) hospitals before and after the LBO that was initiated in 2006. We used data from the Medicare Hospital Cost Report Information System and analyzed data from 130 HCA hospitals and 490 comparison hospitals. Findings show that HCA hospitals reduced expenses and their number of full-time equivalents (FTEs) relative to local competitor hospitals. HCA hospitals' cash-flow-margin ratio was substantially higher when adjusted for its local competing hospitals at the beginning of the LBO as well as at end of the LBO. When compared to local hospitals, HCA hospitals had a significant decrease in their capital investment in fixed assets from 2006 to 2009. These findings underscore the effectiveness of HCA's management strategies to repay debt and increase the value of the company, and they are informative for healthcare firms and their managers who are considering LBOs.