Association of Commercial-to-Medicare Relative Prices With Health System Financial Performance.

Importance: Various studies have documented the rise in commercial insurance prices during the past 2 decades; however, estimates on the association of rising costs with health systems' financial health are lacking. This study calculated 2 measures from standardized Audited Financial Statements (AFSs)-operating margins and days of unrestricted cash on hand-to explore the associations. Objective: To estimate the association between health systems' financial condition and the ratio of commercial to Medicare relative prices. Design, Setting, and Participants: This cross-sectional analysis combined standardized 2018 AFSs from a large sample of US health systems with publicly available relative price data to assess the association between their financial outcomes and commercial-to-Medicare relative inpatient prices. The 2018 AFSs were collected and standardized from a convenience sample of multihospital health systems and single hospitals that were included in round 4 of the RAND Hospital Price Transparency Study. Cross-sectional, multivariate regression models were estimated, controlling for payer mix and other system characteristics, and models were weighted by health systems' 2018 adjusted admissions. The analyses were conducted July 2021 through November 2022. Exposures: The commercial-to-Medicare relative price for inpatient services (2018-2020 pooled average), which represents the average amount paid by commercial plans as a percentage of what Medicare would have paid to the same health system for the same services. Main Outcomes and Measures: Operating margins and days cash on hand, which capture complementary aspects of financial performance (profitability and liquidity). Results: The study sample included 156 health systems in the US, representing diverse geography, size, and ownership type. Mean (SD) days cash on hand were 180.1 (113.3) and operating margins were 3.3% (3.6%) in 2018. Overall, a 1-unit increase in the commercial-to-Medicare relative price ratio was associated with a 21.3% (95% CI, 21.3% to 21.4%; P < .001) increase in days cash on hand and a 2.7 (95% CI, 2.7 to 2.7; P < .001) percentage point increase in average operating margins. Higher Medicaid payer mix share was associated with fewer days cash on hand (-3.3%; 95% CI, -3.3% to -3.3%; P < .001) and lower operating margins (-0.081; 95% CI, -0.082 to -0.081; P < .001). Conclusions and Relevance: This cross-sectional study of health system financial data found that higher commercial-to-Medicare relative prices and a lower Medicaid payer share were associated with higher profits and more days cash on hand. These findings provide evidence against the claim that relatively higher commercial prices are primarily used to offset losses from public payers rather than to increase profits and liquidity.

After the Bell: Lifestyle Transformation After Cancer Treatment.

There are many traditions on the last day of chemotherapy. It is often a happy time when patients have pictures taken with their oncology nurses and ring the bell as they leave the infusion area. For many, the bell is symbolic of the completion of cancer treatment and the beginning of the rest of their lives as cancer survivors. After the bell, survivors often go home wondering what they can do to be healthier and reduce their risk of recurrence.


Predictors of Payer Mix and Financial Performance Among Safety Net Hospitals Prior to the Affordable Care Act.

The objective of this study was to use audited hospital financial statements to identify predictors of payer mix and financial performance in safety net hospitals prior to the Affordable Care Act. We analyzed the 2010 financial statements of 98 large, urban safety net hospital systems in 34 states, supplemented with data on population demographics, hospital features, and state policies. We used multivariate regression to identify independent predictors of three outcomes: 1) Medicaid-reliant payer mix (hospitals for which at least 25% of hospital days are paid for by Medicaid); 2) safety net revenue-to-cost ratio (Medicaid and Medicare Disproportionate Share Hospital payments and local government transfers, divided by charity care costs and Medicaid payment shortfall); and 3) operating margin. Medicaid-reliant payer mix was positively associated with more inclusive state Medicaid eligibility criteria and more minority patients. More inclusive Medicaid eligibility and higher Medicaid reimbursement rates positively predicted safety net revenue-to-cost ratio. University governance was the strongest positive predictor of operating margin. Safety net hospital financial performance varied considerably. Academic hospitals had higher operating margins, while more generous Medicaid eligibility and reimbursement policies improved hospitals' ability to recoup costs. Institutional and state policies may outweigh patient demographics in the financial health of safety net hospitals.

Assessing the impact of privatizing public hospitals in three American states: implications for universal health coverage.

Many countries with universal health systems have relied primarily on publicly-owned hospitals to provide acute care services to covered populations; however, many policymakers have experimented with expansion of the private sector for what they hope will yield more cost-effective care. The study provides new insight into the effects of hospital privatization in three American states (California, Florida, and Massachusetts) in the period 1994 to 2003, focusing on three aspects: 1) profitability; 2) productivity and efficiency; and 3) benefits to the community (particularly, scope of services offered, price level, and impact on charity care). For each variable analyzed, we compared the 3-year mean values pre- and postconversion. Pre- and postconversion changes in hospitals' performance were then compared with a nonequivalent comparison group of American public hospitals. The results of our study indicate that following privatization, hospitals increased operating margins, reduced their length of stay, and enjoyed higher occupancy, but at some possible cost to access to care for their communities in terms of higher price markups and loss of beneficial but unprofitable services.

From striving to thriving: systems thinking, strategy, and the performance of safety net hospitals.

BACKGROUND: Safety net hospitals (SNH) have, on average, experienced declining financial margins and faced an elevated risk of closure over the past decade. Despite these challenges, not all SNHs are weakening and some are prospering. These higher-performing SNHs provide substantial care to safety net populations and produce sustainable financial returns. PURPOSE: Drawing on the alternative structural positioning and resource-based views, we explore strategic management as a source of performance differences across SNHs. METHODOLOGY/APPROACH: We employ a mixed-method design, blending quantitative and qualitative data and analysis. We measure financial performance using hospital operating margin and quantitatively evaluate its relationship with a limited set of well-defined structural positions. We further evaluate these structures and also explore the internal resources of SNHs based on nine in-depth case studies developed from site visits and extensive interviews. FINDINGS: Quantitative results suggest that structural positions alone are not related to performance. Comparative case studies suggest that higher-performing SNH differ in four respects: (1) coordinating patient flow across the care continuum, (2) engaging in partnerships with other providers, (3) managing scope of services, and (4) investing in human capital. On the basis of these findings, we propose a model of strategic action related to systems thinking--the ability to see wholes and interrelationships rather than individual parts alone. PRACTICE IMPLICATIONS: Our exploratory findings suggest the need to move beyond generic strategies alone and acknowledge the importance of underlying managerial capabilities. Specifically, our findings suggest that effective strategy is a function of both the internal resources (e.g., managers' systems-thinking capability) and structural positions (e.g., partnerships) of organizations. From this perspective, framing resources and positioning as distinct alternatives misses the nuances of how strategic advantage is actually achieved.

Strained local and state government finances among current realities that threaten public hospitals' profitability.

This study demonstrates that some safety-net hospitals--those that provide a large share of the care to low-income, uninsured, and Medicaid populations--survived and even thrived before the recent recession. We analyzed the financial performance and governance of 150 hospitals during 2003-07. We found, counterintuitively, that those directly governed by elected officials and in highly competitive markets were more profitable than other safety-net hospitals. They were financially healthy primarily because they obtained subsidies from state and local governments, such as property tax transfers or supplemental Medicaid payments, including disproportionate share payments. However, safety-net hospitals now face a new market reality. The economic downturn, slow recovery, and politics of deficit reduction have eroded the ability of local governments to support the safety net. Many safety-net hospitals have not focused on effective management, cost control, quality improvement, or services that attract insured patients. As a result, and coupled with new uncertainties regarding Medicaid expansion stemming from the recent Supreme Court decision on the Affordable Care Act, many are likely to face increasing financial and competitive pressures that may threaten their survival.

The effect of ellagic acid on platelet activation as measured by the quantification of P-selectin using flow cytometry.

The purpose of this study was to investigate the effects of ellagic acid on platelet expression via the cyclooxygenase (COX) pathway by examining its effects on platelet activation and comparing them with known COX inhibitors in male Sprague-Dawley rats. Ellagic acid is a major compound found in certain fruits and nuts. It has been attributed as having anti-inflammatory, free radical scavenging, and coagulation properties as well as effects on tumor genesis in multiple forms of cancer. We assessed the similarities of ellagic acid to known COX-2 specific and nonspecific COX inhibitors by examining their effects on platelet activation via use of P-selectin flow cytometry. Compared with the vehicle group, both the ellagic acid (P = .035) and the ketorolac (P = .038) groups demonstrated a significant decrease in platelet activation (P = .026). Furthermore, compared with all other groups, ellagic acid plus ketorolac group showed a significant decrease in platelet activation (P = .01). Our findings suggest that ellagic acid is likely a nonspecific COX inhibitor. It also suggests that combining ellagic acid with a known nonspecific COX inhibitor such as ketorolac may cause a significant decrease in platelet activity and an increase in blood loss.

From skepticism to engagement.

WellStar Kennestone Hospital's patient flow improvement initiative is a case study in engaging physicians in a collaborative effort that benefits both the physicians and the hospital. Kennestone's success was in large part due to the active participation of physician leaders on the committee charged with leading the project. The initiative provides a lesson for hospitals looking to collaborate with physicians in meeting reform's mandate for the highest-quality care delivered with the highest level of efficiency at the lowest possible cost.

Traditional fee-for-service Medicare payment systems and fragmented patient care: the backdrop for non-operating room procedures and anesthesia services.

Achieving fundamental reform of the health care system to improve patient outcomes will take decades of effort and a major shift in financial, medical, and political behaviors that have built up since the beginning of health insurance in the United States. To the extent that the present payment systems contribute to the high cost, poor quality, and lack of accountability that characterizes today's health care delivery system, there is hope that reforms are within reach.

The internal processes and behavioral dynamics of hospital boards: an exploration of differences between high- and low-performing hospitals.

BACKGROUND: Nonprofit hospital boards are under increasing pressure to improve financial, clinical, and charitable and community benefit performance. Most research on board effectiveness focuses on variables measuring board structure and attributes associated with competing ideal models of board roles. However, the results do not provide clear evidence that one role is superior to another and suggest that in practice boards pursue hybrid roles. Board dynamics and processes have received less attention from researchers, but emerging theoretical frameworks highlight them as key to effective corporate governance. PURPOSE: We explored differences in board processes and behavioral dynamics between financially high- and low-performing hospitals, with the goal of developing a better understanding of the best board practices in nonprofit hospitals. METHODOLOGY/APPROACH: A comparative case study approach allowed for in-depth, qualitative assessments of how the internal workings of boards differ between low- and high-performing facilities. FINDINGS: Boards of hospitals with strong financial performance exhibited behavioral dynamics and internal processes that differed in important ways from those of hospitals with poor financial performance. PRACTICE IMPLICATIONS: Boards need to actively attend to key processes and foster positive group dynamics in decision making to be more effective in governing hospitals.

Hospital board dynamics: the five questions.

High-performing boards communicate clearly and often and aren't afraid to challenge the status quo. How does your board compare?

Project ENABLE: a palliative care demonstration project for advanced cancer patients in three settings.

At the end of the 1990s, based on data from two major studies of end-of-life (EOL) care, the Study to Understand Prognoses and Preferences for Outcomes and Risks of Treatment (SUPPORT), and the Hospitalized Elderly Longitudinal Project (HELP), a consensus panel report documented the problems and needs of patients with cancer and other life-limiting diagnoses at end-of-life. A national program of The Robert Wood Johnson Foundation (RWJF), Promoting Excellence in End-of-Life Care, attempted to address these needs by funding demonstration projects to test various approaches to improve identified deficits. In 1998, Project ENABLE (Educate, Nurture, Advise Before Life Ends), one of four RWJF-funded cancer center/hospice collaborations of the Promoting Excellence program, began to address these issues. The jointly sponsored Norris Cotton Cancer Center (NCCC)/Hospice of Vermont and New Hampshire (Hospice VNH) program provided an integrated approach to the management of life-limiting cancer. Project ENABLE was aimed at alleviating the symptoms of disease and treatment, enhancing clinician and patient/family communication, offering support for families, friends and other caregivers, addressing emotional and spiritual needs of dying people and providing conceptual and administrative structure to provide EOL care consistent with patients' values and preferences. Although patient symptom data is not yet available, other measures of success included improved access to hospice and palliative care services from the time of diagnosis and a sustained palliative care program at two of the three sites in which the program was implemented.

Exploring the relationship between inpatient hospital costs and quality of care.

This research explores the potential benefit of improving the clinical quality and reducing the cost of inpatient care using administrative data to inform or restrict provider choice. Cost and quality measures derived from this source are already available to purchasers, payers, and consumers in support of insurance products designed to provide financial incentives for consumers to seek high-quality, low-cost care. It will be important to further refine the clinical and cost data to take into account measurable differences in the severity of illness of patients, and to acknowledge that some of the differences in cost or quality variation among hospitals may not be captured despite such refinements. Medicare cost report data is merged with Uniform Hospital Discharge Abstracts to identify the additional direct cost of patients experiencing 1 of 6 poor clinical outcomes, or admissions for ambulatory care sensitive conditions, or selected surgical procedures at low volume hospitals. Variability in case mix-adjusted cost per case among community and teaching hospital groups is also quantified; measurable quality differences between low cost and other hospitals in each group is described. Our results suggest that, despite implementation challenges, purchaser and payer initiatives that encourage consumers to seek lower cost inpatient care without sacrificing clinical quality are worth pursuing.