The Medicare IPPS 40 Years Later: Lessons Learned and What to Do Next.

The 1983 implementation of the Medicare Inpatient Prospective Payment System (IPPS) was successful in controlling Medicare inpatient costs because it was designed as a clinically credible management tool that facilitated real behavior change and performance improvement. The next phase of IPPS should expand the inpatient payment bundle to a hospital episode-of-care performance bundle that explicitly links episode cost and quality. A uniform, comparable, and transparent episode performance bundle that highlights the tradeoffs between episode cost and quality can expand the incentives to control costs and provide hospitals the management information to improve performance.

Comparison of the Financial and Operational Characteristics of For-Profit and Nonprofit Hospitals Receiving Federal Graduate Medical Education Payments, 2011-2020.

This study compares graduate medical education (GME) payments between nonprofit and for-profit hospitals between 2011 and 2020 to assess how hospitals value GME.

Structural Racial Disparities in the Allocation of Disproportionate Share Hospital Payments.

This cross-sectional study examines the allocation of Medicare and Medicaid Disproportionate Share Hospital payments by race.

Financial Outcomes Associated With the COVID-19 Pandemic in California Hospitals.

Importance: The COVID-19 pandemic challenged the financial solvency of hospitals, yet there is limited evidence examining hospital financial performance through the first 15 months of the pandemic. Objective: To assess the financial outcomes associated with the COVID-19 pandemic in California hospitals. Design, Setting, and Participants: This cross-sectional study tracked the financial performance of 348 hospitals in California using Hospital Quarterly Financial and Utilization Data from the State of California Office of Statewide Health Planning and Development. Hospital financial performance was examined from January 2019 to June 2021 for all hospitals in aggregate and by safety-net status. Exposures: Pre-COVID-19 financial outcomes vs COVID-19 period outcomes. Main Outcomes and Measures: Quarterly revenues, expenses, and profits. Results: In 348 California hospitals, hospital financial performance was highly variable during the COVID-19 pandemic. Losses were reduced by COVID-19 relief funding and strong equities market performance starting in the second quarter of 2020. Non-safety net hospitals maintained positive operating margins throughout the pandemic, while safety-net hospitals experienced large losses. Between the first quarter of 2020 and the second quarter of 2021, California safety-net hospitals' net operating losses were more than $3.2 billion. Conclusions and Relevance: In this cross-sectional study of California hospitals, hospital financial performance was tracked between the first quarter of 2019 and the second quarter of 2021. Although hospitals experienced reduced profits between January 2020 and June 2021, the interventions of government assistance programs were able to mitigate more detrimental fiscal consequences. When compared with non-safety net hospitals, safety-net hospitals were confronted with more concentrated financial losses.

High-Performing and Low-Performing Hospitals Across Medicare Value-Based Payment Programs.

This cross-sectional study examines the number and characteristics of hospitals that performed well or poorly across 3 Medicare value-based programs in fiscal year 2020.

Performance Evaluation of Hospital Economic Management with the Clustering Algorithm Oriented towards Electronic Health Management.

In order to study the clustering algorithm based on density grid, the performance evaluation index system of hospital economic management under the application of electronic health management system is constructed. Firstly, this work designs the basic architecture of electronic health management system, classifies and screens the process of index system of electronic health management system, compares the clustering algorithm based on density grid with the simple clustering algorithm based on density or grid, and then applies it to the performance evaluation index system of hospital economic management. According to the principle of Mitchell scoring method, the expert questionnaire of hospital economic management performance evaluation index system was designed, and Delphi method was used to evaluate the candidate indexes from the three dimensions of right, legitimacy, and urgency. The results show that, compared with simple network clustering algorithm and density clustering algorithm, the clustering algorithm based on density network produces higher purity (94% VS 73% VS 67%) and lower entropy (0.9 VS 1.4 VS 1.54), which effectively saves memory consumption, and the difference is statistically significant (P < 0.05). The core indicators with scores above 4.5 in both dimensions include budget revenue implementation rate, budget expenditure implementation rate, implementation rate of special financial appropriation, asset-liability ratio, hospitalization income cost rate, medical insurance settlement rate, average cost of discharged patients, and drug proportion. The coefficient of variation of the first grade index is between 0.05 and 0.14 and that of the second grade index is between 0.05 and 0.15. Clustering algorithm based on density network has higher purity and lower entropy, which can effectively save memory consumption. The performance evaluation index system of hospital economic management finally determines 6 first-level indexes: budget management, financial fund management, cost management, medical expense management, medical efficiency, medical quality, and 25 second-level indexes.

In-hospital economic burden of anastomotic leakage after colorectal anastomosis surgery: a real-world cost analysis in Italy.

BACKGROUND: Anastomotic leakage (AL) is a severe complication of colorectal surgery. We aimed to quantify inpatient costs and key cost contributors associated with AL in a single Italian center. RESEARCH DESIGN AND METHODS: Electronic records for adults who had undergone colorectal surgery with anastomosis (January 2015 - December 2016), were retrospectively reviewed. Patients with AL were identified using clinical signs and/or imaging findings and/or intraoperative findings. Available data included patient, clinical, and procedural characteristics, healthcare resource utilization, and inpatient costs. Multivariate models were used to adjust for potential confounders. RESULTS: AL occurred in 12.3% of patients (N = 317). Mean adjusted inpatient cost was 108% higher (p < 0.001) for patients with AL versus no AL (€14,711; 95% CI: 12,113; 17,866 versus €7,089; 95% CI: 6,623; 7,587). Key cost contributors were ward stay, disposables, operating room, and hospital consultations. Mean losses (reimbursement minus costs) were €2,041/patient with AL. AL extended mean length of stay by 9 days and increased odds of reoperation and ICU stay (all p < 0.001). CONCLUSIONS: Patients with AL place considerable economic and resource burden on healthcare systems and hospital reimbursement rates do not cover treatment costs. This study highlights an unmet need for novel techniques to reduce the burden of AL.

Medicaid Expansion and Not-For-Profit Hospitals' Financial Status: National and State-Level Estimates Using IRS and CMS Data, 2011-2016.

Several studies have shown that Medicaid expansion has improved hospital financial performance. All of these studies have either used data from the Internal Revenue Service (IRS) or the Centers for Medicare and Medicaid Services (CMS), and none of them has examined the state-level impact of expansion on hospital finances. Using data for not-for-profit hospitals from both IRS and CMS for 2011-2016, we described the difference in costs related to uncompensated care and Medicaid shortfalls. We then estimated the impact of Medicaid expansion on hospitals' financial status nationally and by state. Nationally, the estimated net effect of expansion reduced not-for-profit hospital costs by 2 percentage points based on IRS data and 0.83 percentage points based on CMS data. Across expansion states, the estimated net effects varied widely with approximately a 10-fold difference for hospitals based on IRS data and a 2-fold difference based on CMS data. Future studies should further explore the differences across IRS and CMS data.

Luck of the draw: Role of chance in the assignment of medicare readmissions penalties.

Pay-for-performance programs are one strategy used by health plans to improve the efficiency and quality of care delivered to beneficiaries. Under such programs, providers are often compared against their peers in order to win bonuses or face penalties in payment. Yet luck has the potential to affect performance assessment through randomness in the sorting of patients among providers or through random events during the evaluation period. To investigate the impact luck can have on the assessment of performance, we investigated its role in assigning penalties under Medicare's Hospital Readmissions Reduction Policy (HRRP), a program that penalizes hospitals with excess readmissions. We performed simulations that estimated program hospitals' 2015 readmission penalties in 1,000 different hypothetical fiscal years. These hypothetical fiscal years were created by: (a) randomly varying which patients were admitted to each hospital and (b) randomly varying the readmission status of discharged patients. We found significant differences in penalty sizes and probability of penalty across hypothetical fiscal years, signifying the importance of luck in readmission performance under the HRRP. Nearly all of the impact from luck arose from events occurring after hospital discharge. Luck played a smaller role in determining penalties for hospitals with more beds, teaching hospitals, and safety-net hospitals.

Celebrating a decade of the minor operations clinic: an approach at a regional New Zealand hospital.

BACKGROUND: A minor operations clinic has been providing a "one-stop shop" at our regional New Zealand hospital for the past decade to service management of skin lesions. This study aims to assess demographics, service characteristics, clinical standards and cost-savings from this setup, and to identify areas for improvement and potentially provide a model for other health units. METHODS: All patients seen between May 2009 and June 2019 were prospectively included. Data includes demographics, waitlist period, referral sources, follow-up destinations, histology including involvement of margins and cost. RESULTS: A total of 4,926 patients were included, with 6,442 procedures overall. Median age was 72 years old. The main source of referrals was primary care. The majority of patients were returned directly to primary care. Median wait-time was 66 days, and this remained static over the decade. 56.6% of excised lesions yielded malignant histology and 90.1% achieved clear margins. There was a calculated saving of NZ$607.00 per patient with our one-stop shop compared to our previous traditional model. A further calculated saving of NZ$452,028.50 was achieved by diverting complex procedures from requiring operating theatre environments. CONCLUSIONS: Our model provides successful, streamlined and cost-effective treatment of skin lesions for our community. This model (or aspects of) may be similarly effective in other regional centres.

Year 1 of the Bundled Payments for Care Improvement-Advanced Model.

BACKGROUND: The Center for Medicare and Medicaid Innovation launched the Medicare Bundled Payments for Care Improvement-Advanced (BPCI-A) program for hospitals in October 2018. Information is needed about the effects of the program on health care utilization and Medicare payments. METHODS: We conducted a modified segmented regression analysis using Medicare claims and including patients with discharge dates from January 2017 through September 2019 to assess differences between BPCI-A participants and two control groups: hospitals that never joined the BPCI-A program (nonjoining hospitals) and hospitals that joined the BPCI-A program in January 2020, after the conclusion of the intervention period (late-joining hospitals). The primary outcomes were the differences in changes in quarterly trends in 90-day per-episode Medicare payments and the percentage of patients with readmission within 90 days after discharge. Secondary outcomes were mortality, volume, and case mix. RESULTS: A total of 826 BPCI-A participant hospitals were compared with 2016 nonjoining hospitals and 334 late-joining hospitals. Among BPCI-A hospitals, the mean baseline 90-day per-episode Medicare payment was $27,315; the change in the quarterly trends in the intervention period as compared with baseline was -$78 per quarter. Among nonjoining hospitals, the mean baseline 90-day per-episode Medicare payment was $25,994; the change in quarterly trends as compared with baseline was -$26 per quarter (difference between nonjoining hospitals and BPCI-A hospitals, $52 [95% confidence interval {CI}, 34 to 70] per quarter; P<0.001; 0.2% of the baseline payment). Among late-joining hospitals, the mean baseline 90-day per-episode Medicare payment was $26,807; the change in the quarterly trends as compared with baseline was $4 per quarter (difference between late-joining hospitals and BPCI-A hospitals, $82 [95% CI, 41 to 122] per quarter; P<0.001; 0.3% of the baseline payment). There were no meaningful differences in the changes with regard to readmission, mortality, volume, or case mix. CONCLUSIONS: The BPCI-A program was associated with small reductions in Medicare payments among participating hospitals as compared with control hospitals. (Funded by the National Heart, Lung, and Blood Institute.).

Differences in Cancer Care Expenditures and Utilization for Surgery by Hospital Type Among Patients With Private Insurance.

Importance: With rising expenditures on cancer care outpacing other sectors of the US health system, national attention has focused on insurer spending, particularly for patients with private insurance, for whom price transparency has historically been lacking. The type of hospital at which cancer care is delivered may be an important factor associated with insurer spending for patients with private insurance. Objective: To examine differences in spending and utilization for patients with private insurance undergoing common cancer surgery at National Cancer Institute (NCI) centers vs community hospitals. Design, Setting, and Participants: This retrospective cross-sectional study included adult patients with an incident diagnosis of breast, colon, or lung cancer who underwent cancer-directed surgery from 2011 to 2014. Mean risk-adjusted spending and utilization outcomes were examined for each hospital type using multilevel generalized linear mixed-effects models, adjusting for patient, hospital, and region characteristics. Data were collected from the Health Care Cost Institute's national multipayer commercial claims data set, which encompasses claims paid by 3 of the 5 largest commercial health insurers in the United States (ie, Aetna, Humana, and UnitedHealthcare). Data analyses were conducted from February 2018 to February 2019. Exposures: Hospital type at which cancer surgery was performed: NCI, non-NCI academic, or community. Main Outcomes and Measures: Spending outcomes were surgery-specific insurer prices paid and 90-day postdischarge payments. Utilization outcomes were length of stay (LOS), emergency department (ED) use, and hospital readmission within 90 days of discharge. Results: The study included 66 878 patients (51 569 [77.1%] women; 31 585 [47.2%] aged ≥65 years) with incident breast (35 788 [53.5%]), colon (21 378 [32.0%]), or lung (9712 [14.5%]) cancer undergoing cancer surgery at 2995 hospitals (5522 [8.3%] at NCI centers; 10 917 [16.3%] at non-NCI academic hospitals; 50 439 [75.4%] at community hospitals). Treatment at NCI centers was associated with higher surgery-specific insurer prices paid compared with community hospitals ($18 526 [95% CI, $16 650-$20 403] vs $14 772 [95% CI, $14 339-$15 204]; difference, $3755 [95% CI, $1661-$5849]; P < .001) and 90-day postdischarge payments ($47 035 [95% CI, $43 289-$50 781] vs $41 291 [95% CI, $40 350-$42 231]; difference, $5744 [95% CI, $1659-9829]; P = .006). There were no significant differences in LOS, ED use, or hospital readmission within 90 days of discharge. Conclusions and Relevance: In this cross-sectional study, surgery at NCI centers vs community hospitals was associated with higher insurer spending for a surgical episode without differences in care utilization among patients with private insurance undergoing cancer surgery. A better understanding of the factors associated with prices and spending at NCI cancer centers is needed.

Geriatric Assessment and In-Hospital Economic Cost of Elderly Patients With Acute Coronary Syndromes.

BACKGROUND: Elderly patients with acute coronary syndromes (ACS) are at higher risk for complications and health care resources expenditure. No previous study has assessed the specific contribution of frailty and other geriatric syndromes to the in-hospital economic cost in this setting. METHOD: Unselected patients with ACS aged ≥75 years were prospectively included. A comprehensive geriatric assessment was performed during hospitalisation. Hospitalisation-related cost per patient was calculated with an analytical accountability method, including hospital stay-related expenditures, interventions, and consumption of devices. Expenditure was expressed in Euros (2019). The contribution of geriatric syndromes and clinical factors to the economic cost was assessed with a linear regression method. RESULTS: A total of 194 patients (mean age 82.6 years) were included. Mean length of hospital stay was 11.3 days. The admission-related economic cost was €6,892.15 per patient. Most of this cost was attributable to hospital length of stay (77%). The performance of an invasive strategy during the admission was associated with economic cost (p=0.008). Of all the ageing-related variables, comorbidity showed the most significant association with economic cost (p=0.009). Comorbidity, disability, nutritional risk, and frailty were associated with the hospital length of stay-related component of the economic cost. The final predictive model of economic cost included age, previous heart failure, systolic blood pressure, Killip class at admission, left main disease, and Charlson index. CONCLUSIONS: Management of ACS in elderly patients is associated with a significant economic cost, mostly due to hospital length of stay. Comorbidity mostly contributes to in-hospital resources expenditure, as well as the severity of the coronary event.

Exceptional Prices of Medical and Other Supplies during the COVID-19 Pandemic in Ecuador.

Shortages of essential supplies used to prevent, diagnose, and treat COVID-19 have been a global concern, and price speculation and hikes may have negatively influenced access. This study identifies variability in prices of products acquired through government-driven contracts in Ecuador during the early pandemic response, when the highest mortality rates were registered in a single day. Data were obtained from the National Public Procurement Service (SERCOP) database between March 1 and July 31, 2020. A statistical descriptive analysis was conducted to extract relevant measures for commonly purchased products, medical devices, pharmaceutical drugs, and other goods. Among the most frequently purchased products, the greatest amounts were spent on face masks (US$4.5 million), acetaminophen (US$2.2 million), and reverse transcriptase quantitative polymerase chain reaction assay kits (US$1.8 million). Prices varied greatly, depending on each individual contract and on the number of units purchased; some were exceptionally higher than their market value. Compared with 2019, the mean price of medical examination gloves increased up to 1,307%, acetaminophen 500 mg pills, up to 796%, and oxygen flasks, 30.8%. In a context of budgetary constraints that actually required an effective use of available funds, speculative price hikes may have limited patient access to health care and the protection of the general population and health care workers. COVID-19 vaccine allocations to privileged individuals have also been widely reported. Price caps and other forms of regulation, as well as greater scrutiny and transparency of government-driven purchases, and investment in local production, are warranted in Ecuador for improved infectious disease prevention.

Does Eco-Certification Correlate with Improved Financial Performance? Evidence From a Longitudinal Study in the US Hospital Industry.

Health care-based negative production externalities, such as greenhouse gas emissions, underscore the need for hospitals to implement sustainable practices. Eco-certification has been adopted by a number of providers in an attempt, for instance, to curb energy consumption. While these strategies have been evaluated with respect to cost savings, their implications pertaining to hospitals' financial viability remain unknown. We specify a fixed-effects model to estimate the correlation between Energy Star certification and 3 different hospitals' financial performance measures (net patient revenue, operating expenses, and operating margin) in the United States between 2000 and 2016. The Energy Star participation indicators' parameters imply that this type of eco-certification is associated with lower net patient revenue and lower operating expenses. However, the estimated negative relationship between eco-certification and operating margin suggests that the savings in operating expenses are not enough for a hospital to achieve higher margins. These findings may indicate that undertaking sustainable practices is partially related to intangible benefits such as community reputation and highlight the importance of government policies to financially support hospitals' investments in green practices.

Graduate Medical Education in Otolaryngology: Making Dollars and Sense of Reform.

Graduate medical education (GME) is funded by the Centers for Medicare and Medicaid Services through both direct and indirect payments. In recent years, stakeholders have raised concerns about the growth of spending on GME and distribution of payment among hospitals. Key stakeholders have proposed reforms to reduce GME funding such as adjustments to statutory payment formulas and absolute caps on annual payments per resident. Otolaryngology departmental leadership should understand the potential effects of proposed reforms, which could have significant implications for the short-term financial performance and the long-term specialty workforce. Although some hospitals and departments may elect to reduce resident salaries or eliminate positions in the face of GME funding cuts, this approach overlooks the substantial Medicare revenue contributed by resident care and high cost of alternative labor sources. Commitment to resident training is necessary to align both the margin and mission of otolaryngology departments and their sponsoring hospitals.