Identifying healthcare cost drivers in Palestine.

We examine the relationship between national health expenditure and its drivers to help inform resource allocation policy decisions in Palestine. We forecast health expenditures from the financing agency perspective, and examine Granger-Causality relationships to assess implied causality between health spending and exogenous variables, using estimates of vector autoregressions. We forecast national health expenditure to be US$1.45 billion in 2015 and grow at 7% annually through 2020. This is due to expected increases in government health expenditure, and household spending, at 5% and 7%, respectively, compared to 2014. The proportion of household spending on health services is expected to increase, while the government proportion is expected to decrease over the long run due to budget constraints. Population growth, ageing and changes in chronic disease patterns contribute significantly as drivers of the increase in healthcare costs. Our results suggest a need to review and modify the current health insurance scheme.

Estimation of health care costs and cost recovery: the case of Rafidya Hospital in Palestine.

The purpose of this study is to develop an estimation model for health care costs and cost recovery, and evaluate service sustainability under an uncertain environment. The Palestinian National Authority's recent focus on improving financial accountability supports the need to research health care costs in the Palestinian territories. We examine data from Rafidya Hospital from 2005-2009 and use step-down allocation to distribute overhead costs. We use an ingredient approach to estimate the costs and revenues of health services, and logarithmic estimation to prospectively estimate the demand for 2011. Our results indicate that while cost recovery is generally insufficient for long-term sustainability, some services can recover their costs in the short run. Our results provide information useful for health care policy makers in setting multiple-goal policies related to health care financing in Palestine, and provide an important initiative in the estimation of health service costs.

A comparative analysis of the CVP structure of nonprofit teaching and for-profit non-teaching hospitals.

Due to the market turbulence facing the hospital industry, the financial viability of teaching hospitals has been severely threatened. Their missions of education, research, and patient care even strengthen this crisis. Therefore, the objective of this study is to conduct a comparative analysis of the cost, volume, and profit (CVP) structure between large nonprofit urban teaching hospitals and small for-profit rural/suburban non-teaching hospitals. The following two hypotheses were developed: (1) large nonprofit urban teaching hospitals tend to have higher fixed cost, lower variable cost, lower total revenue adjusted by case mix index (CMI), and lower return on total assets (ROA); and (2) small for-profit rural/suburban non-teaching hospitals tend to have lower fixed cost, higher variable cost, higher total revenue adjusted by CMI, and higher ROA. Using 117 teaching hospitals and 102 non-teaching hospitals selected from the Medicare Cost Report database in 2005, the results from multiple regression indicated that large nonprofit teaching hospitals located in urban areas are more likely to have higher fixed cost and lower variable cost. While such cost structure doesn't necessarily affect their total revenue adjusted by CMI, it does lead to a lower return on hospitals' total assets. The results support our hypotheses in terms of fixed cost percentage, variable cost percentage, and ROA, but not total revenue adjusted by CMI. The results suggest that cost structure is significantly associated with hospitals' performance. Also, as teaching hospitals' portfolios of services and programs increase (e.g., provision of uncompensated care to Medicare and Medicaid patients and doing research), it becomes strategically necessary and critical to manage the allocation of resources or investments into the fixed capital that supports the business.

Interactive financial decision support for clinical research trials.

The purpose of this article is to describe a decision support approach useful for evaluating proposals to conduct clinical research trials. Physicians often do not have the time or background to account for all the expenses of a clinical trial. Their evaluation process may be limited and driven by factors that do not indicate the potential for financial losses that a trial may impose. We analyzed clinical trial budget templates used by hospitals, health science centers, research universities, departments of medicine, and medical schools. We compiled a databank of costs and reviewed recent research trials conducted by the Department of Cardiothoracic Surgery in a major academic health science center. We then developed an interactive spreadsheet-based budgetary decision support approach that accounts for clinical trial income and costs. It can be tailored to provide quick and understandable data entry, accurate cost rates per subject, and clear go/no-go signals for the physician.

Bootstrapping implementation research training: A successful approach for academic health centers.

Demand for building competencies in implementation research (IR) outstrips supply of training programs, calling for a paradigm shift. We used a bootstrap approach to leverage external resources and create IR capacity through a novel 2-day training for faculty scientists across the four Texas Clinical & Translational Science Awards (CTSAs). The Workshop combined internal and external expertise, targeted nationally established IR competencies, incorporated new National Institutes of Health/National Cancer Institute OpenAccess online resources, employed well-known adult education principles, and measured impact. CTSA leader buy-in was reflected in financial support. Evaluation showed increased self-reported IR competency; statewide initiatives expanded. The project demonstrated that, even with limited onsite expertise, it was possible to bootstrap resources and build IR capacity de novo in the CTSA community.

The relationship between the Balanced Budget Act and length of stay for Medicare patients in US hospitals.

BACKGROUND: The Balanced Budget Act (BBA) of 1997 and Balanced Budget Refinement Act (BBRA) of 1999 led to deep financial cuts for hospitals and nursing homes. OBJECTIVES: We examine the effects of these acts on hospital length of stay (LOS) for Medicare recipients. METHODS: Using data for all short-stay community hospitals in the country, we compared LOS for Medicare patients before and after the BBA/BBRA relative to known determinants of LOS, e.g., hospital ownership, region, beds, financial performance, and conversion/change in ownership type. RESULTS: Hospital LOS was reduced as a result of the acts. Reductions were more apparent for larger urban hospitals that provided safety-net services. LOS varied slightly by hospital ownership. CONCLUSION: This study is among the first to evaluate the impact of BBA and BBRA on hospital services. These acts had a negative effect on the ability of hospitals to continue offering safety-net services and negatively affected LOS.

The development of certificate of need legislation.

This article examines the development of Certificate of Need (CON) legislation in the United States. Over time, CON legislation developed into efforts to contain rising health care costs, while maintaining quality of care. In recent years, numerous states have begun to reevaluate the current impact of CON regulations, and ask whether the programs should be discontinued. State regulators as well as academic researchers must address the costs vs. benefits of such legislation. Specific measures within such regulations must be addressed in order for health policy makers, administrators, and researchers to help meet the escalating demand for health services.

The association of willingness-to-pay and patient attributes: a cost-volume-profit analysis of cardiac catheter unit services in Ramallah Hospital, Palestine.

The purpose of this study is to examine the association of willingness-to-pay and patient attributes in relation to the multi-service cost-volume-profit structure of a cardiac catheter unit in Ramallah Hospital. This article contributes to the literature by providing primary evidence on patient willingness-to-pay, by identifying the specific break-even parameters of three hospital cardiac catheter unit service types (diagnosis, balloon, and pacemaker), and by demonstrating the cross-subsidization of patient income groups that is inherent in the existing hospital rate structure. Our results provide information useful for (1) evidence-based policy making with respect to hospital rate setting and cross-subsidies of patient income groups; (2) the advancement of hospital management, by demonstrating the estimated variable and fixed cost parameters and the impact of patient revenue mix on the profitability of cardiac catheter unit services; and (3) the advancement of theory, by documenting the relationship of patient demand and the cost of supply in a multi-patient-group, multi-service hospital setting.

Implementing an essential medicines list: effects on pricing and utilization in West Bank, Palestine.

The purpose of this article is to examine the effects of implementing an essential medicines list (EML) on medicine prices, utilization and aggregate cost savings in the public sector of West Bank, Palestine. The Palestinian Ministry of Health (MOH) introduced an EML to contain escalating costs and improve appropriate utilization within the public sector. To assess the effects of the EML implementation, we obtained price and utilization data for 76 medicine groups for 1997-2003. We also collected demographic and economic information for the population living in the catchment areas of the MOH health care facilities. After EML implementation, medicine utilization declined by 1.7 defined daily doses (DDDs) per-capita per year, and prices declined by US $0.0013 per DDD. The aggregate cost savings totaled US $5.38 million. We conclude that the EML implementation was successful in containing medicine costs and should continue to increase savings into the future.

Paying hospital specialists: Experiences and lessons from eight high-income countries.

Payment systems for specialists in hospitals can have far reaching consequences for the efficiency and quality of care. This article presents a comparative analysis of payment systems for specialists in hospitals of eight high-income countries (Canada, England, France, Germany, Sweden, Switzerland, the Netherlands, and the USA/Medicare system). A theoretical framework highlighting the incentives of different payment systems is used to identify potentially interesting reform approaches. In five countries,most specialists work as employees - but in Canada, the Netherlands and the USA, a majority of specialists are self-employed. The main findings of our review include: (1) many countries are increasingly shifting towards blended payment systems; (2) bundled payments introduced in the Netherlands and Switzerland as well as systematic bonus schemes for salaried employees (most countries) contribute to broadening the scope of payment; (3) payment adequacy is being improved through regular revisions of fee levels on the basis of more objective data sources (e.g. in the USA) and through individual payment negotiations (e.g. in Sweden and the USA); and (4) specialist payment has so far been adjusted for quality of care only in hospital specific bonus programs. Policy-makers across countries struggle with similar challenges, when aiming to reform payment systems for specialists in hospitals. Examples from our reviewed countries may provide lessons and inspiration for the improvement of payment systems internationally.

Medical tourism and its impact on the US health care system.

The health care industry within the United States continues to face unprecedented increases in costs, along with the task of providing care to an estimated 46 million uninsured or underinsured patients. These patients, along with both insurers and employers, are seeking to reduce the costs of treatment through international outsourcing of medical and surgical care. Knows as medical tourism, this trend is on the rise, and the US health care system has not fully internalized the effects this will have on its economic structure and policies. The demand for low-cost health care services is driving patients to seek treatment on a globally competitive basis, while balancing important quality of care issues. In this article, we outline some of the issues facing legislators, health care policy makers, providers, and health service researchers regarding the impact of medical tourism on the US health care system.

Using return on equity and total profit margin to evaluate hospital performance in the U.S.: a piecewise regression analysis.

We investigated hospital profitability by comparing Total Profit Margin (TPM) and Return on Equity (ROE) as measures of profitability, while controlling for inflation and other salient factors. We controlled for variables such as, Disproportionate Share Hospital status, location, type of ownership control, teaching status, conversion to or from nonprofit status, Critical Access Hospital status, sole Medicare provider status, case mix adjusted patient length of stay, bed size, number of employees, and occupancy rate. We allowed for nonlinearities in our model, and used 1996 and 1998 data in our analysis to bridge potential effects of the Balanced Budget Act of 1997. Most of the hospitals we examined were nonprofit organizations that did not convert their type of ownership control. As a consequence, we found TPM to be a better measure of profitability than ROE, and profitability was mainly influenced by location, size, occupancy rate, volume of Medicare and Medicaid patients, and teaching status. Our results clarify the primary factors associated with profitability for our sample hospitals, and will assist creditors, managers and regulators in their assessments of comparative hospital financial performance.

Toward an international case mix index for comparisons in OCED countries. Organization for Economic Cooperation and Development.

During the last 20 years, a number of studies have examined the effect of Diagnosis Related Group (DRG)-based health care prospective payment systems on the cost and quality of services. To examine these issues, it is necessary to control for variations in patient mix and the related resources needed by incorporating some form of a case mix index. As part of our ongoing research on comparative DRG-based health care payment systems, we develop a preliminary, international case mix index using the Organization for Economic Cooperation and Development (OECD) health care database. We illustrate the application of our case mix index and use it to devise a standardized cost per case and a standardized cost per day for several countries. We also provide some preliminary analysis of the data demonstrating the observable and predictable effects of DRG-based payments on case m ix index, length of stay,cost per day, and cost per case.

The impact of DRG-based payment systems on quality of health care in OECD countries.

Ever since DRG-based payment systems were first introduced in the United States in 1983, the medical community has expressed concern about the potential impact of these price control systems on the quality of care. Several research studies have examined the impact of DRG-based payment systems on the quality of care within a single state in the United States, or within a specific country. We have not identified any attempts in the literature to examine the impact of DRG-based payment systems on the quality of health care across different countries. In this article we contribute to the debate by (1) providing a unique identification of DRG adoption status for each of 35 countries, (2) refining an international case mix index, and (3) applying it to examine whether DRG-based payments impact the quality of health care across national and cultural boundaries. We find some evidence for Organization for Economic Cooperation and Development countries that, compared with non-adopters, adoption of DRG-based payment systems is associated with faster hospital case mix increases and slower quality gains with respect to patient mortality from surgical and medical misadventures.

The effects of knowledge management on surgeon behavior.

Knowledge management is an important process for health care researchers and administrators. The way we manage and transfer knowledge in an organization can have a substantial impact on behavior and performance. In this article, we examine the behavioral effects of transferring performance-efficiency knowledge to a group of hospital-based surgeons. We observe the way the knowledge transfer impacts their sense of professional accountability and practice patterns for a limited set of diagnoses. We defined performance efficiency for a surgeon as the deviation from expected average length of inpatient hospital stay, and from expected average hospital charges (adjusted for risk and outcomes) for three of the most frequently performed and most costly surgical procedures in our subject hospital. We communicated knowledge of their performance efficiency to the group of hospital-based surgeons, along with benchmarked professional best practices, and included an identification of dimensions where performance could be improved. We then measured and compared their performance efficiency one year later. We did observe differences in performance efficiency, but not in consistent directions, and not in statistically significant magnitudes. Also, surgeons who initially had low levels of efficiency continued to have low levels of efficiency one year later. Within a professional accountability system, transfer of performance-efficiency knowledge alone did not provide sufficient motivation to induce consistent, significant change in practice behaviors among the group of surgeons. We conclude that medical opinion leaders and individualized strategies for surgeon motivation may have greater promise for improving performance efficiency if linked to the knowledge transfer system.

Rational use effects of implementing an essential medicines list in West Bank, Palestinian Territories.

The Palestinian Ministry of Health introduced an essential medicines list (EML) in 2000 to improve rational use of medicines and contain costs. We have examined the effects of the EML in the Palestinian healthcare public sector. We obtained data on prescription patterns for medicines from 3570 prescriptions given during outpatient visits in 17 healthcare facilities in the West Bank from 1997 to 2003. We analyzed the prescriptions to measure rational use. We modeled indicators of rational use as a function of the EML and 16 health center indicator variables. The EML was effective in shifting all prescribing indicators toward standard values. To improve rational medicine use, treatment protocols for the most common diseases and continuous education for medical staff is required.