Technological innovation in healthcare yields better health outcomes but also drives healthcare expenditure, and governments are struggling to maintain an appropriate balance between patient access ...to modern care and the economic sustainability of healthcare systems. Health Technology Assessment (HTA) and centralized procurement are increasingly used to govern the introduction and diffusion of new technologies in an effort to make access to innovation financially sustainable. However, little empirical evidence is available to determine how they affect the selection of new technologies and unit prices. This paper focuses on medical devices (MDs) and investigates the combined effect of various HTA governance models and procurement practices on the two steps of the MD purchasing process (i.e., selecting the product and setting the unit price). Our analyses are based on primary data collected through a national survey of Italian public hospitals. The Italian National Health Service is an ideal case study because it is highly decentralized and because regions have adopted different HTA governance models (i.e., regional, hospital-based, double-level or no HTA), often in combination with centralized regional procurement programs. Hence, the Italian case allows us to test the impact of different combinations of HTA models and procurement programs in the various regions. The results show that regional HTA increases the probability of purchasing the costliest devices, whereas hospital-based HTA functions more like a cost-containment unit. Centralized regional procurement does not significantly affect MD selection and is associated with a reduction in the MD unit price: on average, hospitals located in regions with centralized procurement pay 10.1% less for the same product. Hospitals located in regions with active regional HTA programs pay higher prices for the same device (+23.2% for inexpensive products), whereas hospitals that have developed internal HTA programs pay 8.3% on average more for the same product.
•HTA and procurement are increasingly used to govern the uptake of new devices.•Little empirical evidence exists regarding their impact on healthcare expenditure.•We collected primary data through a national survey of Italian public hospitals.•Regional HTA favors the adoption of costly devices, unlike hospital-based HTA.•Centralized regional procurement yields lower medical device unit prices.
A widespread assumption across health systems suggests that greater clinicians' involvement in governance and management roles would have wider benefits for the efficiency and effectiveness of ...healthcare organisations. However, despite growing interest around the topic, it is still poorly understood how managers with a clinical background might specifically affect healthcare performance outcomes. The purpose of this review is, therefore, to map out and critically appraise quantitatively-oriented studies investigating this phenomenon within the acute hospital sector.
The review has focused on scientific papers published in English in international journals and conference proceedings. The articles have been extracted through a Boolean search strategy from ISI Web of Science citation and search source. No time constraints were imposed. A manual search by keywords and citation tracking was also conducted concentrating on highly ranked public sector governance and management journals. Nineteen papers were identified as a match for the research criteria and, subsequently, were classified on the basis of six items. Finally, a thematic mapping has been carried out leading to identify three main research sub-streams on the basis of the types of performance outcomes investigated.
The analysis of the extant literature has revealed that research focusing on clinicians' involvement in leadership positions has explored its implications for the management of financial resources, the quality of care offered and the social performance of service providers. In general terms, the findings show a positive impact of clinical leadership on different types of outcome measures, with only a handful of studies highlighting a negative impact on financial and social performance. Therefore, this review lends support to the prevalent move across health systems towards increasing the presence of clinicians in leadership positions in healthcare organisations. Furthermore, we present an explanatory model summarising the reasons offered in the reviewed studies to justify the findings and provide suggestions for future research.
Many hospital executives and economists have suggested that since Medicare adopted a hospital prospective payment system in 1985, prices on the hospital chargemaster (an exhaustive list of the prices ...for all hospital procedures and supplies) have become irrelevant. However, using 2013 nationally representative hospital data from Medicare, we found that a one-unit increase in the charge-to-cost ratio (chargemaster price divided by Medicare-allowable cost) was associated with $64 higher patient care revenue per adjusted discharge. Furthermore, hospitals appeared to systematically adjust their charge-to-cost ratios: The average ratio ranged between 1.8 and 28.5 across patient care departments, and for-profit hospitals were associated with a 2.30 and a 2.07 higher charge-to-cost ratio than government and nonprofit hospitals, respectively. We also found correlation between the proportion of uninsured patients, a hospital's system affiliation, and its regional power with the charge-to-cost ratio. These findings suggest that hospitals still consider the chargemaster price to be an important way to enhance revenue. Policy makers might consider developing additional policy tools that improve markup transparency to protect patients from unexpectedly high charges for specific services.
Intermediate care (i.e., step-down or progressive care) is an alternative to the intensive care unit (ICU) for patients with moderate severity of illness. The adoption and current use of intermediate ...care is unknown.
To characterize trends in intermediate care use among U.S. hospitals.
We examined 135 million acute care hospitalizations among elderly individuals (≥65 yr) enrolled in fee-for-service Medicare (U.S. federal health insurance program) from 1996 to 2010. We identified patients receiving intermediate care as those with intensive care or coronary care room and board charges labeled intermediate ICU.
In 1996, a total of 960 of the 3,425 hospitals providing critical care billed for intermediate care (28%), and this increased to 1,643 of 2,783 hospitals (59%) in 2010 (P < 0.01). Only 8.2% of Medicare hospitalizations in 1996 were billed for intermediate care, but billing steadily increased to 22.8% by 2010 (P < 0.01), whereas the percentage billed for ICU care and ward-only care declined. Patients billed for intermediate care had more acute organ failures diagnoses codes compared with general ward patients (22.4% vs. 15.8%). When compared with patients billed for ICU care, those billed for intermediate care had fewer organ failures (22.4% vs. 43.4%), less mechanical ventilation (0.9% vs. 16.7%), lower mean Medicare spending ($8,514 vs. $18,150), and lower 30-day mortality (5.6% vs. 16.5%) (P < 0.01 for all comparisons).
Intermediate care billing increased markedly between 1996 and 2010. These findings highlight the need to better define the value, specific practices, and effective use of intermediate care for patients and hospitals.
Patient experience has had a direct financial impact on hospitals since value-based purchasing was instituted by the Centers for Medicare & Medicaid Services in 2013 as a method to reward or punish ...hospitals based on performance on various measures, including patient experience. Although other industries have shown an indirect impact of customer experience on overall profitability, that link has not been well established in the health care industry. Return-to-provider rate and perceptions of health quality have been associated with profitability in the health care industry.
Our aims were to assess whether, independent of a direct financial impact, a more positive patient experience is associated with increased profitability and whether a more negative patient experience is associated with decreased profitability.
We used a sample of 19,792 observations from 3767 hospitals over the 6-year period 2007-2012. The data were sourced from Centers for Medicare & Medicaid Services and Hospital Consumer Assessment of Healthcare Providers and Systems. Using generalized estimating equations to account for repeated measures, we fit four separate models for three dependent variables: net patient revenue, net income, and operating margin. Each model included one of the following independent variables of interest: percentage of patients who definitely recommend the hospital, percentage of patients who definitely would not recommend the hospital, percentage of patients who rated the hospital 9 or 10, and percentage of patients who rated the hospital 6 or lower.
We identified that a positive patient experience is associated with increased profitability and a negative patient experience is even more strongly associated with decreased profitability.
Management should have greater justification for incurring costs associated with bolstering patient experience programs. Improvements in training, technology, and staffing can be justified as a way to improve not only quality but now profitability as well.
As of March 23, 2012, the Internal Revenue Service (IRS) requires tax-exempt hospitals to conduct Community Health Needs Assessment (CHNA) every 3 years to incentivize hospitals to provide programs ...responsive to the health needs of their communities.
To examine the distribution and variation in community benefit spending among North Carolina's tax-exempt hospitals 2 years after completing their first IRS-mandated CHNA.
Cross-sectional study using secondary analysis of published community benefit reports. Community benefit was categorized on the basis of North Carolina Hospital Association's community benefit reporting guidelines. Multiple regression analysis using generalized linear model was used to examine the variation in community benefit spending among study hospitals considering differences in hospital-level and community characteristics.
Fifty-three private, nonprofit hospitals across North Carolina.
Dollar expenditures as a percentage of operating expenses of the 2 categories of community benefit spending: patient care financial assistance and community health programs.
Study hospitals' aggregate community benefit spending was $2.6 billion, 85% of which was in the form of patient care financial assistance, with only 0.7% of total spending allocated to community-building activities such as affordable housing, economic development, and environmental improvements. On average, the study hospitals' community benefit spending was equivalent to 14.6% of operating expenses. Hospitals with 300 or more beds provided significantly higher investments in community health programs as a percentage of their operating expenses than hospitals with 101 to 299 beds (P = .03) or hospitals with 100 or fewer beds (P = .04). Access to care was not associated with patient care financial assistance (P = .81) or community health programs expenditures (P = .94).
The study hospitals direct most of their community benefit expenditures to patient care financial assistance (individual welfare) rather than population health improvement initiatives, with virtually no investments in community-building activities that address socioeconomic determinants of health.
IMPORTANCE Surgical site infections (SSIs) may increase health care costs, but few studies have conducted an analysis from the perspective of hospital administrators. OBJECTIVE To determine the ...change in hospital profit due to SSIs. DESIGN Retrospective study of data from January 1, 2007, to December 31, 2010. SETTING The study was performed at 4 of The Johns Hopkins Health System acute care hospitals in Maryland: Johns Hopkins Bayview (560 beds); Howard County General Hospital (238 beds); The Johns Hopkins Hospital (946 beds); and Suburban Hospital (229 beds). PARTICIPANTS Eligible patients for the study included those patients admitted to the 4 hospitals between January 1, 2007, and December 31, 2010, with complete data and the correct International Classification of Diseases, Ninth Revision code, as determined by the infection preventionist. Infection preventionists performed complete medical record review using National Healthcare Safety Network definitions to identify SSIs. Patients were stratified using the All Patient Refined Diagnosis Related Groups to estimate the change in hospital profit due to SSIs. EXPOSURE Surgical site infections. MAIN OUTCOMES AND MEASURES The outcomes of the study were the difference in daily total charges, length of stay (LOS), 30-day readmission rate, and profit for patients with an SSI when compared with patients without an SSI. The hypothesis, formulated prior to data collection, that patients with an SSI have higher daily total costs, a longer LOS, and higher 30-day readmission rates than patients without an SSI, was tested using a nonpaired Mann-Whitney U test, an analysis of covariance, and a Pearson χ2 test. Hospital charges were used as a proxy for hospital cost. RESULTS The daily total charges, mean LOS, and 30-day readmission rate for patients with an SSI compared with patients without an SSI were $7493 vs $7924 (P = .99); 10.56 days vs 5.64 days (P < .001); and 51.94 vs 8.19 readmissions per 100 procedures (P < .001). The change in profit due SSIs was $2 268 589. CONCLUSIONS AND RELEVANCE The data suggest that hospitals have a financial incentive to reduce SSIs, but hospitals should expect to see an increase in both cost and revenue when SSIs are reduced.
We sought to quantify the financial impact of elective surgery cancellations in the US during COVID-19 and simulate hospitals' recovery times from a single period of surgery cessation.
COVID-19 in ...the US resulted in cessation of elective surgery-a substantial driver of hospital revenue-and placed patients at risk and hospitals under financial stress. We sought to quantify the financial impact of elective surgery cancellations during the pandemic and simulate hospitals' recovery times.
Elective surgical cases were abstracted from the Nationwide Inpatient Sample (2016-2017). Time series were utilized to forecast March-May 2020 revenues and demand. Sensitivity analyses were conducted to calculate the time to clear backlog cases and match expected ongoing demand in the post-COVID period. Subset analyses were performed by hospital region and teaching status.
National revenue loss due to major elective surgery cessation was estimated to be $22.3 billion (B). Recovery to market equilibrium was conserved across strata and influenced by pre- and post-COVID capacity utilization. Median recovery time was 12-22 months across all strata. Lower pre-COVID utilization was associated with fewer months to recovery.
Strategies to mitigate the predicted revenue loss of $22.3B due to major elective surgery cessation will vary with hospital-specific supply-demand equilibrium. If patient demand is slow to return, hospitals should focus on marketing of services; if hospital capacity is constrained, efficient capacity expansion may be beneficial. Finally, rural and urban nonteaching hospitals may face increased financial risk which may exacerbate care disparities.
The recent recession had a profound effect on all sectors of the US economy, including health care. We examined how private hospitals fared through the recession and considered how changes in their ...financial health may affect their ability to respond to future industry challenges. We categorized 2,971 private short-term general medical or surgical hospitals (both nonprofit and for-profit) according to their pre-recession financial health and safety-net status, and we examined their operational status changes and operating and total financial margins during 2006-11. We found that hospitals that were financially weak before the recession remained so during and after the recession. The total margins of nonprofit hospitals (both safety-net and other institutions) declined in 2008 but returned to their pre-recession levels by 2011. The recession did not create additional fiscal pressure on hospitals that were previously financially weak or in safety-net roles. However, both groups continue to have notable financial deficiencies that could limit their abilities to meet the growing demands on the industry.
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