Managing strategic outsourcing in the healthcare industry

Hospitals and healthcare systems are facing increased financial difficulties because of the Balanced Budget Act of 1997 and managed care. As a result, healthcare executives face the challenge of reducing costs while maintaining quality patient care. One of the strategic tools healthcare executives use to meet this challenge is outsourcing. Even though outsourcing has many benefits, outsourcing will fail if not managed successfully. Senior executives must choose outsourcing managers who have the necessary leadership capabilities. Managing outsourcing requires an understanding of outsourcing strategy, the benefits and risks of outsourcing, the evaluation process, and the methods to managing strategically. With appropriate management, strategic outsourcing should provide healthcare executives with a viable strategy for controlling costs and maintaining quality patient care.     

Role of teleconsultation in moving the healthcare system forward

The equitable access to quality healthcare by Malaysians has consistently been the primary objective of the Ministry of Health (MOH). The epidemiological transition to chronic illnesses, advances in medical technology, escalating healthcare costs and rising patient expectations has necessitated the strategic use of information systems in healthcare delivery. Malaysia has broken new ground by implementing a nationwide network to address inadequate access to healthcare, as well as to lower costs and achieve better health outcomes. Teleconsultation refers to the electronic transmission of medical information and services from one site to another using telecommunication technologies. This technology transforms the healthcare system by rapidly matching patient needs with the appropriate level of care however geographically remote they may be. Our findings suggest that even in these early stages of implementation, teleconsultation has led to cost savings, a more efficient allocation of resources, enhanced diagnostic options and better health outcomes.     

Employer perspectives on the preferred provider organization concept

The goal of preferred provider organizations (PPOs) is to identify cost effective physicians, hospitals and other providers and form them into healthcare delivery systems. Widespread interest in PPOs stems from the belief that they can contain costs while offering consumers a choice of physicians and hospitals. But there is little information available about the demand by employers to offer PPOs as a health plan option. This study gathered information on employers' attitudes toward PPOs through a survey of companies in the Minneapolis metropolitan area. Most of the surveyed firms were found to be self-insured and offered a choice of healthcare plans, including HMOs. Contrary to some previous studies, healthcare costs are a major concern by all of the firms. PPOs are viewed as one part of an overall strategy to reduce those costs while maintaining quality of care and convenient access to providers. Although somewhat skeptical about potential savings and concerned over the administrative costs of offering a new health plan, most of the firms indicated support for the PPO concept. The greatest market opportunity for PPOs is to offer the plan as an alternative within the company's existing indemnity plan, wherein employees who use the preferred providers are exempt from at least a portion of the coinsurance and deductible requirements.     

Prisoner healthcare co-payment policy

Cost-effective provision of adequate healthcare to prisoners is a core problematic issue in contemporary correctional healthcare settings. An increasingly popular policy for reducing prison healthcare costs is prisoner co-payment systems for health services. Advocates of this policy assert that it facilitates efficient healthcare delivery in prison settings. This article examines the appropriateness and consequences of prisoner healthcare co-payment systems in US prisons. In conclusion, the policy has a strong potential to compromise prisoners' access to healthcare, while not significantly reducing prison healthcare costs. Alternative approaches for improving the efficiency of prison healthcare services are suggested, and implications for Australia are considered.     

Household health surveys in developing countries: could more use be made of them in planning?

Existing health information systems in Eastern Africa are basedon findings in patients visiting hospitals and clinics and onroutine administrative data. They do not reflect the healthsituation and the health care of the underserved, and do not,therefore, generate the information required for planning andprogramming health care for all. Household health surveys arepotentially very useful in filling important information gaps,but past surveys have been poorly adapted to existing healthcare systems; they have been expensive and difficult to replicate,and findings seem to have been rarely used in the planning process.After a brief presentation of current routine reporting, a fewplanning-oriented surveys conducted in Third World countriesare critically reviewed and presented from a planning perspective.It is concluded that household health surveys can be usefulcomponents of health information systems and could be used moreextensively. However, it is important to involve local healthplanners/managers in developing the survey design and the implementationplan, to keep costs at a replicable level and to estimate andreport survey utility and costs.     

Disease management at the system level--an effective way to improve health care

The disease management approach to improving health care, at the system as well as the hospital level, has proved to be very powerful, producing unprecedented results in reducing costs while improving quality of care and patient satisfaction. The Boston Consulting Group (BCG), working with a variety of leading managed care providers and pharmaceutical clients, has pioneered the development and dissemination of the disease management concept. Defines the disease management approach and outlines how it differs from the traditional component management approach. Also describes the key elements of disease management, characteristics to look for in a candidate disease, and results achieved so far. Finally, discusses the three strategic roles a healthcare player can take in disease management.     

The analogue substitution model: Introducing competition in the absence of generic substitution in Danish hospitals

Increasingly advanced medicines have created monopolies in treatment areas with no viable options for generic substitution due to patent protection. As health care systems are increasingly under pressure to deliver health care improvements, costs become prohibitive as budgets are under pressure. To create financial flexibility, Danish regional authorities have over the period from 2009 until today developed, implemented, and gradually increased the use of a new model for analogue medicine substitution. The model introduces competitive tenders among patented medicines by declaring these medicines therapeutically equivalent in the treatment of specific diseases and thereby creating new opportunities for reducing annual medicine expenses. The model is based on enhanced collaboration among the health technology assessment (HTA) body, the procurement body, and the hospital owner, and it effectively covers medicine expenditure and cost-effectiveness while ensuring standardized treatments across hospitals and regions. The model is internationally unique in integrating several healthcare stakeholders and balancing their respective agendas to generate optimized outcomes for the healthcare system as a whole. However, some challenges persist, as the HTA process is resource and time consuming. Future research can show whether there are other challenges connected with the model.     

Integration challenges. What you can do to smooth the transition

As the focus in healthcare delivery shifts to building a seamless continuum of care, many organizations are turning to integrated delivery systems as a way to provide high-quality healthcare while keeping costs down. Although these systems can take many forms, they often encounter similar roadblocks once the components are put into place. Healthcare Executive talked with several consultants and healthcare executives about some of the challenges you can address before and during integration to help you avoid those roadblocks later.     

An integrative framework for HIPAA-compliant I*IQ healthcare information systems

Currently the healthcare industry in the US is not only contending with relentless pressures to lower costs while maintaining and increasing the quality of service but is also under a stringent timeline to become compliant with the health insurance, portability and accountability act (HIPAA) regulatory requirements. Robust healthcare information systems (HCIS) become critical to enabling healthcare organizations address these challenges. Hence, it becomes an imperative need that the information that is captured, generated and disseminated by these HCIS be of the highest possible integrity and quality as well as compliant with regulatory requirements. This paper addresses this need by proposing an integrative framework for HIPAA compliant, I*IQ HCIS. It bases this framework on an integration of the requirements for HIPAA compliance, the principles of information integrity, as well as the healthcare quality aims set forth by the Committee on the Quality of Healthcare in America.     

The Economics of Medicare Accountable Care Organizations

Background

Accountable care organizations (ACOs) have been created to improve patient care, enhance population health, and reduce costs. Medicare in particular has focused on ACOs as a primary device to improve quality and reduce costs.

Objective

To examine whether the current Medicare ACOs are likely to be successful.

Discussion

Patients receiving care in ACOs have little incentive to use low-cost quality providers. Furthermore, the start-up costs of ACOs for providers are high, contributing to the minimal financial success of ACOs. We review issues such as reducing readmissions, palliative care, and the difficulty in coordinating care, which are major cost drivers. There are mixed incentives facing hospital-controlled ACOs, whereas physician-controlled ACOs could play hospitals against each other to obtain high quality and cost reductions. This discussion also considers whether the current structure of ACOs is likely to be successful.

Conclusion

The question remains whether Medicare ACOs can achieve the Triple Aim of “improving the experience of care, improving the health of populations, and reducing per capita costs of health care.” Care coordination in ACOs and information technology are proving more complicated and expensive to implement than anticipated. Even if ACOs can decrease healthcare costs and increase quality, it is unclear if the current incentives system can achieve these objectives. A better public policy may be to implement a system that encompasses the best practices of successful private integrated systems rather than promoting ACOs.     

Drastically improving health care with focus on managing the patient with a disease: the macro and micro perspective

The disease management approach to improving health care, at the systems as well as the hospital level, has proved to be very powerful, producing unprecedented results in reducing costs while improving quality of care and patient satisfaction. The Boston Consulting Group (BCG), working with a variety of leading managed care providers and pharmaceutical clients, has pioneered the development and dissemination of the disease management concept. Describes the disease management approach at the system level and shows results achieved so far. Shows also how the application of the logic of disease management within the boundaries of a single hospital leads to fundamental changes and quantum-leap results. In outlining the key success factors for a change process following the disease management approach, focusing on the patient with a disease, shows how the approach differs from traditional hospital re-engineering.     

The relevance of unrelated costs internal and external to the healthcare sector to the outcome of a cost-comparison analysis of secondary prevention: the case of general colorectal cancer screening in the German population

The potential of secondary prevention measures, such as cancer screening, to produce cost savings in the healthcare sector is a controversial issue in healthcare economics. Potential savings are calculated by comparing treatment costs with the cost of a prevention program. When survivors’ subsequent unrelated health care costs are included in the calculation, however, the overall cost of disease prevention rises. What have not been studied to date are the secondary effects of fatal disease prevention measures on social security systems. From the perspective of a policy maker responsible for a social security system budget, it is not only future healthcare costs that are relevant for budgeting, but also changes in the contributions to, and expenditures from, statutory pension insurance and health insurance systems. An examination of the effect of longer life expectancies on these insurance systems can be justified by the fact that European social security systems are regulated by the state, and there is no clear separation between the financing of individual insurance systems due to cross-subsidisation. This paper looks at how the results of cost-comparison analyses vary depending on the inclusion or exclusion of future healthcare and non-healthcare costs, using the example of colorectal cancer screening in the German general population. In contrast to previous studies, not only are future unrelated medical costs considered, but also the effects on the social security system. If a German colorectal cancer screening program were implemented, and unrelated future medical care were excluded from the cost-benefit analysis, savings of up to €548 million per year would be expected. The screening program would, at the same time, generate costs in the healthcare sector as well as in the social security system of €2,037 million per year. Because the amount of future contributions and expenditures in the social security system depends on the age and gender of the recipients of the screening program (i.e. survivors of a typically fatal condition), the impact of age and gender on the results of a cost-comparison analysis of colorectal cancer screening are presented and discussed. Our study shows that colorectal cancer screening generates individual cost savings in the social security system up to a life expectancy of 60 years. Beyond that age, the balance between a recipient’s social security contributions and insurance system expenditure is negative. The paper clarifies the relevance of healthcare costs not related to the prevented disease to the economic evaluation of prevention programs, particularly in the case of fatal diseases such as colorectal cancer. The results of the study imply that, from an economic perspective, the participation of at-risk individuals in disease prevention programs should be promoted.     

Measuring Healthcare Providers' Performances Within Managed Competition Using Multidimensional Quality and Cost Indicators

Background and objectives: The Dutch healthcare system is in transition towards managed competition. In theory, a system of managed competition involves incentives for quality and efficiency of provided care. This is mainly because health insurers contract on behalf of their clients with healthcare providers on, potentially, quality and costs. The paper develops a strategy to comprehensively analyse available multidimensional data on quality and costs to assess and report on the relative performance of healthcare providers within managed competition. Data and methods: We had access to individual information on 2409 clients of 19 Dutch diabetes care groups on a broad range of (outcome and process related) quality and cost indicators. We carried out a cost‐consequences analysis and corrected for differences in case mix to reduce incentives for risk selection by healthcare providers. Results and conclusion: There is substantial heterogeneity between diabetes care groups' performances as measured using multidimensional indicators on quality and costs. Better quality diabetes care can be achieved with lower or higher costs. Routine monitoring using multidimensional data on quality and costs merged at the individual level would allow a systematic and comprehensive analysis of healthcare providers' performances within managed competition. Copyright © 2015 John Wiley & Sons, Ltd.     

Disease State Management Programmes

Disease state management (DSM) is a new concept in healthcare which is rapidly growing in terms of interest and potential as an effective approach to improving patient outcomes. The term DSM refers to a ‘systematic population-based approach to identify persons at risk, intervene with specific programmes of care, and measure clinical and other outcomes.’ This alternative method for ‘managing care’ is being driven by an increased understanding of best practices coupled with new technologies for changing behaviour and measuring outcomes. The concept of health promotion coupled with a systems approach to healthcare could significantly improve clinical outcomes while reducing costs for many people with chronic diseases. This article describes the experience of one health plan with DSM. In addition, guidelines are presented to assist the reader in evaluating their own organisations’s ability and needs regarding disease management.     

Policy statement on antimicrobial stewardship by the Society for Healthcare Epidemiology of America (SHEA), the Infectious Diseases Society of America (IDSA), and the Pediatric Infectious Diseases Society (PIDS)

Antimicrobial resistance has emerged as a significant healthcare quality and patient safety issue in the twenty-first century that, combined with a rapidly dwindling antimicrobial armamentarium, has resulted in a critical threat to the public health of the United States. Antimicrobial stewardship programs optimize antimicrobial use to achieve the best clinical outcomes while minimizing adverse events and limiting selective pressures that drive the emergence of resistance and may also reduce excessive costs attributable to suboptimal antimicrobial use. Therefore, antimicrobial stewardship must be a fiduciary responsibility for all healthcare institutions across the continuum of care. This position statement of the Society for Healthcare Epidemiology of America, the Infectious Diseases Society of America, and the Pediatric Infectious Diseases Society of America outlines recommendations for the mandatory implementation of antimicrobial stewardship throughout health care, suggests process and outcome measures to monitor these interventions, and addresses deficiencies in education and research in this field as well as the lack of accurate data on antimicrobial use in the United States.