Does the physician order-entry system increase the revenue of a general hospital?

OBJECTIVE: The purpose of this study was to examine whether the physician order-entry system (POE) could increase the outpatient and inpatient revenue of hospitals. METHOD: We analyzed the inpatient and outpatient revenue data of all general hospitals (212) in South Korea obtained from the Korean National Health Insurance Corporation (KNHIC) during the period from 1996 to 1999 using the mixed model for repeated measure data. RESULTS: Analysis of the 4-years' panel data showed that both outpatient and inpatient revenues increased significantly after POE introduction. The hospital characteristics significantly influencing inpatient revenue were the number of beds, number of physicians and the tertiary status of a hospital; whereas those for outpatient revenue were the number of beds, number of physicians, the private status of a hospital, the tertiary status of a hospital and the urban status of a hospital. CONCLUSION: The revenues from both outpatients and inpatients were found to be increased after the introduction of the POE, while controlling for population size, competition, income, hospital location, hospital size, tertiary status and public status.     

An evaluation of four proposals to reduce the financial burden of medical education.

PURPOSE: To determine the financial impact of four potential solutions to reduce the financial burden of medical education: reducing medical school tuition, decreasing medical school duration, increasing residency compensation, and decreasing residency duration. METHOD: The four proposed remedies were compared to the current medical education system using net present value, a standard financial metric, which calculates financial impact in today's dollars. Medical school tuition and duration, residency stipends and duration, and physician salaries for general internists and internal medicine subspecialists were modeled based on historical data and current requirements. RESULTS: Decreasing medical school duration by one year had the greatest financial benefit for future physicians and ranged from 160,000 US dollars to 230,000 US dollars in today's dollars. Reducing residency duration for medicine subspecialists by one year generated a financial benefit of 170,000 US dollars. Increasing residency compensation to that of a first-year physician assistant resulted in a financial benefit of between 60,000 US dollars and 100,000 US dollars. Reducing medical school tuition by 25% had the smallest financial impact, 30,000 US dollars in today's dollars. CONCLUSIONS: Decreasing the duration of medical education offers the greatest potential for reducing the financial burden of medical education. In many cases, the benefit in current dollars to a prospective physician exceeds 100,000 US dollars. This solution warrants further investigation.     

Overcoming a perfect storm: an academic cardiology section's story of survival.

Increasingly, academic institutions are grappling with financial pressures that threaten the academic mission. The author presents an actual case history in which a section of cardiology in an academic health center was confronted with huge projected deficits that had to be eliminated within the fiscal year. The section used eight principles to shift from deficit to profitability (i.e., having revenue exceed costs). These principles included confronting the brutal facts, managing costs and revenue cycles, setting expectations for faculty, and quality improvement. The section accomplished deficit reduction through reducing faculty salaries (nearly $2 million) and nonfaculty salaries ($1.3 million) and reducing operational costs while maintaining revenues by increasing individual faculty productivity and reducing accounts receivable. In the face of these reductions, clinical revenues were maintained, but research revenue and productivity fell (but research is being fostered now that clinical services are profitable again). These principles can be used to stabilize the financial position of clinical practices in academic settings that are facing financial challenges.     

Multisystemic treatment of poorly controlled type 1 diabetes: effects on medical resource utilization

OBJECTIVE: To determine whether multisystemic therapy (MST), an intensive, home-based psychotherapy, could decrease rates of hospital utilization and related costs of care among adolescents with poorly controlled type diabetes. METHODS: Thirty-one adolescents were randomly assigned to receive either MST or standard care. MST lasted approximately 6 months, and all participants were followed for 9 months. Rates of inpatient admissions and emergency room (ER) visits were calculated for a 9-month prestudy period and during the 9 months of study participation. The relationship between changes in inpatient admissions and changes in metabolic control was also investigated. RESULTS: Intervention participants had a decreasing number of inpatient admissions from the baseline period to the end of the study, whereas the number of inpatient admissions increased for controls. Use of the emergency room did not differ. Related medical charges and direct care costs were significantly lower for adolescents receiving MST. Correlational analyses conducted with a subset of participants indicated that decreases in inpatient admissions were associated with improved metabolic control for MST but not control participants. CONCLUSIONS: Findings suggest that MST has the potential to decrease inpatient admissions among adolescents with poorly controlled type 1 diabetes.     

A bridge to Africa: how health professionals can help in development

US secretary of Health and Human Services Sullivan addresses the issue of the role the US has now and the role it may play in improving health across the African continent. Progress made is attributed to the courageous individual commitment of many dedicated health care problems, and substantial cooperative international efforts. The 1990 US contribution through USAID is 80 million dollars for child survival in Africa and 80 million dollars for voluntary family planning activities. The 1991 figures increased in the total development fund from 560 million dollars to 800 million dollars. AIDS activities receive 11 million dollars out of a total world budget of 52 million dollars. An additional 14 million dollar grant was awarded for a Ugandan effort to fight AIDS and child health care problems and 242,000 dollar grant was given to the Soweto Township AIDS program and AIDS prevention and treatment. The future emphasis was directed to providing a steady, cooperative partnership with African countries, to increasing support for political stability and ending violence, and continuing US policy based on broad based economic growth which fosters sustainable and effective health assistance programs. Support must be provided to assist programs which develop indigenous primary health care systems. Work must be focused on helping Africans learn and practice personal health promotion and disease prevention, which is also of particular significance in breaking the AIDS transmission chain. Increased efforts must address malaria through applied and basic research and malaria control programs. US information technology in the form of, for instance, technical training in epidemiology, disease surveillance, and computer science and data use, needs to be provided to African health professionals. Utilitarian means in international cooperation and relief must be used to foster economic development, democracy, and delivery of health care improvements. The role for health professionals in the US must be to mobilize efforts to share information and expertise with their African counterparts; i.e., through University sponsored meetings and conferences, and private foundation efforts. The reach is with compassion, advanced technology and medical expertise and financial support.     

Trends in the cost of illness for asthma in the United States, 1985-1994

BACKGROUND: During the past decade, there have been notable changes in asthma prevalence, morbidity, and mortality. In this same time period, there have also been important national efforts to increase asthma awareness and improve asthma care. OBJECTIVE: The purpose of this study was to examine the changes in US cost of illness for asthma during the 10-year period from 1985-1994. METHODS: The study was a two-period (1985 and 1994), cross-sectional, cost-of-illness analysis. Cost estimates were based on US population and health care survey data available from the National Center for Health Statistics. RESULTS: The total US costs of asthma for 1994 were $10.7 billion. On the basis of 1985 estimates adjusted to 1994 dollars, total asthma costs increased by 54.1% and direct medical expenditures increased by 20.4% during the 10-year period. In 1985, hospital inpatient care represented the largest component cost of direct medical expenditures (44.6%). Hospital inpatient costs decreased to 29.5% of direct medical expenditures in 1994, primarily because of shorter lengths of stay, as opposed to a decrease in the total number of admissions. In 1994, medications represented the largest component cost of direct medical expenditures (40.1%, up from 30.0% in 1985). The largest component increase in indirect costs was due to loss of work. On the basis of adjusted dollars, estimated costs per affected person with asthma declined by 3.4% (decrease of 15.5% for children and an increase of 2.9% for persons 18 years and older) during this time period. CONCLUSION: Although the US costs of asthma increased during the 1985-1994 time period, estimated costs per person with asthma demonstrated a modest decline. These findings may represent a combination of reductions in hospital lengths of stay and increasing prevalence of persons with low consumption of asthma-related health care resources. In examining the component costs, it is unclear whether these changes can be attributed to the many local, regional, and national efforts aimed at controlling untoward asthma outcomes during the 1985-1994 time period.     

The cost effectiveness of stopping preterm labor with beta-adrenergic treatment

We retrospectively compared the costs of maternal and neonatal medical care after beta-adrenergic drug treatment, given to arrest preterm labor, with expected costs associated with no gestational delay. The treatment arrested labor for at least three days in 61 per cent of patients; gestation was extended by 14.1 +/- 1.1 weeks (mean +/- S.E.M.) in infants with the earliest gestational age at treatment (20 to 25 weeks) and by 2.3 +/- 0.7 weeks in those with the latest gestational age (36 to 37 weeks). Costs were based on hospital charges and physicians' fees, including high-risk obstetric outpatient charges, obstetric prenatal and delivery inpatient charges, and pediatric inpatient charges. Treatment provided between 26 and 33 weeks of gestation was clearly cost effective, resulting in expected savings of $11,240 (1981 dollars) per birth. After 33 weeks there was no substantial difference in expected costs with or without treatment. Between 20 and 25 weeks of gestation, the expected costs per surviving infant were $39,000 lower with treatment; however, the number of mothers who were not treated at this early stage of gestation (three patients) was too small to permit statistical significance. When the improved survival of infants after prenatal treatment was taken into account, treatment before 25 weeks was also cost effective. Thus, the increased costs of prenatal medical care were offset by decreased costs of neonatal medical care when treatment was given before 34 weeks of gestation.     

Childhood sexual abuse, psychological distress, and medical use among women

OBJECTIVE: This study examined the relationships between reported history of childhood sexual abuse (CSA), psychological distress, and medical utilization among women in a health maintenance organization (HMO) setting. METHODS: Participants were 206 women aged 20 to 63 years who were recruited from an HMO primary care clinic waiting area. Participants were classified, using screening questionnaires and the revised Symptom Checklist 90, as 1) CSA-distressed, 2) distressed only, 3) CSA only, or 4) control participants. Medical utilization rates were generated from the computerized database of the HMO for 1) nonpsychiatric outpatient, 2) psychiatric outpatient, 3) emergency room (ER), and 4) inpatient admissions. RESULTS: CSA-distressed and distressed only groups both used significantly more nonpsychiatric outpatient visits than CSA only and control participants but were not different from one another. CSA only and control participants did not differ on nonpsychiatric outpatient utilization. CSA-distressed participants used significantly more ER visits and were more likely to visit the ER for pain-related complaints than other participants. Among CSA-distressed participants, those who met criteria for physical abuse had significantly more ER visits than those who did not. There were no differences among the four groups in inpatient utilization rates. CONCLUSIONS: Psychological distress is associated with higher outpatient medical utilization, independent of CSA history. History of CSA with concomitant psychological distress is associated with significantly higher ER visits, particularly for those with a history of physical abuse. History of CSA without distress is not associated with elevated rates of medical utilization. Screening for psychological distress, CSA, and physical abuse may help to identify distinct subgroups with unique utilization patterns.     

Association of the Implementation of PACS with Hospital Revenue

The purpose of this study is to assess the association of implementation of PACS with the inpatient and outpatient revenue of a general hospital. The authors analyzed the in- and outpatient revenue data of all general hospitals (212) in South Korea obtained from the Korean National Health Insurance Corporation (KNHIC) during the period from 1996 through 1999 using the mixed model for repeated measure data. The following variables were used in the analysis: status of picture archiving and communication systems (PACS) implementation, population size, state of competition, inhabitant's income, hospital location, hospital size, whether a tertiary hospital, whether public or private, the effect of year. The revenues from both in- and outpatient departments were significantly higher one year after the introduction of PACS while controlling for the confounding variables. Although the causality needs to be clarified, the implementation of PACS was correlated significantly to the increased amount of inpatient and outpatient revenue.     

What do medicine clerkship preceptors do best?

PURPOSE: Students' ratings of preceptors are widely used in medical education for feedback and evaluation purposes. The present study investigated students' ratings of the clinical teaching skills of inpatient attending physicians, inpatient residents, and outpatient attending physicians to assess differences among types of preceptors and relative strengths and weaknesses. METHOD: A total of 268 students from three academic years (1997-2000) at one medical school rated preceptors on an end-of-clerkship evaluation, for a total of 1,680 ratings. When the ratings were aggregated by preceptors' names and types, there were 691 mean ratings of preceptors. Relative strengths and weaknesses were identified. Differences in mean ratings by preceptor type (inpatient attending physician, inpatient resident, and outpatient attending physician) were evaluated, and strengths and weaknesses were identified by rank ordering the items' means. RESULTS: Students tended to rate outpatient attending physicians higher than inpatient attending physicians or residents. Areas where ratings suggested relative strengths included showing an interest in teaching, respecting students' opinions, and being available to students. Areas of relative weakness included increasing physical examination and interviewing skills. CONCLUSIONS: Students' ratings are useful for identifying strengths and weakness for groups of preceptors and, as such, are important sources of information for setting priorities for faculty development efforts.     

Physicians' responses to financial incentives. Evidence from a for-profit ambulatory care center

Health Stop is a major chain of ambulatory care centers operating for profit. Until 1985 its physicians were paid a flat hourly wage. In the middle of that year, a new compensation plan was instituted to provide doctors with financial incentives to increase revenues. Physicians could earn bonuses the size of which depended on the gross incomes they generated individually. We compared the practice patterns of 15 doctors, each employed full time at a different Health Stop center in the Boston area, in the same winter months before and after the start of the new arrangement. During the periods compared, the physicians increased the number of laboratory tests performed per patient visit by 23 percent and the number of x-ray films per visit by 16 percent. The total charges per month, adjusted for inflation, grew 20 percent, mostly as a result of a 12 percent increase in the average number of patient visits per month. The wages of the seven physicians who regularly earned the bonus rose 19 percent. We conclude that substantial monetary incentives based on individual performance may induce a group of physicians to increase the intensity of their practice, even though not all of them benefit from the incentives.     

The effect on test ordering of informing physicians of the charges for outpatient diagnostic tests

We studied the effect of informing physicians of the charges for outpatient diagnostic tests on their ordering of such tests in an academic primary care medical practice. All tests were ordered at microcomputer workstations by 121 physicians. For half (the intervention group), the charge for the test being ordered and the total charge for tests for that patient on that day were displayed on the computer screen. The remaining physicians (control group) also used the computers but received no message about charges. The primary outcomes measured were the number of tests ordered and the charges for tests per patient visit. In the 14 weeks before the study, the number of tests ordered and the average charge for tests per patient visit were similar for the intervention and control groups. During the 26-week intervention period, the physicians in the intervention group ordered 14 percent fewer tests per patient visit than did those in the control group (P less than 0.005), and the charges for tests were 13 percent ($6.68 per visit) lower (P less than 0.05). The differences were greater for scheduled visits (17 percent fewer tests and 15 percent lower charges for the intervention group; P less than 0.01) than for unscheduled (urgent) visits (11 percent fewer tests and 10 percent lower charges; P greater than 0.3). During the 19 weeks after the intervention ended, the number of tests ordered by the physicians in the intervention group was only 7.7 percent lower than the number ordered by the physicians in the control group, and the charges for tests were only 3.5 percent lower (P greater than 0.3). Three measures of possible adverse outcomes--number of hospitalizations, emergency room visits, and outpatient visits during the study period and the following six months--were similar for the patients seen by the physicians in both groups. We conclude that displaying the charges for diagnostic tests significantly reduced the number and cost of tests ordered, especially for patients with scheduled visits. The effects of this intervention did not persist after it was discontinued.     

Restructuring the inpatient practice of an academic internal medicine department.

The authors describe the process undertaken by the Department of Medicine at the Mayo Clinic in Rochester, Minnesota to improve inpatient care. The department systematically analyzed its inpatient practice and developed a set of hypotheses that challenged whether new inpatient models with greater physician commitment could improve the quality of care; patient, resident, and staff satisfaction; and financial performance. The new practice model they developed, which includes using more physicians whose time is dedicated to the hospital practice, has led to a more focused hospital experience for learners and has implications for all academic medical centers involved with primary care, subspecialty care, and hospital consultative services.     

Development of a central division of general internal medicine

A division of general internal medicine was, by design, developed to be central to many of the activities of the department of medicine. Since 1979 the division has grown from five faculty members to 29 members and has the potential for substantial additional growth. The division provides approximately 70% of all inpatient teaching by attending physicians, provides all of the general medicine outpatient teaching, and has substantial impact on medical student training programs. The division is responsible for more than $1.5 million of clinical services and approximately 10% of hospital admissions, and it is responsible for approximately 40% of all patients on the general medicine service. Research activities are divided into several distinct modules, including medical informatics, clinical epidemiology, occupational medicine, geriatrics, medical competency testing, and ethics. The division receives approximately $1.2 million from external sources, including the federal government and foundations, for its research activities. Because of its success, it may serve as a potential model for similar divisions in other departments of medicine.     

Primary care compensation at an academic medical center: a model for the mixed-payer environment.

The authors' academic medical center, Brigham and Women's Hospital, Boston, Massachusetts, developed a primary care physician (PCP) salary incentive program for employed academic physicians. This program, first implemented in 1999, was needed to meet the financial imperatives placed on the institution by managed care and the Balanced Budget Act of 1997; its goal was to create a set of incentives for PCPs that is consistent with the mission of the academic center and helps motivate and reward PCP's work. The program sought to simultaneously increase productivity while optimizing resource utilization in a mixed-payer environment. The salary incentive program uses work relative-value units (wRVUs) as the measure of productivity. In addition to productivity-derived base pay, bonus incentives are added for efficient medical management, quality of care, teaching, and seniority. The authors report that there was significant concern from several members of the physician staff before the plan was implemented; they felt that the institution's PCPs were already operating at maximum clinical capacity. However, after the first year of operation of this plan, there was an overall 20% increase in PCP productivity. Increases were observed in all PCP subgroups when stratified by professional experience, clinical time commitment, and practice location. The authors conclude that the program has succeeded in giving incentives for academic PCPs to achieve under the growing demands for revenue self-sufficiency, managed care performance, quality of care, and academic commitment.     

The cost implications of academic group practice. A randomized controlled trial

We evaluated the reorganization of a general medical clinic into several group practices, using equivalent groups of patients and physicians in a randomized controlled trial. The group practice, unlike the traditional clinic, provided decentralized registration, clinic coverage five days a week, and telephone coverage at night and on weekends. Residents worked in small groups with an attending physician, nurse practitioner, and receptionist. All financial activity involving a sample of 2299 patients was followed during the 11-month intervention. The total hospital charges per patient were 26 percent lower for the patients seen in the group practice than for those seen in the traditional clinic (P = 0.003). This difference was primarily attributable to inpatient charges, which were 27 percent lower per patient hospitalized (P = 0.004). The mean length of stay was 8.3 days among group-practice patients and 10.5 days among traditional-clinic patients (P = 0.011). We conclude that organizational changes to improve outpatient access and to integrate inpatient and outpatient services can decrease medical charges.     

Incremental cost-effectiveness of a collaborative care intervention for panic disorder

BACKGROUND: Panic disorder is a prevalent, often disabling, disorder among primary-care patients, but there are large gaps in quality of treatment in primary care. This study describes the incremental cost-effectiveness of a combined cognitive behavioral therapy (CBT) and pharmacotherapy intervention for patients with panic disorder versus usual primary-care treatment. METHOD: This randomized control trial recruited 232 primary-care patients meeting DSM-IV criteria for panic disorder from March 2000 to March 2002 from six primary-care clinics from university-affiliated clinics at the University of Washington (Seattle) and University of California (Los Angeles and San Diego). Patients were randomly assigned to receive either treatment as usual or a combined CBT and pharmacotherapy intervention for panic disorder delivered in primary care by a mental health therapist. Intervention patients had up to six sessions of CBT modified for the primary-care setting in the first 12 weeks, and up to six telephone follow-ups over the next 9 months. The primary outcome variables were total out-patient costs, anxiety-free days (AFDs) and quality adjusted life-years (QALYs). RESULTS: Relative to usual care, intervention patients experienced 60.4 [95% confidence interval (CI) 42.9-77.9] more AFDs over a 12-month period. Total incremental out-patient costs were 492 US dollars higher (95% CI 236-747 US dollars ) in intervention versus usual care patients with a cost per additional AFD of 8.40 US dollars (95% CI 2.80-14.0 US dollars ) and a cost per QALY ranging from 14,158 US dollars (95% CI 6,791-21,496 US dollars ) to 24,776 US dollars (95% CI 11,885-37,618 US dollars ). The cost per QALY estimate is well within the range of other commonly accepted medical interventions such as statin use and treatment of hypertension. CONCLUSIONS: The combined CBT and pharmacotherapy intervention was associated with a robust clinical improvement compared to usual care with a moderate increase in ambulatory costs.     

Hospitalists in medical education: coming to an academic medical center near you

Hospitalists are physicians whose medical practice focuses on general medical inpatient care. In the past decade, the number of practicing hospitalists has soared, and hospitalist programs have been established at both community hospitals and academic medical centers. As hospitalists increasingly assume a greater share of inpatient care responsibilities, they will contribute to the training of medical students and house staff. This paper reviews current data on the impact of hospitalists on medical education and the future of hospitalist training.     

Charges for hospital admissions attributable to health disparities for African-American patients, 1998-2002

OBJECTIVE: Racial disparities exist across most major disease categories, which result in a disproportionately large number of hospital admissions for many conditions. Estimates for the financial impact of the racial admission differences for the State of South Carolina are assessed. METHODS: South Carolina hospital discharge data for 1998-2002 was used for the analysis. The database includes all-payer billing data for inpatient hospital admissions as received on the UB-92 billing file for the covered episode. Charges were inflation adjusted to 2002 constant dollars. RESULTS: For 1998-2002, there were an estimated dollar 1.6 billion in total charges for hospital admissions in South Carolina that were attributed to higher age-adjusted admission rates for African-American patients. In addition, African Americans had consistently higher hospital admission rates for disease categories that are often associated with a failure to obtain ambulatory and preventive care. CONCLUSION: This simple analysis reveals that age-adjusted hospital admission rates for African Americans in South Carolina are higher than for Caucasians, and the gap appears to be widening over time. Given the magnitude of the financial implication, interventions with even a small impact on the conditions underlying the racial disparities in hospital admissions are likely to be cost effective.     

A comprehensive study of the direct and indirect costs of adult asthma

BACKGROUND: Asthma is a common and costly health condition, but most estimates of its economic effect have relied on secondary sources with limited condition-specific detail. OBJECTIVE: We sought to estimate the magnitude of direct and indirect costs of adult asthma from the perspective of society. METHODS: We used cross-sectional survey data from an ongoing community-based panel study of 401 adults with asthma originally derived from random samples of northern California pulmonologists, allergist-immunologists, and family practitioners to assess health care use for asthma, to assess purchase of items to assist with asthma care, and to measure work and other productivity losses. Unit costs derived from public-use and proprietary data sources were then assigned to the survey items. RESULTS: Total per-person annual costs of asthma averaged $4912 US dollars, with direct and indirect costs accounting for $3180 US dollars (65%) and $1732 US dollars (35%), respectively. The largest components within direct costs were pharmaceuticals ($1605 US dollars [50%]), hospital admissions ($463 US dollars[15%]), and non-emergency department ambulatory visits ($342 US dollars [11%]). Within indirect costs, total cessation of work accounted for $1062 US dollars (61%), and the loss of entire work days among those remaining employed accounted for another $486 US dollars (28%). Total per-person costs were $2646, $4530, and $12,813 US dollars for persons self-reporting mild, moderate, and severe asthma, respectively (P <.0001, 1-way ANOVA). CONCLUSION: Asthma-related costs are substantial and are driven largely by pharmaceuticals and work loss.