Hospitals and health systems: the best of times and the worst of times

Hospitals and health systems, whether general acute care hospitals or specialty-driven hospitals, are attempting to prosper in a unique time. This year, hospitals throughout the country will see increased reimbursement for hospital inpatient services, rather than decreased reimbursement. Many hospitals are examining a multitude of options for debt financing and a number of the nation's hospitals are in the process of renovating, expanding, or replacing their current hospitals. Further, more private equity and venture capital funds are pursuing hospital investments than seen in several years. Despite the positive signals stemming from many of the country's hospitals, this remains a time of tremendous uncertainty and risk in the hospital industry. This article discusses five strategic and development issues facing many hospitals and addresses how hospitals can prepare for the future should the current climate, supportive of growth, development, investment, and debt financing, change.     

Die Krankenhausversorgung im internationalen Vergleich

The article deals with data on expenditure, capacities and services of hospitals in comparative perspective and information on the structure of the health care systems and the hospital sector in OECD member states. International comparison shows that German hospitals by no means are particularly expensive. Therefore, the fact that Germany’s health care sector is very costly is explained by other factors, i.e. comparatively high costs of pharmaceuticals. In addition, the article shows that countries with social insurance-based health care systems usually favor the planning of hospital capacities by public authorities, not by the social health insurance funds. Like in Germany, in most other countries different systems for the financing of capital and running costs do exist. DRGs are getting more important everywhere, however, there is no example for a country using DRGs as a remuneration system for all hospital services.     

Costs per discharge and hospital ownership under prospective payment and cost-based reimbursement systems in Taiwan

This study in Taiwan examined the relationships between health care costs and hospital ownership under two financing systems with diametrically opposite incentives, case-payment (a form of prospective payment) and cost-based reimbursement. The universal sample of patients treated in 2000, for three standard care groups under each payment method, was included. The case payment diagnoses were uncomplicated cases of caesarean section, femoral/inguinal hernia operation and thyroidectomy, and the cost-based reimbursement diagnoses were uncomplicated cases of benign breast neoplasm, pneumococcal pneumonia and traumatic finger amputation. Costs per discharge were significantly lower in for-profit hospitals (by 2.8 to 5.7%) compared with public and not-for-profit hospitals for case payment diagnoses, which is consistent with the literature on US hospitals. For the cost-based reimbursement diagnoses, for-profits had 11.5 to 21.8% higher costs per discharge. The opposite direction of associations under the two payment systems validates the assumptions of the property rights theory in Taiwan's health care sector. Three plausible explanations for the study findings are suggested: (1). greater productive efficiency in private hospitals under case payment, (2). cost shifting from case payment diagnoses to cost-reimbursed diagnoses, and (3). patient dumping. Longitudinal studies using detailed hospital-level information with patient tracking facility are needed to clarify these issues.     

论公立医院筹资模式的构建

在当前医疗环境下,公立医院资金短缺,严重制约医院的发展。如何分散资金压力,筹集充足资金,降低资金成本已成为医院财务管理的重点。本文分析公立医院筹资管理中存在的问题,介绍并探讨公立医院可行的筹资模式。医院应立足于单位实际情况,进行科学的筹资决策,选择最优的筹资方案。     

Paying the hospital: American problems and foreign solutions

Hospital financing in the United States suffers from many problems. Many persons lack access because they lack third-party coverage. Among those covered, benefits vary, and persons receive unequal services. Costs are high and are uncontrolled. The hospital is burdened by complicated relations with many payers. In order to cover their costs and earn extra cash, hospitals overcharge the more generous third parties, and recriminations result. All other developed countries have either statutory health insurance, national health services, or full public financing of privately managed hospitals. Whatever the financing method, all countries avoid the problems prevailing in the United States. All citizens are covered, all have access, and hospitals reject no one for financial reasons. All citizens have equal benefits and receive the same basic services. Regulation by government and negotiations with health insurance carriers guarantee the hospital's operating costs to service its catchment area adequately, but also prevent the hospital from installing excessive equipment and excessive staff. Each hospital is paid by all-payer standard rates, administration of reimbursement is simple, and shifting of costs among payers is both unnecessary and administratively impossible. Costs are contained by the total management of the system, not by fragmented efforts by separate insurance carriers. Considerable strategic thinking by government, the providers, and other interest groups sets guidelines for spending levels every year to meet the country's clinical needs but also to stay within its fiscal capacity. Capital investment for new treatments depends on government grants and evaluation of needs.     

Financing graduate medical education: an update and a suggestion for reform.

This article reports data pertinent to three issues in the financing of graduate medical education: sources of funds for house staff support, the financing of faculty salaries for educational activities, and reimbursement bias in favor of care provided in inpatient settings. Using data from a 1979 hospital survey, we estimate that total expenditures for house-staff stipends and fringe benefits were almost $1.6 billion. Eighty-seven percent of these funds were derived from patient care revenues. Faculty salaries for educational activities added another $376 million to the cost of graduate medical education. Teaching hospitals collected 81 percent of their charges for inpatient care, but only 72.8 percent of charges for outpatient care. However, Medicare and Medicaid reimbursed approximately the same proportion of charges in both settings. The article concludes by arguing that a unified-charge system for paying teaching hospitals would eliminate most of the issues currently associated with the financing of graduate medical education as matters of public policy.     

Financing graduate medical education: An update and a suggestion for reform

This article reports data pertinent to three issues in the financing of graduate medical education: sources of funds for house staff support, the financing of faculty salaries for educational activities, and reimbursement bias in favor of care provided in inpatient settings. Using data from a 1979 hospital survey, we estimate that total expenditures for house-staff stipends and fringe benefits were almost $1.6 billion. Eighty-seven percent of these funds were derived from patient care revenues. Faculty salaries for educational activities added another $376 million to the cost of graduate medical education. Teaching hospitals collected 81 percent of their charges for inpatient care, but only 72.8 percent of charges for outpatient care. However, Medicare and Medicaid reimbursed approximately the same proportion of charges in both settings. The article concludes by arguing that a unified-charge system for paying teaching hospitals would eliminate most of the issues currently associated with the financing of graduate medical education as matters of public policy.     

Supplementary private health insurance: The impact of physician financial incentives on medical practice

In the French diagnosis-related group (DRG)-based payment system, both private and public hospitals are financed by a public single payer. Public hospitals are overcrowded and have no direct financial incentives to choose one procedure over another. If a patient has a strong preference, they can switch to a private hospital. In private hospitals, the preference does come into play, but the patient has to pay for the additional cost, for which they are reimbursed if they have supplementary private health insurance. Do financial incentives from the fees received by physicians for different procedures drive their behavior? Using French exhaustive data on delivery, we find that private hospitals perform significantly more cesarean deliveries than public hospitals. However, for patients without private health insurance, the two sectors differ much less in terms of cesareans rate. We determine the impact of the financial incentive for patients who can afford the additional cost. Affordability is mainly ensured by the reimbursement of costs by private health insurance. These findings can be interpreted as evidence that, in healthcare systems where a public single payer offers universal coverage, the presence of supplementary private insurance can contribute to creating incentives on the supply side and lead to practices and an allocation of resources that are not optimal from a social welfare perspective.     

公益性视角的公立医院融资困境及应对策略

医疗服务需求的持续释放激发了公立医院的发展冲动,政府财政补助和医院自有资金不足背景下部分公立医院寻求市场化融资方式的支持,但是公立医院的公益性和资本的逐利性两者之间的矛盾使得公立医院融资进程陷入进退两难困境。通过对公立医院公益性内涵和PPP项目案例的分析,发现公立医院的公益性并不完全排斥资本的逐利性,资本逐利所依托的市场竞争机制也是实现公立医院公益性的前提条件。要在坚持公立医院公益性的基础上利用好市场化融资方式必须做到:第一,坚持政府在公立医院运营方向上的主导性;第二,在引进资本的同时着眼于运营机制的改革与创新;第三,将归属于政府的分红转化为对公立医院的持续性投入以支持公益性的实现;第四,结合地方政府财力采用差异化的融资模式。     

Organization and financing of mental health care in Poland

ORGANIZATION OF CARE: Health care is provided to patients with mental disorders by the state health care facilities as well as by social help agencies. Mental health care services are provided mostly by mental health facilities and partly by primary care units. Outpatient clinics, separate for psychiatric patients and substance abusers, are the most numerous mental health care units, amounting to a total of 1120. Intermediate care facilities include 110 day hospitals, 23 community mobile teams and ten hostels. The number of hospital beds amounts to 31913, i.e. 8.3 beds per 10000 population. 80% of beds are located in mental hospitals. TRENDS OF DEVELOPMENT: The trends in mental health care development are outlined in the Mental Health Programme and accompanying documents accepted by the Minister of Health and Social Welfare. The programme defines specific goals to be achieved by the year 2005 in the primary, secondary and tertiary prevention of mental disorders. In the domain of mental health care accessibility the most important goals are the following: a significant reduction in the number of beds in large mental hospitals, a marked (nearly threefold) rise in the number of beds in psychiatric wards at general hospitals and a significant increase in the number of community-based forms of care (e.g. a fourfold rise in the number of day hospitals). FINANCING OF CARE: Before 1999, the health care system was financed from the state budget and the health care spendings were subject to a political auction each year. Allocation of funds among hospitals and health care centres was based on the total previous year budgetary spendings of particular facilities and did not take into account a detailed cost analysis. Such a financing approach, although giving a feeling of a relative financial safety, did not encourage health care facilities to introduce an organizational flexibility and to expand the scope of their services. In psychiatry, it manifested itself in a very slow development of some community psychiatry forms (mostly day hospitals, mobile community teams and hostels). The Health Care Institutions Act has created a legal framework for the financial management of health care units in their new, independent form. Conditions for health care financing through regional sickness funds were thus created. The financing is currently based on contracts made by sickness funds with health care facilities for specific health services. Both the quantity and price of services should be mutually negotiated. Some simplified measures of services offered were used during the first insurance financing year. In mental hospitals and day hospitals it was a person-day; in out-patient care it was a visit. Both cost indicators were aggregated, including all the components present so far in the functioning a given unit.     

The 2015 long-term care reform in the Netherlands: Getting the financial incentives right?

In 2015 the system of long-term care (LTC) financing and provision in the Netherlands was profoundly reformed. The benefits covered by the former comprehensive public LTC insurance scheme were split up and allocated to three different financing regimes. The objectives of the reform were to improve the coordination between LTC, medical care and social care, and to reinforce incentives for an efficient provision of care by making risk-bearing health insurers and municipalities responsible for procurement. Unintentionally, the reform also created a number of major incentive problems, however, resulting from the way: (i) LTC benefits were split up across the three financing regimes; (ii) the various third party purchasers were compensated; and (iii) co-payments for the beneficiaries were designed. These incentive problems may result in cost shifting, lack of coordination between various LTC providers, inefficient use of LTC services and quality skimping. We discuss several options to get the financial incentives better aligned with the objectives of the reform.     

THE DETERMINANTS OF HEALTH CARE EXPENDITURE TOWARD THE END OF LIFE: EVIDENCE FROM TAIWAN

This paper empirically investigates the relationship between the health care expenditure of end‐of‐life patients and hospital characteristics in Taiwan where (i) hospitals of different ownership differ in their financial incentives; (ii) patients are free to choose their providers; and (iii) health care services are paid for by a single public payer on a fee‐for‐services basis with a global budget cap. Utilizing insurance claims for 11 863 individuals who died during 2005–2007, we trace their hospital expenditures over the last 24 months of their lives. We find that end‐of‐life patients who are treated by private hospitals in general are associated with higher inpatient expenditures than those treated by public hospitals, while there is no significant difference in days of hospital stay. This finding is consistent with the difference in financial incentives between public and private hospitals in Taiwan. Nevertheless, we also find that the public–private differences vary across accreditation levels. Copyright © 2013 John Wiley & Sons, Ltd.     

DRG-related prices applied in a public health care system--can Finland learn from Norway and Sweden?

In the early 1990s, DRG based hospital financing was introduced into some hospital districts in Finland. The 1993 state subsidy reform decentralising all hospital financing to municipalities, and the aim of improving productivity, were the driving forces for introducing DRG. This study addresses the pros and cons of DRG in hospital financing in the Finnish health care system and puts forward several solutions to avoid potential problems. We consider the objectives and optimal features of hospital financing systems in the context of the public health care system, where the public sector owns and finances hospitals. We analyse impacts of introducing different types of DRG based hospital financing systems, taking into account earlier experiences in countries such as Sweden and Norway, as well as Finnish system specific features. DRG could assist the Finnish municipalities to compare quality, costs and prices of services between hospitals, and related cost information might help them budget expenditure more accurately. System specific features mean that traditional uses of DRG in hospital pricing are not feasible in Finland. But some benefits of DRG could be exploited, for instance in the controlled contracts between municipalities and hospitals.     

DRGs and prospective payment under Medicare

In moving from cost-based reimbursement to a DRG-based prospective system, the Medicare Prospective Payment System (PPS) has radically restructured the financial incentives for the care of patients. The incentives potentially may lead to increased hospital admissions, decreased lengths of stay, decreased volume of services to some individuals, service shifts outside the hospital, and increased selectivity/specialization by hospitals in limited DRGs. The Prospective Payment Assessment Commission (ProPAC) is charged with evaluating important issues and factors affecting the implementation of the PPS and with making recommendations for improving system performance.     

Health sector reforms in Argentina and the performance of the health financing system

In Argentina, health sector reforms put particular emphasis on decentralization and self-management of the tax-funded health sector, and the restructuring of the social health insurance during the 1990s. Unlike other countries in the region, there was no comprehensive plan to reform and unify the sector. In order to assess the effects of the reforms on the performance of the health financing system, this study looks at impacts on the three inter-related functions of revenue collection, pooling, and purchasing/provision of health services. Data from various sources are used to illustrate the findings. It was found that the introduction of cost recovery by self-managed hospitals increased their budgets only marginally and competition among social health insurance funds did not reduce fragmentation as expected. Although reforming the Solidarity Redistribution Fund and implementing a single basic package for the insured was an important step towards equity and transparency, the extent of risk pooling is still very limited. This study also provides recommendations regarding strengthening reimbursement mechanisms for public hospitals, and regulating the private sector as approaches to improving the fairness of the health financing system and protecting people from financial hardship as a result of illness.     

卫生筹资的区域公平性研究

研究我国卫生筹资区域公平性的现状及其与医疗资源和服务利用产业内集聚的关系。公立医院事实上的“民营化”引致了卫生筹资区域不公平问题的产生,医疗资源的产业内集聚在其中起了重要的作用,而累退的财政补贴又加剧了这种不公平性。因而有必要改变医疗服务的市场化道路,加大政府对基层医疗服务的转移支付力度。     

The effect of centralized hospital administration on financial control and hospital service delivery: the case of Hong Kong.

Administration, financial control and service delivery are three mutually influential dimensions of a hospital system. The centralized hospital system of Hong Kong is a case-in-point that illustrates such influence. By spending only a small fraction of the Gross Domestic Product each year, the government has been able to provide limited modern health care services at nominal financial cost to the public. At the same time, hospitals are subject to a strict system of administrative and financial controls. Consequently, Hong Kong hospitals must utilize their limited facilities effectively to provide modern health services to the public. However, the trade-off between low-cost health services and limited facilities is the incurrence, by the public, of non-monetary costs in obtaining hospital admission.     

公立医院财务风险的有效防范

公立医院财务风险存在于医院资产运营、筹资和投资及其制度安排的各个环节,随着公立医院改革的深化、投资扩张及其快速的发展,公立医院经营者的财务风险就越发凸显。盘活存量资产、科学投资理财、有效的资产管理和建立完善的财务监控体系是有效防范和化解财务风险的重要途径。