Costs of a hepatitis A outbreak affecting homosexual men: Franklin County, Ohio, 1999

BACKGROUND: Hepatitis A is one of the most commonly reported, vaccine-preventable diseases in the United States. Many cases occur in association with community-wide outbreaks, but societal costs to the community are seldom documented. METHODS: Hepatitis A case-patients available for a follow-up interview as part of an outbreak investigation were asked about hospitalization, healthcare costs, missed work, and lost wages associated with their illness, as well as healthcare insurance coverage and sick-leave reimbursement. Average costs were calculated by case-patient age, gender, and hospitalization status for lost wages, and by age and hospitalization status for medical costs, and then assigned to case-patients not re-interviewed to provide an estimate of overall costs. Health departments provided outbreak-associated costs. RESULTS: Between the weeks of November 2, 1998, and May 17, 1999, a total of 136 cases of hepatitis A were reported. Of the 89 (65.4%) case-patients available for interview, 74 (83%) were male; of those, 47 (64%) identified themselves as men who have sex with men (MSM). The average cost of the outbreak per case-patient was $2894 US dollars, of which 51% was associated with lost wages, 40% with medical costs, and 9% with health department costs. Case-patients incurred 44% of total outbreak costs; employers, 29%; healthcare insurers, 18%; and health departments, 9%. CONCLUSIONS: In this community-wide hepatitis A outbreak, case-patients incurred the largest portion of costs, followed by employers, healthcare insurers, and health departments.     

Uncompensated Hospital Care: Charitable Mission or Profitable Business Decision?

Provision of hospital uncompensated care is generally assumed to be adversely affected as increased healthcare competition decreases demand for compensated hospital services. Economic theory, however, suggests the question is more complex. Non-profit hospitals are assumed in this paper to maximize utility as a function of uncompensated care, subject to the constraint that revenues cover costs. For-profit hospitals, in contrast, are assumed to maximize profit while recognizing that failure to meet community expectations regarding provision of uncompensated care could negatively impact profits. Therefore, for-profit hospital supply of uncompensated care focuses on balancing the hospital's marginal costs and marginal benefits. These models predict that non-profit hospitals will respond to increased competition by reducing the supply of uncompensated care. In contrast, for-profit hospitals will increase the supply of uncompensated care when market demand decreases since the concurrent decrease in compensated care reduces the marginal cost of producing uncompensated care. The models also predict that for-profit hospitals will respond to changes in community expectations regarding the provision of uncompensated care. © 1997 by John Wiley & Sons, Ltd.     

Optimal cost reimbursement of health insurers to reduce risk selection

In the absence of a perfect risk adjustment scheme, reimbursing health insurers' costs can reduce risk selection in community‐rated health insurance markets. In this paper, we develop a model in which insurers determine the cost efficiency of health care and have incentives for risk selection. We derive the optimal cost reimbursement function, which balances the incentives for cost efficiency and risk selection. For health cost data from a Swiss health insurer, we find that an optimal cost reimbursement scheme should reimburse costs only up to a threshold. Copyright © 2010 John Wiley & Sons, Ltd.     

Analysis of uncompensated hospital care using a DEA model of output congestion

Uncompensated care can create financial difficulties for hospitals. The problem is likely to worsen as the number of individuals lacking health insurance continues to grow. The objective of this study is to measure how uncompensated care affects hospitals' ability to provide the services for which they do receive compensation. Applying output-based data envelopment analysis (DEA) under various assumptions on the disposability of outputs to a sample of Pennsylvania hospitals, we find that, on average, hospitals could have produced 7% more output if they had all operated on the best-practice frontier and that uncompensated care reduced the production of other hospital outputs by 2%. Thus, even if hospitals were to operate efficiently, they might still face financial distress as a result of providing uncompensated care. The findings in our study suggest that policy makers should continue looking at ways to increase funding to hospitals providing uncompensated care while not distorting economic incentives to reduce excessive costs.     

The growing power of some providers to win steep payment increases from insurers suggests policy remedies may be needed

In the constant attention paid to what drives health care costs, only recently has scrutiny been applied to the power that some health care providers, particularly dominant hospital systems, wield to negotiate higher payment rates from insurers. Interviews in twelve US communities indicated that so-called must-have hospital systems and large physician groups--providers that health plans must include in their networks so that they are attractive to employers and consumers--can exert considerable market power to obtain steep payment rates from insurers. Other factors, such as offering an important, unique service or access in a particular geographic area, can contribute to provider leverage as well. Even in markets with dominant health plans, insurers generally have not been aggressive in constraining rate increases, perhaps because the insurers can simply pass along the costs to employers and their workers. Although government intervention--through rate setting or antitrust enforcement--has its place, our findings suggest a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.     

Computerized physician order entry systems in hospitals: mandates and incentives

Concerns with health care quality and medical errors are evident in media reports and research studies. A number of studies have demonstrated that computerized physician order entry (CPOE) can reduce medication error rates. In response, the California government and the Leapfrog Group have called for hospitals to implement CPOE for medications. However, few hospitals now use CPOE. Barriers include the large investment needed and the state of commercial CPOE systems. We argue that government, employers, and insurers should share the costs of CPOE and should fund further research into its benefits and means of implementation.     

Payers test reference pricing and centers of excellence to steer patients to low-price and high-quality providers

Hospitals frequently exhibit wide variation in their prices, and employers and insurers are now experimenting with the use of incentives to encourage employees to make price-conscious choices. This article examines two major new benefit design instruments being tested. In reference pricing, an employer or insurer makes a defined contribution toward covering the cost of a particular service and the patient pays the remainder. Through centers of excellence, employers or insurers limit coverage or strongly encourage patients to use particular hospitals for such procedures as orthopedic joint replacement, interventional cardiology, and cardiac surgery. We compare these two types of benefit designs with respect to consumer choice and how they balance price and quality. The article then examines their potential role in the policy debate over appropriate coverage and cost-sharing requirements.     

Proposal to reimburse occupational medicine disease and injury claims through third party health insurance

The current system of compensation for the medical costs of occupational illnesses and injuries, a component of health insurance coverage for most workers in the United States, has recently come under scrutiny in the national health care reform debate. The cost of treatment of these conditions is significant, and there exist numerous disincentives for physicians and patients to use the workers' compensation system. Physicians who treat workers with occupationally related diseases may find compensation for a condition is disputed at the same time that it is excluded from payment by third party insurance coverage, leaving the patient selectively uninsured for at least some medical care services. In addition, most workers' compensation programs have been designed in a way that discourages efficient resource use by providers and claimants. We propose allowing health care providers to bill third party health insurers for all care, including work-related diseases and injuries. Insurers, in turn, would bill workers' compensation programs for associated treatment costs. The potential advantages of such a system include reductions in inefficiency and unfair burdens placed on providers and patients, in reporting bias, and in administrative costs balanced against the risks of insurers excluding workers in high risk occupations from obtaining low cost health insurance and shifting away from employers the administrative burden for workers' compensation.     

Rochester, New York: a model for health reform

The 50-year-old health care experiment conducted in Rochester, New York, has yielded encouraging results. The policies implemented there include coverage by a single payer, community rating, a spending cap, encouraged use of HMOs, and general cooperation among providers, employers, insurers, and the area's one million residents. Surveys of those residents and local employers indicate that they are more satisfied with Rochester's health system than the rest of Americans are with the U.S. system.     

Occupational and environmental medicine in the United States: A proposal to abolish workers' compensation and reestablish the public health model

The workers' compensation model of occupational and environmental medicine should be converted to a public health model. Occupational and environmental medicine, as a part of the public health infrastructure,could play a much more substantive part in bringing about a national program to deal with occupational and environmental health. The workers' compensation insurance system could be discontinued at any time,but it will be vital to do so when national health insurance is adopted in the United States. Abolishing workers' compensation would remove the perverse incentives that currently undermine the practice of occupational medicine. Medical care for workers should be provided by health care professionals who are not subject to influence by employers or insurers.Eligibility for benefits should not be determined by health and safety professionals. Wage-replacement benefits for workers should be determined by guidelines established by government and industry that prevent manipulation of health and safety professionals by employers and insurers. A nationwide comprehensive system to track work-related injury and illness, superior to the current reliance on records provided by employers and collated by government agencies, should be adopted. When unusually high rates of injuries, illnesses,and fatalities occur, government inspectors ought to respond and regulate the industry accordingly.Occupational health and safety professional strained in public health can and should participate in these activities, but not when they are in the employ of industry or insurers.     

Community benefit prevails. Are radical changes in hospital tax-exemption laws necessary?

Voluntary, not-for-profit hospitals are in danger of losing their tax-exempt status as policymakers lean toward stricter charity care requirements that would penalize hospitals which failed to provide at least a predetermined level of charity care. Proposed legislation abandons community benefit and advocates a relief-of-poverty standard. The relief-of-poverty standard advances the notion that hospitals are not providing enough charity care to merit their tax exemption. However, the voluntary hospitals' share of uncompensated care costs (as a percentage of total costs) increased from 70 percent in 1981 to 75 percent in 1989. The relief-of-poverty standard is inferior to the community benefit standard because it does not take into account that the character of community benefit varies among hospitals and communities. However, community benefit must be better defined. Some current activities--individual hospital reassessments, collective hospital reassessments, voluntary development of criteria, and statutory standards--will be instructive in efforts to arrive at a definition of community benefit that is appropriate for the specific community. Leaders in voluntary, not-for-profit hospitals need to develop positive and equitable criteria for hospital tax exemption. These hospitals' accountability is in question, but it is their integrity that is at stake.     

The Impact of the Individual Mandate and Internal Revenue Service Form 990 Schedule H on Community Benefits From Nonprofit Hospitals

In response to a growing concern that nonprofit hospitals are not providing sufficient benefit to their communities in return for their tax-exempt status, the Internal Revenue Service (IRS) now requires nonprofit hospitals to formally document the extent of their community contributions.While the IRS is increasing financial scrutiny of nonprofit hospitals, many provisions in the recently passed historical health reform legislation will also have a significant impact on the provision of uncompensated care and other community benefits.We argue that health reform does not render the nonprofit organizational form obsolete. Rather, health reform should strengthen the nonprofit hospitals’ ability to fulfill their missions by better targeting subsidies for uncompensated care and potentially increasing subsidized health services provision, many of which affect the public''s health.INTERNAL REVENUE CODE § 501(c)(3) exempts nonprofit hospitals from federal income taxes. Since 1969 the community benefit standard1 has been the criteria by which the deservedness of tax exemption has been determined.2 There is, however, a long-standing debate in both the health policy and economics literatures on whether there is a substantial difference between the actions of for-profit and nonprofit hospitals, with empirical evidence supporting both schools of thought.3 The inconclusive nature of this research helped spur political and legal action regarding community benefit provision by nonprofit hospitals.4 In response to this growing concern that nonprofit hospitals are providing insufficient benefits to their communities in return for their tax-exempt status, the Internal Revenue Service (IRS) has revised Form 990 requiring nonprofit hospitals to submit additional detailed financial documentation regarding their community benefit expenditures on Schedule H beginning with 2009 filings.Simultaneously with tax reform, many provisions in the recently passed health reform legislation5 will also significantly impact hospitals and their provision of community benefit activities. Sufficient provision of these services has important implications for the public''s health. Former US Surgeon General David Satcher has argued that health reform and, specifically, the reduction in the number of uninsured, is “critical to our achieving the overarching goal of eliminating disparities in health.”6^(p15) Regina Benjamin, the current US Surgeon General, states that “eliminating health disparities should certainly be at the top of our national health agenda.”7 Approximately 31% of direct medical costs for minority populations from 2003 to 2006 were excess costs resulting from health inequities.8We explored the potential ramifications of the Patient Protection and Affordable Care Act (PPACA) and the Health Care Education Affordability Reconciliation Act of 2010 (HCEARA) on the level, measurement, and potential change in the composition of hospital community benefits, with regard to the new IRS regulations. We considered whether these legislative changes may further blur the distinction between for-profit and nonprofit hospital behavior and performance and explored the potential public health consequences of eliminating the tax-exempt status of nonprofit hospitals. We used data from Maryland, a state that implemented legislation similar to the recent IRS regulations in 2001, to guide our discussion and evaluate potential effects under these new legislative acts.     

The benefits of HMO community benefits programs

Managed care is becoming the dominant mode of health care coverage, and health maintenance organizations (HMOs) are playing a key role in the delivery of health care within the evolving, cost-competitive system. However, in this cost-cutting arena, do HMOs have responsibility for health services to communities which extends beyond their enrolled populations? Do HMO community benefits programs have significant impact on the uninsured or the related problem of paying for uncompensated care? The Massachusetts Attorney General believed so and developed the first set of voluntary guidelines in the nation for HMOs to follow in developing community benefits programs. This study reports on the initial year of the program and raises important policy questions regarding the responsibility HMOs have to the communities apart from the population they contract with, and the extent to which communities benefit from HMO community benefits programs.     

Health insurance in South Africa: an empirical analysis of trends in risk-pooling and efficiency following deregulation

This paper reports an empirical investigation into the pattern of private health insurance coverage in South Africa before and after deregulation of the health insurance industry. More specifically, we sought to measure trends in risk-pooling over the period 1985-95, and to assess the impact of risk pooling on the costs of health insurance cover over this period. South African mutual health insurers (Medical Schemes) have existed for over 100 years, and have been regulated under a specific Act since 1967. Up until 1989, health insurers were required by law to community rate their premiums, and were not allowed to exclude high-risk enrolees from cover. In 1989 these regulations were removed, effectively allowing health insurers to risk-rate the cover which they provided, and exclude 'medically uninsurables'. Data were obtained from the office of the health insurance regulator (the Registrar of Medical Schemes) for the period 1985-95, and consisted of the statutory returns from all registered medical schemes for each year during the study period. Multiple regression methods were used to assess the determinants of changes in the risk pools of insurers, and their costs. Both cross-sectional and longitudinal models were estimated. Unadjusted data suggest changes in risk-pooling since the deregulation period after 1985. Health insurers with open enrolment had worse than average risk profiles in the 1980s, but this reversed by the early 1990s, leaving them with significantly better risk profiles by 1995. Worsening risk profiles were associated with decreasing fund size, higher loss-ratios and past premium increases. Most models showed that risk rating of premiums was consistently associated with higher premiums, after adjustment for risk, quality, scale and other environmental differences between insurers. Likely explanations include the additional costs required for marketing and underwriting risk-rated policies, insufficient incentives to use cost-control techniques, and higher levels of moral hazard associated with diminished risk-pooling. Current re-regulation of risk-pooling within medical schemes may thus improve both equity and efficiency of private health care cover.     

Building a network on a legacy of teamwork

The nine hospitals that belong to the Hospital Consortium of Greater Rochester have a long history of working together to control health care costs in this upstate New York community. Now they're focusing on creating an electronic health information network. The project has the support of major local employers, which want to keep unnecessary care to a minimum to reduce costs. Electronic networking also will support longstanding efforts in Rochester to ensure that hospitals don't needlessly duplicate services. And the network will allow providers to more easily draw on a treasure trove of information already stored in clinical data bases.     

Factors associated with the provision of uncompensated care in Pennsylvania hospitals

Data from 190 Pennsylvania hospitals in 1995 were used in regression analysis of the determinants of uncompensated care and profitability. Uncompensated care as a percentage of operating expenses was negatively related with hospital size and positively associated with obstetrical services emphasis, emergency visit mix, area unemployment rate, and sole community hospital status. Hospital profitability was not associated with uncompensated care; it was negatively associated with HMO penetration, Medicare and Medicaid share of admissions and religious ownership; and it was positively associated with medium size. Pennsylvania hospitals may have been shielded from the financial burdens of uncompensated care by the availability of funds from other sources that may not be available in the future. Consequently, unless new sources of funding are developed or insurance coverage expanded, financial pressures from providing uncompensated care may cause hospitals to face the dilemma of abandoning uninsured patients or risking financial insolvency.     

Traditional kinship system enhanced classic community-directed treatment with ivermectin (CDTI) for onchocerciasis control in Uganda

The challenges of community-directed treatment with ivermectin (CDTI) for onchocerciasis control in Africa have been: maintaining a desired treatment coverage, demand for monetary incentives, high attrition of community distributors and low involvement of women. This study assessed how challenges could be minimised and performance improved using existing traditional kinship structures.In classic CDTI areas, community members decide upon selection criteria for community distributors, centers for health education and training, and methods of distributing ivermectin. In kinship enhanced CDTI, similar procedures were followed at the kinship level. We compared 14 randomly selected kinship enhanced CDTI communities with 25 classic CDTI communities through interviews of 447 and 750 household members and 127 and 64 community distributors respectively.Household respondents from kinship enhanced CDTI reported better performance (P < 0.001) than classic CDTI on the following measures of program effectiveness: (a) treatment coverage (b) decision on treatment location and (c) mobilization for CDTI activities. There were more female distributors in kinship enhanced CDTI than in classic CDTI. Attrition was not a problem. Kinship enhanced CDTI had a higher number of community distributors per population working among relatives, and were more likely to be involved in additional health care activities. The results suggest that kinship enhanced CDTI was more effective than classic CDTI.     

Factors related to preference for participation and degree of commitment in community activities among older adults in Japanese depopulated areas

To address the rapid increase in the ageing population, Japan implemented the Long‐Term Care Insurance System (LTCS) in 2000. Additionally, a community‐based integrated community care system was released in 2012. The purpose of these policies was to help older people who need care or support to continue to live their preferred lifestyles in their own communities. According to this paradigm, older residents are themselves considered members of the community caregiving team and expected to participate in volunteer activities to help the neighbourhood. One such activity is social participation including community activities. Many factors influencing social participation have been found in previous literature. However, knowledge of specific factors about community activities is limited, even though these kinds of activities have attracted policy attention. Our study examined factors related to thoughts about community activities among people aged >40 years. We conducted random sampling in two depopulated areas in Japan and used an anonymous mail survey method. Our survey consisted of three parts: social demographics, health and life, and medical/long‐term care. A total of 2,466 individuals participated in the study (response rate 52.2%), whose average age was 64.2 (SD = 10.3) and 46.5% (n = 1,146) were female. Items including talking with neighbours frequently (social demographics), higher self‐rated health (health and life), the need for health consultations and the desire to take care of family members when they need help (medical/long‐term care) were significantly related to both preference for participation and degree of commitment in community activities. To encourage participation in community activities among older citizens, we recommend interventions related to health literacy and family ties.