Medicare payment system for ambulatory surgical centers

Ambulatory Surgical Centers are paid under a fee schedule for eight service cost categories. The fee schedule is geographically wage adjusted and is updated annually. Anticipated future adjustments to the Ambulatory Surgical Centers prospective payment system (PPS) includes conversion to resource based rates.     

Performance-based payment incentives increase burden and blame for hospital nurses

We interviewed hospital leaders and unit nurses in twenty-five hospitals between June and October 2008 to explore the effect of performance-based incentives. Interviewees expressed favorable impressions of the impact that incentive policies have on quality and safety. However, they raised concerns about the policies' effects on the nurse workforce. Their concerns included the belief that performance-based incentives would increase both the burden and the blame for nurses without corresponding improvements in staffing levels, work environment, salaries, or turnover. To maximize the intended policy impact without jeopardizing the workforce that holds the key to their adoption, we recommend that policy makers invest in implementation support, redesign hospital incentives to reward teamwork, and involve nursing leaders in the design of future incentive policies.     

Cream-skimming,incentives for efficiency and payment system

Reform proposals of health care systems in several countries have advocated variations of a risk adjustment/capitation system. These proposals face a serious objection: incentives to risk selection are prevalent in the system. By now, considerable literature has been devoted to finding ways of mitigating, if not eliminating, this problem, while at the same time preserving incentives to efficiency. We contribute to this debate presenting a transfer system that, under some circumstances, attains both provider efficiency and no risk selection. The transfer system extends typical linear payment systems. It can be interpreted as a fixed transfer in the beginning of the period plus an ex-post fund at the end of the period. The novelty rests in the way contributions to this fund are defined.     

HMO penetration, hospital competition, and growth of ambulatory surgery centers

Using metropolitan statistical area (MSA) panel data from 1992-2001 constructed from the 2002 Medicare Online Survey Certification and Reporting (OSCAR) System, we estimate the market effects of health maintenance organization (HMO) penetration and hospital competition on the growth of freestanding ambulatory surgery centers (ASCs). Our regression models with MSA and year fixed effects suggest that a 10-percentage-point increase in HMO penetration is associated with a decrease of 3 ASCs per 1 million population. A decrease from 5 to 4 equal-market-shared hospitals in a market is associated with an increase of 2.5 ASCs per 1 million population.     

Effects of financial incentives on physicians' specialty and location decisions

Available information is reviewed on the effects of financial incentives on physicians' specialty and location decisions. Income of physicians varies by specialty and geographic area, but evidence is limited on the effects of these differences on career decisions. Only two studies have been done on the relationship of oncome to specialty choice. These studies showed that the impact of income on specialty choice, if any, is weak. Studies on the relationship of both reimbursement levels and income to physician location choice generally concluded that there is a small, positive correlation between these financial factors and physician density. Thus, increasing physicians' income appears to be viable public policy for attracting physicians to underserved areas. Though rough estimates are calculated of the cost of attracting additional physicians, based on studies reviewed, conclusions on costs of incentive programs are premature.     

Impact of insurance and hospital ownership on hospital length of stay among patients with ambulatory care-sensitive conditions

PURPOSE Some studies suggest proprietary (for-profit) hospitals are maximizing financial margins from patient care by limiting therapies or decreasing length of stay for uninsured patients. This study examines the role of insurance related to length of stay once the patient is in the hospital and risk for mortality, particularly in a for-profit environment. METHODS We undertook an analysis of hospitalizations in the National Hospital Discharge Survey (NHDS) of the 5-year period of 2003 to 2007 for patients aged 18 to 64 years (unweighted n = 849,866; weighted n = 90 million). The analysis included those who were hospitalized with both ambulatory care-sensitive conditions (ACSCs), hospitalizations considered to be preventable, and non-ACSCs. We analyzed the transformed mean length of stay between individuals who had Medicaid or all other insurance types while hospitalized and those who were hospitalized without insurance. This analysis was stratified by hospital ownership. We also examined the relationship between in-hospital mortality and insurance status. RESULTS After controlling for comorbidities; age, sex, and race/ethnicity; and hospitalizations with either an ACSC or non-ACSC diagnosis, patients without insurance tended to have a significantly shorter length of stay. Across all hospital types, the mean length of stay for ACSCs was significantly shorter for individuals without insurance (2.77 days) than for those with either private insurance (2.89 days, P = .04) or Medicaid (3.19, P <.01). Among hospitalizations for ACSCs, in-hospital mortality rate for individuals with either private insurance or Medicaid was not significantly different from the mortality rate for those without insurance. CONCLUSIONS Patients without insurance have shorter lengths of stay for both ACSCs and non-ACSCs. Future research should examine whether patients without insurance are being discharged prematurely.     

On the effect of prospective payment on local hospital competition in Germany

The introduction of prospective hospital reimbursement based on diagnosis related groups (DRG) in 2004 has been a conspicuous attempt to increase hospital efficiency in the German health sector. As a consequence of the reform a rise of competition for (low cost) patients could be expected. In this paper the competition between hospitals, quantified as spatial spillover estimates of hospital efficiency, is analyzed for periods before and after the reform. We implement a two-stage efficiency model that allows for spatial interdependence among hospitals. Hospital efficiency is determined by means of non-parametric and parametric econometric frontier models. We diagnose a significant increase of negative spatial spillovers characterizing hospital performance in Germany, and thus, confirm the expected rise of competition.     

Physician knowledge, financial incentives and treatment decisions for depression

BACKGROUND: Two important policy levers to affect health care delivery are financing and informational interventions. Unfortunately, these two approaches have not been considered simultaneously and little is known about how their effects compare. AIMS OF THE STUDY: This paper estimates the relative role of financial incentives (prepaid versus fee for service) and provider information (perceived knowledge of antidepressant medications and skill in counseling for depression) on quality of care for less and more severely depressed patients and their health and cost outcomes. METHODS: We develop a theoretical model of provider behavior and estimate a reduced form using a multinomial probit model with heteroskedastic covariances. The likely effects of changing provider knowledge about depression treatment in primary care are then simulated and contrasted with the effects of a shift toward prepaid managed care as opposed to fee-for-service care. The empirical model is estimated using data from the Medical Outcomes Study. RESULTS: We conclude that financing and information have different effects and that their combination can achieve the conflicting goals of improved health outcomes and reduced direct treatment goals. Moreover, including family income as one important dimension of social cost suggests that the combination of informational interventions and a shift to prepaid care may dominate either one intervention in isolation from a social cost perspective. Specifically regarding information, we found that increasing provider knowledge could have the highly desirable effect of greater targeting of treatments to sicker patients while not raising overall treatment rates much - a treatment pattern that many hoped managed care could achieve, but for which there has been little evidence. CONCLUSIONS: Our analysis illustrates the value of considering these widely different policy goals simultaneously. We learned that variation in physician knowledge generally had stronger associations with clinically relevant practice patterns for depression than did a complete change in financing strategy. The moderate change in perceived knowledge we simulated (not near the extremes of observed values of perceived knowledge) was associated with enough improvement in appropriateness of care to more than offset the reduction in appropriateness with a complete shift from fee-for-service to prepaid managed care. IMPLICATIONS FOR HEALTH POLICY: The paper demonstrates the importance of considering different interventions simultaneously. Combining informational and financial interventions simultaneously can achieve better quality of care and reduce health care costs, something neither intervention can in isolation.     

宁夏某三甲医院不同支付方式住院费用差异分析

[目的]分析不同支付方式住院费用差异,为进一步促进医保资金的合理使用提供依据。[方法]以2009-2011年某三级医院历年住院病人业务量前25位中重合的6个病种为研究对象,比较分析各年不同支付方式次均住院费用及其结构变化情况。[结果]次均住院费用总体处于平稳增长趋势,但不同支付方式间差异较大,依次体现在中药费、其他费用和西药费用。[结论]规范诊疗行为、合理用药、医疗服务明晰化是解决不同支付方式住院费用差异的有效手段。     

Effects of ownership, subsidization and teaching activities on hospital costs in Switzerland

This paper explores the cost structure of Swiss hospitals, focusing on differences due to teaching activities and those related to ownership and subsidization types. A stochastic total cost frontier with a Cobb-Douglas functional form has been estimated for a panel of 148 general hospitals over the six-year period from 1998 to 2003. Inpatient cases adjusted by DRG cost weights and ambulatory revenues are considered as two separate outputs. The adopted econometric specification allows for unobserved heterogeneity across hospitals. The results suggest that teaching activities are an important cost-driving factor and hospitals that have a broader range of specialization are relatively more costly. The excess costs of university hospitals can be explained by more extensive teaching activities as well as the relative complexity of the offered medical treatments from a teaching point of view. However, even after controlling for such differences university hospitals have shown a relatively low cost-efficiency especially in the first two or three years of the sample period. The analysis does not provide any evidence of significant efficiency differences across ownership/subsidy categories.     

Patient satisfaction in Bangkok: the impact of hospital ownership and patient payment status.

INTRODUCTION: Patient satisfaction with care received is an important dimension of evaluation that is examined only rarely in developing countries. Evidence about how satisfaction differs according to type of provider or patient payment status is extremely limited. OBJECTIVE: To (i) compare patient perceptions of quality of inpatient and outpatient care in hospitals of different ownership and (ii) explore how patient payment status affected patient perception of quality. METHODS: Inpatient and outpatient satisfaction surveys were implemented in nine purposively selected hospitals: three public, three private for-profit and three private non-profit. RESULTS: Clear and significant differences emerged in patient satisfaction between groups of hospitals with different ownership. Non-profit hospitals were most highly rated for both inpatient and outpatient care. For inpatient care public hospitals had higher levels of satisfaction amongst clientele than private for-profit hospitals. For example 76% of inpatients at public hospitals said they would recommend the facility to others compared with 59% of inpatients at private for-profit hospitals. This pattern was reversed for outpatient care, where public hospitals received lower ratings than private for-profit ones. Patients under the Social Security Scheme, who are paid for on a capitation basis, consistently gave lower ratings to certain aspects of outpatient care than other patients. For inpatient care, patterns by payment status were inconsistent and insignificant. CONCLUSIONS: The survey confirms, to some extent, the stereotypes about quality of care in hospitals of different ownership. The results on payment status are intriguing but warrant further research.     

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.     

Uncompensated care before and after prospective payment: the role of hospital location and ownership.

Research was undertaken to determine the effects of hospital ownership, location, and Medicare's prospective payment system (PPS) on inpatient uncompensated care. A nonequivalent group design was used with repeated measures of uncompensated care (UNCC) on 137 system hospitals taken pre- and post-PPS. Investor-owned system hospitals demonstrated the largest increase in UNCC (37 percent) under the PPS. Results suggest that not-for-profit and investor-owned system hospitals are becoming more similar in levels of uncompensated care provided and that the PPS has had a negative effect on rural hospital profitability.     

Physicians' payment contracts, treatment decisions and diagnosis accuracy

We derive optimal payment contracts for physicians when neither physicians' effort to gather information about the patient's health condition (diagnosis effort) nor the actual patient's health condition (physicians' private information) are contractible. In a model where the patient is allowed to demand health care on more than one occasion, we show that, in general, the optimal payment contract includes supply-side cost sharing. This provides the physician with incentives to provide the most adequate treatment and to gather an informative signal about the patient's illness, to decrease the likelihood of future cost sharing. However, for some extreme values of the parameters of the model, we show that a public insurer may prefer to induce some 'blind' decision making.     

单病种付费对前列腺增生患者住院费用及医疗服务满意度的影响

目的 评估单病种付费对前列腺增生患者住院费用和医疗服务满意度的影响。方法 本院2015年6月—2018年6月主要诊断为前列腺增生的出院患者,按是否采用单病种付费将其分为实验组和对照组。采用典型抽样法,对2组患者进行医疗服务满意度问卷调查。比较分析2组患者住院费用、主要诊断符合率、治愈率、并发症发生率、治疗效果和医疗服务满意度评分。结果 采用单病种付费方式患者较未采用的患者住院时间有所缩短,治疗费用显著降低,其中化验费、检查费、药费和麻醉费减少明显,差异有统计学意义(P<0.01)。而2组主要诊断符合率、治愈率、并发症发生率和满意度评分差异无统计学意义(P>0.05)。结论 单病种付费在保障医疗安全和服务质量的基础上,明显降低了患者医疗费用,费用结构趋于合理,但也需要进一步完善相关配套政策,以更有效地发挥其作用。     

Effects of competition on hospital quality: an examination using hospital administrative data

This paper investigates the effects of competition on hospital quality using hospital administration data from the State of Victoria, Australia. Hospital quality is measured by 30-day mortality rates and 30-day unplanned readmission rates. Competition is measured by Herfindahl–Hirschman index and the numbers of competing public and private hospitals. The paper finds that hospitals facing higher competition have lower unplanned admission rates. However, competition is related negatively to hospital quality when measured by mortality, albeit the effects are weak and barely statistically significant. The paper also finds that the positive effect of competition on quality as measured by unplanned readmission differs greatly depending on whether the hospital is publicly or privately owned.     

Effects of market position and competition on rural hospital closures.

OBJECTIVE: To examine the dynamic effects of competition and hospital market position on rural hospital closures. DATA SOURCE/STUDY SETTING: Analysis of all rural community hospitals operating between 1984 and 1991, with the exception of sole-provider hospitals. Data for the study are obtained from four sources: the AHA Annual Surveys of Hospitals, the HCFA Cost Reports, the Area Resource File, and a hospital address file constructed by Geographic Inc. DATA COLLECTION AND ANALYSIS: Variables are merged to construct pooled, time-series observations for study hospitals. Hospital closure is specified as a function of hospital market position, market level competition, and control variables. Discrete-time logistic regressions are used to test hypotheses. PRINCIPAL FINDINGS: Rural hospitals operating in markets with higher density had higher risk of closure. Rural hospitals that differentiated from others in the market on the basis of geographic distance, basic services, and high-tech services had lower risks of closure. Effects of market density on closure disappeared when market position was included in the model, indicating that differentiation in markets should be taken into account when evaluating the effects of competition on rural hospital closure. CONCLUSIONS: Our findings suggest that rural hospitals can reduce competitive pressures through differentiation and that accurate measures of competition in geographically defined market areas are critical for understanding competitive dynamics among rural hospitals.     

The alignment and blending of payment incentives within physician organizations

OBJECTIVE: To analyze the blend of retrospective (fee-for-service, productivity-based salary) and prospective (capitation, nonproductivity-based salary) methods for compensating individual physicians within medical groups and independent practice associations (IPAs) and the influence of managed care on the compensation blend used by these physician organizations. DATA SOURCES: Of the 1,587 medical groups and IPAs with 20 or more physicians in the United States, 1,104 responded to a one-hour telephone survey, with 627 providing detailed information on physician payment methods. STUDY DESIGN: We calculated the distribution of compensation methods for primary care and specialty physicians, separately, in both medical groups and IPAs. Multivariate regression methods were used to analyze the influence of market and organizational factors on the payment method developed by physician organizations for individual physicians. PRINCIPAL FINDINGS: Within physician organizations, approximately one-quarter of physicians are paid on a purely retrospective (fee-for-service) basis, approximately one-quarter are paid on a purely prospective (capitation, nonproductivity-based salary) basis, and approximately one-half on blends of retrospective and prospective methods. Medical groups and IPAs in heavily penetrated managed care markets are significantly less likely to pay their individual physicians based on fee-for-service than are organizations in less heavily penetrated markets. CONCLUSIONS: Physician organizations rely on a wide range of prospective, retrospective, and blended payment methods and seek to align the incentives faced by individual physicians with the market incentives faced by the physician organization.     

Association of hospital ownership with patient transfers to outpatient care under a prospective payment system in Taiwan

Case payment, a prospective payment system akin to diagnosis-related groups (DRGs) has in-built incentives for hospitals to transfer inpatients to their own ambulatory care units following early discharge. This study used nation-wide inpatient claims data on a total of 100,730 patients treated in 2000 in (Taiwan): cesarean section (59,364 cases), femoral/inguinal hernia operation (18,675 cases), and hemorrhoidectomy (22,691 cases), all reimbursed by case payment, to explore the relationship between hospital ownership and patient transfers to outpatient treatment. For all three diagnoses, for-profit (FP) hospitals not only had lower lengths of stay (LOS) compared to public hospitals, but also showed very high odds of patient transfer to their own outpatient units, after controlling for institutional variables, (hospital level, teaching status, and geographic location), hospital competitive environment (the Herfindal-Hirschman index), and patient variables (gender, age, length of stay, and number of secondary diagnoses, a proxy for severity of illness). Similar, though slightly lower odds were observed with not-for-profit (NFP) hospitals relative to public hospitals. The findings support the property rights theory, suggesting that in Taiwan, institutional profit maximization motives may be driving patient transfers under the case payment diagnoses, rather than medical care needs. In NFP hospitals, their physician compensation mechanism, driven largely by care volumes provided by each physician, appears to be driving the disproportionately greater likelihood of patient transfer to outpatient care.