Consumer-driven health care: just a tweak or a revolution?

Although some believe that consumer-driven health care amounts to nothing more than a tweak to the current system of third-party payment, others see it as a far more profound development. They argue that enabling patients to control more of their health care dollars will lead to transformation throughout the health care system, starting with a demand for information. Once patients control the resources and are equipped with information, they will expect health care providers to deliver high-quality services at reasonable prices and at the convenience of the buyer.     

Health care costs: the other point of view

Health care delivery in America is not efficient. Hospitals are not efficient and many are still wasteful. Some of the most blatant wastes in hospitals are staffing patterns that developed during the years of cost reports. Spending patterns become the norm, rather than excess, when they continue unabated for years. There are many reasons for cost increases in health care and specifically in hospitals. However, it is difficult to make these reasons add up to the total cost increase. No one has the answers; observation can only be made of what has been occurring and what continues to occur. Whatever the reason for the increase in health care costs, the consumer will bear the burden because of the circular flow of income and expenditures between the business sector and the household sector. Increased health care costs are passed on to the consumer in the form of increased expenditures for household goods and services or taxes. Ford Motor Company President Mr. Peterson says that $1,500 of every new automobile represents employee health care costs. The American consumer created the demand for health care services, and only the consumer can control the demand. One solution would be to let the consumer bear health care costs directly and remove the inefficiencies created by third party insurance carriers. This hypothesizes that the health care consumer is the most efficient shopper for health care services, and that third party insurance carriers are an important source of inefficiency in the health care delivery system. Many other solutions have been proposed by the government and by the insurance and health care industries, but most have only increased the cost of health care. Perhaps some day the health care industry will learn how to control the dynamics of this four-party purchasing decision. Until then, costs will continue to grow dramatically, and the executives of the industries who compete in the two-party purchasing system will wonder why the process is so complicated.     

Total quality management: an implementation strategy for excellence in the medical record department

Trustees do not seem to agree on how quality accountability will be accomplished, but they are starting to agree that procedures to establish quality accountability are necessary. They also agree that leadership from the board level, coupled with a firm resolve to monitor quality, will ensure that hospitals provide high-quality care and services to their most important and influential customers: patients. The manufacturing industry has provided the health care industry with the benefit of its experiences with continuous quality improvement, including the pitfalls. It is both exciting and challenging to learn the philosophies of total quality management and build a customized strategy for excellence, especially in medical record departments. As a customer of numerous processes throughout the health care organization and a supplier of products and services as well, the MRD represents a common thread throughout the organization, often linking people and departments together. A medical record professional who is working in a health care organization whose executives believe in TQM can expect great things in the decade ahead.     

Health economics and resource management: a model for hospital efficiency

As health care spending continues to climb, government and industry, as the two major purchasers of health care services, are intensifying their scrutiny over health care delivery in an attempt to reduce their health care burden. The first round of utilization controls and reimbursement restrictions focused on necessity of admission and efficiency of care, causing a profound effect on hospital-based services. Declining occupancy rates, reduced inpatient reimbursements, and mounting contractual losses have pushed many hospitals to the point of financial disaster. The second round of controls has expanded into the outpatient sector and will begin to focus on both appropriateness of treatment and outcome of care, affecting both hospital and physician-related services. In an environment of increasing external pressures for appropriateness, justification and outcome of medical services, and potential financial risk imposed by reimbursement cutoffs or penalties for unnecessary care, hospitals and physicians are under increasing pressure to improve their efficiency as health care providers. The resource management model is presented as an example of how hospitals and physicians can monitor health care services and improve their performance in the delivery of more cost-efficient, high-quality medical care. The importance of hospital-physician education, communication, and interaction is stressed as a means of attaining internal control over a system plagued by resource-limited external constraints.     

Containing health costs in the Americas

In recent years, a series of policy measures affecting both demand and supply components of health care have been adopted in different Latin American and Caribbean countries, as well as in Canada and the United States. In applying these measures various objectives have been pursued, among them: to mobilize additional resources to increase operating budgets; to reduce unnecessary utilization of health services and consumption of pharmaceuticals; to control increasing production costs; and to contain the escalation of health care expenditures. In terms of demand management, some countries have established cost-recovery programmes in an attempt to offset declining revenues. These measures have the potential to generate additional operating income in public facilities, particularly if charges are levied on hospital care. However, only scant information is available on the effects of user charges on demand, utilization, or unit costs. In terms of supply management, corrective measures have concentrated on limiting the quantity and the relative prices of different inputs and outputs. Hiring freezes, salary caps, limitations on new construction and equipment, use of drug lists, bulk procurement of medicines and vaccines, and budget ceilings are among the measures utilized to control production costs in the health sector. To moderate health care expenditures, various approaches have been followed to subject providers to 'financial discipline'. Among them, new reimbursement modalities such as prospective payment systems offer an array of incentives to modify medical practice. Cost-containment efforts have also spawned innovations in the organization and delivery of health services. Group plans have been established on the basis of prepaid premiums to provide directly much or all health care needs of affiliates and their families. The issue of intrasectorial co-ordination, particularly between ministries of health and social security institutions, has much relevance for cost containment. In various countries, large-scale reorganization processes have been undertaken to eliminate costly duplications of resources, personnel, and services that resulted from the multiplicity of providers in the public subsector. Given the pluralistic character of the region's health systems, an important challenge for policy-makers is to find ways to redefine the role of state intervention in health from the simple provision of services to one that involves the 'management' of health care in the entire sector.     

Maternal Medical Complexity: Impact on Prenatal Health Care Spending among Women at Low Risk for Cesarean Section

BackgroundObstetric procedures are among the most expensive health care services, yet relatively little is known about health care spending among pregnant women, particularly the commercially-insured.ObjectiveThe objective of this study was to examine the association between maternal medical complexity, as a result of having one or more comorbid conditions, and health care spending during the prenatal period among a national sample of 95,663 commercially-insured women at low risk for cesarean delivery.MethodsWe conducted secondary analyses of 2010–2011 inpatient, outpatient, and professional claims for health care services from the Health Care Cost Institute. Allowed charges were summed for the prenatal and childbirth periods. Ordinary least squares regressions tested associations between maternal health conditions and health care expenditures during pregnancy.ResultsThirty-four percent of pregnant women had one or more comorbidities; 8% had two or more. Pregnant women with one or more comorbidities had significantly higher allowed charges than those without comorbidities (p < .001). Spending during the prenatal period was nearly three times higher for women with preexisting diabetes compared with women with no comorbid conditions. Average levels of prenatal period spending associated with maternal comorbidities were similar for women who had vaginal and cesarean deliveries. Patient characteristics accounted for 30% of the variance in prenatal period expenditures.ConclusionsThe impact of maternal comorbidities, and in particular preexisting diabetes, on prenatal care expenditures should be taken into account as provider payment reforms, such as pay-for performance incentives and bundled payments for episodes of care, extend to maternal and child health-related services.     

Ambulatory care in the public sector: perinatal care in Los Angeles County

In planning its response to the increasing demand for perinatal services and the increasing rate of infant mortality and low-birthweight infants the Los Angeles County Department of Health Services faces a formidable set of tasks. Initiatives already in place are attempting to deal with some of the most pressing problems. However, increased services must be made available to enable the increasing number of women to access the system of care, and further outreach is necessary to encourage more women to begin prenatal care early in pregnancy. The county needs to increase the availability of perinatal care services, and these services must respond to the cultural and socioeconomic needs of pregnant women. Financial barriers to care must be eased, and the process of qualifying for Medi-Cal must be simplified. Additional private providers need to be brought into the system, and alternative care providers--such as birthing centers and delivery by midwives--should be expanded for low-risk pregnancies. The DHS has been forced to respond to staggering increases in demands for perinatal care services, and the population pressures and the widening socioeconomic gaps are unlikely to decrease in the near future. These same forces also require the DHS to respond to the increased demand for other health services. The DHS is being required to develop and maintain a complex program of health services without adequate financial resources. The solution to the perinatal care crisis in Los Angeles County and other localities with high rates of poverty cannot be found solely within local governments. It is unrealistic to expect that local taxation can support an increase of this magnitude in the need for care, and increased state and federal support is essential. Other nations, spending far less for health care, produce significantly better results: how much longer will it take this nation to recognize its responsibilities to its most vulnerable citizens?     

Quality of Care for Maternal and Newborn Health in Health Facilities in Nepal

Introduction

Nepal has pledged to substantially reduce maternal and newborn death by 2030. Improving quality of intrapartum health services will be vital to reduce these deaths. This paper examines quality of delivery and newborn services in health facilities of Nepal.

Methods

Data were sourced from the Nepal Health Facility Survey 2015, which covered a national representative sample of health facilities. The datasets were analysed to assess service readiness, availability and quality of delivery and newborn care in a sample of 992 health facilities.

Results

Of the 992 facilities in the sample, 623 provided delivery and newborn care services. Of the 623 facilities offering delivery and newborn care services, 13.3% offered comprehensive emergency obstetric care (CEmONC), 19.6% provided basic emergency obstetric care (BEmONC) and 53.9% provided basic delivery and newborn service. The availability of essential equipment for delivery and newborn care was more than 80% in health facilities. Except for the coverage of vitamin K injection, the coverage of immediate newborn care was more than 85% in all health facilities. The coverage of use of chlorhexidine ointment to all newborns was more than 70% in government hospitals and primary health care centers (PHCCs) and only 32.3% in private hospitals.

Conclusions

These findings show gaps in equipment and drugs, especially in PHCCs and private health facilities. Improving readiness and availability of equipment and drugs in PHCCs and private health facility will help improve the quality of care to further reduce maternal and newborn mortality in Nepal.

     

Tax policy toward health insurance and the demand for medical services

Researchers have argued that the tax subsidy to employer-provided health insurance has led to overinsurance, excess demand for medical care, and to rapid expenditure growth in the medical care sector. This paper determines the quantitative significance of this linkage, using existing estimates of the elasticities of demand for health insurance and medical services in a static microsimulation model. We find that incorrect assumptions about the elasticities of demand and pattern of health insurance coverage led earlier researchers to overestimate the likely impact of the elimination of the tax expenditures for health insurance. We estimate, using mid-range assumptions, that complete elimination of the favorable tax treatment of employer contributions to health insurance would reduce the demand for employer-sponsored health insurance by 16–27 percent and the overall demand for medical services by about 4–6 percent and not more than 10 percent.     

Have out‐of‐pocket health care payments risen under free health care policy? The case of Sri Lanka

Compared to its neighbors, Sri Lanka performs well in terms of health. Health care is provided for free in the public sector, yet households' out‐of‐pocket health expenditures are steadily increasing. We explore whether this increase can be explained by supply shortages and insufficient public health care financing or whether it is rather the result of an income‐induced demand for supplementary and higher quality services from the private sector. We focus on total health care expenditures and health care expenditures for specific services such as expenses on private outpatient treatments and expenses on laboratory and other diagnostic services. Overall, we find little indication that limited supply of public health care per se pushes patients into the private sector. Yet income is identified as one key driver of rising health care expenditures, ie, as households get richer, they spend an increasing amount on private services suggesting a dissatisfaction with the quality offered by the public sector. Hence, quality improvements in the public sector seem to be necessary to ensure sustainability of the public health care sector. If the rich and the middle class increasingly opt out of public health care, the willingness to pay taxes to finance the free health care policy will certainly shrink.     

The latest revolution. What solutions will technology offer?

What can we expect of the "typical" health care organization in five years? As basic functions are widely adopted, the "e" will begin to drop from e-health. Consumers will demand free medical content, basic self-service tools, and other online functions and services.     

Have structural adjustments led to health sector reform in Africa?

This paper explores the issue of whether and how structural adjustment in Sub-Saharan Africa has altered the level and nature of state involvement in the health care system. Stabilization and structural adjustment generally entail a reduction in aggregate demand, especially government spending, and a reduced role for the state in the provision of many goods and services. Consequently, there is an a priori concern that stabilization and adjustment in Africa may have resulted in lower health expenditures with deleterious effects on the health status of the population, particularly the poor. This paper concludes that structural adjustment programs in Africa did not reduce public health expenditures. In fact, many countries experienced higher real expenditures after adjustment. The fact that many indicators of health status deteriorated during the 1980s, however, presents somewhat of a paradox given the patterns of health expenditures. This paradox is resolved, by an investigation of the intrasectoral allocation of health expenditures which reveals that there are systematic biases in public expenditures towards tertiary and curative care, and a general weakness in the public sector's capacity to deliver adequate health care services even with higher real health sector budgets. In many countries, these biases have persisted despite government and donor intentions to promote health care reform. Finally, the paper reviews a set of policy and institutional issues which hinder the efficient use of budget resources, including overcentralization of health care administration, inappropriate drug and supply procurement practices, the lack of mechanisms for cost recovery, and poor organization, financial and personnel management. At each level of analysis, the paper catalogs those instances where progress is being made towards effective health care reform, including intrasectoral budget rationalization, administrative decentralization, the adoption of user fees for cost recovery, privatization in service delivery, particularly through non-governmental organizations, and organizational and management reform.     

Home is not where the heart is: looming problems of the home care industry

This analysis shows a definite trend of fiscal and social retrenchment policy by the government concerning in-home care service delivery (Tables 1 and 2). Ruggie (1990:164) notes that such shifts and changes in Medicare reimbursement patterns may be efforts of the government to realign itself to become the pivotal force in the provision or delivery of in-home care. Cost-containment pressures, although most needed in the health care industry, are the primary driving force behind retrenchment and the subsequent realignment of government. Such forces tend to impede the development of a comprehensive system for the provision of long-term care services. As noted, the movements and shifts in reimbursement patterns documented by this analysis can lead one to conclude that the same old features will continue to prevail instead of new and innovative delivery structures or public-private partnerships. In other words, the in-home care industry will become more like the nursing home industry--highly regulated and perpetually plagued by questions concerning quality of care. Although government is attempting to diminish its task as the prime provider of health services (i.e., through fiscal retrenchment) and the public's role as the dominant delivery system (i.e., social retrenchment), nevertheless the government has been unable to retrench politically in spite of its present direction of cost containment and fiscal restraint. Consequently, Ruggie (1990:147) notes that "the social welfare functions may continue to be performed" in spite of cost restraint policies. As a result, another "no care zone" is created and policy-makers will continue to develop "crisis policy" such as intense demands to hold unit costs low. The home care system has expanded many of the long-term care options and has emerged as a salient segment of our health and social service system (Applebaum and Phillips, 1990). Yet, policy-makers have not developed a comprehensive long-term care system, particularly one that defines a common policy for home care benefits and engenders the right kind of public-private partnership for the delivery of quality home care.     

Automated Multiphasic Health Testing

The Tennessee Valley Authority (TVA) has found automated multiphasic health testing (AMHT) to be an excellent complementary medical tool for providing health care for urban and nonurban employees. Automated multiphasic health testing adapted to a mobile unit has been particularly valuable in keeping the health of remote-area employees under surveillance.

As a regional resource development agency, TVA is also interested in finding ways to upgrade the health of the area’s people. In cooperative community projects, TVA has helped to demonstrate the potential value of AMHT for introducing nonurban populations into a health care system and for improving existing health care by providing previously unavailable diagnostic services.

But AMHT must be used in conjunction with organized health care delivery systems. If it is not, confusion in health care delivery and physician rejection may result.     

Some Basic Determinants of Medical Care and Health Policy: An Overview of Trends and Issues

Long-term trends in our economy and social structure are radically affecting the supply and demand for health services. Population increases, both generally and in the over-65-years-of-age bracket, growing ratio of nonwhites to whites, increasing proportion of women, increasing urbanization, industrialization, educational levels and per capita income are only some of the major factors affecting the demand for health services. Major developments in the science, technology and organization of medical care are and will continue breaking traditional patterns in rendering such care, and definitely point in the direction of multidisciplinary and institutional makeup in the delivery of health services. Changes in the financing of medical care are bringing in a foray of public programs sponsored by all levels of the government, contributing to the unique American pluralistic health care economy with its “mix” of public and private activities. Questions, intended to point up some of the more far-reaching issues, are appended to each section of the paper.     

Public expectations of nonprofit and for-profit ownership in American medicine: clarifications and implications

Policymakers, advocates, and scholars frequently make claims about how the American public sees ownership affecting the delivery of medical care. In this paper we provide a comprehensive assessment of how Americans think about nonprofit and for-profit ownership. We summarize findings from surveys fielded between 1985 and 2000 and supplement them with findings from a new survey. Most Americans believe that ownership matters for multiple aspects of medical care; they expect nonprofit hospitals and health plans to be more trustworthy, fair, and humane but lower in quality. People who are better informed about ownership have more positive expectations about nonprofits' performance.     

Achievements and challenges of medicare in Canada: Are we there yet? Are we on course?

Health care policy in Canada is based on providing public funding for medically necessary physician and hospital-based services free at the point of delivery ("first-dollar public funding"). Studies consistently show that the introduction of public funding to support the provision of health care services free at the point of delivery is associated with increases in the proportionate share of services used by the poor and in population distributions of services that are independent of income. Claims about the success of Canada's health care policy tend to be based on these findings, without reference to medical necessity. This article adopts a needs-based perspective to reviewing the distribution of health care services. Despite the removal of user prices, significant barriers remain to services being distributed in accordance with need-the objective of needs-based access to services remains elusive. The increased fiscal pressures imposed on health care in the 1990s, together with the failure of health care policy to encompass the changing nature of health care delivery, seem to represent further departures from policy objectives. In addition, there is evidence of increasing public dissatisfaction with the performance of the system. A return to modest increases in public funding in the new millennium has not been sufficient to arrest these trends. Widespread support for first-dollar public funding needs to be accompanied by greater attention to the scope of the legislation and the adoption of a needs-based focus among health care policymakers.