Cost-containment Programs Research Articles

An Empirical Analysis of Avoidable Medicare Payments and Medicare Payment Variations

This study investigates the determinants of average Medicare payments, focusing on the impact of secondary diagnoses, demographic factors, and regional disparities. Our model reveals that major complications and comorbidities (MCCs) significantly increase average Medicare payments compared to less severe complications (CCs), with coefficients of 7674.13 and 1542.67, respectively. Higher percentages of the elderly living in poverty correlate with increased payments, highlighting the influence of social determinants on healthcare costs. Demographic analysis shows that counties with higher populations of Black, Hispanic, Asian, or other races receive higher Medicare payments, indicating potential racial disparities in healthcare access and quality. Political affiliation also plays a role, with Democrat-voting counties incurring higher Medicare costs. Surprisingly, larger populations served correlate with decreased payments, possibly due to cost-containment programs like Medicare’s Competitive Bidding. State-level analysis reveals significant regional variations, with states like Oregon and Wyoming showing higher payments, while Mississippi and Georgia have the lowest. Our findings underscore the complexity of Medicare funding and the need for targeted policy interventions to address health disparities and ensure sustainable healthcare delivery.

The Effect of the Great Recession on Italian Life Expectancy

The 2008 economic crisis, also called the Great Recession, produced only a moderate rise in unemployment in Italy, but the consequences for public debt management were far more serious. Italy makes for a good case study for evaluating the effect on life expectancy at birth of the cost containment program in the health care system, implemented after the crisis began. To this end we employed the Artificial Control method using the data from the Human Mortality Database to assess the causal effect of the 2008 economic crisis on the subsequent evolution of life expectancy at birth (until 2019, before the onset of the COVID-19 pandemic). Our analysis identifies a significant deceleration in the progression of Italian life expectancy. Ten years after the onset of the crisis, Italy appears to have lost almost 1 year of life expectancy with respect to what would have been expected had the crisis never happened.

The Clinical and Economic Impact of High Value External Fixation Utilization at a Level II Trauma Center

Introduction: In the current climate of cost containment and fiscal responsibility, high value implant alternatives represent a substantial opportunity for the treatment of orthopedic trauma patients. As patents have expired on many commonly used trauma implants, high value alternatives have become available. The purpose of this study was to examine the clinical and economic impact of a cost containment program using high quality, low cost external fixation components for temporary spanning constructs in the treatment of tibial plateau and pilon fractures. Methods: 62 patients with tibial plateau and pilon fractures treated with temporary high value external fixation devices were compared to 62 patients treated with conventional brand external fixation devices over the same time period. The groups were analyzed for differences in intraoperative and post-operative outcomes in order to analyze the clinical efficacy of high value devices. Operative records were analyzed to identify intraoperative complications, operative time and estimated blood loss. Cases of infection, malunion, nonunion or need for repeat surgery were recorded. Hospital financial records were appraised to determine implant costs. Results: There were no significant differences in age, sex, presence of diabetes, smoking or fracture type between the high value and conventional groups. No difference in operative time was noted. No intraoperative or postoperative complications occurred in either group from the time of external fixation to the time of external fixator removal and conversion to definitive fixation. Overall the hospital realized a 58% reduction in implant costs, an average of $2,200 savings per case and a total savings of $136,400 during the study period. Conclusions: Use of high value external fixation implant constructs has been a very successful endeavor at our institution providing equivalent clinical outcomes while significantly reducing implant expenditures. Based on this data the use of high value implants has the potential to markedly reduce operative costs as long as quality products are utilized.

The Affordable Care Act 10 Years In: What Nursing Leaders Should Know

The Affordable Care Act (ACA) introduced wide-ranging health care reforms but faces many challenges. This article reviews 6 key points for today’s nurse leader on the law’s 10th anniversary: a renewed legal battle is on its way to the Supreme Court; 27 million people still lack coverage, partly due to nonexpansion of Medicaid in 15 states; Medicaid waivers provide coverage for some low-income people but leave many people out; value-based purchasing has allocated billions of dollars in rewards and penalties; ACA Marketplace plans are not always affordable, but premiums are stabilizing; and the 2020 elections could result in dramatic consequences for health care reform.

Measuring the Relationship between Hospital Costs and Quality of Care: An Example of Acute Myocardial Infraction in Edmonton, Alberta, Canada

<p><em>This study explores the relationship between hospital costs and quality of care for Acute Myocardial Infarction (AMI) in the Edmonton area hospitals. The importance of this relationship is realized when policy makers face decisions about cost minimization and quality maximization during times of health care budget constraints. This study uses regression modelling with increasing specifications as well as various robustness checks to ensure the accuracy of the results. The Model specifications include demographics, AMI risk adjustments, Hospital fixed effects, and year fixed effects. Semi-parametric regression removes the assumption of linearity to determine the true relationship between hospital cost and AMI quality. Higher AMI quality is associated with a 39% increase in hospital costs after adjustments and controls. The semi-parametric regression shows a fairly linear relationship between cost and AMI quality. This study suggests that Canadian policy and decision makers should take caution during budget cuts and implementing cost containment programs. The results suggest that reducing AMI budgets may have a negative effect on the quality of AMI care patients receive in Edmonton, Alberta. The linear relationship suggests that the return on the quality of AMI is consistent for each dollar invested with no economies of scale.</em></p>

Comanagement and Gainsharing Opportunities for Independent Physicians.

Gainsharing and comanagament programs are both successful means of achieving physician buy-in for all cost containment programs in Orthopaedic Trauma. Under comanagement agreements, physicians are reimbursed for their time and intellectual efforts in program and algorithm creation. The cost is minimal for the hospital in return for the millions of dollars in savings they achieve. Gainsharing models can incentivize physicians to quickly adopt cost-effective implant choices, care plans, and program development. Hospital systems keep the majority of the profits, patients, and insurance carriers benefit from the cost savings and physicians receive remuneration for their efforts. Careful attention must be paid to the legal issues surrounding the Federal Anti-Kickback Statute, the Civil Monetary Penalty Law, and the Physician Self-Referral Law when setting up these agreements. The keys to success for these programs are the presence of a physician champion, economic transparency for both physicians and hospitals, accurate data collection, and adequate economic incentive for physicians to drive change in practice patterns.

The Clinical and Economic Impact of Generic Locking Plate Utilization at a Level II Trauma Center.

In today's climate of cost containment and fiscal responsibility, generic implant alternatives represent an interesting area of untapped resources. As patents have expired on many commonly used trauma implants, generic alternatives have recently become available from a variety of sources. The purpose of this study was to examine the clinical and economic impact of a cost containment program using high quality, generic orthopaedic locking plates. The implants available for study were anatomically precontoured plates for the clavicle, proximal humerus, distal radius, proximal tibia, distal tibia, and distal fibula. Retrospective review. Level II Trauma center. 828 adult patients with operatively managed clavicle, proximal humerus, distal radius, proximal tibia, tibial pilon, and ankle fractures. Operative treatment with conventional or generic implants. The 414 patients treated with generic implants were compared with 414 patients treated with conventional implants. There were no significant differences in age, sex, presence of diabetes, smoking history or fracture type between the generic and conventional groups. No difference in operative time, estimated blood loss or intraoperative complication rate was observed. No increase in postoperative infection rate, hardware failure, hardware loosening, malunion, nonunion or need for hardware removal was noted. Overall, our hospital realized a 56% reduction in implant costs, an average savings of $1197 per case, and a total savings of $458,080 for the study period. Use of generic orthopaedic implants has been successful at our institution, providing equivalent clinical outcomes while significantly reducing implant expenditures. Based on our data, the use of generic implants has the potential to markedly reduce operative costs as long as quality products are used. Therapeutic Level III.

Surgeon Attitudes Regarding the Use of Generic Implants: An OTA Survey Study.

To determine the role of generic orthopaedic trauma implants in the current orthopaedic trauma market, as perceived by OTA members, and investigate potential hurdles to the use of generic implants and other cost-containment measures. Survey study. Not applicable. All active OTA members with valid e-mail addresses were invited to participate. Participants completed a brief online survey with questions regarding participation in cost-containment and incentive programs, industry relationships, generic implant use, and the role of surgeons in cost containment. Survey data. Participation in cost-containment programs (comanagement agreements, bundled payment for care improvement, and gainsharing) was found to be very low among participants (17%, 36.5%, 17%, respectively). Industry sales representatives were present in a majority of participants' cases (76.9%) the majority of time, but relatively a few surgeons (21.2%) felt their presence was necessary. Most surgeons were aware of the availability of generic implants (72.6%), but a few had adopted the use of such implants (25.5%), despite 50/52 (96.2%) prescribing generic drugs and 45/52 (86.5%) using generic products in their own households. Most participants agreed that generic orthopaedic implants have a role in cost containment, but a few have adopted these implants. The presence of sales representatives does not seem to be necessary for most surgeons, and minimizing or eliminating their presence may result in substantial savings for health care institutions. Increased education and the use of financial incentive programs may encourage improved surgeon participation in cost containment and adoption of generic implants and may help reduce health care spending. Level 4. See Instructions for Authors for a complete description of levels of evidence.

Paying the Piper: Funding Local Government Retiree Health Care Benefits

This article examines measures between various funding options and demographic and strategic human resource goals drawing on a survey of retiree health care benefits in American local governments. Survey results show that local governments have adopted cost-containment strategies and cost-sharing programs. This article explores finance approaches and revenue enhancements. Local governments have even begun to contemplate major cost-shedding options. The article investigates the relationship between these options and local government demographics (size, region, metro status, form of government, unfunded liability per capita and union influence), along with the perceived strategic effects on human resources goals (recruitment, retention and retirement).

Weill Cornell Medical College of Cornell University

Weill Cornell Medical College of Cornell University

The Trade‐Off between Costs and Outcomes: The Case of Acute Myocardial Infarction

ObjectiveTo investigate and to quantify the relationship between hospital costs and health outcomes for patients with acute myocardial infarction (AMI) in Veterans Health Administration (VHA) hospitals using individual-level data for costs and outcomes.Data SourcesVHA administrative files for the fiscal years 2000–2006.Study DesignCosts were defined as costs incurred during the index hospitalization for treatment of AMI. Mortality and readmission, assessed 1 year after the index hospitalization, were used as measures of clinical outcome. We examined health outcomes as a function of costs and other patient-level and hospital-level characteristics using a two-stage Cox proportional hazard model that accounted for competing risks within a multilevel framework. To control for patient comorbidities, we compiled a comprehensive list of comorbidities that have been found in other studies to affect mortality and readmissions.Principal FindingsWe found that costs were negatively associated with mortality and readmissions. Every U.S.$100 less spent is associated with a 0.63 percent increase in the hazard of dying and a 1.24 percent increase in the hazard to be readmitted conditional on not dying. This main finding remained unchanged after a number of sensitivity checks.ConclusionsOur results suggest that there is a trade-off between costs and outcomes. The negative association between costs and mortality suggests that outcomes should be monitored closely when introducing cost-containment programs. Additional studies are needed to examine the cost–outcome relationship for conditions other than AMI to see whether our results are consistent.

Setting Hospital Rates To Control Costs And Boost Quality: The Maryland Experience

For decades Maryland has maintained a hospital payment system in which all payers-public and private-pay the same rates. This paper describes Maryland's all-payer hospital payment system-the legislative goals and principles that directed regulatory efforts in the state; how well the system performs in meeting these goals; and current initiatives on payment design, quality-based reimbursement, and their application elsewhere in the health sector. Maryland's rate-setting system is one of the most enduring and successful cost containment programs in the United States. Lessons learned are relevant to other states and provide useful bases for consideration of future health reform strategies.

Letter to the Editor: Recognizing and Preventing Burnout among Orthopaedic Leaders

Dear Sir: The article by Saleh et al. regarding surgeon burnout is particularly interesting during this time of managed care [1]. In the past, surgeons experienced pressures primarily from issues related to quality of care, quality of their surgery, and results obtained. Managed care introduced increasing pressure from hospital managers, the financial industry including insurance companies, marketing from material producers, and lawyers and litigation. The managed care system that gained popularity in the 1980s in the United States was slowly introduced in France. As in the US, it has had similar consequences on decreasing resources for care, increasing expenses in public health, new regulations for quality control, requirements for expertise, and administrative empowerment. It also has increased surgeon stress leading to burnout. Saleh et al. have presented important data on this phenomenon [1] and have suggested different preventive and therapeutic ways to deal with managed care and decrease surgeon burnout, including increasing productivity, increasing numbers of surgeons in groups, and efficacy. May I suggest another method to decrease stress? Other than seeing an analyst, it is to write a book. I recently wrote a book titled, “Chirurgien au bord de la crise de nerfs” [2], which could be translated into English as “Surgeon close to burnout”. I attempted to explain the details and difficulties of our profession to the general public. I described in lay terms some surgical procedures. I explained how the fear of judges progressively replaces the fear of malpractice. In each chapter, I concentrated on a subject that contributes to our stress, such as quality control systems, cost containment programs, debates regarding nosocomial infection, and increasing litigation, and for each of these subjects, I explained how they are beneficial for insurance companies, lawyers, for-profit companies that own hospitals, and manufacturers of supplies, but in no way are beneficial to quality control, cost containment, or surgeon efficacy. I recently underwent a liver transplant and I used this difficult episode in my life to increase empathy with potential readers, to show them I am not an arrogant surgeon as many frequently imagine, but a regular patient who also has suffered with this system of managed care as everyone else has.

Direct Costs in Patients Hospitalised with Community-Acquired Pneumonia After Non-Response to Outpatient Treatment with Macrolide Antibacterials in the US

Antibacterial cost-containment programmes emphasise the use of narrow-spectrum generic agents whenever possible. The use of these agents is driven by their lower purchase prices; the consequences of treatment failure are rarely considered. This study was conducted to identify the costs of treating patients hospitalised with community-acquired pneumonia (CAP) associated with Streptococcus pneumoniae following failure to respond to outpatient treatment with macrolide antibacterials. A multicentre, retrospective, observational study was performed in patients with CAP due to S. pneumoniae who were admitted to 31 North American hospitals following a lack of response to >or=2 days of outpatient treatment with a macrolide antibacterial. Direct medical costs (year 2004 values) of infection-related hospital resources, including antibacterials (purchase, preparation, dispensing, administration and monitoring), diagnostic tests, therapeutic procedures, treatment of adverse events and therapeutic failures, and hospitalisation per diem (ward, critical care and ventilator days), were analysed. Total hospital costs were then compared with standard diagnosis-related group (DRG) reimbursement. A total of 122 patients were enrolled. Patients were frequently bacteraemic (52%) and infected with macrolide-resistant strains of S. pneumoniae (71%). Initial inpatient antibacterial treatment was not successful in 17 patients (14%) and seven patients (5.7%) died. The mean length of stay was 8.7 days (SD 7) including 1.3 days (SD 2.9) in a critical care unit and 1.4 days (SD 4.4) of mechanical ventilation. The mean cost of hospitalisation was US dollars 12,678 (SD 13 346) but standard DRG reimbursement averaged only US dollars 8,634. Patients who do not respond to outpatient treatment with a macrolide antibacterial and who are subsequently hospitalised with CAP caused by S. pneumoniae are likely to be infected with a non-susceptible strain, are frequently bacteraemic, are at an increased risk for mortality compared with previously published estimates in patients with CAP due to S. pneumoniae, and incur hospital costs that far exceed standard DRG reimbursement for CAP.

Disposable versus reusable biopsy forceps: a prospective cost evaluation

Background: There is growing advocacy for the use of disposable medical accessories to reduce the risks of infection transmission. Their purchase costs can, however, be considered as prohibitive in an endoscopy unit operating under a cost-containment program. We therefore compared the costs of reusable and disposable biopsy forceps. Methods: From October 1995 to September 1997, biopsies were obtained in 7740 sessions. The evaluation of costs included purchase prices, repairs, cleaning (chemicals, equipment, technician time) and autoclaving costs in a centralized sterilization unit. For comparison, the lowest purchase price for disposable biopsy forceps was $26.90 in 1997. Results: A mean of 12 new reusable forceps were purchased every year for a total purchase price of $5460. A total of 315 biopsy sessions were performed per forceps (mean time life of 3 years per forceps, including 3 repairs). Yearly repair cost was $3308, equipment $1002, chemicals $3250, central sterilization $8333, and technician salary $4373. Total cost was $25,726 and cost per biopsy session was $6.65. Conclusions: Total purchase and reprocessing costs for reusable biopsy forceps were 25% of those of disposable devices. The use of disposable biopsy forceps would have led to a yearly extra cost of $78,377 in the operation of our endoscopy unit. (Gastrointest Endosc 2000;51:262-5.)

Effects of health care cost-containment programs on patterns of care and readmissions among children and adolescents.

This study examined the effects of a utilization management program on patterns of medical care among children and adolescents. From 1989 through 1993, the program conducted 8568 reviews of pediatric patients, ranging in age from birth to 18 years. The program used preadmission and concurrent review procedures to review and certify patients' need for care. This study used multivariate analyses to assess changes in the number of days of inpatient care approved by the program and to determine whether limitations imposed on length of stay affected the risk of 60-day readmission. Concurrent review reduced the number of requested days of inpatient care by 3.2 days per patient. Low-birthweight infants and adolescent patients with depression or alcohol or drug dependence accounted for a disproportionate share of the reduction. Patients classified as admitted for medical or mental health care and whose stay was restricted by concurrent review were more likely (P < .05) to be readmitted within 60 days after discharge. By limiting care through its review procedures, the utilization management program decreased inpatient resource consumption but also increased the risk of readmission for some patients. Continued investigation should be conducted of the effects of cost-containment programs on the quality of care given to children and adolescents, especially in the area of mental health.

Legal challenges to managed care cost containment programs: an initial assessment.

The success of managed care cost containment innovations depends on many factors, including how courts decide litigation challenging various cost containment initiatives. Although such litigation is just emerging, enough cases have been reported to enable an initial assessment of court rulings. To date there is no evidence that courts have systematically impeded cost containment initiatives. Few courts seem willing to usurp legislative choices in formulating health policy or to obstruct the market in organizing and delivering health care services. The anticipated role of the courts as policymakers in shaping health care delivery has yet to emerge.

Cost-effectiveness analysis in anaesthesia

In order to preserve the quality of anaesthetic care under cost containment programmes, the concept of value-based anaesthesia was introduced. To achieve this goal, namely, the provision of the best possible care attainable at a reasonable cost, studies are necessary that compare anaesthetic techniques in terms of both quality and costs, e.g. by means of cost-effectiveness analyses.

Socioeconomic evaluation in medicine in Europe. Core economic concepts.

In most European countries, healthcare cost-containment programmes have failed to meet their targets on a long term basis. For this reason, decision-makers sought effective and rational strategies to assist in the optimal allocation of available resources. The scholarly discipline of economics provides methods and instruments for investigating the rational use of limited resources. In the context of these efforts, socioeconomic evaluations of healthcare programmes have become increasingly important during the last decade. A socioeconomic evaluation is an analysis of all costs and consequences over a relevant time-period for a particular healthcare intervention. For example, a socioeconomic evaluation of an influenza prevention programme should consider the total costs of preventing influenza (costs of the vaccine, vaccination programme and treatment of adverse events), as well as the benefits of such a programme (costs saved as a result of cases of influenza avoided). In general, socioeconomic evaluations usually compare costs and benefits relative to alternative treatment strategies. The core concepts of socioeconomic analyses are as follows: costs and consequences, discounting, marginal and incremental costs, and externalities (spill-over effects). All these concepts are fixed components of published guidelines and should be considered when conducting a socioeconomic evaluation.

Discussion

Medical science and pharmaceutical technology have progressed in enormous leaps. The professions have access to knowledge of improved therapies that cover a large selection of diagnoses. This state of affairs is a successful result of the long and purposeful co-operation between science and technology, theory and practice. The therapies have changed but their delivery to the patient remains the same. During the recent international recession and the continuous cost containment programmes the question of availability has risen to the fore. Availability is a question of means. That is usually interpreted as equal to saving and cost cutting. At times of affluence it could mean allowance but that seems far in the past. Availability also concerns the physical distribution of the therapies such as pharmaceuticals. So far, advances in the science have not affected either the distribution or availability of pharmaceutical products. With the rise in patient awareness, pressure is rising to make full use of the research results. This is a natural, albeit unmet, demand and represents an opportunity for the pharmacy institutions with their well trained personnel, modern outlets and the unique as well as traditional position in direct contact with the patients. This role could gain added weight through the progress of the technologies that allow ambulatory therapies instead of cost consuming institutionalisation. It would appear quite natural that the providers of such services would seek the pharmacy outlet networks as their proper points of delivery. There is no doubt that this choice would be taken as a convenient solution by the consumers of the services. This would offer considerable savings to society and efficiency to the patients.