Why not private health insurance? 2. Actuarial principles meet provider dreams.
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What do insurers and employers feel about proposals to expand Canadian health care financing through private insurance, in either a parallel stream or a supplementary tier? The authors conducted 10 semistructured, open-ended interviews in the autumn and early winter of 1996 with representatives of the insurance industry and benefits managers working with large employers; respondents were identified using a snowball sampling technique. The respondents felt that proposals for parallel private plans within a competitive market are incompatible with insurance principles, as long as a well-functioning and relatively comprehensive public system continues to exist; the maintenance of a strong public system was both socially and economically desirable. With the exception of serving the niche market for the private management of return-to-work strategies, respondents showed little interest in providing parallel coverage. They were receptive to a larger role for supplementary insurance but cautioned that they are not willing to cover all delisted services. As business executives they stated that they are willing to insure only services and clients that will be profitable. (+info)
The fall of the house of AHERF: the Allegheny bankruptcy.
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The $1.3 billion bankruptcy of the Allegheny Health, Education, and Research Foundation (AHERF) in July 1998 was the nation's largest nonprofit health care failure. Many actors and factors were responsible for AHERF's demise. The system embarked on an ambitious strategy of horizontal and vertical integration just as reimbursement from major payers dramatically contracted, leaving AHERF overly exposed. Hospital and physician acquisitions increased the system's debt and competed for capital, which sapped the stronger institutions and led to massive internal cash transfers. Management failed to exercise due diligence in many of these acquisitions. Several external oversight mechanisms, ranging from AHERF's board to its accountants and auditors to the bond market, also failed to protect these community assets. (+info)
Does reengineering really work? An examination of the context and outcomes of hospital reengineering initiatives.
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OBJECTIVE: To examine the effect of reengineering on the competitive position of hospitals. Although many promises have been made regarding outcomes of process reengineering, little or no research has examined this issue. This article provides an initial exploration of the direct effects of reengineering on the competitive cost position of hospitals and the modifying effects of implementation factors. DATA SOURCES/STUDY SETTING: Obtained for primary data from a 1996/1997 national survey of hospital restructuring and reengineering sponsored by the American Hospital Association and the Leonard Davis Institute for Health Economics. Responses from approximately 30 percent of all U.S. acute care hospitals with 100 or more inpatient beds in metropolitan service areas were combined with American Hospital Association annual survey and InterStudy HMO data in this study. STUDY DESIGN: A first-difference multivariate regression was utilized to examine the effects of reengineering and other explanatory variables on the change in the cost position of a hospital's expenses per adjusted patient day relative to its market's costs per adjusted patient day. DATA COLLECTION/EXTRACTION METHODS: The survey of hospital restructuring and reengineering was mailed to hospital chief executive officers. The CEOs identified reengineering and restructuring hospital activities over the previous five years. The extensiveness and components of reengineering and internal restructuring were identified and used in the empirical analysis. PRINCIPAL FINDINGS: Results suggest that reengineering without integrative and coordinative efforts may damage an organization's cost position. The use of steering committees, project teams, codification of the change process, and executive involvement in core changes modifies the results of reengineering to improve an organization's competitive position. CONCLUSIONS: In a national sample of hospitals, reengineering alone was not found to improve the relative cost-competitive position. Organizations attempting to improve their cost competitiveness must consider the way in which change is implemented. This research suggests that the process of change may be as important as the change instrument. Additional research is needed to explore differences between early and late adopters. (+info)
Pharmaceutical policies in Canada: another example of federal-provincial discord.
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Pharmaceutical policy in Canada is set at both the federal and provincial levels of government. The federal government is responsible for intellectual property rights of manufacturers (patents) and the initial approval and labelling of prescription drugs and for ensuring overall market competitiveness. The provincial government has responsibility and jurisdiction over the funding of all health care services, including pharmaceuticals. Various interactions between the pharmaceutical industry, the federal and provincial governments and consumers have shaped the current landscape for prescription drugs in Canada. One key failing of the system is that the federal government is almost completely insulated from the impact of its policies because, although it regulates drug prices, it does not buy any drugs. In contrast, provincial governments have no jurisdiction over market competitiveness or pricing, yet end up paying for most of the drug expenditures incurred. (+info)
The scientist's world.
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This paper describes the features of the world of science, and it compares that world briefly with that of politics and the law. It also discusses some "postmodern" trends in philosophy and sociology that have been undermining confidence in the objectivity of science and thus have contributed indirectly to public mistrust. The paper includes broader implications of interactions of government and science. (+info)
The Medicare prescription drug benefit: how will the game be played?
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Most recent proposals to add a prescription drug benefit to the Medicare program suggest using pharmacy benefit managers (PBMs) to control costs and promote quality. However, the proposals give little detail on the institutional arrangements that would govern PBM operations and drug procurement. The recent Congressional Budget Office cost estimate of the Clinton administration's proposal reflects this lack of detail on how PBMs would function. We sketch an approach for structuring PBM operations that focuses on competition among PBMs, manufacturers, and distributors; incentive pricing; and risk sharing with PBMs. (+info)
The industrialization of clinical research.
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Recent controversies over the protection of human subjects, payment of physicians for recruiting patients to clinical trials, Food and Drug Administration (FDA) removal of approved drugs from the market, and reporting of results of clinical trials have highlighted important facets of clinical research. Less visible has been the industrialization of clinical research, and especially of clinical trials, that is, its emergence as a "line of business" of substantial magnitude and rapid growth. The growth of drug-industry outsourcing of clinical trials and the concomitant rise of a contract research industry are described in this paper, which argues for greater transparency in the conduct of both publicly and privately sponsored clinical trials. (+info)
Health plan competition in local markets.
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OBJECTIVE: To examine the structure of local health insurance markets and the strategies health plans were using to respond to competitive pressures in local markets in 1996/1997. DATA SOURCES/STUDY SETTING: Community Tracking Study site visits conducted between May 1996 and April 1997 in 12 U.S. markets selected to be nationally representative. STUDY DESIGN: In each site, 36 to 60 interviews on local health system change were conducted with healthcare industry informants representing health plans, providers, and purchasers. DATA COLLECTION/EXTRACTION METHOD: Relevant data for this article were abstracted from standardized protocols administered to multiple respondents in each site. PRINCIPAL FINDINGS: Although the competitive threat from national plans was pervasive, local plans in most sites continued to retain strong, often dominant, positions in historically concentrated markets. In all sites, in response to purchaser pressures for stable premiums and provider choice, and the threat of entry and to plans were using three strategies to increase market share and market power: (1) consolidation/geographic expansion, (2) price competition, and (3) product line/segment diversification that focused on broad networks and open-access products. In most markets, in response to the demand for provider choice, the trend was away from ownership and exclusive arrangements with providers. CONCLUSIONS: Although local plans were moving to become full-service regional players, there was uncertainty about the abilities of all plans to sustain growth strategies at the expense of margins and organizational stability, and to effectively manage care with broad networks. (+info)