A comparison of two methods of collecting economic data in primary care.
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BACKGROUND: There have been few attempts to assess alternative methods of collecting resource use data for economic evaluations. OBJECTIVE: This study aimed to compare two methods of collecting resource use data in primary care: GPs' case records and a self-complete postal questionnaire. METHODS: 303 primary care attenders were sent a postal survey, incorporating a questionnaire designed to collect service utilisation information for the previous six months. Data were also collected from GP case records. The reporting of GP visits between the two methods, and estimates of costs associated with those visits, were compared. RESULTS: There was good agreement between the number of GP visits recorded on GP case records (mean 3.03) and on the CSRI (mean 2.99) (concordance correlation coefficient = 0.756). In contrast, estimates of average costs of visits from CSRI data were higher and had greater variance compared to case record-based costs (54.63 pound sterling versus 42.37 pound sterling; P = 0.003). This may be explained by differences in average visit length (11.66 versus 9.36 minutes). CONCLUSIONS: This study shows good agreement between GP case records and a self-complete questionnaire for the reporting of GP visits. However, differences in costs associated with those visits arose due to differences in the method used for calculating length of visit. (+info)
The economic effect of a tertiary hospital-based heart failure program.
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OBJECTIVES: This study was designed to determine the economic effect of a tertiary heart failure (HF) program at an academic medical center. BACKGROUND: Most hospitals use cross-sectional financial models to analyze the economic contribution of clinical programs for a budget period. We estimated the incremental value of a tertiary hospital HF program on the basis of the longitudinal utilization of a sample of HF patients. METHODS: The primary data source was a sample of 82 HF patients referred for cardiac transplant evaluation at an academic medical center during calendar years 2000 to 2001. Cumulative recurrent rates of utilization, cost, and reimbursement for hospital services were computed as functions of time using reliability models. The economic contribution of patients transplanted was contrasted with those not transplanted. RESULTS: Mean hospitalizations and outpatient encounters per patient at the end of the first year of follow-up for those transplanted were 2.1 (95% confidence interval [CI] 1.6 to 2.7) and 11.9 (95% CI 9.2 to 15.4), compared with 1.1 (95% CI 0.8 to 1.6) and 6.0 (95% CI 4.8 to 7.6), respectively, for those not transplanted. Mean revenue and direct cost per patient were 194,470 dollars (95% CI 136,683 dollars to 276,689 dollars) and 146,623 dollars (95% CI 96,377 dollars to 233,065 dollars), respectively, for transplanted patients and 43,587 dollars (95% CI 28,149 dollars to 67,503 dollars) and 33,424 dollars (95% CI 21,584 dollars to 51,760 dollars), respectively, for non-transplanted patients. The point estimates of first-year contribution margins per patient for transplanted and non-transplanted patients were 47,847 dollars and 10,163 dollars, respectively. CONCLUSIONS: Newly evaluated patients for cardiac transplantation at an academic medical center generated substantial incident demands for inpatient and outpatient services over a two-year follow-up period. The estimated contribution margin associated with these services was positive. Hospitals without cardiac transplantation that serve high-acuity HF patients may generate favorable long-term contribution margins, on the basis of the results for the non-transplant group. (+info)
Profit and loss analysis for an intensive care unit (ICU) in Japan: a tool for strategic management.
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BACKGROUND: Accurate cost estimate and a profit and loss analysis are necessary for health care practice. We performed an actual financial analysis for an intensive care unit (ICU) of a university hospital in Japan, and tried to discuss the health care policy and resource allocation decisions that have an impact on critical intensive care. METHODS: The costs were estimated by a department level activity based costing method, and the profit and loss analysis was based on a break-even point analysis. The data used included the monthly number of patients, the revenue, and the direct and indirect costs of the ICU in 2003. RESULTS: The results of this analysis showed that the total costs of USD 2,678,052 of the ICU were mainly incurred due to direct costs of 88.8%. On the other hand, the actual annual total patient days in the ICU were 1,549 which resulted in revenues of USD 2,295,044. However, it was determined that the ICU required at least 1,986 patient days within one fiscal year based on a break-even point analysis. As a result, an annual deficit of USD 383,008 has occurred in the ICU. CONCLUSION: These methods are useful for determining the profits or losses for the ICU practice, and how to evaluate and to improve it. In this study, the results indicate that most ICUs in Japanese hospitals may not be profitable at the present time. As a result, in order to increase the income to make up for this deficit, an increase of 437 patient days in the ICU in one fiscal year is needed, and the number of patients admitted to the ICU should thus be increased without increasing the number of beds or staff members. Increasing the number of patients referred from cooperating hospitals and clinics therefore appears to be the best strategy for achieving these goals. (+info)
The cost-shift payment 'hydraulic': foundation, history, and implications.
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The cost-shift payment "hydraulic" is an integral component of the fragmented U.S. health care financing system. If private payers' acceptance of the cost-shifting burden were to erode, our system of health care financing could become unstable. This is especially true for the hospital industry. In this paper we provide a series of examples of cost shifting and a historical profile of the cost shift in the hospital industry since 1980, noting that cost-shifting pressures seem to fluctuate over time and across health care markets. Cost shifting need not be dollar per dollar, as hospitals can absorb some degree of cost-shifting pressure through increased efficiency and decreases in service provision. (+info)
Evidence of cost shifting in California hospitals.
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We used 1993-2001 data from private hospitals in California to investigate whether decreases in Medicare and Medicaid prices were associated with increases in prices paid for privately insured patients. We found that a 1 percent relative decrease in the average Medicare price is associated with a 0.17 percent increase in the corresponding price paid by privately insured patients; similarly, a 1 percent relative reduction in the average Medicaid price is associated with a 0.04 percent increase. These relationships imply that cost shifting from Medicare and Medicaid to private payers accounted for 12.3 percent of the total increase in private payers' prices from 1997 to 2001. (+info)
The importance of comorbidity in analysing patient costs in Swedish primary care.
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BACKGROUND: The objective was to explore the usefulness of the morbidity risk adjustment system Adjusted Clinical Groups (ACG), in comparison with age and gender, in explaining and estimating patient costs on an individual level in Swedish primary health care. Data were retrieved from two primary health care centres in southeastern Sweden. METHODS: A cross-sectional observational study. Data from electronic patient registers from the two centres were retrieved for 2001 and 2002, and patients were grouped into ACGs, expressing the individual combination of diagnoses and thus the comorbidity. Costs per patient were calculated for both years in both centres. Cost data from one centre were used to create ACG weights. These weights were then applied to patients at the other centre. Correlations between individual patient costs, age, gender and ACG weights were studied. Multiple linear regression analyses were performed in order to explain and estimate patient costs. RESULTS: The variation in individual patient costs was substantial within age groups as well as within ACG weight groups. About 37.7% of the individual patient costs could be explained by ACG weights, and age and gender added about 0.8%. The individual patient costs in 2001 estimated 22.0% of patient costs in 2002, whereas ACG weights estimated 14.3%. CONCLUSION: ACGs was an important factor in explaining and estimating individual patient costs in primary health care. Costs were explained to only a minor extent by age and gender. However, the usefulness of the ACG system appears to be sensitive to the accuracy of classification and coding of diagnoses by physicians. (+info)
Development of a practical costing method for hospitals.
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To realize an effective cost control, a practical and accurate cost accounting system is indispensable in hospitals. In traditional cost accounting systems, the volume-based costing (VBC) is the most popular cost accounting method. In this method, the indirect costs are allocated to each cost object (services or units of a hospital) using a single indicator named a cost driver (e.g., Labor hours, revenues or the number of patients). However, this method often results in rough and inaccurate results. The activity based costing (ABC) method introduced in the mid 1990s can prove more accurate results. With the ABC method, all events or transactions that cause costs are recognized as "activities", and a specific cost driver is prepared for each activity. Finally, the costs of activities are allocated to cost objects by the corresponding cost driver. However, it is much more complex and costly than other traditional cost accounting methods because the data collection for cost drivers is not always easy. In this study, we developed a simplified ABC (S-ABC) costing method to reduce the workload of ABC costing by reducing the number of cost drivers used in the ABC method. Using the S-ABC method, we estimated the cost of the laboratory tests, and as a result, similarly accurate results were obtained with the ABC method (largest difference was 2.64%). Simultaneously, this new method reduces the seven cost drivers used in the ABC method to four. Moreover, we performed an evaluation using other sample data from physiological laboratory department to certify the effectiveness of this new method. In conclusion, the S-ABC method provides two advantages in comparison to the VBC and ABC methods: (1) it can obtain accurate results, and (2) it is simpler to perform. Once we reduce the number of cost drivers by applying the proposed S-ABC method to the data for the ABC method, we can easily perform the cost accounting using few cost drivers after the second round of costing. (+info)
Four and a half million Americans gained employer-sponsored health insurance coverage during 1997-2001, while nearly nine million lost coverage in the ensuing economic downturn (2001-2003), after population growth was accounted for. Macroeconomic trends affecting employment, job quality, and incomes drove most of the coverage changes, although key factors varied during the two periods. Take-up rates affected coverage, mostly reflecting the interaction of premium cost trends and labor-market tightness, but take-up also was influenced by the implementation of the State Children's Health Insurance Program (SCHIP) during 1997-2001. Coverage among low-income people was most affected by economic conditions and premium costs. (+info)