A qualitative insight into rural casemix education, CHERE Project Report No 10

NSW, while often regarded as the non- Casemix state, has been using Casemix information to assist planning and funding of hospitals. However, the use of this tool and the necessary education and knowledge about Casemix has not been evenly spread throughout the state, with health service staff in metropolitan areas relatively more familiar with its use then their colleagues in rural NSW. In 1998, both NSW Health and the NSW Casemix Clinical Committee (NCCC) proposed that an effort be made to increase the knowledge and participation of rural clinical and health service staff in Casemix activities. This research was proposed as a means of establishing the current situation regarding Casemix, knowledge in rural areas, providing advice regarding the best methods of implementing Casemix education for rural staff and, if possible, evaluating the success of the education. Casemix is a broad term referring to the tools and information system used to assist in such activities as planning, benchmarking, managing and funding health care services. Casemix is underpinned by classification systems that allow meaningful comparisons of workload or throughput between facilities. In this study, qualitative research methods were used to examine the issues faced by rural health service staff in gaining knowledge of and using Casemix. This information was supplemented by a survey, which assessed the level of knowledge and understanding of Casemix in two rural areas.Casemix, hospital funding

Reference costs and the pursuit of efficiency in the 'new' NHS

Both the White Paper, The New NHS, and the later consultation document, A National Framework for Assessing Performance, stress the need to develop new instruments to tackle inefficiency in the NHS. Among these instruments it has been proposed to benchmark Trusts, and by association Health Authorities, using Healthcare Resource Group (HRG) costs. The NHS Executive has published plans for a system of ‘Reference Costs’ that will itemise the cost of every treatment in every Trust. These reference costs will be derived from costing HRGs and are to be used for many purposes: benchmarking cost improvement, measuring relative efficiency, identifying best practice, funding transfers and costing health improvement programmes. This paper examines the construction of reference costs, considers incentives to use the information appropriately and asks whether a single accounting construct, the costed HRG, can be expected to contribute successfully to its many intended functions of regulation and management.performance measures; costing

Are Hospital Pharmacies More Efficient if They Employ Nurses?

This paper assesses the efficiency of utilizing nurses in Washington State hospital pharmacies. We take the perspective of a pharmacy department manager and model an input oriented hospital pharmacy production process. Data envelopment analysis (DEA) is used to examine both scale efficiency and technical efficiency, and differences across hospital pharmacies that use and do not use nurse staffing are analyzed using cross-tabulations and nonparametric hypothesis tests. The results indicate that the use of nurse staffing does not significantly impact either scale or technical efficiency. Thus, permitting nurses to play a greater role in hospital pharmacies does not adversely affect efficiency. This paper has important policy implications for hospital administrators and pharmacists.

Output-Driven Funding and Budgeting Systems in the Public Sector

Output-driven funding systems are systems in which payments made to service-delivery agencies by government are an explicit function of quantities of outputs delivered by those agencies. This paper considers the feasibility of such systems for the funding tax-financed public services. It focuses upon the implications of key characteristics of public sector outputs, and specifically upon the prevalence of heterogeneous outputs, the predominance of services (as opposed to physical goods), and the presence of many ‘contingent capacity services’.

Optimal Contracts and Contractual Arrangements Within the Hospital: Bargaining vs. Take-it-or-leave-it Offers

We study the impact of different contractual arrangements within the hospital on the optimal contracts designed by third party payers when severity is hospital's private information. We develop a multi-issue bargaining process between doctors and managers within the hospital. Results are then compared with a scenario where doctors and managers decide independently by maximizing their own profit, with managers proposing to doctors a take-it-or leave-it offer. Results show that, when the cost of capital is sufficiently low, the informational rent arising on information asymmetry is higher in a set up where managers and doctors decide together through a strategic bargaining process than when they act as two decision-making units.Strategic Bargaining; Optimal Contracts; Hospitals; Asymmetric Information

Quantifying the effects of modelling choices on hospital efficiency measures: A meta-regression analysis

It has often been argued that the results of efficiency analyses in health care are influenced by the modelling choices made by the researchers involved. In this paper we use meta-regression analysis in an attempt to quantify the degree to which modelling factors influence efficiency estimates. The data set is derived from 253 estimated models reported in 95 empirical analyses of hospital efficiency in the 22-year period from 1987 to 2008. A meta-regression model is used to investigate the degree to which differences in mean efficiency estimates can be explained by factors such as: sample size; dimension (number of variables); parametric versus non-parametric method; returns to scale (RTS) assumptions; functional form; error distributional form; input versus output orientation; cost versus technical efficiency measure; and cross-sectional versus panel data. Sample size, dimension and RTS are found to have statistically significant effects at the 1% level. Sample size has a negative (and diminishing) effect on efficiency; dimension has a positive (and diminishing) effect; while the imposition of constant returns to scale has a negative effect. These results can be used in improving the policy relevance of the empirical results produced by hospital efficiency studies.

Accounting for heterogeneity in the measurement of hospital performance

With prospective payment of hospitals becoming more common, measuring their performance is gaining in importance. However, the standard cost frontier model yields biased efficiency scores because it ignores technological heterogeneity between hospitals. In this paper, efficiency scores are derived from a random intercept and an extended random parameter frontier model, designed to overcome the problem of unobserved heterogeneity in stochastic frontier analysis. Using a sample of 100 Swiss hospitals covering the years 2004 to 2007 and applying Bayesian inference, significant heterogeneity is found, suggesting rejection of the standard cost frontier model. Estimated inefficiency decreases even below the 14 percent reported by Hollingsworth (2008) for European countries. Accounting for unobserved heterogeneity would make hospitals rated below 85 percent efficiency according to the standard model gain up to 12 percentage points, serving to highlight the importance of heterogeneity correction in the estimation of hospital performance.Hospital efficiency, unobserved heterogeneity, Bayesian inference, Switzerland, stochastic frontier analysis

The process of evolution of medical services tariffs and reimbursements based on Diagnosis-Related Groups

Introduction: Diagnosis Related Groups (DRG) is a classification system used for the inpatients in which the inpatients who use similar resources are classified as one similar category. This classification is based on the following components: diagnosis codes, taken actions, age, complications, gender and the discharge status. This study intended to explore the universal approach for the evolution of this reimbursement and its challenges and benefits so that an appropriate strategy can be agreed for the reimbursement system in Iran. Methodology: This study of descriptive comparative nature was conducted in 2013 to shed some light on the evolution process of the DRG in the health care system. The data were gathered though using information resources including articles, books, magazines and valid web-sites. To obtain the strategies used in the selected nations, 110 articles were extracted from varied magazines and scientific resources. Then, the status of the nations on the development of this reimbursement system was compared so that the related obtained results can be used as guide for developing an appropriate strategy for Iran's repayment system. Findings: Based on the findings of this study, one of the criteria for development of DRG is its high penetration coefficient in terms of determining the accuracy of the row of the diagnosis, the accuracy of main diagnosis coding, the accuracy of the used codes and the condition of the patient at the discharge time. Using DRG, the speed of calculating the medical and healthcare services' costs increases, since checking the profile, the skillful coder is able to perform coding appropriately and rapidly and finally, the payment of costs can be done based on the respective codes. Conclusion: As a prospective payment system, DRG acts as a motivator for the service providers for decreasing the level of services and consequently, the patient's length of stay. © IDOSI Publications, 2014

The cost of radiology procedures using Activity Based Costing (ABC) for development of cost weights in implementation of casemix system in Malaysia

Presently there is a gross lack of information on cost and cost weights in many developing countries that implement casemix system. Furthermore, studies that employed Activity Based Costing method (ABC) to estimate the costs of radiology procedures were rarely done in developing countries, including Malaysia. The main objective of this study is to determine the costs of radiology procedures for each group in casemix system, in order to develop cost weights to be used in the implementation of the casemix system. An economic evaluation study was conducted in all units in the Department of Radiology in the first teaching hospital using the casemix system in Malaysia. From the 25,754 cases, 16,173 (62.8%) of them were from medical discipline. Low One Third and High One Third (L3H3) method was employed to trim the outlier cases. Output from the trimming, 15,387 cases were included in the study. The results revealed that the total inpatients’ charges of all the radiology procedures was RM1,820,533.00 while the cost imputed using ABC method was RM2,970,505.54. The biggest cost component were human resources in Radiology Unit (Mobile) (57.5%), consumables (78.5%) of Endovascular Interventional Radiology (EIR) Unit, equipment (81.4%) of Magnetic Resonance Imaging (MRI) Unit, reagents (68.1%) of Medical Nuclear Unit. The one highest radiology cost weight, was for Malaysia Diagnosis Related Group (MY-DRG®) B-4-11-II (Hepatobiliary and Pancreas Neoplasms with severity level II, 2.8301). The method of calculation of the cost of procedures need to be revised by the hospital as findings from this study showed that the cost imposed to patient is lower than the actual cost

Capturing patients’ needs in casemix: a systematic literature review on the value of adding functioning information in reimbursement systems

STROBE. (PDF 28 kb