HealthCare Partners: Building on a Foundation of Global Risk Management to Achieve Accountable Care

Describes the progress of a medical group and independent practice association in forming an accountable care organization by working with insurers as part of the Brookings-Dartmouth ACO Pilot Program. Lists lessons learned and elements of success

Provider diversity in the NHS: impact on quality and innovation

The overall objective of the research project has been to assess the impact of provider diversity on quality and innovation in the NHS. The specific research aims were to identify the differences in performance between non-profit Third Sector organisations, for-profit private enterprises, and incumbent public sector institutions within the NHS as providers of health care services, as well as the factors that affect the entry and growth of new private and Third Sector providers. The study used both qualitative and quantitative methods based on case studies of four Local Health Economies (LHEs). Qualitative methods included documentary analysis and interviews with key informants and managers of both commissioning and provider organisations. To provide a focus to the study, two tracer conditions were followed: orthopaedic surgery and home health care for frail older people. In the case of hospital inpatient care, data on patient characteristics were also collected from the HES database. The analysis of this data provided preliminary estimates of the effects of provider type on quality, controlling for client characteristics and case mix. In addition, a survey of patient experience in diverse provider organisations was analysed to compare the different dimensions of quality of provision of acute services between incumbent NHS organisations and new independent sector treatment centres. The research has shown that, in respect of inpatient hospital services, diverse providers supply health services of at least as good quality as traditional NHS providers, and that there is ample opportunity to expand their scale and scope as providers of services commissioned by the NHS. The research used patient experience survey data to investigate whether hospital ownership affects the quality of services reported by NHS patients in areas other than clinical quality. The raw survey data appear to show that private hospitals provide higher quality services than the public hospitals. However, further empirical analysis leads to a more nuanced understanding of the performance differences. Firstly, the analysis shows that each sector offers greater quality in certain specialties. Secondly, the analysis shows that differences in the quality of patients’ reported experience are mainly attributable to patient characteristics, the selection of patients into each type of hospital, and the characteristics of individual hospitals, rather than to hospital ownership as such. Controlling for such differences, NHS patients are on average likely to experience a similar quality of care in a public or privately-run hospital. Nevertheless, for specific groups of patients and for specific types of treatments, especially the more straightforward ones, the private sector provides an improved patient experience compared to the public sector. Elsewhere, the NHS continues to provide a high quality service and outperforms the private sector in a range of services and for a range of clients

Changes in Hospital Efficiency after Privatization

We investigated the effects of privatization on hospital efficiency in Germany. To do so, we obtained bootstrapped DEA efficiency scores in the first stage of our analysis and subsequently employed a difference-in-difference matching approach within a panel regression framework. Our findings show that conversions from public to private for-profit status were associated with an increase in efficiency of between 3.2 and 5.4%. We defined four alternative post- privatization periods and found that the increase in efficiency after a conversion to private for- profit status appeared to be permanent. We also observed an increase in efficiency one year after hospitals were converted to private non-profit status, but our estimations suggest that this effect was transitory. Our findings also show that the efficiency gains after a conversion to private for-profit status were achieved through substantial decreases in staffing ratios in all analyzed staff categories with the exception of physicians. It was also striking that the efficiency gains of hospitals converted to for-profit status were significantly lower in the DRG era than in the pre-DRG era. Altogether, our results suggest that converting hospitals to private for-profit status may be an effective way to ensure the scarce resources in the hospital sector are used more efficiently.Privatization, Performance measurement, Data envelopment analysis, Propensity score matching, Germany

The Structural Response and Performance of General Hospitals in a Managed Care Environment

The study purpose is to link hospital structure, represented by each hospital’s professional contingent, service mix, and inpatient capacity; and its environment, characterized by the penetration of managed care enrollees. The secondary purpose is to test the relationship between hospital structural change and subsequent hospital performance. The study employs a non-experimental panel design, with a sample of 1882 community hospitals (service type: general medical and surgical). Environmental variables are measured for the base year 1989. Hospital structural variables are measured for 1989 and 1994, with change variables computed. Performance variables are measured for 1989 and 1995, with change computed for cost measures. Hospital structural change is viewed as a dependent variable related to the environment, as well as an independent variable related to performance. Descriptive data are extracted from the American Hospital Association Annual Survey of Hospitals. Hospital cost performance data are from the Health Care Financing Administration Prospective Payment System Minimum Data Sets. Hospital mortality data for 1989 are from Medicare Hospital Mortality Information. HMO enrollment data are extracted from the Interstudy Edge and aggregated to metropolitan statistical area (MSA) level. Market competition data are from the 1989 Area Resource File. A Herfindahl-Hirschman index (HHI) is calculated for each hospital’s MSA. Analytical hypotheses are tested using ordinary least squares (OLS) technique. Results from Part 1 suggest that where HMO penetration was relatively high, sample hospitals tended to contain growth in their registered nurse (RN) staff between 1989 and 1994. Higher HMO penetration is also associated with more stabilization in occupancy rates, preventive services, and ambulatory workload. In contrast, market competition is associated with changes to a higher Medicare case-mix index (CMI), and increase in ambulatory visits. Results from Part 2 indicate positive associations between increased RN staff and hospital cost growth between 1989 and 1995. Hospitals which did not experience an increased CMI are similarly linked with cost growth. Alternatively, reduction in hospital bedsize is associated with more controlled growth in hospital cost per patient day. Several control variables display noteworthy associations with the variables of interest. Theoretical and management implications for community hospitals are discussed

Management Practices Across Firms and Countries

For the last decade we have been using double-blind survey techniques and randomized sampling to construct management data on over 10,000 organizations across twenty countries. On average, we find that in manufacturing American, Japanese, and German firms are the best managed. Firms in developing countries, such as Brazil, China and India tend to be poorly managed. American retail firms and hospitals are also well managed by international standards, although American schools are worse managed than those in several other developed countries. We also find substantial variation in management practices across organizations in every country and every sector, mirroring the heterogeneity in the spread of performance in these sectors. One factor linked to this variation is ownership. Government, family, and founder owned firms are usually poorly managed, while multinational, dispersed shareholder and private-equity owned firms are typically well managed. Stronger product market competition and higher worker skills are associated with better management practices. Less regulated labor markets are associated with improvements in incentive management practices such as performance based promotion.

Reforming decentralized integrated health care systems: Theory and the case of the Norwegian reform

In this essay a conceptual and theoretical scheme for decentralized integrated health care systems of the northern European kind is developed. With small changes it is also applicable to other countries, e.g. Italy, Spain, and Portugal. Three ideas tie together the scheme: modified fiscal federalism, principalagent thinking and the analysis of discrete structural alternatives from new institutional economics. As a special case it encompasses the ideas of planned markets and public competition developed by von Otter and Saltman. The scheme can be used to analyse driving forces behind reforms and prediction of effects. To illustrate the thinking the recent Norwegian reform is put into context, not only geographically but also theoretically. The geographical context is that of Scandinavia and there is a summary of reforms in the Scandinavian countries over the past 20-30 years. The essay thus serves the double purpose of presenting and evaluating the Norwegian reform in a Scandinavian context and to take part in the neglected discipline of developing a theory of health care reform. The Norwegian January 2002 reform is described in some detail. It is a reversal of the Scandinavian model of decentralization and a move towards more centralism. The hospital system was transferred to the state that established five regions with independent (non-political) boards and each region has a number of daughters (hospitals) that have great autonomy with their own boards and are outside the legal restrictions of the public sector. Basically the idea is to mimic the corporate structure of large private companies. The reform is evaluated based on principal-agent thinking and the analysis of discrete structural alternatives. Overall there is no a priori reason to expect large improvements in efficiency – but on the other hand neither should one expect things to get worse. Many effects depend, however, crucially, on (a) the financing system that will be put in place late 2002 or early 2003, and (b) whether or not the political and management culture change as a result of the reform. In the concluding sections possible implications for Denmark and Sweden are discussed.Health care reform; Norway; principal-agents; discrete structural analysis

Not-for-Profit Organizations: Community Benefits, Efficiency and Quality

This study addresses the effect of hospital ownership on the delivery of medical services to patients with financial difficulties in the southern New England community, using two alternative definitions of community benefits. Also, this study examines the impact of government subsidies on the efficiency and quality of care provided by nonprofit hospitals versus for-profit in Connecticut, and Rhode Island. Previous research demonstrates that there are no differences when it comes to efficiency and quality when dealing with nonprofit organization or a for-profit company. Using data from hospitals in Connecticut and Rhode Island, these findings on efficiency and quality have been reinforced. In addition, the study finds that nonprofit hospitals may not provide enough community benefits to cover the subsidies provided by the United States government on a national average. These results are sensitive to the definition of community benefits, thus indicating need for a more explicit identification of both the amount of benefits provided, and what is considered a community benefit

Health Center Financial Check-Up: Prescriptions for Strengthening New York's Diagnostic and Treatment Centers

Analyzes evidence of financial distress among nonprofit health centers and contributing factors for individual centers as well as the sector. Makes recommendations for the state, philanthropic organizations, public and private payers, and health centers

Is The Medical Arms Race Still Present In Today's Managed Care Environment?

Prior to the emergence of managed care, the popular consensus and the majority of research supported the idea that hospitals competed for doctor affiliations and, through them, for patients by offering specialized, high-tech services. This phenomenon was known as the Medical Arms Race (MAR) and was facilitated by the reimbursement practices of health insurance that were common at the time. With the introduction of managed care and the Medicare Prospective Payment System, however, hospitals were no longer able simply to pass on inflated costs to their patients and began to concentrate on reducing costs. This paper examines whether the MAR exists in the current managed care environment. I investigate empirically whether the level of competition in the market influences hospitals in their decision concerning high-tech service provision using a sample of 15 high-tech services across 57 Californian counties. We find that hospitals do take into consideration the level of competition in their markets when deciding whether or not to provide high-tech services, indicating that managed care may not yet have extinguished the MAR