PubMed · 8716569
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K R Jones. 1996. Inventory management.. https://pubmed.ncbi.nlm.nih.gov/8716569/
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OBJECTIVES: The introduction of the Medicare Prospective Payment System and the more recent rise of managed care plans have greatly increased the importance of effective hospital financial management. Because physicians play a central role in directing hospital resource use, policies to influence physician behavior and to align physician and hospital interests more effectively are being advocated increasingly. This article evaluates the effect of nine strategies to facilitate physician involvement and integration into the hospital on hospital financial performance. METHODS: Data came primarily from the Prospective Payment Assessment Commission's hospital-physician relations survey of 1,485 hospitals and the Medicare Cost Reports. Both ordinary least squares and first differencing models were used to evaluate the effect of physician integration on hospital financial performance. RESULTS: Hospitals with lower margins and higher costs were more likely to have implemented strategies to integrate physicians and to modify physician behavior than their counterparts. Analysis using first differencing models indicated that making department heads responsible for the profits and losses had a significant positive effect on margins, whereas including medical staff on the hospital's board and offering physicians management services had a significant negative impact on average Medicare costs. In addition the number of strategies implemented was associated positively with financial performance. The paper also emphasizes the importance of model specification in evaluations of hospital-physician arrangements. CONCLUSIONS: Changes in hospital-physician relations may have been one reason why hospitals have been relatively successful at containing costs and retaining profitability in recent years. More research needs to be done on which specific arrangements affect hospital financial performance, as well as their effect on the quality of patient care.
Many postacute care providers are concerned about the effects of the prospective payment system on skilled nursing facilities. To retain their contractual arrangements, physical, occupational and speech therapists are trying to develop services within the financial constraints the PPS imposed. Management and staff of SNFs also are struggling with the Resource Utilization Groups III and the Minimum Data Set that will be the basis for the predetermined, per diem, all-inclusive fixed rate to be paid. The most logical approach to dealing with this crisis is to reengineer all of the SNFs' processes.
To survive in the sturm und drang of health care administration, hospitals and health care systems will have to restructure themselves in ways that emphasize their specific clinical strengths, control their costs, and manage the delivery and outcomes of care. Structuring the organization along clinical lines of service (e.g., oncology, cardiology, rehabilitation) cedes total bottom-line authority for all aspects of that service to the service, or product, line manager. This article discusses the qualifications, compensation, and responsibilities of service-line managers in well-integrated health care systems and describes how they and managed care organizations view each other. It also suggests which organizations will, and will not, benefit from restructuring along service lines.