Surgonomics: prospective payment systems and the surgeon.
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Adolescent↗
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Results for “Prospective Payment System”
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The financial incentive for hospitals to prevent nosocomial infections under the prospective payment system. An empirical determination from a nationally representative sample.
To clarify the financial incentives for hospitals to prevent nosocomial infections, we analyzed 9423 nosocomial infections identified in 169 526 admissions selected randomly from the adult admissions to a random sample of US hospitals. By classifying each admission into a baseline diagnosis related group (DRG) (after first excluding all diagnoses of nosocomial infection) and a final DRG (after including these diagnoses), we found that only 5% to 18% of nosocomial infections would have caused the admission to be reclassified to a higher-paying DRG, depending on the extent to which physicians recorded nosocomial infection diagnoses in patients' medical records. The extra payment from the reclassification, averaged over all nosocomial infections, would have been no more than $93 per infection (in 1985 reimbursement rates), constituting only 5% of the hospitals' costs for treating these infections. Thus, at least 95% of the cost savings obtained from preventing nosocomial infections represents financial gains to the hospital.
Adult↗
What would VA nursing home care cost? Methods for estimating private sector payments.
OBJECTIVES: To describe the methods used to validate Veterans Health Administration (VA) nursing home acuity data and estimate hypothetical payments for nursing home patients in VA-based and community-based units. METHODS: For a sample of VA-based and community-based nursing home patients at six sites, auditors validated the resource utilization classifications from the most recent complete full or quarterly assessments. Scores were averaged to obtain an acuity index for each nursing home population. Per diem rates were calculated for a fully phased-in Medicare prospective payment system, a transitional prospective payment system for free-standing and hospital-based nursing homes, and average national Medicaid benefits based on VA patients in community nursing facilities. Days of care came from each site's end of year gains and losses financial statement. Nursing home estimates were calculated by multiplying together the number of days of care, the per diem, and the acuity index. RESULTS: The VA acuity information was valid. Generally, veterans' dependencies and depression were underscored (similar to the practice for non-VA patients). The cost of patients' nursing home care absent VA facilities would depend on the types of nursing homes in which they were placed. The most costly option (hospital-based facilities with cost exemptions) would cost 3.5 times the least costly. Only the Medicaid-only estimate was lower than actual VA expenditures. DISCUSSION: Future research on nursing homes must relate quality to the cost of care to help policy makers assess the value of different options for providing that care.
Delivery of Health Care↗
The impact of prospective pricing on the information system in the health care industry.
The move from a retrospective payment system (value added) to a prospective payment system (diagnostic related) has not only influenced the health care business but also changed their information systems' requirements. The change in requirements can be attributed both to an increase in data processing tasks and also to an increase in the need for information to more effectively manage the organization. A survey was administered to capture the response of health care institutions, in the area of information systems, to the prospective payment system. The survey results indicate that the majority of health care institutions have responded by increasing their information resources, both in terms of hardware and software, and have moved to integrate the medical and financial data. In addition, the role of the information system has changed from a cost accounting system to one intended to provide a competitive edge in a highly competitive marketing environment.
Data Collection↗
The impact of the New Jersey all-payer DRG system.
Two prospective payment systems that operated concurrently in New Jersey during 1980-1982 created a natural experiment and a unique opportunity to compare the effectiveness of the two systems in restraining cost increases. Our results indicate that during that period, annual increases in the cost per case were significantly less in hospitals that were subject to the all-payer DRG system than in those institutions that were paid under the Standard Hospital Accounting and Rate Evaluation (SHARE) program. We also found that, relative to the SHARE program, the DRG system appears to have increased admission rates and reduced length of stay.
Blue Cross Blue Shield Insurance Plans↗
Effect of patient characteristics on hospital costs for cirrhosis: implications for the disease-related group (DRG) reimbursement system.
The Prospective Payment System uses Diagnosis-Related Groups (DRG) as a reimbursement system. DRG 202 is a disease-related group including liver cirrhosis as a whole. Patients referring to the inpatient unit complain of variable severity and complications of cirrhosis, possibly implying different expenditure of resources. Aim of the investigation was to identify factors affecting cost variability in patients with cirrhosis. A total of 73 consecutive, DRG 202-assigned, cirrhotic patients classified according to demographic and clinical variables were evaluated for length and costs of hospitalization calculated on a full-cost basis. Mean length of hospitalization was 10.2 +/- 7 days. Mean cost of hospitalization was Lit. 4.348.000 +/- 2.718.000. Medical, nursing, diagnostic, drug and general charges accounted for 13%, 29%, 37%, 5% and 16% of the cost, respectively. Child-Pugh score significantly correlated with drug consumption (p < 0.005), length (p < 0.01) and costs (p < 0.001) of hospitalization, but not with cost per day. Age, sex, admission status, referral reason, associated diseases and liver transplant susceptibility did not correlate with duration and costs of hospitalization. Disease severity significantly modifies costs of hospital admission in cirrhotic patients mostly on account of longer hospital stay. Surrogate indexes of disease severity, derived from ISTAT/DRG records, cannot identify patients consuming larger resources. In liver cirrhosis, the DRG system could be improved by introducing parameters, such as Child-Pugh score, directly taking into account disease severity.
Adolescent↗
Hospitals dislike cost-based system, favor prospective payment: survey.
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Attitude↗
[Prospective Payment Information Systems and epidemiology: a difficult link to establish].
This paper reviews the epidemiologic limitations to take into account when using data produced within the frame of the French Prospective Payment System for planning or medical evaluation purposes. Problems in describing medical data include completeness, reliability, granularity (precision) and sequencing. Referral bias hamper morbidity data collected at the institutional level. Differences in the case-mix may be due to the characteristics of the reference population but also to available equipment and variations in medical practice.
Bias↗
Preparing for Medicare's APC system.
The imminent arrival of Medicare's Ambulatory Payment Classification (APC) system, HCFA's new outpatient prospective payment system (PPS), is expected to have as significant an effect on outpatient health care as the Diagnosis-Related Groups (DRG) system had on inpatient health care when it was launched in the early 1980s. Unlike the inauguration of the DRG system, however, the APC program is not expected to be as forgiving to organizations unprepared to implement the new prospective payment system. Since the APC program will be put into effect, HCFA says, "as soon as possible after January 1, 2000," healthcare financial managers should be preparing now.
Ambulatory Care↗
The transition to prospective payment changes the face of home care.
Home care agencies are actually looking forward to the imminent implementation of the Prospective Payment System, as mandated by the Balanced Budget Act of 1997--that is, if they can survive the implementation of the Interim Payment System.
Budgets↗
Financial success under PPS: how to beat the odds.
Whether you are a publicly held company or a small mom and pop agency, you have to maximize both efficiency and productivity while maintaining patient satisfaction and staff morale. In the new world of home care, this is a tall order. In this first installment of a two part series, the author reviews the dimensions of financial success, issues of length of stay and episode of care, resource utilization planning, and reducing overhead. The second part will cover overall productivity, clinical productivity, and management strategies to synergize financial success under the prospective payment system.
Delivery of Health Care, Integrated↗
Trends in Medicare home health care use: 1997-2001.
The Balanced Budget Act of 1997 mandated a major overhaul in Medicare payment for home health care with an interim payment system (IPS) preceding a prospective payment system (PPS). This study extends an earlier analysis of the impact of the IPS to determine whether home health use and spendingtrends changed after the introduction of the PPS. The rapid decline in the incidence of use and visits per user under the IPS slowed in its final year and then picked up again in the first year of the PPS. In addition, average payment per visit increased sharply under the PPS. Little is known about the impact of continued large reductions in home health services since 1999.
Aged↗
Understanding the effects of PPS on Medicare home health use.
This study examines changes between 1983 and 1985 in the use of Medicare home health services. The key finding is that while overall increases in the proportion of Medicare enrollees who use home health services and the average number of visits received were relatively small, they were much greater than they would have been without the Prospective Payment System. The introduction of prospective payment for Medicare hospital services appears to have increased Medicare outlays for home health by an estimated 25%. In an effort to reduce patient stays, it appears that hospitals discharged more patients to home health and that home health users were discharged earlier, thus increasing both the number of users and the number of visits received per user. The study also found that changes in nursing home bed supplies and Medicaid reimbursement rates appear to bring about changes in home health use. These results have implications for understanding the impacts on home health services of changes in Medicare and Medicaid policies in other sectors.
Health Expenditures↗
Economies of scale, physician volume for neurosurgery patients, and the diagnosis-related group prospective hospital payment system.
Hospitals face an increasingly competitive environment in the era of diagnostic related group (DRG) prospective pricing. Further reductions in Medicare outlays relative to hospital costs are likely, given the looming federal deficit. We analyzed the relationship of individual neurosurgical volume, hospital costs, and outcome. All neurosurgical patients (n = 1002) treated for a 3-year period at our large academic medical center were grouped into those treated by low-volume neurosurgeons versus those treated by high-volume neurosurgeons (arbitrarily defined by us); 95% of patients admitted for neurosurgical procedures fit into one of these two categories. Patients of low-volume neurosurgeons had higher hospital costs (even after correction for DRG case-mix and severity of illness) (P less than 0.01), a much worse financial position under DRGs (P less than 0.01), but a similar outcome for both emergency and nonemergency admissions when compared to patients of higher volume neurosurgeons. Pearson correlation showed an inverse relationship between declining cost per patient and increasing neurosurgical volume for both nonemergency patients -0.340 (P less than 0.0001), and emergency patients, -0.321 (P less than 0.0001). These findings suggest that the volume of neurosurgical procedures performed by an individual neurosurgeon is related to hospital resource utilization. This study also suggests that the DRG prospective payment system could provide incentives that may affect both neurosurgical practice and the access to neurosurgical care.
Academic Medical Centers↗
The effects of a prospective case payment system on hospital charges for total hip arthroplasty in Taiwan.
We evaluate the effects of instituting prospective case payment system (PPS) system on total hip arthroplasty (THA) charges and compare our university hospital THA cost structure with comparable health care institutions in the United States. The study consisted of 5009 patients who received a primary THA in 24 hospitals between 1995 and 2001. After adjusting for inflation, the average total charge of THA for pre-PPS was 4762 US dollars and 4054 US dollars for post-PPS. The average cost for prostheses accounted for 61% of total costs at our hospital, as compared with the US studies ranging from 27% to 34%. As United States, PPS achieved the purpose of cost containment and changed practice patterns of orthopedic surgeons and hospital resource use in Taiwan.
Arthroplasty, Replacement, Hip↗
Prospective payment for psychiatric hospitalization: context and background.
Retrospective cost-based reimbursement, incorporated into Medicare from the outset, has been the dominant mode of financing for health and mental hospital services. However, steadily rising health care costs led to the 1983 enactment of a prospective payment system for hospital reimbursement for Medicare, based on diagnosis-related groups. Many psychiatric hospitals and units are currently exempted from the system, but psychiatry and the health care field in general must deal with a number of issues, such as cost-shifting, quality of care, and adequate recognition of severity of illness, resulting from implementation of the system. The authors provide background for the prospective payment system by defining terms, summarizing the history of federal prospective payment legislation, describing three state systems, and discussing generic issues facing the health care community.
Cost Control↗
Effect of prospective reimbursement on nursing home costs.
OBJECTIVE: This study evaluates the effect of Maine's Medicaid nursing home prospective payment system on nursing home costs and access to care for public patients. DATA SOURCES/STUDY SETTING: The implementation of a facility-specific prospective payment system for nursing homes provided the opportunity for longitudinal study of the effect of that system. Data sources included audited Medicaid nursing home cost reports, quality-of-care data from state facility survey and licensure files, and facility case-mix information from random, stratified samples of homes and residents. Data were obtained for six years (1979-1985) covering the three-year period before and after implementation of the prospective payment system. STUDY DESIGN: This study used a pre-post, longitudinal analytical design in which interrupted, time-series regression models were estimated to test the effects of prospective payment and other factors, e.g., facility characteristics, nursing home market factors, facility case mix, and quality of care, on nursing home costs. PRINCIPAL FINDINGS: Prospective payment contributed to an estimated $3.03 decrease in total variable costs in the third year from what would have been expected under the previous retrospective cost-based payment system. Responsiveness to payment system efficiency incentives declined over the study period, however, indicating a growing problem in achieving further cost reductions. Some evidence suggested that cost reductions might have reduced access for public patients. CONCLUSIONS: Study findings are consistent with the results of other studies that have demonstrated the effectiveness of prospective payment systems in restraining nursing home costs. Potential policy trade-offs among cost containment, access, and quality assurance deserve further consideration, particularly by researchers and policymakers designing the new generation of case mix-based and other nursing home payment systems.
Cost Control↗
Current trends in health plan payment methods for the facility costs of outpatient care.
Outpatient hospital and ambulatory care services represent the fastest growing part of national health care expenditures. Until recently, most health plans reimbursed providers' outpatient facility costs on the basis of billed charges. Some health plans have now implemented prospective payment systems with incentives for limiting the volume of ambulatory care services. Findings from 1997 telephone interviews with senior managers in national managed care companies and local health plans reveal that recent reforms at some health plans have been generally incremental, building on existing systems, but use of outpatient prospective payment systems by private health plans is still rare. However, health plan managers expect continued reforms in the future as experience is gained with new payment systems such as those based on the Ambulatory Patient Groups case mix grouping method.
Ambulatory Care↗