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Combining DRGs and per diem payments in the private sector: the Equitable Payment Model.

The many types of payment models used in the Australian private sector are reviewed. Their features are compared and contrasted to those desirable in an optimal private sector payment model. The EPM(TM) (Equitable Payment Model) is discussed and its consistency with the desirable features of an optimal private sector payment model outlined. These include being based on a robust classification system, nationally benchmarked length of stay (LOS) results, nationally benchmarked relative cost and encouraging continual improvement in efficiency to the benefit of both health funds and private hospitals. The advantages in the context of the private sector of EPM(TM) being a per diem model, albeit very different to current per diem models, are discussed. The advantages of EPM(TM) for hospitals and health funds are outlined.

Acute Disease↗

Problems in counting and paying for multidisciplinary outpatient clinics.

Policy-makers have always found it problematic to formulate fair and consistent counting rules for public hospital outpatient activities. In the context of output-based funding, such rules have consequences which can affect patient care. This paper reviews the rationale for organising multidisciplinary clinics and reports on a series of focus groups convened in four Melbourne teaching hospitals to consider funding policy for such clinics. It discusses issues of targeting outpatient services, along with implications for payment policy. It evaluates counting rules in terms of intended and unintended consequences in the context of Victoria's introduction of output-based funding for outpatient services.

Accounting↗

Lessons from the other side: what can we learn from the private sector?

Business has reacted in an impressive manner to increasing globalisation, short-term stock market pressure for performance, emerging industries and new technologies. While the private sector has become increasingly competitive, the public sector has not adopted this commercial rigour. Funding pressures on health services will continue, as will increasing consumer and staff demands and the blurring of public and private health care provision. As a result, there are lessons and techniques the public and private health sectors should learn from each other. I have drawn the issues that follow from my experience in the steel and food industries.

Delivery of Health Care↗

Profiling physician practice: a potential for misuse.

Profiling physician practice is not unfamiliar to hospital epidemiologists. Surgeon-specific postoperative wound infection rates have been used to monitor and improve the quality of surgical outcomes. However, concerns for small sample sizes, validity of methods for risk adjustment, and reliability of data collection methods along with other methodologic concerns have resulted in mixed opinions regarding physician profiling as a tool for improving quality of care. In light of pressures for healthcare reform and skepticism regarding physicians' decision making, it is unlikely that methodologic concerns will dissuade regulators and managers from expanding scrutiny of physician practice.

Data Collection↗

Laparoscopic radical nephrectomy: financial disincentives by the Health Care Financing Administration.

BACKGROUND AND PURPOSE: Laparoscopic radical nephrectomy is a minimally invasive alternative to open radical nephrectomy. We have noticed that since the beginning of 2001, when the Current Procedural Terminology (CPT) code 50545 became available for laparoscopic nephrectomy, the reimbursement for the laparoscopic operation was significantly lowered. This led us to survey 25 laparoscopic urologic surgeons to assess trends in reimbursement from all over the United States. MATERIALS AND METHODS: During this period, the records of reimbursements for radical nephrectomy were available from a single practice to compare that for the open and laparoscopic techniques. The 19 open and 10 laparoscopic operations were entered in a database for statistical analysis. Endourologists around the country also were polled on the subject. RESULTS: The average reimbursement for an open radical nephrectomy was $1581 +/- 325 (SD), while the average reimbursement for a laparoscopic radical nephrectomy was $1192 +/- 184. Twenty-five polled endourologists had noted similar reductions in reimbursement for laparoscopic procedures. Many of those polled had participated in the Specialty Society Relative Value Unit (RVU) survey for laparoscopic radical nephrectomy and stated that their recommendations were that the value be considered greater than that of the open counterpart. CONCLUSION: The highly significant difference in reimbursement reflects a financial disincentive to surgeons performing laparoscopic procedures. It is obvious that in the U.S., the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) is devaluating all surgical procedures, and financial pressures of this type are disturbing.

Centers for Medicare and Medicaid Services, U.S.↗

Breastfeeding by objectives.

BACKGROUND: In many countries, the rates of breastfeeding fall far short of those recommended. National plans to promote breastfeeding are badly needed. We describe the results of a breastfeeding promotion programme planned by objectives and financial penalties in a small region of Italy. METHODS: This observational study was conducted in all the maternity hospitals and immunisation clinics of the six local health authorities of Friuli Venezia Giulia, in the northeast of Italy. The regional health authority included breastfeeding in its annual plans for 1998 and 1999, and asked local health authorities to develop local workplans and targets. A financial penalty was contemplated for local health authorities not achieving objectives and targets. The rates of exclusive, predominant and complementary breastfeeding were measured at birth and at 16-19 weeks of age. Data were collected, using standard definitions and methods, at discharge from hospitals and at the time of the second mandatory immunisation. RESULTS: All local health authorities and hospitals set up a breastfeeding reporting system in 1998 and defined breastfeeding promotion activities for 1999. The rate of exclusive breastfeeding at discharge and at 16-19 weeks increased significantly between 1998 and 1999, with a corresponding reduction of complementary breastfeeding. CONCLUSION: Financial penalties may contribute to the promotion of exclusive breastfeeding.

Birth Rate↗

Performance-based reimbursement in health care. Consequences for physicians' cost awareness and work environment.

BACKGROUND: The funding and structure of health care is currently undergoing major changes. The impact of such changes on professional behaviour and working conditions have not been widely studied in Europe. The two aims of this study were to prospectively assess the impact of performance-based reimbursement on physicians' attitudes and self-assessed professional behaviour, related to cost awareness, as well as their working conditions. METHOD: Physicians in Stockholm County Council (with a performance-based reimbursement system) and physicians in eleven Swedish councils without performance-based reimbursement were examined simultaneously in 1994. This was a cross-sectional questionnaire study. RESULT: The results show a heightened cost awareness among physicians in Stockholm but also greater discontent with working condition factors such as decision latitude, job satisfaction and personal well-being. CONCLUSION: These results suggest that in order to counteract physicians discontent as a result of altered structure and increased focus on performance-based reimbursement, the autonomy and influence of physicians over the work processes need to be considered.

Adult↗