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Economics, Hospital↗

Determinants of nursing service in urban public hospitals: an economic perspective.

The purpose of the present study was to analyze the determinants of nurse staffing in urban public hospitals in Japan. The study sample included 51 public hospitals in 23 urban cities in 1996. Structural equation modeling was performed using the following: nurse-to-inpatient ratio; medical service and hospitalization fees; approved nurse staffing level; outpatient-to-inpatient ratio; subsidy-to-hospital-revenue ratio; and regional variation index of inpatient service expenditures. The nurse-to-inpatient ratio was associated with medical service fees reflecting patients' acuity levels and the subsidy-to-hospital-revenue ratio, but was not associated with the hospital income from hospitalization fees (the largest share of which consists of nursing fees). Public hospitals in areas with limited inpatient care resources had a higher level of approved nurse staffing and a higher subsidy-to-hospital-revenue ratio. A significant determinant of public hospitals' nurse staffing was local government-funded subsidization rather than the balance between nursing service fees and costs.

Health Expenditures↗

The algebra of healthcare reform: hospital-physician economic alignment.

In summary the tertiary care programs in this nation are trapped in a difficult dilemma. On one side is the ongoing reduction in provider revenue driven by real and powerful market forces. On the other side is a traditional payment system governed by necessary laws that inhibit meaningful re-engineering of tertiary care delivery. If a remedy to this situation cannot be created then it is very likely that all aspects of quality as defined earlier will suffer. It is our hope that by very careful construction of a relationship, with attention to applicable statutes and careful measurement of utilization and quality, a limited business alignment of a hospital and a group of tertiary physicians can be approved in the care of Medicare, Medicaid and all federally funded patients.

Cardiology Service, Hospital↗

The new economic credentialing: protecting hospitals from competition by medical staff members.

This Article addresses hospitals' use of economic criteria to determine an individual's qualifications for staff privileges. Hospitals are resorting to economic conflict-of-interest credentialing policies in an attempt to ensure physician's loyalty and maintain their own economic viability. Physicians, however, argue that entrepreneurial activities are necessary for them to meet the economic challenges posed by declining reimbursements and rising insurance costs. The Article surveys the numerous legal theories that physicians (and, in some cases, the federal government) could employ in attacking these new types of credentialing policies and concludes that, on balance, hospitals should be able to implement their policies in ways that minimize liability in most jurisdictions. The Article concludes by discussing other issues that economic credentialing policies raise, including those implicating tax-exempt status and nonlegal considerations.

Antitrust Laws↗

Outsourcing and benchmarking in a rural public hospital: does economic theory provide the complete answer?

INTRODUCTION: The ideology and pronouncements of the Australian Government in introducing 'competitive neutrality' to the public sector has improved efficiency and resource usage. In the health sector, the Human Services Department directed that non-clinical and clinical areas be market tested through benchmarking services against the private sector, with the possibility of outsourcing. These services included car parking, computing, laundry, engineering, cleaning, catering, medical imaging (radiology), pathology, pharmacy, allied health and general practice. Managers, when they choose between outsourcing, and internal servicing and production, would thus ideally base their decision on economic principles. Williamson's transaction cost theory studies the governance mechanisms that can be used to achieve economic efficiency and proposes that the optimal organisation structure is that which minimises transaction costs or the costs of exchange. Williamson proposes that four variables will affect such costs, namely: (i) frequency of exchange; (ii) asset specificity; (iii) environmental uncertainty; and (iv) threat of opportunism. This paper provides evidence from a rural public hospital and examines whether Williamson's transaction cost theory is applicable. METHOD: Case study research operates within the interpretivism paradigm and is used in this research to uncover why the outsourcing decision was made. Such research aims to study real-life experiences by examining the way people think and act and, in contrast to positivism, allows the interviewer to participate to better understand the details and features of the experiences. In the present research, individual interviews were conducted with managers of the hospital and owners and staff of the vendor organisations using semi- and unstructured questions to ascertain the extent of, and processes used in, outsourcing specific functional areas, and areas that were not outsourced. RESULTS: Pathology, radiology, dental technician services and lawn mowing were outsourced while food services was retained internally. The outsourcing of radiology was due to the hospital being unable (or unwilling) to finance new equipment and the problematical relationship between the existing radiologists, and hospital management and staff. Outsourcing resulted in increased staff morale, upgraded capital equipment and improved services. The outsourcing of pathology and dental technical services aimed to increase labour flexibility, thereby decreasing costs. Additional drivers in pathology were the changing nature of the funding arrangements rendering it profitable for the private sector to move into the provision of pathology and the increasing power of the medical scientists' union. The outsourcing of lawn mowing was simply to reduce costs. Food services was not outsourced because there was a lack of evidence that costs could be reduced. In addition, the existing relationships with food services staff were regarded as important because they had previously made immense changes to work practices, reduced staff numbers and decreased costs. CONCLUSION: Transaction costs are important when analysing how managers make the outsourcing decision, but the evidence from this case is that not all transaction costs are included in the decision, and that such costs are more complex than can be included in the type of analysis often undertaken by decision-makers. Taking into account Williamson's variables, the research shows that the outsourcing of services did not comply solely with the levels of transaction frequency or the requirement of asset specificity. In addition, opportunistic behaviour was evident on the part of all parties and was used in some cases as a reason for outsourcing, and in others to sway the decision to the manager's predisposed choice. A variety of arrangements were used to reduce environmental uncertainty, such as the transfer of staff to the contractor and the use of long-term contracts. Indeed the case shows that relationships between the hospital, its staff and the vendor are an important consideration that may not always be factored into an analysis that relies solely on transaction costs.

Journal Article↗

Economic consequences of hospital infections in a 1,000-bed university hospital in Norway.

Hospital infections were studied among 41,000 patients admitted to a 1,000-bed university hospital in Oslo, Norway. A prevalence rate of 8.5% in 1995 contributed to 14,500 days of extra stay in the hospital. The direct economic consequences of hospital infections was 40 to 50 million Norwegian kroner ($6-$7 million). The extra direct cost per infected patient was 14,300 Norwegian kroner ($2,200). Hospital infections are generating high extra costs and morbidity in countries with good general health care and with few problems with resistant bacteria.

Cross Infection↗

Identifying efficiently and economically operated hospitals: the prospects and pitfalls of applying frontier regression techniques.

This article examines whether policy makers can make immediate use of recently developed frontier regression techniques to identify efficient hospitals primarily for rate setting purposes. This new approach is applied to data on Florida hospitals for the period 1982-1993 to appraise how well it performs in gauging variations in hospital costs and efficiency. This appraisal suggests that frontier methods are quite promising, but that they may not yield sufficiently unambiguous results to serve the short-term needs of hospital regulators interested in scaling reimbursement rates to the efficiency with which hospitals deliver services. Other policy-relevant strengths and weaknesses of frontier techniques are also discussed.

Cross-Sectional Studies↗