Strategic hospital alliances: impact on financial performance

Acute care hospitals have increasingly been forming local strategic hospital alliances (SHAs), which consume considerable resources in forming and may affect the competitiveness of provider markets. This research shows that SHAs and market factors, which have been perceived to be threats to hospitals, are related to hospitals' financial performance. Among the findings are that SHA members have higher net revenues but that they are not more effective at cost control. Nor do the higher net revenues result in higher cash flow. However, increasing SHA penetration in a market is related to lower net revenues per case. In addition, the penetration of private health maintenance organizations in markets is associated with lower revenues and expenses.     

Participation as a complicating mechanism: the effect of clinical professional and middle manager participation on hospital performance

One way hospitals complicate themselves is by increasing the participation of clinical professionals and middle managers in making strategic decisions. Using a survey methodology this article investigates the relationships between the participation of clinical professionals (MDs and RNs) and middle managers with hospital costs, as well as the possible moderating effect of strategic complexity.     

The etiology and determinants of hospital closure

This article examines the etiology of hospital closure and the correlates of hospital closure and the extent of similarity in this organizational outcome between pre- and post-Prospective Payment System (PPS) implementation. It also replicates a study from an earlier time period. Findings support the study's main hypotheses: in more stringent and turbulent markets, institutional and strategic variables are more important determinants of hospital closure. Merger acquisitions are found to be similar to both system acquisitions and autonomous hospitals. Standard Metropolitan Statistical Area (SMSA) status and regulation show an effect on hospital closure and merger acquisition. While many similarities exist when compared to the replicated study and findings prior to PPS implementation, it appears that sufficient differences exist to support the hypothesis that the PPS has an impact upon hospital organizational outcome.     

Reactive oxygen species in human semen: investigations and measurements

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.     

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.     

Hematopoietic changes in rats after inescapable and escapable shocks

The key hypothesis of the study was that hospital pharmacies under the pressure of managed care would be more likely to adopt process innovations to assure less costly and more cost-effective provision of care. We conducted a survey of 103 hospitals and analyzed secondary data on cost and staffing. Compared to the size of the reduction in length of stay, changes in the way that a day of care is delivered appear to be minor, even in areas with substantial managed care share. The vast majority of hospitals surveyed had implemented some form of therapeutic interchange and generic substitution. Most hospitals used some drug utilization guidelines, but as of mid 1995 these were not yet important management tools for hospital pharmacies. To our knowledge, ours was the first survey to investigate the link between hospital formularies and use of cost-effectiveness analysis. At most cost-effectiveness was a minor tool in pharmaceutical decision making in hospitals at present. We could determine no differences in use of such analyses by managed care market share in the hospital's market share. One impediment to the use of cost-effectiveness studies was the lack of timeliness of studies. Other stated reasons for not using cost-effectiveness analysis more often were: lack of information on hospitalized patients and hence on the potential cost offsets accruing to the hospital: lack of independent sponsorship, and inadequate expertise in economic evaluation.     

Dental museums and collections in Illinois

The article explores the relationship between the cost and the quality of hospital care by elaborating a conceptual model of hospital performance. The model relates the financial health status of an organization (financial integrity) to the quality of care provided by that organization (clinical integrity) within an environment that is characterized by various forms of risk. The model suggests that both concepts determine the corporate destiny (success, bankruptcy, or merger) of the organization. If this model proves valid empirically, the results could be used as an early warning system to identify hospitals that might experience financial or clinical distress.     

An examination of "nonleadership": From laissez-faire leadership to leader reward omission and punishment omission.

Laissez-faire leadership has received much less attention than have the 3 transactional leadership dimensions of the Multifactor Leadership Questionnaire (MLQ). However, laissez-faire leadership has shown strong negative relationships with various leadership criteria, and the absence of leadership (laissez-faire leadership) may be just as important as is the presence of other types of leadership. This article focuses on a single type of laissez-faire leadership (i.e., the lack of response to subordinate performance). Using a reinforcement perspective, the authors developed measures and examined the effects of the lack of performance-contingent reinforcement in 2 forms: reward omission (leader nonreinforcement of good subordinate performance) and punishment omission (leader nonreinforcement of poor subordinate performance). They found strong evidence in support of the construct validity of the new measures and found that omission was related to follower satisfaction with the leader, subordinate-rated leader effectiveness, subordinate-perceived role clarity, and supervisor-rated subordinate performance. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

The relationship of hospital ownership and teaching status to 30- and 180-day adjusted mortality rates

Hospital characteristics have been shown previously to be associated with variations in the probability of death within 30 days of admission. In the current study, the authors extend the examination of the relationship between hospital type to both short-term and long-term adjusted mortality. Observed and predicted 1988 hospital mortality rates were obtained from the Health Care Financing Administration (HCFA). A total of 3,782 acute care hospitals were divided into six mutually exclusive groups on the basis of their status as osteopathic, private for-profit, public teaching, public nonteaching, private teaching, and private nonteaching hospitals. After adjusting for the HCFA predicted mortality, Medicaid admissions, and emergency visits, 30-day and 30-to-180-day patient mortality rates were compared for these hospital types. Separate comparisons also were performed after stratifying hospitals into three groups defined by community size. The risk-adjusted 30-day mortality per 1,000 patients was 91.5, ranging from 85.4 for private teaching hospitals to 95.3 for nonteaching public hospitals, and 97.4 for osteopathic hospitals. The adjusted 30-to-180-day mortality was 84.7, ranging from 82.6 for nonteaching public hospitals to 87.4 and 88.2, respectively for public teaching and osteopathic hospitals. Differences among hospital types were minimal for small communities and increased with community size. In the large communities, the types of hospitals with high 30-day mortality also had higher mortality after 30 days. There was a strong association of hospital type with adjusted 30-day mortality, which should depend on the quality of hospital care, and a much weaker association with post-30-day mortality, which may be more dependent on patient risk. There was no evidence that types of hospitals with low 30-day mortality were postponing rather than preventing mortality.     

Economic aspects of anesthesia. I. Health care reform in the German Republic

Implications for Hospitals and Departments of Anaesthesiology. This article outlines the new German health care laws and their impact on the statutory health care system, hospitals and anaesthesia departments. The German health care system provides coverage for all citizens, although financial support from the public sector is on the downgrade. Hence, pressure to reduce public sector health care spending is likely to continue in the near future. Hospital costs account for one-third of total health care spending in Germany, and hospitals are facing increasing economic constraints: the volume and the charges for specific medical treatments are negotiated between the hospitals and the insurance agencies (or sickness funds) in advance. Only part of hospital care is still reimbursed on the basis of a per diem rate, and an increasing number of services are based on fixed payments per case or treatment. Reducing the costs for this treatment is therefore of utmost importance for hospitals and hospital departments. The prospective payment system and the pressure to contain costs demand a controlling system that allows for cost accounting per case. However, an economic evaluation must include comparative analysis of alternative therapeutic options in terms of both costs and outcome. Economic aspects challenge the traditional relationship between physicians and patients: doctors are still the advocates of their patients, but also act as agents for their institutions. Nevertheless, not only economic issues, but also ethical priorities and the value of an anaesthetic practice must be considered in the era of cost containment. Anaesthetists must be actively involved in providing high-quality care with its obvious benefits for the patient and be able to resist efforts to cut out expensive treatment modalities regardless of their benefits.     

Teaching hospital costs: implications for academic missions in a competitive market

CONTEXT: As the managed care environment demands lower prices and a greater focus on primary care, the high cost of teaching hospitals may adversely affect their ability to carry out academic missions. OBJECTIVE: To develop a national estimate of total inpatient hospital costs related to graduate medical education (GME). DESIGN: Using Medicare cost report data for fiscal year 1993, we developed a series of regression models to analyze the relationship between inpatient hospital costs per case and explanatory variables, such as case mix, wage levels, local market characteristics, and teaching intensity (the ratio of interns and residents to beds). SETTING AND PARTICIPANTS: A total of 4764 nonfederal, general acute care hospitals, including 1014 teaching hospitals. MAJOR OUTCOME MEASURES: Actual direct GME hospital costs and estimated indirect GME-related hospital costs based on the statistical relationship between teaching intensity and inpatient costs per case. RESULTS: In 1993, academic medical center (AMC) costs per case were 82.9% higher than those for urban nonteaching hospitals (actual cost per case, $9901 vs $5412, respectively). Non-AMC teaching hospital costs per case were 22.5% higher than those for nonteaching hospitals (actual cost per differences in case, $6630 vs $5412, respectively). After adjustment for case mix, wage levels, and direct GME costs, AMCs were 44% more expensive and other teaching hospitals were 14% more costly than nonteaching hospitals. The majority of this difference is explained by teaching intensity. Total estimated US direct and indirect GME-related costs were between $18.1 billion and $22.8 billion in 1997. These estimates include some indirect costs, not directly educational in nature, related to clinical research activities and specialized service capacity. CONCLUSIONS: The cost of teaching hospitals relative to their nonteaching counterparts justifies concern about the potential financial impact of competitive markets on academic missions. The 1997 GME-related cost estimates provide a starting point as public funding mechanisms for academic missions are debated. The efficiency of residency programs, their consistency with national health workforce needs, financial benefits provided to teaching hospitals, and ability of AMCs to maintain higher payment rates are also important considerations in determining future levels of public financial support.     

Operating in turbulent times: how Ontario's hospitals are meeting the current funding crisis

With the escalation of the cost of providing health care in Ontario, politicians have begun to attempt to stay the increase by curtailing hospital funding. This article reports on an interview survey of 15 randomly chosen Ontario hospitals that are attempting to cope in the current funding cutbacks. Overall, we found our sample hospitals to be an innovative group on the whole, which were willing to try out new ideas and adapt to the changing environment while protecting quality of patient care.     

The bright-side and the dark-side of CEO personality: Examining core self-evaluations, narcissism, transformational leadership, and strategic influence.

This article reports on an examination of the relationships between chief executive officer (CEO) personality, transformational and transactional leadership, and multiple strategic outcomes in a sample of 75 CEOs of Major League Baseball organizations over a 100-year period. CEO bright-side personality characteristics (core self-evaluations) were positively related to transformational leadership, whereas dark-side personality characteristics (narcissism) of CEOs were negatively related to contingent reward leadership. In turn, CEO transformational and contingent reward leadership were related to 4 different strategic outcomes, including manager turnover, team winning percentage, fan attendance, and an independent rating of influence. CEO transformational leadership was positively related to ratings of influence, team winning percentage, and fan attendance, whereas contingent reward leadership was negatively related to manager turnover and ratings of influence. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

In vivo morphometry of the lamina cribrosa and its relation to visual field loss in glaucoma

Academic medical centers (i.e., teaching hospitals) and academic medical practices are under pressure to control costs to compete with for-profit health care institutions. The authors explain how academic physician managers who want to control costs wisely must first understand the cost structure of the medical center or practice and compare that structure with those of for-profit institutions. Doing this requires a firm understanding of how to use a valuable tool, financial statement analysis, to assess an institution's health and performance. Such analysis consists of calculating a variety of financial ratios (e.g., operating income divided by revenues; net income divided by total assets) and then comparing them with the corresponding ratios that are considered industry norms. Three types of financial statements (defined in detail) lend themselves to this approach: the balance sheet, income statement, and statement of cash flows. The authors define standard financial ratios, point out their uses and limitations, and emphasize that a ratio's meaning derives from comparing it with the corresponding benchmark ratio in the industry as a whole. Ratios should be used not as the end point of assessing financial status, but as ways to identify possible problems that require further investigation. Analysis of trends of ratios over time within an institution is a complementary approach. The authors then discuss the use of ratios in three standard types of institutional evaluation: of performance, of liquidity and leverage, and of strategic planning. In addition, they present the financial statement of a fictitious academic medical center as an example of how to use ratios for financial statement analysis. The authors emphasize that the key to using the ratios they discuss and hundreds of others is first to decide what question needs answering and then to choose the relevant ratios to provide a basis for finding the answer.     

Unusual development of urothelioma of the upper urinary tract]

The purpose of this study was to assess the possibility of lowering costs to organ procurement organizations by purchasing a custom medical supply pack for use in the operating room. Six hospitals in the organ procurement organization's service area were selected for a cost comparison report on selected medical supply items; 37 items were selected for review. A retrospective review of the itemized hospital bills from recent organ recovery cases at each hospital was completed. A medical supply company was contacted for price quotes on selected items for the supply pack. The price quote from the medical supply company totaled $220.30. The average cost of the items selected from the six hospitals was $822.65. The average cost savings per organ recovery case was calculated at $602.35. Based on an estimated 80 organ donors per year, organ procurement organizations could save as much as $48,188 annually.     

Availability, use and cost of antidotes in Catalonia

BACKGROUND: To know the availability of antidotes in hospital and extra-hospital emergency services in Catalonia (Spain), their real use, and the cost. PATIENTS AND METHODS: Availability was studied by means of a transversal questionnaire carried out in 24 hospitals and 3 extra-hospital emergency services in Catalonia; the real use of antidotes was investigated using a prospective study carried out for one year in the same 24 hospitals, and the cost was determined using the data obtained over 12 months in one large hospital. RESULTS: Average availability was 35 antidotes in hospital and 13 in extra-hospital emergency services. In no service did the availability coincide exactly with that of another service, nor with the recommendations made by international institutions (World Health Organization and International Programme for Chemical Safety) or the Government of Catalonia. The low incidence of availability of antidotes to cyanide was notable. Antidotes were used in 12.9% of acute intoxications. In 167 cases treated with these drugs, only 9 different antidotes were used. The consumption of these antidotes represents 0.1% of the budget of a pharmacy service in one large hospital. CONCLUSIONS: The availability of antidotes in Catalonia is heterogeneous and some services lack antidotes whose use is considered essential. Antidotes are scarcely used in acute intoxications and their economic cost is low.     

The growth of corporate private hospitals in Malaysia: policy contradictions in health system pluralism

The rapid growth of corporate investment in the Malaysian private hospital sector has had a considerable impact on the health care system. Sustained economic growth, the development of new urban areas, an enlarged middle class, and the inclusion of hospital insurance in salary packages have all contributed to a financially lucrative investment environment for hospital entrepreneurs. Many of Malaysia's most technologically advanced hospitals employing leading specialists are owned and operated as corporate business ventures. Corporate hospital investment has been actively encouraged by the government, which regards an expanded private sector as a vital complement to the public hospital system. Yet this rapid growth of corporately owned private hospitals has posed serious contradictions for health care policy in terms of issues such as equity, cost and quality, the effect on the wider health system, and the very role of the state in health care provision. This article describes the growth of corporate investment in Malaysia's private hospital sector and explores some of the attendant policy contradictions.     

A method for estimating solid organ donor potential by organ procurement region

OBJECTIVES: This study sought to develop a methodology for estimating potential solid organ donors and measuring donation performance in a geographic region based on readily available data on the hospitals in that region. METHODS: Medical records were reviewed in a stratified random sample of 89 hospitals from 3 regions to attain a baseline of donor potential. Data on a range of hospital characteristics were collected and tested as predictors of donor potential through the use of hierarchical Poisson regression modeling. RESULTS: Five hospital characteristics predicted donor potential: hospital deaths, hospital Medicare case-mix index, total hospital staffed beds, medical school affiliation, and trauma center certification. Regional estimates were attained by aggregating individual hospital estimates. Confidence intervals for these regional estimates indicated that actual donations represented from 28% to 44% of the potential in the regions studied. CONCLUSIONS: This methodology accurately estimates organ donor potential within 3 geographic regions and lays the foundation for evaluating organ donation effectiveness nationwide. Additional research is needed to test the validity of the model in other geographic regions and to further explore organ donor potential in hospitals with fewer than 50 beds.     

Reorganizing departments of psychiatry, hospitals, and medical centers for the 21st century

Market forces are reshaping health care, transforming it from a public service into a product that is sold in a highly competitive marketplace. This transformation has been particularly disruptive for hospital departments of psychiatry and medical centers that were the early targets for managed care efforts at cost containment. To survive, health care institutions have embarked on a clinical and administrative re-engineering process. The author describes a series of steps for reconfiguring departments, hospitals, and medical centers as they enter the 21st century. The steps include identifying the leadership team, formulating a mission statement and strategic plan, creating a legal entity capable of achieving the organization's goals, drawing up an organizational chart, and developing the provider network. Other steps in the process include enhancing the continuum of services offered, developing administrative capability, dealing with managed care, paying attention to fundamental business practices, integrating psychiatric services into the health care system, and marketing psychiatric services.