The impact of health maintenance organization penetration on the use of hospitals that serve minority communities

OBJECTIVES: Health maintenance organization (HMO) penetration has made hospital markets more price competitive. Hospitals in minority communities may be at a competitive disadvantage because they serve patients who are, on average, sicker and more likely to be uninsured or underinsured. This study estimated the impact of HMO penetration on the use of hospitals in minority communities during 1987 to 1992. METHODS: Using a sample of 1,413 short-term general hospitals from the 85 largest metropolitan statistical areas, the determinants of hospitals' patient volumes were estimated. Hospitals located in predominately nonwhite neighborhoods were designated minority hospitals, and other hospitals were designated nonminority hospitals. Using regression analysis, the impact of HMO penetration and concentration on hospitals' patient volumes were estimated. By interacting the HMO penetration and concentration variables with a minority hospital indicator variable, HMOs' impact on minority hospitals was calculated. RESULTS: Health maintenance organization penetration was correlated with lower patient volumes in minority hospitals and higher patient volumes in nonminority hospitals. Competition in HMO markets was correlated with lower patient volumes for all hospitals. This effect was stronger for minority hospitals. CONCLUSIONS: These findings suggest that minority hospitals may be at risk of losing patients as HMO penetration increases.     

Liquidated Damages: Review of Current State of the Practice

Liquidated damages (LDs) are contractually specified damages that provide restitution for additional owner costs incurred from contractor delayed completion. Established legal precedence requires owners to specify rates that are a good faith pre-estimate of actual anticipated damages. Additionally, the Federal Highway Administration provides guidance to state highway agencies (SHAs) in developing these rates. In reviewing current practices, SHAs were surveyed about individual LD practices utilized. Survey results are divided into three categories for discussion purposes: (1) contractual practices; (2) estimating practices; and (3) administrative practices. All SHAs chose to recover damages through a contractual LD clause although implementation varies. SHA estimating practices are generally not detailed and tend to place rates at the low end of actual damages. Few SHAs verify estimated rates with actual project cost experiences. Administrative practices have field personnel administering the primary element of the LD clause, contract time. These practices also reveal a high priority on contract closeout, sometimes sacrificing LD amounts due by contractors under contract. Few states have experienced legal challenges regarding their LDs provision.     

Effects of market position and competition on rural hospital closures

OBJECTIVE: To examine the dynamic effects of competition and hospital market position on rural hospital closures. DATA SOURCE/STUDY SETTING: Analysis of all rural community hospitals operating between 1984 and 1991, with the exception of sole-provider hospitals. Data for the study are obtained from four sources: the AHA Annual Surveys of Hospitals, the HCFA Cost Reports, the Area Resource File, and a hospital address file constructed by Geographic Inc. DATA COLLECTION AND ANALYSIS: Variables are merged to construct pooled, time-series observations for study hospitals. Hospital closure is specified as a function of hospital market position, market level competition, and control variables. Discrete-time logistic regressions are used to test hypotheses. PRINCIPAL FINDINGS: Rural hospitals operating in markets with higher density had higher risk of closure. Rural hospitals that differentiated from others in the market on the basis of geographic distance, basic services, and high-tech services had lower risks of closure. Effects of market density on closure disappeared when market position was included in the model, indicating that differentiation in markets should be taken into account when evaluating the effects of competition on rural hospital closure. CONCLUSIONS: Our findings suggest that rural hospitals can reduce competitive pressures through differentiation and that accurate measures of competition in geographically defined market areas are critical for understanding competitive dynamics among rural hospitals.     

Which types of hospital mergers save consumers money?

This study analyzes the changes in costs and prices from 1986 to 1994 for more than 3,500 U.S. short-term general hospitals, including 122 horizontal mergers. These mergers were generally financially beneficial to consumers, providing average price reductions of approximately 7 percent. Merger-related price reductions were considerably less in market areas with higher market concentration levels. Merger-related price reductions in areas with higher penetration by health maintenance organizations (HMOs) were approximately twice those in areas with lower HMO penetration. Merger-related price reductions were greater for low-occupancy hospitals, nonteaching hospitals, nonsystem hospitals, similar-size hospitals, and hospitals with greater premerger service duplication.     

Best Practices of Bridge System Management—A Synthesis

The paper’s primary purpose is to evaluate current practices in bridge management and inspection procedures in the United States and how State Highway Agencies (SHAs) follow U.S. Department of Transportation guidelines. The efficiency of SHA in utilizing the bridge management systems (BMSs) available to them is analyzed, and the agencies’ readiness to respond to events such as hurricanes, flooding, or earthquakes is evaluated. The paper addresses issues regarding bridges with unknown foundations, interviewing four structural engineers from three SHA regarding these topics. Bridge management officials across the country will benefit from this research by evaluating their agencies’ current practices in comparison with other state agencies. Findings show that state officials attempt to follow very closely the guidelines set by the federal government for bridge inspection and maintenance. However, it was also discovered that, during catastrophic events, agencies rely heavily on managing engineers’ experience and decision-making capabilities because there is no set of response procedures for these extreme conditions. Although powerful BMS tools are available, few SHA utilize these tools to their full capabilities.     

Dynamic cost shifting in hospitals: evidence from the 1980s and 1990s

The purpose of this paper is to determine whether dynamic cost shifting occurred among acute care hospitals during the period from the early 1980s to the early 1990s and, if so, whether market factors affected the ability to shift costs. Evidence from this study of California acute care hospitals during three time intervals shows that the hospital did practice dynamic cost shifting, but that their ability to shift costs decreased over time. Surprisingly, hospital competition and HMO penetration did not influence cost shifting. However, increasing HMO penetration (measured as the HMO percentage of hospital discharges) did decrease both net prices and costs for the early part of the study, but later was associated with increases in both.     

Method to Determine Minimum Contract Bid for A+B+I?/D Highway Projects

More and more state highway agencies (SHAs) have begun to consider the value of time in highway construction. The “A?(cost)+B?(time?cost)+I/D?(incentive/disincentive)” bidding concept is designed to shorten the total contract time by allowing each contractor to bid the number of days in which the work can be accomplished, in addition to the traditional cost bid. I/D are not only used to provide an incentive to the contractor for earlier completion, but also to provide a disincentive for late completion of a project. Contractors are then presented with the problem of determining the best strategy of bid estimation, including construction cost, time cost, and incentive/disincentive. SHAs are also faced with the problem of placing a maximum and/or minimum on the time bid. To provide users a useful tool to estimate project time more accurately using this advanced method, this study develops a quantified model of the price-time bidding contract. The functional relationship between the construction cost and time duration is developed based on data from the Florida Department of Transportation (FDOT). The contractor’s construction cost “A” is then combined with the road user cost and incentive/disincentive to determine the optimum low bid price and time. This optimum can then be used by the SHA to set limits on the range of acceptable time bids. Finally, several projects completed by the FDOT will be used to illustrate the validity of this model.     

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.     

Managed care and open-heart surgery facilities in California

More than 25 percent of hospitals in California that offer open-heart surgery performed fewer than the number recommended by minimum volume guidelines in 1991. This DataWatch examines the characteristics of these hospitals and the patients they treat. The analysis suggests that the market share of these providers has remained constant over recent years, despite substantial growth in managed care. Simple explanations--for example, that these hospitals are serving isolated geographic markets or are hospitals in transition--do not explain the phenomenon. Medicare beneficiaries represent approximately half of the patient volume at these facilities. Health maintenance organizations (HMOs) are more likely to send their enrollees to high-volume facilities.     

HMO market structure and performance: 1985-1995

This paper estimates the effect of market structure on hospital days and ambulatory visits in independent practice associations (IPAs) and group-model health maintenance organizations (HMOs) where market structure is measured by HMO penetration and the number of HMOs operating in a market. There was a steady decline in inpatient use in HMOs during the study period and a steady increase in use of ambulatory care. In multivariate analyses, inpatient use is significantly higher in IPAs, but there is no difference in ambulatory use. As HMO penetration increases and the number of HMOs increases, group-model HMOs have lower hospital use and greater ambulatory use. In contrast, use of both inpatient and ambulatory care decreases in IPAs but only at high levels of penetration and numbers of competitors.     

Short-Term Wind Power Forecast Based on ARX Models

Among distributed energy resources, wind power has recently showed great potential and it is being promoted in many countries. The wind power penetration increase and the trend of the wind farms to enter the market, makes necessary the development of new prediction tools. Prediction tools have been fully verified and used for demand forecast and, more recently, to predict the market prices. Among the different prediction methods proposed, the initial and more deeply verified were the statistical ones. In the present work, time series statistical methods are used to explore and assess the achievable improvement over a persistent model. Both autoregressive (AR) models that consider wind power time series and autoregressive with exogenous variable (ARX) models which include wind speed time series are used to carry out the prediction. An analysis of the appropriate parameters for the models is carried out and shows, for different wind farms, comparative results for persistent, AR, and ARX models with 6, 12, and 24?h forecast which can be useful for the day-ahead and hour-ahead electricity markets. The study also includes a comparative analysis of the different wind farms considered both independently and in an aggregated manner. The forecast improvement due to the use of ARX models and to the wind farm aggregation is fully assessed.     

CER suppression, passive-avoidance learning, and stress-induced suppression of drinking in the Syracuse high- and low-avoidance strains of rats (Rattus norvegicus).

The Syracuse strains of Long-Evans rats were selectively bred for good (SHA) or poor (SLA) avoidance learning in a two-way shuttle box, which resulted in a phenotypic difference that is correlated with behavior patterns indicative of emotional reactivity, SLA animals showing evidence of greater emotional reactivity than SHA animals. The first three experiments examined conditioned suppression of bar pressing and compared paired and unpaired conditioned- and unconditioned-stimulus presentations to evaluate the influence of conditioning versus primary aversive stimulation on baseline responding. SLA animals acquired conditioned suppression faster than SHA animals and also showed greater suppression of baseline responding than SHA animals. In Experiment 4, SLA animals learned a passive-avoidance task faster than SHA animals. In Experiment 5, SLA animals showed greater stress-induced suppression of drinking a weak quinine solution than SHA animals. These data are consistent with the hypothesis that SLA animals are more emotionally reactive than SHA animals. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

World and Russian markets of arsenic

A review of the current state of the world and Russian markets of arsenic and its compounds is presented, and prospects of the domestic market are shown. The dynamics of the world production of As and its prices for recent years is considered. The need for arsenic and its compounds in the midterm and long-term prospects is evaluated, and developmental tendencies of the markets are analyzed. The review of producers of this metal and As compounds is given. Special attention is paid to the market of special purity arsenic as the initial component for the developing gallium arsenide market; to clarify this question, a short analysis of the modern state of the market of GaAs and GaAs-based devices is given. Modern methods of deep purification of arsenic as well as the situation with arsenic emissions at domestic enterprises for roasting and smelting of nonferrous metal feedstock are considered. The problem of destruction of reserves of lewisite, yperite, and their mixtures in Russia is discussed. Proposals on the use of forming reaction masses as a nonconventional arsenic source are analyzed.     

Risks in Chinese Construction Market—Contractors’ Perspective

With China’s entry into the World Trade Organization (WTO), the Chinese construction market will be increasingly open and finally become part of the international market. Because of different social and economic systems, as well as different historical and cultural backgrounds, contractors are likely to encounter different risks in different markets. Based on questionnaires and case studies, this paper adopts an importance evaluation index and makes an importance evaluation of various risks encountered by Chinese contractors when contracting for projects in Chinese markets. This paper also makes comparisons between and analyses of the research findings and related available investigation results. The Cox–Stuart trend increase test method is applied in the current research, the results indicating that the variance corresponding to the importance index value tends to increase as the risk event importance decreases. This tendency shows that those investigated tend towards unanimity in terms of higher importance risk events. This paper also examines the reliability of the questionnaires by means of Cronbach’s Alpha Coefficient. The research shows that the main risk currently encountered by Chinese contractors in domestic markets includes owner’s irregular behavior and government departments’ interference in construction markets. China’s accession to the WTO has provided greater opportunities for international contractors to enter the Chinese construction market. Therefore the research results described in this paper can provide valuable data enabling international contractors to gain a better understanding of the potential risks in the environment of the Chinese construction market.     

Empirical Investigation into Factors Affecting Exporting Construction Services in SMEs in Singapore

The Singapore government is encouraging construction enterprises to venture abroad for exporting their services and become global players since the local construction pie is shrinking and the global market is growing. The Building and Construction Authority of Singapore has revamped the contractors registration system with the hope of bringing about merger and acquisition of companies for improving the local contractors’ standing in the global construction scene. To diversify into new markets in a new environment, which is very different from local environment, requires diversification vis-à-vis exporting strategy. This study examines the attitudes and views of contractors, operating in Singapore (excluding foreign contractors), on how the strategic move should be focused for diversification vis-à-vis exporting services. The aim of this study is to establish the survival skills necessary for Singapore’s construction small and medium sized enterprises (SMEs) to venture abroad. A postal questionnaire survey was conducted and the results show that local construction SMEs who have diversified have reaped the benefits derived from diversification into new markets abroad. The main conclusions are that construction SMEs have to export their services in order to survive and they can enhance their export capabilities by forming a consortium with the help of local government.     

Quality of care information makes a difference: an analysis of market share and price changes after publication of the New York State Cardiac Surgery Mortality Reports

OBJECTIVES: Quality report cards are becoming increasingly more common and receive much publicity. They can have significant impact on competition among providers, costs, and quality of health care. The authors test the hypotheses that hospitals and surgeons with better outcomes reported in the NYS Cardiac Surgery Reports experience a relative increase in their market share and prices. METHODS: Information from the New York State Cardiac Surgery Reports was linked with physicians' claims submitted to Medicare and was used to calculate market shares and average prices for hospitals and physicians performing CABG surgeries. Regression models were estimated to test hypotheses. All 30 hospitals offering coronary artery bypass graft (CABG) were studied as well as a majority of surgeons (114 or approximately 80%) performing CABG surgery in New York State during the 1990-1993 period. RESULTS: Findings indicate that hospitals and physicians with better outcomes experienced higher rates of growth in market shares. Physicians with better outcomes also had higher rates of growth in charges for this procedure. CONCLUSIONS: Patients (and referring physicians) seem to respond to information about quality of individual surgeons and hospitals as expected. The magnitude of the association between reported mortality and market shares varies geographically, potentially reflecting differences in sociodemographic characteristics. The association tends to decline over time, suggesting that it is primarily due to "new" information.     

Cost effectiveness of clinical training in a community mental health center.

The future of professional psychology may well rest on psychology training programs successfully defending their existence in purely monetary terms. This article examines the effectiveness of the training program of an urban mental health center that includes an American Psychological Association-accredited psychology internship. The training program was found to produce net revenues for the facility and to meet the training needs of its participants. Variables related to producing a cost effective psychology training program are discussed. (PsycINFO Database Record (c) 2010 APA, all rights reserved)     

Quality of services and demand for health care in Nigeria: a multinomial probit estimation

This study attempts to empirically answer three important policy questions for a population sample from Ogun State, Nigeria: 1. Would price (fee) increases for health care lead to large reductions of care usage or to shifts across types of care used? 2. Would price increases lead to net increases in revenues for the health system? 3. Would the price increases have larger impacts (in the form of reductions in health care usage) on lower income members of the population? Household data are combined with data on prices and quality of care, collected directly from facilities, to estimate the demand for outpatient health care. Many of the statistical problems of demand estimation with micro level data are avoided by an innovation--the first use of the multinomial probit estimation method for health demand. A separate but related problem, that the price data used in such studies are usually endogenous (in fact usually are expenditures, which are to a great degree determined by the actual care choice) is avoided by the collection of a specific exogenous price variable directly from the health providers. Because the health care 'good'--outpatient health care--can vary to such a degree across providers, quality of care must be controlled in order that the coefficients on prices and other variables will not be biased. A strong circumstantial case can be made that past estimation efforts probably underestimated the impact of prices of care on provider choices, because those providers charging higher prices also tend to provide higher quality care and those charging lower prices to provide care of lower quality. Because of this fear of bias on the extremely important price coefficient, effective control of the quality of the care available at the alternative accessible care providers is almost certainly at this time the most important marginal innovation to demand estimation. Most past researchers simply have not had available to them exogenous quality of care information collected via a facility (provider) survey. This study tried several health care provider quality variables and finally used three distinct variables which were statistically significant: (a) expenditure per person in population served; (b) percentage of times drugs are available; and (c) interviewers evaluation of the physical condition of the facility. Price of a visit to the facility is also included, and also is an exogenous variable collected directly from the alternative available providers. For the variables of most interest for this study, price and quality of care, the results are quite reasonable and much as expected.(ABSTRACT TRUNCATED AT 250 WORDS)     

Growth in HMO share of the Medicare market, 1989-1994

Between 1989 and 1994 the health maintenance organization (HMO) share of the Medicare market grew rapidly. It is still heavily concentrated geographically, however. The most influential factor in this growth is HMO penetration into an area's general health care market. Medicare payment rates and prior Medicare HMO penetration also have an impact, but their effects are much weaker. Thus, payment rate reform is likely to have only a modest impact on Medicare HMO growth in the short term. In the longer term, the HMO share of the Medicare market will continue to grow, because HMO penetration in the general health care market is growing rapidly.     

Going for the gold: the redistributive agenda behind market-based health care reform

Political conflict over the respective roles of the state and the market in health care has a long history. Current interest in market approaches represents the resurgence of ideas and arguments that have been promoted with varying intensity throughout this century. (In practice, advocates have never wanted a truly competitive market, but rather one managed by and for particular private interests). Yet international experience over the last forty years has demonstrated that greater reliance on the market is associated with inferior system performance--inequity, inefficiency, high cost, and public dissatisfaction. The United States is the leading example. So why is this issue back again? Because market mechanisms yield distributional advantages for particular influential groups. (1) A more costly health care system yields higher prices and incomes for suppliers--physicians, drug companies, and private insurers. (2) Private payment distributes overall system costs according to use (or expected use) of services, costing wealthier and healthier people less than finance from (income-related) taxation. (3) Wealthy and unhealthy people can purchase (real or perceived) better access or quality for themselves, without having to support a similar standard for others. Thus there is, and always has been, a natural alliance of economic interest between service providers and upper-income citizens to support shifting health financing from public to private sources. Analytic arguments for the potential superiority of hypothetical competitive markets are simply one of the rhetorical forms through which this permanent conflict of economic interest is expressed in political debate.