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. d into an analysis that relies solely on transaction

Economic deprivation and its effects on subjective wellbeing in families of people with multiple sclerosis

Background: There has been limited research on the role of financial strain on the adjustment of people with multiple sclerosis.

Aims: This study examined the financial costs of MS and the impact of financial strain on the quality of life and adjustment of people with MS and their families.

Methods: Interviews were conducted with 16 health professionals, 26 people with MS and 11 family members of people who have MS.

Results: Economic deprivation impacted on the subjective well being of many families living with MS. Concerns included adjustment to a lower income if the person with MS reduced or ceased work, and meeting the costs of home alterations, mobility equipment, and special transport. The additional cost of living with MS is a stress factor, especially for people dependent on disability support pensions.

Conclusions: It is anticipated that the findings from this study will raise the awareness of health professionals and politicians regarding the potential impact of financial stress on people with MS and their families.

Socio-economic factors in obesity: a case of slim chance in a fat world?

The global obesity pandemic has been well-documented and widely discussed by the public, the media, health officials, the food industry and academic researchers. While the problem is widely recognised, the potential solutions are far less clear. There is only limited evidence to guide decisions as to how best to manage obesity in individuals and in populations. While widely viewed as a clinical and public health problem in developed countries, it is now clear that many developing countries also have to grapple with this problem or face the crippling healthcare costs resulting from obesity-related morbidity. There is also abundant evidence that obesity is socio-economically distributed. In developed countries persons of lower socio-economic position are more likely to be affected, while in developing countries, it is often those of higher socio-economic position who are overweight or obese. The aim of this paper is to briefly review the evidence that links socio-economic position and obesity, to discuss what is known about underlying mechanisms, and to consider the role of social, physical, policy and cultural environments in explaining the relationships between socio-economic position and obesity. We introduce the concept of ‘resilience’ as a potential theoretical construct to guide research efforts aimed at understanding how some socio-economically disadvantaged individuals manage to avoid obesity. We conclude by considering an agenda to guide future research and programs focused on understanding and reducing obesity among those of low socio-economic position.

How can socio-economic differences in physical activity among women be explained? A qualitative study

This qualitative study investigated why women of low socio-economic status (SES) are less physically active than women of higher-SES. Semi-structured interviews were conducted with 19 high-, 19 mid- and 18 low-SES women. A social-ecological framework, taking into account intrapersonal, social and environmental level influences, was adopted to guide the development of interview questions and interpretation of data. Thematic analysis identified a number of key influences on physical activity that varied by SES. These included negative early life/family physical activity experiences (a consistent theme among those of low-/mid-SES); participation in a wider range of physical activities in leisure time (high-SES); greater priority given to television viewing (low-SES); lack of time due to work commitments (low-SES); lack of time due to family commitments (high-SES); and neighbourhood-level barriers (low-SES). Financial costs were not perceived as a key barrier by women in any SES group. Public health strategies aimed at reducing SES

Attaching unit costs to Australia`s national survey of mental health and wellbeing

Background: In mental health, policy-makers and planners are increasingly being asked to set priorities. This means that health economists, health services researchers and clinical investigators are being called upon to work together to define and measure costs. Typically, these researchers take available service utilisation data and convert them to costs, using a range of assumptions. There are inefficiencies, as individual groups of researchers frequently repeat essentially similar exercises in achieving this end. There are clearly areas where shared or common investment in the development of statistical software syntax, analytical frameworks and other resources could maximise the use of data.

Aims of the Study: This paper reports on an Australian project in which we calculated unit costs for mental health admissions and community encounters. In reporting on these calculations, our purpose is to make the data and the resources associated with them publicly available to researchers interested in conducting economic analyses, and allow them to copy, distribute and modify them, providing that all copies and modifications are available under the same terms and conditions (i.e., in accordance with the `Copyleft' principle). Within this context, the objectives of the paper are to: (i) introduce the `Copyleft' principle; (ii) provide an overview of the methodology we employed to derive the unit costs; (iii) present the unit costs themselves; and (iv) examine the total and mean costs for a range of single and comorbid conditions, as an example of the kind of question that the unit cost data can be used to address.

Method: We took relevant data from the Australian National Survey of Mental Health and Wellbeing (NSMHWB), and developed a set of unit costs for inpatient and community encounters. We then examined total and mean costs for a range of single and comorbid conditions.

Results: We present the unit costs for mental health admissions and mental health community contacts. Our example, which explored the association between comorbidity and total and mean costs, suggested that comorbidly occurring conditions cost more than conditions which occur on their own.

Discussion: Our unit costs, and the materials associated with them, have been published in a freely available form governed by a provision termed `Copyleft'. They provide a valuable resource for researchers wanting to explore economic questions in mental health.

Implications for Health Policies: Our unit costs provide an important resource to inform economic debate in mental health in Australia, particularly in the area of priority-setting. In the past, such debate has largely been based on opinion. Our unit costs provide the underpinning to strengthen the evidence-base of this debate.

Implications for Further Research: We would encourage other Australian researchers to make use of our unit costs in order to foster comparability across studies. We would also encourage Australian and international researchers to adopt the `Copyleft' principle in equivalent circumstances. Furthermore, we suggest that the provision of `Copyleft'-contingent funding to support the development of enabling resources for researchers should be considered in the planning of future large-scale collaborative survey work, both in Australia and overseas.

Trial application of a model of resource utiliztion, costs, and outcomes for stroke (MORUCOS) to assist priority setting in stroke.

Background and Purpose— Cost-effectiveness data for stroke interventions are limited, and comparisons between studies are confounded by methodological inconsistencies. The aim of this study was to trial the use of the intervention module of the economic model, a Model of Resource Utilization, Costs, and Outcomes for Stroke (MORUCOS) to facilitate evaluation and ranking of the options.

Methods— The approach involves using an economic model together with added secondary considerations. A consistent approach was taken using standard economic evaluation methods. Data from the North East Melbourne Stroke Incidence Study (NEMESIS) were used to model "current practice" (base case), against which 2 interventions were compared. A 2-stage process was used to measure benefit: health gains (expressed in disability-adjusted life years [DALYs]) and filter analysis. Incremental cost-effectiveness ratios (ICERs) were calculated, and probabilistic uncertainty analysis was undertaken.

Results— Aspirin, a low-cost intervention applicable to a large number of stroke patients (9153 first-ever cases), resulted in modest health benefits (946 DALYs saved) and a mean ICER (based on incidence costs) of US $1421 per DALY saved. Although the health gains from recombinant tissue-type plasminogen activator (rtPA) were less (155 DALYs saved), these results were impressive given the small number of persons (256) eligible for treatment. rtPA dominates current practice because it is more effective and cost-saving.

Conclusions— If used to assess interventions across the stroke care continuum, MORUCOS offers enormous capacity to support decision-making in the prioritising of stroke services.

Economic evaluation of Australian stroke services: a prospective, multicenter study comparing dedicated stroke units with other care modalities

Background and Purpose: Level I evidence from randomized controlled trials demonstrates that the model of hospital care influences stroke outcomes; however, the economic evaluation of such is limited. An economic appraisal of 3 acute stroke care models was facilitated through the Stroke Care Outcomes: Providing Effective Services (SCOPES) study in Melbourne, Australia. The aim was to describe resource use up to 28 weeks poststroke for each model and examine the cost-effectiveness of stroke care units (SCUs). Methods: A prospective, multicenter, cohort study design was used. Costs and outcomes of stroke patients receiving 100% treatment in 1 of 3 inpatient care models (SCUs, mobile service, conventional care) were compared. Health-sector resource use up to 28 weeks was measured in 1999. Outcomes were thorough adherence to a suite of important clinical processes and the number of severe inpatient complications. Results: The sample comprised 395 participants (mean age 73 [SD 14], 77% first-ever strokes, males 53%). When compared with conventional care (n=84), costs for mobile service (n=209) were significantly higher (P=0.024), but borderline for SCU (n=102, P=0.08; $AUD12 251; $AUD15 903; $AUD15 383 respectively). This was primarily explained by the greater use of specialist medical services. The incremental cost-effectiveness of SCUs over conventional care was $AUD9867 per patient achieving thorough adherence to clinical processes and $AUD16 372 per patient with severe complications avoided, based on costs to 28 weeks. Conclusions: Although acute SCU costs are generally higher, they are more cost-effective than either mobile service or conventional care.

Diminishing and negative welfare returns of economic growth : an index of sustainable economic welfare (ISEW) for Thailand

Thailand has achieved remarkable levels of economic growth over the last three decades. This sustained economic growth has played a major role in reducing absolute poverty levels from nearly one third of the population in 1975 to presently less than 10%, thus increasing the welfare of many Thais. This performance ranks Thailand as one of the world's most successful economies during this period. However, an increasing number of studies have begun to find that at a certain point achieving economic growth stops improving welfare and actually begins to diminish it due to the hidden and traditionally unreported costs of associated with this growth. With one exception, these new studies have focussed on high-income countries. This study will estimate an index of sustainable economic welfare (ISEW) for a developing country, Thailand, over a 25-year period, 1975–1999. This paper concludes that even low–middle income countries are beginning to approach the point in which economic growth produces both diminishing and, at times, negative welfare returns as the costs of achieving economic growth begin to outweigh the benefits. These results are important for policy makers and highlight the importance of implementing alternative welfare enhancing interventions that must be considered in place of simply achieving economic growth. The emphasis of this paper is not on the methodology of estimating the ISEW for Thailand, but rather on the policy implications for developing countries of diminishing and negative welfare returns brought about through the achievement of economic growth.

Economic growth and sustainability - an empirical study of the Thai development experience

Increasing economic growth has long been the dominant position within the public policies of all South East Asian countries. More recently, a new issue, sustainability, has emerged within development economic literature, which has significant implications for the continual pursuit of economic growth. Sustainability is concerned with ensuring the current generation meets their present needs without threatening future generations' ability to do likewise. This ability is dependent on a healthy and functioning socio-economic environmental (SEE) system. Economic growth can damage the SEE-system, though, through resource degradation, over-harvesting and pollution. Therefore, achieving economic growth and sustainability simultaneously may not be possible. This paper discusses these tensions between economic growth and sustainability by undertaking a number of SEE-based adjustments to GDP in order to measure sustainability. Thailand is used as a case study for a 25 year period, 1975-1999. The adjustments include the environmental costs caused by economic growth such as noise pollution, water pollution, the depletion of non-renewable resources, and deforestation. The results show a stark difference in terms of GDP per capita and the SEE-adjusted GDP per capita figure. The paper concludes that with increasing environmental costs of economic growth, pursuing high growth objectives without considerations to the environment threatens sustainability

Widening development prescriptions: policy implications of an index of sustainable economic welfare (SEW) for Thailand

Over the past three decades, Thailand has recorded consistently high levels of economic growth, making it one of the most successful economies in the world during this period. However, economic growth has associated costs that can also reduce social welfare. This study will estimate an Index of Sustainable Economic Welfare (ISEW) for Thailand over a twenty-five year period, 1975–1999. This paper concludes that even low-middle income countries are beginning to approach the point at which economic growth produces both diminishing and, at times, negative welfare returns as the costs of achieving growth begin to outweigh the associated benefits. These results are important for policy makers and highlight the importance of widening policy prescriptions in order to increase social welfare. However, the policy guidelines that are suggested must be critically accepted before being adopted due to possible weaknesses of the ISEW approach.

Estimating the economic value of Mount Buffalo National Park with the travel cost and contingent valuation models

The Mount Buffalo National Park is the oldest national park in Victoria, Australia. There has been a rapid increase in the number of visitors to the park during the last decade and park management has been a concern, especially in the light of declining budgetary allocations and potential damage due to the increased visitor numbers. Policy options to increase park revenue remain unclear because of a lack of information on demand parameters and user costs. This study estimates the economic value of the park using the travel cost method (TCM) and the contingent valuation method (CVM). The TCM gives higher consumer surplus (CS) than the CVM. The CS shows that the economic value of the park is high and that there are opportunities to introduce innovative fee schemes to enhance its revenue. Present entry fee systems do not capture the economic value of the park.

Pieces of silver : examples of the economic impact and management of the silver gull (Larus novaehollandiae) in Melbourne, Australia

Like a number of gull species, the silver gull Larus novaehollandiae has expanded its population in response to human food subsidy. The major anthropogenic food source is food waste at rubbish tips. Other sources of human food waste are also exploited. Many problems result from the activities of these birds, including human health and safety, economic impacts, and effects on the conservation of other species. My study examines aspects of the economic impacts of the silver gull on the human community of the Greater Melbourne Area comprising approximately 4065 km2 (1569 square miles). My data collection method involves identifying sites where problems have been experienced and completing questionnaires during face to face interviews with the managers of those sites. Data collected at this early stage of the study demonstrate that there are significant, quantifiable economic impacts associated with the superabundance of the silver gull in this area. Other impacts, such as reduced amenity and potential health hazards are equally real but more difficult to quantify. Costs include damage to structures and products, damage prevention measures, and loss of production. Information about the costs of these problems will be presented to the relevant landfill management authorities to encourage them to consider alternative means of disposing of putrescible waste, rather than by open landfill disposal, because even current best practice management of open landfill sites (rubbish tips) provides ample opportunity for silver gulls and certain other bird species to exploit this food source. Controlling access by the silver gull to food at rubbish tips would be an important first step in managing the population of this species.

Why invest in a national public health program for stroke? An example using Australian data to estimate the potential benefits and cost implications

Objectives: Stroke is the world’s second leading cause of death in people aged over 60 years. Approximately 50,000 strokes occur annually in Australia with numbers predicted to increase by about one third over 10-years. Our objectives were to assess the economic implications of a public health program for stroke by: (1) predicting what potential health-gains and cost-offsets could be achieved; and (2) determining the net level of annual investment that would offer value-for-money.

Methods: Lifetime costs and outcomes were calculated for additional cases that would benefit if ‘current practice’ was feasibly improved, estimated for one indicative year using: (i) local epidemiological data, coverage rates and costs; and (ii) pooled effect sizes from systematic reviews.

Interventions: blood pressure lowering; warfarin for atrial fibrillation; increased access to stroke units; intravenous thrombolysis and aspirin for ischemic events; and carotid endarterectomy. Value-for-money threshold: AUD$30,000/DALY recovered.

Results: Improved, prevention and management could prevent about 27,000 (38%) strokes in 2015. In present terms (2004), about 85,000 DALYs and AUD$1.06 billion in lifetime cost-offsets could be recovered. The net level of annual warranted investment was AUD$3.63 billion.

Conclusions: Primary prevention, in particular blood pressure lowering, was most effective. A public health program for stroke
is warranted

Colorectal cancer screening in Australia: an economic evaluation of a potential biennial screening program using faecal occult blood tests

Objective: To evaluate whether the introduction of a national, co-ordinated screening program using the faecal occult blood test represents 'value-for-money' from the perspective of the Australian Government as third-party funder.  Methods: The annual equivalent costs and consequences of a   biennial screening program in 'steady-state' operation were estimated for the Australian population using 1996 as the reference year. Disability-adjusted life years (DALYs) and the years of life lost (YLLs) averted, and the health service costs were modelled, based on the epidemiology and the costs of colorectal cancer in Australia together with the mortality reduction achieved in randomised controlled trials. Uncertainty in the model was examined using Monte Carlo simulation methods. Results: We estimate a minimum or 'base program' of screening those aged 55 to 69 years could avert 250 deaths per annum (95% uncertainty interval 99–400), at a gross cost of $A55 million (95% UI $A46 million to $A96 million) and a gross incremental cost-effectiveness ratio of $A17,000/DALY (95% UI $A13,000/DALY to $A52,000/DALY). Extending the program to include 70 to 74-year-olds is a more effective option (cheaper and higher health gain) than including the 50 to 54-year-olds. Conclusions: The findings of this study support the case for a national program directed at the 55 to 69-year-old age group with extension to 70 to 74-year-olds if there are sufficient resources. The pilot tests recently announced in Australia provide an important opportunity to consider the age range for screening and the sources of uncertainty, identified in the modelled evaluation, to assist decisions on implementing a full national program.

Soil erosion in developing countries: a socio-economic appraisal

Soil erosion is the single most important environmental degradation problem in the developing world. Despite the plethora of literature that exists on the incidence, causes and impacts of soil erosion, a concrete understanding of this complex problem is lacking. This paper examines the soil erosion problem in developing countries in order to understand the complex inter-relationships between population pressure, poverty and environmental-institutional dynamics. Two recent theoretical developments, namely Boserup's theory on population pressure, poverty and soil erosion and Lopez's theory on environmental and institutional dynamics have been reviewed. The analysis reveals that negative impacts of technical change, inappropriate government policies and poor institutions are largely responsible for the continued soil erosion in developing countries. On the other hand, potential for market-based approaches to mitigate the problem is also low due to the negative externalities involved. A deeper appreciation of institutional and environmental dynamics and policy reforms to strengthen weak institutions may help mitigate the problem.