Evaluating the impact of vertical integration on health system peformance

Vertical integration is grounded in economic theory as a corporate strategy for reducing cost and enhancing efficiency. There were three purposes for this dissertation. The first was to describe and understand vertical integration theory. The review of the economic theory established vertical integration as a corporate cost reduction strategy in response to environmental, structural and performance dimensions of the market. The second purpose was to examine vertical integration in the context of the health care industry, which has greater complexity, higher instability, and more unstable demand than other industries, although many of the same dimensions of the market supported a vertical integration strategy. Evidence on the performance of health systems after integration revealed mixed results. Because the market continues to be turbulent, hybrid non-owned integration in the form of alliances have increased to over 40% of urban hospitals. The third purpose of the study was to examine the application of vertical integration in health care and evaluate the effects. The case studied was an alliance formed between a community hospital and a tertiary medical center to facilitate vertical integration of oncology services while maintaining effectiveness and preserving access. The economic benefits for 1934 patients were evaluated in the delivery system before and after integration with a more detailed economic analysis of breast, lung, colon/rectal, and non-malignant cases. A regression analysis confirmed the relationship between the independent variables of age, sex, location of services, race, stage of disease, and diagnosis, and the dependent variable, cost. The results of the basic regression model, as well as the regression with first-order interaction terms, were statistically significant. The study shows that vertical integration at an intermediate health care system level has economic benefits. If the pre-integration oncology group had been treated in the post-integration model, the expected cost savings from integration would be 31.5%. Quality indicators used were access to health care services and research treatment protocols, and access was preserved in the integrated model. Using survival as a direct quality outcome measure, the survival of lung cancer patients was statistically the same before and after integration. ^

A model of factors determining levels of public support for health care policy in the United States

Public preferences for policy are formed in a little-understood process that is not adequately described by traditional economic theory of choice. In this paper I suggest that U.S. aggregate support for health reform can be modeled as tradeoffs among a small number of behavioral values and the stage of policy development. The theory underlying the model is based on Samuelson, et al.'s (1986) work and Wilke's (1991) elaboration of it as the Greed/Efficiency/Fairness (GEF) hypothesis of motivation in the management of resource dilemmas, and behavioral economics informed by Kahneman and Thaler's prospect theory. ^ The model developed in this paper employs ordered probit econometric techniques applied to data derived from U.S. polls taken from 1990 to mid-2003 that measured support for health reform proposals. Outcome data are four-tiered Likert counts; independent variables are dummies representing the presence or absence of operationalizations of each behavioral variable, along with an integer representing policy process stage. Marginal effects of each independent variable predict how support levels change on triggering that variable. Model estimation results indicate a vanishingly small likelihood that all coefficients are zero and all variables have signs expected from model theory. ^ Three hypotheses were tested: support will drain from health reform policy as it becomes increasingly well-articulated and approaches enactment; reforms appealing to fairness through universal health coverage will enjoy a higher degree of support than those targeted more narrowly; health reforms calling for government operation of the health finance system will achieve lower support than those that do not. Model results support the first and last hypotheses. Contrary to expectations, universal health care proposals did not provide incremental support beyond those targeted to “deserving” populations—children, elderly, working families. In addition, loss of autonomy (e.g. restrictions on choice of care giver) is found to be the “third rail” of health reform with significantly-reduced support. When applied to a hypothetical health reform in which an employer-mandated Medical Savings Account policy is the centerpiece, the model predicts support that may be insufficient to enactment. These results indicate that the method developed in the paper may prove valuable to health policy designers. ^

An analysis of Texas's school based HPV vaccine mandate: A public health risk communication failure: HPVETO!

Genital human papillomavirus (HPV) is of public health concern because persistent infection with certain HPV types can cause cervical cancer. In response to a nationwide push for cervical cancer legislation, Texas Governor Rick Perry bypassed the traditional legislative process and issued an executive order mandating compulsory HPV vaccinations for all female public school students prior to their entrance in the sixth grade. By bypassing the legislative process Governor Perry did not effectively mitigate the risk perception issues that arose around the need for and usefulness of the vaccine mandate. This policy paper uses a social policy paradigm to identify perception as the key intervening factor on how the public responds to risk information. To demonstrate how the HPV mandate failed, it analyzes four factors, economics, politics, knowledge and culture, that shape perception and influence the public's response. By understanding the factors that influence the public's perception, public health practitioners and policy makers can more effectively create preventive health policy at the state level. ^

The determinants of improvements in health outcomes and of cost reduction in hospital inpatient care

This study aims to address two research questions. First, ‘Can we identify factors that are determinants both of improved health outcomes and of reduced costs for hospitalized patients with one of six common diagnoses?’ Second, ‘Can we identify other factors that are determinants of improved health outcomes for such hospitalized patients but which are not associated with costs?’ The Healthcare Cost and Utilization Project (HCUP) Nationwide Inpatient Sample (NIS) database from 2003 to 2006 was employed in this study. The total study sample consisted of hospitals which had at least 30 patients each year for the given diagnosis: 954 hospitals for acute myocardial infarction (AMI), 1552 hospitals for congestive heart failure (CHF), 1120 hospitals for stroke (STR), 1283 hospitals for gastrointestinal hemorrhage (GIH), 979 hospitals for hip fracture (HIP), and 1716 hospitals for pneumonia (PNE). This study used simultaneous equations models to investigate the determinants of improvement in health outcomes and of cost reduction in hospital inpatient care for these six common diagnoses. In addition, the study used instrumental variables and two-stage least squares random effect model for unbalanced panel data estimation. The study concluded that a few factors were determinants of high quality and low cost. Specifically, high specialty was the determinant of high quality and low costs for CHF patients; small hospital size was the determinant of high quality and low costs for AMI patients. Furthermore, CHF patients who were treated in Midwest, South, and West region hospitals had better health outcomes and lower hospital costs than patients who were treated in Northeast region hospitals. Gastrointestinal hemorrhage and pneumonia patients who were treated in South region hospitals also had better health outcomes and lower hospital costs than patients who were treated in Northeast region hospitals. This study found that six non-cost factors were related to health outcomes for a few diagnoses: hospital volume, percentage emergency room admissions for a given diagnosis, hospital competition, specialty, bed size, and hospital region.^

Economic evaluation of latent tuberculosis infection screening among health care workers in Houston

Since interferon-gamma release assays (IGRAs) were introduced in the 2000's, tuberculin skin testing (TST) and IGRAs have been used in various latent tuberculosis infection (LTBI) screening settings. IGRAs are laboratory-based tests and are considered not to be affected by previous Bacille de Calmette et Guérin (BCG) vaccination; however, they are more costly when compared directly with TST, which does not require specimen processing in a laboratory. This study aimed to examine TST and two types of IGRAs, QuantiFERON-TB Gold in Tube (QFT-GIT) and T-SPOT. TB (TSPOT), from an economic viewpoint. Firstly, a systematic literature review was conducted to identify cost related analyses of LTBI screening. Secondly, specific cost information detailing each test's items and labor was collected from an LTBI screening program of health care workers in Houston, and the cost of each test was computed. Thirdly, using the computed cost estimate of each test, cost-effectiveness analyses were conducted to compare TST and IGRAs.^ A literature search showed that a limited number of studies have been conducted, but the IGRA's economic advantages were common among studies. Cost analyses showed that IGRAs were much more costly than TST. The results were consistent with previous studies. In cost-effectiveness analyses, where test cost and consequential TB-related cost were considered, IGRAs showed variable advantages over TST depending on the targeted population. When only non BCG-vaccinated people were considered, TST was the least costly option among the three tests. On the other hand, when only BCG-vaccinated people were considered, IGRAs were less costly options. These results were mostly consistent even with varying assumption parameters.^ IGRAs can be more costly than TST, but their economic disadvantages are alleviated when the target population was BCG-vaccinated. Based on current knowledge, IGRAs may be recommended in a population where the BCG history is mixed. Additional studies are needed to better understand IGRA's reliability among low-incidence and low-risk populations in which background TB prevalence is low.^