Health Care Cost Analysis

This afternoon you will be working on descriptive statistics, such as what is the total number of discharges in the state of Montana for a given Diagnosis Related Group (DRG), what is the average payment of a given DRG, and what is the range of payments of a given DRG. We will also formulate and solve a statistical question such as is there a relationship between the size of a hospital and the average payment of a given DRG.

HEALTH CARE COST INCREASES IN METROPOLITAN AREAS

The research project is an extension of the economic theory to the health care field and health care research projects evaluating the influence of demand and supply variables upon medical care inflation. The research tests a model linking the demographic and socioeconomic characteristics of the population, its community case mix, and technology, the prices of goods and services other than medical care, the way its medical services are delivered and the health care resources available to its population to different utilization patterns which, consequently, lead to variations in health care prices among metropolitan areas. The research considers the relationship of changes in community characteristics and resources and medical care inflation.^ The rapidly increasing costs of medical care have been of great concern to the general public, medical profession, and political bodies. Research and analysis of the main factors responsible for the rate of increase of medical care prices is necessary in order to devise appropriate solutions to cope with the problem. An understanding of the community characteristics and resources-medical care costs relationships in the metropolitan areas potentially offers guidance in individual plan and national policy development.^ The research considers 145 factors measuring community milieu (demographic, social, educational, economic, illness level, prices of goods and services other than medical care, hospital supply, physicians resources and techological factors). Through bivariate correlation analysis, the number of variables was reduced to a set of 1 to 4 variables for each cost equation. Two approaches were identified to track inflation in the health care industry. One approach measures costs of production which accounts for price and volume increases. The other approach measures price increases. One general and four specific measures were developed to represent each of the major approaches. The general measure considers the increase on medical care prices as a whole and the specific measures deal with hospital costs and physician's fees. The relationships among changes in community characteristics and resources and health care inflation were analyzed using bivariate correlation and regression analysis methods. It has been concluded that changes in community characteristics and resources are predictive of hospital costs and physician's fees inflation, but are not predictive of increases in medical care prices. These findings provide guidance in the formulation of public policy which could alter the trend of medical care inflation and in the allocation of limited Federal funds.^

Hospital beds in Illinois : alternative systems and bed counts : a report for the Certificate of Need Committee, Illinois Health Care Cost Containment Council /

Includes bibliographical references.

Report of the Illinois Health Care Cost Containment Council to the Governor and the Illinois General Assembly on the effectiveness of certificate of need reveiew.

Cover title.

Health care and lost productivity costs of overweight and obesity in New Zealand

Objective: To estimate the costs of health care and lost productivity attributable to overweight and obesity in New Zealand (NZ) in 2006.

Methods: A prevalence-based approach to costing was used in which costs were calculated for all cases of disease in the year 2006. Population attributable fractions (PAFs) were calculated based on the relative risks obtained from large cohort studies and the prevalence of overweight and obesity. For each disease, the PAF was multiplied by the total health care cost. The costs of lost productivity associated with premature mortality were estimated using both the Human Capital approach (HCA) and Friction Cost approach (FCA).

Results: Health care costs attributable to overweight and obesity were estimated to be NZ$686m or 4.5% of New Zealand's total health care expenditure in 2006. The costs of lost productivity using the FCA were estimated to be NZ$98m and NZ$225m using the HCA. The combined costs of health care and lost productivity using the FCA were $784m and $911m using the HCA.

Conclusion: The cost burden of overweight and obesity in NZ is considerable.

Implications: Policies and interventions are urgently needed to reduce the prevalence of obesity thereby decreasing these substantial costs.

Health-care costs of underweight, overweight and obesity: Australian population-based study

AIM: Child health varies with body mass index (BMI), but it is unknown by what age or how much this attracts additional population health-care costs. We aimed to determine the (1) cross-sectional relationships between BMI and costs across the first decade of life and (2) in longitudinal analyses, whether costs increase with duration of underweight or obesity. METHODS: Participants: Baby (n = 4230) and Kindergarten (n = 4543) cohorts in the nationally representative Longitudinal Study of Australian Children. OUTCOME: Medicare Benefits Scheme (including all general practitioner plus a large proportion of paediatrician visits) plus prescription medication costs to federal government from birth to sixth (Baby cohort) and fourth to tenth (Kindergarten cohort) birthdays. PREDICTOR: biennial BMI measurements over the same period. RESULTS: Among Australian children under 10 years of age, 5-6% were underweight, 11-18% overweight and 5-6% obese. Excess costs with low and high BMI became evident from age 4-5 years, with normal weight accruing the least, obesity the most, and underweight and overweight intermediate costs. Relative to overall between-child variation, these excess costs per child were very modest, with a maximum of $94 per year at age 4-5 years. Nonetheless, this projects to a substantial cost to government of approximately $13 million per annum for all Australian children aged less than 10 years. CONCLUSIONS: Substantial excess population costs provide further economic justification for promoting healthy body weight. However, obese children's low individual excess health-care costs mean that effective treatments are likely to increase short-term costs to the public health purse during childhood.

Essays on health care reform, wealth inequality, and demography

This thesis contains three chapters. The first chapter uses a general equilibrium framework to simulate and compare the long run effects of the Patient Protection and Affordable Care Act (PPACA) and of health care costs reduction policies on macroeconomic variables, government budget, and welfare of individuals. We found that all policies were able to reduce uninsured population, with the PPACA being more effective than cost reductions. The PPACA increased public deficit mainly due to the Medicaid expansion, forcing tax hikes. On the other hand, cost reductions alleviated the fiscal burden of public insurance, reducing public deficit and taxes. Regarding welfare effects, the PPACA as a whole and cost reductions are welfare improving. High welfare gains would be achieved if the U.S. medical costs followed the same trend of OECD countries. Besides, feasible cost reductions are more welfare improving than most of the PPACA components, proving to be a good alternative. The second chapter documents that life cycle general equilibrium models with heterogeneous agents have a very hard time reproducing the American wealth distribution. A common assumption made in this literature is that all young adults enter the economy with no initial assets. In this chapter, we relax this assumption – not supported by the data – and evaluate the ability of an otherwise standard life cycle model to account for the U.S. wealth inequality. The new feature of the model is that agents enter the economy with assets drawn from an initial distribution of assets. We found that heterogeneity with respect to initial wealth is key for this class of models to replicate the data. According to our results, American inequality can be explained almost entirely by the fact that some individuals are lucky enough to be born into wealth, while others are born with few or no assets. The third chapter documents that a common assumption adopted in life cycle general equilibrium models is that the population is stable at steady state, that is, its relative age distribution becomes constant over time. An open question is whether the demographic assumptions commonly adopted in these models in fact imply that the population becomes stable. In this chapter we prove the existence of a stable population in a demographic environment where both the age-specific mortality rates and the population growth rate are constant over time, the setup commonly adopted in life cycle general equilibrium models. Hence, the stability of the population do not need to be taken as assumption in these models.

The impact of physical activity on mitigation of health care costs related to diabetes mellitus: findings from developed and developing settings Diabetes mellitus and physical exercise

Over the last decades, the prevalence of diabetes mellitus (DM) has been increasing globally such that nowadays the disease constitutes an important outcome related to early mortality among adults. In parallel with the high prevalence, healthcare costs related to DM treatment have increased significantly, exacerbating its burden on modern society. The scientific literature points out that obesity and physical inactivity have a central role in the development of most DM cases. In fact, either physical exercise practice or an increase in the level of physical activity, constitute relevant tools in the guidelines for treatment of the disease. On the other hand, the effect of physical activity on the economic consequences of DM is not completely clear. The identification of the actual burden of lifestyle changes on the reduction of healthcare costs related to DM is relevant, primarily for developing nations, where it could represent a cheaper strategy for treating the disease and its complications than paying for drug treatment, which is commonly related to collateral effects. That being said, the prevention of DM and other diseases and consequently the mitigation of the costs related to these outcomes seem to depend essentially on the promotion of healthy habits. The aim of the present review was therefore to discuss recent evidence on the effects of physical activity/exercise on mitigation of health care cost related to DM.

Health Care Reform or More Affordable Health Care?

This article investigates the impact on the U.S. economy of making health care more affordable. We compare health care cost reductions with the Patient Protection and Affordable Care Act (PPACA) using a rich life cycle general equilibrium model with heterogeneous agents. We found that all policies were able to reduce uninsured population, but the PPACA was the most effective: in the long run, less than 5% of Americans would remain uninsured. Cost reductions alleviated the government budget, while tax hikes were needed to finance the reform. Feasible cost reductions are less welfare improving than the PPACA.

Health care in Illinois, a system in transition : report to the honorable members of the 84th session of the Illinois General Assembly.

Cover title.

Report to Illinois General Assembly regarding the status of health care in Illinois.

Cover title.

The Evolution of national health policy and the Illinois health care delivery system.

Prepared by the Illinois Health Care Cost Containment Council.

Wellness and Obesity: Implications for Health Care Costs Among Restaurant Managers

Overeating, inadequate exercise, work-related stress, and long working hours are accepted issues among restaurant managers. The underlying question was whether such life styles affect employers' health care cost and restaurant managers' health and ability to cope with imposed business requirements. The author discusses strategies to help employers reduce health care costs, increase employee productivity, and improve job satisfaction.

Managing health care in Australia : steps on the health care roundabout?

This paper explores some of the lessons of the coordinated care trials in Australia in the context of managed care in America and asks how do we best manage our finite health care dollars for the most equitable and effective outcomes for whole populations? The COAG trial in Australia tested a more structured process for managing the care of patients with chronic illness and postulated that currently fragmented health system funding could be pooled around individual patient need, and managed for improved economic outcomes and patient wellbeing. There is little doubt, following this initiative and much work in other countries, that as health care costs rise, for a range of reasons, improvements are needed in the management of our resources if we are to control rising health care costs. We also know that chronic illness, much of which is preventable and avoidable, is the major component in the rising health care cost equation and a factor likely to consume around 75% of our health dollars in the future. Much chronic illness can be prevented through social and population health strategies and we know that even if chronic illness can?t be prevented, it can be managed better through community-based chronic illness management programs. These programs rely on information, education, patient lifestyle and behaviour change, and on patients developing improved self-management skills. But, what is the best way to manage population health in Australia and ensure equity and fairness in the health care market as we evolve new approaches, especially to the management of chronic illness?

Health-care costs over 15 years after bariatric surgery for patients with different baseline glucose status: results from the Swedish Obese Subjects study

BACKGROUND: Bariatric surgery prevents and induces remission of type 2 diabetes in many patients. The effect of preoperative glucose status on long-term health-care costs is unknown. We aimed to assess health-care costs over 15 years for patients with obesity treated conventionally or with bariatric surgery and who had either euglycaemia, prediabetes, or type 2 diabetes before intervention. METHODS: The Swedish Obese Subjects (SOS) study is a prospective study of adults who had bariatric surgery and contemporaneously matched controls who were treated conventionally (age 37-60 years; BMI of ≥34 in men and ≥38 in women) recruited from 25 Swedish surgical departments and 480 primary health-care centres. Exclusion criteria were identical for both study groups, and were previous gastric or bariatric surgery, recent malignancy or myocardial infarction, selected psychiatric disorders, and other contraindicating disorders to bariatric surgery. Conventional treatment ranged from no treatment to lifestyle intervention and behaviour modification. In this study, we retrieved prescription drug costs for the patients in the SOS study via questionnaires and the nationwide Swedish Prescribed Drug Register. We retrieved data for inpatient and outpatient visits from the Swedish National Patient Register. We followed up the sample linked to register data for up to 15 years. We adjusted mean differences for baseline characteristics. Analyses were by intention to treat. The SOS study is registered with ClinicalTrials.gov, number NCT01479452. FINDINGS: Between Sept 1, 1987, and Jan 31, 2001, 2010 adults who had bariatric surgery and 2037 who were treated conventionally were enrolled into the SOS study. In this study, we followed up 4030 patients (2836 who were euglycaemic; 591 who had prediabetes; 603 who had diabetes). Drug costs did not differ between the surgery and conventional treatment groups in the euglycaemic subgroup (surgery US$10,511 vs conventional treatment $10,680; adjusted mean difference -$225 [95% CI -2080 to 1631]; p=0·812), but were lower in the surgery group in the prediabetes ($10,194 vs $13,186; -$3329 [-5722 to -937]; p=0·007) and diabetes ($14,346 vs $19,511; -$5487 [-7925 to -3049]; p<0·0001) subgroups than in the conventional treatment group. Compared with the conventional treatment group, we noted greater inpatient costs in the surgery group for the euglycaemic ($51,225 vs $25,313; $22,931 [19,001-26,861]; p<0·0001), prediabetes ($58,699 vs $32,861; $27,152 [18,736-35,568]; p<0·0001), and diabetes ($61,569 vs $47,569; 18,697 [9992-27,402]; p<0·0001) subgroups. We noted no differences in outpatient costs. Total health-care costs were higher in the surgery group in the euglycaemic ($71,059 vs $45,542; $22,390 [17,358-27,423]; p<0·0001) and prediabetes ($78,151 vs $54,864; $26,292 [16,738-35,845]; p<0·0001) subgroups than in the conventional treatment group, whereas we detected no difference between treatment groups in patients with diabetes ($88,572 vs $79,967; $9081 [-1419 to 19,581]; p=0·090). INTERPRETATION: Total health-care costs were higher for patients with euglycaemia or prediabetes in the surgery group than in the conventional treatment group, but we detected no difference between the surgery and conventional treatment groups for patients with diabetes. Long-term health-care cost results support prioritisation of patients with obesity and type 2 diabetes for bariatric surgery. FUNDING: AFA Försäkring and Swedish Scientific Research Council.