Financial performance drivers and strategic control: The case of cancer treatment centers

Strategic control is defined as the use of qualitative and quantitative tools for the evaluation of strategic organizational performance. Most research in strategic planning has focused on strategy formulation and implementation, but little work has been done on strategic performance evaluation particularly in the area of cancer research. The objective of this study was to identify strategic control approaches and financial performance metrics used by major cancer centers in the country as an initial step in expanding the theory and practice behind strategic organizational performance. Focusing on hospitals which share similar mandate and resource constraints was expected to improve measurement precision. The results indicate that most cancer centers use a wide selection of evaluation tools, but sophisticated analytical approaches were less common. In addition, there was evidence that high-performing centers tend to invest a larger degree of resources in the area of strategic performance analysis than centers showing lower financial results. The conclusions point to the need for incorporating higher degree of analytical power in order to improve the tracking of strategic performance. This study is one of the first to concentrate in the area of strategic control.^

Specialized managed care for children with cystic fibrosis: Resource use patterns and rate design for a high cost Medicaid population

Objective. This research study had two goals: (1) to describe resource consumption patterns for Medi-Cal children with cystic fibrosis, and (2) to explore the feasibility from a rate design perspective of developing specialized managed care plans for such a special needs population.^ Background. Children with special health care needs (CSHN) comprise about 2% of the California Medicaid pediatric population. CSHN have rare but serious health problems, such as cystic fibrosis. Medicaid programs, including Medi-Cal, are enrolling more and more beneficiaries in managed care to control costs. CSHN, however, do not fit the wellness model underlying most managed care plans. Child health advocates believe that both efficiency and quality will suffer if CSHN are removed from regionalized special care centers and scattered among general purpose plans. They believe that CSHN should be "carved out" from enrollment in general plans. One alternative is the Specialized Managed Care Plan, tailored for CSHN.^ Methods. The study population consisted of children under age 21 with CF who were eligible for Medi-Cal and California Children's Services program (CCS) during 1991. Health Care Financing Administration (HCFA) Medicaid Tape-to-Tape data were analyzed as part of a California Children's Hospital Association (CCHA) project.^ Results. Mean Medi-Cal expenditures per month enrolled were $2,302 for 457 CF children, compared to about \$1,270 for all 47,000 CCS special needs children and roughly $60 for almost 2.6 million ``regular needs'' children. For CF children, inpatient care (80\%) and outpatient drugs (9\%) were the major cost drivers, with {\it all\/} outpatient visits comprising only 2\% of expenditures. About one-third of CF children were eligible due to AFDC (Aid to Families with Dependent Children). Age group explained about 17\% of all expenditure variation. Regression analysis was used to select the best capitation rate structure (rate cells by age and eligibility group). Sensitivity analysis estimated moderate financial risk for a statewide plan (360 enrollees), but severe risk for single county implementation due to small numbers of children.^ Conclusions. Study results support the carve out of CSHN due to unique expenditure patterns. The Specialized Managed Care Plan concept appears feasible from a rate design perspective given sufficient enrollees. ^