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 ANALYSIS OF THE DEMAND FOR PRESCRIPTION MEDICINE IN THE UNITED STATES

The purpose of this study was to understand the role of principle economic, sociodemographic and health status factors in determining the likelihood and volume of prescription drug use. Econometric demand regression models were developed for this purpose. Ten explanatory variables were examined: family income, coinsurance rate, age, sex, race, household head education level, size of family, health status, number of medical visits, and type of provider seen during medical visits. The economic factors (family income and coinsurance) were given special emphasis in this study.^ The National Medical Care Utilization and Expenditure Survey (NMCUES) was the data source. The sample represented the civilian, noninstitutionalized residents of the United States in 1980. The sample method used in the survey was a stratified four-stage, area probability design. The sample was comprised of 6,600 households (17,123 individuals). The weighted sample provided the population estimates used in the analysis. Five repeated interviews were conducted with each household. The household survey provided detailed information on the United States health status, pattern of health care utilization, charges for services received, and methods of payments for 1980.^ The study provided evidence that economic factors influenced the use of prescription drugs, but the use was not highly responsive to family income and coinsurance for the levels examined. The elasticities for family income ranged from -.0002 to -.013 and coinsurance ranged from -.174 to -.108. Income has a greater influence on the likelihood of prescription drug use, and coinsurance rates had an impact on the amount spent on prescription drugs. The coinsurance effect was not examined for the likelihood of drug use due to limitations in the measurement of coinsurance. Health status appeared to overwhelm any effects which may be attributed to family income or coinsurance. The likelihood of prescription drug use was highly dependent on visits to medical providers. The volume of prescription drug use was highly dependent on the health status, age, and whether or not the individual saw a general practitioner. ^

Policy analysis of iron micronutrient programs at USAID: The FANTA program in East Africa and the micronutrient initiative in Bihar region of India, using comparative cost effective and cost benefit analysis

It is the aim of this paper to examine iron supplementation programs which receive funding from United States Agency for International Development (USAID) but approach combating iron deficiency anemia in two vastly different ways. A brief literature review and background information on iron deficiencies and the differences between supplementation programs and micronutrient fortification were reviewed. Two non-governmental organizations (NGO's) were examined for this paper: the Food and Nutrition Technical Assistance II (FANTA) and the MicroNutrient Initiative. The FANTA program included an educational component to their supplementation program while the MicroNutrient Initiative solely used supplementation of micronutrients to their population. Methods used were cost-benefit analysis and cost-effectiveness analysis to determine the overall effectiveness of each program in reducing iron deficiency anemia in each population, if the added costs of the incentives in the FANTA program changed the cost-effectiveness of the program compared to the MicroNutrient Initiative program and to determine which program imparted the greatest benefit to each population by reducing the disease burden in Disability Adjusted Life Years (DALY). Results showed that the unit cost of the FANTA program per person was higher than the MicroNutrient Initiative program due to the educational component. The FANTA program reduced iron deficiency anemia less overall but cost less for each percentage point of anemia decreased in their respective populations. The MicroNutrient Initiative program had a better benefit cost ratio for the populations it served. The MicroNutrient Initiative's large scale program imparted many advantages by reducing unit cost per person and decreasing iron deficiency anemia. The FANTA program was more effective at decreasing iron deficiency anemia with less money: $5,660 per 1% decrease in iron deficiency anemia versus $18,450 per 1% decrease in iron deficiency anemia for the MicroNutrient Initiative program. ^ In conclusion, economic analysis cannot measure all of the benefits associated with programs that contain an educational component or large scale supplementation. More information needs to be gathered by NGOs and reported to USAID, such as detailed prevalence rates of iron deficiency anemia among the populations served. Further research is needed to determine the effects an educational supplementation program has on compliance rates of participants and motivation to participate in supplementation programs whose aim is to decrease iron deficiency anemia in a targeted population.^

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.^

Effects of overweight and obesity on economic outcomes among U.S. adults with kidney disease

Background. Kidney disease is a growing public health phenomenon in the U.S. and in the world. Downstream interventions, dialysis and renal transplants covered by Medicare's renal disease entitlement policy in those who are 65 years and over have been expensive treatments that have been not foolproof. The shortage of kidney donors in the U.S. has grown in the last two decades. Therefore study of upstream events in kidney disease development and progression is justified to prevent the rising prevalence of kidney disease. Previous studies have documented the biological route by which obesity can progress and accelerate kidney disease, but health services literature on quantifying the effects of overweight and obesity on economic outcomes in the context of renal disease were lacking. Objectives . The specific aims of this study were (1) to determine the likelihood of overweight and obesity in renal disease and in three specific adult renal disease sub-populations, hypertensive, diabetic and both hypertensive and diabetic (2) to determine the incremental health service use and spending in overweight and obese renal disease populations and (3) to determine who financed the cost of healthcare for renal disease in overweight and obese adult populations less than 65 years of age. Methods. This study was a retrospective cross-sectional study of renal disease cases pooled for years 2002 to 2009 from the Medical Expenditure Panel Survey. The likelihood of overweight and obesity was estimated using chi-square test. Negative binomial regression and generalized gamma model with log link were used to estimate healthcare utilization and healthcare expenditures for six health event categories. Payments by self/family, public and private insurance were described for overweight and obese kidney disease sub-populations. Results. The likelihood of overweight and obesity was 0.29 and 0.46 among renal disease and obesity was common in hypertensive and diabetic renal disease population. Among obese renal disease population, negative binomial regression estimates of healthcare utilization per person per year as compared to normal weight renal disease persons were significant for office-based provider visits and agency home health visits respectively (p=0.001; p=0.005). Among overweight kidney disease population health service use was significant for inpatient hospital discharges (p=0.027). Over years 2002 to 2009, overweight and obese renal disease sub-populations had 53% and 63% higher inpatient facility and doctor expenditures as compared to normal weight renal disease population and these result were statistically significant (p=0.007; p=0.026). Overweigh renal disease population had significant total expenses per person per year for office-based and outpatient associated care. Overweight and obese renal disease persons paid less from out-of-pocket overall compared to normal weight renal disease population. Medicare and Medicaid had the highest mean annual payments for obese renal disease persons, while mean annual payments per year were highest for private insurance among normal weight renal disease population. Conclusion. Overweight and obesity were common in those with acute and chronic kidney disease and resulted in higher healthcare spending and increased utilization of office-based providers, hospital inpatient department and agency home healthcare. Healthcare for overweight and obese renal disease persons younger than 65 years of age was financed more by private and public insurance and less by out of pocket payments. With the increasing epidemic of obesity in the U.S. and the aging of the baby boomer population, the findings of the present study have implications for public health and for greater dissemination of healthcare resources to prevent, manage and delay the onset of overweight and obesity that can progress and accelerate the course of the kidney disease.^

State rate -setting in conjunction with Medicare prospective payment: The effects of the Maine program

Maine implemented a hospital rate-setting program in 1984 at approximately the same time as Medicare started the Prospective Payment System (PPS). This study examines the effectiveness of the program in controlling cost over the period 1984-1989. Hospital costs in Maine are compared to costs in 36 non rate-setting states and 11 other rate-setting states. Changes in cost per equivalent admission, adjusted patient day, per capita, admissions, and length of stay are described and analyzed using multivariate techniques. A number of supply and demand variables which were expected to influence costs independently of rate-setting were controlled for in the study. Results indicate the program was effective in containing costs measured in terms of cost per adjusted patient day. However, this was not true for the other two cost variables. The average length of stay increased during the period in Maine hospitals indicating an association with rate-setting. Several supply variables, especially the number of beds per 1,000 population were strongly associated with the cost and use of hospitals. ^

Hospital district viability and Medicaid /market changes

Hospital districts (HD) that serve the uninsured and the needy face new challenges with the implementation of Medicaid managed. The potential loss of Medicaid patients and revenues may affect the ability to cost-shift and subsequently decrease the ability of the HD to meet its legal obligation of providing care for the uninsured. ^ To investigate HD viability in the current market, the aims of this study were to: (1) describe HD's environment, (2) document the HDs strategic response, (3) document changes in the HD's performance (patient volume) and financial status, and (4) determine whether relationships or trends exist between HD strategy, performance and financial status. ^ To achieve these aims, three Texas HDs (Fort Worth, Lubbock, and San Antonio) were selected to be evaluated. For each HD four types of strategic responses were documented and evaluated for change. In addition, the ability of each HD to sustain operations was evaluated by documenting performance and financial status changes (patient volume and financial ratios). A pre-post case study design method was used in which the Medicaid managed care “rollout'” date, at each site, was the central date. First, a descriptive analysis was performed which documented the environment, strategy, financial status, and patient volume of each hospital district. Second, to compare hospital districts, each hospital district was: (i) classified by a risk index, (ii) classified by its strategic response profile, and (iii) given a performance score based upon pre-post changes in patient volume and financial indicators. ^ Results indicated that all three HDs operate in a high risk environment compared to the rest of the nation. Two HDs chose the “Status Quo” response whereas one HD chose the “Competitive Proactive” response. Medicaid patient volume decreased in two of three HDs whereas indigent patient volume increased in two of the three (an indication of increasing financial risk). Total patient revenues for all HDs increased over the study period; however, the rate of increase slowed for all three after the Medicaid rollout date. All HDs experienced a decline in financial status between pre-post periods with the greatest decline observed in the HD that saw the greatest increase in indigent patient volume. ^ The pre-post case study format used and the lack of control study sites do not allow for assignment of causality. However, the results suggest possible adverse effects of Medicaid managed care and the need for a larger study, based on a stronger evaluation research design. ^

Estimates of hospital and physician costs of epilepsy in the United States for 1995 comparing the provider -based survey method and a patient -based medical charts and billing method

This investigation compares two different methodologies for calculating the national cost of epilepsy: provider-based survey method (PBSM) and the patient-based medical charts and billing method (PBMC&BM). The PBSM uses the National Hospital Discharge Survey (NHDS), the National Hospital Ambulatory Medical Care Survey (NHAMCS) and the National Ambulatory Medical Care Survey (NAMCS) as the sources of utilization. The PBMC&BM uses patient data, charts and billings, to determine utilization rates for specific components of hospital, physician and drug prescriptions. ^ The 1995 hospital and physician cost of epilepsy is estimated to be $722 million using the PBSM and $1,058 million using the PBMC&BM. The difference of $336 million results from $136 million difference in utilization and $200 million difference in unit cost. ^ Utilization. The utilization difference of $136 million is composed of an inpatient variation of $129 million, $100 million hospital and $29 million physician, and an ambulatory variation of $7 million. The $100 million hospital variance is attributed to inclusion of febrile seizures in the PBSM, $−79 million, and the exclusion of admissions attributed to epilepsy, $179 million. The former suggests that the diagnostic codes used in the NHDS may not properly match the current definition of epilepsy as used in the PBMC&BM. The latter suggests NHDS errors in the attribution of an admission to the principal diagnosis. ^ The $29 million variance in inpatient physician utilization is the result of different per-day-of-care physician visit rates, 1.3 for the PBMC&BM versus 1.0 for the PBSM. The absence of visit frequency measures in the NHDS affects the internal validity of the PBSM estimate and requires the investigator to make conservative assumptions. ^ The remaining ambulatory resource utilization variance is $7 million. Of this amount, $22 million is the result of an underestimate of ancillaries in the NHAMCS and NAMCS extrapolations using the patient visit weight. ^ Unit cost. The resource cost variation is $200 million, inpatient is $22 million and ambulatory is $178 million. The inpatient variation of $22 million is composed of $19 million in hospital per day rates, due to a higher cost per day in the PBMC&BM, and $3 million in physician visit rates, due to a higher cost per visit in the PBMC&BM. ^ The ambulatory cost variance is $178 million, composed of higher per-physician-visit costs of $97 million and higher per-ancillary costs of $81 million. Both are attributed to the PBMC&BM's precise identification of resource utilization that permits accurate valuation. ^ Conclusion. Both methods have specific limitations. The PBSM strengths are its sample designs that lead to nationally representative estimates and permit statistical point and confidence interval estimation for the nation for certain variables under investigation. However, the findings of this investigation suggest the internal validity of the estimates derived is questionable and important additional information required to precisely estimate the cost of an illness is absent. ^ The PBMC&BM is a superior method in identifying resources utilized in the physician encounter with the patient permitting more accurate valuation. However, the PBMC&BM does not have the statistical reliability of the PBSM; it relies on synthesized national prevalence estimates to extrapolate a national cost estimate. While precision is important, the ability to generalize to the nation may be limited due to the small number of patients that are followed. ^

A Mathematical Representation of "Excitement" in Games from the Viewpoint of a Neutral Audience

Researchers have long believed the concept of "excitement" in games to be subjective and difficult to measure. This paper presents the development of a mathematically computable index that measures this concept from the viewpoint of an audience. One of the key aspects of the index is the differential of the probability of "winning" before and after one specific "play" in a given game. If the probability of winning becomes very positive or negative by that play, then the audience will feel the game to be "exciting." The index makes a large contribution to the study of games and enables researchers to compare and analyze the "excitement" of various games. It may be applied to many fields especially the area of welfare economics, ranging from allocative efficiency to axioms of justice and equity.

A Mathematical Representation of "Excitement" in Games: A Contribution to the Theory of Game Systems

Researchers have long believed the concept of "excitement" in games to be subjective and difficult to measure. This paper presents the development of a mathematically computable index that measures the concept from the viewpoint of an audience and from that of a player. One of the key aspects of the index is the differential of the probability of "winning" before and after one specific "play" in a given game. The index makes a large contribution to the study of games and enables researchers to compare and analyze the “excitement” of various games. It may be applied in many fields, especially the area of welfare economics, and applications may range from those related to allocative efficiency to axioms of justice and equity.

A dynamic, probabilistic model for city building

The problem of interdependence between housing and commuting in a city has been analysed within the framework of welfare economics. Uncertain changes overtime in the working population has been considered by means of a dynamic, probabilistic model. The characteristics of irreversibility and durability in city building have been explicitly dealt with. The ultimate objective is that the model after further development will be an auxiliary tool in city planning.

Sustainable Development and Collective Learning: Theory and a European Case Study. Bruges European Economic Policy (BEEP) Briefing 7/2004

Network governance of collective learning processes is an essential approach to sustainable development. The first section of the article briefly refers to recent theories about both market and government failures that express scepticism about the way framework conditions for market actors are set. For this reason, the development of networks for collective learning processes seems advantageous if new solutions are to be developed in policy areas concerned with long-term changes and a stepwise internalisation of externalities. With regard to corporate actors’ interests, the article shows recent insights from theories about the knowledge-based firm, where the creation of new knowledge is based on the absorption of societal views. This concept shifts the focus towards knowledge generation as an essential element in the evolution of sustainable markets. This involves at the same time the development of new policies. In this context innovation-inducing regulation is suggested and discussed. The evolution of the Swedish, German and Dutch wind turbine industries are analysed based on the approach of governance put forward in this article. We conclude that these coevolutionary mechanisms may take for granted some of the stabilising and orientating functions previously exercised by basic regulatory activities of the state. In this context, the main function of the governments is to facilitate learning processes that depart from the government functions suggested by welfare economics.