Using Medicare to ease the FAS No. 106 burden

By letting Medicare pay the first part of retirees' health care, employers can achieve significant savings. There are several ways of integrating with Medicare; some are more beneficial than others.

The emerging healthcare environmental manager

The following speech was delivered in November 1991 by Dr. Lerner at the New England American Society for Healthcare Environmental Services [ASHES] regional conference. It concerns issues vital to the management of environmental and occupational health and safety in healthcare facilities and should be read by hazardous materials managers and hospital CEOs alike.

The relationship between wellness participation and health care benefit utilization

To examine the relationship between participation in a wellness program and the amount of absenteeism and medical claims, seven years of retrospective absenteeism and medical claims records were collected for 207 employees (pre- and postwellness intervention) and entered into a database. A proportional stratified random sample of workers by wellness participation was selected. While there was no significant change in the amount of sick leave taken over time, a log transformation revealed a significant increase in the dollar amount of medical claims over time, particularly for the middle-aged group of employees. This confirms that wellness intervention slowed the rate of increasing claims among middle-aged participants after just three years of wellness intervention.

Alternative geographic adjustments in Medicare payment to health maintenance organizations

The payment received by a health maintenance organization (HMO) for its Medicare enrollees is proportionate to the average cost of Medicare beneficiaries in that county. However, HMO market share in an area appears to decrease costs in the fee-for-service sector, so that HMOs are paid less. For this and other reasons, alternative payment formulas may be desirable and several are developed in this article. The conceptually simplest location factor would be an input price index. An alternative strategy would also recognize systematic variation in utilization. Utilization rate is regressed on variables such as county population density and physicians per 1,000 persons. The predicted utilization rate times an input price index could serve as a location factor. The value of alternative location factors are presented for specific counties.

Intervention to discontinue parenteral antimicrobial therapy in patients hospitalized with pulmonary infections: effect on shortening patient stay

OBJECTIVES

Current efforts to contain anti-microbial costs in hospitals are based on restricting drugs. We explored the effects of unsolicited case-specific recommendations to physicians to discontinue parenteral antimicrobial therapy in medically stable patients with pneumonia, in order to shorten hospital length of stay.

METHODS

A nurse-interventionist, working as an emissary of an appropriate committee in 3 nonteaching community hospitals, presented randomly assigned physicians with nonconfrontational suggestions to substitute comparable oral antimicrobials for parenteral antimicrobials. Blinded observers evaluated in-hospital and 30-day postdischarge courses of patients of physicians who had been contacted by the nurse (cases) and those who had not (controls).

RESULTS

Eighty-two patient episodes (47 physicians) met study criteria. There were 53 cases and 29 controls. In 42 of 53 (79%) case episodes, physicians discontinued parenteral antimicrobials; patients' mean length of stay was 2.4 days less than for 29 control episodes (estimated cost savings was $884/patient). In 11 (21%) episodes, case physicians continued parenteral therapy; patients' mean length of stay was 1.9 days longer than for controls (estimated cost excess was $704/patient). Education, training and practice characteristics were comparable in physician groups. Severity of illness indicators and postdischarge outcomes were comparable in patient groups.

CONCLUSIONS

The major cost-saving potential for shifting from parenteral to oral antimicrobial therapy is shortened length of stay. Timely information about alternative drug therapies, offered on a patient-specific basis, appears to modify the treating behavior of physicians. The program as currently conducted is cost-effective, with an estimated net savings of $50,000 per 100 interventions.

The practical zealot. Interview by Joe Flower

In 1987, Ellen Gaucher took an unusual trip. As senior associate director of the University of Michigan's sprawling 11,000-employee Medical Center, she was invited to a conference about a movement that was rapidly growing in the word of business--total quality. The occasion was the organizational conference of the National Demonstration Project on Quality Improvement in Health Care, led by the Harvard Community Health Plan in Boston. Gaucher was skeptical at first. Total quality seemed a great way to make better cars, light bulbs, and aluminum siding, but would it work in a service industry? More to the point, would it work in an industry as complex, as critical, as pressured, as high-tech, as human, and as intellectual as healthcare? But by the second day, she says, "I was sold that this was what we had needed for a long time." She hurried back to Michigan like a missionary trekking into cannibal country. Today, not only is the University Medical Center deep in a total quality conversion experience, so is the University itself, through its president, James J. Duderstadt. He was exposed to the idea through Gaucher: In his ex-officio position as chairman of the Medical Center's board, he had experienced her vivid and enthusiastic educational efforts. Gaucher has related her intense experiences with TQ at conferences, in articles, in the 1990 book, Transforming Healthcare Organizations (winner of the Hamilton Award given by the American College of Healthcare Executives for the best book of the year) as well as the forthcoming Total Quality in Healthcare (both co-authored with Richard Coffey). (ABSTRACT TRUNCATED AT 250 WORDS)

Standards bring the vision closer to reality

A large multi-entity health system in the Midwest now processes more than 150,000 electronic claims each year. With industry-wide standards for EMC formats and edits, Franciscan Health System looks to significantly increase that number with a commensurate increase in billing efficiency.

Electronic claims are smart way to trim costs, share outcomes

Health and Human Services wants to trim the administrative fat from the country's $666 billion healthcare bill. The Hartford Foundation is letting bids for a system that allows individual communities to share healthcare data for a variety of purposes. Both efforts draw significantly on electronic media claims.

The '90s paradigm shift for electronic claims

In the development of any new industry, certain events signal a paradigm shift. Those affected by the "new way" finally seem to grasp that change is inevitable. The paradigm shift has begun for electronic claims submission.

The pros and cons of point-of-service plans

A relatively new addition to the growing list of managed care options, POS plans contain some of the cost control elements of HMOs. Yet they also allow enrollees some of the freedom of choice associated with PPOs.

Employees pay more, get more

One benefit plan shares costs with employees by increasing deductibles. But the plan also allows employees to share in the savings it creates.

Managers as social surgeons

Deals with the Health Service manager's problems of pruning staff in NHS Trust applications. Compares handling staff with a surgeon handling patients pre-, during and post-operations. Concludes that the Health Service manager must consider the key issues of communication, involvement, unambiguity and encouraging the free expression of dissent.

Prospective screening of diagnostic testing: a valuable tool

The elimination of unneeded services is a key to reducing medical costs and enhancing quality of care. Diagnostic tests have been a target of efforts to reduce costs primarily because they are discretionary and often appear to be unnecessary. Believing that the concept of prior review for many diagnostic tests is a good one, this pilot study sought to evaluate prospectively the propriety of diagnostic tests ordered during the first half of 1989 on individuals insured through a major insurance carrier. A physician review found that 21% of the tests were deemed inappropriate, leading to the conclusion that prospective review can be an effective means of screening inappropriately ordered tests.

Inventory to go: can stockless deliver efficiency?

Influenced by the Japanese management concept of "just-in-time," healthcare organizations are looking to their departmental inventories for possible cost reductions. Some organizations have developed a materials management technique known as stockless inventory, in which much of the management of an organization's supplies is switched to an outside vendor. By eliminating its storeroom and many of the staffing needs that go along with it, a hospital with a stockless inventory program can realize significant cost savings. Whether these savings offset potentially large service fees is a question each hospital must decide on its own.