What's behind the health expenditure trends?

Drivers of healthcare expenditure growth in West Africa: A panel data investigation

Per capita health expenditure in West African countries appears to have assumed a growing trend over the years. This may not be unconnected with the critical role played by health in economic growth, sustainable development and human capital formation. This study analysed drivers of healthcare expenditure in West Africa, using panel data analysis. Random Effects estimating technique was preferred to pooled Ordinary Least Squares and Fixed Effects techniques based on Hausman and Breusch-Pagan Lagrangian multiplier tests. Data employed were sourced from World Bank's world development indicators. The findings indicated that number of people using at least basic sanitation services, incidence of tuberculosis, malaria incidence, and per capita GDP, significantly increased healthcare expenditure in West Africa within the study period. Infant and under-five mortality (UFM) rates raised healthcare expenditure but insignificantly in the sub-region. The study recommends the need to reduce malaria and tuberculosis incidences as well as UFM rate in West Africa through appropriate policy enactment. Such policies should include adequate investment in education, increased per capita income, development of malaria vaccines, maintenance of hygienic environment and free treatment of tuberculosis patients.

Failure to rescue as a patient safety indicator for neurosurgical patients: are we there yet? A systematic review

Failure to rescue (FTR) is a standardized patient safety indicator (PSI-04) developed by the Agency for Healthcare Research and Quality (AHRQ) to assess the ability of a healthcare team to prevent mortality following a major complication. However, FTR rates vary and are impacted by non-modifiable individual patient characteristics such as baseline frailty. This raises concerns regarding the validity of FTR as an objective quality metric, as not all patients have the same baseline frailty level, or physiological reserve, to recover from major complications. Literature from other surgical specialties has identified flaws in FTR and called for risk-adjusted metrics. Currently, knowledge of factors influencing FTR and its subsequent implementation in neurosurgical patients are limited. The present review assesses trends in FTR utilization to assess how FTR performs as an objective neurosurgery quality metric. This review then proposes how FTR may be best modified to optimize use in neurosurgical patients. A PubMed search was performed to identify articles published until August 9, 2023. Studies that reported FTR as an outcome in patients undergoing neurosurgical procedures were included. A qualitative assessment was performed using the Newcastle Ottawa Scale (NOS). The initial search revealed 1232 citations. After a title and abstract screen, followed by a full text screen, 12 studies met criteria for inclusion. These articles measured FTR across a total of 764,349 patients undergoing neurosurgical procedures. Five studies analyzed FTR with regard to hospital characteristics, and three studies utilized patient characteristics to predict FTR. All studies were considered high quality based on the NOS. Modifications in criteria to measure FTR are necessary since FTR depends on patient characteristics like frailty. This would allow for the incorporation of risk-adjusted FTR metrics that would aid in clinical decision making in neurosurgical patients.

The Effect of Primary Care Visits on Total Patient Care Cost: Evidence From the Veterans Health Administration

BACKGROUND

Since the 1980s, primary care (PC) in the US has been recognized as the backbone of healthcare providing comprehensive care to complex patients, coordinating care among specialists, and rendering preventive services to contain costs and improve clinical outcomes. However, the effect of PC visits on total patient care cost has been difficult to quantify.

OBJECTIVE

To assess the effect of PC visits on total patient care cost.

METHODS

This is a retrospective study of over 5 million patients assigned to a PC provider in the Veterans Health Administration (VHA) in each of the 4 fiscal years (FY 2016-2019). The main outcome of interest is total annual patient care cost. We assessed the effect of primary care visits on total patient care cost first by descriptive statistics, and then by multivariate regressions adjusting for severity of illness and other confounders. We conducted in-depth sensitivity analyses to validate the findings.

RESULTS

On average, each additional in-person PC visit was associated with a total cost reduction of $721 (per patient per year). The first PC visit was associated with the largest savings, $3976 on average, and a steady diminishing return was observed. Further, the higher the patient risk (severity of illness), the larger the cost reduction: Among the top 10% of high-risk patients, the first PC in-person visit was associated with a reduction of $16 406 (19%).

CONCLUSIONS

These findings, substantiated by our exhaustive sensitivity analyses, suggest that expanding PC capacity can significantly reduce overall health care costs and improve patient care outcomes given the former is a strong proxy of the latter.

Administrative costs in health care-A scoping review

BACKGROUND

Administrative costs (AC) are a relevant spending category in health care, and several approaches exist on how to define and measure them. Based on available AC studies, this paper aims to provide a map for this multifaceted research topic.

METHODS

A scoping review was conducted using the databases MEDLINE, EconLit, and Business Source Premier. Literature was screened focussing on the research question: What is known about the methodology of AC research from scientific publications?

RESULTS

Definition concepts mostly rely on national cost documentations. The international cost reporting framework of the Systems of Health Accounts was a critical reference point in six studies. Indications on how to operationalise AC independently from periodical cost reports were suggested by ten publications. In this context, time and full time equivalents are the most common cost measurements.

CONCLUSIONS

The results indicate a lack of evidence regarding patients' perceptions of administrative issues in health care. Also, research on administrative impact on working conditions for health care employees beyond hospitals and physicians' offices is underrepresented. A systematic approach to reporting AC studies is needed. Reporting should include the appointment of entities actually empowered to change administrative resource usage. This would help to promote principles of a balanced administration.

Factors Associated With Increases in US Health Care Spending, 1996-2013

IMPORTANCE

Health care spending in the United States increased substantially from 1995 to 2015 and comprised 17.8% of the economy in 2015. Understanding the relationship between known factors and spending increases over time could inform policy efforts to contain future spending growth.

OBJECTIVE

To quantify changes in spending associated with 5 fundamental factors related to health care spending in the United States: population size, population age structure, disease prevalence or incidence, service utilization, and service price and intensity.

DESIGN AND SETTING

Data on the 5 factors from 1996 through 2013 were extracted for 155 health conditions, 36 age and sex groups, and 6 types of care from the Global Burden of Disease 2015 study and the Institute for Health Metrics and Evaluation's US Disease Expenditure 2013 project. Decomposition analysis was performed to estimate the association between changes in these factors and changes in health care spending and to estimate the variability across health conditions and types of care.

EXPOSURES

Change in population size, population aging, disease prevalence or incidence, service utilization, or service price and intensity.

MAIN OUTCOMES AND MEASURES

Change in health care spending from 1996 through 2013.

RESULTS

After adjustments for price inflation, annual health care spending on inpatient, ambulatory, retail pharmaceutical, nursing facility, emergency department, and dental care increased by $933.5 billion between 1996 and 2013, from $1.2 trillion to $2.1 trillion. Increases in US population size were associated with a 23.1% (uncertainty interval [UI], 23.1%-23.1%), or $269.5 (UI, $269.0-$270.0) billion, spending increase; aging of the population was associated with an 11.6% (UI, 11.4%-11.8%), or $135.7 (UI, $133.3-$137.7) billion, spending increase. Changes in disease prevalence or incidence were associated with spending reductions of 2.4% (UI, 0.9%-3.8%), or $28.2 (UI, $10.5-$44.4) billion, whereas changes in service utilization were not associated with a statistically significant change in spending. Changes in service price and intensity were associated with a 50.0% (UI, 45.0%-55.0%), or $583.5 (UI, $525.2-$641.4) billion, spending increase. The influence of these 5 factors varied by health condition and type of care. For example, the increase in annual diabetes spending between 1996 and 2013 was $64.4 (UI, $57.9-$70.6) billion; $44.4 (UI, $38.7-$49.6) billion of this increase was pharmaceutical spending.

CONCLUSIONS AND RELEVANCE

Increases in US health care spending from 1996 through 2013 were largely related to increases in health care service price and intensity but were also positively associated with population growth and aging and negatively associated with disease prevalence or incidence. Understanding these factors and their variability across health conditions and types of care may inform policy efforts to contain health care spending.

Impact of State Public Health Spending on Disease Incidence in the United States from 1980 to 2009

OBJECTIVE

To understand the relationship between state-level spending by public health departments and the incidence of three vaccine preventable diseases (VPDs): mumps, pertussis, and rubella in the United States from 1980 to 2009.

DATA SOURCES

This study uses state-level public health spending data from The Census Bureau and annual mumps, pertussis, and rubella incidence counts from the University of Pittsburgh's project Tycho.

STUDY DESIGN

Ordinary least squares (OLS), fixed effects, and random effects regression models were tested, with results indicating that a fixed effects model would be most appropriate model for this analysis.

PRINCIPAL FINDINGS

Model output suggests a statistically significant, negative relationship between public health spending and mumps and rubella incidence. Lagging outcome variables indicate that public health spending actually has the greatest impact on VPD incidence in subsequent years, rather than the year in which the spending occurred. Results were robust to models with lagged spending variables, national time trends, and state time trends, as well as models with and without Medicaid and hospital spending.

CONCLUSION

Our analysis indicates that there is evidence of a significant, negative relationship between a state's public health spending and the incidence of two VPDs, mumps and rubella, in the United States.

Where The Money Goes: The Evolving Expenses Of The US Health Care System

National health care expenditures constitute revenue to the health care system. However, little is known about how this revenue is distributed across sectors. This article calculates revenues and detailed expenditures for physicians' offices, hospitals, and outpatient care centers in 1997, 2002, 2007, and 2012, using a range of Census Bureau and Bureau of Labor Statistics sources. Between 1997 and 2012, spending on these three sectors rose by $580 billion, and employment rose by 1.7 million people. Just under half of all 2012 revenues were spent on labor compensation. The labor compensation share of spending declined slightly; within these sectors, the share of compensation paid to physicians and nurses increased. Although employment of nonprofessional labor grew during the study period, this group did not account for much of the sector's increased spending. The plurality of the 1997-2012 spending increase went to producers of purchased materials and services, which now account for more than one-third of payments.

Policy-Oriented Research on Improved Physician Incentives for Higher Value Health Care

Policy makers (both public and private) are seeking ways to improve the value delivered within our health care system, that is, using fewer resources to provide the same benefit to patients, or using equivalent resources to provide more benefit. One strategy is to alter the predominant fee‐for‐service (FFS) economic incentives in the current system. To inform such policy changes, this paper identifies areas in which little is known about the effects of specific incentives (FFS, salary, etc.) on the two components of value: resource use and quality. Specific suggestions are offered regarding research that would be informative for policy makers, focusing on fundamental “building block” studies rather than overall evaluations of complex interventions, such as accountable care organizations. This research would better identify critical aspects of the FFS model and salary‐based payments that are particularly problematic, as well as situations in which FFS or salary may be less problematic. The research would also explore when alternatives, such as episode‐based payment might be feasible, or simply be hypothetical solutions. The availability of electronic health record‐based data in various delivery systems would allow many of these studies to be accomplished in 3–5 years with budgets manageable by public and private funding sources.

Decomposition of the drivers of the U.S. hospital spending growth, 2001-2009

BACKGROUND

United States health care spending rose rapidly in the 2000s, after a period of temporary slowdown in the 1990s. However, the description of the overall trend and the understanding of the underlying drivers of this trend are very limited. This study investigates how well historical hospital cost/revenue drivers explain the recent hospital spending trend in the 2000s, and how important each of these drivers is.

METHODS

We used aggregated time series data to describe the trend in total hospital spending, price, and quantity between 2001 and 2009. We used the Oaxaca-Blinder method to investigate the relative importance of major hospital cost/spending drivers (derived from the literature) in explaining the change in hospital spending patterns between 2001 and 2007. We assembled data from Medicare Cost Reports, American Hospital Association annual surveys, Prospective Payment System (PPS) Impact Files, Medicare Provider Analysis and Review (MedPAR) Medicare claims data, InterStudy reports, National Health Expenditure data, and Area Resource Files.

RESULTS

Aggregated time series trends show that high hospital spending between 2001 and 2009 appears to be driven by higher payment per unit of hospital output, not by increased utilization. Results using the Oaxaca-Blinder regression decomposition method indicate that changes in historically important spending drivers explain a limited 30% of unit-payment growth, but a higher 60% of utilization growth. Hospital staffing and labor-related costs, casemix, and demographics are the most important drivers of higher hospital revenue, utilization, and unit-payment. Technology is associated with lower utilization, higher unit payment, and limited increases in total revenue. Market competition, primarily because of increased managed care concentration, moderates total revenue growth by driving lower unit payment.

CONCLUSIONS

Much of the rapidly rising hospital spending growth in the 2000s in the United States is driven by factors not commonly known or well measured. Future studies need to explore new factors and dynamics that drive longer-term hospital spending growth in recent years, particularly through the channel of higher prices.

Evidence links increases in public health spending to declines in preventable deaths

Public health encompasses a broad array of programs designed to prevent the occurrence of disease and injury within communities. But policy makers have little evidence to draw on when determining the value of investments in these program activities, which currently account for less than 5 percent of US health spending. We examine whether changes in spending by local public health agencies over a thirteen-year period contributed to changes in rates of community mortality from preventable causes of death, including infant mortality and deaths due to cardiovascular disease, diabetes, and cancer. We found that mortality rates fell between 1.1 percent and 6.9 percent for each 10 percent increase in local public health spending. These results suggest that increased public health investments can produce measurable improvements in health, especially in low-resource communities. However, more money by itself is unlikely to generate significant and sustainable health gains; improvements in public health practices are needed as well.

Japan’s Health Care System: Containing Costs And Attempting Reform

As Japan's economy declined, more intensive control of prices and even volume through the fee schedule, plus increases in various copayment rates, led to an actual reduction of medical spending in 2002 for the first time in history. To augment established mechanisms of cost containment, case-mix-based inclusive fees for inpatient care were introduced in university hospitals in 2003 and are planned for subacute and long-term care. However, substantial reform, including the introduction of market-based medicine, is not likely to occur in other areas. Progress in making the delivery system more accountable to patients has been meaningful but slow.