Controlling inventory in a small specialty hospital

Controlling inventory in a small specialty hospital has many parallels to controlling inventory in a large, acute care hospital. However, in a specialty hospital, there seems to be a plethora of specialty items that must always be on hand in ample supply. To achieve a significant inventory reduction, a strategic plan was developed that revolved around training sessions with the materiel management team, meetings with key hospital staff, and the establishment of two prime vendor contracts. In 1991, the annual inventory value in the general storeroom was approximately $2.3 million; in 1992, the inventory value was $1.6 million, and the projected inventory value for 1993 is $1.2 million. Implementing a just-in-time program to control inventory is best achieved through a collaborative effort with all of the materiel management team feeling a sense of contribution as well as receiving recognition from hospital administration.     

San Francisco success story: merging hospitals and increasing giving

Pacific Presbyterian Medical Center and Children's Hospital of San Francisco not only pulled off a major merger but they raised total annual giving by nearly 20 percent to $9.4 million.     

Air service and urban growth: Evidence from a quasi-natural policy experiment

While significant work has been done to examine the determinants of regional development, there is little evidence on the role of air services. This paper exploits the large and swift changes to air traffic induced by the 1978 Airline Deregulation Act to identify the link between air traffic and local economic growth. Using data for 263 Metropolitan Statistical Areas (MSAs) over a two-decade time period, we estimate the effects of airline traffic on local population, income, and employment growth. Our most conservative estimates suggest that a 50-percent increase in an average city’s air traffic growth rate generates an additional stream of income over a 20-year period equal to 7.4 percent of real GDP, the equivalent of $523.3 million in 1978 dollars.     

The economic impact of superfund’s litigation on the value of the firm: An empirical analysis

The authors use a standard event-study methodology to evaluate the capital market reaction to superfund lawsuits brought against firms between 1980 and 1990. The results of the time series study indicate that the firms, on the average, suffered a statistically significant loss of 1.30 percent ($30.17 million) of their market value over the two-day event interval. The magnitude of the penalty varies among the industries examined, with the greatest impact falling on the pollution management industry. The lawsuit appears to have significant information effect, with the losses providing some indication that the lawsuits could impose costly constraints on the firms.     

The effects of Wal-Mart on local labor markets

We estimate the effects of Wal-Mart stores on county-level retail employment and earnings, accounting for endogeneity of the location and timing of Wal-Mart openings that most likely biases the evidence against finding adverse effects of Wal-Mart stores. We address the endogeneity problem using a natural instrumental variables approach that arises from the geographic and time pattern of the opening of Wal-Mart stores, which slowly spread out from the first stores in Arkansas. The employment results indicate that a Wal-Mart store opening reduces county-level retail employment by about 150 workers, implying that each Wal-Mart worker replaces approximately 1.4 retail workers. This represents a 2.7 percent reduction in average retail employment. The payroll results indicate that Wal-Mart store openings lead to declines in county-level retail earnings of about $1.4 million, or 1.5 percent. Of course, these effects occurred against a backdrop of rising retail employment, and only imply lower retail employment growth than would have occurred absent the effects of Wal-Mart.     

Agency costs in U.S. manufacturing: An empirical measure using X-efficiency

By adapting the concept of X-inefficiency, the deadweight cost associated with agency problems is estimated for U.S. manufacturing industry. X-inefficiency theory postulates that agent’s opportunistic behavior will lead to second-best outcomes in imperfect markets. When the methodology is applied to the 1986/87 fiscal year, thirty industries are identified as X-inefficient. The total deadweight agency cost generated by these industries amounts to some $76 million. On average, in any given industry, agency costs represent two-tenths of one percent of that industry’s annual sales.     

Airline flight networks, cycle times, and profitability: 2004–2006

This research investigates the relationships between airline flight networks, aircraft cycle times, and carrier profitability for ten large US domestic airlines. We find that direct point-to-point flight networks and short cycle times are operational factors that airlines should exploit to improve profitability. These findings are based on the analysis of 11.9 million flight records from 2004 through 2006. The results contradict earlier research validating performance advantages of hub-and-spoke flight networks. Today, the advantages of passenger consolidation at hub airports are lost to lower aircraft utilization and productivity problems created by the extended cycle times at hubs. We also find that airline operating profit can be increased by improving the efficiency of the aircraft turnaround process and decreasing aircraft fleet complexity. This research also provides an estimate of the marginal opportunity cost of ground time. A 1-min reduction in aircraft fleet ground time increases the average sized carriers’ operating income by $12 to $18 million.     

Relative prices and electronic substitution: Changes in household-level demand for postal delivery services from 1986 to 2004

This paper quantifies the extent to which the shift in the aggregate household-level demand for postal delivery services can be attributed to the appearance of alternative modes of communication versus the concomitant rise in postal prices. We find that both recent postal price increases and the penetration of personal computer technology among US households led to similar reductions in postal expenditure. We further find that a 5% postal price increase, such as the one introduced in January 2006 reduces revenue collected from US households by $215 million and imposes an aggregate welfare loss on US households of $333 million.     

Sovereignty, Separation and Risk Premiums

This study investigates the risk premia of Canadian debt issuers in the U.S. capital markets under conditions of sovereignty stress. In particular, the impact of separatist activity is considered. The incidence of separation news around the sale of debt issues is associated with a specific increase in the proceeds yield or cost to the issuer, but not the market yield. Debt issues by Quebec parties within the separation news event window had an added cost. The added cost is estimated at more than 0.56% to the issuer or about $1.30 million per average $230.77 million issue. These costs are additional fees that are paid to the investment banking syndicate, but these do not increase the yield to the investors. Brown, Durbin and Evans (BDE) recursive residuals tests support the hypothesis of structural changes over time in the pricing process. Debt issues from other countries facing political risk may be priced in a similar manner.     

Forecast Summary

The forecast illustrates the costs and benefits of joining the ERM at the relatively high central parity of DM2.95. It shows that, providing the government does keep the pound within its wide 6 per cent EMS band, retail price inflation can be brought down to the average European level of 3 per cent by the mid 1990s. But there is a cost in terms of lower output and rising unemployment. GDP growth is expected to slow to about 1 1/2per cent this year and next and to average 2 per cent or slightly more from 1992 onwards. This is less than the rate of growth of productive potential and implies a weak labour market with unemployment rising steadily bock above 2 million. The forecast assumes a $25 oil price; in an alternative we sketch out the implications of a rise in the price to $45 for a limited period.     

The market price of Low-Income Housing Tax Credits

The Low-Income Housing Tax Credit (LIHTC) program awards a subsidy to private developers who construct and operate housing units with income-targeted rent controls for at least 15 years. The program allocated $6.6 billion to developers in 2006, and over 1.6 million units have been subsidized under the program since its inception in 1987. A historical literature suggests place-based housing subsidies, such as the LIHTC program, will be more expensive in providing the same level of housing support to the poor than tenant-based strategies (i.e., housing vouchers). This paper uses an administrative data series of LIHTC subsidized properties in California to show the program encourages developers to construct housing units that are an estimated 20% more expensive per square foot than average industry estimates. It is additionally shown that due to liquidity constraints faced by LIHTC primary developers in how the subsidy is allocated, virtually all developers sell the tax credits at a substantial discount below their statutory value immediately after construction. This price is estimated to be $0.73 per $1 of tax credit, or $1.8 billion annually, as compared to alternatively allocating a lump sum grant to developers.     

A disposable choice for hospital waste

"On-site incineration is becoming an increasingly important alternative for the treatment and disposal of institutional waste. Incineration reduces the weight and volume of most institutional solid waste by 90 to 95 percent, sterilizes pathogenic waste, detoxifies chemical waste, converts obnoxious waste (such as animal carcasses) into innocuous ash, and provides a substantial reduction in off-site disposal costs, making on-site incineration highly cost effective. Many systems have payback periods of less than one year. In addition, on-site incineration reduces the need to depend on off-site disposal contractors, which, in turn, minimizes potential exposures and liabilities associated with illegal or improper waste disposal activities." At this time, the hospital has found its best method for the treatment of infectious and noninfectious medical waste. It is not a perfect method, but all current technologies have limitations. There are several promisingly innovative approaches being pursued; however, they are only in developmental stages. "Winston-Salem, Forsyth Memorial Hospital is reducing infectious wastes ... with an innovative microwave system being used for the first time in the United States. Once the waste is run through the microwave system, the infectious content is destroyed. As a result, ninety percent of the hospital's infectious waste can be sent to the local landfill, which saves more than $200,000 a year in transport and disposal costs. The hospital hopes the $650,000 German system will pay for itself in three years." It is hoped that these new technologies will progress into reliable treatment options for medical waste during the 1990s. In the meantime, our hospital will continue to pursue refinements in its on-site operation, which is already providing cost savings, improved safety, and environmental benefits.     

Competition and Conflict in the U.S. Atlantic Coast Menhaden Industry

Abstract . Fluctuations in the harvest of menhaden off the U.S. Atlantic coast, a common property resource, have caused competition and conflict among the small number of companies, two large and several small, which operate in the fishery. With no strong central management, the resource is not being exploited to the optimum and increased fishing pressure and effort bring, cyclically, a peak catch followed by contraction in catch and industry. The industry, state agencies and federal offices disagree on corrective measures. Restriction of the fall harvest off the North Carolina coast to replenish the stock would call for an extraordinary sacrifice by the North Carolina industry—costing it between $4.4 and $6.8 million to provide increases between $6.6 million and $8.4 million in gross revenues for the rest of the industry from Maine to Florida. This raises problems of equitable sharing of the burden. A bioeconomic computer model quantifies short and long run impacts that must be faced.     

Measuring Hospital Performance in the Presence of Quasi-Fixed Inputs: An Analysis of Québec Hospitals

This research proposes an approach to measure hospital performance based on a generalization of Banker and Morey (1986) and Førsund (1996). This approach considers quasi-fixed inputs explicitly, calculates their implicit cost, and quantifies returns to scale. The performance measure is decomposed into allocative and technical inefficiencies. Based on a very complete data set of Québec hospitals, we find that significant inefficiencies of up to 17% ($700 CAN million) could have been saved through improved performance. Postestimation analyses that include qualitative measures of care suggest that differences in performance are attributable to differences in management or unobservable quality of care rather than patient case mix.     

Labour supply and commuting time: An empirical study

We estimate a simple labour supply model that incorporates commuting time in a utility maximizing framework. Housing prices are assumed to vary with commuting time, and the elasticity of housing prices with respect to the latter is estimated to be about 10 percent. Using this elasticity estimate the price of commuting time averaged over all individuals is $3.22 while the wage rate is $4.72; thus commuting time is implicitly valued at about two-thirds of the wage rate on average. As far as work hours are concerned, almost all individuals are on the backward bending part of their labour supply curve.     

Employer responses to disability: Preliminary evidence and a research agenda

Representatives from 50 New Jersey private-sector businesses that had accommodated one or more workers with disabilities were interviewed about their experiences. This purposive sample included large and small businesses from a variety of industries located in every section of the state. Respondents were asked about the nature of the individual’s disability, how the accommodation was determined, what accommodations were considered and implemented, the costs of the accommodations, their success, and the performance level of the accommodated individual. Most respondents reported positive experiences in hiring, accommodating, and evaluating the performance of workers with disabilities. Fifty-four percent of the respondents who made accommodations reported that the accommodations cost nothing; another 16% spent less than $500 on the accommodation. Because so little research exists on the subject of accommodating workers with disabilities, a research agenda is proposed.     

The impact of reshoring decisions on shareholder wealth

Interest in reshoring, defined as the return of manufacturing and service operations from previously offshored locations to the U.S., has gained momentum recently. Yet, there is no academic evidence on the shareholder value implications of reshoring decisions. This paper analyzes the shareholder wealth effects of 37 reshoring decisions announced by U.S. firms during 2006–2015. Our results indicate that reshoring announcements result in positive abnormal stock returns. Mean (median) abnormal stock returns on reshoring announcements are 0.45% (0.29%), corresponding with a mean (median) market value change of $322.57 million ($31.60 million). Our findings imply that the benefits associated with the reshoring tend to outweigh the costs. This finding is relevant for firms faced with the decision of whether to move business activities from offshore to domestic locations. It is also of interest to policy makers who may seek to further stimulate the reshoring phenomenon.     

How robots change the world

• ? The global robotics revolution is rapidly accelerating, as fast‐paced technological advances converge. This will transform robots’ capabilities and their ability to replace human workers, including in services where robot use is also set to rise steeply.
• ? The global stock of industrial robots multiplied three‐fold over the past two decades, to 2.25 million. Trends suggest it will multiply even faster in the next 20 years, reaching as many as 20 million by 2030, with 14 million in China alone.
• ? The rise of the robots will boost productivity and growth, and create new jobs, some in yet‐to‐exist industries. We estimate a 30% rise in robot installations by 2030 would create around $5 trillion in additional global GDP in today's prices.
• ? But existing business models will be disrupted and jobs lost – we estimate up to 20 million manufacturing jobs by 2030. Each new industrial robot eliminates 1.6 manufacturing jobs on average and almost twice that in low‐skilled regions.
• ? Job losses will vary greatly across countries and regions, with the toll falling disproportionately on lower‐skilled workers and on poorer local economies, aggravating social and economic stresses. The challenges for governments and policy‐makers are daunting at a time of already growing political polarisation

     

Case study: Targeting demand-side management for electricity transmission and distribution benefits

This paper shows how a vertically integrated utility develops a least-cost transmission and distribution (T&D) plan that considers demand-side management (DSM) to defer capacity expansion necessary for serving growing demand. The plan is the result of applying dynamic optimization techniques to a T&D planning area in the service territory of Pacific Gas and Electric Company (PG&E), the largest privately owned utility in the USA. In the case study area alone, DSM enables PG&E to reduce the present value of its planned investment in local T&D from $112.3 million to $77.3 million over a 20-year period.     

Overpaid CEOs got FDIC debt guarantees

From 2008 to 2009, the FDIC guaranteed hundreds of billions of dollars of newly issued bank debt through the Temporary Liquidity Guarantee Program (TLGP). We find that CEOs making more than their peer groups were significantly more likely to steer their companies to obtain federal guarantees for their banks’ debt. The average bank in our sample with a debt guarantee had a CEO who was paid $1.6 million per year more than the average CEO in his or her peer group. In addition, there is evidence that large, systemically important banks were more likely to obtain FDIC debt guarantees.