The costs of hospital at home: the case of the New Brunswick extra-mural hospital

Policy markers in number of countries have become concerned in recent years about steadily rising costs of hospital treatment. One approach which has been proposed involves moving some treatment out of traditional hospitals by making greater use of clinics and home care. The New Brunswick Extra Mural Hospital is a province-wide system designed to treat certain classes of patient at home rather than in hospitals. Its decentralized sturucture raises questions about coordination and control, and whether a single cost function can be said to exist for the whole system. This paper estimates a cost function for the Extra Mural Hospital and tests for structural differences across geographically separated delivery units. The results indicate that the system has been successful in maintaining a common cost sturcture, supporting the view that a decentralized hospital-at-home system can be run efficiently.     

The costs of behavioral health care coverage

Psychiatric and chemical dependency conditions can have significant financial implication for plan sponsors, but a variety of mechanisms are available to control these costs. The application of appropriately designed and implemented benefit designs in combination with managed behavioral health care protocols can have a significant return on investment for the plan sponsor.     

On the welfare implications of firing costs

This is a paper on the theory of institutions. It provides a rationale for the presence of firing costs in OECD countries based on a market failure that takes the form of an externality. Workers have firm-specific and industry-specific skills, and in each period there is a nonzero probability that a worker quits. The quitting probability makes the private discount rate (used by firms in making decisions about firing workers) higher than the social discount rate. This generates a “quitting externality”, where firms lay off too many workers in a recession. Firms are too quick to dispose of their human capital in a cyclical downturn because it is of less value to them than it is to society. State-mandated redundancy payments become a second-best remedy to overcome the market failure.     

Managing health care costs in the small business environment

Managed care is bringing down health care costs. But few small business employers find the time to manage their own health, much less that of their employees. Despite time constraints and other factors, small business employers need to embrace managed care. A critical first step is to encourage and support the implementation of important medical management initiatives.     

Quantifying the defensive medicine contribution to primary care costs

Background:

Defensive medicine represents one cause of economic losses in healthcare. Studies that measured its cost have produced conflicting results.

Objective:

To directly measure the proportion of primary care costs attributable to defensive medicine.

Research design and methods:

Six-week prospective study of primary care physicians from four outpatient practices. On 3 distinct days, participants were asked to rate each order placed the day before on the extent to which it represented defensive medicine, using a 5-point scale from 0 (not at all defensive) to 4 (entirely defensive).

Main outcome measures:

This study calculated the order defensiveness score for each order (the defensiveness/4) and the physician defensive score (the mean of all orders defensiveness scores). Each order was assigned a weighted cost by multiplying the total cost of that order (based on Medicare reimbursement rates) by the order defensiveness score. The proportion of total cost attributable to defensive medicine was calculated by dividing the weighted cost of defensive orders by the total cost of all orders.

Results:

Of 50 eligible physicians, 23 agreed to participate; 21 returned the surveys and rated 1234 individual orders on 347 patients. Physicians wrote an average of 3.6?±?1.0 orders/visit with an associated total cost of $72.60?±?18.5 per order. Across physicians, the median physician defensive score was 0.018 (IQR?=?[0.008, 0.049]) and the proportion of costs attributable to defensive medicine was 3.1% (IQR?=?[0.5%, 7.2%]). Physicians with defensive scores above vs below the median had a similar number of orders and total costs per visit. Physicians were more likely to place defensive orders if trained in community hospitals vs academic centers (OR?=?4.29; 95% CI?=?1.55–11.86; p?=?0.01).

Conclusions:

This study describes a new method to directly quantify the cost of defensive medicine. Defensive medicine appears to have minimal impact on primary care costs.     

Nursing home costs and quality of care outcomes

The relationship between cost and quality of care in nursing homes was examined using quality indicator measures of resident outcomes. While each individual quality measure makes only small contributions to costs, when considered across the facility, quality could have a substantial financial impact on the operations of the home.     

On measuring the benefits of lower transport costs

Despite large amounts invested in rural roads in developing countries, little is known about their benefits. This paper derives an expression for the willingness-to-pay for a reduction in transport costs from the canonical agricultural household model and uses it to estimate the benefits of a hypothetical road project. Estimation is based on novel cross-sectional data collected in a small region of Madagascar with enormous, yet plausibly exogenous, variation in transport cost. A road that essentially eliminated transport costs in the study area would boost the incomes of the remotest households – those facing transport costs of about $75/ton – by nearly half, mostly by raising non-farm earnings. This benefit estimate is contrasted to one based on a hedonic approach.     

The impact of frailty on the economic evaluation of geriatric surgery: hospital costs and opportunity costs based on meta-analysis

Abstract

Objectives: We used a systematic review and meta-analysis to analyze the difference in costs between surgery for frail and non-frail elderly patients. The opportunity cost of frailty in geriatric surgery is estimated using the results.

Methodology: Two literature reviews were carried out between 2000 and 2019: (1) studies comparing total hospital costs of frail and non-frail surgical patients; (2) studies evaluating the length of hospital stay and cost for surgical geriatric patients. We performed a meta-analysis of the items selected in the first review. We subsequently calculated the opportunity cost of frail patients, based on the design of a cost/time variable.

Results: Twelve articles in the first review were selected (272,717 non-frail and 16,461 frail). Fourteen articles were selected from the second review. Frail patients had higher hospital costs than non-frail patients (22,282.541 € and 16,388.844, p?<?.001) and a longer hospital stay (10.16 days and 8.4 (p?<?.001)). The estimated opportunity cost in frail patients is 1,019.56 € (cost/time unit factor of 579.30 €/day).

Conclusions: Frail surgical geriatric patients generate a higher total hospital cost, and an opportunity cost arising from not operating in the best possible state of health. Preoperatively treating the frailty of elderly patients will improve the use of health resources