Public and Private Provision of Health Care

One of the mechanisms that are implemented in the cost containment movement in the health care sectors in western countries is the definition, by the third-party payer, of a set of preferred providers. The insured patients have different access rules to such providers when ill. The rules specify the copayments patients must pay when using an out-of-plan care provider. This paper studies the competitive process among providers in terms of both prices and qualities. Competition is influenced by the status of providers as in-plan or out-of-plan care providers. Also, there is a moral hazard of provider choice related to the trade-off between freedom to choose and the need to hold down costs. It is possible to achieve the first-best allocation by an appropriate definition of the reimbursement scheme when decisions on prices and qualities are taken simultaneously (as in primary health care sectors). In contrast, some type of regulation is needed to achieve the optimal solution when decisions are sequential (as in specialized health care sectors). We also derive normative conclusions on how price controls should be implemented in some European Union member states.     

Factors to consider in the delivery of quality services by hospitals

The focus of any health care provider, such as a hospital, is on assessing and improving the well-being of the people in the system's target area, and it is this focus that differentiates health care providers from other enterprises. The purpose of this article is to identify the essential factors in the delivery of quality services by hospitals. These factors include patients' active participation in their delivery, the nature of the clinical procedures, and the management of the interaction of all the customers involved in the process.     

Network Incentives in Managed Health Care

This paper introduces a theory of network incentives in managed health care. Participation in the plan's network confers an economic benefit on providers; in exchange, the plan expects compliance with its protocols. The network sets a target for the number of outpatient visits in an episode of care. A provider failing to satisfy the target may be penalized by the plan's attempt to direct patients to other providers within its network. There is an equilibrium in which every provider in the network uses the target. We test the theory by observing behavior of providers before and after the introduction of managed mental health care in a large, employed population. Managed care consisted of price reductions, utilization review, and creation of a network. Quantity per episode of care fell sharply after initiation of managed care. We identify a network effect in our empirical work. The results indicate that in this case, network incentives account for most of the quantity reduction due to managed care.     

A healthy bottom line and quality patient care: can they coexist?

In summary, it is the writer's opinion that a healthy bottom line and quality patient care can coexist. With today's economic pressures and with more and tighter controls and regulations being imposed by the government and regulatory agencies, providers (especially hospitals) need to be cost efficient and cost effective. Will the cost-containment measures necessary to maintain a healthy bottom line reduce the quality of patient care? They needn't. In point, such measures might actually increase the quality of care by avoiding wasteful clinical practices. Quality patient care comprises three basic elements: value, service, and compassion. To omit any one of these ingredients is to remove the quality from patient care. Should this happen, no cost-containment measure will be enough to sustain a hospital. Financial accountability is essential; quality care is imperative. Blended together thoroughly, they are the recipe to survival--for the hospital and for the patient.     

Design of financial incentives and payment schemes in healthcare systems: A review

In this paper, we review the existing studies on the design of financial incentives and payment mechanisms for healthcare service providers, which have been published in the literature of operations research & management science. We classify these studies in two ways: first, by the care provider focused on: physicians or hospitals; and next, by categorizing payment/incentive schemes as retrospective or prospective models under each care provider group. The problem setting, including the geographic background and research methodology, are briefly discussed for each paper, as are the findings with regard to accessibility, quality, efficiency, and the facilitation of integration and collaboration, if reported. We also provide a detailed discussion of potential research problems that would offer promising avenues for future study.     

Provider Competition in a Dynamic Setting

We examine provider and patient behavior in a dynamic model where effort is noncontractible, competition between providers is modeled in an explicit way and where patients' outside options are solved for in equilibrium. Physicians are characterized by an individual-specific ethical constraint which allows for unobserved heterogeneity. This introduces uncertainty in the patient's expected treatment if he were to leave his current physician to seek care elsewhere. We also introduce switching costs and uncertainty in the treatment–outcome relationship. Our model generates equilibria with treatment heterogeneity, unstable physician–patient relationships, and overtreatment (a form of defensive medicine).     

An innovative mobile approach for patient safety services: The case of a Taiwan health care provider

As the importance of patient safety increases for hospital management, many health care providers have begun to use innovative mobile technology to make their procedures more accurate and efficient, and to reduce the risk of human error. This paper explores an innovative mobile approach for patient safety and health care services in a Taiwan hospital, where a web-based patient safety services (PSS) system was implemented to enhance the efficiency of diagnosis and patient safety. The functions and operating procedures of the PSS system are introduced. Furthermore, the contributions of the PSS system over a six-month period of clinical use are analyzed. Finally, the managerial implications of mobile PSS are discussed.     

对第三方物流的决策因素及决策形式的探讨

高效的第三方物流活动在增强企业核心竞争力、提高增值服务水平、降低物流成本、优化内外资源等方面都起着不可替代的作用。但第三方物流这些作用能否得以充分发挥很大程度上取决于第三方物流供应商的水平和实力,而目前现有的评价选择方法又有一定局限,所以能否建造有效的第三方物流供应商的选择模型、能否选择合适的第三方物流供应商成为企业物流业务外包成败的关键,这也是很有现实意义又亟待解决的问题。     

A case history: forging a "reusable" alliance

This article presents the focus of partnerships in the future of health care providers. It discusses the necessity for partnerships as well as the mutual benefits that must be a vital part of the relationship. The article also shows specific information about and outlines the value of a specific partnership between the Medical Center of Central Georgia and Medline Industries. The future of health care delivery and reform will depend on different types of partnerships and that all the providers of services and products, as well as health care delivery, must be willing to aggressively align with partners.     

Exclusivity and Control

We model competition between content distributors (platforms) for content providers, and show that whether or not content is exclusive or “multihomes” depends crucially on whether or not content providers maintain control over their own pricing to consumers: if content providers sell their content outright and relinquish control, they will tend to be exclusive; on the other hand, if content providers maintain control and only “affiliate” with platforms, then multihoming is sustainable in equilibrium. We show that the outcome under affiliation depends on the tradeoff between platform rent extraction (which increases in exclusivity) and content rent extraction (which increases in multihoming), and demonstrate that the propensity for exclusivity can be increasing, decreasing, or even nonmonotonic in content quality. Finally, if a content provider internalizes the effect of its own price on platform demand, we prove that a platform that already has exclusive access to content may prefer to relinquish control over content pricing to the content provider in order to reduce price competition at the platform level.     

Bringing the employer back in: why social care needs a standard employment relationship

Quality social care requires a quality workforce but the normal route for workforce development, through strong HR policies and good quality employment relationships, has not been promoted by current social care policy. Through a study of one local authority and five of its domiciliary care providers, including public, for‐profit and not‐for‐profit concerns, this article demonstrates that even standard basic employment guarantees may not be available to domiciliary care staff. Much of the responsibility for these conditions is found to lie with the contracting conditions under which the independent providers operate. Employers still provide some basic coordination and protection functions for staff in this highly fragmented sector but future plans for user‐driven care may further weaken the employers' role. Instead policymakers should seek to underpin quality improvement programmes by the creation of conditions in which strong employment relationships are able to be forged.     

Quality competition with motivated providers and sluggish demand

We study incentives for quality provision in markets where providers are motivated (semi-altruistic); prices are regulated and firms are funded by a combination of block grants and unit prices; competition is based on quality, and demand adjusts sluggishly. Health or education are sectors in which the mentioned features are the rule. We show that the presence of motivated providers makes dynamic competition tougher, resulting in higher steady-state levels of quality in the closed-loop solution than in the benchmark open-loop solution, if the price is sufficiently high. However, this result is reversed if the price is sufficiently low (and below unit costs). Sufficiently low prices also imply that a reduction in demand sluggishness will lead to lower steady-state quality. Prices below unit costs will nevertheless be welfare optimal if the providers are sufficiently motivated.     

Risk allocation in service triads – The case of Dutch and Finnish home care procurement

We compare how Finland and the Netherlands organize home care services, both in legislation and in procurement practices, from a service triad risk perspective. We find Finnish public bodies rely to a great extent on inhouse provision and hybrid outsourcing. Dutch public bodies rely completely on outsourcing, using framework agreements with many care providers in parallel. Incentives used in contracts affect financial and service quality risks assumed by buyers, suppliers, and end-customers in the triad. This research improves our understanding of risk allocation among the actors in the service triad based on buyer decisions on outsourcing and supply market conditions. The risk profiles for all three actors in the home care service triad are affected by the manner in which public bodies outsource home care services: the purchasing practices. The delivery method (whether public and private or all private) and the number of providers impact the information position of the municipality versus the care provider in the triad.     

试论服务业差异化竞争模式与服务标准化

服务商对差异化竞争战略的选择主要受制于博弈双方目标客户群体的交叉程度、服务商与目标客户群体的信息对称程度两大因素。按两大因素的状态进行组合,可得到服务商竞争关系矩阵图。服务商要降低来自其他服务商的竞争强度,就必须提高自身产品的差异化程度,提高与目标客户群体的信息对称程度,搞好与目标客户群体的信息沟通,加强服务业的标准化建设。     

Getting to go in managed care

The challenge for leadership and the required changes are great. Our personal limitations include a limited view of the world and the threat of an overwhelming risk if one gets too far out on the limb. "Getting to go" will open up new and strange territories that will provide opportunity and failure for leaders. Capable leaders will pursue the opportunity. Threatened leaders will resist the change. For those leaders who feel that the managed care existing today provides the most cost-effective, quality outcome for the individual, his or her sponsor in the community, they will go no further. Unfortunately for many of us, managed care means a third party trying to micromanage patients (deductions, authorizations, and so on), employers (claims, incentives, and so forth), and providers (approvals, forums, payment, tricks, and the like). Providers need to go ahead and master efficient care. We owe that to the community and the third party nightmare of administrative overkill must be laid to rest. For those healthcare leaders who believe that managed care as a system focused on improving the health status of our communities is superior to our existing system, their individual goals and leadership focus must be changed accordingly. We cannot sit by idly and wait for the system to change us. Instead our obligation is to lead our organizations toward a new era in health care.     

Provision and price of child care services: For-profits and nonprofits

We study the market for child care services, with a special focus on examining competition between for- and nonprofits. We estimate a two-stage oligopoly model of product differentiation. The first stage estimates a model of endogenous market structure and the second stage corrects for market structure to examine the prices charged and capacity choices for child care centers. We find that the actions of “same-type” providers have a statistically significant impact on a provider’s entry and pricing decisions but we fail to find evidence that the actions of “other types” have a significant impact. Nonprofit child care providers and Head Start centers do not appear to crowd out for-profit providers. Further, we find that for-profits and nonprofits respond differently to market characteristics generating spatial differences in the types of center available in a market. Our data suggest that for-profits are more likely to enter markets with higher percentages of economically disadvantaged students, but they primarily serve those who work, rather than live, in the market. The prevalence of disadvantaged students does not impact the entry decision of nonprofits leaving disadvantaged areas with relatively fewer non-profit options to serve residents. Policies to encourage for-profit daycare would likely lead centers to locate in markets where they can provide service for workers, whereas a policy to encourage nonprofit entry might be more effective in providing low cost care for nearby residents.     

The influence of authentic leadership behaviors on trust and work outcomes of health care staff

A key element of a healthy work environment is trust: trust between staff and their leaders. Authentic leadership is proposed as the core of effective leadership needed to build trust because of its clear focus on the positive role modeling of honesty, integrity, and high ethical standards in the development of leader‐follower relationships. A model linking authentic leadership behaviors with trust in management, perceptions of supportive groups and work outcomes (including voice or speaking‐up behavior, self‐rated job performance, and burnout) using secondary analysis procedures was examined. The hypothesized model was tested using structural equation modeling in two samples of health care employees from a western Canadian cancer care agency: clinical care providers including nurses, pharmacists, physicians, and other professionals (N = 147) and nonclinical employees including administrative, support, and research staff (N = 188). Findings suggest that supportive leader behavior and trust in management are necessary for staff to be willing to voice concerns and offer suggestions to improve the workplace and patient care.     

Exclusionary Equilibria in Health-Care Markets

We have demonstrated that when providers of health insurance are perceived to be differentiated by consumers, circumstances may arise under which they find it advantageous to restrict the set of health-care providers that they approve to their customers. Even if all health-care providers are equally qualified and efficient, payers may choose to contract with a selected subset of them in order to secure more favorable contract terms. Moreover, in a concentrated health-care market that consists of two health insurance companies (payers) and two health-care providers (hospitals), both payers may choose to contract with only one of the hospitals while excluding the other completely from the market. When consumers' valuation of an extended choice of providers is small in comparison with the extent of differentiation that exists between the payers, such an exclusionary outcome is the unique equilibrium of the game.     

Crowding Out Informal Care? Evidence from a Field Experiment in Germany*

This article evaluates the effects of a consumer‐directed home care programme (Personal Budgets) compared with the standard home care programmes of the German long‐term care insurance (LTCI). The evaluation makes use of a random assignment into a treatment group receiving personal budgets and a control group receiving either in‐kind benefits (agency care) or cash payments. Compared with agency care, personal budgets extend the support by independent providers, but leave health outcomes unchanged. Compared with cash payments, personal budgets tend to improve health outcomes, but double LTCI spending due to a strong crowding out of informal care by formal care.     

SIPP and health care issues.

There are three major areas in health care policy which can be addressed by the data elements in the Survey of Income and Program Participation (SIPP): (1) health insurance coverage and the stability of insurance over time; (2) health disability and its relationship to socioeconomic variables, including unemployment, over time; and (3) health care utilization. The survey does not, however, include information on health care expenditures or on details of visits to providers.