Comment on these two:
1.
Several cost control strategies include:
Controlling price inflation.
Eliminating ineffective and inappropriate care.
Administrative waste.
Innovation and cost-saving.
Ounces of prevention &. Prioritization and analysis of cost-effectiveness (Bodenheimer & Grumbach, 2016 pp 99-102).
Focusing on Eliminating ineffective care, as a past Maternity nurse, C-section patients spent 7-10 in the hospital vs. now 2-3 days and more if an incident comes up. Then, vaginal deliveries were 3-5 days; now, less than 24 hours can be the standard.
A key strategy used to contain hospital expenses during the 1980s was to reduce the total number of admissions and average lengths of stay. Evaluating the extent of the savings achieved, the effect of the cuts on the rate of increase in costs, and the prospects for future savings through reductions in the number of days patients spend in the hospital, inpatient days (Schwartz & Mendelson, 1991).
In the 1980s, both the private sector and the federal government strenuously tried to contain the continuing rise in the costs of hospital care. An essential part of their strategy has been eliminating unnecessary hospital days and moving as much care as possible from inpatient to outpatient settings. As a result of these efforts, the annual number of days patients spent in the hospital (inpatient days) dropped, and the rate of increase in costs has been slowed (Schwartz & Mendelson, 1991).
“During the five-year period immediately before 1982, the average annual increase in hospital costs was 6.1 percent. In 1982 costs rose by 8.7 percent, but by 1984 the annual increase in costs had fallen to a low of 2.2 percent. It then rose steadily, reaching 7.2 percent by 1988” (Schwartz & Mendelson, 1991).
The Impact on Hospital Costs of Reductions in the Number of Inpatient Days and Increases in Outpatient Visits, 1982 through 1988 (Schwartz & Mendelson, 1991).
“As the number of inpatient days had fallen, the number of outpatient visits to the hospital has risen, shows the effect of this phenomenon on costs; the reduction in costs due to fewer inpatient days is plotted downward, whereas the offsetting increase in costs from increased visits for ambulatory care is plotted upward. We used annual data from the AHA1 to calculate the increase in outpatient costs and adjusted for economy-wide inflation as described above” (Schwartz & Mendelson, 1991). The rise in costs due to the increase in outpatient visits remained at around 1.2 percentage points a year between 1984 and 1988 (Schwartz & Mendelson, 1991).
“A broad array of interventions have been developed to decrease the length of stay (LOS), and they differ in design, intent, and focal point. While some interventions primarily aim at improving clinical care (ERAS,4-6 clinical pathways,7, and early patient mobility programs8), other approaches address logistical factors (care coordination, transition and discharge planning,9-11 case management,12 medication management,13, or specialized units for high-risk populations14,15). Other interventions target the workforce, such as multidisciplinary care teams16 or redesigned staffing models” (Interventions To Decrease Hospital Length of Stay 2020).
Reducing time in the hospital could increase concerns about the risk of readmission or shifting costs of care. Conversely, interventions could be ineffective in lowering LOS but yield significant improvements in other patient-centered outcomes, such as patient satisfaction (Interventions to Decrease Hospital Length of Stay 2020).
References
Bodenheimer, T., & Grumbach, K. (2016). Understanding health policy: a clinical approach. McGraw-Hill.
Interventions To Decrease Hospital Length of Stay. Effective Health Care Program. (2020, August 24). https://effectivehealthcare.ahrq.gov/products/hospital-length-of-stay/protocol.
Schwartz, W. B., & Mendelson, D. N. (1991). Hospital Cost Containment in the 1980s. New England Journal of Medicine, 324(15), 1037–1042. https://doi.org/10.1056/nejm199104113241506
2. A cost-control strategy as an example is: the “competitive strategy”.
When considering competitive strategies that attempt to make purchases more price sensitive, it is important to consider who the purchaser of health insurance really is. For employment based health insurance, inflation of health insurance costs continued to spiral upward and economic growth slowed in recent decades, employers became more active in their approach to health insurance costs. The competitive approach to health insurance financing encourages price-sensitive purchasing by both employer and employees, the competitive strategy calls for businesses to be more aggressive in their negotiations with health plans over premium rates (Bodenheimer,T. & Grumbach, K. (2016).
Controlling health care costs requires that limits be placed either on prices, quantities of services, or both. Healthcare financing in the United States is fragmented, complex, and the most costly in the world, and often confusing approaches to financing health care requires an examination of the nation’s values and historical context, for the U.S has a long history of individualism, an emphasis on freedom to choose alternatives and an aversion to large-scale government intervention into the private realm. In the U.S., no single public entity oversees or controls the entire health care system, making the payment for and delivery of health care complex, inefficient, and expensive, the system is composed of many public and private programs that form interrelated parts at the federal, state, state, and local levels ((Bodenheimer,T. & Grumbach, K. (2016).
As a healthcare worker, my employer solely selects which type of health plans to offer us as employees. Employees then can decide to enroll in a specific plan based on the options provided. I noted that in the last 5 years, my health plan has changed 3 times and looking at the options offered, it is more beneficial for my employer as they are always finding ways to save money. As an employee, the hospital human resources team makes all employees more cost aware when selecting a health plan by limiting the amount of the insurance premium that the hospital would pay. Thus for employers, the competitive strategy calls for businesses to be more aggressive in their negotiations with health plans over premium rates. Employers bargain actively with health plans and offer only plans that keep their rates below a certain level.
Some potential effects of price controls in relation to access and health care service include: a) more services may be provided or billing practices may change to offset the reduction in providers’ revenues when prices are reduced. B) Providers may substitute other services for those whose prices are controlled. C) Price controls implemented for a specific population group (such as Medicare or Medicaid enrollees) may result in higher prices charged or an increase in services provided to other population groups. D) When prices are controlled for only some groups, those groups may have reduced access to health care or receive lower quality services than others.
Hospitals and healthcare systems are focused on managing their costs. More than just cutting, healthcare leaders are trying to find financial predictability in an industry that is anything but predictable. Moreover, the balance between cost and delivering positive patient experiences is fragile. Cost reduction strategies must prioritize the health of patients, employees while examining opportunities to cut costs. A health plan with lesser options for the employee or the patient effects their quality of care for there may be limitations of coverage for health services, which can delay the care needed, and have the potential to result in poor health outcomes.
Bodenheimer ,T. & Grumbach, K. (2016). Understanding health policy: A clinical approach (7th ed). McGraw Hill Medical
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4193364/
https://www.compassonehealthcare.com/blog/cost-reduction-strategies-health-systems/
