Economics of critical care: Medicare part A versus part B payments.

OBJECTIVE: To review the effect of Medicare part A payments (to hospitals) and part B payments (to providers) on critical care in the United States. DATA SOURCE AND SELECTION: Sources included U.S. government data and published literature reviewing the impact of Medicate payments on critical care. DATA EXTRACTION AND SYNTHESIS: Government data were reviewed to assess the history and status of reimbursement to hospitals and healthcare providers. These data, along with input from published literature, was used to assess the adequacy of current and projected Medicare reimbursements and the implications of these payments. CONCLUSION: Medicare payments to hospitals, particularly for critically ill patients, seem to fall short of the costs of caring for these patients. Reimbursements to providers seem more encouraging, although the opportunity exists to improve in this area as well.

The future of hospital economic health.

OBJECTIVE: To evaluate factors which may influence the economic future of academic medical centers (AMCs). DATA SOURCE AND SELECTION: A literature search was performed to identify publications which reviewed the areas of revenue sources for AMCs, costs and expenses incurred by these institutions, and mechanisms for optimizing institutional economic stability. DATA EXTRACTION AND SYNTHESIS: Data were reviewed and evaluated in two primary contexts: hospital revenues and organizational and administrative factors influencing hospital economic health. CONCLUSIONS: Increasing economic stress will require AMCs to make efforts both to increase revenue through a variety of mechanisms and to minimize expenses without compromising their mission or impairing worker morale.

Critical care medicine as a distinct product line with substantial financial profitability: the role of business planning.

OBJECTIVE: As academic health centers face increasing financial pressures, they have adopted a more businesslike approach to planning, particularly for discrete "product" or clinical service lines. Since critical care typically has been viewed as a service provided by a hospital, and not a product line, business plans have not historically been developed to expand and promote critical care. The major focus when examining the finances of critical care has been cost reduction, not business development. We hypothesized that a critical care business plan can be developed and analyzed like other more typical product lines and that such a critical care product line can be profitable for an institution. DESIGN: In-depth analysis of critical care including business planning for critical care services. SETTING: Regional academic health center in southern New Jersey. SUBJECTS: None. INTERVENTIONS: As part of an overall business planning process directed by the Board of Trustees, the critical care product line was identified by isolating revenue, expenses, and profitability associated with critical care patients. MEASUREMENTS AND MAIN RESULTS: We were able to identify the major sources ("value chain") of critical care patients: the emergency room, patients who are admitted for other problems but spend time in a critical care unit, and patients transferred to our intensive care units from other hospitals. The greatest opportunity to expand the product line comes from increasing the referrals from other hospitals. A methodology was developed to identify the revenue and expenses associated with critical care, based on the analysis of past experience. With this model, we were able to demonstrate a positive contribution margin of dollar 7 million per year related to patients transferred to the institution primarily for critical care services. This can be seen as the profit related to the product line segment of critical care. There was an additional positive contribution margin of dollar 5.8 million attributed to the critical care portion of the hospital stay of patients admitted primarily through other product lines or the emergency room. This can be seen as the profit related to the "hospital service" segment of critical care. This represented a total contribution margin of dollar 12.8 million, approximately 24% of the institution's entire contribution margin. This information was subsequently used to develop strategic plans to promote this product line. CONCLUSIONS: We were able to define the critical care product line, and we were able to demonstrate profitability through an analysis of revenue and expenses related to critical care services. Our experience suggests that the concept of critical care as a product line, in addition to a hospital service, may lead to a useful analysis of this new discipline. This plan provided a rational foundation for development of the operating and capital budgets for the health system.

Guidelines on critical care services and personnel: Recommendations based on a system of categorization of three levels of care.

OBJECTIVES: To describe three levels of hospital-based critical care centers to optimally match services and personnel with community needs, and to recommend essential intensive care unit services and personnel for each critical care level. PARTICIPANTS: A multidisciplinary writing panel of professionals with expertise in the clinical practice of critical care medicine working under the direction of the American College of Critical Care Medicine (ACCM). DATA SOURCES AND SYNTHESIS: Relevant medical literature was accessed through a systematic Medline search and synthesized by the ACCM writing panel, a multidisciplinary group of critical care experts. Consensus for the final written document was reached through collaboration in meetings and through electronic communication modalities. Literature cited included previously written guidelines from the ACCM, published expert opinion and statements from official organizations, published review articles, and nonrandomized, historical cohort investigations. With this background, the ACCM writing panel described a three-tiered system of intensive care units determined by service-based criteria. CONCLUSIONS: Guidelines for optimal intensive care unit services and personnel for hospitals with varying resources will facilitate both local and regional delivery of consistent and excellent care to critically ill patients.

Ethical issues in hospital medicine.

The medical ethics of the new millennium will be fascinating and fast moving in our pluralistic Western society. This will be particularly true in ethics in the hospital setting and under hospitalist models. Ethical decisions are ubiquitous in medical practice, at the microlevel of the patient-physician relationship and at the macro-level of the allocation of resources and other ethical decisions. Hospitalists need to recognize that ethical issues are distinct from medical ones and need to utilize different techniques in their resolution. Ethics in the public sector, such as in hospitals and other health care organizations, cannot transcend politics completely, because the public sector is the political arena. For ethical guidelines to survive, however, they must be based not on political expediency but on sound ethical principles and reasoning. As the knowledge of medicine, technology, and science continues to grow, the challenges of regulation, policy, and ethical issues in the hospital setting and elsewhere in the health care system will occupy physicians for some time to come.