Graduate medical education costs in nonacademic health center teaching hospitals: evidence from Maryland.

As managed care has grown, much concern has been expressed about the potential plight of the nation's 125 academic health centers (AHCs). Less concern has focused on non-AHC teaching hospitals, although most studies of graduate medical education (GME) costs include these hospitals in their estimates. While most studies have found that costs increase positively with various measures of "teaching intensity," some have concluded that hospitals with smaller programs have costs that are the same or less than comparable nonteaching hospitals. However, few studies have tested whether AHCs' cost structures are sufficiently similar to those of other hospitals to reliably include them in the same estimation. This article tests that assumption for Maryland hospitals, finds it violated, and presents results for non-AHC teaching hospitals. The results reveal that, at least in Maryland, even small teaching programs add to hospital costs.

Patterns of decline among inpatient procedures.

This paper explores how the new financial incentives and organizational structures that prevail in the hospital industry have affected the mix of services provided by hospitals. Using data from the Agency for Health Care Policy and Research's Healthcare Cost and Utilization Project, the authors studied the 150 procedures that were most frequently performed on inpatients in 1980. They found that (a) 37 of the 150 procedures declined in use more than 40 percent by 1987, (b) patients that continued to receive one of the 37 procedures in 1987 on an inpatient basis tended to be more severely ill than in 1980, and (c) rates of decline were disproportionately large for Medicaid recipients. Three main factors have contributed to the decline in inpatient use of these procedures. Most important has been the shift from inpatient to outpatient settings, a result of new technologies and pressures from reimbursement mechanisms and utilization review policies. Some procedures have been replaced by less invasive, more effective approaches. Other procedures are now considered ineffective by the medical community and have been largely abandoned as a result.

Hospitals with chronic financial losses: what came next?

Hospitals with chronic losses might respond by closing, by drastically changing their services and patient mix, or by increasing efficiency. These possible responses are examined by studying a cohort of hospitals that were losing money between 1980 and 1984 as measured by their five-year average total revenue margins. These "negative-cohort" hospitals were followed through 1988 to see if they survived, and if they did, what changes they made. Only about 10 percent of hospitals in the negative cohort closed. The remainder did not alter their service mix or select in favor of easier, better-paying patients. However, there was a reduced rate of investment in new technologies.

The protracted demise of medical technology. The case of intermittent positive pressure breathing.

In this study, the effects of hospital, staff, and patient characteristics on the rates of use and abandonment of an outmoded medical technology, intermittent positive pressure breathing (IPPB) are analyzed. The study focuses specifically on the use of IPPB to treat inpatients with chronic obstructive pulmonary disease in a national sample of more than 500 community hospitals from 1980 to 1987. Cross-sectionally, hospitals with shorter case-mix-adjusted lengths of stay, private nonprofit or investor-owned hospitals, and hospitals located outside of the north central United States were more likely to abandon IPPB by 1980. Teaching status, location, ownership, volume, and source of payment all appeared to affect rates of IPPB use in 1980. The longitudinal analysis examines both the probability a hospital abandoned IPPB and declines in rates of IPPB use over the study period, conditioned on the availability of IPPB in 1980. The results show that changes in the characteristics of hospitals, patients, and physicians all help to explain variations in the abandonment of IPPB. These findings contrast with previous studies of technological change, which find hospital size to be the most important variable. Size is important in explaining the rate of use in 1980, but it has no effect on the rate of decline in use or abandonment after 1980. In general, the analysis demonstrates that a combination of factors, economic incentives as well as information, contribute to the abandonment of outmoded medical technologies. Given the surprisingly long time periods required for this process to occur, the analysis underscores the need to strengthen financial incentives that encourage appropriate medical decisions and to disseminate information about the efficacy of specific procedures more widely and effectively.