ABSTRACT
Market and regulatory pressures are requiring health care organizations to find new ways to compete. This article introduces the concept of time-based competition, a strategy adopted by firms in the manufacturing sector to strengthen their competitive positions, as a new strategy for health care organizations. The Just-in-Time technique and set-up time reduction activities are used to demonstrate the adoption of this paradigm by health care organizations. A case study comparing the movement of elderly patient through the health care delivery system under traditional and time-based competition practices is used to illustrate gains from adopting the new paradigm.
Subject(s)
Economic Competition , Health Care Sector , Case Management , Continuity of Patient Care/economics , Continuity of Patient Care/organization & administration , Cost Control , Critical Pathways , Health Services Research , Information Services , Quality of Health Care , Time Factors , United StatesABSTRACT
As is well recognized, the provisions of PL98-21 not only transfer financial risks from the Medicare program to the hospital but also induce institutions to adjust the diagnostic mix of Medicare beneficiaries so as to maximize net income or minimize the net loss. This paper employs variation in the set of net returns as the sole measure of financial risk and develops a model that identifies the mix of beneficiaries that maximizes net income, subject to a given level of risk. The results indicate that the provisions of PL98-21 induce the institution to deny admission to elderly patients presenting conditions for which the net return is relatively low and the variance in the cost per case is large. Further, the paper suggests that the treatment of beneficiaries at a level commensurate with previous periods or the preferences of physicians may jeopardize the viability and solvency of Medicare-dependent hospitals.
Subject(s)
Financial Management, Hospital , Financial Management , Prospective Payment System/economics , Cost Allocation , Diagnosis-Related Groups , Medicare/economics , Models, Theoretical , Risk , United StatesABSTRACT
Recognizing that the suboptimal allocation of plant assets contribute to the inflationary pressures in the health industry, this paper employs the principles of goal programming to develop a model for distributing diagnostic-specific technology among potential recipients in a given geographic region. The model allocates diagnostic-specific equipment so as to ensure that the provision of the related service satisfies the health needs of the population at risk, the capacity to provide the service in the region and in the hospital is optimal, the service is provided at minimum cost, and access to the equipment is satisfactory. An application and the practical implications of the model are also explored.
