Towards a common framework for defining ancillary material quality across the development spectrum.

Ancillary materials (AMs) play a critical role in the manufacture of cell and gene therapies, and best practices for their quality management are the subject of ongoing discussion. Given that the final product cannot be sterilized, AM quality becomes increasingly critical to the clinical advancement of cell and gene therapies. Despite a lack of direct legislative direction regarding AM quality, internationally harmonized guidance is available from several industry-standard bodies that describe the principles and application of a risk-based approach to AM qualification and related supply-chain risk management. According to a best-practice risk-based approach, AMs must be adequately qualified to a degree that reflects the level of risk the material presents to patient safety and the drug product's specification. This general approach can be implemented in different ways, and balancing quality with cost of goods is critical to the cost-effective manufacture of advanced therapy medicinal products. In some cases, it may be preferable or necessary to use AMs that are produced in compliance with current Good Manufacturing Practice. However, developers may be able to suppress manufacturing costs without undermining safety or regulatory compliance in the case that a material presents a lower risk profile. Despite a great deal of attention and interest in the quality of AMs in the cell and gene therapy space, there is still a need for greater harmonization to create a shared understanding of what constitutes a risk-based approach to AM production and sourcing. In this article, we propose a staged approach to AM quality that achieves a balance between the competing demands of risk mitigation and cost of goods containment at the various stages of AM quality development. Our novel, heuristic framework for communication among AM suppliers, users and regulators aims to bring down development and manufacturing costs and lessen the workload around regulatory compliance.

Use of Office Versus Ambulatory Surgery Center Setting and Associated Ancillary Services on Healthcare Cost Burden for Vasectomy Procedures.

OBJECTIVE: To analyze variation in total healthcare costs for vasectomies performed in the United States, based on procedure setting and use of ancillary pathology services. METHODS: We queried the MarketScan Commercial Claims database using CPT, ICD, and HCPCS codes to identify men who underwent vasectomy between 2009 and 2015, either in the office or ambulatory surgical center (ASC) setting, with or without use of pathology services. All payments for each treatment episode were calculated based on relevant claims. Patient out-of-pocket expenses were defined as the sum of copayments, coinsurance, and deductibles for each claim. Trends in vasectomy use, and differences in procedure costs by practice setting were compared over the study period. RESULTS: 453,492 men underwent a vasectomy between 2009 and 2015. The number of procedures decreased from 76,197 in 2009 to 37,575 in 2015 (P = .002). Average procedural costs increased from $870 in 2009 to $938 in 2015 (P = .001). Overall, 82.6% and 17.4% of procedures were performed in the office vs ASCs, respectively. In-office procedures were associated with lower total healthcare costs ($707 vs $1851) and lower patient out-of-pocket expenses ($173 vs $356) than those performed in ASCs. Vasal segments were submitted for pathologic evaluation in 40% of cases, which increased average payments by 55%. The use of ASCs and ancillary pathology services for vasectomies performed during the study period increased vasectomy-associated costs by $64 million. CONCLUSION: The unnecessary use of ASCs and ancillary pathology services for vasectomy may lead to tens of millions of dollars in potentially avoidable healthcare costs annually.

Top 4 sources of savings in support services.

Examples of ways that a hospital can reduce support-service costs include: Incorporating more comprehensive performance metrics as part of its contract renewal process for food services. Managing equipment service contracts centrally and reexamining existing contracts. Converting from heavy-weight to lighter-weight linens. Providing rigorous training for environmental services staff on critical touch points in patient room cleaning.

The changing role of ancillary health care service providers: an evaluation of Health Diagnostic Laboratory, Inc.

In an effort to reduce cost and improve quality, health care payers have enacted a number of incentives to motivate providers to focus their efforts on achieving better clinical outcomes and reducing the prevalence and progression of disease. In response to these incentives, providers are entering into new arrangements such as accountable care organizations and patient-centered medical homes to redesign delivery processes and achieve quality and cost objectives. This article reports the results of a study designed to evaluate the impact on cost and quality of care resulting from services provided by Health Diagnostic Laboratory, Inc., a clinical laboratory with a comprehensive care model. The results show that patients who utilized these laboratory services experienced lower total cost of care (23% reduction, P<0.01) and improved lipid profiles during the follow-up period. Total cost reductions were related to cost reductions found in both inpatient and ambulatory care. These findings suggest that accountable care organizations, patient-centered medical homes, and other groups entering shared savings initiatives should consider the potential role ancillary service providers with comprehensive care models can play in the delivery of integrated care.

Non-medical out-of-pocket expenses incurred by families during their child's hospitalization.

Little is known about the nonmedical out of pocket expenses (NOOPEs) incurred by families of hospitalized children. The purpose of this study is to help nurses, other healthcare providers, hospital administrators, and policymakers better understand the NOOPEs incurred by families during their child's hospitalization. Parents of children (n = 50) who underwent orthopedic surgery at a major tertiary-care children's hospital reported all NOOPEs incurred during their child's hospitalization. Descriptive statistics and univariate and multiple logistic regression analyses were used to analyze the data. The total NOOPEs ranged from $17.00 to $4745.00 (M = $736.21) per hospitalization, with 2096 missed hours from work. Length of stay, gross family income, distance from the hospital, and Hollingshead score are significant predictors of expenses (F-ratio = 732.88, p < 0.001). Hospitalization is associated with numerous NOOPEs. Future research needs to investigate the total array of expenses to families.

Hospital quality and the cost of inpatient surgery in the United States.

CONTEXT: Payers, policy makers, and professional organizations have launched a variety of initiatives aimed at improving hospital quality with inpatient surgery. Despite their obvious benefits for patients, the likely impact of these efforts on health care costs is uncertain. In this context, we examined relationships between hospital outcomes and expenditures in the US Medicare population. METHODS: Using the 100% national claims files, we identified all US hospitals performing coronary artery bypass graft, total hip replacement, abdominal aortic aneurysm repair, or colectomy procedures between 2005 and 2007. For each procedure, we ranked hospitals by their risk- and reliability-adjusted outcomes (complication and mortality rates, respectively) and sorted them into quintiles. We then examined relationships between hospital outcomes and risk-adjusted, 30-day episode payments. RESULTS: There was a strong, positive correlation between hospital complication rates and episode payments for all procedures. With coronary artery bypass graft, for example, hospitals in the highest complication quintile had average payments that were $5353 per patient higher than at hospitals in the lowest quintile ($46,024 vs $40,671, P < 0.001). Payments to hospitals with high complication rates were also higher for colectomy ($2719 per patient), abdominal aortic aneurysm repair ($5279), and hip replacement ($2436). Higher episode payments at lower-quality hospitals were attributable in large part to higher payments for the index hospitalization, although 30-day readmissions, physician services, and postdischarge ancillary care also contributed. Despite the strong association between hospital complication rates and payments, hospital mortality was not associated with expenditures. CONCLUSIONS: Medicare payments around episodes of inpatient surgery are substantially higher at hospitals with high complications. These findings suggest that local, regional, and national efforts aimed at improving surgical quality may ultimately reduce costs and improve outcomes.

Shared networks of interpreter services, at relatively low cost, can help providers serve patients with limited english skills.

Language barriers in health care-a large and growing problem in the United States-contribute to disparities in health care quality and outcomes in populations with limited English proficiency. Providing access to adequate interpreter services has been shown to reduce health disparities in these populations. However, many health care organizations do not provide such services because of the perceived high cost. In this observational study we calculated the costs incurred by a group of California public hospitals that formed a network to make trained interpreters available via videoconference and telephone. We found that encounters in this network where interpreters helped patients and providers communicate lasted an average of 10.6 minutes and cost an average of $24.86 per encounter. Such costs should be weighed against the likely alternatives, such as the opportunity costs of having other hospital staff act as ad hoc interpreters; medical errors that could result from inadequate interpretation; and the fact that not providing such services may leave providers out of compliance with federal law. We also discuss ways in which providers could be compensated for providing interpreter services.

Capitalizing hidden values from hospital assets.

Benefits from selling noncore assets include generating capital and freeing up management resources. Monetization transaction structures include sale, partnership, and strategic affiliation. A hospital that engages in such a transaction needs to ensure that the purchaser or joint venture partner will maintain the hospital's high standards of care and ethical principles.

Nonpatient revenues in hospitals.

BACKGROUND: Health management studies of hospital revenues have tended to focus on patient-service revenues, with little attention to the magnitude and the nature of nonpatient revenues. OBJECTIVES: This study (a) examines the size and sources of nonpatient revenues in hospitals, (b) analyzes the impact of nonpatient revenues on hospital profit margins, and (c) investigates variations in nonpatient revenues by ownership and bed size. DATA AND METHODS: The data source for this study is the Florida Hospital Uniform Reporting System. The unit of observation is a private, acute care hospital, with the data being averaged over the period 2003-2005 (n = 143). Descriptive statistics and nonparametric tests of differences between groups are the primary methods of analysis. FINDINGS: During the period 2003-2005, on average, other operating revenues accounted for 1.3% and nonoperating revenues accounted for 4.1% of total revenues, although there was considerable variation across hospitals. Nonpatient activities contributed importantly to hospital profit margins. The average patient care margin was 3.1%, and the average total margin before tax was 4.8%. Thus, without nonpatient activities, total margin before tax would have been 1.7 percentage points lower. Nonpatient revenues tended to be more important for not-for-profit compared with for-profit hospitals, with little differences by bed size. PRACTICE IMPLICATIONS: The key practice implication is that because nonpatient activities contribute importantly to hospital profit margins, they should constitute a core element in the organization's financial and operational planning. In particular, hospitals should consider treating nonpatient activities as profit centers.

Charging for ancillary items and services: 4 myths (and realities).

Because CMS does not dictate or regulate what is included on hospitals' itemized statements, there is some confusion--and several myths--about what may and may not be charged, especially in ancillary departments. Separating the myths from the realities can help control the confusion, produce more correct payments, and improve your hospital's Medicare compliance.

The impact of an enhanced interpreter service intervention on hospital costs and patient satisfaction.

BACKGROUND: Many health care providers do not provide adequate language access services for their patients who are limited English-speaking because they view the costs of these services as prohibitive. However, little is known about the costs they might bear because of unaddressed language barriers or the costs of providing language access services. OBJECTIVE: To investigate how language barriers and the provision of enhanced interpreter services impact the costs of a hospital stay. DESIGN: Prospective intervention study. SETTING: Public hospital inpatient medicine service. PARTICIPANTS: Three hundred twenty-three adult inpatients: 124 Spanish-speakers whose physicians had access to the enhanced interpreter intervention, 99 Spanish-speakers whose physicians only had access to usual interpreter services, and 100 English-speakers matched to Spanish-speaking participants on age, gender, and admission firm. MEASUREMENTS: Patient satisfaction, hospital length of stay, number of inpatient consultations and radiology tests conducted in the hospital, adherence with follow-up appointments, use of emergency department (ED) services and hospitalizations in the 3 months after discharge, and the costs associated with provision of the intervention and any resulting change in health care utilization. RESULTS: The enhanced interpreter service intervention did not significantly impact any of the measured outcomes or their associated costs. The cost of the enhanced interpreter service was $234 per Spanish-speaking intervention patient and represented 1.5% of the average hospital cost. Having a Spanish-speaking attending physician significantly increased Spanish-speaking patient satisfaction with physician, overall hospital experience, and reduced ED visits, thereby reducing costs by $92 per Spanish-speaking patient over the study period. CONCLUSION: The enhanced interpreter service intervention did not significantly increase or decrease hospital costs. Physician-patient language concordance reduced return ED visit and costs. Health care providers need to examine all the cost implications of different language access services before they deem them too costly.

Per-click, under arrangement, mark-up, and other dirty words.

So, the winners under these CMS proposals are OBs in rural areas and people who make minor mistakes when trying to meet a Stark exception. The losers are diagnostic test purchasers, per-click lease participants (at least when the lessor is a physician), and hospitals and physicians who are involved in UA arrangements. Those left in limbo (since they were not addressed) are block lease participants as well as per-click lease parties where the physician is both the lessee and the source of patients. Of course, this is not the last word. CMS will take public comments on the proposals until August 31, 2007. We will then have to wait in suspense for the final rule, which could take years (although it is possible that at least some of the current proposals could be finalized soon since they are currently part of the 2008 Physician Fee Schedule proposal.) This suspense is only heightened by the impending Stark II Phase III rules. For the full text of the CMS proposals, go to www.cms.hhs.gov/physicianfeesched/downloads/CMS-1385-P.pdf?agree=yes&next= Accept.

The impact of different rehabilitation strategies after major events in the elderly: the case of stroke and hip fracture in the Tuscany region.

BACKGROUND: On a regional level, our aims were to describe rehabilitation patterns for elderly patients with stroke and hip fracture and to investigate mortality risk during the 6-month post acute period. METHODS: Data sources included administrative data relative to patients aged 65+ resident in Tuscany admitted in hospital for stroke or hip fracture between 2001 and 2003, traced up to 3 years before and 6 months following index admission. The study design involves computerized linkage of administrative data, and an exploratory analysis of the association between rehabilitation patterns and 6-month mortality, adjusting for clinical, demographic, and acute-related care characteristics using multivariate Cox regression. RESULTS: Rehabilitation patterns vary greatly across Tuscany with considerable cost implications. Six month mortality risk for stroke patients is significantly lower among residents of Local Health Authorities where patients are more frequently rehabilitated, specifically in extra-hospital settings. CONCLUSION: Our study, targeting two crucial conditions for elderly patients, found a high variability of rehabilitation patterns across a region, albeit coherent between the two pathologies, associated with remarkable differences in average expenditure. Differences in hazard rates for 6-month mortality after stroke at population level were also found. These results need to be confirmed and further investigated through a more robust information framework.

Financial impact of hand surgery programs on academic medical centers.

BACKGROUND: This study analyzes the financial performance of hand surgery in the Department of Surgery at the University of Michigan. This analysis can serve as a reference for other medical centers in the financial evaluation of a hand surgery program. METHODS: Fiscal year 2004 billing records for all patients (n = 671) who underwent hand surgery procedures were examined. The financial data were separated into professional revenues and costs (relating to the hand surgery program in the Section of Plastic Surgery) and into facility revenues and costs (relating to the overall University of Michigan Health System). Professional net revenue was calculated by applying historical collection rates to procedural and clinic charges. Facility revenue was calculated by applying historical collection rates to the following charge categories: inpatient/operating room, clinic facility, neurology/electromyography, radiology facilities, and occupational therapy. Total professional costs were calculated by adding direct costs and allocated overhead costs. Facility costs were obtained from the hospital's cost accounting system. Professional and facility incomes were calculated by subtracting costs from revenues. RESULTS: The net professional revenue and total costs were 1,069,836 and 1,027,421 dollars, respectively. Professional operating income was 42,415 dollars, or 3.96 percent of net professional revenue. Net facility revenue and total costs were 5,500,606 and 4,592,534 dollars, respectively. Facility operating income was 908,071 dollars, or 16.51 percent of net facility revenues. CONCLUSIONS: While contributing to the academic mission of the institution, hand surgery is financially rewarding for the Department of Surgery. In addition, hand surgery activity contributes substantially to the financial well-being of the academic medical center.