Management accounting use and financial performance in public health-care organisations: evidence from the Italian National Health Service.

Reforms of the public health-care sector have emphasised the role of management accounting (MA). However, there is little systematic evidence on its use and benefits. To fill this gap, we propose a contingency-based model which addresses three related issues, that is, whether: (i) MA use is influenced by contextual variables and MA design; (ii) top-management satisfaction with MA mediates the relationship between MA design and MA use; and (iii) financial performance is influenced by MA use. A questionnaire was mailed out to all Italian public health-care organisations. Structural equation modelling was performed to validate the research hypotheses. The response rate was 49%. Our findings suggest that: (i) cost-containment strategies encourage more sophisticated MA designs; (ii) MA use is directly and indirectly influenced by contingency, organisational, and behavioural variables; (iii) a weakly significant positive relationship exists between MA use and financial performance. These findings are relevant from the viewpoint of both top managers and policymakers. The former must make sure that MA is not only technically advanced, but also properly understood and appreciated by users. The latter need to be aware that MA may improve performance in ways and along dimensions that may not fully translate into better financial results.

New funding arrangements in the Italian National Health Service.

In the 1990s, the Italian National Health Service (INHS) experienced a major reform introducing regionalization, quasi-markets and managerialism. The combination of quasi-markets and regionalization has produced an interesting scenario: 21 Regional Governments designing their own organizational and funding models to achieve the desired combination of equity, efficiency, freedom of choice and cost containment. This paper reports the results of a research project carried out in 1998-99 to identify such models, verify their actual states of implementation and analyse the resulting incentives for individual health-care organizations. Overall, most Regions have designed their models according to the 'LHU-centred' template, under which most public hospitals remain under Local Health Unit (LHU) control, LHUs are funded by their Regions on a capitation basis and each LHU is expected to reimburse other LHUs, Independent INHS Hospitals (IHs) and accredited private providers for services supplied to its residents. Reimbursements are activity-based according to Regional fee schedules. The major exception is Lombardy, Italy's largest and wealthiest Region, which has formally opted for the 'purchaser-provider split' template, with LHUs acting mostly as purchasers while IHs and accredited private professionals and organizations act as providers. In practice, however, many Regions still show significant features of the traditional cost-reimbursement system.

Success rates and cost-effectiveness of antibiotic combinations for initial treatment of central-venous-line infections during total parenteral nutrition.

BACKGROUND: Central-venous-line infections can be successfully treated with appropriate antibiotics, thus avoiding the need for catheter removal. Based on our experience, vancomycin, gentamicin, piperacillin, ceftazidime, and amphotericin, alone or in combination, are usually administered, pending sensitivity results. This empirical list, however, has never been verified against actual sensitivity results nor has it been tested for cost or efficacy. METHODS: Medical records of inpatients on hyperalimentation over 1 year were reviewed. Success rate, therapy duration, and drug acquisition cost and charge were assessed for central-venous-line infections. Antibiotics then were paired and evaluated in terms of charge and efficacy against all microorganisms as determined by sensitivity results. RESULTS: In 500 inpatients receiving hyperalimentation for 9,698 patient-days, 8.4 central-venous-line infections/1,000 patient-days occurred. Staphylococcus non-aureus, Candida species, Enterococcus faecium, and Staphylococcus aureus predominantly were isolated. Of the infections, 51 (67%) were sensitive to one or more of the initial antibiotics. A 2-week course of antibiotics successfully treated 50 (66%) catheter infections without line removal. Appropriate initial therapy on average reduced treatment duration by 8 to 10 days and drug charges by $400 to $700. CONCLUSIONS: Amikacin-vancomycin appears to be the most cost-effective selection for presumed central-venous-line infections, pending sensitivity results, followed by valid alternatives. Lower failure rates are well worth the extra cost in pharmaceutical charges.

[The new financing system in the Italian National Health Service. Implications for internal medicine]. / Il nuovo sistema di finanziamento delle Aziende Sanitarie. Implicazioni per la medicina interna.

Since 1995, the Italian National Health Service has begun to fund its hospitals on a DRG basis. This paper presents the main features of the DRG system as well as its likely implications for general internal medicine. The first part describes the introduction of DRGs in the US. The first paragraphs summarize the features of the US health-care system and particularly its private nature with two major exceptions: Medicare and Medicaid. The development of the DRG system and its adoption by Medicare are then described. Finally, the main effects of Medicare's DRG system are underlined: shorter hospital stays, fewer hospital admissions, several diagnostic and surgical procedures shifted from the inpatient to the outpatient setting, and apparently no negative quality implications. The second part focuses on Italy, in general and with specific reference to general internal medicine. For general internal medicine, the new funding system has two major implications. First, it may lead to the creation of larger medical departments including both the current general internal medicine divisions and the various specialties. Second, even under the current organisational structure, divisions will be increasingly required to produce positive financial margins. In this respect, general internal medicine divisions seem to be in a favourable position, especially in terms of costs (both per-diem and per-admission).