A longitudinal analysis of the impact of hospital service line profitability on the likelihood of readmission.

Quality of care may be linked to the profitability of admissions in addition to level of reimbursement. Prior policy reforms reduced payments that differentially affected the average profitability of various admission types. The authors estimated a Cox competing risks model, controlling for the simultaneous risk of mortality post discharge, to determine whether the average profitability of hospital service lines to which a patient was admitted was associated with the likelihood of readmission within 30 days. The sample included 12,705,933 Medicare Fee for Service discharges from 2,438 general acute care hospitals during 1997, 2001, and 2005. There was no evidence of an association between changes in average service line profitability and changes in readmission risk, even when controlling for risk of mortality. These findings are reassuring in that the profitability of patients' admissions did not affect readmission rates, and together with other evidence may suggest that readmissions are not an unambiguous quality indicator for in-hospital care.

Juggling the lineup. Seeking better financial results, providers change services; experts worry about access.

Not-for-profit hospitals are dropping some services and adding others as they strive to better their bottom lines in tough economic times. "The recession and the drop in admissions and elective cases put more pressure on us to look at behavioral health in a brand new way," says Sam Raneri, left, of Excela Health, which curbed outpatient psychiatric care and closed skilled-nursing services.

Hospital specialization: product-line planning during the market reformation.

Rational expectations theory dictates that firms respond to shifts in the demand function as a result of substantial reforms in the insurance marketplace. Federal health reform has enhanced the benefits of specialization. Hospital product-line specialization trends are studied using multiple regression analysis for the period 2001-2010. The observed 32.8 percent rise in specialization was associated with a 9.8 percent decline in unit cost per admission. The number of specialized hospitals has grown by 174 percent in the past decade. Other hospitals are getting more specialized by reducing their product lines. Specialization has been highest in competitive West Coast markets and lowest in the rate-regulated states (New York and Massachusetts). Hospitals have less incentive to contain costs by decreasing the array of services offered in stringent rate-setting states. The term "underspecialization" is advanced to capture the inability of some hospitals to selectively prune out product lines in order to specialize. Such hospitals spread resources so thinly that many good departments suffer. Unit cost per case (DRG-adjusted) is higher in the less specialized hospitals.

Effective cost modeling for service line planning.

Healthcare executives have struggled to have accurate, timely information about cost and resources to model and monitor service line performance. Process-based cost modeling has been used successfully in other industries, but is relatively new in health care. Understanding costs and resources at process and patient levels can make the difference between a service line having a positive or negative margin.

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.

Marketing strategies for vascular practitioners.

BACKGROUND: A common misconception is that marketing is synonymous with advertising. Marketing by physicians has undergone a transformation from the earlier unacceptable slick sales pitches to a more common sense, tasteful, comprehensive, and well thought out plan to reach potential patients. METHODS AND RESULTS: Marketing is a much broader concept comprising four aspects: product, price, promotion, and place. Marketing activities for a medical practice include not only external but internal tactics. Publicly available resources are available to assist physicians in developing and targeting the plan towards a narrow patient demographic. The marketing process includes: determining objectives, identifying resources, defining target population, honing a message, outlining a media plan, implementing the plan, and finally, evaluating the success or failure of the marketing campaign. CONCLUSION: A basic knowledge of marketing combined with a common sense approach can yield dividends for those practices that need the service. For surgical practices that exist in heavily populated urban areas with significant competition, a well thought out marketing plan can assist the practice in reaching out to new groups of patients and maintaining the existing patient base.

Measuring service line success: the new model for benchmarking.

Important issues in service line management and performance include: Defining a service line. Understanding the benefits. Measuring performance. Communicating with key audiences.

Competition keeps getting hotter for ambulatory surgery.

With fast-paced advances in medicine and technology, certain types of surgery that could once only be performed on an inpatient basis are now moving to ambulatory surgery centers. Hospitals are exploring a variety of strategies to hold on to--and even expand--their share of the few profitable areas of health care today.

Using a business practice model to control product line costs.

Faced with a downward turn in its total joint replacement product line, Avera McKennan Hospital was able to avert further decline and save dollar 500,000 annually by: Reviewing and analyzing the product line's past performance. Developing a business model to govern its new implant supply process. Obtaining physician buy-in. Ensuring vendor compliance with its new contracts. Developing a role as business partner with its orthopedic surgeons.

Specialty-service lines: salvos in the new medical arms race.

Hospitals and physicians are developing and marketing discrete and profitable specialty-service lines. Although closely affiliated specialist physicians are central to hospitals' service-line products, other physicians compete directly with hospitals via physician-owned specialty facilities. Specialty-service lines may be provided in a variety of settings, both inside and outside traditional hospital walls. Thus far, the escalating battle between hospitals and physicians for control over specialty services has not affected hospital profitability. However, as the scope of care that can be safely performed in the outpatient arena expands, physician competition for control over specialty services may threaten hospitals' financial health.