Andrea Szczesny

DETERMINANTS OF BANK LENDING PERFORMANCE IN GERMANY** Evidence from Credit File Data

We empirically identify factors that can explain the financial performance of bank lending activities. We also analyze the individual bank’s evaluation of a loan’s risk. We use our results to test theoretical hypotheses on the impact of certain parameters on credit terms and distress probabilities. We find ratings act as an important factor in the bank’s lending policy. Ratings reflecting higher risks lead to higher interest rate premia. The findings on collateralization are less clear and do not fully support any of hypotheses that are advanced to describe the role of collateral and covenants in credit contracts.

Capped hospital budgets, risk-influencing activities and financial consequences

It has long been recognized in the health economics literature that increased financial incentives for better-informed health care providers may not only lead to desirable efficiency gains and cost savings. In addition, accounting-based cost containment instruments like capped budgets or prospective payment may induce physicians and hospitals to systematically avoid high-cost patients. Our paper uses an empirical approach backed by theoretical arguments to study a small German hospitals reactions to a major increase in financial incentives. We first describe essential features of the German hospital sector and developments that led to the introduction of capped budgets for hospital care in 1993. Next, incentives to treat high cost patients before and after the reform are analyzed in more detail. Using an anesthesia-related patient severity score (ASA score) as a proxy for financial patient risk, we empirically address the question how the distribution of ASA scores has changed over time at the hospital for the 1989-2002 period. Our analysis of detailed operating room data showed that the number of high risk patients (high ASA score) showed a systematic and significant decrease after the introduction of capped budgets. Using data from the new German DRG-reimbursement system, we also gain some preliminary evidence of the possible financial consequences of such practices.

Success of commonly used operating room management tools in reducing tardiness of first case of the day starts: evidence from German hospitals.

BACKGROUND: One of the declared objectives of surgical suite management in Germany is to increase operating room (OR) efficiency by reducing tardiness of first case of the day starts. We analyzed whether the introduction of OR management tools by German hospitals in response to increasing economic pressure was successful in achieving this objective. The OR management tools we considered were the appointment of an OR manager and the development and adoption of a surgical suite governance document (OR charter). We hypothesized that tardiness of first case starts was less in ORs that have adopted one or both of these tools. METHODS: Using representative 2005 survey data from 107 German anesthesiology departments, we used a Tobit model to estimate the effect of the introduction of an OR manager or OR charter on tardiness of first case starts, while controlling for hospital size and surgical suite complexity. RESULTS: Adoption reduced tardiness of first case starts by at least 7 minutes (mean reduction 15 minutes, 95% confidence interval (CI): 7–22 minutes, P < 0.001). CONCLUSION: Reductions in tardiness of first case starts figure prominently the objectives of surgical suite management in Germany. Our results suggest that the appointment of an OR manager or the adoption of an OR charter support this objective. For short-term decision making on the day of surgery, this reduction in tardiness may have economic implications, because it reduced overutilized OR time.

Cost Accounting Implications of Surgical Learning in the DRG Era - Data Evidence from a German Hospital

On January 1st 2004, Germany introduced a prospective payment system for the reimbursement of almost all inpatient hospital cases. The new system, which is based on Diagnosis Related Groups (DRGs), is now mandatory for all hospitals that treat patients insured under Germany’s statutory health insurance system (GKV). Although most German hospitals are currently exerting great efforts to calculate their individual DRG-costs, concerns have been raised whether such a system of administered fixed prices will be able to cope with medical innovation or quickly become obsolete. To gain insights into this question, an analysis of the dynamic properties of medical process innovations and their possible impact on the DRG system which is based on actual German data seems clearly merited. For two important medical innovations of the last two decades, a new method of knee replacement surgery and minimally invasive gall bladder removal (laparoscopic cholecystectomy), we empirically explore the question of whether the important cost driver “procedure time” displays a learning effect that accords with classical learning curve theory. Our principal results suggest that for these two high-cost, high-volume procedures, individual and organizational learning does indeed take place in the operating room. Based on these empirical results, we discuss our findings’ implications for hospital cost accounting in the era of DRGs.

Ökonometrische Verfahren zur Modellierung von Kreditausfallwahrscheinlichkeiten: Logit- und Probit-Modelle

SummaryThe paper describes simple econometric methods for the analysis of default risk and applies them to a data set obtained from credit files taken from six large German universal banks. The paper focuses on probit and logit models which enable the credit analyst to quantify the default probability of an individual credit. Recent developments in the analysis of panel data are also outlined. Empirical illustrations of the methods facilitate the understanding of the econometric models described in the paper. Numerous suggestions for further reading complete this short walk down the econometric quantification of default risk.

Does Learning Matter for Knee Replacement Surgeries? Data Evidence from a German Hospital

In 2003, Germany will be the first country in the world to adopt a fully prospective payment system for the reimbursement of all inpatient hospital services. To face the increasing competition, hospitals can pursue either a specialization or a cost and quality leadership strategy. It stands to reason that organizational and individual learning will play an important role for both strategies. This paper raises the question, whether results from traditional learning curve theory can be applied to surgical procedures despite the latters heterogeneity. We develop a theoretical model of surgical learning and test it using detailed operating room data from the first 601 total knee replacement surgeries of a small German hospital between 1994–2000. Our results suggest that classical learning curve theory can indeed be applied to this high cost high volume procedure.

The Role of Performance Reporting System Characteristics for the Coordination of High-Cost Areas in Hospitals

Abstract This paper explores the role of a performance reporting regime’s characteristics for two non-financial performance measures that are commonly used in the management of operating theaters (OTs) in German hospitals. The performance measures are the on-time first case of the day starts and the percentage of deviations from the short-term OT plan. The characteristics studied are reporting detail, reporting method and reporting frequency. We find that the degree of detail that the reporting system provides on the causes of negative performance exerts a significant positive effect on both performance measures. The reporting method and frequency do not affect performance. We also study the effect of existing processual, organizational and governance-related problems on performance. We find that these problems exert a significant negative effect on performance but that performance can be improved by detailed reporting.

Knee Replacement Surgery and Learning Effects — Data Evidence from a German Hospital

In 2003, Germany will be the first country in the world to adopt a fully prospective payment system for the reimbursement of all inpatient hospital services. To face the increasing competition, hospitals can pursue either a specialization or a cost and quality leadership strategy. It stands to reason that organizationaland individual learning will play an important role for both strategies. We develop a theoretical model of surgical learning and test it using detailed operating room data from the first 601 total knee replacement surgeries of a small German hospital between 1994–2000. Our results suggest that classical learning curve theory can indeed be applied to this high cost high volume procedure.