Dana A. Forgione

Global Outsourcing of Healthcare: A Medical Tourism Decision Model

Abstract The demand for global healthcare services is experiencing tremendous growth. US patients are seeking to reduce their expenditures on healthcare through obtaining treatment on an internationally competitive basis. This trend, known as medical tourism, is on the rise, and US legislators and policy makers must be aware of the issues facing American patients. This paper seeks to model factors that influence a patient’s decision to seek healthcare services abroad. We develop a two-stage model for medical tourism - the first stage being the evaluation of the foreign country and the second stage choosing the healthcare facility. We argue country-specific characteristics influence the country of choice - including economic conditions, political climate, and regulatory policies. We also argue that certain factors - including costs, hospital accreditation, quality of care, and physician training - impact the choice of healthcare facility. The model suggests that no one factor is dominant in the decision, but all play a crucial role in choosing healthcare on an international basis. Policy makers must use these factors to evaluate the impact medical tourism will continue to have on the US healthcare system in order to effectively compete in today’s global, consumer-driven healthcare market.

DTC pharmaceutical advertising: the debate’s not over

Direct‐to‐consumer (DTC) advertising of prescription drugs is no longer the novel experiment it was during the late 1980s. Liberalization of the Food and Drug Administration regulations in the USA, combined with a substantial body of evidence that DTC advertising is a stimulus to consumer purchasing behavior, has resulted in DTC advertising becoming a standard component of every major drug company’s marketing plan. Research since the late 1980s has compared consumers’ perceptions of DTC ads with the perceptions of physicians. While the studies are methodologically diverse, the results have been directionally consistent. In general, consumers have positive attitudes toward DTC advertising, viewing it as a valuable educational resource that helps them become more involved in their health care. A significant proportion of DTC readers claim to have acted directly on the message by talking to their doctor about the advertised brand. Consumers report that they are more likely to take prescribed medication and/or get their prescriptions filled when prompted by DTC advertising. Physicians, however, have been far less enthusiastic about DTC advertising, with majorities expressing the wish that it be decreased, or discontinued altogether. In most studies, only small minorities of physicians believed that it contributed in a positive way to the doctor‐patient relationship. In certain specialties, notably internal medicine and family practice, approval rates were below the norm. We relate problems identified in advertising communication research to applications of DTC pharmaceutical advertising, and identify specific issues in need of further research. Notably, gaining an improved understanding of how well consumers comprehend DTC advertising messages, and which copy elements hinder comprehension, can help the industry to better educate consumers, facilitate improved ad campaign recognition, brand recall and message association, and help promote more constructive, and less confrontational, doctor‐patient relationships.

Hospital financial distress, recovery and closure: Managerial incentives and political costs

The purpose of this study is to examine the association of managerial incentives and political costs with hospital financial distress, recovery or closure. The Medicare Payment Advisory Commission has stated that hospital closures are important for evaluating the distribution of cost, quality and access to healthcare throughout the US. Using Logistic regression, we demonstrate that hospital closure is associated with low occupancy, return on investment, asset turnover, and lack of affiliation with a multihospital system. It is also significantly associated with urban location, teaching programs, high Medicare and Medicaid patient populations, and high debt. Essential access nonprofit hospitals are less likely to close, while this does not affect governmental and for-profit hospitals. Our research hypotheses are supported by these results.

Rational use effects of implementing an essential medicines list in West Bank, Palestinian Territories.

The Palestinian Ministry of Health introduced an essential medicines list (EML) in 2000 to improve rational use of medicines and contain costs. We have examined the effects of the EML in the Palestinian healthcare public sector. We obtained data on prescription patterns for medicines from 3570 prescriptions given during outpatient visits in 17 healthcare facilities in the West Bank from 1997 to 2003. We analyzed the prescriptions to measure rational use. We modeled indicators of rational use as a function of the EML and 16 health center indicator variables. The EML was effective in shifting all prescribing indicators toward standard values. To improve rational medicine use, treatment protocols for the most common diseases and continuous education for medical staff is required.

A Cost Analysis of Kidney Replacement Therapy Options in Palestine

This study provides a cost analysis of kidney replacement therapy options in Palestine. It informs evidence-based resource allocation decisions for government-funded kidney disease services where transplant donors are limited, and some of the common modalities, i.e., peritoneal dialysis (PD) and home hemodialysis (HD), are not widely available due to shortages of qualified staff, specialists, and centers to follow the patient cases, provide training, make home visits, or provide educational programs for patients. The average cost of kidney transplant was US

Going-concern modified audit opinions for non-profit organizations

16 277 for the first year; the estimated cost of HD per patient averaged US

AN EMPIRICAL INVESTIGATION OF AUDIT FEES IN THE US FOR-PROFIT HEALTHCARE SECTOR

16 085 per year—nearly as much as a transplant. Consistent with prior literature and experience, while live, related kidney donors are scarce, we found that kidney transplant was more adequate and less expensive than HD. These results have direct resource allocation implications for government-funded kidney disease services under Palestinian Ministry of Health. Our findings strongly suggest that investing in sufficient qualified staff, equipment, and clinical infrastructure to replace HD services with transplantation whenever medically indicated and suitable kidney donors are available, as well as deploying PD programs and Home HD programs, will result in major overall cost savings. Our results provide a better understanding of the costs of kidney disease and will help to inform Ministry of Health and related policy makers as they develop short- and long-term strategies for the population, in terms of both cost savings and enhanced quality of life.

The diligence of audit committees in the healthcare sector

Non-profit organizations constitute an important share of the U.S. economy, and recent audit failures and GAO findings highlight the importance of auditor reporting decisions in this sector. In this study, we examine going-concern modified audit opinions for non-profit organizations. Using audit opinion data for 3,567 non-profits exhibiting some signs of financial stress, we find that non-profits are more likely to receive a goingconcern modified opinion if they are smaller, are in worse financial condition, expend less on program-related activities, and have more internal control related audit findings. Our analysis of the subsequent resolution of the going-concern uncertainties suggest that only 27 percent of the non-profits receiving an initial going-concern modified audit opinion filed for dissolution in the subsequent four fiscal years. Our findings fill a gap in an important area that has received little research attention, and provide a useful benchmark for non-profits and their auditors.

The relationship between the Balanced Budget Act and length of stay for Medicare patients in US hospitals

The purpose of this paper is to analyze the market for audit services for publicly traded companies operating in the US for-profit (FP) healthcare sector. Complex national and local healthcare laws and regulations suggest the importance of assessing fee effects of joint nationallevel and city-specific expertise among auditors. Using cross-sectional OLS regression analysis, we find that joint expertise significantly affects audit pricing in the healthcare sector. We find a fee premium of 33.6 percent on engagements where auditors are both national and city-specific specialists. We also find that Big-4 auditor reputation is significantly priced over and above the effects of joint auditor expertise, and a significant positive association exists between audit and non-audit service fees-indicating the presence of knowledge spillover effects among healthcare company auditors.

Economic incentives in the hospice care setting: A comparison of for-profit and nonprofit providers

Problems with governance at non-profit (NP) healthcare organizations have recently led to legislative scrutiny of their audit committee practices. Using data from a survey of chief financial officers of NP healthcare organizations and from the GuideStar database, we examine audit committee interactions with external auditors for a sample of 69 NP healthcare organizations. We find that 71% of the audit committees in our sample meet privately with the external auditor and the mean number of such meetings 1.9. Our results also suggest that audit committee interaction with the external auditor varies in response to resource dependencies, existence of debt, audit quality, audit tenure, and organizational size. These findings suggest that NP healthcare organizations respond to monitoring demands by adopting suitable audit committee related interactions.