Terje P. Hagen

The Effect of Activity-Based Financing on Hospital Efficiency: A Panel Data Analysis of DEA Efficiency Scores 1992-2000

Activity-based financing (ABF) was implemented in the Norwegian hospital sector from 1 July 1997. A fraction of the block grant from the state to the county councils has been replaced by a matching grant depending upon the number and composition of hospital treatments. As a result of the reform, the majority of county councils have introduced activity-based contracts with their hospitals. This paper studies the effect of activity-based funding on hospital efficiency. We predict that hospital efficiency will increase because the benefit from cost-reducing efforts in terms of number of treated patients is increased under ABF as compared with global budgets. The prediction is tested using a panel data set from the period 1992–2000. Efficiency indicators are estimated by means of data envelopment analysis (DEA) with multiple inputs and outputs. Using a variety of econometric methods, we find that the introduction of ABF has improved efficiency when measured as technical efficiency according to DEA analysis. The result is less uniform with respect to the effect on cost-efficiency.

Sex-based differences in premature first myocardial infarction caused by smoking: twice as many years lost by women as by men

Background It has been debated whether smoking increases the risk of heart disease relatively more in women than in men. It is not known whether there are sex differences with regard to how many years prematurely smoking causes acute myocardial infarction (AMI) to occur. We aimed to determine how smoking affects the age of onset of first myocardial infarction in both the sexes. Design Clinical data were consecutively entered into a database and were analysed with a multivariate regression technique. Methods In the years 1998-2005, data on 1784 consecutive patients (38.3% women) who were discharged from or died in a district general hospital with a diagnosis of first myocardial infarction were included in the study. Age at first AMI was analysed. Results Unadjusted mean ages were 76.2 years for women and 69.8 years for men, a difference of 6.4 years (P < 0.001). Mean age within the various groups was: women nonsmokers 80.7 years, women smokers 66.2 years, difference 14.4 years (P < 0.001); men nonsmokers 72.2 years, men smokers 63.9 years, difference 8.3 years (P < 0.001). After adjustment for risk factors (hypertension, cholesterol levels, diabetes) and patient characteristics (history of angina, history of stroke) 13.7 years of the age difference in women were attributed to smoking; the corresponding figure in men was 6.2 years (P < 0.001). Conclusion First AMI occurred significantly more prematurely in women than in men smokers, implying that twice as many years were lost by women as by men smokers. Eur J Cardiovasc Prev Rehabil 16:174-179

Do hospital mergers increase hospital efficiency? Evidence from a National Health Service country

Objectives: To analyse the effects on technical and cost efficiency of seven hospital mergers over the period 1992–2000 in Norway. The mergers involved 17 hospitals. Methods: First, efficiency scores were generated using Data Envelopment Analysis for 53 merged and non-merged hospitals over the nine years. Second, the effect of mergers was estimated through panel data analysis. Results: In general, the mergers showed no significant effect on technical efficiency and a significant negative effect of 2–2.8% on cost efficiency. However, positive effects on both cost and technical efficiency were found in one merger where more hospitals were involved, and where administration and acute services were centralized. Conclusion: The findings indicate that large mergers involving radical restructuring of the treatment process may improve efficiency as intended, but most mergers do not.

Cost of autologous peripheral blood stem cell transplantation: the Norwegian experience from a multicenter cost study

Summary:High-dose therapy with autologous blood progenitor cell support is now routinely used for patients with certain malignant lymphomas and multiple myeloma. We performed a prospective cost analysis of the mobilization, harvesting and cryopreservation phases and the high-dose therapy with stem cell reinfusion and hospitalization phases. In total, 40 consecutive patients were studied at four different university hospitals between 1999 and 2001. Data on direct costs were obtained on a daily basis. Data on indirect costs were allocated to the specific patient based on estimates of relevant department costs (ie the service departments costs), and by means of predefined allocation keys. All cost data were calculated at 2001 prices. The mean total costs for the two phases were US

Cost of extracorporeal membrane oxygenation: evidence from the Rikshospitalet University Hospital, Oslo, Norway

32 160 (range US

Reimbursement systems, organisational forms and patient selection: evidence from day surgery in Norway

19 092–50 550). The mean total length of hospital stay for two phases was 31 days (range 27–37). A large part of the actual cost in the harvest phase was attributed to stem cell mobilization, including growth factors, harvesting and cryopreservation. In the high-dose chemotherapy phase, the most significant part of the costs was nursing staff. Average total costs were considerably higher than actual DRG-based reimbursement from the government, indicating that the treatment of these patients was heavily subsidized by the basic hospital grants.

Costs and reimbursement gaps after implementation of third-generation left ventricular assist devices.

OBJECTIVE The main objective is to describe and analyse hospital costs of the extracorporeal membrane oxygenation (ECMO) procedure. STUDY SAMPLE AND METHODOLOGY: Between January and December 2007, 14 ECMO patients were consecutively included in the study. Costs at the patient level were registered prospectively, while overhead costs were registered retrospectively. Patient costs were obtained from patient records and time-motion studies and included personnel resources, diagnostic and laboratory tests, radiology and operating room procedures, medication and blood products. Overhead costs were allocated to clinical departments and further to the individual patients by predefined keys. To achieve estimates of total costs, patient-specific costs and patient-specified overhead costs were summarised. RESULTS The mean estimated cost for the ECMO procedure was 73,122 USD (SD 34,786) and median 62,545 USD (range: 34,121-154,817). The mean estimated total hospital costs, including pre- and post-ECMO procedures, was 213,246 USD (SD 12,265), median 191,436 USD (range: 59,871-405,497). On average, 82% of costs for the total hospital stay were related to personnel use, and blood products constituted 7%, lab and radiology 2.5%, disposable items 3% and medication 1.5%. The mean duration of an ECMO procedure was 9.5 days (range: 4-23 days) and the average total length of stay in hospital was 51.5 days (range: 6-123 days). The cost data were converted from Norwegian kroner (NOK) to US dollars (USD), with an exchange rate of 1 USD=5.5 NOK. CONCLUSION ECMO procedure is a resource-demanding procedure.

Markedly Changed Age Distribution among Patients Hospitalized for Acute Myocardial Infarction

Cream skimming can be defined as the selective treatment of patients that demand few resources while providing high economic refunds. We test whether cream skimming occurs after the introduction of DRG-based activity-based financing (ABF) in Norway in 1997 and if the problem further increased after the 2002 organizational reform when hospitals were turned into trusts. The DRG-system offers the same economic reimbursement for patients classified within day-surgical DRGs irrespective of whether the patient receives same-day treatment or in-patient care over several days. This provides potential for cream skimming and allows us to investigate cream skimming within the actual diagnoses. Patient data from the period 1999-2005 is analyzed. Waiting times are used as indicators of patient selection and analyzed as a function of severity within each diagnosis, controlling for age and gender of the patient, as well as institutional and time-dependent variables. The analysis gives some evidence of cream skimming in the first period of ABF, in particular within the lighter orthopaedic diagnoses. However, cream skimming does not increase after the 2002 organizational reform but is stable, and for some DRGs even reduced. The study indicates that cream skimming may occur if reimbursement systems are not particularly sophisticated. Softening of budget constraints after the hospital reform of 2002 may explain why cream skimming does not increase after the reform. However, further investigation into this mechanism is needed.

Changes in myocardial infarction mortality

BACKGROUND The purpose of this study was to compare and contrast total hospital costs and subsequent reimbursement of implementing a new program using a third-generation left ventricular assist device (LVAD) in Norway. METHODS Between July 2005 and March 2008, the total costs of treatment for 9 patients were examined. Costs were calculated for three periods-the pre-implantation LVAD phase, the LVAD implantation phase and the post-implantation LVAD phase-as well as for total hospital care. Patient-specific costs were obtained prospectively from patient records and included personnel resources, medication, blood products, blood chemistry and microbiology, imaging, and procedure costs including operating room costs. Overhead costs were registered retrospectively and allocated to the specific patient by pre-defined allocation keys. Finally, patient-specific costs and overhead costs were aggregated into total patient costs. RESULTS The average total patient cost in 2007 U.S. dollars was

Hospital costs fell as numbers of LVADs were increasing: experiences from Oslo University Hospital

735,342 and the median was