State rate-setting and its effects on the cost of nursing-home care

The paper uses data from nursing-home cost reports to analyze the effectiveness of different approaches to nursing-home reimbursement. Our research has produced considerable evidence on the effect of states' efforts to reduce the rate of increase in nursing-home costs. First, homes in states with flat-rate reimbursement systems were found to have lower rates of increase than homes in other states, while there were no consistent differences between the results of prospective and retrospective systems. Second, efficiency incentives, inflation-projection methods, and the level of ceilings on rates appear to be very important, regardless of the general reimbursement method. For example, prospective systems with weak efficiency incentives, generous inflation adjustments, and high percentile ceilings have lesser cost-containment effects than prospective systems with stringent inflation allowances and low percentile ceilings. There is also evidence that the inherent weakness of the cost-containment incentives in retrospective systems can be offset by low percentile ceilings and efficiency bonuses.     

Using the New Jersey Spill Act Safe Harbor to Protect Lenders

Lenders in New Jersey have come to understand that they may be exposed to environmental liability for hazardous substances affecting collateral under federal and state law. While initially the parameters of this liability were not clearly understood, the New Jersey legislature and the U.S. Congress have enacted amendments to environmental laws in an attempt to clarify the activities that lenders may undertake to protect their interests while avoiding environmental liability, before making a loan, after making a loan but before foreclosure, and after acquiring title through foreclosure. This article describes how lenders can protect themselves from liability under the New Jersey Spill Compensation and Control Act by availing themselves of the protections of the act's safe harbor provisions.     

Improved access to care for the uninsured poor in large cities: do public hospitals make a difference?

This study compares the volume of uncompensated care provided to the uninsured poor in cities with public hospitals to that provided in cities without a public hospital in order to determine whether public hospitals increase access to care. Multiple regression analysis is used to control for selected variables that also influence utilization of hospital care. Cities with public hospitals were found to provide between 31 and 34 uncompensated adjusted admissions per 100 uninsured poor; in cities without a public hospital, 24 such admissions were provided. In the regression analysis the coefficients for dummy variables representing three types of public hospital governance structures were all positive and statistically significant. The coefficient measuring teaching commitment among a city's hospitals was also positive and statistically significant. This analysis suggests that local tax support for public hospitals does not merely offset philanthropic or other revenue sources for voluntary hospital uncompensated care but is also likely to increase the amount of uncompensated care offered. We also find that public hospital closures may reduce access to care for the uninsured poor in large cities.     

Applying antitrust concepts to the acute care hospital industry: defining the relevant market for hospital services

In considering the possible antitrust implications of a merger of two or more competing hospitals, the courts have generally found that hospitals provide a cluster of services which have significant peculiar characteristics that allow them to be considered a single product market. Spurred by changes in their environments, hospitals during the last decade have become markedly less homogeneous in their range of products and geographic markets. As a result, the impact of hospital mergers in the future may need to be assessed in multiple, more narrowly defined relevant markets, for which several possible definitional bases are suggested in this paper. The increased precision associated with such multidimensional antitrust analysis should permit a more effective consideration of the trade-offs between increases in hospitals' market power and advances in their relative operating efficiency and/or quality of services.     

Health care and the labor market: learning from the German experience

Many observers have begun to question the U.S. reliance on an employment-based private health insurance system. In thinking about the future of this system, it is instructive to examine the German experience. The German health insurance system is almost entirely organized and financed around the labor market. In recent years, the German labor market has changed in several ways. Among other changes, more German women now work, the proportion of retirees in the population has increased, the share of manufacturing in employment has declined, and the economy has become more open. These labor market changes have made it more difficult to organize health insurance around employment in Germany. Recent changes in the German health insurance system have, to some extent, decoupled health insurance from employment. This decoupling is likely to continue as the labor market changes further. We explore the implications of this experience for the United States.     

Enrollment--provision of hospital and outpatient care to veterans--VA. Proposed rule

This document proposes to amend VA's medical regulations. The Veterans' Health Care Eligibility Reform Act of 1996 mandates that VA implement a national enrollment system to manage the delivery of healthcare services. Accordingly, the medical regulations are proposed to be amended to establish provisions consistent with this mandate. Starting October 1, 1998, most veterans must be enrolled in the VA healthcare system as a condition of receiving VA hospital and outpatient care. Veterans would be allowed to apply to be enrolled at any time. They would be eligible to be enrolled based on funding availability and their priority status. In accordance with statutory provisions, the proposed rule also states that some categories of veterans would be eligible for VA hospital and outpatient care even if not enrolled. This document further proposes to establish a "medical benefits package" setting forth, with certain exceptions, the hospital and outpatient care that would be provided to enrolled veterans and certain other veterans.     

Price competition in hospital markets: the significance of managed care

Anticompetitive conduct in the healthcare industry is often hard to detect, and has been ignored by some courts that appear to lack an understanding of managed care and its significance in maintaining price competition. These courts have adopted an approach that is far too historical and mechanistic, and is characterized by outdated factors analyzed in isolation from each other. In order to preserve effective price competition, the courts should embrace a realistic analysis that accurately reflects the workings of health services markets. This article describes the many facets of market power and anticompetitive conduct, and how they affect healthcare prices. The author then tums to an analysis of two recent hospital antitrust decisions, and critiques them for their failure to properly analyze the dynamics of local hospital markets.     

Hospital and patient characteristics of uncompensated hospital care: policy implications

For this study, a sample of 1,689 patients classified as "charity" and "bad debt" cases in 1986 were identified from 27 general acute care hospitals and one tertiary hospital in Indiana. Half of the hospitals were in rural areas and 57 percent were small (less than 150 beds). Most of the patients (87.2 percent) incurred uncompensated amounts under $2,500, and 40 percent of the cases were below $500. About 72 percent of the patients with uncompensated care were from the same county as the location of the hospital (range from 30.9% to 100.0%). The majority of the cases (79.4 percent) with over $5,000 in uncompensated care were treated in urban hospitals. The average age of these patients was 27.2 years. Fifty-four percent of the patients were single, 60.7 percent were female, and nearly all (83.0 percent) were discharged to home care. Only 44.6 percent of the patients with uncompensated care had no insurance; 46.8 percent had some form of commercial insurance which covered part of the charges for care. The most common diagnosis for these patients was pregnancy and childbirth (22.8 percent), with injury and poisoning second (10.7 percent). The cases with $5,000 or more in bad debt (about 4 percent of the cases) account for 28.3 percent of the total uncollected amount. Bad debt represents a cost of doing business. Any national effort to contain health care costs must address this problem.     

Health workforce redesign in Australia: implications for health care professional liability and the provision of professional indemnity insurance

The Productivity Commission's research report entitled Australia's Health Workforce, which was commissioned by the Commonwealth Government and released in January 2006, has been key to recent health workforce policy development. Many of the Productivity Commission's proposals have been endorsed by the Council of Australian Governments and a National Health Workforce Taskforce established to drive change. Surprisingly, the report gave little attention to medico-legal factors that may impact upon workforce supply and consequently may represent a barrier to workforce redesign. This column examines the implications of health workforce redesign and in particular the potential impact of task substitution and task delegation on professional liability and the provision of professional indemnity insurance for private sector health care professionals in Australia. It also identifies and addresses some other medico-legal issues not considered in the report.