Power and cost containment in a Danish public hospital

The assumption that hospital decision-making is hierarchical in character underpins the policy formulation process in public as well as pluralist national health care systems. This article's analysis of decision-making in a Danish public hospital reinforces the contrary assertion: that effective authority in acute-care hospitals rests in an amorphous power relationship among the hospital's several occupational groups, in which physicians clearly have the upper hand. After a brief introduction to this Danish hospital, the article develops a detailed portrait of its informal power structure and of the different occupational groups' permanent power-maximizing strategies. Subsequently, the article assesses the impact of these strategies upon two recent efforts to contain the hospital's costs: a decision to close an expensive specialty clinic, and an attempt to shrink the hospital's size by transferring less sick elderly patients to a newly created rehabilitation facility. The study's findings suggest that efforts to impose hospital cost containment by exclusively political means are unlikely to succeed.     

Health insurance without provider influence: the limits of cost containment

In our previous paper, we showed that market forces can play a significant role in controlling health care costs and that a considerable amount of cost containment effort was pursued by third-party insurers in Oregon in the 1930s and 1940s. Although physicians were able to thwart this cost-control effort, a 1986 Supreme Court decision, FTC v. Indiana Federation of Dentists, found that a boycott of insurers by dentists violated Section 5 of the Federal Trade Commission Act. Further investigation of recent developments, including the recent Wickline v. California decision, indicates that the primary barriers to cost containment today are not obstructive tactics by providers or provider-controlled health insurance plans. Rather, the primary barriers are increases in the development and diffusion of new technology and society's apparent preference for paying for new tests and procedures regardless of economic efficiency.     

The European airline industry: law and economics of low cost carriers

This article offers an analysis of the European airline industry in order to understand the new dynamics of the competitive field. The liberalization process did not lead the entrance of competitors similar to incumbents, but a new organizational model has been developed, the one of low cost carriers. The incumbents’ reaction to the liberalization process coupled with the entrance of low cost companies into the sector are hence considered. Two theories are analysed: the contestable markets theory, to understand the theoretical vision that has influenced the liberalization process, and the core theory, a modern approach to the concept of destructive competition that, according to some authors, is a recurring problem in the sector. While numerous barriers to entry still exist, the paper examines how the organizational model of low cost companies has helped new entrants to overtake these obstacles. By the same token, the application of the core theory does not seem to justify strategic alliances taking place in these years. The competitive framework is definitely clearer if we analyse sector changes in a different way, from the point of view of low cost companies considered as new market actors.     

Personnel leadership in action: doing something about health care cost containment

It's no secret that health care costs are skyrocketing and will continue to do so unless business, particularly personnel professionals, takes responsibility for containing them. This month, we present a panel report whose participants--ranging from the corporate manager of employee benefits at TRW to the director of public relations at Blue Cross Of Milwaukee--are taking concrete action to improve employee health and company expenses.     

Finding the levers, finding the courage: lessons from cost containment in North America

"Learning" is broader and more complex than simply the orderly acquisition of new knowledge. At least as important is the evolution of the background of assumptions and beliefs held by the community, or its principal decision makers, and implicit in its institutions and policies. These may bear only a loose relation to evidence or knowledge narrowly defined. The pressures of cost escalation over the past twenty years, and the attempts at containment in the U.S. and Canada, have added substantially to our knowledge of how the health care system works. Containment is possible, and the successful mechanisms, thus far, are quite specific. But the results of these attempts and (in the U.S.) the continued escalation have also significantly shifted the broader set of assumptions in the community about appropriate priorities and policies in health care. Attitudes towards physician supply, variations in practice patterns, capitated practice, and for-profit organization, for example, have changed radically, although the supporting evidence has not. But cost pressures have created an audience which wants to hear, whose background assumptions provide a different "fit" for the evidence.     

The devil is in the details: Managed care and the unforeseen costs of utilization review as a cost containment mechanism

This article addresses issues of liability when a single-payor in a national health care system makes a decision based on a utilization review program that injures the patient as a result. In Part I, the history of Managed Care Organizations (MCOs) is discussed to establish an understanding of the current health care landscape. Part II explains MCOs' use of utilization review to contain costs and analyzes the manner in which courts have addressed the issue of MCO liability for patient injuries sustained from denial ofcoverage. Finally, Part III concludes that current case law may limit a patient's access to a remedy for injuries sustained from a utilization review decision in a single-payor national health care system.     

Institutional law and economics

Behavioral economics provides one of the foundation for institutional law and economics (ILE). Improvement in predicting the performance of alternative laws will be built on ILE insights into how distribution affects productivity of labor and realization of joint gains. Our understanding of obedience to law as well as other categories of failure to be opportunistic (such as in high exclusion-cost situations) will be better understood from an ILE perspective that investigates learning to supplement specific sanctions.The boundaries of ILE inquiry encompass private property rights, regulation, and public spending and taxation since these are complements and substitutes. Public spending is not a good measure of the size of government, and regulation is not the opposite of freedom in the aggregate. This framework of ILE can usefully be seen as distinctive, even if all of its practitioners do not use the label and several of its propositions are shared with other paradigms. A better label might simply be institutional economics or political economy.