The use of expensive health technologies in the era of managed care: the remarkable case of neonatal intensive care

The use of neonatal intensive care (NIC) continued to rise rapidly in the 1990s despite the concerns of observers about its cost effectiveness and its successes being mostly in facilities with high volume and capabilities. The objective of this study is to test the effects of insurance type, competition among hospitals, and market pressure from managed care plans on the supply and cost of NIC. The analysis uses logistic and linear models with techniques to avoid bias from (a) market area definitions based on actual patient flows and (b) self-selection of hospitals by patients with unmeasured risk of needing NIC. The data source contains all births in short-term hospitals in New Jersey during 1990 and 1994. Both the number of days and charges for NIC are reported. Key findings are that the decision of a hospital to offer NIC was associated with teaching status, the proportion of infants in the market area with documented high risk, and the market concentration of major competitors. The market share of managed care plans and the concentration of enrollment were not associated with either NIC being offered or with the standardized charges. Whether a particular patient was given to a NIC depended on patient risk factors and whether a NIC unit was present, but not on payer group. The results are consistent with the hypothesis that young insured parents (with the advice of their obstetricians) prefer hospitals with NIC and also are relatively profitable enrollees for health plans. In conclusion: using the results here and in other research, public and private policy makers may consider several ways to strengthen the incentives for health plans to contract for cost-effective birth-related services. The results also raise questions for a number of regulatory and payment policies and call for better public data on costs and outcomes for NIC.     

Privatization,regulation and development: Some questions of training strategy

In the current debate over the role of the public sector and its effective and efficient management, too little attention has been paid to the training implications of the various policy options. These include privatization as well as public enterprise performance improvement and rehabilitation. Third world training institutions are only just beginning to respond to the new tasks of re-equipping public sector managers to enable them to play a more ‘enabling’ or ‘facilitating’ role vis-à-vis the private and parastatal sectors. Accordingly, this article suggests a number of major elements that need go into any national training effort to strengthen the government-enterprise interface, including some of the curricular content, needs for case and teaching materials, developing training methods, the role of research, possibilities of a regional approach and the role of the international donor community.