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Book part
Publication date: 26 October 2020

Michael D. Rosko

This chapter assessed internal and external environmental factors that affect variations in rural hospital profitability with a focus on the impact of the Patient Protection and…

Abstract

This chapter assessed internal and external environmental factors that affect variations in rural hospital profitability with a focus on the impact of the Patient Protection and Affordable Care Act regulations that resulted in the expansion of Medicaid eligibility, as well as four Medicare programs that target rural hospitals. A cross section of 2,114 rural US hospitals operating during 2015 was used. The primary source of data was Medicare Hospital Cost Reports. Ordinary least squares regression with correction for serial correlation, using total margin and operating margin as dependent variables, was employed to ascertain the association between profitability and its correlates.

The mean values for operating margin and total margin were −0.0652 and 0.0259, respectively. Hospital profitability was positively associated with location in a Medicaid expansion state, classification by Medicare as a Critical Access Hospital or Rural Referral Center (total margin only), hospital size, system membership, and occupancy rate. Profitability was negatively associated with average length of stay, government ownership, Medicare and Medicaid share of admissions, teaching status, and unemployment rate.

This chapter found that the Medicaid expansions provided modest help for the financial condition of rural hospitals. However, the estimates for the four targeted Medicare Programs (i.e., Critical Access Hospital, Medicare Dependent, Sole Community Critical Access Hospital, and Rural Referral Center) were either small or not significant (p > 0.10). Therefore, these specially targeted federal programs may have failed to achieve their goals of preserving the financial viability of rural hospitals. This chapter concludes with implications for practice.

Article
Publication date: 1 March 2011

Li-Lin (Sunny) Liu, Kathryn J. Jervis, Mustafa (Mike) Z. Younis and Dana A. Forgione

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

Abstract

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.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 23 no. 1
Type: Research Article
ISSN: 1096-3367

Article
Publication date: 28 October 2014

Jared Frank and Muhiuddin Haider

The purpose of this study is to conduct a comparative analysis of the Medicare patients discharged to a long-term (acute) care hospitals (LTCH), skilled nursing facility (SNF) or…

Abstract

Purpose

The purpose of this study is to conduct a comparative analysis of the Medicare patients discharged to a long-term (acute) care hospitals (LTCH), skilled nursing facility (SNF) or inpatient rehabilitation facility (IRF) following an acute inpatient hospitalization under Medicare-severity diagnosis-related group (MS-DRG) 207. The likelihood of discharge by provider type was also examined to determine criteria informing patient discharge to a LTCH, SNF or IRF for treatment.

Design/methodology/approach

Retrospective cohort study, based on secondary data analysis, utilizing Medicare Provider Analysis and Review (MedPAR) File data collected by Centers for Medicare & Medicaid Services for fiscal year 2011, October 1, 2010, through September 30, 2011.

Findings

Numerous analyses were conducted upon those patients discharged to a LTCH, SNF or IRF following an acute inpatient hospitalization under MS-DRG 207. Concerning those patients discharged to LTCHs, patients were not significantly older, did not have the highest length of stay and had comparable diagnoses and diagnosis counts to those discharged to SNFs or IRFs. However, costs were significantly higher among discharges to LTCHs. Multinomial logistic regression analyses also indicated numerous associations between certain variables and discharge location.

Originality/value

With the aging of the US population and increasing costs of rendering services, both the Medicare population and Medicare expenditures, already at their highest levels in the history of the program, are projected to rise going forward (The Boards of Trustees, 2012). As such, recent research has focused on Part A hospitals/facilities and the variations in costs submitted and payments received for treatment/services provided. This study aims to address whether patients discharged to LTCHs, which receive higher payment(s) as a result of serving a higher proportion of medically complex beneficiaries, are more medically complex than those discharged to SNFs/IRFs.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 8 no. 4
Type: Research Article
ISSN: 1750-6123

Keywords

Article
Publication date: 1 March 2014

Kelly Noe and Dana A. Forgione

We examine the association of for-profit (FP) and nonprofit (NP) economic incentives in hospice care providers with financial and nonfinancial metrics of management performance…

Abstract

We examine the association of for-profit (FP) and nonprofit (NP) economic incentives in hospice care providers with financial and nonfinancial metrics of management performance. Controlling for quality of patient care and differences in cost-efficiency, we find that FP providers (1) selectively admit patients with longer life-prognoses and billable days and hence lower average costs per day, (2) employ a lower average cost/skill mix of workers, and (3) have higher CEO compensation and profit. The NP providers admit more patients with the less profitable life-prognoses attributes, have lower CEO compensation, and reinvest their net earnings under the non-distribution constraint. While the profit incentive may be needed to attract providers into this rapidly growing and underserved market, the NP providers return a lower cost per patient served from the taxpayer's perspective.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 26 no. 2
Type: Research Article
ISSN: 1096-3367

Article
Publication date: 1 March 2007

Dana A. Forgione, Melony J. Goodhand and John A. Wrieden

We present a legislative background and assessment of approaches to financing the US Department of Veterans Affairs (VA) healthcare services, and focus on issues related to…

Abstract

We present a legislative background and assessment of approaches to financing the US Department of Veterans Affairs (VA) healthcare services, and focus on issues related to beneficiaries eligible for both VA and Medicare benefits. We refer to a large, VA Medical Center (VAMC) hospital and healthcare complex as a case for comparison of financing approaches. Several legislative proposals had been made to grant the VA funding transfers from Medicare. To date, none has passed in the Congress. Our analysis shows that payments from Medicare would need to be adjusted for the specialized characteristics of VAMC patients, as well as for higher capital costs related to the federal VAMC mandate to maintain reserve capacity for national health emergencies, in order to appropriately apply Medicare payments.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 19 no. 3
Type: Research Article
ISSN: 1096-3367

Book part
Publication date: 21 April 2010

William D. Cabin

Purpose – To explore how home care social worker perceptions of their organizations' dominant goals and means affect direct service home care professionals' care delivery and…

Abstract

Purpose – To explore how home care social worker perceptions of their organizations' dominant goals and means affect direct service home care professionals' care delivery and meeting of patient needs for persons with Alzheimer's disease.

Methodology/approach – The study used a convenience sample of 34 home care social workers in the New York City metropolitan area and an extensive literature review.

Findings – The study found that literature indicates a dissonance between effective, evidence-based research psychosocial Alzheimer's disease interventions and Medicare home health policy which does not cover their use. Furthermore, interviews indicated home care social workers' different strategies to cope with organization demands, which affect their perceptions and care delivered to patients. The coping strategies are characterized using a modified version of Merton's (1957) adaptation model – conformist, innovator, and rebel.

Contribution to the field – The study is the first to use the voice of home care social workers to explore how perceptions of organizational dominant goals and means affect direct service home care professionals' care delivery and meeting of patient needs. The study asserts the need for a home care-based policy model drawing on the Hospice Medicare Benefit (HMB) to address Alzheimer's disease more cost-effectively with a more positive quality of life manner, thus limiting the adverse consequences of the evolving epidemic.

Details

Understanding Emerging Epidemics: Social and Political Approaches
Type: Book
ISBN: 978-1-84855-080-3

Book part
Publication date: 11 August 2014

Lawton Robert Burns, Jeff C. Goldsmith and Aditi Sen

Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of these…

Abstract

Purpose

Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of these models and if this organizational transformation is underway.

Design/Methodology Approach

We summarize the evidence on scale and scope economies in physician group practice, and then review the trends in physician group size and specialty mix to conduct survivorship tests of the most efficient models.

Findings

The distribution of physician groups exhibits two interesting tails. In the lower tail, a large percentage of physicians continue to practice in small, physician-owned practices. In the upper tail, there is a small but rapidly growing percentage of large groups that have been organized primarily by non-physician owners.

Research Limitations

While our analysis includes no original data, it does collate all known surveys of physician practice characteristics and group practice formation to provide a consistent picture of physician organization.

Research Implications

Our review suggests that scale and scope economies in physician practice are limited. This may explain why most physicians have retained their small practices.

Practical Implications

Larger, multispecialty groups have been primarily organized by non-physician owners in vertically integrated arrangements. There is little evidence supporting the efficiencies of such models and some concern they may pose anticompetitive threats.

Originality/Value

This is the first comprehensive review of the scale and scope economies of physician practice in nearly two decades. The research results do not appear to have changed much; nor has much changed in physician practice organization.

Details

Annual Review of Health Care Management: Revisiting The Evolution of Health Systems Organization
Type: Book
ISBN: 978-1-78350-715-3

Keywords

Case study
Publication date: 11 September 2017

Miriam Weismann, Javier Hernandez Lichtl, Heather Pierce, Denise Harris, Lourdes Boue and Cathy Campbell

The first three years of operation of the West Kendall Baptist Hospital (WKBH) in Miami, Florida provided a “poster child” for efficient and cost effective healthcare delivery to…

Abstract

Synopsis

The first three years of operation of the West Kendall Baptist Hospital (WKBH) in Miami, Florida provided a “poster child” for efficient and cost effective healthcare delivery to the West Kendall community that it served. The hospital leadership and management team exemplified a quality-oriented staff that moved as a cohesive and dedicated organization. WKBH exceeded every budget prediction and showed a profit in year 3, well before expected. Then came the winds of regulatory change. With the passage of the Affordable Care Act (ACA) and the attendant imposition of new reimbursement metrics, the picture at WKBH changed almost overnight. By the first quarter of 2016, WKBH started to lose money in excess of budget predictions despite its increased patient admissions, careful financial planning, expense reductions, quality service, and excellence in patient care delivery. A serious financial crisis was looming with little relief in sight. The hospital management team began to search for solutions.

Research methodology

The research methodology includes collecting quantitative data: original financial statements and financial data from WKBH, as well as qualitative data: interviews of hospital administrators and historical information.

Relevant courses and levels

Graduate capstone course in a finance course; masters in health administration; and/or the MBA program.

Theoretical bases

While it is clear that the ACA was designed with all good intentions, it has created substantial and perhaps, unanticipated financial burdens for caregivers. These issues are not only faced by WKBH. Most hospitals could relate to one or more of the four questions examined as part of this learning process. Graduate MBA students worked with the hospital to identify, define, focus, and resolve difficult quantitative and qualitative issues faced by the hospital as a result of major changes in the regulatory environment with the passage of the ACA. This case focuses upon the current reimbursement environment that has only recently emerged as a result of the implementation of the ACA.

Details

The CASE Journal, vol. 13 no. 5
Type: Case Study
ISSN: 1544-9106

Keywords

Article
Publication date: 1 March 2014

Kelly Noe and Dana A. Forgione

This paper examines the association of charitable donations with quality of care proxies for nonprofit hospice providers in the United States (US). An estimated 1.45 million…

Abstract

This paper examines the association of charitable donations with quality of care proxies for nonprofit hospice providers in the United States (US). An estimated 1.45 million patients received hospice care in the US in 2008. Medicare hospice spending exceeded $10 billion in 2007 and is expected to more than double over the next 10 years. Using Guidestar and Medicare Hospice Cost Report data, we find donations are positively associated with proxies for nurse and social worker quality of care, but not with our home-health aide quality proxy. This research adds to our understanding of charitable contributions in hospice provider organizations.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 26 no. 4
Type: Research Article
ISSN: 1096-3367

Article
Publication date: 1 March 2017

Kelly Noe, Dana A. Forgione, Pamela C. Smith and Hanni Liu

We examine earnings management in non-publicly listed companies, with a focus on for-profit (FP) hospice organizations, and extend the accounting earnings management literature to…

Abstract

We examine earnings management in non-publicly listed companies, with a focus on for-profit (FP) hospice organizations, and extend the accounting earnings management literature to the hospice industry. FP hospice organizations file Medicare cost reports that include complete financial statements not otherwise publicly available. Managers of FP hospice organizations have incentives to manage earnings to increase performancebased bonuses, meet or beat bond covenant requirements, or avoid public scrutiny. We find total accruals are significantly positively associated with profitability, debt, and size factors. However, discretionary accruals are significantly negatively associated with debt and size, but not profitability. Thus, monitoring and political cost factors appear to effectively mitigate earnings management in this industry sector.

Details

Journal of Public Budgeting, Accounting & Financial Management, vol. 29 no. 1
Type: Research Article
ISSN: 1096-3367

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