A variety of recent theoretical and empirical advances have renewed interest in monopsonistic models of the labor market. However, there is little direct empirical support for these models, even in labor markets that are textbook examples of monopsony. We use an exogenous change in wages at Veterans Affairs hospitals as a natural experiment to investigate the extent of monopsony in the nurse labor market. In contrast to much of the prior literature, we estimate that labor supply to individual hospitals is quite inelastic, with short-run elasticity around 0.1. We also find that non-VA hospitals responded to the VA wage change by changing their own wages.

Aims The prevalence of Type 2 diabetes mellitus (DM) has grown rapidly, but little is known about the drivers of inpatient spending in low- and middle-income countries. This study aims to compare the clinical presentation and expenditure on hospital admission for inpatients with a primary diagnosis of Type 2 DM in India, China, Thailand and Malaysia.

Methods We analysed data on adult, Type 2 DM patients admitted between 2005 and 2008 to five tertiary hospitals in the four countries, reporting expenditures relative to income per capita in 2007.

Results Hospital admission spending for diabetic inpatients with no complications ranged from 11 to 75% of per-capita income. Spending for patients with complications ranged from 6% to over 300% more than spending for patients without complications treated at the same hospital. Glycated haemoglobin was significantly higher for the uninsured patients, compared with insured patients, in India (8.6 vs. 8.1%), Hangzhou, China (9.0 vs. 8.1%), and Shandong, China (10.9 vs. 9.9%). When the hospital admission expenditures of the insured and uninsured patients were statistically different in India and China, the uninsured always spent less than the insured patients.

Conclusions With the rising prevalence of DM, households and health systems in these countries will face greater economic burdens. The returns to investment in preventing diabetic complications appear substantial. Countries with large out-of-pocket financing burdens such as India and China are associated with the widest gaps in resource use between insured and uninsured patients. This probably reflects both overuse by the insured and underuse by the uninsured.

BACKGROUND: Safety climate refers to shared perceptions of what an organization is like with regard to safety, whereas safety culture refers to employees' fundamental ideology and orientation and explains why safety is pursued in the manner exhibited within a particular organization. Although research has sought to identify opportunities for improving safety outcomes by studying patterns of variation in safety climate, few empirical studies have examined the impact of organizational characteristics such as culture on hospital safety climate.

PURPOSE: This study explored how aspects of general organizational culture relate to hospital patient safety climate.

METHODOLOGY: In a stratified sample of 92 U.S. hospitals, we sampled 100% of senior managers and physicians and 10% of other hospital workers. The Patient Safety Climate in Healthcare Organizations and the Zammuto and Krakower organizational culture surveys measured safety climate and group, entrepreneurial, hierarchical, and production orientation of hospitals' culture, respectively. We administered safety climate surveys to 18,361 personnel and organizational culture surveys to a 5,894 random subsample between March 2004 and May 2005. Secondary data came from the 2004 American Hospital Association Annual Hospital Survey and Dun & Bradstreet. Hierarchical linear regressions assessed relationships between organizational culture and safety climate measures.

FINDINGS: Aspects of general organizational culture were strongly related to safety climate. A higher level of group culture correlated with a higher level of safety climate, but more hierarchical culture was associated with lower safety climate. Aspects of organizational culture accounted for more than threefold improvement in measures of model fit compared with models with controls alone. A mix of culture types, emphasizing group culture, seemed optimal for safety climate.

PRACTICE IMPLICATIONS: Safety climate and organizational culture are positively related. Results support strategies that promote group orientation and reduced hierarchy, including use of multidisciplinary team training, continuous quality improvement tools, and human resource practices and policies.

Magnetic resonance imaging (MRI) is a technology frequently used to evaluate low back pain, despite evidence that challenges the usefulness of routine MRI and the surgical interventions it may trigger. We analyze the relationship between MRI supply and care for fee-for-service Medicare patients with low back pain. We find that increases in MRI supply are related to higher use of both low back MRI and surgery. This is worrisome, and careful attention should be paid to assessing the outcomes for patients.

Economics influences how medical care is delivered, organized, and progresses. Fee-for-service payment encourages delivery of services. Fee-for-individual-service, however, offers no incentives for clinicians to efficiently organize the care their patients need. Global capitation provides such incentives; it works well in highly integrated practices but not for independent practitioners. The failures of utilization management in the 1990s demonstrated the need for a third alternative to better align incentives, such as bundling payment for an episode of care. Building on Medicare's approach to hospital payment, one can define expanded diagnosis-related groups that include all hospital, physician, and other costs during the stay and appropriate preadmission and postdischarge periods. Physicians and hospitals voluntarily forming a new entity (a care delivery team) would receive such bundled payments along with complete flexibility in allocating the funds. Modifications to gainsharing and antikickback rules, as well as reforms to malpractice liability laws, will facilitate the functioning of the care delivery teams. The implicit financial incentives encourage efficient care for the patient; the episode focus will facilitate measuring patient outcomes. Payment can be based on the resources used by those care delivery teams achieving superior outcomes, thereby fostering innovation improving outcomes and reducing waste.

BACKGROUND: Many hospitals enrolled in the American Heart Association's Get With The Guidelines (GWTG) Program achieve high levels of recommended care for heart failure, acute myocardial infarction (MI) and stroke. However, it is unclear if outcomes are better in those hospitals recognized by the GWTG program for their processes of care. METHODS: We compared hospitals enrolled in GWTG and receiving achievement awards for high levels of recommended processes of care with other hospitals using data on risk-adjusted 30-day survival for heart failure and acute MI reported by the Center for Medicare and Medicaid Services. RESULTS: Among the 3,909 hospitals with 30-day data reported by Center for Medicare and Medicaid Services 355 (9%) received GWTG achievement awards. Risk-adjusted mortality for hospitals receiving awards was lower for both heart failure (11.0% vs 11.2%, P = .0005) and acute MI (16.1% vs 16.5%, P < .0001) compared to those not receiving awards. After additional adjustment for hospital characteristics and noncardiac performance measures, the reduction in mortality remained significantly lower for GWTG award hospitals for acute myocardial infraction (-0.19%, 95% CI -0.33 to -0.05), but not for heart failure (-0.11%, 95% CI -0.25 to 0.02). Additional adjustment for cardiac processes of care reduced the benefit of award hospitals by 28% for heart failure mortality and 43% for acute MI mortality. CONCLUSIONS: Hospitals receiving achievement awards from the GWTG program have modestly lower risk adjusted mortality for acute MI and to a lesser extent, heart failure, explained in part by better process of care.

In 2008 Medicare stopped reimbursing hospitals for treating eight avoidable hospital-acquired conditions. Using 2006 California data, we modeled the financial impact of this policy on six such conditions. Hospital-acquired conditions were present in 0.11 percent of acute inpatient Medicare discharges; only 3 percent of these were affected by the policy. Payment reductions were negligible (0.001 percent, or $0.1 million-equivalent to $1.1 million nationwide) and are unlikely to encourage providers to improve quality. Options to strengthen the incentives include further payment modifications for hospital-acquired conditions or expanding the hospital-acquired condition policy to exclude payment for consequences, additional procedures, and readmissions.

Background: An increasing number of people suffer from chronic illness. Processes exist to provide better chronic illness care and yet for the most part, they are not used.

Objective: To examine the change in use of commonly recommended chronic illness care management processes (CMPs) in large medical groups between 2000 and 2006 and the factors associated with the change.

Design and Measures: Cohort analysis of data from a national telephone survey in year 2000 and again in 2006. Participants provided information on their organizations' ownership, size, use of defined chronic illness CMPs, financial incentives, quality improvement involvement, profitability, and use of electronic medical records.

Setting: Medical groups and independent practice associations of 20 physicians or more (N = 369) that treat patients with asthma, congestive heart failure, depression, and diabetes, and that responded to the survey in 2000 and 2006.

Results: Use of CMP increased from 6.25 to 7.67 (of a total of 17; P ≤ 0.001), that is, by 23%, between 2000 and 2006. Increases were greatest for those practices receiving financial rewards for quality; those participating in quality improvement activities; and those practices that were profitable. Most of the increase was in use of registries and in patient self-management support services.

Conclusions: There is significant opportunity for improving chronic illness care even in larger physician organizations. Public policies that promote financial rewards for improving quality and that encourage quality improvement initiatives are likely to be associated with improved chronic illness care.