Private consultants up to 20 times more expensive
A consultant at St Luke's Hospital costs as little as five per cent for a consultant at St James Hospital, resulting in much higher prices for various surgical procedures in the private sector, according to Amanda Borg, a research officer with the...
A consultant at St Luke's Hospital costs as little as five per cent for a consultant at St James Hospital, resulting in much higher prices for various surgical procedures in the private sector, according to Amanda Borg, a research officer with the Malta Council for Social and Economic Development.
"The main reason for this is that in private practice, consultants have a stronger bargaining power and there are no controls on the fees that they charge. Thus, consultants end up juggling work between the public and the private sector so as to obtain higher earnings," she found.
Ms Borg carried out a comprehensive study comparing the cost of 10 surgical interventions at St Luke's Hospital and St James. The aim was to come up with a methodology that could be used to set up a remuneration mechanism for the financing of hospitals by case, known as a Diagnosis-Related Group System. This system was introduced in the US in the early 1980s and was since taken up in various forms by a number of other countries, often as part of a payment system that includes a straight grant.
"The DRG approach is beneficial because it approximates the true costs of medical procedures performed on patients. Hospitals that do not know their true cost have no incentive for improvement, especially when financed by block grants," she wrote.
Her study was one of the four papers carried in the 35th edition of the Bank of Valletta Review.
Ms Borg chose operations without medical or surgical complications and her method included both direct costs like personnel, drugs and consumables and indirect costs such as equipment depreciation and maintenance, utilities and support staff.
The discrepancy between St Luke's and St James for other costs were not as significant as those for the consultants' fees, averaging at 65 per cent.
A more detailed analysis shows that at St Luke's, about 85 per cent of total costs for all the 10 procedures result from direct costs, while about 15 per cent result from indirect costs. At St Luke's 72 per cent of total costs represent drugs and devices, suture material and consumables.
Ms Borg warned that the accounting procedure used does not capture the impact of pilfering and that further research would be required.
For the Cost estimates per procedure table at St Luke's Hospital and St James Hospital - visit: http://business.timesofmalta.com/image_library/200708/20070823_rates.pdf
"The main reason for this is that in private practice, consultants have a stronger bargaining power and there are no controls on the fees that they charge. Thus, consultants end up juggling work between the public and the private sector so as to obtain higher earnings," she found.
Ms Borg carried out a comprehensive study comparing the cost of 10 surgical interventions at St Luke's Hospital and St James. The aim was to come up with a methodology that could be used to set up a remuneration mechanism for the financing of hospitals by case, known as a Diagnosis-Related Group System. This system was introduced in the US in the early 1980s and was since taken up in various forms by a number of other countries, often as part of a payment system that includes a straight grant.
"The DRG approach is beneficial because it approximates the true costs of medical procedures performed on patients. Hospitals that do not know their true cost have no incentive for improvement, especially when financed by block grants," she wrote.
Her study was one of the four papers carried in the 35th edition of the Bank of Valletta Review.
Ms Borg chose operations without medical or surgical complications and her method included both direct costs like personnel, drugs and consumables and indirect costs such as equipment depreciation and maintenance, utilities and support staff.
The discrepancy between St Luke's and St James for other costs were not as significant as those for the consultants' fees, averaging at 65 per cent.
A more detailed analysis shows that at St Luke's, about 85 per cent of total costs for all the 10 procedures result from direct costs, while about 15 per cent result from indirect costs. At St Luke's 72 per cent of total costs represent drugs and devices, suture material and consumables.
Ms Borg warned that the accounting procedure used does not capture the impact of pilfering and that further research would be required.
For the Cost estimates per procedure table at St Luke's Hospital and St James Hospital - visit: http://business.timesofmalta.com/image_library/200708/20070823_rates.pdf