Titton Et All 2008

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The Accessibility Paradox in Health Services: Global and Individual Costs

Prof. Luiz Antonio Titton, Universidade de São Paulo, Brasil

Prof. Julio Araujo Carneiro da Cunha, Universidade de São Paulo, Brasil

Prof. Dr. Marilson Alves Gonçalves, Universidade de São Paulo, Brasil

Prof. Dr. Hamilton Luiz Correa, Universidade de São Paulo, Brasil

The health organizations management has three important cornerstones that are

fundamental for organizational performance: quality; accessibility and costs (AL-ASSAF,

1997). They are, hence, fundamental for its evaluation, resulting in a perspective for

healthcare organizations more incisive based in performance (SHORTELL; KALUZNY,

2000). These issues related to healthcare organizations management are shown necessary

before the perception that great part of healthcare professionals point out that management

where they work is inefficient (VLASTARAKOS; NIKOLOPOULOS, 2007).

COSTS

The intense control over little resources on hospital-physician context demands an

adequate medical service that involves decision makings based on planning and resources

management (HARPER, 2002), Hospital financing limitations bring along the need to find

efficient ways to manage (utilize and allocate) lack of resources (AKTAS et al., 2007). This

consideration has direct effects on hospital management, since studies from several different

countries (developed nations and not-developed ones) have already denoted the challenge in

managing costs from lack of resources and contentions, e.g. United Kingdom

(FITZGERALD, 1994; FITZGERALD; DUFOUR, 1998), Sweden (QUAYE, 1997), Canada

(LOO, 1997; FITZGERALD; DUFOUR, 1998), Netherlands (SCHOLTEN; VAN DER

GRINTEN, 1998), United States (GOSS; VOZIKIS, 2002; SLOAN, 2007), Oman (ABRI et

al., 2006), Spain (SÁNCHEZ-MARTÍNEZ et al., 2006), France (BELLANGER; TARDIF,



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2006), Poland (KOZIERKIEWICZ et al., 2006), Turkey (AKTAS et al., 2007), Tanzand

(GILSON, 1995).

This worries with researches based on costs related to health also interferes on Brazil,

what is reflected when it’s perceived that 69% of researches from Economic Healthcare done

in the country involves in some way the analysis of costs from hospital management

(ANDRADE et al., 2007). In Brazil, according with Cherchiglia and Dallari (2006), these

pressures for higher efficient and effectiveness in organizational activities about lack of resources happened in 1990 decade, mainly when treating about public hospitals. The authors

allege that these lasts suffered with a State crisis that reduced the financial maintenance power

of the State with public organizations. This decade was marked by an increasing fiscal crisis,

protectionism exhaustion to national organizations and a bureaucratic and inefficient public

management.

Thus, it’s evidenced that one of the greatest issues of Brazilian hospitals relates to lack

of resources. In absolute aspects, in the year of 2004, the public spending with health had a

mean value of 99,89 euro per habitant (DATASUS, 2006). Adding to this, in the year of 2003,

5,32% of familiar earnings in Brazil was spent with health assistance (IBGE, 2004). So, it’s

justified why management costs is the greatest issue on national discussion in Healthcare

Management. In general aspects, managing lack of resources is still a challenge for Healthcare

Management.

It means that for some time, healthcare organizations from different countries are

facing similar problems (HUNTER, 1996), what brings the fact that no matter what culture

the nation has, similar issues are found in different healthcare organizations. In many

countries, the hospital costs make pressure over healthcare management, bringing along

reflections about how the resources are better destined and allocated in hospital management

(KEEN et al., 1993). According to Hunter (1996), these issues related to costs contention seek

for better services performance, in an effort to make hat services more sensitiveness to user

(patient) and to achieve higher value for hospital invested money.

Great part of these worries comes before a reality where there’s lack of financial

expertise for decision makings in medical management, what turns vulnerable the physicianmanagement (LLEWELLYN, 2001). Thus, it’s demanded a hospital management that has



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administrative and financial knowledge to deal with actual context given the essential of costs

management in healthcare organizations.

So, the financial management in hospitals can be defined as a set of specific

techniques that are fundamental, in order to the healthcare organizations management provide

entities perpetuation, reasonable remuneration to labor and capital factors and finally

excellence in medical services (OLIVEIRA; GIUSTI, 2006). A financial increment or an

additional rate charged to patient brings better quality in his attendance (LITVACK;BODART, 1993). It means that higher costs tend to involve greater financial quantities in

attendance, what favors the existence of a positive relation between cost and

quality .

It must be observed that this relation maintain in fixed costs as well as in variable

ones, once investments in equipments that provides better quality in diagnosis and treatment

demands higher costs. Also, there’s an increase in variable costs for better quality in

attendance.However, the adequate management of costs involves the precise diagnostic of

patient’s health problems and his real needs in terms of resources to be used (AKTAS et al.,

2007). It requires precise analysis that involves operational practices as well as practices

relate do managerial practices. It makes costs management related to others aspects of

healthcare organization, what is justified by the relation between costs to quality and

organization capacity to accessibility.

There’re, hence, pressures to costs reduction allied to hospital services quality

increasing, that comes from government, healthcare insurance plans, community and patients

(LI; BENTON, 1996).

However, it’s not possible due to the existence of a tradeoff between security and

costs, mainly what is referred to practices of material reutilization that should be used only

once (SLOAN, 2007), what is also common in Brazilian hospitals and directly affects services

quality i. e. it’s a practice that goes against security sanitary norms, but, that represents the

strategy usually used by physicians that struggle against lack of resources.



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QUALITY

Even before non-consensous and neither a research thought line common

between researchers in definition of hospital services quality, Chassin and Galvin (1998) had

already denoted the need to establish measurements over hospital quality with more scientific

precision and a more standardized definition between term researches.

Medical services quality have directly influence on patient’s quality of life(MIER et al., 2008). So, quality services have direct influence over healthcare organization

main function of population life quality improvement.

It brings along the so called evidence-based medicine (based com evidences

and proves) which determined hospitals and their respective physicians have greater prone to

develop scientific knowledge, offering healthcare services of higher quality and lesser costs

(BERRY et al., 2004). It’s based on the integration between clinical experience and expertise

of individual physician and from better external available evidences through systematic

researches done by physician (SACKETT et al., 1996). It’s perceived that a higher level of

quality, mainly when technology appears, can influence the costs reduction in a healthcare

organization. However, it’s defended the principle that quality increasing requires an

investment from health organization that is associated to a cost increasing. Adding to that,

Porter and Teisberg (2006) what is observed is a growing increase in hospital costs in an

alarming quality level. So, an increase in healthcare services quality can be linked also with a

posture and organizational culture change from hospitals (DAVIES et al., 2000).

From the moment that services quality and costs attentions have direct relation with

hospital management, we’re referring to a multidisciplinary attention that involves practical

clinical aspects as well as financial and quality management awareness. So, quality is related

with financial dimension of healthcare organizations when it’s recognized that quality

depends on management, no matter what name each one gives to it. Limits of what can be

done in an organization depend on it, as matter of investments (financial or not), that can be

done when expectations that will be lifted and ideally attended through quality (SCHIESARI;

MALIK, 2006 b).



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Quality in hospitals, according to Schiesari and Malik (2006 a), can be linked

with standard conformities, right using and client satisfaction. It’s considered here that quality

is related to standard conformity and to right using, in a services providence that can attend

the patient in a way that better satisfy him. However, it’s not considered as quality the

patient’s perception related to healthcare services, as considered in some researches (e.g.

ANDALEEB, 2001) or even the medical team perception of their offered job (e.g. ARNETZ,

1999).Quality is related to higher medical services practices. According to Campbell et al.

(2000), medical services quality is related to its efficiency and accessibility. The efficiency is

related to cliinical practices and inter-personal cares receipted.

Quality definition defended here is the same developed in the 1990 decade and

adopted by Institute of Medicine, in which quality is the level of healthcare service provided

to individuals and populations that increases the possibility in achieving expected results in a

consistent way with existent medical knowledge and practices. In this thought line, the

Institute of Medicine (2001) complements that hospital quality involves measures that

increases: patient’s security; service effectiveness according to available and existent medical

knowledge; patient centralization, guaranteeing a respectful and responsible attendance

according to his values and needs; wait reduction in attendance; efficiency in waste

avoidance, being them material, resources, ideas or energy; attendance equity, without

variations according to patients personal characteristics.

This quality vision is linked with costs and it’s seen on studies that allege that patient

can pay for a better performance (e.g. TERRIS; LIKATER, 2008; ROSE, 2008), gaining more

qualified professionals and better structure and materials, as well as medications availability.

It indicates that quality in services is financial linked with what can be done in a medical

service.

To Chassin and Galvin (1998), healthcare services quality depends also on medical

team training, as well as other hospital functionaries, and on services and medical processes

organization.



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These elements indicate that healthcare services quality depends on investments and

on higher operational cost level that makes believe that quality is positively related to hospital

costs .

ACCESSIBILITY

Healthcare services quality, as mentioned, are related to accessibility capacity that

service offers to its users (CAMPBELL et al., 2000). From the three cornerstones of hospital

management, accessibility is the more related one to social objectives of healthcare

organizations. Socially, a hospital has the function to attend the higher number of individuals

as possible, in order to provide higher welfare to population. In fact, healthcare organizations

can promote elements that facilitate individual’s accessibility to its dependencies

(DONABEDIAN, 1973).However, accessibility, as social objective, must be done under equity between

individuals (SILVA; FORMIGLI, 1994), what doesn’t happen when talking about private

healthcare organization, given that corporative earnings are over this social function.

Accessibility can be seen through the focus on patient’s satisfaction according to his

accessibility opportunities.

Accessibility can be also related to healthcare organization geographical issues,

mainly when the hospital localization doesn’t favors attendance maximization. So, it’s

recognized that healthcare services localization interferes also on accessibility rate

(UNGLERT et al., 1987). This discussion gains more relevancy when treating about patients

from rural area (e.g. FORTNEY et al., 1999).

This fact guides to other reflections, that industrialized regions, that have

higher socio-economic levels than rural areas, hence, have higher accessibility to health

(ADLER et al., 2008). It means that proximity is not just an explicative factor to healthcare

services accessibility, but also, financial issues affect its access.

The focus utilized here is related to internal and structural capacity that

healthcare organization has to attend a specific quantity of patients. i.e. it’s a vision related to



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resources availability (inputs) and price formation from these organizations to potentially

attend their patients.

ACCESSIBILITY, QUALITY AND COSTS

Researches in healthcare must contain information about medical dimension that canbe related and correlated to social information (ROOS et al., 2008). It must keep sociological

character when medicine is seen through sociological medicine scope (SETTLETON, 2007),

this one that better justifies itself when it’s observed a healthcare organization through

Organization Theory focus. So, understand the social reality as well as environmental and

population concepts attended by hospital is fundamental to make conclusions about

qualitative information lifted on research.

Accessibility and quality dimensions have lot of adherence between each other

because is desirable the accessibility increase with quality maintenance and vice-versa.

When accessibility increase is chased, not only social issues are important. Costs

reduction, especially through fixed costs dilution, is desired. It happens because in direct

relation between accessibility and quality, investments in material resources also happen to

quality increase, resulting in fixed costs.

A healthcare organization performance boundary is the lack of financial resources

available that is opposing (inverse related) to the objective of quality and accessibility

maximization. The costs minimization is the main manner available to keep conditions for

organization work under available resources.

Performance = f(Max Q + Max A + Min C)

When seeking for quality maximization, the consequences are the cost increase and

accessibility reduction, resulting the reduction of financial resources availability.

The cost increase happens through necessary investments in resources that possiblybetter diagnosis and treatments. These equipments, besides better performance and



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productivity, maintain significant values in immobilization. As result, it’s necessary the cost

re-pass to user (patient), that when treating about private health, absorb it in order to gain

better service perception.

When observed the health public service, this cost can’t be re-passed to user. In the

specific case of Brazil, there’re public hospitals that receive investments (very little), that

usually end up being used to equipment maintenance, many of them already obsoletes, but

that are absolutely necessary to hospitals (peccary) function. All citizens have the right topublic assistance, without distinction, and their search for a better attendance is justified by

the existence of private healthcare insurance plans.

On its turn, private healthcare insurance plans attend through an agreement network

within private hospitals. However, the biggest client of private hospitals is the State. Public

sector contracts remunered services based on charts that pay values much lower than that

practiced value on private sector. e.g. the laboratorial exam chart is not readjusted for 13

years, even with an 4% per year inflation, and the sector survives due to the investments is

equipment and higher productivity.

To compensate for this, the output is to maximize the free resources generation, which

is the difference between inflows and costs. Tickets are scarce and therefore the action of

management focuses on reducing costs, which is one of the pillars of management.

When you reduce costs is the result of the increased accessibility, however is not

desirable deterioration in the quality of service. Thus, quality acts as limiting the reduction of

both costs and increased access.



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Maximising the accessibility, which is access to services of health organizations, is a

social objective. When you increase the capacity of numerical care, the quality serves as a

limiting factor, for example, when there is considerable influx of patients in clinics to free

vaccination against tropical fevers in Brazil, the level of quality of care is very disadvantaged,

both in the health point of view about the perception of quality perceived by the user. A

medical consultation in situations like this takes on average ten minutes, which is well below

the estimated time only for a standard history (the time pattern of consultations for the SUS,Brazilian public health system, thirty minutes for the first consultation and fifteen minutes in

returns). The time of doctors is a scarce resource, as far as beds, and very poorly paid, and any

increase in access to care leads in crisis throughout the country.

The goal of maximizing accessibility affects the cost of two ways, within an

organizational and another in the level of each transaction.

Under the terms of organization, the increase in the level of accessibility as a result

brings the increase in total expenditures, since they are necessary investments and the level of

operating costs in a higher level. This increase in costs may reflect a greater or lesser amount

of free resources, depending on the level of revenue from this increase in accessibility. This

dependence is linked to the ability to sum of these costs to the user, and if this is a user comes

from the public system, there's no way to pass the short and medium term.

Thus, while maximizing access, there is a drop in costs accompanied by a decrease in

funds free. These conditions are real in both the fixed costs (which are better diluted) and the

variable costs (which can be shared). For free resources, increased accessibility creates a

demand for working capital finance the service, because both the public and the private sector

service providers of pay periods with more than 30 days and is common in the public sector,

in default of law, delays of up to one year, and these resources should be allocated for the

financial management of the hospital.

The generation of free resources for the organisation of health can only be obtained in

two ways:



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1) increasing the spin, the quantitative increase in attendance and gain in scale, or,

2) gain in margin from the reduction of unit cost of transaction.

What is presented as paradox is that the limited resources leads the administrator to

decisions based on two factors: one wishes that the organization reduce their individual costs

of transaction, and secondly that there is a greater training Free Resources total.

The first parameter decision leads to a desired result antagonistic to the second:

When you aim Minimize Cost, you get greater accessibility, which will generate the

detention of the capital of spin, reducing the accessibility and in turn generating costs, is to

finance the shortfall of cash, is to maintain accessibility.

The solution found in one of the cases was investigated pass the lack of resources freeto start the operation through a constant negotiation with suppliers, increasing deadlines so

that the cycle of receipts could offset the financial commitments. In the case studied, suppliers

are not prepared to accept the negotiation have been replaced.

The equation suggests that it cancels a course in search of a static equilibrium, which

is not necessarily the result of cost reduction. In this case, there is still the limiting factor is

that the quality is not negatively elastic.

Final

The prospect of consequences of reducing costs is the generation of increasing the

availability Appeal Free generated per transaction, which will finance other activities that

consume resources of the organization. These other activities can consume resources by

increasing the cost (aiming to increase quality, for example), or the decrease of free generated

result (when there is a need to fit working capital).

This sets a paradox regarding the maximization of accessibility within the overall

context of individual and organizational processes. A hospital, seek to increase the



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accessibility of its health service in its social role to seek meet as many of the people, reduce

the scarce resources if it is a balance favourable to enable it to pass its cash needs for

investment.

The need to allocate resources for turning in medium and long term is not consistent

with the increase of resources generated by trade, leaving the hospital management with an

unresolved paradox in relation to planning goals, achievement of objectives and strategic

alignment of the organization, it does not admit fall of quality.The study was conducted in a scenario with specific characteristics of developing

countries, and new comparative studies would be needed to form a picture of how this

happens in other scenarios, even if it is a paradox inherent in the stage of development.

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