Practice patterns, case mix, Medicare payment policy, and dialysis facility costs.
OBJECTIVE: To evaluate the effects of case mix, practice patterns, features of the payment system, and facility characteristics on the cost of dialysis. DATA SOURCES/STUDY SETTING: The nationally representative sample of dialysis units in the 1991 U.S. Renal Data System's Case Mix Adequacy (CMA) Study. The CMA data were merged with data from Medicare Cost Reports, HCFA facility surveys, and HCFA's end-stage renal disease patient registry. STUDY DESIGN: We estimated a statistical cost function to examine the determinants of costs at the dialysis unit level. PRINCIPAL FINDINGS: The relationship between case mix and costs was generally weak. However, dialysis practices (type of dialysis membrane, membrane reuse policy, and treatment duration) did have a significant effect on costs. Further, facilities whose payment was constrained by HCFA's ceiling on the adjustment for area wage rates incurred higher costs than unconstrained facilities. The costs of hospital-based units were considerably higher than those of freestanding units. Among chain units, only members of one of the largest national chains exhibited significant cost savings relative to independent facilities. CONCLUSIONS: Little evidence showed that adjusting dialysis payment to account for differences in case mix across facilities would be necessary to ensure access to care for high-cost patients or to reimburse facilities equitably for their costs. However, current efforts to increase dose of dialysis may require higher payments. Longer treatments appear to be the most economical method of increasing the dose of dialysis. Switching to more expensive types of dialysis membranes was a more costly means of increasing dose and hence must be justified by benefits beyond those of higher dose. Reusing membranes saved money, but the savings were insufficient to offset the costs associated with using more expensive membranes. Most, but not all, of the higher costs observed in hospital-based units appear to reflect overhead cost allocation rather than a difference in real resources devoted to treatment. The economies experienced by the largest chains may provide an explanation for their recent growth in market share. The heterogeneity of results by chain size implies that characterizing units using a simple chain status indicator variable is inadequate. Cost differences by facility type and the effects of the ongoing growth of large chains are worthy of continued monitoring to inform both payment policy and antitrust enforcement. (+info)
Can restrictions on reimbursement for anti-ulcer drugs decrease Medicaid pharmacy costs without increasing hospitalizations?
OBJECTIVE: To examine the impact of a policy restricting reimbursement for Medicaid anti-ulcer drugs on anti-ulcer drug use and peptic-related hospitalizations. DATA SOURCES/STUDY SETTING: In addition to U.S. Census Bureau data, all of the following from Florida: Medicaid anti-ulcer drug claims data, 1989-1993; Medicaid eligibility data, 1989-1993; and acute care nonfederal hospital discharge abstract data (Medicaid and non-Medicaid), 1989-1993. STUDY DESIGN: In this observational study, a Poisson multiple regression model was used to compare changes, after policy implementation, in Medicaid reimbursement for prescription anti-ulcer drugs as well as hospitalization rates between pre- and post-implementation periods in Medicaid versus non-Medicaid patients hospitalized with peptic ulcer disease. PRINCIPAL FINDINGS: Following policy implementation, the rate of Medicaid reimbursement for anti-ulcer drugs decreased 33 percent (p < .001). No associated increase occurred in the rate of Medicaid peptic-related hospitalizations. CONCLUSIONS: Florida's policy restricting Medicaid reimbursement for anti-ulcer drugs was associated with a substantial reduction in outpatient anti-ulcer drug utilization without any significant increase in the rate of hospitalization for peptic-related conditions. (+info)
Financial incentives and drug spending in managed care.
This study estimates the impact of patient financial incentives on the use and cost of prescription drugs in the context of differing physician payment mechanisms. A large data set was developed that covers persons in managed care who pay varying levels of cost sharing and whose physicians are compensated under two different models: independent practice association (IPA)-model and network-model health maintenance organizations (HMOs). Our results indicate that higher patient copayments for prescription drugs are associated with lower drug spending in IPA models (in which physicians are not at risk for drug costs) but have little effect in network models (in which physicians bear financial risk for all prescribing behavior). (+info)
Health insurance in developing countries: lessons from experience.
Many developing countries are currently considering the possibility of introducing compulsory health insurance schemes. One reason is to attract more resources to the health sector. If those who, together with their employers, can pay for their health services and are made to do so by insurance, the limited tax funds can be concentrated on providing services for fewer people and thus improve coverage and raise standards. A second reason is dissatisfaction with existing services in which staff motivation is poor, resources are not used to best advantage and patients are not treated with sufficient courtesy and respect. This article describes the historical experience of the developed countries in introducing and steadily expanding the coverage of health insurance, sets out the consensus which has developed about health insurance (at least in Western European countries) and describes the different forms which health insurance can take. The aim is to bring out the advantages and disadvantages of different approaches from this experience, to set out the options for developing countries and to give warnings about the dangers of some approaches. (+info)
Prepaid capitation versus fee-for-service reimbursement in a Medicaid population.
Utilization of health resources by 37,444 Medicaid recipients enrolled in a capitated health maintenance organization was compared with that of 227,242 Medicaid recipients enrolled in a traditional fee-for-service system over a 1-year period (1983-1984) in the state of Kentucky. Primary care providers in the capitated program had financial incentives to reduce downstream costs like specialist referral, emergency room use, and hospitalizations. The average number of physician visits was similar for both groups (4.47/year in the capitated program; 5.09/year in the fee-for-service system). However, the average number of prescriptions (1.9 versus 4.9 per year), average number of hospital admissions per recipient (0.11 versus 0.22 per year), and average number of hospital days per 1,000 recipients (461 versus 909 per year) were 5% to 60% lower in the capitated group than in the fee-for-service group. The Citicare capitated program resulted in a dramatic reduction in healthcare resource utilization compared with the concurrent fee-for-service system for statewide Medicaid recipients. (+info)
Regulating the financial incentives facing physicians in managed care plans.
Recent accounts of enrolees in managed care plans being denied access to potentially lifesaving services have heightened public anxiety about the impact of managed care on the accessibility and appropriateness of care, and this anxiety has been translated into legislative action. The present review focuses on an area of managed care operations that has received considerable attention in state legistlatures and in Congress during the past 2 years: the financial relationship between managed care health plans and physicians. Twelve states now mandate that managed care plans disclose information about their financial relationship with physicians, and 11 states regulate the method used by managed care health plans to compensate physicians. Most laws that regulate methods of compensation prohibit health plans from providing physicians an inducement to reduce or limit the delivery of "medically necessary" services. Moreover, in 1996 the Health Care Financing Administration finalized its regulations governing the financial incentives facing physicians in plans that treat Medicaid or Medicare patients, and these regulations went into effect on January 1, 1997. These regulations also are examined in this study. (+info)
Behavioral health services: carved out and managed.
This article highlights the financial pressures that led to an examination of how mental healthcare was provided and paid for, and discusses the rise, characteristics, and functioning of carved-out behavioral healthcare. The typical characteristics of managed behavioral health carve outs (MBHCOs), including contracts, payment arrangements, provider networks, and data collection are discussed and illustrated using the example of United Behavioral Health. The article details the function of the MBHCO on cost and utilization, access, quality, and the relationship of behavioral health services to general medical care and other human services, but cautions that further research is needed to evaluate the qualitative aspects of care. (+info)
Inborn errors of metabolism: medical and administrative "orphans".
CONTEXT: Inborn errors of metabolism are genetic conditions that affect the normal biochemical functions of the body in any organ and at any age. More than 500 metabolic diseases are known; almost all are classified as orphan diseases under the US Food and Drug Administration guidelines (incidence < 200,000 persons) and each has its own requirements for diagnosis and treatment. Management of these complex, lifelong, multisystem disorders often requires a coordinated, multidisciplinary approach involving several subspecialists and which may include complex laboratory evaluations, genetic counseling, nutritional therapy, and unusual therapeutic approaches that have been used in only a small number of cases. RESULTS: Not infrequently, inborn errors of metabolism fall outside current standard diagnostic and treatment guidelines of managed care plans. This results in delays in diagnosis and appropriate management, with increased costs to patients and to society. CONCLUSIONS: Patients with inborn errors of metabolism should not be discriminated against and all health plans should specify that access to specialists and metabolic centers are a covered benefit of the plan. The acceptance of treatment guidelines, the development of international disease classification codes for the disorders, and the performance of cost-benefit analyses would all greatly facilitate this process. However, without recognition that these disorders require such services, and steps to provide them by the insurance industry, the care of children with metabolic disorders and other chronic diseases will continue to be a source of frustration and anger among the caregivers and the families they serve. (+info)