Data tools: the promise and the problems.
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Biomedical subjects
Publications and source records attributed to D Aquilina.
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The Healthcare Educational and Research Foundation (HERF) in Minneapolis undertook a two-year research project to study the effects of health maintenance organizations (HMOs) and competition on the hospital industry in Minneapolis/St. Paul. This article summarizes HERF's major findings surrounding three key questions: (1) do the HMOs in Minneapolis/St. Paul use fewer hospital resources relative to conventional payers?; (2) do recent overall community trends in inpatient use suggest evidence of hospital utilization-reducing effects attributable to HMOs?; and (3) given the highly visible competitive process among Minneapolis/St. Paul providers, do hospital cost and revenue data suggest any evidence of cost-containment? The findings (based on data through 1982) indicate that for comparable patients, Twin Cities HMOs appear to use fewer medical care resources per hospitalized patient. There was, however, no clear evidence of community-wide, utilization-reducing effects directly attributable to the "competitive effect" of HMO introduction and development in the market. In addition, there was no empirical evidence that HMOs (which had enrolled 25 percent of the consumer market by 1982), or other large buyers of inpatient services, have selected hospitals on the basis of price as hypothesized by competition advocates.
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Cost-shifting, the practice by hospitals of raising their prices to make up for reimbursement shortfalls from payers that do not pay full charges, is an important and controversial issue. Concerns about cost-shifting, particularly its effects on payment equity and cost escalation, have led many insurers, business groups, and legislators to advocate rate-setting regulation for hospitals. This article seeks to clarify the definition of cost-shifting, and quantifies its magnitude in Minneapolis/St. Paul. We believe that cost-shifting is the consequential result of the failure of both public and private payers to structure payment policies that reward cost-effective hospitals, and we outline a market-oriented alternative to rate-setting to address the discount dilemma caused by cost-shifting.
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