Cost functions for dialysis facilities and the quality of dialysis.
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Cost Control↗
Biomedical subjects
J J Escarce
Publications and source records attributed to J J Escarce.
Financial incentives and drug spending in managed care.
Pharmaceutical costs have been rising dramatically since 1995, growing 16.6% in 1998 alone. This rate of increase is more than four times that of all health care spending. Employers, managed care organizations and consumers are looking anew for ways to stem these rising costs, without denying patients effective care. Therefore, this Issue Brief is especially timely because it investigates how patient copayments and financial incentives for physicians affect drug spending in managed care.
Cost Sharing↗
Diagnostic coding and medical rehabilitation length of stay: their relationship.
OBJECTIVE: To determine if diagnostic information provided in the form of International Classification of Diseases, 9th Revision, Clinical Modification (ICD-9-CM) codes improves rehabilitation length of stay (LOS) prediction when used in combination with the Functional Independence Measure-Function Related Groups (FIM-FRGs) classification system. DESIGN: Various models characterizing diagnostic information using ICD-9-CM codes were created that included individual ICD-9-CM codes and groupings of those codes by organ or etiology involved. Each method was evaluated using linear regression with the natural logarithm of LOS as the dependent variable. Separate validation data sets were held back to quantify the incremental effect of diagnosis when combined with the FIM-FRG classification system. SETTING: Records from 252 rehabilitation facilities and hospital units across the nation. PATIENTS: Analyses were undertaken using 82,646 records from patients discharged in 1992. RESULTS: The addition of ICD-9-CM diagnostic information to the FIM-FRG classification system increased the variance explained by a maximum of 1.9%, from 31.5% to 33.4%. CONCLUSIONS: Refinement of the FIM-FRGs to include ICD-9-CM diagnoses does not appear warranted on the basis of the small increase in the percentage of explained variance in LOS. We believe the lack of improved prediction with the addition of ICD-9-CM codes relates primarily to incomplete coding practices and to the effect of patients' diagnoses being absorbed in variables as already expressed by the FIM-FRG system. Although ICD-9-CM codes, overall, did not greatly improve LOS prediction, they appeared to have some impact in certain impairment categories.
Brain Injuries↗
Physician opportunity costs in physician practice cost functions.
Estimation of cost functions for physician firms is problematic because many physicians are self-employed, and the marginal opportunity cost of physician labor is not observed. In this paper, we show how to recover marginal costs and conventional measures of economies of scale from cost functions that condition on the amount of physician labor input. In addition, we introduce the new concepts of marginal nonphysician input costs and 'behavioral' economies of scale, which reflect the structure of costs when physician labor input moves along a utility-maximizing expansion path. Our results could be useful in the design of resource-based physician fee schedules.
Cost Allocation↗
Indications for and outcomes of cholecystectomy: a comparison of the pre and postlaparoscopic eras.
PURPOSE: Examine changing patient characteristics and surgical outcomes for patients undergoing cholecystectomy at five community hospitals in 1989 and 1993. PROCEDURES: In a retrospective chart review, data were gathered regarding gallstone disease severity, type of admission, patient age, number of comorbidities, American Society of Anesthesiologists (ASA) Physical Status Classification, length of stay, and multiple outcomes of surgery. MAIN FINDINGS: The volume of nonincidental cholecystectomies increased 26%, from 1611 in 1989 to 2031 in 1993. Nearly all of the increase occurred among patients with uncomplicated cholelithiasis and with elective admissions. In 1993, lengths of stay were significantly shorter and percentages of complications were significantly lower for infectious, cardiac, pulmonary, and gastrointestinal complications when controlling for patient case-mix characteristics. There were more major intraoperative complications (unintended wounds or injuries to the common bile duct, bowel, blood vessel(s), or other organs) in 1993. CONCLUSIONS: Different types of patients underwent cholecystectomy in 1993 compared with patients in 1989, which supports the hypothesis of changing thresholds. Statements supporting the safety of cholecystectomy in the laparoscopic era were borne out when controlling for differences in patient characteristics.
Adult↗
Consumer response to quality information.
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Attitude to Health↗
Health maintenance organization penetration and the practice location choices of new physicians: a study of large metropolitan areas in the United States.
OBJECTIVES: The rapid growth of health maintenance organizations is reshaping the practice opportunities available to physicians. The practice location decisions of new physicians provide a sensitive bellwether of these changes. This study assessed the effect of health maintenance organization penetration on practice location for physicians completing graduate medical education (GME). METHODS: Conditional logit regression analysis was used to determine the effect of health maintenance organization penetration on practice location, controlling for other market characteristics. Subjects were physicians who finished GME between 1989 and 1994 and who located in one of the 98 US metropolitan areas with more than 500,000 population. The outcome measure was the particular metropolitan area chosen by each new physician. RESULTS: Early in the study period, new generalists were significantly more likely to locate in metropolitan areas with high health maintenance organization penetration than in low penetration areas, whereas new specialists' practice location choices were not associated with health maintenance organization penetration. The likelihood of choosing a high penetration relative to a low penetration area declined with time, however, for both generalists and specialists. Consequently, by the end of the study period, health maintenance organization penetration had a weak but significant negative effect on practice location for generalists and a strong negative influence on practice location for specialists. CONCLUSIONS: New generalists who completed graduate medical education between 1989 and 1994 were more likely than new specialists to locate in market areas with high health maintenance organization penetration; however, the proportions of both generalists and specialists who chose high penetration areas decreased during the study period. This finding may reflect reduced practice opportunities in high penetration areas relative to low penetration areas as health maintenance organizations' systems for controlling utilization began to yield results. Alternatively, new physicians may have become more hesitant to accept available positions in high penetration areas.
Adult↗
Quality assessment in contracting for tertiary care services by HMOs: a case study of three markets.
BACKGROUND: Few studies have examined the provision of tertiary care services by managed care organizations (MCOs). Moreover, little is known about the role of quality assessment and quality assurance mechanisms in the contracting process. Site visits were conducted in 1995 in three geographic areas to describe and evaluate the contracting processes for tertiary care services, especially neonatal intensive care and coronary artery bypass graft surgery, of health maintenance organizations (HMOs). METHODS: Three market areas in the United States, each with differing levels of "maturity", as primarily defined in terms of managed care penetration, were selected for study. Interviews were conducted with HMO and hospital managers about the processes for identifying potential tertiary care hospitals and mechanisms for quality assessment and quality improvement (QI) that are considered in the contracting process. FINDINGS: The most sophisticated contracting arrangements were found in the most mature market-where HMOs select hospitals for tertiary care services based on both the price and quality of services, with quality assessed through both objective and subjective data. Yet in all three markets, quality assessment was the least well-developed component of tertiary care contracting. Even in the mature market, we found inconsistent use of even validated quality or outcomes measures in hospital contracting. CONCLUSION: The potential of MCOs to increase quality depends on their ability to identify high-quality hospitals and their willingness to direct enrollees to those hospitals. Yet inconsistent evidence was found that mechanisms for evaluating and rewarding quality are being fully adopted in the three markets studied.
Catchment Area, Health↗
How practicing surgeons trained for laparoscopic cholecystectomy.
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Adult↗
Development of function-related groups version 2.0: a classification system for medical rehabilitation.
OBJECTIVE: To present a new version (2.0) of the Functional Independence Measure-Function Related Group (FIM-FRG) case-mix measure. DATA SOURCE/STUDY SETTING: 85,447 patient discharges from 252 freestanding facilities and hospital units contained in the 1992 Uniform Data System for Medical Rehabilitation. STUDY DESIGN: Patient impairment category, functional status at admission to rehabilitation, and patient age were used to develop groups that were homogeneous with respect to length of stay. Within each impairment category patients were randomly assigned to one data set to create the system (through recursive partitioning) or a second set for validation. Clinical and statistical criteria were used to increase the percentage of patients classified, expand the impairment categories of FIM-FRGs Version 1.1, and evaluate the incremental predictive ability of coexisting medical diagnoses. Predictive stability over time was evaluated using 1990 discharges. PRINCIPAL FINDINGS: In Version 2.0, the percentage of patients classified was increased to 92 percent. Version 2.0 includes two new impairment categories and separate groups for patients admitted to rehabilitation for evaluation only. Coexisting medical diagnoses did not improve LOS prediction. The system explains 31.7 percent of the variance in the logarithm of LOS in the 1992 validation sample, and 31.0 percent in 1990 discharges. CONCLUSIONS: FIM-FRGs Version 2.0 includes more specific impairment categories, classifies a higher percentage of patient discharges, and appears sufficiently stable over time to form the basis of a payment system for inpatient medical rehabilitation.
Aged↗
Effect of dialyzer reuse on survival of patients treated with hemodialysis.
OBJECTIVE: To evaluate the impact of dialyzer reuse on the survival of US hemodialysis patients. STUDY DESIGN AND PARTICIPANTS: Nonconcurrent cohort study of 27938 patients beginning hemodialysis in the United States in 1986 and 1987. MAIN OUTCOME MEASURE: Patient survival. RESULTS: Dialysis in freestanding facilities reprocessing dialyzers with the combination of peracetic and acetic acids was associated with greater mortality than treatment in facilities not reprocessing dialyzers (rate ratio [RR],1.10, 95% confidence interval [CI], 1.02-1.18; P=.02) In contrast, there was no significant difference between survival in freestanding facilities reprocessing dialyzers with either formaldehyde (RR,1.03, 95% CI, 0.96-1.10; P=.45) or glutaraldehyde (RR, 1.13, 95% CI, 0.95-1.35, P=.18) and survival in freestanding facilities not reprocessing dialyzers. Among freestanding facilities reprocessing dialyzers, use of peracetic/acetic acid was associated with a higher rate of death than use of formaldehyde (RR = 1.08, 95% CI, 1.01-1.14; P=.02). There was no statistical difference between survival in hospital-based facilities reprocessing dialyzers with either peracetic/acetic acid (RR=0.95, 95% CI, 0.85-1.06; P=.40), formaldehyde (RR=1.06, 95% CI, 0.98-1.15; P=.12), or glutaraldehyde (RR=1.09, 95% CI, 0.71-1.67; P=.70) and survival in hospital-based facilities not reprocessing dialyzers. In addition, choice of sterilant was not associated with a statistically significant difference in survival among hospital-based facilities reprocessing dialyzers. CONCLUSIONS: Dialysis in freestanding facilities reprocessing dialyzers with peracetic/acetic acid may be associated with worse survival than dialysis in free-standing facilities not reprocessing dialyzers or in those reprocessing with formaldehyde. We were unable to determine whether these relationships arose from greater comorbidity among patients treated in facilities using peracetic/acetic acid, poor quality of dialysis procedures in these facilities, or direct toxicity of peracetic/acetic acid. These findings raise important concerns about potentially avoidable mortality among US hemodialysis patients treated in dialysis facilities reprocessing hemodialyzers.
Adult↗
Survival of Medicare patients after enrollment in hospice programs.
BACKGROUND: Each year more than 220,000 Medicare beneficiaries receive care from hospice programs designed to enhance the quality of the end of life. Enrollment requires certification by a physician that the patient has a life expectancy of less than six months. We examined how long before death patients enrolled in hospice programs. METHODS: Using 1990 Medicare claim data, we analyzed the characteristics and survival of 6451 hospice patients followed for a minimum of 27 months with respect to mortality. RESULTS: The patients' mean age was 76.4 years; 92.4 percent were white. Half the patients were women, and 80.2 percent had cancer of some type. The most common diagnoses were lung cancer (21.4 percent), colorectal cancer (10.5 percent), and prostate cancer (7.4 percent). The median survival after enrollment was only 36 days, and 15.6 percent of the patients died within 7 days. At the other extreme, 14.9 percent of the patients lived longer than six months. Survival varied substantially according to diagnosis, even after adjustment for age and co-existing conditions. The unadjusted survival after enrollment was shortest for those with renal failure, those with leukemia or lymphoma, and those with liver or biliary cancer; it was longest for those with chronic lung disease, those with dementia, and those with breast cancer. Patients at for-profit, larger, outpatient, or newer hospices lived longer after enrollment than those in other types of hospice programs. CONCLUSIONS: Most patients who enter hospice care do so late in the course of their terminal illnesses. The timing of enrollment in hospice programs varies substantially with the characteristics of the patients and the hospices.
Aged↗
Externalities in hospitals and physician adoption of a new surgical technology: an exploratory analysis.
Much recent work on the economics of new technology adoption has investigated the roles of information and externalities. However, studies of technology adoption by physicians have not addressed these issues. This paper examines the adoption by general surgeons of laparoscopic cholecystectomy, a new surgical procedure which was introduced in 1989. The paper addresses the informational and cost externalities which may be generated when the first surgeon in a hospital adopts a new procedure. The findings suggest that access to information about laparoscopic cholecystectomy influenced surgeons' adoption behavior, and that externalities in hospitals may have hastened the diffusion of the procedure.
Attitude of Health Personnel↗
Using physician practice cost functions in payment policy: the problem of endogeneity bias.
Empirical estimates of physician practice cost functions, especially estimates of marginal practice costs and scale economies, could assist in setting physician payment policy. This paper examines the bias that may result in these estimates from the usual approach of treating physician labor input as exogenous. Data come from 207 general surgeons included in the Physician Payment Review Commission's 1988 National Survey of Physicians. The empirical practice cost function is specified as a generalized translog. Results are compared for alternative estimation methods that treat physician labor input as exogenous and as endogenous. The findings suggest that marginal cost estimates which ignore the endogeneity of physician labor are biased downward, while estimates of economies of scale are biased upward. In particular, with physician labor exogenous, statistically significant scale economies are found over a wide range of output levels; with physician labor endogenous, constant returns to scale cannot be rejected. Applying econometric studies of physician practice costs to policy will require attention to important methodological issues and collection of high-quality data.
Bias↗
Outcomes of open cholecystectomy in the elderly: a longitudinal analysis of 21,000 cases in the prelaparoscopic era.
OBJECTIVE: We sought to obtain unbiased estimates of open cholecystectomy outcomes in a population-based cohort of elderly patients during the immediate prelaparoscopic era. METHODS: Medicare claims data were used to identify 21,131 patients aged 65 years or more who underwent open cholecystectomy in Pennsylvania between 1986 and 1989 and to develop longitudinal histories of hospitalizations and physician services utilization for these patients. Study patients were divided into three groups: simple cholecystectomy, cholecystectomy with intraoperative cholangiography (IOC) alone, and cholecystectomy with common bile duct exploration (CBDE). Outcomes examined included 30- and 90-day postoperative mortality rates and postoperative complications. RESULTS: Postoperative mortality rates in all patients was 2.1% at 30 days and 3.6% at 90 days. Patients in the CBDE group had a significantly higher mortality rate than those in the simple cholecystectomy or IOC groups; adjusted for differences in case mix, the mortality rate in the CBDE group was 47% higher at 30 days and 29% higher at 90 days. Rates of retained or recurrent common duct stones, bile duct stricture, and recurrent biliary tract surgery by 42 to 60 months after cholecystectomy were 2.8%, 0.4%, and 1.0%, respectively. CBDE was a strong risk factor for these complications. In contrast, the IOC group had a significantly lower risk of having clinically manifest retained or recurrent common duct stones develop by 42 months after operation. CONCLUSIONS: This study provides an unbiased assessment of open cholecystectomy outcomes necessary for future comparisons of open and laparoscopic cholecystectomy in elderly patients. Estimates of the excess mortality rates associated with CBDE provide a benchmark for assessing the outcomes of alternative strategies for managing common duct stones during laparoscopic cholecystectomy. Findings regarding the rates of retained or recurrent common bile duct stones in patients undergoing simple cholecystectomy and IOC challenge widespread beliefs about the limited clinical importance of unsuspected common duct stones, at least in the elderly population, and are relevant to the debate about routine IOC.
Aged↗
Diffusion of laparoscopic cholecystectomy among general surgeons in the United States.
Introduced in 1989, laparoscopic cholecystectomy has rapidly become the treatment of choice for symptomatic gallstones. This study describes the diffusion of laparoscopic cholecystectomy among general surgeons; assesses the importance of various reasons for surgeons adopting the procedure; and examine the influence of surgeon, practice, and health care market characteristics on the timing of adoption. The data were obtained from a survey of a national sample of surgeons. Most surgeons (81%) adopted laparoscopic cholecystectomy by early 1992. More than three fourths of adopters identified the desire to keep up with the state-of-the-art and improved patient outcomes as very or extremely important reasons for adoption. Results of proportional hazards regression analysis indicate that individual surgeons' adoption behavior generally was consistent with expected utility maximization in an uncertain new technological environment. Of particular interest, fee-for-service payment and more competitive practice settings and markets were associated with earlier adoption. These findings suggest that the "technological imperative" and surgeons' perception of the relative clinical and financial advantages of laparoscopic cholecystectomy were important reasons for the rapid diffusion of laparoscopic cholecystectomy. Policies that accelerate current trends toward payment of physicians based on salary or capitation and promote the growth of multispecialty group practice could slow the diffusion of new physician-based product innovations in health care.
Adult↗
Revised estimates of diagnostic test sensitivity and specificity in suspected biliary tract disease.
BACKGROUND: The purpose of this study was to estimate the sensitivity and specificity of diagnostic tests for gallstones and acute cholecystitis. METHODS: All English-language articles published from 1966 through 1992 about tests used in the diagnosis of biliary tract disease were identified through MEDLINE. From 1614 titles, 666 abstracts were examined and 322 articles were read to identify 61 articles with information about sensitivity and specificity. Application of exclusion criteria based on clinical and methodologic criteria left 30 articles for analysis. Cluster-sampling methods were adapted to obtain combined estimates of sensitivities and specificities. Adjustments were made to estimates that were biased because the gold standard was applied preferentially to patients with positive test results. RESULTS: Ultrasound has the best unadjusted sensitivity (0.97; 95% confidence interval, 0.95 to 0.99) and specificity (0.95; 95% confidence interval, 0.88 to 1.00) for evaluating patients with suspected gallstones. Adjusted values are 0.84 (0.76 to 0.92) and 0.99 (0.97 to 1.00), respectively. Adjusted and unadjusted results for oral cholecystogram were lower. Radionuclide scanning has the best sensitivity (0.97; 95% confidence interval, 0.96 to 0.98) and specificity (0.90; 95% confidence interval, 0.86 to 0.95) for evaluating patients with suspected acute cholecystitis; test performance is unaffected by delayed imaging. Unadjusted sensitivity and specificity of ultrasound in evaluating patients with suspected acute cholecystitis are 0.94 (0.92 to 0.96) and 0.78 (0.61 to 0.96); adjusted values are 0.88 (0.74 to 1.00) and 0.80 (0.62 to 0.98). CONCLUSIONS: Ultrasound is superior to oral cholecystogram for diagnosing cholelithiasis, and radionuclide scanning is the test of choice for acute cholecystitis. However, sensitivities and specificities are somewhat lower than commonly reported. We recommend estimates that are midway between the adjusted and unadjusted values.
Acute Disease↗
A case-mix classification system for medical rehabilitation.
Dissatisfaction with Medicare's current system of paying for rehabilitation care has led to proposals for a rehabilitation prospective payment system, but first a classification system for rehabilitation patients must be created. Data for 36,980 patients admitted to and discharged from 125 rehabilitation facilities between January 1, 1990, and April 19, 1991, were provided by the Uniform Data System for Medical Rehabilitation. Classification rules were formed using clinical judgment and a recursive partitioning algorithm. The Functional Independence Measure version of the Function Related Groups (FIM-FRGs) uses four predictor variables: diagnosis leading to disability, admission scores for motor and cognitive functional status subscales as measured by the Functional Independence Measure, and patient age. The system contains 53 FRGs and explains 31.3% of the variance in the natural logarithm length of stay for patients in a validation sample. The FIM-FRG classification system is conceptually simple and stable when tested on a validation sample. The classification system contains a manageable number of groups, and may represent a solution to the problem of classifying medical rehabilitation patients for payment, facility planning, and research on the outcomes, quality, and cost of rehabilitation.
Activities of Daily Living↗