Approaches to financing care for the uninsured.
Explore the source record for details and available documents.
Cost Control↗
Biomedical subjects
S E Berki
Publications and source records attributed to S E Berki.
A psychiatric patient classification system. An alternative to diagnosis-related groups.
It is generally accepted that diagnosis-related groups (DRGs) for alcohol, drug, and mental disorders are inappropriate for inpatient prospective payment. To address this issue, the Veterans Administration (VA) supported a project to construct alternative classes that are more clinically meaningful, more homogeneous in their resource use, and that account for more variation in resource use among psychiatric and substance use cases than existing DRGs. This paper reports on this project. Using a data set containing universally available discharge data plus behavioral, social, and functional information obtained by a survey of 116,191 discharges from VA psychiatric beds, and with AUTOGRP as the classifying algorithm, a classification system was formed. Twelve psychiatric diagnostic groupings (PDGs) were identified, analogous to major diagnostic groups in the DRG system. Within each PDG, from 4 to 9 terminal groups of Psychiatric Patient Classes (PPCs) were formed and validated. The 12 substance abuse PPCs explain greater than 31% of the variation in length of stay; for the mental disorder PPCs the variance explanation is greater than 11%, a substantial improvement over DRGs that, for the same data set, explain less than 2 and 3%, respectively. With the addition of only 5 variables beyond those presently included in discharge data sets, greater precision for payment purposes can be achieved. Implications for adoption of this classification system are discussed.
Algorithms↗
Frequency and cost of diagnosis-related group outliers among newborns.
Analysis of outliers, as defined by the Health Care Financing Administration, among 47,776 newborns discharged from 33 short-term hospitals in Maryland in 1981 shows that the three prematurity diagnosis-related groups (DRGs) (386 to 388) represented only 5.3% of all discharges of newborns, but more than one fifth of all outliers and more than three fifths of outlier days of care for newborns. The disparity in charges for outliers and inliers (not exceeding the "trim point") is even more dramatic. Newborns with "extreme immaturity" (DRG 386) and "prematurity with major problems" (DRG 387) together accounted for less than 3% of all newborn discharges but for nearly one fourth of all outlier discharges. The mean length of stay in hospitals for outliers in those two DRGs was more than 2 months. The mean charge per outlier discharge in DRG 386 was $27,061 in 1981. Nearly one third of the discharges and more than two thirds of the days of care in this DRG were for outliers. Outliers occurred up to five times more often among premature neonates than among normal newborns and occurred preponderantly in teaching hospitals, especially those with more than 400 beds. This finding may require a reevaluation of the outlier trim points and the reimbursement method for newborn DRGs to assure adequate payment to the providers of neonatal intensive care, mainly large teaching hospitals.
Centers for Medicare and Medicaid Services, U.S.↗
A look at catastrophic medical expenses and the poor.
Explore the source record for details and available documents.
Catastrophic Illness↗
Practice mode and payment method. Effects on use, costs, quality, and access.
Explore the source record for details and available documents.
Fees, Medical↗
Health insurance coverage of the unemployed.
Of 1,332 unemployed individuals in the Detroit area interviewed in late 1983, 51% did not have health insurance. Lack of insurance was directly related to length of unemployment. Of those unemployed 3 months or less, 31% had no insurance, as compared with 56% of those unemployed more than 3 years. For the most part, these were not the chronically uninsured: 78% of them were insured when they were employed. Three fourths of those without insurance were not covered by Medicaid either. These findings suggest that during the latest economic recession, the problem of health insurance loss due to losing one's job was more severe than had been assumed by most policymakers.
Adult↗
DRGs, incentives, hospitals, and physicians.
Explore the source record for details and available documents.
Costs and Cost Analysis↗
Length-of-stay variations within ICDA-8 diagnosis-related groups.
The number of bed days per inpatient episode, the length of stay (LOS), is a major indicator of hospital performance and a basic measure of patients' resource consumption. Hospital reimbursement on the basis of treated cases requires a system for accurately identifying case categories. Diagnosis Related Groups (DRGs) have been proposed for this purpose. An initial study to analyze variations in length of stay and resource consumption within DRGs is presented. Regression analysis of variation in ALOS for 7 DRGs, in terms of 8-10 independent variables not included in the classification scheme itself, was done. Results indicate that 30-65% of the large intra-DRG LOS variations are explainable by indicators of case complexity and severity despite the homogeneity claimed for the DRGs. For certain DRGs, such variations are also related to admission factors. Results indicate the need for more precise patient taxonomies than the ICDA-8-based DRGs.
Ancillary Services, Hospital↗
The design of case-based hospital payment systems.
Reimbursing hospitals on the basis of treated cases, as in the New Jersey diagnosis-related groups (DRG) experiment, is equivalent to a centrally set pricing scheme, with all of its inherent difficulties. In addition to the problems of appropriate case definition, it is not obvious how hospitals should be classified to form reference groups for cost determination. Because empirically derived cost schedules are based on observed treatment patterns and resource use, they reflect variations in clinical appropriateness and quality and in resource use efficiency that characterize the system from which the data are drawn. If case-based schemes are to incorporate desirable performance incentives, they must be much better specified and take into account the complexity of hospital behavior. This article identifies the basic components of case-based systems of hospital reimbursement and discusses the analytic and empiric problems involved in their design.
Cost Allocation↗
Classification of hospitals based on measured output: the VA system.
Evaluation of hospital performance and improvement of resource allocation in hospital systems require a method for classifying hospitals on the basis of their output. Previous approaches to hospital classification relied largely on input characteristics. The authors propose and apply a procedure for classifying hospitals into groups where within-group hospitals are similar with respect to output. Direct measures of case-mix-adjusted discharges and outpatient visits are the principal measures of patient care output; other measures capture training and research functions. The component measures were weighted, and a composite output measure was calculated for each of the 162 hospitals in the Veterans Administration health care system. The output score then was used as the dependent variable in an Automatic Interaction Detector analysis, which partitioned the 162 hospitals into 10 groups, accounting for 85 per cent of the variance in the dependent variable. An extension of the output classification method is presented for illustration of how the difference between hospitals' actual operating costs and costs predicted on the basis of output can be used in defining isoefficiency groups.
Budgets↗
Increasing Medicare enrollment in HMOs: the need for capitation rates adjusted for health status.
Although the federal government has sought to increase enrollment of Medicare beneficiaries in HMOs, at the end of 1981 less than 2% were HMO members. Of these, only two-tenths of 1% were enrolled under the type of risk-sharing contracts characteristic of HMOs. HMOs might have greater incentives to market to Medicare beneficiaries if a factor that adjusts for health status could be incorporated into the capitation formula. This paper develops such a factor using measures based on prior-year utilization, perceived health status, and functional health status.
Capitation Fee↗
HMO enrollment: who joins what and why: a review of the literature.
Enrollment in an HMO involves a simultaneous choice of insurance benefits and a provider system. Review of an extensive series of studies shows that breadth of coverage, lower cost, and assured access to benefits are key elements anticipated in the choice. But so too are the perceived limitations inherent in selection of a physician within a close-panel plan, and the inconvenience of centralized sites. For the design and evaluation of future policy, current knowledge based on past enrollment behavior offers only tentative suggestions.
Catchment Area, Health↗
On the analysis of ambulatory utilization: an investigation of the roles of need, access and price as predictors of illness and preventive visits.
After separating ambulatory visits into those made in connection with illness or injury and preventive visits, the utilization patterns of a sample of families and individuals are analyzed. Need, in terms of perceived health status and the numbers of acute and chronic conditions, price, and access are found to be the best predictors of visit rates, but their roles in illness and preventive visit rates are different. The methodologically relevant findings indicate that individual self-reports and independent individual observations are required to identify relationships hidden by family member data, such as that between hospital episodes and ambulatory visits. The substantive findings indicate a substitutive relationship between illness and preventive visits, lend further evidence for relatively low price elasticity for illness visits and show that membership in a closed panel health maintenance organization increases preventive visit rate while price has little or no effect on it. The tentative policy implication--that it is not so much price as the characteristics of the usual source of care which appear to determine preventive services utilization--is discussed in the context of potential biases inherent in the sample.
Ambulatory Care↗
Expectations and experience of HMO enrollees after one year: an analysis of satisfaction, utilization, and costs.
The impact of HMO enrollment on utilization and satisfaction in a sample of industrial employees was investigated using a panel study design. Preenrollment and postenrollment ambulatory utilization rates, out-of-pocket costs, and measures of satisfaction are presented for enrollees in two closed- and one open-panel HMO-type plans. Their health care experiences are compared to those of reenrollees remaining in the HMOs during both surveys, as well as to those retaining their Blue Cross-Blue Shield membership. Lack of access to and dissatisfaction with previous sources of care distinguished the preenrollment experience of those who selected the closed-panel plans; their postenrollment experience produced increasing satisfaction reflecting that their expectations in these areas were met. Continuing enrollees in closed-panel plans were somewhat less satisfied after a year of experience than they were earlier. Those who joined the open-panel plan did so because of the expanded benefits and financial advantages which, their postenrollment experience showed, were accurately perceived. Utilization patterns also changed: continuing enrollees in both types of plans made fewer illness but more preventive visits; new enrollees used greater numbers of both types of services after enrolling than before.
Ambulatory Care↗
Enrollment choices in different types of HMOs: a multivariate analysis.
Enrollment decisions of a sample of an employed population choosing among open-panel and closed-panel HMOs and Blue Cross/Blue Shield are analyzed. This report, unlike previous ones, overcomes some of the difficulties of bivariate analysis by the use of the multivariate logistic probability model, logit. The results show that there are four consistent predictors of enrollment choice: previous source of care as the measure of access; family life stage and chronic conditions per family member as indicators of health risk; per capita income as the measure of economic vulnerability; and health concern. Having a private physician as the source of care is the best single predictor, its absence predicting a higher probability of enrollment in the closed, and its presence in the open-panel HMO. Higher risk life stage families, younger and with more children, are more likely to join the open-panel plan than the closed or retain BC/BS; higher incomes and larger numbers of chronic conditions appear to have the same effects. Higher levels of health concern, on the other hand, predict a greater probability of choosing the closed-panel plan. The probability of enrollment in any HMO is predicted with more than 50 per cent accuracy for 60 per cent of the sample. Choice between open and closed-panel plans is predicted with an accuracy in excess of 50 per cent for 80 per cent, and with an accuracy greater than 90 per cent for over 10 per cent of potential enrollees. The applicability of this approach to HMO feasibility analysis and planning is clearly indicated.
Analysis of Variance↗
Education and income effects in the use of ambulatory services in the United States: an analysis of the 1970 National Health Interview Survey data.
The roles of education and income as determinants for utilization of ambulatory services in the U.S. are investigated by the application of path analysis to a subsample of the 1970 National Health Interview Survey. The methodology permits the identification of both the direct and indirect effects of each independent variable on utilization within a model that views need as the major determinant of care. Previous findings that income has no direct effect on utilization, while education does, are reaffirmed. Contrary to previous analyses, however, it is shown that income does have a strong indirect effect on utilization via its impact on need arising from chronic conditions, measured as limitation of activity. Individuals in the highest income category have a mean annual visit rate of 4.13, while the rate for those in the lowest is 5.43. Most of the differential, 1.3, is attributable to the lower prevalence of chronic conditions in the highest income bracket. The total effect of education, on the other hand, is only 60% of its direct effect since higher educational attainment is associated with lower levels of chronicity. Disaggregation of direct and indirect effects through the need variables shows that income has a greater effect on utilization than does education.
Ambulatory Care↗
The mysteries of prescription pricing in retail pharmacies.
A sample of 13,314 prescriptions filled in 20 pharmacies during a two-week period is analyzed to identify price variations both among and within pharmacies. The results reaffirm previous reports of inter-pharmacy price variation by finding that prices among pharmacies vary by as much as 200 per cent. What is surprising, however, is that the data show that within a two-week period, the price of the same quantity of the same dosage form of the same drug in the same pharmacy also varies by as much as 130 per cent. The findings are consistent with the hypothesis of anti-competitive pricing which, by denying consistent price information to the consumer, makes rational purchasing behavior impossible.
Fees, Pharmaceutical↗