Biomedical subjects
S Folland
Publications and source records attributed to S Folland.
Small area variations: a critical review of propositions, methods, and evidence.
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The effect of prospective payment under DRGs on the market value of hospitals.
This article investigates the effect of a change in Medicare payment regulations on for-profit hospital market values. A theoretical argument on the effects of this regulatory event is presented in which hospital managers are concerned about firm wealth but also value prestige, provider perceptions of quality, and perhaps other prerequisites. In this case, DRGs will induce hospitals to seek higher wealth because they increase the opportunity cost of nonpecuniary benefits. The issue is pursued empirically by estimating the market response to DRG legislation using seemingly unrelated regressions.
Sources of small area variations in the use of medical care.
This paper develops an economic model of physician care utilization which incorporates the uncertainty and practice style hypotheses proposed by Wennberg and others as explanations of the substantial intermarket variations in per capita utilization rates of many medical and surgical procedures. Practice style, which is distinguished from inducement, is modeled as a set of physician beliefs about the production function of health. In the model, per capita utilization is decomposed into a first occurrences demand and an intensity demand. It is argued that the influence of practice style affects primarily the intensity with which physicians treat their patients. Alternative tests are proposed and carried out on a comprehensive aggregated measure of physician care utilization for market areas in Michigan. Although practice style is undoubtedly important for some individual procedures, the empirical results indicate that it is unimportant in determining either an aggregated index of market area utilization or the average intensity with which patients are treated by physicians.
Variations in the use of physician services by Medicare beneficiaries.
Variations in the utilization of physicians' services by Medicare enrollees in Michigan are examined in this article. Two measures of market-area utilization are estimated. One is the standard per capita utilization rate, which has been the common focus of many small area variation studies. The second measures the intensity with which physicians treat their patients and can be taken as an indicator of the so-called practice-style phenomenon. The results show that, although substantial intermarket variation in per capita utilization is found, the variations are not as large as one might expect and are considerably less than the variations in per capita utilization for Michigan's Blue Shield population. More important, the relationship between a market's per capita utilization and intensity of care of primary care physicians is insignificant. The relevance of these findings, especially within the context of the practice style hypothesis and policy proposals that would establish physician practice norms, are discussed.
Implications of prospective payment under DRGs for hospital marketing.
The authors analyze the hospital marketing implications of Medicare's prospective payment system under DRGs. They take an appropriately broad view of marketing and consider related impacts on culture, structure, and management, in addition to the traditional marketing mix. The article serves to present in one place the ideas and discussions on the subject from a wide and disparate literature. The aim throughout is to identify those marketing responses warranting recommendation. The recommendations are assembled in a concluding section. Though many of the ideas are not new, they have yet to be widely adopted by hospitals. Hence they represent untapped marketing opportunities attributable to the advent of the DRG system. The authors conclude with suggestions for future research.