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Medicare modernization: the new prescription drug benefit and redesigned Part B and Part C.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 was enacted in November 2003 and became effective on January 1, 2006. Two major changes occurred. A prescription drug benefit is now available for seniors and younger persons with disabilities who are covered by Medicare. The managed care program, formerly known as Medicare + Choice, has been redesigned and renamed Medicare Advantage.

Journal Article↗

Negotiating strategies for capitation.

The appropriate strategy to employ in contract negotiations will vary, depending on a number of important factors. These include the relative size and power of the network, the conditions of the local market, the strength of the managed-care payer in the market, and a host of other issues. The negotiating strategy ultimately adopted will be in accordance with the organizations overall preference, style, and needs. In approaching any contract negotiation, two key points should be kept in mind. First, networks must recognize they can become more prepared and empowered for contract negotiations through the acquisition of additional information. Second, form contracts can be changed; nothing is set in stone. Despite the frequent statements of payer organizations that the form cannot be modified to meet the provider's unique desires and needs, in most cases a contract can be modified in one way or another to meet the parties' mutual needs and desires. Everything is negotiable: Any party involved in such negotiations should be positive, avoiding conflict; use a problem-solving approach; agree whenever possible--strive to become "we"; acknowledge the payer's interest and position, expressing a desire to compromise; and acknowledge the authority and ability of the assigned negotiator. Once the managed-care contract is consummated, the network should attempt to ensure that the parties get maximum value from the agreement. One step to achieving such a desired end is to identify a leader who will be responsible for overseeing contract implementation and performance and responsible for knowing the requirements of the agreement inside out and for focusing on all other requirements of the managed-care program.

Capitation Fee↗

Integrating knowledge workers and the organization: the role of IT.

Agency theory is primarily concerned with the relationship between the principal (employer/purchaser) and the agent (employee/contractor) in the issue of goal-aligned behavior. Jensen and Meckling and others were not referring to a knowledge worker agent in their conceptualization of the principal/agent relationship. The significance of having a knowledge worker agent is that the decision rights are no longer located with the principal but with the agent. This in turn has a tremendous bearing on goal alignment and agency problems. We propose that information systems/information technology (IS/IT), in particular enterprise wide systems, can alleviate these agency problems. We illustrate this through a case example from health care, an industry with a high proportion of knowledge worker agents.

Contract Services↗

Estimating prevalence, incidence, and disease-related mortality for patients with epilepsy in managed care organizations.

PURPOSE: The purpose of the present study was to apply computer algorithms to an administrative data set to identify the prevalence of epilepsy, incidence of epilepsy, and epilepsy-related mortality of patients in a managed care organization (MCO). METHODS: The study population consisted of members enrolled in Lovelace Health Plan, a component of Lovelace Health Systems, a statewide MCO headquartered in Albuquerque, New Mexico. Patient records were obtained from July 1996 to June 2001. Four logistic regression models with high sensitivity and specificity were applied to 1-, 3-, and 5-year time frames in which members were continuously enrolled in the MCO. Incidence was defined for patients who did not have an epilepsy-associated code in the 18 months before the first diagnosis entry. Mortality estimates in the population also were assessed by using a matched control group and linkage to a statewide death registry. RESULTS: The data yielded estimated prevalence rates of 7-10 per 1,000, depending on age, sex, ethnicity, and time interval. Annualized incidence was 47 per 100,000 for members continuously enrolled for 3 years and 71 per 100,000 for members continuously enrolled for 5 years. Crude mortality rates were 2-2.5 times higher for epilepsy patients identified with the algorithms than for the matched controls. Conditional logistic regression indicated that the odds of death for epilepsy patients as compared with controls ranged from 1.24 to 2.06. CONCLUSIONS: Accurate estimation of prevalence, incidence, and mortality rates for epilepsy is an essential component of disease management in MCOs. The algorithms in this project can be used to monitor trends in prevalence, incidence, and mortality to inform decisions critical to improving the health care needs and quality of life for patients with epilepsy.

Adult↗

Antibiotic treatment of acute respiratory tract infections in the elderly: effect of a multidimensional educational intervention.

OBJECTIVES: : To measure and improve antibiotic use for acute respiratory tract infections (ARIs) in the elderly. DESIGN: : Prospective, nonrandomized controlled trial. SETTING: : Ambulatory office practices in Denver metropolitan area (n=4 intervention practices; n=51 control practices). PARTICIPANTS: : Consecutive patients enrolled in a Medicare managed care program who were diagnosed with ARIs during baseline (winter 2000/2001) and intervention (winter 2001/2002) periods. A total of 4,270 patient visits were analyzed (including 341 patient visits in intervention practices). INTERVENTION: : Appropriate antibiotic use and antibiotic resistance educational materials were mailed to intervention practice households. Waiting and examination room posters were provided to intervention office practices. MEASUREMENTS: : Antibiotic prescription rates, based on administrative office visit and pharmacy data, for total and condition-specific ARIs. RESULTS: : There was wide variation in antibiotic prescription rates for ARIs across unique practices, ranging from 21% to 88% (median=54%). Antibiotic prescription rates varied little by patient age, sex, and underlying chronic lung disease. Prescription rates varied by diagnosis: sinusitis (69%), bronchitis (59%), pharyngitis (50%), and nonspecific upper respiratory tract infection (26%). The educational intervention was not associated with greater reduction in antibiotic prescription rates for total or condition-specific ARIs beyond a modest secular trend (P=.79). CONCLUSION: : Wide variation in antibiotic prescription rates suggests that quality improvement efforts are needed to optimize antibiotic use in the elderly. In the setting of an ongoing physician intervention, a patient education intervention had little effect. Factors other than patient expectations and demands may play a stronger role in antibiotic treatment decisions in elderly populations.

Acute Disease↗

Building the information infrastructure required for managed care.

PURPOSE: To describe the information used by health care purchasers, policymakers, and administrators when making the decisions required in a managed-care environment and what the profession must do to develop an information infrastructure to demonstrate its contribution to patient outcomes. SCOPE: Managed care has created a competitive environment for all health care organizations in which they must offer the best value for their dollar. The purchasing processes germane to managed care rely heavily on information for the selection of cost-effective providers and the provision of efficient care. Information used in these processes is derived from transaction systems that largely describe physician and other health care worker's services, but not nursing care. Data analysis by computers requires that data be obtained using a standardized language. Currently, nursing lacks a unified approach to the use of a standardized nursing language. CONCLUSIONS: Individual nurses, nurse managers, executives, and educators should strive to develop an information infrastructure that will overcome barriers. Nurses should both adopt a unified approach to a standardized language, and develop a nationwide information infrastructure that will demonstrate nursing's contribution to patient outcomes.

Contract Services↗

Strategies for implementing quantifiable group practice guidelines.

Managed care organizations are striving to provide quality healthcare by establishing best-practice guidelines that decrease the variability in delivering care. Current literature provides few details on how organizations have developed and implemented guidelines and evaluated indicators. This article describes Methodist Medical Group's step-by-step approach to executing each component of this process for seven guidelines in physician office practices. It offers practical guidance for choosing a measurement method for each guideline, introduces patient surveys to measure guidelines, and identifies proven strategies for overcoming barriers in each phase.

Attitude of Health Personnel↗

The effects of newborn early discharge on hospital readmissions.

The objective of this study is to determine the effects of early newborn hospital discharge policy on hospital readmission for Medicaid infants. It is a multiple year, retrospective study in which early hospital discharges were followed using Medicaid claims data to determine the rate of readmissions for newborns during 1989-1992, the years in which this policy became widespread in Maryland. Analysis compares early discharges, using chi 2 tests, and calculates odds ratios to estimate the risk of readmissions. Our results found significant increases in early discharges for Medicaid newborns over time among sick newborns. The odds of readmissions for normal babies discharged early were about the same as for those kept longer, but for sick babies discharged early they were significantly greater, especially during the early study years. Findings from this natural experiment indicate that early discharge of Medicaid newborns with physical problems increases their likelihood of readmissions. Careful attention to the needs of these higher risk infants must be a part of any hospital or managed care program implementing early discharge policy.

Humans↗

Do market-level hospital and physician resources affect small area variation in hospital use?

This study evaluates the effect of market-level physician and hospital resources on hospital use. It is anticipated that higher hospital discharges are associated with (1) greater hospital and physician resources, (2) more differentiated hospital and physician resources, and (3) higher levels of teaching intensity in the community. Data on 14 modified diagnostically related groups (DRGs) and 58 hospital market communities in Michigan are analyzed during a 7-year period. Findings indicate that physician resources, hospital resources, differentiation of hospital and physician resources, and teaching intensity contribute only modestly to discharges, holding constant the socioeconomic attributes of the community and adjusting for the variation in hospital use over time. With the inclusion of hospital and physician resource variables, socioeconomic factors remain important determinants of the variation across market communities. Findings are discussed in terms of their implications for health care organizations, managed care programs, and cost control efforts in general.

Adult↗

Community health clinics under managed competition: navigating uncharted waters.

In this article, we consider how major changes in the health care system, both real and proposed, may affect the future of community health clinics (CHCs) in the United States and their ability to continue to provide comprehensive care to underserved populations. We discuss the constraints and opportunities that CHCs face in a health care system that is rapidly moving away from fee-for-service medical care toward a model of managed competition. We describe the role that the National Association of Community Health Centers has played in advocating for CHCs in Congress and the role state primary care associations are playing in spear-heading the development of statewide CHC-sponsored health maintenance organizations. We also analyze CHC reactions to the changes in federal policies that were proposed in the major health care reform bills of the 103d Congress, as well as the prospects for CHCs under Medicaid managed care as it sweeps rapidly across the nation. As a case study, we examine California's policies that mandate that Medicaid recipients enroll in either a private managed care plan or a newly created public plan, which compete against each other within each county. CHCs are vulnerable during the transition to managed care and managed competition, and they have neither the resources nor the ability to integrate or compete successfully with private health maintenance organizations without safeguards, new sources of funding, technical assistance, improved infrastructure, and vigorous monitoring and oversight from federal and state governments, as well as the continued education, training, and policy advocacy provided by the National Association of Community Health Centers and state primary care associations.

California↗

Redefining rate regulation in a competitive environment.

Neither rate regulation nor market competition alone is likely to contain health care spending in the long run. We need an approach to cost containment that can simultaneously address the major causes of rising health expenditures: higher prices, greater intensity, and new technologies. Whereas rate regulation and market competition have been viewed as alternative strategies, an innovative approach would include a rate-regulatory system that is compatible with an evolving competitive market. We discuss the Maryland hospital rate-setting system as an illustration of the compatibility of a regulatory approach within a competitive market. In addition, we consider the feasibility of expanding a hospital rate-setting system nationwide and to the nonhospital sectors.

Capitation Fee↗

The technocratic wish: making sense and finding power in the "managed" medical marketplace.

Enormous changes have recently swept through the organization and delivery of medical care. Scholars and students of the health care system and its politics try to make sense of the shift in power to identify and allocate needed resources away from physicians and toward corporate firms. I suggest that we cannot understand managed care unless we understand its power as at least substantially due to its reliance on a claim to be better science. In this way, managed care needs to be placed within an analytic historical tradition that is concerned with how accounts of scientific objectivity become convincing and support (and are confirmed as scientific by) social and political objectives. In this way, managed care reflects what I call the technocratic wish: an appeal to objective measures to resolve contentious issues and/or clothe their resolution as scientifically logical and natural.

Evidence-Based Medicine↗

Markets, Medicare, and making do: business strategies after national health care reform.

This essay examines the role of business health care purchasers in keeping market solutions at the center of the health system. One might assume that employers would have a clear ideological preference for market solutions, but big business managers are ambivalent about market interventions at both the firm and public policy levels. Although currently enthusiastic about market-oriented managed care, large employers have been periodically disappointed by firm-level market experiments during the past two decades. They viewed with skepticism the Republican proposal to apply private-sector market cures to the public Medicare and Medicaid, fearing that the proposals would accelerate cost-shifting to private business payers. Big business objections have been muted, however, by the organizational weakness so vividly illustrated during the national health reform debate.

Commerce↗