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PubMed1993

Reimbursement of tumor marker tests.

The diffusion of new technology is significantly affected by coverage and reimbursement decisions. A variety of agencies (public and private) make decisions as to which technologies or treatments will be covered and what the levels of reimbursement will be. Recently, these agencies' coverage decisions have tended to be strongly affected by whether a technology is cost raising or cost reducing. Historically, a common effect of medical innovation has been improved quality of health care but with a corresponding increase in cost of delivery. The Medicare program has significant influence on the coverage policies of public and private third-party payers. This influence is especially visible in coverage and reimbursement decisions for cancer-related diagnostic procedures and systems. Coverage for these procedures and systems is not widespread because payers have not been convinced of the clinical usefulness of the assays. The industry must take the responsibility of working through the issues surrounding coverage and reimbursement of cancer-related diagnostic procedures with the payers. The ability to successfully negotiate payment for assays requires knowledge of Medicare coverage policies and a grasp of the reimbursement system.

Biomarkers, Tumor↗

PubMedDate not supplied

Impact of a Resource-Based Relative Value Scale fee schedule on reimbursements to neonatologists.

We investigated the possible effect of the Resource-Based Relative Value Scale (RBRVS) fee schedule on reimbursements for neonatologists. This payment system may prove attractive to most third-party payers and is predicted to result in lower procedural reimbursement, which is a significant component of neonatal care. We studied the charges and reimbursements for the portion of our intensive care nursery patient population covered by Medicaid for a 1-year period. Total, procedural, and nonprocedural reimbursements under three current systems and the RBRVS were compared. The RBRVS system produced overall improved reimbursement compared with Medicaid, but decreased reimbursement compared with the other two systems. Nonprocedural services were relatively better reimbursed than procedural services. The impact of RBRVS will depend on the population mix of third-party payers, the proportion of nonprocedural charges in a particular neonatal intensive care unit, and the conversion factor used by the third-party payer.

Fees, Medical↗

PubMed2005

The Chaoulli Case: a two-tier Magna Carta?

There has been considerable speculation about the potential impact of the Supreme Court of Canada's judgment in Chaoulli v. Quebec. Even if those who are most friendly--or most hostile--to Canadian medicare are exaggerating the impact of the decision, its impact will be large. While the decision does not strike down any existing single-payer medicare system in any province, including Quebec's single-payer system, it is certainly capable of becoming the Magna Carta for two-tier medicare through future judicial interpretation and extension. In any event, it has already become the battering ram of choice for medicare's most tenacious opponents.

Canada↗

PubMed1999

Cost containment mechanisms in Canada.

AIM: Describe the mechanisms currently being used by federal and provincial/territorial governments, medical associations, and private insurers to control the cost of health care in our country. METHODS: Descriptive method used. Statistics on percentage GDP spent on health, and health status of the population, were compared with other OECD countries. Questions discussed: importance of cost control, why difficult to control, and what is needed to control costs. RESULTS: System-wide mechanisms used to control health care costs include: single payer financing, universal coverage for hospital/physician services, global budgets, preventive health services, evidence-based information systems, and regionalization. Sector specific mechanisms used to control costs of physicians, hospitals, drugs, and technology. Cost control within the health care sector allows spending on other sectors (e.g., employment) that have a proven impact on one's health. Future health care cost containment policies must focus on restraining private sector costs and encouraging movement towards the determinants of health approach. CONCLUSIONS: Canada's relative success in containing costs is the result of public financing of the health insurance system. Our single payer, publicly financed health care system, allows for cost containment and universal access based on need for services rather than ability to pay. The shift of costs from the public to private sector must be curtailed. The determinants of health approach is instrumental in containing and channeling future spending on health.

Canada↗

PubMed1998

The cost-effectiveness of screening for type 2 diabetes. CDC Diabetes Cost-Effectiveness Study Group, Centers for Disease Control and Prevention.

CONTEXT: Type 2 diabetes mellitus is a common and serious disease in the United States, but one third of those affected are unaware they have it. OBJECTIVE: To estimate the cost-effectiveness of early detection and treatment of type 2 diabetes. DESIGN: A Monte Carlo computer simulation model was developed to estimate the lifetime costs and benefits of 1-time opportunistic screening (ie, performed during routine contact with the medical care system) for type 2 diabetes and to compare them with current clinical practice. Cost-effectiveness was estimated for all persons aged 25 years or older, for age-specific subgroups, and for African Americans. Data were obtained from clinical trials, epidemiologic studies, and population surveys, and a single-payer perspective was assumed. Costs and benefits are discounted at 3% and costs are expressed in 1995 US dollars. SETTING: Single-payer health care system. PARTICIPANTS: Hypothetical cohort of 10000 persons with newly diagnosed diabetes from the general US population. MAIN OUTCOME MEASURES: Cost per additional life-year gained and cost per quality-adjusted life-year (QALY) gained. RESULTS: The incremental cost of opportunistic screening among all persons aged 25 years or older is estimated at $236449 per life-year gained and $56649 per QALY gained. Screening is more cost-effective among younger people and among African Americans. The benefits of early detection and treatment accrue more from postponement of complications and the resulting improvement in quality of life than from additional life-years. CONCLUSIONS: Early diagnosis and treatment through opportunistic screening of type 2 diabetes may reduce the lifetime incidence of major microvascular complications and result in gains in both life-years and QALYs. Incremental increases in costs attributable to screening and earlier treatment are incurred but may well be in the range of acceptable cost-effectiveness for US health care systems, especially for younger adults and for some subpopulations (eg, minorities) who are at relatively high risk of developing the major complications of type 2 diabetes. Although current recommendations are that screening begin at age 45 years, these results suggest that screening is more cost-effective at younger ages. The selection of appropriate target populations for screening should consider factors in addition to the prevalence of diabetes.

Adult↗

PubMed1996

The role of the part-time physician-teacher in dermatology.

As we approach the 21st century, specialty training programs in dermatology are feeling increasing pressures that have begun to erode clinical teaching. Full-time faculty members are being asked to spend more time in patient care to support an increasing portion of their income or are spending more time to develop laboratory data and write grant applications to survive in a brutally competitive academic world. Other faculty members are leaving academic medicine for private practice having decided that the risk-reward ratio is no longer acceptable. In California, the state government has implemented a plan that decreases specialty residency positions and their funding in favor of primary care positions. Third-party payers are becoming more restrictive in paying for inpatient and outpatient dermatologic services. Dermatologic inpatient services in some university teaching programs have been eliminated. Third-party payers are also balking at subsidizing teaching and research activities at teaching hospitals.

Dermatology↗

PubMed2000

Physicians' ethical beliefs about cost-control arrangements.

BACKGROUND: Although much has been written about the ethics of new methods of health care financing, little is known about the extent to which physicians experience these cost-control arrangements as ethical problems. METHOD: A cross-sectional telephone survey of 1,549 physicians, 8 to 17 years after residency, randomly selected from 75 US metropolitan service areas (response rate, 74.0%). RESULTS: Only 17.0% believed that financial incentives to limit services are ethically acceptable. Although 52.9% thought that physicians should try to abide by guidelines discouraging the use of interventions with possible but unproven benefit, only 14.5% thought such guidelines should be enforced by payers. Only 5.7% thought that it was morally acceptable for payers to discourage physicians from telling patients about their personal financial incentives, and only 9.1% found compliance with such restrictions morally acceptable. Changes in the health care system in the past 5 years were believed to have had a negative impact on their own patients' trust in them by 50.6%, and 80.8% believed that changes in the health care system in the past decade have diminished physicians' commitment to an ethic of undivided loyalty to patients. In multiple regression analysis, physicians who reported that the overall personal financial incentives in their practices encouraged them to reduce services were significantly more likely to have ethical objections to such incentives, to believe their own patients' trust in them had diminished, and to believe that the ethic of undivided loyalty to patients had diminished. CONCLUSIONS: Many of the methods now commonly used to influence medical decision making are considered ethically objectionable by most midcareer physicians. Whether their ethical disquiet about these arrangements is justified cannot be answered from these data.

Attitude of Health Personnel↗

PubMed1996

Managed care and economic dynamics.

Over the past several decades, health care delivery in the United States evolved in an environment lacking marketplace constraints. The unforeseen result was the current health care crisis--uncontrolled costs, shrinking access, and redundant technological capabilities. Managed care is a strategy to impose fiscal constraints on health care delivery. A diagrammatic analysis of the economic dynamics between consumers and producers in an open marketplace is compared with that of patients, providers, and payers under the health care scheme that produced the health care crisis and under managed care. Patient demands, expectations, and needs for health care are not subject to fiscal constraint under managed care since the dislinkage between consumer and payer still exits. Managed care does not impose true open marketplace fiscal constraints on health care delivery. Furthermore, any solution to the US health care crisis that used true marketplace fiscal constraints would necessitate fundamental changes in societal values concerning individual rights to health care.

Delivery of Health Care↗

PubMed1997

Maternal and infant health: effects of moderate reductions in postpartum length of stay.

BACKGROUND: The Newborns' and Mothers' Health Protection Act of 1996 prohibits payers from restricting "benefits for any hospital length of stay in connection with childbirth for the mother or newborn child, following a normal vaginal delivery, to less than 48 hours." The law recognizes the basic right of women and physicians to make decisions about aptness of discharge timing. OBJECTIVE: To provide data as a basis for decisions about aptness of discharge timing by studying the effect of voluntary, moderate reductions in length of postpartum hospital stay on an array of maternal and infant health outcomes. DESIGN: A prospective cohort study. Patients were surveyed by telephone at 3 and 8 weeks postpartum. SETTING: A teaching hospital where 38% of the patients are in a managed care health plan with a noncompulsory reduced stay program offering enhanced prepartum and postpartum services, including home visits. PATIENTS: Consecutive mothers discharged after vaginal delivery during a 3-month period. MAIN OUTCOME MEASURES: The outcomes were health services use within 21 days, breast-feeding, depression, sense of competence, and satisfaction with care. Multivariate analyses adjusted for sociodemographic factors, payer status, services, and social support. RESULTS: Of 1364 eligible patients, 1200 (88%) were surveyed at 3 weeks; of these 1200, 1015 (85%) were resurveyed at 8 weeks. The mean length of stay was 41.9 hours (SD, 12.2 hours). Of patients going home in 30 hours or less, 60.8% belonged to a managed care health plan. The length of stay was not related to the outcomes, except that women hospitalized shorter than 48 hours had more emergency department visits than those staying 40 to 48 hours (adjusted odds ratio, 5.78; 95% confidence interval, 1.19-28.05). CONCLUSIONS: When adequate postpartum outpatient care is accessible, a moderately shorter length of postpartum stay after an uncomplicated vaginal delivery had no adverse effect on an array of outcomes. Researchers and policy makers should seek to better define the content of postpartum services necessary for achieving optimal outcomes for women and newborns; funding should be available to provide such services, regardless of the setting in which they are provided.

Adolescent↗

PubMed1996

The shift toward a managed care environment in a multispecialty group practice model. Looking for reciprocal benefits.

Managed care is notably affecting the practice of surgery in the United States. Four principal elements are subject to change: (1) patient care patterns, (2) ethics, (3) education and research, and (4) surgeon compensation. The Virginia Mason Clinic, a multispecialty group practice, is adapting to the demands of managed and capitated care. With the patient as the primary focus of effort, the goal is to create optimum value in health care. The principles of Continuous Quality Improvement are used to increase value in health care by ensuring appropriate treatment with optimum outcome at reasonable cost. Practice patterns are shifting to provide value to patients and payers. Ethical conflicts threaten but have been avoided. Surgical education remains unaffected, but future funding is problematic. The emphasis in surgical research has shifted toward outcome-based studies. The conflict between work effort and resource conservation as determinants of physician compensation is less for surgical than for medical practitioners. Although the principal benefactors of the shift toward managed care have been the payers, patients have gained modestly through efficiencies in the health care process and more stable insurance premiums. The satisfaction level of the surgeons in our multispecialty group practice remains high. Surgical research is thriving, volumes and case mix remain excellent, and changes in practice pattern have enabled us to increase efficiency without compromising patient care.

Ethics, Medical↗

PubMedDate not supplied

Health USA. A national health program for the United States.

The Health USA Act of 1991 addresses two fundamental health services financing problems: the more than 30 million uninsured persons and the rising costs for health care and for health insurance. Health USA would provide coverage of the entire resident population for comprehensive medical and preventive health and long-term care services through a universal tax-funded financing system. The federal government would contribute an average of 87% of program costs to each state, which would establish, under federal guidelines, a state health program. Each individual or family may enroll in any health plan approved by the state program, including many private plans, or a plan run by the state program. Through the approved plan of their choice, enrollees would receive covered services and obtain their care from participating physicians and other professional practitioners, hospitals, and other facilities. The state program would pay approved plans a capitation payment for every person enrolled. The plans would pay professional providers fees, as part of an all-payer system of fee schedules and expenditure targets, or capitation payments or salary. Hospitals would be financed through global budgets negotiated by the state program with each hospital. The plan run by the state program would pay the health care costs of any person who does not enroll in an approved plan, making the state plan the payer of last resort and eliminating uncompensated care and cost shifting by providers. Health USA would separate health care coverage from employment, ensuring uninterrupted coverage and eliminating employers' administrative role in providing coverage. Federal and state taxes would replace present methods of financing by private insurance premiums and large out-of-pocket expenditures. Building on the present system of health plans, Health USA would offer all persons a wide choice of competing plans in which to enroll and offer professional providers a wide choice of plans in which to practice. It would control costs by increasing financial accountability of providers and health plans, reducing present reliance on intrusive utilization review and on patient cost sharing. By controlling health care and administrative costs, Health USA would cover the entire population and, according to independent cost estimates, reduce national health expenditures by $11.5 billion in 1991.

Cost Control↗

PubMed1999

Relationship between modifiable health risks and short-term health care charges.

CONTEXT: If physical inactivity, obesity, and smoking status prove to contribute significantly to increased health care charges within a short period of time, health plans and payers may wish to invest in strategies to modify these risk factors. However, few data are available to guide such resource allocation decisions. OBJECTIVE: To examine the relationship of modifiable health risks to subsequent health care charges after controlling for age, race, sex, and chronic conditions. DESIGN, SETTING, AND PARTICIPANTS: Cohort study of a stratified random sample of 5689 adults (75.5% of total sample of 7535) aged 40 years or older who were enrolled in a Minnesota health plan and completed a 60-item questionnaire. MAIN OUTCOME MEASURE: Resource use as measured by billed health care charges from July 1, 1995, to December 31, 1996, compared by health risk (physical activity, body mass index [BMI], and smoking status). RESULTS: The mean annual per patient charge in the total study population was $3570 (median, $600), and 15% of patients had no charges during the study period. After adjustment-for age, race, sex, and chronic disease status, physical activity (4.7% lower health care charges per active day per week), BMI (1.9% higher charges per BMI unit), current smoking status (18% higher charges), and history of tobacco use (25.8% higher charges) were prospectively related to health care charges over 18 months. Never-smokers with a BMI of 25 kg/m2 and who participated in physical activity 3 days per week had mean annual health care charges that were approximately 49% lower than physically inactive smokers with a BMI of 27.5 kg/m2. CONCLUSIONS: Our data suggest that adverse health risks translate into significantly higher health care charges within 18 months. Health plans or payers seeking to minimize health care charges may wish to consider strategic investments in interventions that effectively modify adverse health risks.

Adult↗

PubMed2004

Economic implications of evidence-based prescribing for hypertension: can better care cost less?

CONTEXT: Deviation from evidence-based guidelines in hypertension treatment is common, but its economic impact has not been rigorously studied. Suboptimal prescribing patterns contribute to the high cost of medications for elderly patients as well as the difficulty in providing affordable prescription drug benefits for older Americans. OBJECTIVE: To calculate the potential savings from the perspective of health care payers that would result from increased adherence to evidence-based recommendations for managing hypertension in patients older than 65 years. DESIGN: Comparative analysis of medications prescribed vs potential regimens suggested by evidence-based guidelines tailored to each patient's medical history, with calculation of the costs of both the actual and the evidence-based regimens. SETTING AND PATIENTS: A total of 133,624 patients being treated for hypertension during 2001 who were enrolled in a large state pharmaceutical assistance program that provides prescription drug insurance for elderly persons. MAIN OUTCOME MEASURE: Cost difference between medications actually prescribed and regimens suggested by evidence-based guidelines. RESULTS: The patients studied filled more than 2.05 million prescriptions for antihypertensive medications in 2001, at an annual program cost of 48.5 million dollars (363 dollars per patient). We identified 815,316 prescriptions (40%) for which an alternative regimen appeared more appropriate according to evidence-based recommendations. Such changes would have reduced the costs to payers in 2001 by 11.6 million dollars (nearly a quarter of program spending on antihypertensive medications), as well as being more clinically appropriate overall. Replacement of calcium channel blockers resulted in the largest potential savings. Use of pricing limits similar to those in the Medicaid program would have resulted in even larger potential savings of 20.5 million dollars (42% of program costs). CONCLUSIONS: Adherence to evidence-based prescribing guidelines for hypertension could result in substantial savings in prescription costs for elderly patients with hypertension that would amount to savings of about 1.2 billion dollars nationally. Identification of similar areas in which prescribing can be improved will be critical for the affordability of prescription drug benefit programs.

Aged↗

PubMed1998

Performance measurement in cancer care: uses and challenges.

Unnecessary, inappropriate, and futile care are given in all areas of health care including cancer care. Not only does such care increase costs and waste precious resources, but patients may have adverse outcomes when the wrong care is given. One of the ways to address this issue is to measure performance with the use of administrative data sets. Through performance measurement, the best providers can be chosen, providers can be rewarded on the basis of the quality of their performance, opportunities for improvement can be identified, and variation in practice can be minimized. Purchasers should take leadership role in creating data sets that will enhance, clinical performance. Specifically, purchasers should require the following from payers: 1) staging information; 2) requirements and/or incentives for proper International Classification of Diseases coding, including other important (comorbid) conditions; 3) incentives or requirements for proper data collection if the payer is using a reimbursement strategy that places the risk on the provider; and 4) a willingness to collect and report information to providers of care, with a view toward increasing quality and decreasing the costs of cancer care. Demanding better clinical performance can lead to better outcomes. Once good data is presented to patients and providers, better clinical behavior and improved cancer care systems will quickly follow.

Cost of Illness↗

PubMed2000

Can cost shifting continue in a price competitive environment?

Both Medicare and Medicaid are reducing payments to hospitals, and there is widespread concern that hospitals may respond by increasing prices to privately insured patients. Theoretical models of hospital behaviour have ambiguous predictions as to whether, and under what circumstances, hospitals will shift costs to private payers. This paper extends previous theoretical models and then tests empirically using data from California for the 1983-1991 period, a time of increasingly intense price competition. Hospitals did increase their prices to private payers in response to reductions in Medicare rates; they had far smaller and generally insignificant responses to changes in Medicaid reimbursement. Hospital ownership and the competitiveness of the hospital market both affected this behaviour, but there was no significant change over time. The results suggest the need to broaden our models of hospital behaviour to 'embed' them in their local markets.

California↗

PubMed1999

Off-label use and reimbursement of contrast media in MR.

Use of an approved contrast agent for a clinical purpose not contained in the package insert is not in violation of current U.S. Acts providing that it is in the course of routine medical practice, not part of an investigation into safety or effectiveness and not commercialized through advertising. The Food and Drug Administration does not have the authority to regulate the use of approved contrast media in any manner that radiologists believe, in their professional judgment, would best serve the patient. Moreover, the use of an approved contrast agent for a clinical purpose not explicitly contained in the labeling does not expose the radiologist to malpractice liability. Regarding reimbursement, there is no guarantee that any payer will reimburse a provider for use of a contrast agent outside of package insert indications. The best way to influence reimbursement is to provide the payer with detailed information prior to claim submission.

Contrast Media↗

PubMed1993

Impact of clinical trial protocols on patient care systems at the University of Texas M.D. Anderson Cancer Center.

Clinical trial protocols represent a significant component of the research program at the University of Texas M.D. Anderson Cancer Center. Currently, there are nearly 800 active protocols using more than 150 investigational drugs. Sponsors of these trials include the National Cancer Institute, numerous pharmaceutical companies, and a variety of other funding sources. Because of our large patient base, however, routine participation in cooperative groups is limited. The impact of clinical trial protocols on patient care systems is a growing concern that is addressed primarily by the Surveillance Committee at M.D. Anderson. Like many institutional review boards, this committee reviews all protocols and must grant approval before the activation of any clinical trial. The issues of medical ethics, including a risk-benefit assessment for research subjects, equitable patient selection, safeguards for economically disadvantaged populations, and the general requirements for informed consent, also fall under the purview of this board. For any comprehensive cancer center to succeed, it must have strong research programs that enhance treatment options for patients. The crisis in financing health care significantly threatens the viability of cancer research. Reimbursement for the related costs of individuals participating in clinical trials has become a battle ground for third-party payers. The resulting economic risk is shared by health care providers and patients. As a consequence, many cancer centers, including M.D. Anderson, have initiated an economic-impact analysis for protocols as a component of the review process. This analysis includes an estimation of the patient care costs compared to the funding allocated to support the research. Future research will include pharmacoeconomic analysis and other ways to relate the costs and outcomes of treatment protocols. In the interim, we must monitor reimbursement trends for patients enrolled in clinical trials closely and amend the informed consent process to include a discussion of potential economic risk or hardship to patients if insurance claims are denied. Cancer care providers, third-party payers, the federal government, and society at large must work together to address the funding of cancer research and patient care.

Cancer Care Facilities↗

PubMed2003

Pharmacoeconomic analysis of oprelvekin (recombinant human interleukin-11) for secondary prophylaxis of thrombocytopenia in solid tumor patients receiving chemotherapy.

BACKGROUND: Previous research has shown oprelvekin (recombinant human interleukin-11 [rhIL-11]) to be effective in reducing the requirements for platelet transfusions after myelosuppressive chemotherapy in patients who have previously experienced thrombocytopenia. The economic consequences of the routine use of this platelet growth factor and the usual standard of platelet transfusions for prophylaxis of severe chemotherapy-induced thrombocytopenia have not been compared. METHODS: The authors constructed a decision-analytic model to compare the alternatives of rhIL-11 versus usual care using probability, outcome, and cost data from previously published clinical trials and their own institutional sources. They incorporated the costs of platelet transfusions and adverse events from rhIL-11 into the analysis. Quality-of-life outcomes were not considered. The pharmacoeconomic analysis was based on the criterion of cost minimization from the payer's perspective. RESULTS: The expected cost of the usual care strategy for prophylaxis of severe thrombocytopenia (transfusion when platelets < 20000 microL(-1)) was US dollars 3495 for a 3-week cycle of chemotherapy. The prophylactic rhIL-11 strategy was more expensive, with an expected cost of US dollars 5328 over the same time period. Nonetheless, it was associated with fewer platelet transfusions, avoiding an average of 6.7 U compared with usual care. The savings from avoidance of platelet transfusion and adverse reactions to transfusion from the use of rhIL-11 were not offset by the substantial cost of the pharmaceutical. The greater expected costs from the rhIL-11 strategy were relatively insensitive to the unit price and efficacy of rhIL-11 and the costs of platelet transfusions and monitoring. CONCLUSIONS: From the payer's perspective, rhIL-11 cannot be considered a cost-saving clinical strategy compared with routine platelet transfusions for patients with severe chemotherapy-induced thrombocytopenia.

Antineoplastic Agents↗