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Has DRG payment influenced the technical efficiency and productivity of diagnostic technologies in Portuguese public hospitals? An empirical analysis using parametric and non-parametric methods.

The use of Diagnosis Related Groups (DRG) as a mechanism for hospital financing is a currently debated topic in Portugal. The DRG system was scheduled to be initiated by the Health Ministry of Portugal on January 1, 1990 as an instrument for the allocation of public hospital budgets funded by the National Health Service (NHS), and as a method of payment for other third party payers (e.g., Public Employees (ADSE), private insurers, etc.). Based on experience from other countries such as the United States, it was expected that implementation of this system would result in more efficient hospital resource utilisation and a more equitable distribution of hospital budgets. However, in order to minimise the potentially adverse financial impact on hospitals, the Portuguese Health Ministry decided to gradually phase in the use of the DRG system for budget allocation by using blended hospital-specific and national DRG case-mix rates. Since implementation in 1990, the percentage of each hospital's budget based on hospital specific costs was to decrease, while the percentage based on DRG case-mix was to increase. This was scheduled to continue until 1995 when the plan called for allocating yearly budgets on a 50% national and 50% hospital-specific cost basis. While all other non-NHS third party payers are currently paying based on DRGs, the adoption of DRG case-mix as a National Health Service budget setting tool has been slower than anticipated. There is now some argument in both the political and academic communities as to the appropriateness of DRGs as a budget setting criterion as well as to their impact on hospital efficiency in Portugal. This paper uses a two-stage procedure to assess the impact of actual DRG payment on the productivity (through its components, i.e., technological change and technical efficiency change) of diagnostic technology in Portuguese hospitals during the years 1992-1994, using both parametric and non-parametric frontier models. We find evidence that the DRG payment system does appear to have had a positive impact on productivity and technical efficiency of some commonly employed diagnostic technologies in Portugal during this time span.

Diagnosis-Related Groups↗

High dose lisinopril in heart failure: economic considerations.

UNLABELLED: BACKGROUND AND OBJECTIVES. In Switzerland, heart failure (HF) is one of the ten most common causes of hospitalization in patients older than 65 and the second most common in those over 80 years. 17% of the population in Switzerland is in this age class. The expenditures associated with HF are thus considerable. High doses of the angiotensin-converting enzyme (ACE) inhibitor lisinopril in patients with heart failure have been shown to significantly reduce the risk of death or hospitalization for heart failure and for any reason. The objective of the present study was to analyze the economic implications of using high doses of lisinopril in the Swiss health care system setting, both from the societal perspective and from that of the Swiss health insurers. PATIENTS AND METHODS: Using published data from the ATLAS Trial, we computed the monthly probability of death and of hospital admission for heart failure, ischemic events, other cardiovascular causes and any reason per patient for both arms of the trial. Swiss resource use patterns and Swiss unit costs were used to calculate expected monthly expenditures per patient from the third party payer perspective and from the societal viewpoint. Extensive sensitivity analyses were performed to test the robustness of our results. RESULTS: Expected monthly expenditures from the third party payer perspective are 347 Euro per patient in the low dose group and 319 Euro in the high dose group. This represents expected savings of 28 Euro per patient monthly. Because the public sector pays more than 50% of hospital costs, the savings from the societal viewpoint are greater. Expected monthly costs from the societal perspective are 762 Euro in the low dose group and 670 Euro in the high dose group per patient. This results in expected monthly savings of 92 Euro. Sensitivity analysis shows that the use of high doses of ACE inhibitor lisinopril does not result in higher health care expenditures for the whole system or even savings through a wide variety of practice patterns and unit costs. CONCLUSIONS: Based on the results of the ATLAS study, high doses of lisinopril are associated with a reduction in the number of hospitalizations for HF and for any reason and with a statistically non-significant reduction in mortality. The additional expenditures incurred because of prescription of high doses are offset by the savings in hospital costs. These are important considerations, given the increasing number of people aged 65 and older in Switzerland, and the prevalence of heart failure in this age group.

Angiotensin-Converting Enzyme Inhibitors↗

Economic evaluation and 1-year survival analysis of MARS in patients with alcoholic liver disease.

Objective of this study was to determine 1-year survival, costs and cost-effectiveness of the artificial liver support system Molecular Adsorbent Recirculating System (MARS) in patients with acute-on-chronic liver failure (ACLF) and an underlying alcoholic liver disease. In a case-control study, 13 patients treated with MARS were compared to 23 controls of similar age, sex and severity of disease. Inpatient hospital costs data were extracted from patients' files and hospital's internal costing. Patients and treating GPs were contacted, thus determining resource use and survival 1-year after treatment. Mean 1-year survival time in MARS group was 261 days and 148 days in controls. Kaplan-Meier analysis shows advantages of MARS patients (Logrank: P=0.057). Direct medical costs per patient for initial hospital stay and 1-year follow-up from a payer's perspective were Euro 18,792 for MARS patients and Euro 9638 for controls. The costs per life-year gained are Euro 29,719 (time horizon 1 year). From a societal perspective, the numbers are higher (costs per life-year gained: Euro 79,075), mainly because of the fact that there is no regular reimbursement of MARS and therefore intervention costs were not calculated from payer's perspective. A trade-off between medical benefit and higher costs has to be made, but 1-year results suggest an acceptable cost-effectiveness of MARS. Prolonging the time horizon and including indirect costs, which will be done in future research, would probably improve cost-effectiveness.

Adult↗

Patient-centred endpoints in economic evaluations of gastro-oesophageal reflux disease.

AIM: To perform a systematic review of the economic literature on gastro-oesophageal reflux disease to evaluate (a) the use of patient-centred effectiveness end-points, or (b) the use of patient-centred economic end-points, and the influence of these end-points on the outcome of the model. METHODS: Three electronic databases (EMBASE, BIOSIS and Medline) were used, together with a manual search of meeting abstracts for relevant articles. The quality of the studies was determined by the Drummond criteria. RESULTS: Our initial search identified 179 articles and a manual search revealed 78 abstracts and articles. A total of 47 studies (36 fully published articles and 11 abstracts) met the seven Drummond criteria for inclusion in our evaluation. CONCLUSIONS: This systematic review demonstrates that many of the published economic evaluations available today take the perspective of the third-party payer and focus on pharmaceutical costs relevant to the third-party payer. Our study also demonstrates that there are a number of costs of illness determinations, such that pharmaceutical costs account for only a small proportion of the total costs of managing gastro-oesophageal reflux disease. Future economic analyses should consider an evaluation of the patient's desire for complete symptom relief by including cost-utility assessments or willingness to pay data.

Cost of Illness↗

Implementing shared decision-making in routine practice: barriers and opportunities.

OBJECTIVE: Determine feasibility of shared decision-making programmes in fee-for-service hospital systems including physicians' offices and in-patient facilities. DESIGN: Survey and participant observation. Data obtained during Phase 1 of a patient outcome study. SETTINGS AND PARTICIPANTS: Three hospitals in Michigan: one 299-bed rural regional hospital, one 650-bed urban community hospital, one 459-bed urban and suburban teaching hospital. All nurses and physicians who agreed to use the programmes participated in the evaluation (n = 34). INTERVENTION: Two shared decision-making(R) (SDP) multimedia programmes: surgical treatment choice for breast cancer and ischaemic heart disease treatment choice. MAIN OUTCOME MEASURES: (1) clinicians' evaluations of programme quality; (2) challenges in hospital settings; and (3) patient referral rates. RESULTS: SDP programmes were judged to be clear, accurate and about the right length and amount of information. Programmes were judged to be informative and appropriate for patients to see before making a decision. Clinicians were neutral about patients' desire to participate in treatment decision-making. Referral volume to SDPs was lower than expected: 24 patients in 7 months across three hospitals. Implementation challenges centred on time pressures in patient care. CONCLUSIONS: Productivity and time pressure in US health care severely constrain shared decision-making programme implementation. Physician referral may not be a reliable mechanism for patient access. Possible innovations include: (1) incorporation into the informed consent process; (2) provider or payer negotiated requirement in the routine hospital procedure to use the SDP as a quality indicator; and (3) payer reimbursement to professional providers who make SDP programmes available to patients.

Journal Article↗

A pharmacy benefit manager perspective.

Lipid-lowering therapy can account for 7% of per patient per month drug costs. Because this can be a significant proportion of a payer's drug expenditure, this class of drugs attracts payers' attention and thus becomes a focus of efforts designed to control drug expenditures. Pharmacy benefit managers (PBMs) use several techniques and capabilities to affect the use of these drugs to improve overall medical care and to capture financial opportunities. There is a gap between the marketplace needs for lipid therapy value information and current pharmacoeconomic evaluations of lipid therapy. The measurement units that current pharmacoeconomic analyses tend to use are not necessarily intuitive and do not easily conform to the existing conceptual framework of policy makers. The successful evaluation of PBM activities will be contingent on a recognizable and widely accepted quantitative measurement framework.

Journal Article↗

Assessment of clinical guidelines for continuation treatment in major depression.

OBJECTIVE: The primary objective of this study was to assess the appropriateness of the existing Dutch clinical guidelines for the treatment of depression from a health-economic perspective. The existing guidelines recommend continuation treatment for a period up to 9 months. METHODS: The assessment was based on a Markov model using decision-analytic techniques. For this analysis we defined six mutually exclusive states defined by the existence of depression and type of treatment. The outcomes for the model were defined as: time without depression (TWD), quality-adjusted life years (QALYs), direct medical costs, and cost of lost productivity. The primary perspective of the study was that of the third-party payer, while the secondary perspective was that of the society in 1999. The probabilities of clinical events and therapeutic choices as well as the utilities were based on published literature. The medical resource use related to each state was abstracted from published literature and expert opinion. The associated 1999 unit costs of the used medical resources were derived from official Dutch tariff lists of allowable reimbursements. Indirect costs in this model were based on lost productivity only. RESULTS: The results of the primary analysis showed that the use of the guidelines is not cost-effective. Continuation treatment for a period of 9 months increases the total direct medical costs (NLG 1276 vs. NLG 474), decreases the costs resulting from lost productivity (NLG 304 vs. NLG 909), increases total costs (NLG 1580 vs. NLG 1383) and increases TWD (96.9% vs. 86.4%). However, continuation treatment does not change the utility outcomes (0.60 vs. 0.61 QALYs) for both treatment strategies. Hence continuation treatment is not cost-effective from either a third-party payer perspective or a societal perspective. A scenario analysis showed that an extension of the continuation treatment to maintenance treatment might result in a favorable cost-effectiveness outcome of the treatment guideline. CONCLUSION: In conclusion, based on the assumptions used in the model, the current Dutch treatment guidelines for depression are only appropriate from a health-economic perspective if continuation treatment is extended to maintenance treatment.

Antidepressive Agents, Tricyclic↗

The economics of gene therapy and of pharmacogenetics.

This paper focuses on the economic issues arising from two uses of genomics: 1) the development of gene therapy; 2) and use of pharmacogenetics to identify a patient's genotype before treatment to exclude those who will not benefit or who may be harmed. We conclude that private-sector investment aimed at developing gene therapy for monogenic diseases is likely to be socially suboptimal. Short-term administration regimens yielding long-term therapeutic benefits are likely to meet payer resistance to large "one-off" costs because of budget constraints or, in competitive systems, concerns that the savings would accrue to future insurers or would attract high-cost patients. For some monogenic diseases, patient numbers may be too small to support commercial development without changes to orphan drug legislation or payer willingness to accept higher cost-effectiveness thresholds. In the case of pharmacogenetics, we conclude that it can often be socially optimal to test before treatment, particularly if the proportion of nonresponders is high, if there is a potential for serious adverse reactions, or if the test is inexpensive. Genetic testing that fragments the patient population could reduce incentives for R&D unless prices are adjusted to reflect the higher expected benefits of targeted treatment per patient. Even in situations where prices are adjusted, patient populations may be too small to make commercial development viable. This problem with small numbers is analogous to that associated with gene therapy for monogenic diseases and may require similar remedies if society values developing treatments for these diseases.

Antibodies, Monoclonal↗

Measuring Physicians' Performances and Marketing the RESULTS: A Breast Cancer Model.

The recent transition to managed care has intensified the public's concerns about the quality of medical care. In response, payers, who until recently seemed preoccupied with costs, are demonstrating a renewed interest in value, which in turn could lead to an expansion of negotiations with physicians to include the tracking of such issues as physician performance, patient satisfaction, and patient outcomes. As a response to public concern and demand for accountability, the medical establishment must develop methods to assist payers in estimating relative value of competing medical services. In anticipation of a values transition in their specialty, breast care, the authors established a performance-oriented database which facilitated assessments of their performance in relation to community standards, and enhanced efforts to identify and correct performance deficiencies. Year-end results were summarized in a report-card format that improved marketability. The author's experiences should be of interest to physicians who are attempting to respond to changes in the rapidly evolving medical marketplace.

Journal Article↗

Medicare financing of graduate medical education.

The past decade has seen ongoing debate regarding federal support of graduate medical education, with numerous proposals for reform. Several critical problems with the current mechanism are evident on reviewing graduate medical education (GME) funding issues from the perspectives of key stakeholders. These problems include the following: substantial interinstitutional and interspecialty variations in per-resident payment amounts; teaching costs that have not been recalibrated since 1983; no consistent control by physician educators over direct medical education (DME) funds; and institutional DME payments unrelated to actual expenditures for resident education or to program outcomes. None of the current GME reform proposals adequately address all of these issues. Accordingly, we recommend several fundamental changes in Medicare GME support. We propose a re-analysis of the true direct costs of resident training (with appropriate adjustment for local market factors) to rectify the myriad problems with per-resident payments. We propose that Medicare DME funds go to the physician organization providing resident instruction, keeping DME payments separate from the operating revenues of teaching hospitals. To ensure financial accountability, we propose that institutions must maintain budgets and report expenditures for each GME program. To establish educational accountability, Residency Review Committees should establish objective, annually measurable standards for GME program performance; programs that consistently fail to meet these minimum standards should lose discretion over GME funds. These reforms will solve several long-standing, vexing problems in Medicare GME funding, but will also uncover the extent of undersupport of GME by most other health care payers. Ultimately, successful reform of GME financing will require "all-payer" support.

Adult↗

The misdiagnosis of cluster headache: a nonclinic, population-based, Internet survey.

OBJECTIVE: We conducted the first nonclinic, Internet-based survey of cluster headache to investigate this population with regard to diagnostic problems encountered, effective and ineffective medications, problems obtaining medications through third-party payers, and symptoms as they relate to International Headache Society criteria. BACKGROUND: Previous cluster headache surveys have been at specialty centers. These patients might be different from cluster headache sufferers in the general population. An Internet-based population of cluster headache sufferers who connected to a Web site responded to the questionnaire, and e-mailed it back to our site to be analyzed. We analyzed a total of 789 respondents, 76% men and 28% women. RESULTS: Eighty-seven percent of respondents qualified as having cluster headache according to International Headache Society criteria. However, diagnosis was delayed an average of 6.6 years from the onset of symptoms. The average number of physicians seen before the correct diagnosis was made was 4.3, and the average number of incorrect diagnoses was 3.9. Seventy-one percent of respondents had undergone unnecessary magnetic resonance or computed tomography scans, and 4% had unnecessary sinus or deviated septum surgery. We found that many inappropriate medications such as propranolol, amitriptyline, and antibiotics were prescribed and that successful medications for clusters such as sumatriptan and oxygen were often denied due to a failure to understand the nature of this disorder. Seventy-seven percent of respondents were smokers. Seventy-four percent stopped smoking in an attempt to improve their condition; however, only 3% experienced relief. CONCLUSIONS: The most alarming finding was the delay in diagnosing cluster headache in this population--an average of 6.6 years. The selection of medications demonstrated to be successful in the treatment of clusters proved effective for the majority of this population. Many respondents reported being denied some of these effective medications by their physicians or third-party payers. Using International Headache Society criteria for cluster headache, 87% of the respondents should have been correctly diagnosed by the first physician seen.

Adult↗

[Pediatric cost-benefit analysis].

BACKGROUND: The aim of this study was to explore the cost-benefit-ratio of pediatric cochlear implantation for congenitally deaf and prelingually deafened children compared to children with hearing aids. The payers' perspective was chosen as this is the most relevant for cost discussions. The study should verify the hypothesis that educational and associated full costs increase with the age at implantation and that these can be below costs for children with hearing aids. METHODS: Children implanted at different ages (group 1: 0 - 1.9 yr., group 2: 2 - 3.9 yr., group 3: 4 - 6.9 yr.) were compared with deaf children using hearing aids (group 4). Payers were sick funds and public authorities, the first paying for medical and indirect costs, the latter paying for education. Educational settings were used as measure for benefit. All costs related to the hearing deficiency were included up to the age of 16 years (end of primary education) based on 1999 costs. RESULTS: Discounted medical and indirect costs for a pediatric cochlear implant user varied between DM 112,000 (53,300 US dollars) and DM 91,000 (43,300 US dollars) depending on the age at implantation. Costs for a hearing aid user added up to DM 36,000 (17,100 US dollars). These costs were paid by the sick funds. Costs for education varied between DM 159,000 (75,700 US dollars) for group 1 and DM 257,000 (122,400 US dollars) for group 3 compared to DM 277,000 (131,900 US dollars) for hearing aid users. These differences are mainly based on the use of mainstream schools. Total costs for sick funds and public authorities ad up to DM 271,000 (129,000 US dollars), DM 334,000 (159,000 US dollars) and DM 348,000 (165,700 US dollars), respectively, for the three age groups of implanted children compared to DM 313,000 (148,600 US dollars) for hearing aid users. CONCLUSION: This study supports the view that pediatric cochlear implantation provides positive cost-benefit ratios compared to hearing aid users depending on the age at implantation. From a societal/payer perspective implantation of prelingually deafened children is especially recommended for children under the age of 2 years. Implantation between ages 2 and 3,9 can be recommended from an educational perspective. Implantation at ages >7 years must be based on individual decisions considering psychosocial environment, speech and language status and type of communication.

Adolescent↗

[Impact of universal varicella vaccination in Germany: an epidemiological and economic analysis].

Varicella is a highly contagious viral disease which mainly affects young children and usually is perceived as infection with a mild disease course. However, there is increasing evidence indicating that the morbidity and mortality as well as the economic impact associated with varicella are significant. While universal childhood vaccination against varicella is currently not recommended in Germany, the availability of safe and efficacious vaccines offers the opportunity for preventive intervention. Detailed and reliable data on the consequences of varicella and the possible impact of a universal vaccination program are missing to date for Germany. In order to generate this information, we conducted a comprehensive evaluation. The objective was to quantify the medical consequences and the economic impact of varicella on third-party payers and the society by means of a model analysis, and particularly to assess the effects of various universal vaccination strategies. The study confirms that varicella represents a significant health and economic burden in Germany. Following mathematical modelling, universal varicella vaccination for children at the age of 12-18 months could prevent more than 82 % of cases and complications on average per year. Economically, universal vaccination would lead to net cost savings not only for the society but also for the third-party payers. From these findings it can be concluded that universal varicella vaccination is a strategy which should be encouraged, from a medical, epidemiological, but also economic viewpoint.

Chickenpox↗

Clinical documentation, coding, and billing.

Practitioners must be aware of ever-changing requirements for documentation and correct diagnostic and procedural coding for billing. These requirements are often dependent on the setting, and clinicians who practice in more than one setting have to understand multiple regulations and guidelines. Some practices are dictated by the payer, such as precertification or using a specific form (e.g., HCFA 1500) to submit the charges. Documentation of services provided encompasses evaluation reports, treatment plans, recertifications, and discharge summaries. Different forms and formats are required in different settings and by different payers. The clinician must document in a clear and concise format that can be understood by others. When documentation is completed accurately and well, reimbursement for services is more likely.

Forms and Records Control↗

The incidence of nonattendance at an urgent care dermatology clinic.

Nonattendance in dermatology clinics remains a burden on clinic efficiency. Nonattendance rates have been measured in an urban university-based dermatology clinic and are significant. The nonattendance rate in a dermatology clinic dedicated primarily to new acute problems is not known. We hypothesized that the nonattendance rate would be minimal in an urgent care setting. We measured the incidence of nonattendance in a university-based, urgent care dermatology clinic. The clinic is held once weekly for patients with new skin problems. Almost all patients seen in the urgent care clinic are first-time patients. We tabulated clinic attendees and nonattendance, including same-day cancellations, for 508 consecutive patients seen over a 10-month period at the urgent care clinic. We then determined nonattendance rates for the group and by payer type. The total nonattendance rate was 23.9%. The percentage of patients who failed to appear was 21.9 and same-day cancellation was 2.0. The highest nonattendance and same-day cancellation rates were noted in HMO-based programs. The lowest rate of nonattendance was in the Medicare-based program. The nonattendance rate in a dermatology clinic dedicated to new skin problems was similar to that reported in a general dermatology clinic and correlated with payer type. In addition to factors identified in previous studies that affect clinic attendance, the rate in this study may reflect spontaneous clearing of patient-identified skin problems.

Appointments and Schedules↗

Selection of a cardiac surgery provider in the managed care era.

OBJECTIVE: Many health planners promote the use of competition to contain cost and improve quality of care. Using a standard econometric model, we examined the evidence for "value-based" cardiac surgery provider selection in eastern Massachusetts, where there is significant competition and managed care penetration. METHODS: McFadden's conditional logit model was used to study cardiac surgery provider selection among 6952 patients and eight metropolitan Boston hospitals in 1997. Hospital predictor variables included beds, cardiac surgery case volume, objective clinical and financial performance, reputation (percent out-of-state referrals, cardiac residency program), distance from patient's home to hospital, and historical referral patterns. Subgroup analyses were performed for each major payer category. RESULTS: Distance from patient's home to hospital (odds ratio 0.90; P =.000) and the historical referral pattern from each patient's hometown (z = 45.305; P =.000) were important predictors in all models. A cardiac surgery residency enhanced the probability of selection (odds ratio 5.25; P =.000), as did percent out-of-state referrals (odds ratio 1.10; P =.001). Higher mortality rates were associated with decreased probability of selection (odds ratio 0.51; P =.027), but higher length of stay was paradoxically associated with greater probability (odds ratio 1.72; P =.000). Total hospital costs were irrelevant (odds ratio 1.00; P =.179). When analyzed by payer subgroup, Medicare patients appeared to select hospitals with both low mortality (odds ratio 0.43; P =.176) and short length of stay (odds ratio 0.76; P =.213), although the results did not achieve statistical significance. The commercial managed care subgroup exhibited the least "value-based" behavior. The odds ratio for length of stay was the highest of any group (odds ratio = 2.589; P =.000) and there was a subset of hospitals for which higher mortality was actually associated with greater likelihood of selection. CONCLUSIONS: The observable determinants of cardiac surgery provider selection are related to hospital reputation, historical referral patterns, and patient proximity, not objective clinical or cost performance. The paradoxic behavior of commercial managed care probably results from unobserved choice factors that are not primarily based on objective provider performance.

Cardiovascular Diseases↗

Stigmatization of Hispanic children, pre-adolescents, and adolescents with mental illness: exploration using a national database.

This paper examines descriptive statistics for the primary payer, length of stay, and admission source of an acute care hospitalization of Hispanic children--pre-adolescents, and adolescents with a primary psychiatric Diagnostic Related Group (DRG)--and relates these variables to the concept of stigma. This paper was a secondary analysis that used data from the National Inpatient Sample database. Psychosis was the most frequent diagnosis of Hispanic youth who were hospitalized. More Hispanic pre-adolescents had a psychiatric DRG than any other ethnic group but fewer Hispanic adolescents were diagnosed with a psychiatric DRG than any other ethnic group. For Hispanic pre-adolescents and adolescents, the primary payer was Medicaid versus private insurance for White pre-adolescents and adolescents. The length of stay was approximately the same for all ethnic groups. The admission source differed for Hispanic pre-adolescents and adolescents with the majority of pre-adolescents being admitted routinely and the majority of Hispanic adolescents being admitted through emergency departments. Recommendations are made for future research, clinical practice, and public policy related to the stigmatization of Hispanic children and adolescents with mental illness.

Acute Disease↗

A new cancer education mission: managed care and clinical trials.

BACKGROUND: The traditional support for clinical research, teaching, and indigent patient care is being seriously compromised by the growth of managed care in the United States. Educational initiatives are needed to ensure the incorporation of clinical trials into the optimal care of cancer patients. METHODS: The Cancer Clinical Trials Task Force of Colorado was established in 1995 to find a collaborative and non-legislative solution to the uncertainty of coverage by third-party payers for cancer patients participating in clinical trials. RESULTS: This program has served to heighten the awareness of the crucial role of clinical trials in defining new treatment strategies among third-party payers. CONCLUSIONS: The Task Force and similar regional and national efforts have begun to provide needed information and education about the importance of clinical trials to the managed care industry; however, much remains to be done to ensure access to and coverage for clinical trials.

Clinical Trials as Topic↗