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PubMed1994

Medicaid policies for HIV-related drug therapies: perspectives of the state affiliates of the American Pharmaceutical Association.

OBJECTIVES: To determine how Medicaid prescription drug policies differ by state, and to assess how these policies affect pharmacies and the drug therapies available to Medicaid patients with HIV infection or tuberculosis. EVALUATION PROCESS: The state affiliates of the American Pharmaceutical Association (APhA) were surveyed to learn how state Medicaid policies impact the provision of prescription drugs to Medicaid patients within their state. The survey focused on Medicaid payment level incentives, Medicaid payments compared with private payments, Medicaid utilization policies, and incentives and disincentives in each state's Medicaid payment system. RESULTS: Approximately two-thirds of the APhA affiliates reported that the Medicaid payment levels in their states for drugs used to treat HIV-related illnesses were at least moderately below private payment levels; in 11 states these Medicaid payments were substantially below those of private payers. Many APhA affiliates responding to the survey stated that the Medicaid program in their state limited the number of reimbursed drugs that Medicaid patients can receive. Eight APhA affiliates reporting that these utilization limits created restrictions on the ability of Medicaid patients with AIDS and HIV-related infections to receive needed medications. CONCLUSIONS: With Medicaid programs becoming the major payers of AIDS-related healthcare, federal policies should standardize Medicaid coverage, payment, and utilization policies for prescription drugs needed by Medicaid recipients with HIV-related conditions. This would enable Medicaid patients to receive necessary and adequate drug therapies regardless of their state of residence. These federally mandated policies also would require an increased federal role in financing this expanded Medicaid drug coverage.

HIV Infections↗

PubMed1998

Managed care for elderly people: a compendium of findings.

Although managed care seems to serve well the interests of non-elderly enrollees and their payers, elderly people face more risks. Chronic conditions, multiple problems, and more limited resources make them more vulnerable, whereas multiple payer sources make them more complicated to cover. This synthesis of managed care delivered in Medicare and Medicaid demonstration projects serving elderly beneficiaries shows that managed care plans either select or attract enrollees who suffer fewer frailties than those served in fee-for-service settings, exhibit reluctance to enter rural markets, provide a broad range of elderly-specific services, offer more comprehensive coverage and services, and result in greater perceived access problems, particularly for vulnerable subgroups. Plans operate more cheaply by using fewer resources, even after adjusting for case mix differences. Managed care enrollees tend to be more satisfied with financial and coverage aspects, whereas fee-for-service enrollees report higher satisfaction on other dimensions. In acute care settings, process of care findings were mixed, whereas clinical and self-reported outcome indicators were no better and in some instances worse in managed care. Long-term care enrollees, in the few studies reported, consistently faired worse in both the processes and outcomes of care. These findings suggest that further research on the effects of managed care in its rapidly changing incarnations is needed, particularly with respect to how to improve the quality of acute and long-term care delivered to elderly people and the proper role of government and other key actors in the health care system.

Aged↗

PubMed2003

Strategies for integrating Medicare and Medicaid: design features and incentives.

In a typical third-party payer situation--representative of most U.S. health care delivery--the payer is likely to have interests that are at odds with the patient and provider. The separation and overlap between Medicare and Medicaid for individuals eligible for both programs introduces an additional level of complexity: multiple masters over plans, providers, and patients. This creates opportunities for shifting costs and administrative burdens between states and the federal government, providers and governments, and patients and everyone else. Program designers who wish to minimize unwanted consequences must find ways to structure their programs to produce financial incentives that encourage the pursuit of societal goals, including appropriately shared intergovernmental responsibilities and appropriate plan, provider, and patient behavior. Here the authors review nine federal and state initiatives that use varying strategies to integrate Medicare and Medicaid services for vulnerable populations. For each initiative, the authors examine and critique program design features in three areas: (1) eligibility determination, (2) finance and administration, and (3) service delivery. They find a few strengths and many weaknesses in design. Future efforts would be well served by carefully considering the incentive structures designed into these initiatives and working to improve them in the next generation of Medicare-Medicaid integration efforts.

Acute Disease↗

PubMed2004

The rate and cost of hospital readmissions for preventable conditions.

The study estimates the rate and cost of preventable readmissions within 6 months after a first preventable admission, by age-group, and by payer and race within age-group. The descriptive results are contrasted with several hypotheses. The hospital discharge data are for residents of New York, Pennsylvania, Tennessee, and Wisconsin in 1999, from files of the Healthcare Cost and Utilization Project of the Agency for Healthcare Research and Quality. About 19 percent of persons with an initial preventable admission had at least one preventable readmission rate within 6 months. Hospital cost for preventable readmissions during 6 months was about 730 million US dollars. There were substantial differences in readmission rates by payer group and by race. Some evidence suggests that preventable readmissions may partly reflect complexity of underlying problems. Interventions to reduce cost might focus on identifying high-risk patients before discharge and devising new approaches to follow-up.

Adolescent↗

PubMed2006

What is the empirical basis for paying for quality in health care?

Despite more than a decade of bench-marking and public reporting of quality problems in the health care sector, changes in medical practice have been slow to materialize. To accelerate quality improvement, many private and public payers have begun to offer financial incentives to physicians and hospitals based on their performance on clinical and service quality measures. The authors review the empirical literature on paying for quality in health care and comparable interventions in other sectors. They find little evidence to support the effectiveness of paying for quality. The absence of findings for an effect may be attributable to the small size of the bonuses studied and the fact that payers often accounted for only a fraction of the targeted provider's panel. Even in non-health settings, however, where the institutional features are more favorable to a positive impact, the literature contains mixed results on the effectiveness of analogous pay-for-performance schemes.

Program Evaluation↗

PubMed1990

The differential effects of a change in reimbursement on public and private university hospitals.

The primary purpose of the government's prospective payment system was to decrease the rate of federal spending for Medicare patients by paying fixed prices for services and by transferring the financial risk for the care provided to the hospital. While PPS certainly has affected all hospitals, this article has attempted to identify some of the expected and unexpected consequences of the change in reimbursement on publicly and privately owned university hospitals. Of importance is the discussion that has analyzed the specific effects of PPS on the components of the UHs' missions. The implementation of PPS may exaggerate the effects of the payment change on both types of UHs. The provision of broadly based primary and specialty care services may be in question as institutions find themselves potentially unable to deliver these services on a price-competitive yet profitable basis. The costs associated with educational, research, and community service programs can no longer be subsidized by excess patient care revenues as payers streamline payments to reflect only the costs of clinical care. Thus, university hospitals may be forced to reexamine their missions and change their operating plans to reflect the current fiscal environment. If taken to an extreme, it is likely that the local society may be negatively affected by these actions. Clinical and community services that increase access, assure continuity of care, or provide needed but costly (public) health services may be eliminated or reduced in scope in an effort to contain costs. Even those services that are cost beneficial from a societal perspective may be eliminated without some form of subsidy or direct payment as institutions are forced to reallocate their limited funds from these types of public health services to support nonprofitable, but critical clinical or academic programs. The potential impact on access, continuity of care, and morbidity and mortality will not be known for many years. Although it is not known how these changes will eventually affect university hospitals, two outcomes seem clear. University hospitals with different governance and management structures may not change their missions and means for achieving institutional goals as much as might have been expected. The interdependence of the university hospitals' goals and the role they play in their local communities may force them to begin to explore new ways to achieve their missions. Public-private sector cooperation is suggested as one approach to use in response to the demands of payers and patients while the institution remains true to its historical mission.(ABSTRACT TRUNCATED AT 400 WORDS)

Community-Institutional Relations↗

PubMed2005

Minimally invasive: minimally reimbursed? An examination of six laparoscopic surgical procedures.

It is generally believed that minimally invasive surgery (MIS) results in less postoperative pain, fewer complications, and shorter recovery periods compared with open procedures. Yet despite these benefits, the level of reimbursement assigned to the surgeon by United States health-care payers is often lower than that for open procedures. Furthermore, the cost of performing a MIS may be higher vs an open procedure because specialized equipment, increased surgical time, or both may be required. In this report, we examine the issue by comparing reimbursements for MIS with open procedures, summarizing the medical literature on MIS vs open surgical procedures, and offering recommendations for payers who establish reimbursement policies. The review is focused on six MIS procedures where outcomes data exist: laparoscopic cholecystectomy (lap chole), laparoscopic colectomy (LC), laparoscopic fundoplication (LF), laparoscopic hysterectomy (LH), laparoscopic ventral hernia repair (LVHR), and laparoscopic appendectomy (LA). Outcomes summarized were length of hospital stay (LOS), operating room time, operating room costs, complications, and return to work or normal activities. The level of scientific evidence was assigned to each study using predetermined criteria. A total of 112 articles were reviewed: 14 for lap chole, 26 for LC, 7 for LF, 19 for LH, 9 for LVHR, and 37 for LA. The data demonstrate that these procedures result in reduced hospital stay, reduced hospital costs, and faster return to work or normal activities. Yet, the operating room time and costs are frequently higher for MIS. These findings suggest that as both the outcomes value and level of operating room resources are greater, MIS warrants reimbursement that meets or exceeds that of open procedures.

Appendectomy↗

PubMed2004

Country-specific cost-effectiveness of early intervention with budesonide in mild asthma.

Early intervention with budesonide is an effective strategy for mild persistent asthma, which has been shown to provide additional clinical benefits at a low incremental cost using USA cost data. The present authors analysed whether this strategy would be cost-effective using cost data for other countries. Based on the 3-yr prospective, randomised, double-blind inhaled Steroid Treatment As Regular Therapy (START) in early asthma study (comparing budesonide and placebo combined with usual asthma therapy), the cost-effectiveness was estimated separately for eight different countries, from both healthcare payer and societal perspectives, of adding budesonide to usual asthma therapy. Local unit costs were applied to data for the total trial population. Incremental cost-effectiveness ratios (ICER) were estimated as cost per symptom-free day (SFD) gained. Budesonide increased SFDs by an average of 14.1 days annually. From a healthcare payer perspective, budesonide would reduce the total cost of asthma care in Australia. In Sweden, Canada, France, Spain, UK, China and the USA, the ICER ranged from US$2.4-11.3 per SFD. From a societal perspective, budesonide would be cost-saving in Australia, Canada and Sweden. In conclusion, for countries where costs with budesonide are higher, the policy implication has to be determined by that health system's willingness to pay for an additional symptom-free day. However, where budesonide therapy increases symptom-free days and reduces total costs, the policy conclusion clearly favours early intervention.

Administration, Inhalation↗

PubMed2003

Cost of managing an episode of relapse in multiple sclerosis in the United States.

BACKGROUND: The purpose of this study was to determine the direct medical US cost of managing multiple sclerosis relapses. METHODS: Direct data analysis and cost modeling were employed to derive typical resource use profiles and costs in 2002 US dollars, from the perspective of a third-party payer responsible for comprehensive health-care. The location and scope of health care services provided over a 90-day period were used to define three levels of relapse management. Hospitalization and resulting subsequent care was defined as high intensity management. A medium level of intervention was defined as either use of the emergency room, an observational unit, or administration of acute treatments, such as intravenous methylprednisolone in an outpatient or home setting. The lowest intensity of care comprised physician office visits and symptom-related medications. Data were obtained from many sources including all payer inpatient, ambulatory and emergency room databases from several states, fee schedules, government reports, and literature. All charges were adjusted using cost-to-charge ratios. RESULTS: Average cost per person for high management level was 12,870 dollars, based on analysis of 4,634 hospital cases (mean age 48 years, 73% female). Hospital care comprised 71% of that cost. At discharge, 36% required inpatient sub-acute care, rehabilitation or home care. The typical cost per moderate episode was 1,847 dollars and mild episode 243 dollars. CONCLUSIONS: Management strategies leading to a reduction in the frequency and severity of a relapse, less reliance on inpatient care, or increased access to steroid infusions in the home, would have a substantial impact on the economic consequences of managing relapses.

Adult↗

PubMed2005

A review of the economic burden of ADHD.

Attention-deficit hyperactivity disorder (ADHD) is a common disorder that is associated with broad functional impairment among both children and adults. The purpose of this paper is to review and summarize available literature on the economic costs of ADHD, as well as potential economic benefits of treating this condition. A literature search was performed using MEDLINE to identify all published articles on the economic implications of ADHD, and authors were contacted to locate conference abstracts and articles in press that were not yet indexed. In total, 22 relevant items were located including published original studies, economic review articles, conference presentations, and reports available on the Internet. All costs were updated and presented in terms of year 2004 US dollars. A growing body of literature, primarily published in the United States, has demonstrated that ADHD places a substantial economic burden on patients, families, and third-party payers. Results of the medical cost studies consistently indicated that children with ADHD had higher annual medical costs than either matched controls (difference ranged from 503 dollars to 1,343 dollars) or non-matched controls (difference ranged from 207 dollars to 1,560 dollars) without ADHD. Two studies of adult samples found similar results, with significantly higher annual medical costs among adults with ADHD (ranging from 4,929 dollars to 5,651 dollars) than among matched controls (ranging from 1,473 dollars to 2,771 dollars). A limited number of studies have examined other economic implications of ADHD including costs to families; costs of criminality among individuals with ADHD; costs related to common psychiatric and medical comorbidities of ADHD; indirect costs associated with work loss among adults with ADHD; and costs of accidents among individuals with ADHD. Treatment cost-effectiveness studies have primarily focused on methylphenidate, which is a cost-effective treatment option with cost-effectiveness ratios ranging from 15,509 dollars to 27,766 dollars per quality-adjusted life year (QALY) gained. As new treatments are introduced it will be important to evaluate their cost-effectiveness to provide an indication of their potential value to clinicians, patients, families, and third-party payers.

Journal Article↗

PubMed2006

Insights from a national survey into why substance abuse treatment units add prevention and outreach services.

BACKGROUND: Previous studies have found that even limited prevention-related interventions can affect health behaviors such as substance use and risky sex. Substance abuse treatment providers are ideal candidates to provide these services, but typically have little or no financial incentive to do so. The purpose of this study was therefore to explore why some substance abuse treatment units have added new prevention and outreach services. Based on an ecological framework of organizational strategy, three categories of predictors were tested: (1) environmental, (2) unit-level, and (3) unit leadership. RESULTS: A lagged cross-sectional logistic model of 450 outpatient substance abuse treatment units revealed that local per capita income, mental health center affiliation, and clinical supervisors' graduate degrees were positively associated with likelihood of adding prevention-related education and outreach services. Managed care contracts and methadone treatment were negatively associated with addition of these services. No hospital-affiliated agencies added prevention and outreach services during the study period. CONCLUSION: Findings supported the study's ecological perspective on organizational strategy, with factors at environmental, unit, and unit leadership levels associated with additions of prevention and outreach services. Among the significant predictors, ties to managed care payers and unit leadership graduate education emerge as potential leverage points for public policy. In the current sample, units with managed care contracts were less likely to add prevention and outreach services. This is not surprising, given managed care's emphasis on cost control. However, the association with this payment source suggests that public managed care programs might affects prevention and outreach differently through revised incentives. Specifically, government payers could explicitly compensate substance abuse treatment units in managed care contracts for prevention and outreach. The effects of supervisor graduate education on likelihood of adding new prevention and outreach programs suggests that leaders' education can affect organizational strategy. Foundation and government officials may encourage prevention and outreach by funding curricular enhancements to graduate degree programs demonstrating the importance of public goods. Overall, these findings suggest that both money and professional education affect substance abuse treatment unit additions of prevention and outreach services, as well as other factors less amenable to policy intervention.

Community-Institutional Relations↗

PubMed2005

Impact of a transfer center on interhospital referrals and transfers to a tertiary care center.

BACKGROUND: The partnership of faculty physicians and senior clinical hospital administrators in the decision to accept interhospital transfers has not been fully studied. Transfers to academic medical centers on the basis of economics have been of particular concern. OBJECTIVES: To evaluate the impact of joint decision making on transfer acceptance, and to evaluate the basis for decisions to transfer patients to an academic medical center. METHODS: This was a database study of requested adult interhospital transfers, excluding psychiatric transfers, occurring between January 1, 2003, and December 31, 2003, by using data from a computerized patient-tracking system. Where possible, comparisons with the prior calendar year (i.e., prior to implementation of the administrative review process) were made. Incidence of refusal to accept requested transfers and payer mix of transfer patients were the main outcomes of interest. RESULTS: More than 90% of the adult patients were transferred for conditions that required tertiary care or met Emergency Medical Treatment and Labor Act (EMTALA) requirements. The patient conditions that did not meet tertiary care needs included obstetric patients who did not have prenatal care, patients who had hand and facial trauma, and patients who weighed more than 300 pounds. The payer mix of transfer patients remained stable when using the administrator and physician team to determine acceptance of transfers. During the evaluation period, approximately 91,500 patients statewide lost some level of Medicaid coverage. CONCLUSIONS: The value of an administrator and physician team as partners in the interhospital transfer process was demonstrated. Active management of interhospital transfers supports transfer of patients who require tertiary care or who meet EMTALA criteria, thus conserving limited bed capacity and ensuring financial equity, while caring for the uninsured and underinsured patients throughout the state.

Adult↗

PubMed2002

Efficacy and costs of two forms of stress management training for cancer patients undergoing chemotherapy.

PURPOSE: Professionally administered psychosocial interventions have been shown to improve the quality of life of cancer patients undergoing chemotherapy. The present study sought to improve access to psychosocial interventions during chemotherapy treatment by evaluating the efficacy and costs of a patient self-administered form of stress management training that requires limited professional time or experience to deliver. PATIENTS AND METHODS: Four hundred eleven patients about to start chemotherapy were randomly assigned to receive usual psychosocial care only, a professionally administered form of stress management training, or a patient self-administered form of stress management training. Quality-of-life assessments were conducted before randomization and before the second, third, and fourth treatment cycles. Intervention costs were estimated from both payer and societal perspectives. RESULTS: Compared with patients who received usual care only, patients receiving the self-administered intervention reported significantly (P < or = .05) better physical functioning, greater vitality, fewer role limitations because of emotional problems, and better mental health. In contrast, patients who received the professionally administered intervention fared no better in terms of quality of life than patients receiving usual care only. Costs of the self-administered intervention were estimated to be 66% (from a payer perspective) to 68% (from a societal perspective) less than the average costs of professionally administered psychosocial interventions for patients starting chemotherapy. CONCLUSION: Evidence regarding the efficacy and favorable costs of self-administered stress management training suggests that this intervention has the potential to greatly improve patient access to psychosocial intervention during chemotherapy treatment.

Adult↗

PubMed2005

Evaluation of factors affecting awareness of and willingness to participate in cancer clinical trials.

PURPOSE: Annually, only 3% of patients participate in cancer clinical trials (CCTs). Barriers to accrual include lack of CCT awareness and uncertain third-party payer coverage. In January 2002, a California law (Senate Bill 37 [SB37]) required all third-party payers to reimburse patient care costs related to CCTs. We evaluated the level of awareness of patients and/or their family members/friends regarding CCTs and SB37. METHODS: We used both a written survey for patients and/or their family members and friends seen in oncology clinics, and a verbal telephone version for Cancer Information Service callers. We tested for correlations between CCT awareness and SB37 knowledge, and willingness to participate in CCTs. RESULTS: Of 1,188 respondents, 59% were aware of CCTs, 19% knew of SB37, and 36% were very likely to consider a CCT. There were significant positive correlations between CCT awareness and willingness to participate (P < .001, Spearman), and between SB37 knowledge and willingness to participate (P = .001, Pearson chi2). Reduced awareness was seen in respondents who were either black or African American (odds ratio [OR], 0.44; P = .004), Hispanic (OR, 0.56; P = .03), had an annual income less than 25,000 dollars (OR, 0.38; P < .001), or had less than a college degree (OR, 0.12 to 0.53; P < .001 to .013). Reduced willingness to participate in CCTs was seen in black or African American participants (OR, 0.38; P < .001), Asians (OR, 0.44; P < .006), or respondents aged 18 to 24 years (OR, 0.35; P = .002). CONCLUSION: These results support the hypothesis that improving CCT awareness and SB37 knowledge especially among lower income, less educated, and minority patients, may potentially overcome barriers to participation and subsequently increase accrual in California.

Adolescent↗

PubMed2007

European perspective on the costs and cost-effectiveness of cancer therapies.

In Europe, the vast majority of the costs of cancer therapy fall on third-party payers, normally the government, or sickness funds. Therefore, the main focus of cost-effectiveness studies is to assist payers in deciding whether new therapies are worthwhile, despite their high cost. Drug budgets are regulated in most European countries. The main form of central control is price setting, with some form of reference pricing being the most common approach. This sets the price of drugs, either to an international standard, or to a common price for drugs in the same group or cluster. At the hospital level, the main control over cancer drugs is the hospital formulary. Studies have shown a wide variation among European countries in access to cancer drugs. Explanations for these variations include differences in research funding, the drug approval process, the role of health economics in decision making, and budgetary issues. Several countries in Europe now require economic data in making decisions about the reimbursement of new drugs. An examination of decisions made by the National Institute for Health and Clinical Excellence in the United Kingdom suggests that cancer drugs have fared quite well, with most recommendations being positive. This could be because of the seriousness of the health condition and the lack of alternative therapies for some cancer patients. If the policy of requesting cost-effectiveness evidence for pricing and reimbursement decisions becomes more popular, a major implication for the pharmaceutical industry is that studies should be conducted during phase III of clinical development to generate the required data.

Antineoplastic Agents↗

PubMed1989

Is there a rationale for regionalizing organ transplantation services?

This paper explores issues in the designation of centers to provide organ transplantation procedures and aftercare, a decision faced increasingly by policymakers, planners, and payers. As background for consideration of the regionalization of organ transplantation services, an array of models of regionalization of health services, ranging from full-scale vertical integration to market-enhancing information provision, is described. In the United States, regionalization has mainly followed the designation model within the certificate-of-need system; vertical integration has been adopted only in limited ways. Next, the authors' review of current approaches to the regionalization of organ transplantation centers by public and private payers indicates that designation of centers is increasing, although the empirical evidence concerning the classes of hospitals upon which designation decisions rest is weak. The authors then review the literature on the relationship between volumes and outcomes on surgical services with particular reference to organ transplantation, which on the whole suggests that a relationship between volumes and outcomes exists. Original empirical analysis of data on kidney transplants that were secured from the Health Care Financing Administration is then presented. The study of the effects of hospital and surgeon volumes on graft and patient survival and of the effect of volume on charges found no systematic influence of hospital or surgeon volumes on graft or patient survival. Some evidence that charges are lower for larger centers was found. The authors conclude that the evidence implies that using volume as the provider characteristic upon which to base designation of transplantation centers is problematic, at least for kidney transplants. Steps policymakers might take to ensure quality of transplantation services is discussed in the final section.

Humans↗

PubMed1994

The success and repeal of the Medicare Catastrophic Coverage Act: a paradoxical lesson for health care reform.

Congress intended the Medicare Catastrophic Coverage Act (MCCA) of 1988 to reduce the risk for illness-related catastrophic financial losses in the elderly. The act was short-lived, facing repeal just one year after passage. Many elderly persons were convinced that the costs of the program outweighed the benefits. However nursing home payment provisions of the MCCA may have affected out-of-pocket expenses paid by the elderly for long-term care more than consumers realized at the time of repeal. A transmittal memorandum, issued by the Health Care Financing Administration independent of Congressional action, enhanced consumers' ability to qualify for Medicare nursing home benefits. We investigated the effects of the Medicare policy change on nursing home payer mix and out-of-pocket expenses in 489 Pennsylvania nursing homes. We found that substantial shifts in payer mix from self-pay to Medicare payment sources occurred, reducing out-of-pocket expenses. Unfortunately the debate over the MCCA's repeal did not include discussion of the improved nursing home benefit structure. These findings, and the fate of the MCCA legislation, reinforce the importance of comprehensive information and clear communication in promoting health care reform.

Aged↗

PubMed1999

Targets and systems of health care cost control.

Discussion of health care cost control policy and politics tends to focus on terms such as "market," "government," and "managed care" that are either too general or too value laden to encourage sound analysis. This article proposes an alternative framework for classifying cost control policies. It first distinguishes targets from systems of control. Targets can then be divided into categories of service (e.g., hospital care, pharmaceutical treatment) and components of cost (e.g., price and volume). Systems can be classified in terms of the degree of pooling of finance, ranging from no insurance to a single pool of funds, and how payment of providers is organized, ranging from all payers paying all providers on the same terms to extensive selective contracting among payers and providers. The article analyzes examples of target policy and politics, system policy and politics, and how system choices can influence which targets are targeted how well, so as to show that both policy consequences and political alignments become clearer by using these terms. As one instance, discussions of "managed care" are often confused because the term has two meanings, one referring to target policy and one to system policy.

Cost Control↗