Prepayment plans vs. fee-for-service.
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Dental Health Services↗
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Contrasts in HMO and fee-for-service performance.
This study compares various aspects of HMO performance in 10 plans with that of the fee-for-service system for the Medicaid population. Additionally, it examines utilization differences between several types of HMO's, grouped according to organization and provider payment. Four areas of behavior were studied--enrollment selectivity, utilization of services, accessibility of care, and satisfaction. The only significant difference between the two systems was in hospital utilization. Group-practice MNO's had significantly lower hospital utilization than the fee-for-service groups: foundation HMO's did not. This difference seems to indicate that capitation payment to an HMO alone is not significant enough to produce major changes in utilization and that the organized multispecialty group-practice arrangement with largely salaried physicians may be more significant. For the other variables--previous health status, ambulatory-care use (including preventive care), accessibility, and satisfaction--the two groups were remarkably similar.
Adolescent↗
A survey of dental care programs offered by "qualified" HMOS.
None of the federally qualified HMOs had a fully prepaid comprehensive dental care program. Less than a third of the plans went beyond the then mandated benefits of the Act, and those that did, only provided the benefits on a fee-for-service basis. The more established plans, with enrollments exceeding 15,000 members, offered a full spectrum of services, and have acceptable levels of utilization. There appears to be a relation between size and services offered and overall utilization of the dental services. The general direction HMOs are taking with regard to the scope of services provided is hard to predict because more than two thirds of the HMOs studied were "transitional" HMOs. The more mature plans appeared to be leaning toward fully comprehensive services; however, only the "basic" dental services then mandated by the Act were covered by prepayment. It is difficult to predict how the nearly 200 HMOs now being planned and developed will integrate dental care into their programs, especially when dental care services are no longer required as a "basic health service". Based upon the cautious approaches used by the HMOs now in operation, it appears safe to assume that comprehensive dental care programs will not be offered by HMOs until they are forced to do so by competing health insurance carriers or a dental program provides them with a competitive edge.
Costs and Cost Analysis↗
Quality assurance today and tomorrow: forecast for the future.
We review here the definition, history, and current findings of quality assessment. Difficulties with quality assessment center principally on methods problems, including using the medical record as a source of information, using process versus outcome criteria, and ignoring decision analysis methods in establishing quality criteria. One overriding issue is placing a value on health and, by extension, on quality assurance and assessment efforts; another is the degree to which improvements in the quality of care can be achieved through changes in physician practices. Several sets of recommendations address these topics. With the assumption that such recommendations could be acted on in a transition period, a hypothetical quality assurance system is described for the 1980s and beyond. This system is based on preservation of the fee-for-service system, adoption of a national health insurance plan, and minimal federal involvement in quality of care decisions at the regional level.
Delivery of Health Care↗
Knowledge of patient's method of payment by physicians in a group practice.
Physicians generally know how patients pay for their medical care. At the Marshfield Clinic, however, a group practice in Marshfield, Wis., physicians did not know the source of payment for the vast majority of their patients (79.3 percent). Also, even for the approximately one-fifth of the patients whose payment status they reported knowing, the information was incorrect for a small proportion. The patient's age and sex, length of time the physician had provided care, patient's place of employment, reason for patient's visit, and whether the physician was in the medical or surgical department apparently affected the physician's knowledge of the patient's payment status. Twenty-five of the 49 physicians studied reported they knew the payment status of none of their patients about whom they were asked; 24 knew the status of at least one patient. Only one physician in seven, however, reported having this knowledge about all the patients about whom he was asked. Physicians in medicine were more likely than those in surgical sub-specialties to know the patient's payment status. About one physician in five said such knowledge would be helpful for at least one patient; about one in seven said it would be helpful for all patients about whom they were asked. The Marshfield Clinic physicians, who receive salaries, emphasize comprehensive care and increased access to care, rather than maximization of income. The clinic offers medical care to patients in a prepayment health plan while continuing to serve other patients on a fee-for-service basis. Arrangements like this may help ease the transition to repayment if health-maintenance organizations become predominant in the delivery of health services in the United States.
Adolescent↗
The potential of organizations of fee-for-service physicians for achieving significant decreases in hospitalization.
Because hospitalization is a key factor in controlling health care costs and because fee-for-service remains the predominant mode of physician payment, a study was undertaken of the hospitalization experiences of open panel fee-for-service health maintenance organizations (IPA-HMOs) and Foundations for Medical Care (FMCs). Ten open panel plans were surveyed as to characteristics of their programs, physicians, and enrollees and their hospitalization rates. Although data were incomplete, three IPA-HMOs, described as case reports, did achieve striking reductions in hospital use relative to a comparison group or period. Salient characteristics of these plans that may influence hospital use are prepayment by enrollees, sharing by physicians of some financial risk, and effective peer review. Further study is needed, but preliminary indications are that IPA-HMOs have a role to play in reducing health care costs.
Costs and Cost Analysis↗
The anti-trust suit against the AMA, 1939-1943: background for today's health planning.
Today, prepaid group medical schemes form a significant component of many legislative health care proposals. Although the concept is over 60 years old, its legality was not established until 1943 by a United States Supreme Court decision that convicted the American Medical Association and the District of Columbia Medical Society for restraint of trade. The history of that suit highlights the antagonisms that exist between prepaid group medical care and the more traditional fee-for-service system.
American Medical Association↗
Private cost containment.
Physicians should recognize that a more competitive health-care market would provide the best defense against government regulation. Aside from group-practice health-maintenance organizations, the cost-containment steps that might be taken in such a market are not well understood. In particular, little attention has been paid to how private health insurers might redefine their coverage to limit the cost-increasing effects of third-party payment. Insurer-provider agreements negotiated in a competitive environment would seem to be especially promising. Competing insurance plans would be variously organized and operated according to provider and consumer preferences. Traditional doctor-patient relations as well as fee-for-service payment could be preserved. The antitrust laws, while curbing concerted effort to prevent change, should assure that physicians are not exploited by dominant buyers. Lucrative opportunities already exist for enterprising and efficient providers.
Cost Control↗
Cost-effectiveness considerations in planning a preventive dental programme for British Columbia.
The Government of British Columbia, Canada, with organized dentistry, in 1974, sponsored research towards the introduction of a comprehensive children's dental programme. Dental care was at that time primarily provided by private practitioners on a personal fee-for-service basis, which system was working close to capacity. Educational and preventive dental programmes in school and health centres were sponsored by governments. Utilization of treatment services by children was estimated at a maximum of 60 per cent per annum. For the improvement of overall dental health, it was adjudged this should be at least 90 per cent. Approximately 45 per cent of children's treatment was related to dental caries. Four possible dental care delivery systems were costed. It was essential that the comprehensive programmed include proven anti-cariogenic measures and that they be the most effective in cost and in the utilization of professional personnel. Techniques for measurement of effectiveness were reviewed. Using a modified Davies cost-benefit ratio, four professionally applied and four self-administered topical fluoride systems were compared. The Knutson-Szwejda technique scored highest when used by community dental health programmes. In a private practice system or in large paediatric clinics the annual application of acidulated phosphate fluoride would be preferable. In British Columbia, experience has indicated problems with continuing school cooperation in mouth rinse programmes. Statistical proof of the effectiveness of "brush-in" programmes was adjudged as inconclusive but hopeful.
Adolescent↗
Medicaid utilization of services in a prepaid group practice health plan.
To provide medical service at lower costs without diminishing either quality or coverage, the District of Columbia enrolled approximately 1,000 Medicaid beneficiaries, voluntarily, in a prepaid group practice (PGP). The project was evaluated over a three-year period (1971-1974) with regard to: 1) rate of utilzation of medical care before and after enrollment; 2) costs of care per capita as compared with those of the 160,000 beneficiaries in the Medicaid fee-for-service universe; and 3) patient satisfaction with the PGP. Results indicate that for the 834 individuals aged 1 through 64 enrolled in the PGP; ambulatory physican encounter rates decreased 15 per cent, drug utilization was down 18 per cent, hospital admissions decreased 30 per cent, and hospital days declined 32 per cent after enrollment. For the same benefit package, annual prepaid per capita costs for the Medicaid PGP enrollees for 1972, 1973, 1974 were only +282, +232, and +286 respectively, representing a 37 per cent saving when compared to the fee-for-service per capita costs of the Medicaid Universe which stood of +373, +435 and +465 over the same period. The instrument used to probe patient satisfaction showed the Study Group was satisfied with the PGP, and received better dental care. The voluntary dropout rate from the PGP was only 2.5 per cent; and out-of-plan utilization was low, indicating good acceptance of the PGP service.
Adolescent↗
The competitive response of Blue Cross and Blue Shield to the health maintenance organization in Northern California and Hawaii.
The health maintenance organization (HMO) can provide an alternative to the predominant form of health care delivery in the United States, fee-for-service. Although market penetration of the HMO is relatively low in most parts of the country, the HMO has achieved a significant market share in a number of states. This paper examines the competitive response of Blue Cross and Blue Shield to the introduction of the HMO in two geographic regions with significant HMO activity, northern California and Hawaii. The evidence obtained from extensive interviews indicates that Blue Cross and Blue Shield plans have responded to HMO competitive pressure by establishing their own HMOs and by altering traditional procedures. HMO competition has stimulated Blue Cross and Blue Shield to make greater cost control efforts and to offer larger benefit packages. These results can have important policy implications for the role that HMOs are to play in cost containment.
Blue Cross Blue Shield Insurance Plans↗
Comparative absence experience among employees covered by a prepaid or a Blue Cross/Blue Shield health insurance program.
Health maintenance organizations report lower hospitalization and surgical experience than fee-for-service practice. If this is true, then sickness absence should be less. This pilot study compared morbidity experience of 247 pairs of Mountain Bell Telephone Company employees--HMO-enrolled employees matched with employees covered only by Blue Cross/Blue Shield. The study period extended before and after enrollment of the HMO subjects. Rates for the HMO group for hospitalization and surgery decreased after enrollment, whereas rates for the Blue Cross/Blue Shield group increased. The absence disability rate for the HMO group remained constant but increased for the BC/BS group. Differences in absenteeism may exist due to the type of medical insurance. The potential impact of such a difference upon absence costs is considerable.
Absenteeism↗
Enhancing Evidence Generation by Linking Randomized Clinical Trials to Real-World Data: The INVESTED-Medicare Linkage Study.
Real-world evidence (RWE) derived from real-world data (RWD) can complement randomized controlled trials (RCTs), yet the validity of RWD relative to RCT data remains insufficiently characterized. We obtained post hoc consent and linked individual participant data from the US-based INVESTED trial (2016-2019) with Medicare fee-for-service claims (2012-2020) to validate demographic factors, baseline characteristics (using 183-, 365-, and 730-day lookback periods) and outcomes, and to assess post-trial events. Among 5260 trial participants, 126 were enrolled and eligible for linkage. Among 115 participants with demographic information available from Medicare enrollment files, agreement between RCT- and RWD-based demographic factors was high: only one major age discrepancy, 100% agreement for sex, and an overall agreement of 0.89 for race. Participants with Medicare claims data (n = 65) were older and more likely to be White compared with the overall RCT population. For the 365-day lookback period, baseline comorbidities showed high sensitivity (median 0.80) and specificity (0.89), as did medication use (sensitivity 1.00, specificity 0.88). Lengthening the lookback period to 730 days increased sensitivity but decreased specificity, whereas shortening to 183 days decreased sensitivity but increased specificity. Clinical outcomes showed high specificity (0.88-0.94) but low sensitivity (0.18-0.50). Among those with Medicare coverage beyond the trial end date (n = 45), 22% experienced cardiopulmonary, 18% cardiovascular, and 7% heart failure (HF) hospitalizations, highlighting the value of RWD for extending RCT evidence. Proactive planning of future RCT-RWD linkage initiatives can improve the efficiency of linkage studies, leading to more actionable results.
Journal Article↗
The effects of outpatient psychiatric utilization on the costs of providing third-party coverage.
Although previous studies conducted in prepaid group practice settings have indicated that the cost of providing coverage for outpatient psychotherapy may be offset by lower utilization of medical/surgical services among those who receive the benefit, no such studies have been conducted in a fee-for-service setting, nor have actual before and after claims costs been compared. This study establishes a methodology for using routinely collected Blue Cross claims data to show how the acquisition and use of a given benefit affects total utilization patterns and the overall costs of providing third-party coverage. The use and cost of outpatient psychiatric coverage in one subscriber group is the particular application given to this methodology in this report. Blue Cross claims records of 136 subjects who utilized outpatient psychiatric benefits over a 48-month period were analyzed. Results indicate that overall medical/surgical utilization is reduced for that subgroup who used the outpatient psychotherapy benefit and that average costs dropped by $9.41, from $16.47 per patient per month before outpatient psychotherapy to $7.06 after contact, with costs being adjusted to reflect parity with the base year. Factors other than psychiatric intervention which may have brought about this cost reduction as well as policy implications of these results are discussed.
Ambulatory Care↗
Cost-financed mental health facility. I. Clinical care pattern in a labor union program.
Cost-financed mental health facilities create opportunities for new patterns of mental health service analogous to community mental health centers in some ways and to HMOs in others. This paper describes the first facility based on such financing. The concept of cost-financed mental health practice is introduced and defined as including a multidisciplinary team serving a defined population of enrollees through prepaid or prebudgeted financing. The financing may be capitation based or generated through an agreed-upon budget for predefined services. Ordinary fee-for-service insurance creates purchasing power but not care system. Cost financing can create service mechanisms. The paper describes the clinical system made possible through such financing. The direct patient service systems for the United Auto Workers at the Johns Hopkins Hospital funded through cost financing included an early case-finding program, intake and evaluations specially designed for blue-collar workers, a full range of continuous treatment modalities, and programs in chronic care and rehabilitation. Programs in prevention, consultation, and education were also included. Conern is described. The authors conclude that this clinical form has the potential to offer both the advantages of the community mental health center and of the private practice system.
Attitude to Health↗
Urgent care in the HMO: evolution of a system in Washington, D.C.
In 1961, Group Health Association, a large, non-hospital based, prepaid group practice in Washington, D.C. established an after-hours walk-in clinic on its premises for the care of medical problems requiring prompt attention. Within a year, this clinic's operation was extended to daytime hours for the use of the consumer-member at his own discretion. After 10 years, in the plan's main health center, the volume of adult visits to the acute care/walk-in center exceeded the number seen in the Department of Internal Medicine; most were of a routine rather than urgent nature. More visits to the acute care service were made during the day, when the full range of ambulatory services were available by appointment, than were made after hours. The choic of immediate first-come, first-served care over the conventional care-by-appointment by so many members was felt to have resulted in discontinuous suboptimal care, segregation of the membership along socioeconomic lines, as well as unnecessary and very costly duplications of service. The background of organizational behavior and community medical practices contribuing to this pattern of utilization are explored. Compared to traditional fee-for-service medicine, demands for outpatient services in the HMO tend to be greater. Acceptable alternatives to off-line channeling of patients with unexpected or acute conditions can be designed. In the general community today, utilization of medical services is strongly influenced by imbalances in available resources and by financial factors which are under no central control. In the HMO, all costs are prepaid and services are planned for a membership of known size. Even so, consumers' use of services in prepaid plans tends to follow the patterns seen in the community. More appropriate distribution of demands requires an active and ongoing system of patient education. A commitment by the HMO's providers and managers toward this goal is indispensable.
Ambulatory Care↗
Factor affecting the choice between two prepaid plans.
This study examines the factors affecting the choice between two comprehensive prepaid plans of medical care available to the staff of Stanford University. One is a Kaiser plan, offered since 1969. Under the other (Clinic plan for short), medical services are provided by a predominantly fee-for-service group practice and hospital services are covered by a standard Blue Cross hospital policy; the Clinic plan has been available since the 1950s. The Kaiser plan has only a token copayment for office and home visit while the Clinic plan has a 25 per cent coinsurance provision applying to all physician and outpatient ancillary services. It was found that the two major factors affecting choice were income and distance to the provider. The preference for the Kaiser plan increased as income decreased. Similarly, as distance from the Clinic increased and distance from a Kaiser facility decreased, the preference for the Kaiser plan increased. However, proximity to the provider was a more important factor for the higher-income Clinic plan subscribers. The data also show that the longer availability of the Clinic plan had a long-term effect on enrollment. A substantial proportion of long time Stanford employees who might have been expected to prefer the Kaiser plan stayed with the Clinic plan.
Attitude to Health↗
Use of physician services under two prepaid plans.
Use of physician services under two prepaid plans offered to Stanford University staff is analyzed and compared. One is a Kaiser plan; under the other (Clinic plan), physician and outpatient ancillary services are provided by a predominantly fee-for-service group practice and hospital services are covered by a Blue Cross policy. The two plans provide much the same benefits but, in addition to the difference in their organization, they differ in their financial provisions. While the Kaiser plan has only a token copayment for office and home visits, the Clinic plan has a 25 per cent coinsurance provision applying to all physician and outpatient ancillary services. Despite these differences, the mean number of physician visits per year is the same for the two groups after account is taken of differences in age composition, socioeconomic status, health status, attitudes toward seeking care, length of plan membership, family size and satisfaction with the plan. However, when adjustment is also made for differences in physician affiliation, the Kaiser rate becomes half a visit higher than the Clinic rate. This is because under both plans, members who have a specific plan physician as regular source of care use more services than those without one, and because only 42 per cent of Kaiser members compared with 87 per cent of Clinic members stated that they had a specific plan physician.
Age Factors↗