Theoretical issues in cost-effectiveness analysis.
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Cost-Benefit Analysis↗
Biomedical subjects
W G Manning
Publications and source records attributed to W G Manning.
An instrument to evaluate the process of psychiatric care in ambulatory settings.
As part of an evaluation of the Utah Prepaid Mental Health Plan, the Process of Care Review Form was developed to assess the quality of the process of psychiatric care provided by Utah's community mental health centers (CMHCs) to clients with schizophrenia. This article briefly reviews issues in the measurement of quality of care and describes the development and implementation of the form. The 67-item form was designed for use by a trained abstracter to gather data from CMHC medical records in six areas: general management of the patient, medication management, medical management, social support, psychiatric hospitalization, and psychiatric assessment. A 59-item version of the form that omits the section on psychiatric assessment has been used in three waves of data collection to document data spanning five years (1990-1994) in the evaluation of the process of psychiatric care in the Utah plan. It is currently being used longitudinally to examine differences between Utah CMHCs receiving capitated payments and those paid on a fee-for-service basis by Medicaid.
Ambulatory Care↗
The cost to health plans of poor glycemic control.
OBJECTIVE: We tested the hypothesis that level of glycemic control is related to medical care costs in adults with diabetes. RESEARCH DESIGN AND METHODS: Regression analysis was used to estimate the relationship between glycemic control and medical care charges for 3,017 adults with diabetes who were continuously enrolled in a large health maintenance organization (HMO) over a 4-year period. Diagnosis of diabetes was ascertained from diagnostic and pharmaceutical databases using a method with an estimated sensitivity of 0.91 and an estimated specificity of 0.99. Charges for care included defined outpatient and inpatient services. Patients who disenrolled or who died during the 4-year period were excluded from the main analysis. RESULTS: Charges for medical care for patients with diabetes from 1993 to 1995 were closely related to HbA1c level in 1992 before and after adjustment for age, sex, coronary heart disease, and hypertension. Standardized 3-year estimates of charges ranged from $10,439 for patients without comorbid conditions to $44,417 for those with heart disease and hypertension. Medical care charges increased significantly for every 1% increase above HbA1c of 7%. For a person with an HbA1c value of 6%, successive 1% increases in HbA1c resulted in cumulative increases in charges of approximately 4, 10, 20, and 30%. The increase in charges accelerated as the HbA1c value increased. For patients with diabetes only, or with diabetes plus other chronic conditions, the rate of increase in charges with HbA1c was consistent. CONCLUSIONS: HbA1c provides useful information to providers and patients regarding both health status and future medical care charges. Economic data suggest that clinicians should assign high importance to low HbA1c results and aggressively maintain the HbA1c status of patients who have low HbA1c values. For economic as well as clinical reasons, it may be beneficial to lower HbA1c when it is > 8% and to reduce cardiovascular risk factors. The medical charge data suggest that investment in clinical systems to improve diabetes care may benefit both payers and patients.
Adult↗
Health insurance: the tradeoff between risk pooling and moral hazard.
Choosing optimal health insurance coverage involves a trade-off between the gain from risk reduction and the deadweight loss from moral hazard. This paper examines this trade-off empirically by estimating both the demand for health insurance and the demand for health services. It relies on data from a randomized controlled trial of cost-sharing's effects on the use of health services and on the health status for a general, non-elderly population.
Actuarial Analysis↗
Do cigarette producers price-discriminate by state? An empirical analysis of local cigarette pricing and taxation.
This study analyzes the interactive effects of oligopoly pricing, state taxation, and anti-smoking regulations on retail cigarette prices by state, using panel data for the 50 US states between 1960 and 1990. The results indicate that cigarette producers do price-discriminate by state, though the effect is not large relative to the final retail price. There are two further results: (1) state taxes are more than passed on - a 1-cent state tax increase results in a price increase of 1.11 cents, and (2) sellers offset state and local anti-smoking laws with lower prices, thereby blunting effects of the regulations.
Commerce↗
Comparing the use of diagnostic tests in Canadian and US hospitals.
Although Americans pay much more for a day in the hospital than Canadians, we know little about whether inpatient physician practice patterns might explain some of this difference. The authors compared the utilization of all diagnostic imaging (plain radiographs, computed tomography (CT) and magnetic resonance imaging (MRI) scanning, ultrasound, nuclear medicine and vascular studies) and selected laboratory tests (hematology, basic biochemistry, and advanced biochemistry) for all patients discharged with selected medical and surgical diagnoses in 1990 and 1991 from four university hospitals and four community hospitals in Canada (n = 6,491) and the United States (n = 7,980). Overall, US medical patients received 22% more diagnostic tests than their Canadian counterparts (544.2 relative value units [RVUs] vs. 446.5 RVUs in Canada, P < 0.001), which was mainly the result of higher radiology use. Although mean radiology use was 40% higher in the United States (370.0 vs. 264.5 RVUs in Canada, P < 0.05), there was little difference in the use of laboratory tests between countries (174.2 vs. 182.4 RVUs in Canada, P = 0.3). Within radiology, only CT and MRI use differed significantly between countries (US patients received 119% more tests than Canadians). These findings were consistent after adjustments for age, gender, diagnosis-related group, and university status. Differences in test use between countries were mainly the result of more testing among the US elderly than counterparts in Canada. Among surgical patients, there was little difference between countries for radiology (76.3 vs. 67.3 RVUs in Canada, P < 0.05) and laboratory (83.6 vs. 91.4 RVUs in Canada, P < 0.05). Comparable inpatients admitted to US hospitals received more diagnostic tests than their Canadian counterparts even in hospitals with similar availability of technology. Differences between countries were larger for high-cost tests than for lower-cost tests. Much of the difference in test use is explained by more intensive use for the elderly in the United States.
Aged↗
Physician use in Ontario and the United States: The impact of socioeconomic status and health status.
OBJECTIVES: This study compared physician use in Ontario and the midwestern and northeastern United States for persons of different socioeconomic status and health status. The distribution of health problems associated with the most recent physician visit also was compared. METHODS: The design of the study was cross sectional; data derived from the 1990 Ontario Health Survey and the 1990 US National Health Interview Survey were used in analyses. RESULTS: Overall, persons in Ontario averaged 19% more visits than US residents, but differences varied markedly across income and health status. At each level of health status, low- income Canadians had 25% to 33% more visits than their US counterparts. However, among higher income persons, those in excellent or very good health had 22% more visits than Americans, while those in good, fair, or poor health had 10% fewer visits than Americans. Higher visit rates in Ontario were not associated with a greater prevalence of low- priority visits. CONCLUSIONS: Under the Canadian single- payer system, medical care in Ontario has been redistributed to low-income persons and the elderly. Compared with the United States, there has been a lower intensity of medical care for the sick higher income population.
Adolescent↗
The demand for alcohol: the differential response to price.
Although several studies indicate that drinking is responsive to price, little work has focused on whether prices have a differential effect on light, moderate, or heavy drinking. This study examines the price responsiveness of the demand for alcohol: whether heavy drinkers are less sensitive to price than light or moderate drinkers. The study uses data on alcohol consumption on the 1983 National Health Interview Survey. The results indicate that both light and heavy drinkers are much less price elastic than moderate drinkers. Further, we cannot reject the hypothesis that the very heaviest drinkers have perfectly price inelastic demands.
Alcohol Drinking↗
Mental health care utilization in prepaid and fee-for-service plans among depressed patients in the Medical Outcomes Study.
OBJECTIVE: We compare mental health utilization in prepaid and fee-for-service plans and analyze selection biases. DATA SOURCE: Primary data were collected every six months over a two-year interval for a panel of depressed patients participating in the Medical Outcomes Study, an observational study of adults in competing systems of care in three urban areas (Boston, Chicago, and Los Angeles). STUDY DESIGN: Patients visiting a participating clinician at baseline were screened for depression, followed by a telephone interview, which included the depression section of the NIMH Diagnostic Interview Schedule. Patients with current or past lifetime depressive disorder and those with depressed mood and three other lifetime symptoms were eligible for this analysis. We analyze mental health utilization based on periodic patient self-report. ANALYTIC METHODS: We use two-part models because of the presence of both nonuse and skewness of use. Standard errors are corrected nonparametrically for correlations across observations due to clustered sampling within participating physicians and repeated observations on the same individual. PRINCIPAL FINDINGS: The average number of mental health visits was 35-40 percent lower in the prepaid system, adjusted and unadjusted for observed differences in patient characteristics, including health status. Utilization differences were concentrated among patients of psychiatrists, with only minor differences among patients of general medical providers. Analyzing the effect of switches that patients make between payment systems over time, we found some evidence of adverse selection into fee-for-service plans based on baseline utilization, but not based on utilization at the end of the study. In particular, after adjusting for observed patient characteristics and health status, patients switching out of prepaid plans had higher baseline use than predicted, whereas patients switching out of fee-for-service had lower use than predicted. Switching itself appears to be related to an immediate decline in utilization and was not followed by an increase or "catch-up" effect. CONCLUSIONS: The absence of the commonly found "catch-up" effect following switching and the significant decrease in utilization during the switching period suggests an interruption in care that does not occur for patients staying within a payment system. This finding emphasizes the need for integrating new patients quickly into a system, an issue that should not be neglected in the current policy discussion.
Boston↗
Impact of prior and current alcohol use on use of services by patients with depression and chronic medical illnesses.
OBJECTIVE: Alcohol use often co-occurs with other major chronic conditions, but its effect on health care utilization in this context is not understood. This study examines the impact of alcohol consumption on health care use by patients with chronic medical conditions or depression, or both. DATA SOURCES/STUDY SETTING: Data came from the Medical Outcomes Study, an observational study of patients from the offices of general medical providers and mental health specialists in three U.S. cities. STUDY DESIGN: Longitudinal data spanning four years for outpatient general medical visits and outpatient mental health visits were analyzed using a two-part model to assess the impact of alcohol use disorder, problem drinking, and current and past alcohol consumption on health care use by patients, controlling for patient demographics and health status. DATA COLLECTION/EXTRACTION METHODS: Data were collected from 2,546 adult patients with hypertension, diabetes, heart disease (congestive heart failure or myocardial infarction), and/or current major depression or subthreshold depression using periodic, self-report surveys detailing health care utilization and health status information. PRINCIPAL FINDINGS: Current alcohol consumption increases outpatient doctor visits, and problems related to current drinking decrease outpatient mental health visits. CONCLUSIONS: Patterns of alcohol consumption have an impact on both mental health and overall health care use by patients with chronic medical conditions or depression.
Adult↗
Do attending or resident physician practice styles account for variations in hospital resource use?
Prospective payment has created incentives for hospitals to identify physicians who are responsible for high or excessive rates of resource use. However, at teaching hospitals it is unclear whether individual attending or resident physicians account for a substantial portion of the observed variations in hospital resource use. To explore this issue, case-mix adjusted hospital length of stay and ancillary resource use at a university teaching hospital for 7,667 consecutive discharges on general medicine wards and 7,566 discharges on medical subspecialty wards were evaluated. After controlling for case mix and patient characteristics (patients' age, sex, marital status, insurance status, and ward service), only 2% of the length of stay variance (log transformed) was attributable to the attending physician on general medicine wards (P = 0.06) and 1% on subspecialty medicine wards (P < 0.01). For total ancillary resource use, about 2% of the variance was attributable to general medicine and subspecialty ward attendings. Similar associations were found for resident physicians, although the overlap of attending and resident physicians' month-long rotations prevented critical appraisal of their independent contributions to resource use. Furthermore, labeling attending physicians as high or low hospital resource utilizers based on data from one month of attending duty (mean admissions = 33 +/- 7) would be scarcely better than randomly classifying them (kappas ranged from -0.05 for length of stay on subspecialty services to 0.18 for pharmacy use on general medicine services). In conclusion, in this university teaching hospital, attendings and residents account or a small, although statistically significant, amount of the variation in hospital resource use. It would be impractical for the hospital to reliably profile the resource use intensity of individual physicians.
Analysis of Variance↗
Switches between prepaid and fee-for-service health systems among depressed outpatients: results from the Medical Outcomes Study.
We analyzed switches between prepaid and fee-for-service health care plans among depressed outpatients in the longitudinal part of the Medical Outcomes Study. Patients of mental health specialists in fee-for-service plans had the lowest adjusted rate of plan switching (8.1%), compared to fee-for-service general medical patients (13.5%) and prepaid patients of both types of providers (10.1% to 11.7%). Although there were no substantial differences in initial sickness by payment system among enrolled patients, differing switching rates by provider specialty and payment system indicated biased selection over time. In addition, we found that married, nonwhite, and wealthier individuals were significantly more likely to leave fee-for-service than prepaid care plans. We analyzed whether system switching had an effect on patient satisfaction and outcomes. None of the results were highly significant, but the power of the data to analyze this issue was limited. Nevertheless, it appears that patients switching from prepaid to fee-for-service may be at risk for poorer functioning outcomes, although there was no similar effect on mental health status.
Adult↗
Taxation, regulation, and addiction: a demand function for cigarettes based on time-series evidence.
This work analyzes the effects of prices, taxes, income, and anti-smoking regulations on the consumption of cigarettes in California (a 25-cent-per-pack state tax increase in 1989 enhances the usefulness of this exercise). Analysis is based on monthly time-series data for 1980 through 1990. Results show a price elasticity of demand for cigarettes in the short run of -0.3 to -0.5 at mean data values, and -0.5 to -0.6 in the long run. We find at least some support for two further hypotheses: that antismoking regulations reduce cigarette consumption, and that consumers behave consistently with the model of rational addiction.
California↗
Risk adjustment for a children's capitation rate.
Few capitation arrangements vary premiums by a child's health characteristics, yielding an incentive to discriminate against children with predictably high expenditures from chronic diseases. In this article, we explore risk adjusters for the 35 percent of the variance in annual out-patient expenditure we find to be potentially predictable. Demographic factors such as age and gender only explain 5 percent of such variance; health status measures explain 25 percent, prior use and health status measures together explain 65 to 70 percent. The profit from risk selection falls less than proportionately with improved ability to adjust for risk. Partial capitation rates may be necessary to mitigate skimming and dumping.
Ambulatory Care↗
Differences in the mix of patients among medical specialties and systems of care. Results from the medical outcomes study.
OBJECTIVE: To determine differences in the mix of patients among medical specialties and among organizational systems of care. STUDY DESIGN: Cross-sectional analysis of 20,158 adults (greater than or equal to 18 years of age) who visited providers' offices during 9-day screening periods in 1986. Patient and physician information was obtained by self-administered, standardized questionnaires. SETTING: Offices of 349 physicians practicing family medicine, internal medicine, endocrinology, and cardiology within health maintenance organizations, large multispecialty groups, and solo or small single-specialty group practices in three major US cities. OUTCOME MEASURES: Demographic characteristics, prevalence of chronic disease, disease-specific severity of illness, and functional status and well-being. RESULTS: Among patients with selected physician-reported chronic illnesses (diabetes, hypertension, recent myocardial infarction, or congestive heart failure), increasing levels of severity were associated with decreasing levels of functional status and well-being and with increased hospitalizations, more physician visits, and higher numbers of prescription drugs. Compared with patients of general internists, patients of cardiologists were older (56 vs 47 years, P less than .01), had worse functional status and well-being scores (P less than .01), and carried more chronic diagnoses (mean 1.32 vs 1.02, P less than .01); patients of family practitioners were younger (40 vs 47 years, P less than .01) and more functional (P less than .01), carried fewer chronic diagnoses (0.70 vs 1.02, P less than .01), and (among diabetic patients only) had lower disease-specific severity scores (2.06 vs 2.30 on a five-point scale, P less than .01). Compared with patients in health maintenance organizations, patients visiting solo practitioners under fee-for-service payment were older (50 vs 45 years, P less than .01) and sicker (had worse physical functioning) and had a higher mean number of chronic diagnoses (1.10 vs 0.93, P less than .01). CONCLUSION: Patient mix is related to utilization and differs significantly across medical specialties and systems of care. These differences must be taken into account when interpreting variations in utilization and outcomes across specialties and systems, and when considering alternative policies for payment.
Activities of Daily Living↗
The impact of utilization review on costs and utilization.
This paper examines the performance of a utilization review program using data from Aetna's utilization review (UR) customers compared to a representative sample of its customers which had no utilization review during the study period. Statistical adjustments were made for the utilization management status, employee demographics, plan benefits, group size, year effects and seasonality. The study period covered from the first quarter of 1987 through the last quarter of 1988. The data suggest that UR reduces overall medical expenses by 4.4 percent, and inpatient expenses by 8.1 percent after a year of experience, largely by reducing length of stay.
Ambulatory Care↗
The effects of psychological distress and psychological well-being on use of medical services.
In this study, the authors determined whether mental health status affects the use of general medical services, with and without adjustment for the correlated effects of general health perceptions and physical health status on such use. Data were used from the RAND Health Insurance Experiment, which has information on up to 5 years of use of medical services by a nonelderly, civilian, general population. Health status and other covariates were assessed by self-administered questionnaires at enrollment. In the absence of statistical control for general and physical health status, worse mental health status-whether assessed by a global self-report measure or its two component parts, psychological well-being and psychological distress-significantly increased the use of both inpatient and outpatient general medical services. After controlling for general health perceptions, physical health status, demographic factors, and insurance plan coverage, the effects of mental health status on use are reduced, but not eliminated. Psychological distress and psychological well-being retained independent effects on total medical expenses.
Activities of Daily Living↗
Utilization review savings at the micro level.
Utilization review (UR) programs have become an integral part of efforts to contain health care costs for private health insurers, employers, and health care organizations. While some studies have measured the overall performance of these programs, important information in the prior level of the health care utilization has not been used in estimating the effectiveness of the program for micro units (e.g., employer groups). In this article, the authors present a model to determine how the impact of the hospital UR program on health care utilization for specific groups varies with historical use patterns. The estimation approach used in this article can be used to determine the effect of UR for specific employer groups without having to rely on the average effectiveness measures for all. Claims obtained from Aetna Health Plans provided data for more than 5,300 employer accounts covering approximately 580,000 employees, 44% of whom had the UR program sometime during the period 1987 to 1990. Because of regression to the mean, UR savings were greater for units with higher prior use and smaller for units with lower use. In addition to prior use, the size of the group also determined the extent of regression to the mean. Groups with smaller number of enrollees had greater potential to save from the UR because of UR's ability to reduce the outliers.
Adolescent↗