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PubMed1997

Disease management: how soon to take the leap?

Managed care has driven development and use of disease management programs, but now these programs are cropping up in fee-for-service hospitals interested in more effectively managing their high-volume chronically ill patient populations. Unlike case management, with its focus on lowering inpatient costs, disease management stresses reducing the number of hospital and emergency department admissions, which puts these hospitals in the troubling position of curbing their income from admissions. Although disease management can be a tough sell in fee-for-service markets, experts stress that developing these programs can give your hospital a leg up on the competition when it comes time to bid for managed care contracts.

Cancer Care Facilities↗
PubMed1990

University catalogues and HMO co-payments: simple lessons in economic rationing.

The rise of health maintenance organizations and its preferred provider kindred has encouraged an increased use of so-called reduced fee services. HMOs have historically marketed themselves as a cost-efficient, more holistic approach to providing for health care needs than do fee-based plans (insurance). But the typical pricing structure appears to have caused unanticipated and undesirable usage patterns to appear. Similar problems are shown to exist in non-medical environments.

Capitation Fee↗
PubMed1990

Changing remuneration systems: effects on activity in general practice.

OBJECTIVE: To investigate the effects on general practitioners' activities of a change in their remuneration from a capitation based system to a mixed fee per item and capitation based system. DESIGN: Follow up study with data collected from contact sheets completed by general practitioners in one period before (March 1987) a change in their remuneration system and two periods after (March 1988, November 1988), with a control group of general practitioners with a mixed fee per item and capitation based system throughout. SETTING: General practices in Copenhagen city (index group) and Copenhagen county (control group). SUBJECTS: 265 General practitioners in Copenhagen city, of whom 100 were selected randomly from the 130 who agreed to participate (10 exclusions) and 326 general practitioners in Copenhagen county. MAIN OUTCOME MEASURES: Number of consultations (face to face and by telephone) and renewals of prescriptions, diagnostic and curative services, and specialist and hospital referrals per 1000 enlisted patients in one week. RESULTS: Of the 75 general practitioners who completed all three sheets, four were excluded for incomplete data. Total contact rates per 1000 patients listed rose significantly compared with the rates before the change index in the city (100.0 before the change v 111.7 (95% confidence interval 106.4 to 117.4 after the change) and over the same time in the control group (100.0 v 106.0), but within a year these rates fell (to 104.2(99.1 to 109.6) and 104.0 respectively). There was an increase in consultations by telephone initially but not thereafter. Rates of examinations and treatments that attracted specific additional remuneration after the change rose significantly compared with those before (diagnostic services, 138.1 (118.7 to 160.5) and 159.5 (137.8 to 184.7) and curative services 194.6 (152.2 to 248.9) and 194.8(152.3 to 249.2) for second and third data collections respectively) and with the control group (diagnostic services 105.3, 107.6 and curative services 106.0, 115.0) whereas referral rates to secondary care fell (specialist referrals 90.1 (80.7 to 100.6) and 77.0 (68.6 to 86.4) and hospital referrals 87.4 (71.1 to 107.5) and 68.4 (54.7 to 85.4] in doctors in the city. CONCLUSIONS: Introducing a partial fee for service system seemed to stimulate the provision of services by general practitioners, resulting in reduced referral rates. The concept of a "target income" which doctors aim at, rather than maximising their income seemed to play a part in adjustment to changing the system of remuneration.

Capitation Fee↗
PubMed2004

The effects of payment method on clinical decision-making: physician responses to clinical scenarios.

BACKGROUND: The influence of payment mechanisms on physician decisions is not well understood. OBJECTIVES: The objective of this study was to test 2 null hypotheses: 1) physicians' clinical decisions would not be influenced by payment incentives; and 2) physicians would have equal concern about medical decisions made under capitation or fee-for-service (FFS) arrangements. RESEARCH DESIGN: We conducted a physician survey in which patient insurance status (capitated or FFS) was randomly incorporated into 4 clinical scenarios using a Latin square design. SUBJECTS: We used a nationally representative random sample of family physicians in direct patient care. MEASURES: We used treatment decisions and physician "bother" scores (a measure of discomfort about decisions) in response to the clinical scenarios and adjusted for physician gender, age, board certification, income, practice location, practice mix, practice setting, geographic region, local area managed care penetration, and capitation or risk pool contracts in practice. RESULTS: Seventy-two percent of sampled physicians responded. Comparing decisions made under capitation to FFS, physicians were less likely to indicate they would perform discretionary care (relative risks [RR] range, .64-.82; P<0.001), but payment had no effect on selection of life-saving care (RR, 1.02, not significant). Physicians felt significantly more "bothered" when they made clinical decisions under capitated payment (P<0.001 in all scenarios), regardless of whether a treatment was discretionary or life-saving, and whether the decision was made for or against the treatment (P<0.001). CONCLUSIONS: Payment mechanism has significant effects on clinical decision-making. Reduction of resources spent for discretionary care might be achieved under capitated arrangements; however, physicians respond with greater levels of discomfort under capitation than FFS.

Attitude of Health Personnel↗
PubMedDate not supplied

Evaluating risk: global fees and episodic care.

In 1999, two articles in The Physician Executive -- "Part I: Global Theory and the Nature of Risk (July-August)." and "Part II: Towards a Choice-Based Model of Managed Care (October-November)" -- outlined the flaws of orthodox managed care theory and highlighted the unique advantages of moving to a genuinely market-based model, which included the concept of direct contracting for integrated episodes of care. This follow-up focuses on comparing an episode contracting system to a traditional capitated program and outlines the features that make this approach much more attractive to physicians, payers, and most importantly patients.

Capitation Fee↗
PubMed1994

PPOs: moving from fee-for-service to accepting financial risk.

Introducing a new acronym for the health care delivery environment--the RPO. As PPOs prepare to accept risk in their relationships with payers and providers, new, more-integrated organizations will evolve to be better prepared to assume risk-bearing contracts.

Capitation Fee↗
PubMed1996

Medicaid health maintenance organizations. Can they reduce program spending?

A randomized trial to evaluate the Florida site of the Program for Prepaid Managed Care showed that the plan, a staff model health maintenance organization, was successful in attracting Medicaid enrollees. The evaluation established that the health maintenance organization was able to limit members' utilization. The savings were in the form of lower likelihood of using care. The amount of services received, once care was initiated, was the same in both fee-for service Medicaid and health maintenance organizations. The authors detected no differences in inpatient use or costs. Additionally, they found evidence that the plan attracted sicker than average enrollees, so this reduced utilization translates into Medicaid program savings.

Adolescent↗
PubMed1996

The remuneration of dentists in a special project of the Israeli Defence Forces.

The behavior of health care professionals is known to be influenced, in part, by their method of remuneration and the financial incentives they face. Describes how the Medical Corps of the Israel Defence Forces (IDF) went about choosing a reimbursement method to increase incentives for dentists and decrease waiting time for the public. Based on q questionnaire sent to all 23 dentists working in a unique IDF civilian dental clinic, and on other information which was available on the productivity and income of these dentists, a new method of remuneration was suggested and accepted, by which a combined method of fee-for-service and salary will be introduced. The base hourly pay and per crown fee were set on levels which provide for a larger compensation range and increase the incentive for improved productivity levels. This suggested method will be investigated further and re-evaluated one year after its implementation.

Attitude of Health Personnel↗
PubMed2003

The effect of capitation on switching primary care physicians.

OBJECTIVE: To examine the relationship between patient case-mix, utilization, primary care physician (PCP) payment method, and the probability that patients switch their PCPs. DATA SOURCES/STUDY SETTING: Administrative enrollment and claims/encounter data for 1994-1995 from four physician organizations. STUDY DESIGN: We developed a conceptual model of patient switching behavior, which we used to guide the specification of multivariate logistic analyses focusing on interactions between patient case-mix, utilization, and PCP reimbursement methods. DATA COLLECTION/EXTRACTION METHODS: Claims data were aggregated to the encounter level; a switch was defined as a change in PCP since the previous encounter. The PCPs were reimbursed on either a capitated or fee-for-service (FFS) basis. PRINCIPAL FINDINGS: Patients with stable chronic conditions (Ambulatory Diagnostic Groups [ADG] 10) and capitated PCPs were 36 percent more likely to switch PCPs than similar patients with FFS PCPs, controlling for patient age and sex and physician fixed effects. When the number of previous encounters was included in the model this relationship was no longer significant. Instead high utilizers with capitated PCPs were significantly more likely to switch PCPs than were similar patients with FFS PCPs. CONCLUSIONS: A patient's demographics and utilization are associated with the probability that the patient will switch PCPs. Capitated PCP payment was associated with higher rates of switching among high utilizers of health care resources. These findings raise concerns about the continuity and quality of care experienced by vulnerable patients in an era of changing financial incentives.

Adult↗
PubMed1998

Financial incentives and primary care provision in Britain: do general practitioners maximise their income?

The system of remunerating general practitioners (GPs) in Britain underwent significant changes in April 1990 with the implementation of a new contract between individual GPs and health authorities. The changes were a precursor to a wide-ranging programme of reforms of the British National Health Service. This paper investigates the relationship between financial incentives and the provision of primary health care services in Britain. A comprehensive anonymized data set was used, comprising information on 208 general practices in Scotland which serve just under one million people. An econometric model was tested to identify the determinants of cross-practice variation in the magnitude of the changes in GPs' remuneration levels between the two contracts. A linear programming model was used to examine the GPs' response to the financial incentives built into the new contract. The results of the econometric model indicated that the main beneficiaries of the 1990 contract were the practices which had expanded over the 1989-92 period, re-structured the GPs' partnership and made use of managerial skills by employing a practice manager; those practices also had larger lists in 1992 and relatively more patients attracting deprivation payments. The linear programming model showed that only a small minority of the practices (4.8%) maximised the remuneration from the new contract. Optimal solutions concerning income maximization strategies identified financial disincentives in the fee structure of the remuneration system associated with the provision of selected services and the care of particular groups of patients. The successful adoption of these strategies would involve cream skimming and selective service provision. However, there is no conclusive evidence of British GPs engaging in such activities.

Age Factors↗
PubMed1996

Policy implications of risk selection in Medicare HMOs: is the federal payment rate too high?

For more than a decade, Medicare beneficiaries have had the option to enroll in risk-contract health maintenance organizations (HMOs) in which the federal payment is set at 95 percent of the estimated fee-for-service cost. Two questions have been raised by health policy researchers ever since: Are Medicare HMO enrollees healthier than the elderly who receive fee-for-service care? If so, does the government payment rate for Medicare HMOs accurately reflect the costs that would have been incurred by a healthier population? This Issue Brief discusses three recent studies of the extent to which risk-contract HMOs experience biased selection and the cost of this to Medicare.

Aged↗
PubMed1997

Use of ineffective or unsafe medications among members of a Medicare HMO compared to individuals in a Medicare fee-for-service program.

Adverse drug reactions and inappropriate prescribing practices are an important cause of hospitalization, morbidity, and mortality in the elderly. This study compares prescribing practices within a Medicare risk contract health maintenance organization (HMO) in 1993 and 1994 with prescribing practices for two nationally representative samples of elderly individuals predominantly receiving medical care within the Medicare fee-for-service sector. Information on prescriptions in the fee-for-service sector came from the 1987 National Medical Expenditures Survey (NMES) and the 1992 Medicare Current Beneficiary Survey (MCBS). A total of 20 drugs were studied; these drugs were deemed inappropriate for the elderly because their risk of causing adverse events exceeded their health benefits, according to a consensus panel of experts in geriatrics and pharmacology. One or more of the 20 potentially inappropriate drugs was prescribed to 11.53% of the Medicare HMO members in 1994. These medications were prescribed significantly less often to HMO members in 1994 than to individuals in the fee-for-service sector, based on information from both the 1987 NMES and the 1992 MCBS. Utilization of unsafe or ineffective medications actually decreased with increasing age in the HMO sample, with lowest rates in individuals over the age of 85. However, no relationship between age and medication use was seen in the NMES study, except for individuals over the age of 90 years. The study data support the conclusion that ineffective or unsafe medications were prescribed less often in the Medicare HMO than in national comparison groups. In fact, for the very old, who are most at risk, the use of these medications was much lower in the Medicare HMO than in the Medicare fee-for-service sector. Nevertheless, in 1994, approximately one of every nine members of this Medicare HMO received at least one such medication. Continued efforts and innovative strategies to further reduce the use of unsafe and ineffective drugs among elderly Medicare HMO members are needed.

Aged↗
PubMed1996

Health status of Medicare enrollees in HMOs and fee-for-service in 1994.

We compared the health status of 863 health maintenance organization (HMO) enrollees with that of 4,576 non-enrollees, controlling for demographics and area of residence, using 1994 data from the Medicare Current Beneficiary Survey (MCBS). HMO respondents were less likely to report fair or poor health, functional impairment, or heart disease. Average predicted costs based on various health-status measures were substantially lower for HMO respondents than for respondents in fee-for-service (FFS) arrangements. The Medicare payment formula for HMOs does not adequately adjust for the better health and consequent lower expected costs of HMO enrollees. The addition of health-status measures would improvement payment accuracy and reduce average HMO payments significantly below current levels.

Activities of Daily Living↗
PubMed2006

Are physician reimbursement strategies associated with processes of care and patient satisfaction for patients with diabetes in managed care?

OBJECTIVE: To examine associations between physician reimbursement incentives and diabetes care processes and explore potential confounding with physician organizational model. DATA SOURCES: Primary data collected during 2000-2001 in 10 managed care plans. STUDY DESIGN: Multilevel logistic regressions were used to estimate associations between reimbursement incentives and process measures, including the receipt of dilated eye exams, foot exams, influenza immunizations, advice to take aspirin, and assessments of glycemic control, proteinuria, and lipid profile. Reimbursement measures included the proportions of compensation received from salary, capitation, fee-for-service (FFS), and performance-based payment; the performance-based payment criteria used; and interactions of these criteria with the strength of the performance-based payment incentive. DATA COLLECTION: Patient, provider group, and health plan surveys and medical record reviews were conducted for 6,194 patients with diabetes. PRINCIPAL FINDINGS: Without controlling for physician organizational model, care processes were better when physician compensation was based primarily on direct salary rather than FFS reimbursement (four of seven processes were better, with relative risks ranging from 1.13 to 1.23) or capitation (six were better, with relative risks from 1.06 to 1.36); and when quality/satisfaction scores influenced physician compensation (three were better, with relative risks from 1.17 to 1.26). However, these associations were substantially confounded by organizational model. CONCLUSIONS: Physician reimbursement strategies are associated with diabetes care processes, although their independent contributions are difficult to assess, due to high correlation with physician organizational model. Regardless of causality, a group's use of quality/satisfaction scores to determine physician compensation may indicate delivery of high-quality diabetes care.

Diabetes Mellitus↗
PubMed1998

When is a group practice ready for Medicare risk contracting?

As senior citizens choose alternatives to traditional Medicare, group practices need to learn how Medicare risk contracting differs from traditional Medicare arrangements. To provide healthcare to Medicare patients, group practices should participate in both Medicare risk contracting and Medicare fee-for-service, but they need to make some operational changes to accommodate all these patients. When implementing an operational plan, group practices should consider three key factors-practice location, education of support staff and patients, and facility accessibility. The practice needs to accommodate the special needs of senior citizens to secure and retain a stable patient base.

Aged↗
PubMed2000

Contract design for primary care physicians: physician location and practice behaviour in small communities.

Most western countries employ a combination of fee-for-service, fixed salary and per capita subsidies to finance the services of general practitioners. Based on Norwegian data, the authors demonstrate that these financial schemes have been used in different types of municipalities. The authors argue that the fee-for-service and per capita components should be allowed to vary between primary physicians and municipalities: (a) If the patient population per primary physician is low and patient supply is unstable, the per capita subsidy or work-free income should be differentiated to ensure recruitment of physicians. (b) Physicians in municipalities with low physician coverage should be allotted a low basic grant, whilst per capita subsidy and fee-for-service payments should be used to stimulate service production. The opposite situation exists where there is a potential of supplier inducement due to high physician coverage. (c) The responsibility for designing contracts should be assigned to local rather than national authorities. These suggestions go against important elements in the reform of primary physician services in Norway.

Capitation Fee↗
PubMedDate not supplied

Quality in managed care: developments and considerations.

With the rapid movement of both individuals and groups away from fee-for-service health care into managed care, concerns have been expressed appropriately that the quality of care may be affected adversely. Over the past several years, a number of developments have taken place to respond to these concerns. This quality movement in managed care has not been without some issues and considerations, however. This article first describes the National Committee for Quality Assurance (NCQA) and the prominent role it has played in this movement. Next, quality improvement study design is addressed in the context of assuring quality, controlling costs, and achieving NCQA accreditation. The effect that capitation, as a payment strategy for providers, has on data quality is then described. Fourth, the value of partnering is explored. Finally, the newest version of NCQA's performance measurement template is discussed: the Health Plan Employer Data and Information Set, version 3.0.

Accreditation↗
PubMedDate not supplied

Managing data in a managed care environment.

Since managed care differs from fee-for-service systems, practices should use this environment as an opportunity to examine their present data collection processes and think of the best way to integrate them into their daily operations. The power of marketing, financial, and quality-management data will be realized when managed care contract negotiations arise and when practices operate from a position of financial strength.

Budgets↗