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PubMed1997

Medicare+Choice program; collection of user fees from Medicare+Choice plans and risk-sharing contractors--HCFA. Interim final rule with request for comments.

This interim final rule with a request for comments establishes the methodology that will be employed to assess fees applicable to Medicare risk-sharing contractors for fiscal year (FY) 1998. Under section 4002 of the Balanced Budget Act of 1997, these contractors must contribute their pro rata share of costs relating to beneficiary enrollment, dissemination of information, and certain counseling and assistance programs. The Medicare+Choice regulation to be published in June of 1998 will implement this requirement for Medicare+Choice plans.

Aged↗
PubMed1992

Issues regarding health plan payments under Medicare and recommendations for reform.

The failures of the market for current Medicare health plans include poor information and price distortions and can be attributed to government policy. Reforms that could improve its structure are annual open enrollment periods, premium rebates from health management organizations (HMOs) to members, and termination of the federal government's subsidy of Medicare supplementary insurance. However, the price for a basic Medicare benefits package would still be distorted because Medicare bases its contribution on the cost of a comparable package in the fee-for-service (FFS) sector rather than on the cost of the most efficient plan available to beneficiaries in each market area. The present Medicare HMO program almost certainly increases total Medicare costs and actually discourages HMO growth by shielding beneficiaries from the true price difference between basic benefits in the HMO and FFS sectors. Lacking payment reforms, the Medicare HMO program should be terminated.

Capitation Fee↗
PubMed1993

Social/health maintenance organization and fee-for-service health outcomes over time.

Evaluating the performance of long-term care (LTC) demonstrations requires longitudinal assessment of multiple outcomes where selective mortality and disenrollment, if not accounted for, can give the appearance of reduced (or enhanced) efficacy. We assessed outcomes in social/health maintenance organizations (S/HMOs) and Medicare fee-for-service (FFS) care using a multivariate model to estimate active life expectancy (ALE). S/HMO enrollees and samples of FFS clients in four sites were analyzed and outcome differences assessed for a 3-year period. Results provide insights into S/HMO performance under different conditions and, more generally, into evaluating LTC demonstrations without randomized client and control groups.

Activities of Daily Living↗
PubMed1995

Health plans and providers: how new partnerships are evolving in a volatile environment.

As the fee-for-service health system dwindles, organized provider structures and mutually beneficial relationships are forming between providers and payers. Providers and payers--united by shared goals of efficiency and effectiveness of care--are beginning to work together to identify and achieve their financial and quality objectives. In this article, the author discusses the evolution of these relationships in health care delivery, addresses the challenges of integration, and reveals the winners in this new delivery system.

Capitation Fee↗
PubMedDate not supplied

Effects of capitation payment for pharmacy services on pharmacist-dispensing and physician-prescribing behavior: I. Prescription quantity and dose analysis.

This paper evaluates changes in quantities and appropriateness of dosages and quantities of prescription in capitation and control pharmacies. The data indicate that, under capitation, changes were made in the quantities of ingredients so that the quantities dispensed were significantly different from those prescribed. However, the number of such modifications to prescriptions was small, and the reader is cautioned against drawing broad conclusions. The analysis, then, considers changes in days' supply of prescription ingredients during the study period. There were significantly increases in the average day's supply of prescription ingredients for maintenance drugs dispensed under the capitation reimbursement scheme; however, no such differences were observed for non-maintenance drugs. Appropriateness of the dosages and quantities of prescriptions were then compared for capitation and fee-for-service pharmacies for the study period, and no significant differences were found. Thus, it is concluded that although capitation was associated with increases in the average days' supply of ingredients dispensed for maintenance prescriptions, such changes did not adversely affect the quality of drug therapy as measured by two sets of criteria.

Capitation Fee↗
PubMed2000

An examination of state Medicaid financing arrangements for early childhood development services.

OBJECTIVE: To determine the extent to which Medicaid finances early childhood development services, either on a capitated or fee-for-service basis, and to gauge future interest in financing such services. METHODS: We analyzed state Medicaid managed care contracts in effect in April 1998 in 45 states using capitated arrangements for children at the end of 1997 to ascertain whether state Medicaid agencies financed any of six types of early childhood development services, including parent counseling, home visiting, comprehensive assessments, telephone advice lines, parent education classes, and case management. We also conducted structured telephone surveys with the same 45 states' Medicaid managed care directors. RESULTS: Overall, state Medicaid agencies finance few early childhood development services on a capitated or fee-for-service basis. Case management was the most popular service to be paid for fee-for-service. Parent education was the most popular service required in managed care contracts. Parent counseling and telephone advice lines for information on child development or parenting issues were the services least likely to be reimbursed through either Medicaid financing mechanism. CONCLUSION: To date, Medicaid agencies generally have not required managed care plans to cover early childhood development services, nor have they paid for such services on a fee-for-service basis. However, 17 states expressed an interest in expanding early childhood development services, particularly home visiting, parent education, and telephone advice lines. Nonetheless, several challenges exist in expanding Medicaid financing, including the need for more evidence on cost-effectiveness and greater political support for promoting early childhood development.

Capitation Fee↗
PubMed1993

An effective, efficient elder care program. Providence ElderPlace focuses on maintaining the continuum of care.

Providence ElderPlace, Portland, OR, is an innovative long-term care health maintenance organization. The program is a type of integrated delivery network, offering comprehensive benefits and coordinating the delivery of healthcare services in a specific geographic market. Providence ElderPlace is based on the Program for All-Inclusive Care for the Elderly (PACE), which was developed 20 years ago by On Lok Health Services of San Francisco. PACE helps frail elderly persons remain in their homes as long as possible. PACE is financed through an integrated funding pool of Medicare, Medicaid, and private fees. To be eligible for PACE, an individual must be in need of nursing home care but able to live in the community, with support. Providence ElderPlace provides all healthcare, community-based, and long-term care support services from an adult day healthcare setting. Participants usually attend the day center three times a week. When participants are not at the center, a team of workers visit their homes to observe participants and provide personal and chore support services.

Aged↗
PubMed1995

New governance for a new era: issues and challenges for integrating systems.

In this first part of a two-part column, Dr. Ruffin introduces seven key factors that will govern the operations of integrated systems. It is important to understand, he says, that, in the movement from a fee-for-service payment mechanism, in which the various elements of the health care field bill for their services independently and according to rules designed for their benefit, to an intregrated system, in which such independence can only lead to confusion in information systems, very substantial changes will be required in the governance of our health care institutions and organizations. In the second part of the column, Dr. Ruffin will elaborate on the seven factors that must be considered in the transition.

Capitation Fee↗
PubMed2006

Economic efficiency of gate-keeping compared with fee for service plans: a Swiss example.

STUDY OBJECTIVE: The impact of isolated gate-keeping on health care costs remains unclear. The aim of this study was to assess to what extent lower costs in a gate-keeping plan compared with a fee for service plan were attributable to more efficient resource management, or explained by risk selection. DESIGN: Year 2000 costs to the Swiss statutory sick funds and potentially relevant covariates were assessed retrospectively from beneficiaries participating in an observational study, their primary care physicians, and insurance companies. To adjust for case mix, two-part regression models of health care costs were fitted, consisting of logistic models of any costs occurring, and of generalised linear models of the amount of costs in persons with non-zero costs. Complementary data sources were used to identify selection effects. SETTING: A gate-keeping plan introduced in 1997 and a fee for service plan, in Aarau, Switzerland. PARTICIPANTS: Of each plan, 905 randomly selected adult beneficiaries were invited. The overall participation rate was 39%, but was unevenly distributed between plans. MAIN RESULTS: The characteristics of gate-keeping and fee for service beneficiaries were largely similar. Unadjusted total costs per person were Sw fr 231 (8%) lower in the gate-keeping group. After multivariate adjustment, the estimated cost savings achieved by replacing fee for service based health insurance with gate-keeping in the source population amounted to Sw fr 403-517 (15%-19%) per person. Some selection effects were detected but did not substantially influence this result. An impact of non-detected selection effects cannot be ruled out. CONCLUSIONS: This study hints at substantial cost savings through gate-keeping that are not attributable to mere risk selection.

Adult↗
PubMed1985

Factors affecting physicians' choice to practice in a fee-for-service setting versus an individual practice association.

Individual Practice Associations (IPAs) must be able to recruit physicians from the community to compete in the future. This article reports the results of a study to assess the factors that influenced physicians in the Research Triangle area of North Carolina to join a primary care network type of IPA. Results indicate that physicians with lower incomes and fewer physician visits and those who were newly established in the community were more likely to join. Peers had a strong influence on their decisions, while Blue Cross/Blue Shield marketing representatives did not.

Attitude of Health Personnel↗
PubMed2000

Surgeon compensation and motivation.

HYPOTHESIS: Financial incentives are the only form of compensation that will motivate surgeons at an academic health sciences center to perform the tasks outlined in the hospital's mission statement. DESIGN: A questionnaire divided into 5 sections: demographics, compensation, time allocation, benefits and incentives, and motivational factors. SETTING: The Department of Surgery, The Toronto Hospital, Toronto, Ontario. PARTICIPANTS: All academic surgeons (N=64) practicing at The Toronto Hospital in July 1997. RESULTS: Of the 64 eligible mailed surveys, there were responses for 59. Of these 59 surgeons, 48 (81%) receive compensation through a fee-for-service method. However, only 32 (54%) of the surgeons prefer the fee-for-service method, while 18 (31%) prefer salary and 9 (15%) prefer an alternative system. On average, these academic surgeons spend 44% of their time teaching or performing research, for which they receive 14% of their total income. Of the motivational factors assessed, financial bonuses are a positive motivational factor for all "surgeon tasks." In addition, task-specific motivational factors were established for research, teaching, and operating, including research facilities, mentorship and prestige, and interesting case types, respectively. CONCLUSIONS: Surgeons are not appropriately renumerated for time spent on academic activities, and many would prefer an alternative form of compensation to the fee-for-service method. Knowledge that surgeons are receptive to tasks supporting the hospital's mission statement leads us to conclude that appropriate motivation can shape the activity of academic surgeons. Financial rewards ranked the highest as a motivational factor for all surgeon tasks; however, task-specific motivational factors were identified. Overall, multiple factors, specifically targeted to the individual, will serve to motivate. Thus, compensation packages based on individual preferences and personal motivational factors will be the most successful.

Academic Medical Centers↗
PubMed2004

Beneath the calm surface: the changing face of physician-service use in British Columbia, 1985/86 versus 1996/97.

BACKGROUND: Although expenditures on health care are continually increasing and often said to be unsustainable, few studies have examined these trends at the level of services delivered to individual patients. We analyzed trends in the various components that contributed to changes in overall expenditures for physician services in British Columbia from 1985/86 to 1996/97. METHODS: We obtained data on all fee-for-service payments to physicians in each study year using the British Columbia Linked Health Data set and analyzed these at the level of individual patients. We disaggregated overall billing levels by year into the following components: number of physicians seen by each patient, number of visits per physician, number of services rendered on each visit and average price of those services. We removed the effect of inflation on fees by adjusting to those in 1988. We used direct age-standardization to isolate and measure the effect of demographic changes. We used the Consumer Price Index to determine the effects of inflation. RESULTS: Total payments to fee-for-service physicians in British Columbia rose 86.3% over the study period. The increase was entirely accounted for by the combined effects of population growth (28.9%), aging (2.1%) and general inflation (41.4%). Service use per capita rose 10.5%; this increase was offset by a decline of 9.4% in inflation-adjusted fees. The average cost of age-adjusted per-capita services rendered by general or family practitioners (GP/FPs) increased very little (3.3%) over the 11-year period, compared with a nearly one-third (31.8%) increase for medical specialists. Although there was a dramatic increase in the number of GP/FPs seen on average by each patient (32.9%), this increase was offset by the combination of decreases in the number of visits per physician (-14.9%), the number of services provided per visit (-8.0%) and the "real cost" of each service provided (-3.5%). Visits to medical specialists increased by about 20% over the study period in all age groups. However, for each person 65 years of age or over receiving any services, the average fee-adjusted expenditures increased 24.8%, almost 4 times the rate of increase for people younger than 65. The use of surgical services grew 26.5% for seniors while declining -2.0% for people under age 65. INTERPRETATION: These findings suggest a form of "homeostasis" in aggregate-level service use and cost. The supposed inflationary effects of population aging and increasing "abuse of the system" by patients were not found.

Adolescent↗
PubMed1996

Bringing managed care incentives to Medicare's fee-for-service sector.

The Health Care Financing Administration (HCFA) could work with eligible physician organizations to generate savings in total reimbursements for their Medicare patients. Medicare would continue to reimburse all providers according to standard payment policies and mechanisms, and beneficiaries would retain the freedom to choose providers. However, implementation of new financial incentives, based on meeting targets called Group-Specific Volume Performance Standards (GVPS), would encourage cost-effective service delivery patterns. HCFA could use new and existing data systems to monitor access, utilization patterns, cost outcomes and quality of care. In short, HCFA could manage providers, who, in turn, would manage their patients' care.

Capitation Fee↗
PubMed2002

Has Medicaid managed care affected beneficiary access and use?

This paper uses data from the 1997 National Survey of America's Families to examine the effects of the various forms of mandatory Medicaid managed care on access and use among beneficiaries not receiving Supplemental Security Income or Medicare benefits. The results show that mandatory health maintenance organization (HMO) programs have had a positive impact on both children and adults, particularly when compared to Medicaid fee-for-service plans. We observed less dependence on emergency rooms as a usual source of care, a greater probability of visiting a doctor and, for children, greater use of preventive care. In contrast, mandatory primary care case management plans (PCCM) provided some benefits to children, but appeared to have very little impact on adult Medicaid beneficiaries. Mandatory programs that use both HMOs and PCCM produced mixed results. With the exception of mandatory HMO programs, discrepancies in access and use continue to exist between Medicaid managed care enrollees and low-income privately insured people.

Adult↗
PubMed1998

Characterizing psychiatry with findings from the 1996 National Survey of Psychiatric Practice.

OBJECTIVE: The authors' goal was to characterize psychiatric practice by reporting findings from the 1996 National Survey of Psychiatric Practice. METHODS: A random sample of 1,481 APA members was selected to participate in the study; 1,375 APA members were determined to be eligible for study participation. The authors report data from 970 respondents (70.5% response rate) and compare them with data from previous surveys of psychiatrists. RESULTS: Twenty-five percent of the participating psychiatrists were women, compared with 19% in a 1988-1989 survey. Since 1988-1989, the proportion of psychiatrists 39 years old or younger has decreased and the proportion of those 55 years old or older has increased. In 1996, psychiatrists saw, on average, 35.4 unduplicated patients and worked an average of 46.4 hours in a typical week. Patients with mood disorders as their primary diagnoses accounted for the greatest proportion of psychiatrists' caseloads, followed by patients with anxiety disorders, then those with schizophrenia and other psychotic disorders. Public sources of payment and uncompensated care were the main sources of payment for psychiatrists services for 41.7% of patients. The primary payment mechanism for psychiatrists' patient care services was fee-for-service, accounting for 52.5% of psychiatrists' income from direct patient care. Twenty-nine percent of psychiatric patients received care through some form of managed care system, and 41.6% received treatment through a nonmanaged public or private health plan. CONCLUSIONS: As psychiatry moves into the next century, findings from the National Survey of Psychiatric Practice will form a baseline for monitoring changes and trends in the delivery and financing of mental health services.

Adolescent↗
PubMed1986

Family physicians and the future of fee-for-service payment plans.

The mechanisms by which health care providers in the United States are reimbursed for their services are undergoing dynamic and rapid changes. Traditional fee-for-service payment schemes as the predominant reimbursement methods are declining and are being supplanted by a plethora of different schemes that incorporate prepayment as the mode of compensation for service. A number of trends over the past decade predict that this transference to prepayment will continue in the future and will have a profound impact on the future practice of family medicine. It is important for family medicine educators and practicing family physicians to understand these market forces and trends so they will be better able to alter their training programs and future practices to meet future needs.

Capitation Fee↗
PubMed2004

The costs of decedents in the Medicare program: implications for payments to Medicare + Choice plans.

OBJECTIVE: To discuss and quantify the incentives that Medicare managed care plans have to avoid (through selective enrollment or disenrollment) people who are at risk for very high costs, focusing on Medicare beneficiaries in the last year of life-a group that accounts for more than one-quarter of Medicare's annual expenditures. DATA SOURCE: Medicare administrative claims for 1994 and 1995. STUDY DESIGN: We calculated the payment a plan would have received under three risk-adjustment systems for each beneficiary in our 1995 sample based on his or her age, gender, county of residence, original reason for Medicare entitlement, and principal inpatient diagnoses received during any hospital stays in 1994. We compared these amounts to the actual costs incurred by those beneficiaries. We then looked for clinical categories that were predictive of costs, including costs in a beneficiary's last year of life, not accounted for by the risk adjusters. DATA EXTRACTION METHODS: The analyses were conducted using claims for a 5 percent random sample of Medicare beneficiaries who died in 1995 and a matched group of survivors. PRINCIPAL FINDINGS: Medicare is currently implementing the Principal Inpatient Diagnostic Cost Groups (PIP-DCG) risk adjustment payment system to address the problem of risk selection in the Medicare+Choice program. We quantify the strong financial disincentives to enroll terminally ill beneficiaries that plans still have under this risk adjustment system. We also show that up to one-third of the selection observed between Medicare HMOs and the traditional fee-for-service system could be due to differential enrollment of decedents. A risk adjustment system that incorporated more of the available diagnostic information would attenuate this disincentive; however, plans could still use clinical information (not included in the risk adjustment scheme) to identify beneficiaries whose expected costs exceed expected payments. CONCLUSIONS: More disaggregated prospective risk adjustment methods and alternative payment systems that compensate plans for delivering care to certain classes of patients should be considered to ensure access to high-quality managed care for all beneficiaries.

Actuarial Analysis↗
PubMed2005

Estimating direct and indirect costs of premenstrual syndrome.

OBJECTIVE: To quantify the economic impact of premenstrual syndrome (PMS) on the employer. METHODS: Data were collected from 374 women aged 18-45 with regular menses. Direct costs were quantified using administrative claims of these patients and the Medicare Fee Schedule. Indirect costs were quantified by both self-reported days of work missed and lost productivity at work. Regression analyses were used to develop a model to project PMS-related direct and indirect costs. RESULTS: A total of 29.6% (n = 111) of the participants were diagnosed with PMS. A PMS diagnosis was associated with an average annual increase of $59 in direct costs (P < 0.026) and $4333 in indirect costs per patient (P < 0.0001) compared with patients without PMS. CONCLUSIONS: A PMS diagnosis correlated with a modest increase in direct medical costs and a large increase in indirect costs.

Absenteeism↗