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PubMed1990

Health maintenance organization environments in the 1980s and beyond.

Throughout the past decade, health maintenance organizations (HMOs) were buffeted by dramatic regulatory and competitive changes. In this article, literature of the 1980s is reviewed to update our knowledge on the HMO industry and to suggest future research. The influence of intensified competition on these organizations and the determinants of market entry, expansion, and exit are examined. These organizations are now beginning to require copayments and deductibles and to offer point-of-service choice, while indemnity plans are developing sophisticated utilization management techniques. Given these significant structural changes, past distinctions among HMO, preferred provider organization and fee-for-service medicine must be replaced with a distinction between degree of provider choice and level of benefits.

Economic Competition↗
PubMed1992

Employer-sponsored health insurance in 1991.

Since 1987 the Health Insurance Association of America (HIAA) has documented features of employer-sponsored group health insurance through detailed surveys of over 3,000 U.S. firms. The 1991 employer survey reveals several noteworthy developments. The percentage of small firms (100 employees and under) that offer health insurance to their employees has declined since 1989. With a significant increase in health maintenance organization (HMO) market share, more than half (54 percent) of employees in employer-sponsored plans are now covered by managed care plans. Premiums increased 14 percent in 1991, showing identical increases for conventional, HMO, and preferred provider organization (PPO) plans. The percentage of employees in self-insured health plans decreased from 45 percent in 1990 to 40 percent in 1991.

Cost Control↗
PubMed2004

Tales from the new frontier: pioneers' experiences with consumer-driven health care.

OBJECTIVE: To conduct site visits to study the early experiences of firms offering consumer-driven health care (CDHC) plans to their employees and firms that provide CDHC products. DATA SOURCES/STUDY SETTING: A convenience sample of three firms offering CDHC products to their employees, one of which is also a large insurer, and one firm offering an early CDHC product to employers. STUDY DESIGN: We conducted onsite interviews of four companies during the spring and summer of 2003. These four cases were not selected randomly. We contacted organizations that already had a consumer-driven plan in place by January 2002 so as to provide a complete year's worth of experience with CDHC. PRINCIPAL FINDINGS: The experience of the companies we visited indicated that favorable selection tends to result when a CDHC plan is introduced alongside traditional preferred provider organization (PPO) and health maintenance organization (HMO) plan offerings. Two sites demonstrated substantial cost-savings. Our case studies also indicate that the more mundane aspects of health care benefits are still crucial under CDHC. The size of the provider network accessible through the CDHC plan was critical, as was the role of premium contributions in the benefit design. Also, companies highlighted the importance of educating employees about new CDHC products: employees who understood the product were more likely to enroll. CONCLUSIONS: Our site visits suggest the peril (risk selection) and the promise (cost savings) of CDHC. At this point there is still far more that we do not know about CDHC than we do know. Little is known about the extent to which CDHC changes people's behavior, the extent to which quality of care is affected by CDHC, and whether web-based information and tools actually make patients become better consumers.

Consumer Behavior↗
PubMedDate not supplied

Medicare disadvantaged and the search for the elusive 'level playing field'.

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) raised payment levels for established Medicare Advantage (private) local plans and would-be regional preferred provider organizations (PPOs). Even though plans on average receive about 108 percent of what would have been spent for the same beneficiaries in traditional Medicare, the Centers for Medicare and Medicaid Services (CMS) added another 2.3 percent in 2004 and 4.0 percent in 2005 in its implementation of risk-adjusted payments. Although MMA gives a clear preference to private plans to start a fundamental restructuring of Medicare, the question remains whether Congress will maintain overpayments to private plans when faced with the pressure to reduce budget deficits.

Centers for Medicare and Medicaid Services, U.S.↗
PubMed1986

Understanding antitrust: focus on the relevant market.

The increase in the past five years of antitrust cases involving the healthcare industry has left few healthcare organizations untouched. Even if a provider has not been part of actual antitrust litigation or involved in a government investigation, the courts' antitrust decisions of the past several years have molded and will continue to affect competitive strategies and operational plans at all levels of the industry. Antitrust is becoming a necessary, if sometimes distasteful, fact of competitive life. In this first of a five-part series of articles on antitrust issues in health care, a framework for understanding the antitrust laws and the increasing number of antitrust suits brought by, against, and between providers is developed. Further articles will feature an expanded discussion of several topics including: antitrust guidelines on medical staff privileges for hospital decision makers; physician-hospital competition and antitrust considerations; provider antitrust suits against third-party payers; and a discussion of whether the antitrust risks in forming and operating preferred provider organizations has been overcome.

Economic Competition↗
PubMed1987

Four systems develop regionally organized HMO.

Plans to establish HealthPlus HMO, Inc.--a joint venture of the Sisters of St. Francis Health Services, Ancilla Systems, Daughters of Charity Health Systems-East Central, and Holy Cross Health System--began in 1984 with a feasibility study to assess the potential for an HMO in Indiana. Goals set by the four systems included protecting and expanding hospitals' market share and physicians' patient bases; establishing local HMO ownership; and providing health education, preventive care, and comprehensive treatment at affordable costs. During the organizational phase, participants created a 12-member board of directors with three representatives from each system, selected the name HealthPlus, and contracted with a management company to direct the HMO's planning and development phases. HealthPlus adopted a regional organizational structure, which allows financial risk to be shared among three regions, and a primary care physician model for the delivery of services. As of January 1987, the joint venture had 16 participating hospitals, 345 primary care physicians, more than 1,000 consulting specialists, and a membership of 13,100. HealthPlus now offers a triple-option product in partnership with a preferred provider organization and an insurance carrier and has developed non-health-related products with the insurance carrier as well.

Catholicism↗
PubMed2001

Implementing evidence-based medicine: the role of market pressures, compensation incentives, and culture in physician organizations.

OBJECTIVES: To assess the extent to which market pressures, compensation incentives, and physician medical group culture are associated with the use of evidence-based medicine practices in physician organizations. METHODS: Cross-sectional exploratory study of 56 medical groups affiliated with 15 integrated health systems from across the United States, involving 1,797 physician respondents. Larger medical groups and multispecialty groups were overrepresented compared with the United States as a whole. Data are from two sources: (1) surveys of physicians assessing the culture of the medical groups in which they work, and (2) surveys of medical directors and other managerial key informants pertaining to care management practices, compensation methods, and the management and governance of the medical groups. Physician-level data were aggregated to the group level to attain measures of group culture and then merged with the data regarding care management, incentives, and management and governance. Stepwise multiple regression was used to examine the study hypotheses. RESULTS: As hypothesized, the number of different types of compensation incentives used (cost containment, productivity, quality) was positively associated with the comprehensiveness of care management practices. The degree of salary control (ie, market-based salary grades and ranges versus the use of bookings or fees and individual negotiation) was also positively associated with the deployment of care management practices. As hypothesized, market pressures in the form of percentages of health maintenance and preferred provider organization patients seen were generally positively associated with the use of care management practices. Organizational culture had no association except that a patient-centered culture in combination with a greater number of different types of compensation incentives used was positively associated with greater use of care management practices. CONCLUSIONS: Both compensation incentives and managed care market pressures were significantly associated with the use of evidence-based care management practices. The lack of association for culture may be due to the relatively amorphous nature of most physician organizations at this point.

Cross-Sectional Studies↗
PubMed1994

Whither ophthalmology in the era of health care system reform?

Ophthalmology as a specialty finds itself at the center of change in health care delivery. During the Bush Administration, concerns for the profession mounted as the administration constrained ophthalmic surgical fees, limited surgical assistants, and experimented with cataract preferred provider organizations. Now, the Clinton Administration's proposed Health Security Act magnifies such concerns. This article discusses some of the specific worries that trouble ophthalmologists within the context of health system reform.

Health Care Reform↗
PubMed1985

The effect of cost containment on the practice of cardiology: predictions.

When health care cost containment is tied to unit pricing, the system may become price-driven rather than care-driven. Although the incentives engendered by unit pricing may not necessarily result in practices detrimental to the young or the patient with relatively pure disease, the potential for adverse effects on the elderly, the poor and the chronically ill is real. Hospitals will soon emphasize quick turnover, efficiency and intensive care. Diagnostic evaluations and chronic disease care will be moved out of hospitals into physician owned-and-operated facilities and out-of-hospital settings, respectively. The health care system will fractionate, and quality control will require restructuring to achieve the present level of quality assurance. Cardiologists, as well as other physicians, will need to alter their teaching style and teaching locations. Better methods for predicting outcomes will need to be developed; we will no longer have the safety net of following a patient closely and altering management plans according to the patient's response. Cost containment may occur under diagnosis related groups, preferred provider organizations, health maintenance organizations and other prepaid or "capped" systems. There are, however, many issues relative to cost versus quality that need to be resolved if severe detrimental effects on care are to be avoided.

Cardiology↗
PubMed2001

Risk selection in the Massachusetts State employee health insurance program.

Using the Diagnostic Cost Group (DCG) model developed from a national sample, we examine biased selection among one fee-for-service (FFS) plan, one preferred provider organization, and several health maintenance organizations (HMOs) in Massachusetts. The proportions of enrollees in low-risk groups are higher in the HMO plans and lower in the FFS plan. The average age in the FFS plan is 9 years greater than that in the HMO plans. Actual premiums are not consistent with risk levels among HMO plans, resulting in gains in some HMO plans and losses in others as high as 20% compared to expected expenses as computed by the DCG model.

Costs and Cost Analysis↗
PubMed1990

Is solo practice really dead?

For years, the demise of solo practice has been predicted as a consequence of the corporatization of health care, the rise of managed care programs, and the creation of preferred provider organizations (PPOs). The predictors of the demise are leaders in the health maintenance organization (HMO) and PPO movement and therefore have much to gain if solo practice dries up. A survey of a random sample of licensed psychologists in New Jersey was conducted to determine the current state of private practice. A 58% return of the anonymous questionnaire revealed that 87% were in solo practice; 90% were not members of any PPO; 92% received either no referrals or less than 5% from HMOs; and 92% indicated that their referral rates and practices have either stayed the same or increased in the past three years. Clearly the predictions as far as New Jersey goes are wrong! The findings are discussed in terms of economics, humanistic concerns, and political concerns.

Cost-Benefit Analysis↗
PubMed1997

At the crossroads: options for financing college health services in the 21st century.

At a time when increasing numbers of uninsured and underinsured students are attending college, many college health programs face formidable challenges in their efforts to sustain services. As financial pressures increase, college health programs must revisit their funding options, including (1) maintaining the current level and source of funding but requiring additional out-of-pocket fees for certain services from students, (2) establishing their own insurance plans, (3) qualifying as a preferred provider organization, or (4) some combination of the above. Whatever strategies are selected and pursued, college health programs must continue to try to provide quality services at a reasonable cost while maintaining an emphasis on prevention, health education, and the provision of services most needed by the college population, including mental health and substance abuse services.

Adolescent↗
PubMed1995

Private payers of health care in Brazil: characteristics, costs and coverage.

The private sector is the predominant provider of health care in Brazil, particularly for inpatient services, and financing is a mix of public (through a prospective reimbursement system) and private. Roughly a quarter of the population has private insurance coverage, reflecting rapid growth in the past decade fuelled by the crisis in the public reimbursement system and the perceived deterioration of publicly provided care. Four major forms of insurance exist: (1) prepaid group practice; (2) medical cooperatives, physician owned and operated preferred provider organizations; (3) company health plans where employers ensure employee access to services under various types of arrangements from direct provision to purchasing of private services; and (4) health indemnity insurance. Each type of plan includes a wide variety of subplans from basic individual/family coverage to comprehensive executive coverage. The paper discusses the characteristics, costs and utilization patterns of all types of privately financed care, as well as the major problems associated with private financing: the limited package of benefits and low payout ceilings, inadequate consumer information and virtually no regulation.

Brazil↗
PubMedDate not supplied

Factors influencing health information system adoption in American hospitals.

OBJECTIVES: To study the number of health information systems (HISs), applicable to administrative, clinical, and executive decision support functionalities, adopted by acute care hospitals and to examine how hospital market, organizational, and financial factors influence HIS adoption. METHODS: A cross-sectional analysis was performed with 1441 hospitals selected from metropolitan statistical areas in the United States. Multiple data sources were merged. Six hypotheses were empirically tested by multiple regression analysis. RESULTS: HIS adoption was influenced by the hospital market, organizational, and financial factors. Larger, system-affiliated, and for-profit hospitals with more preferred provider organization contracts are more likely to adopt managerial information systems than their counterparts. Operating revenue is positively associated with HIS adoption. CONCLUSION: The study concludes that hospital organizational and financial factors influence on hospitals' strategic adoption of clinical, administrative, and managerial information systems.

Cross-Sectional Studies↗
PubMed1995

A comprehensive initiative to manage the incidence and cost of occupational injury and illness. Report of an outcomes analysis.

A comprehensive initiative utilizing an in-house preferred provider organization, medical case management, and application of ergonomic techniques was implemented in an effort to control the incidence and cost of workplace injuries. The program was evaluated utilizing OSHA 200 Logs to compare the incidence and lost time due to compensable injury and illnesses before and after beginning the program. After the introduction, there was a significant decrease in injuries and illnesses (53/1000 vs 27/1000, P<.01) and average days lost per event (10.4 vs 6.6 days, P<.01). A significant increase in restricted-duty days (.2 vs 1.5 days, P<.01) and an 18% reduction in medical and indemnity costs of the institution's workers' compensation expenditures were observed. This study demonstrates the initial effectiveness of an aggressive ergonomic and managed care approach to reducing the incidence, severity, and cost of occupationally related injury and illness. It also highlights the effectiveness of an outcomes analysis approach, using lost time as an end point, to measure the effectiveness of preventive and management strategies in the workers' compensation setting.

Accidents, Occupational↗
PubMed1998

Comparison of workers' compensation costs for two cohorts of injured workers before and after the introduction of managed care.

A comprehensive safety and managed care initiative was instituted in 1991 at a large self-insured medical center in an effort to reduce workers' compensation costs. It features an on-site case management team, a preferred provider organization, and safety engineering efforts and ergonomic controls used proactively to aggressively identify and abate workplace hazards. Two worker populations were followed up longitudinally for three years before and after the initiative. Costs incurred by each cohort were compared. A 50% reduction in total expenditures was seen in the managed care cohort. The hospital component of the system saw a decrease in compensation of 62% for temporary total disability and 38% for permanent partial disability. Medical expenditures decreased 50%. Dramatic reductions in costs are achievable, without compromising quality of care, when managed care principles and safety efforts are emphasized.

Accidents, Occupational↗
PubMed1998

The effect of managed care on surgical rates among individuals filing for workers' compensation.

This work evaluates the imposition of managed care techniques on the rate of claims and surgeries utilizing a pre- versus post-program analysis. The purpose was to ascertain whether managed care techniques--specifically, an ergonomic program, medical treatment guide-line, nurse case management, and utilization of a preferred provider organization consisting of academic physicians--would reduce the rate of the claims and surgery in a population of predominantly health care and university workers. The claims frequency rate and surgical frequency rates per 1,000 employees and per 1,000 claims was significantly lower during the managed care period than during the year prior to the initiation of managed care. The distribution of surgical procedures, as well as the duration of disability in the years of injury, after the initiation of managed care (1993-1997) were different from those same parameters in the fiscal years prior to the initiation of managed care (1990-1992). The results suggest that even in the workers' compensation environment, where financial incentives encourage a higher claims and surgical frequency rate than do the fee-for-service or prepaid medical environments, managed care techniques can be successfully utilized. A unique feature of the study was the use of university-based physicians as a specific managed care technique to influence surgical rates.

Baltimore↗