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PubMed1991

Evaluating PPO performance using prior expenditure data.

Preferred provider organizations (PPOs) have grown dramatically since 1983, a growth that has been spurred by the hope that they will be able to moderate the rate of growth in health care costs. This remarkable growth has taken place despite the small number of empiric studies that have been published evaluating the effectiveness of PPOs in controlling costs. The experience in the first year of operation of a PPO established by an insurance company for the employees and the dependents of a large midwestern manufacturer is reported. It shows that substantial selection effects were observed, with PPO enrollees substantially more likely to be younger, have more and younger dependents, and to be non-bargaining-unit employees. Enrollees in the PPO also tended to have substantially lower expenditures in the prior year ($596 vs. $821). The effect of the PPO on expenditures was estimated in multivariate regression models controlling for demographic and prior expenditure differences. PPO enrollees were found to have increased their expenditures substantially (P less than 0.0001). Increased expenditures stemming from expansions in outpatient benefits and ineffective utilization management had swamped the effects of reductions in inpatient expenditures and of discounted fees.

Adult↗
PubMed2003

Has the increase in HMO enrollment within the Medicaid population changed the pattern of health service use and expenditures?

OBJECTIVE: To describe changes in health services use and expenditures within the Medicaid population between 1987 and 1997 and to estimate the extent to which the increase in Health Maintenance Organization (HMO) enrollment has influenced these changes. SUBJECTS: Individuals under the age of 65 years in the 1987 National Medical Expenditure Survey and the 1997 Medical Expenditure Panel Survey enrolled in Medicaid the entire year. RESEARCH DESIGN: Using bivariate and multivariate techniques, we compared several measures of health services use and expenditures across three groups: (1) individuals enrolled in Medicaid for all of 1987; (2) individuals enrolled in Medicaid for all of 1997 but never enrolled in an HMO; and (3) individuals enrolled in Medicaid for all of 1997 and enrolled in an HMO for at least part of the year. RESULTS: Medicaid enrollees in 1997 differ little from Medicaid recipients in 1987 with respect to use and expenditures. Modest but statistically significant differences emerge, however, when a distinction is made between HMO enrollees and non-HMO enrollees in 1997. Specifically, 1997 Medicaid HMO enrollees have significantly fewer hospital visits than 1987 Medicaid enrollees and spend significantly less on health services than 1997 non-HMO enrollees. CONCLUSIONS: Our findings suggest that the increase in HMO enrollment may have held down use and expenditures to rates modestly lower than what would have been expected had HMO enrollment not increased.

Adolescent↗
PubMed2006

The utility of extended longitudinal profiles in predicting future health care expenditures.

BACKGROUND: Health care spending is highly concentrated. Prediction models that accurately identify the characteristics of individuals most likely to incur high levels of health expenditures in a subsequent year are important analytical and statistical tools. OBJECTIVES: This study examined the capacity of alternative models to predict the likelihood of incurring high levels of medical expenditures in a subsequent year. This effort also evaluated the utility of an additional year of longitudinal information. SUBJECTS: A nationally representative sample from the Medical Expenditure Panel Survey (MEPS). METHODS: The MEPS longitudinal data are used to examine the persistence of high expenditures during a 2-year period. With the unique linkage of the MEPS to the National Health Interview Survey, the utility of an additional year of data also was examined. Resultant models were evaluated in terms of sensitivity, specificity, and predictive capacity. RESULTS: Only modest marginal gains in discrimination capacity were realized from the use of extended longitudinal profiles from the National Health Interview Survey, relative to information on prior year characteristics. CONCLUSIONS: Our results highlight the continuing concentration of health care expenditures during the period 1996 to 2002 and reveal some attenuation in magnitude in the tail of this distribution over time. Further, our results provide evidence of the utility of probabilistic models as prediction tools to identify individuals likely to incur high levels of expenditures in future years. Predictive capacity does not suffer when restricted to a single year of prior information.

Adolescent↗
PubMed2002

An approach to forecasting health expenditures, with application to the U.S. Medicare system.

OBJECTIVE: To quantify uncertainty in forecasts of health expenditures. STUDY DESIGN: Stochastic time series models are estimated for historical variations in fertility, mortality, and health spending per capita in the United States, and used to generate stochastic simulations of the growth of Medicare expenditures. Individual health spending is modeled to depend on the number of years until death. DATA SOURCES/STUDY SETTING: A simple accounting model is developed for forecasting health expenditures, using the U.S. Medicare system as an example. PRINCIPAL FINDINGS: Medicare expenditures are projected to rise from 2.2 percent of GDP (gross domestic product) to about 8 percent of GDP by 2075. This increase is due in equal measure to increasing health spending per beneficiary and to population aging. The traditional projection method constructs high, medium, and low scenarios to assess uncertainty, an approach that has many problems. Using stochastic forecasting, we find a 95 percent probability that Medicare spending in 2075 will fall between 4 percent and 18 percent of GDP, indicating a wide band of uncertainty. Although there is substantial uncertainty about future mortality decline, it contributed little to uncertainty about future Medicare spending, since lower mortality both raises the number of elderly, tending to raise spending, and is associated with improved health of the elderly, tending to reduce spending. Uncertainty about fertility, by contrast, leads to great uncertainty about the future size of the labor force, and therefore adds importantly to uncertainty about the health-share of GDP. In the shorter term, the major source of uncertainty is health spending per capita. CONCLUSIONS: History is a valuable guide for quantifying our uncertainty about future health expenditures. The probabilistic model we present has several advantages over the high-low scenario approach to forecasting. It indicates great uncertainty about future Medicare expenditures relative to GDP.

Accounting↗
PubMed2006

What drug policies cost: estimating government drug policy expenditures.

AIMS: Many nations now spend large sums of government money to reduce drug problems. The size and composition of public expenditures aimed at reducing drug use and related problems (a drug budget) is a useful partial description of a nation's drug policy. This paper examines whether it is possible to estimate these sums in a consistent manner across nations. METHODS: Past drug budget efforts in the United Kingdom and United States were reviewed. A new methodology was offered for estimation and used for estimates of expenditures in the Netherlands and Sweden. Using this methodology, expenditures were compared. FINDINGS: In both the Netherlands and Sweden, with very different official drug policy rhetoric, enforcement expenditures dominate the total; prevention expenditures are a tiny share. The baseline estimates indicate that the Netherlands, by a variety of metrics (e.g. Euros per capita, Euros per problematic user), spends more on drug control, even enforcement, than Sweden but the range of estimates is such that this cannot be inferred with confidence. CONCLUSION: Estimating total government expenditures on reducing drug use and related problems is feasible and can yield useful policy insights.

Budgets↗
PubMed2004

Evaluation of the effect of a consumer-driven health plan on medical care expenditures and utilization.

OBJECTIVE: To compare medical care costs and utilization in a consumer-driven health plan (CDHP) to other health insurance plans. STUDY DESIGN: We examine claims and employee demographic data from one large employer that adopted a CDHP in 2001. A quasi-experimental pre-post design is used to assign employees to three cohorts: (1) enrolled in a health maintenance organization (HMO) from 2000 to 2002, (2) enrolled in a preferred provider organization (PPO) from 2000 to 2002, or (3) enrolled in a CDHP in 2001 and 2002, after previously enrolling in either an HMO or PPO in 2000. Using this approach we estimate a difference-in-difference regression model for expenditure and utilization measures to identify the impact of CDHP. PRINCIPAL FINDINGS: By 2002, the CDHP cohort experienced lower total expenditures than the PPO cohort but higher expenditures than the HMO cohort. Physician visits and pharmaceutical use and costs were lower in the CDHP cohort compared to the other groups. Hospital costs and admission rates for CDHP enrollees, as well as total physician expenditures, were significantly higher than for enrollees in the HMO and PPO plans. CONCLUSIONS: An early evaluation of CDHP expenditures and utilization reveals that the new health plan is a viable alternative to existing health plan designs. Enrollees in the CDHP have lower total expenditures than PPO enrollees, but higher utilization of resource-intensive hospital admissions after an initially favorable selection.

Choice Behavior↗
PubMed1998

Alzheimer's disease under managed care: implications from Medicare utilization and expenditure patterns.

BACKGROUND: Little information is available about the costs, utilization patterns, and the delivery system used by Medicare beneficiaries with chronic illnesses. This information will become increasingly important as more Medicare beneficiaries with chronic illness enroll in managed care plans and delivery systems must be developed to meet their needs. OBJECTIVES: To analyze health care expenditures and utilization patterns for Medicare beneficiaries with dementia of the Alzheimer type (DAT) and compare them with those of all Medicare beneficiaries. DESIGN: A cross-sectional study. SETTING: Practices providing services to Medicare beneficiaries in the U.S. SUBJECTS: Aged Medicare beneficiaries with DAT in fiscal year (FY) 1992. MEASUREMENTS: Medical expenditures and utilization patterns. RESULTS: In FY 1992, per capita Medicare expenditures for 9323 patients with DAT were $6208, or 1.9 times the per capita expenditure for all 1,221,615 beneficiaries in our sample. Inpatient care accounted for 62.7% of expenditures. Internal medicine was the specialty identified with the largest proportion of expenditures, but no single specialty accounted for the majority of care. Payments increased with comorbid conditions such as heart failure, chronic pulmonary diseases, and cerebrovascular disease. CONCLUSION: Current Medicare capitation payments to managed care plans may not meet the higher expected annual costs of care for beneficiaries with DAT. In turn, physicians (or physician groups) who accept capitation for Medicare beneficiaries with DAT should also consider how capitation rates are established by managed care plans and should learn ways to reduce financial risk.

Aged↗
PubMed2004

The relationship between a dementia diagnosis, chronic illness, medicare expenditures, and hospital use.

OBJECTIVES: To determine whether dementia increases medical expenditures, the probability of hospitalization, and potentially preventable hospitalization, controlling for variables including age and comorbidity. DESIGN: Cross-sectional analysis of 1 year of claims data comparing usage by patients with claims for dementia with usage by those without dementia. SETTING: A nationally representative 5% random sample of Medicare beneficiaries in 1999. PARTICIPANTS: Medicare beneficiaries aged 65 and older with fee-for-service Medicare Parts A and B coverage for 1999 (N=1,238,895; dementia patients n=103,512). MEASUREMENTS: Per capita expenditures, rate of all-cause hospitalization, rate of preventable hospitalization as defined using ambulatory-care sensitive condition (ACSC) admissions, and dementia identified using International Classification of Diseases, 9th Edition, codes 290, 294, and 331. RESULTS: Prevalence of dementia was 8.3%. In a model of expenditures in those who survived the year adjusting for age, sex, race, and comorbidity, dementia was associated with an incremental cost of 6,927 US dollars, or 3.3 times greater total expenditures than in nondementia patients (P<.001), with higher expenditures for each specific type of Medicare service. Hospitalization accounted for 54% of adjusted costs. The adjusted odds of hospitalization associated with dementia were 3.68 (95% confidence interval (CI)=3.62-3.73) and adjusted odds of ACSC hospitalization were 2.40 (95% CI=2.35-2.46). In those who died, the associations were positive but of smaller magnitude. CONCLUSION: In a nationally representative sample, higher Medicare expenditures associated with a diagnosis of dementia are in large part due to increased hospitalization. Further study is needed into the factors associated with high rates of hospitalization in dementia patients including aspects of ambulatory management that may be improved.

Aged↗
PubMed2005

Mortality risk and prospective medicare expenditures for persons with dementia.

OBJECTIVES: To determine whether an index that stratifies dementia patients into high- and low-mortality-risk groups can be effective in prospectively identifying persons with high and low expenditures. DESIGN: A mortality risk index developed for persons with dementia was used to stratify persons into groups at high and low risk of 12-month mortality. Expenditures were compiled from Medicare claims for 12 months after the predicted mortality classification. SETTING: The Medicare Alzheimer's Disease Demonstration Evaluation (MADDE) operated in eight sites across the United States. Subjects were living in a community setting at time of their mortality risk classification. PARTICIPANTS: Participants (N=2,255) were volunteer enrollees in MADDE; all had a diagnosis of irreversible dementia and two or more limitations in activities of daily living (ADLs). MEASUREMENTS: Outcomes were Medicare Part A expenditures. Risk factors included age, sex, ADL limitations, selected chronic conditions, prior year hospital stays, and relationship to caregiver. RESULTS: Patients predicted as at high risk of death had higher average monthly Medicare expenditures than those predicted to be at low risk of death. At the 50th sensitivity percentile for mortality, differences in average expenditures exceeded 700 dollars per month. CONCLUSION: It is not known whether it is possible to achieve reductions in expenditures for patients with advanced dementia at high risk of mortality, but study findings support consideration of an advanced illness model that would attempt to generate acute services savings and use these savings for palliative services that might improve patients' and caregivers' quality of life.

Activities of Daily Living↗
PubMed2003

Environmental influences on healthcare expenditures: an exploratory analysis from Ontario, Canada.

STUDY OBJECTIVE: This paper explores the relation between healthcare expenditures (HCEs) and environmental variables in Ontario, Canada. DESIGN: The authors used a sequential two stage regression model to control for variables that may influence HCEs and for the possibility of endogenous relations. The analysis relies on cross sectional ecological data from the 49 counties of Ontario. MAIN RESULTS: The results show that, after control for other variables that may influence health expenditures, both total toxic pollution output and per capita municipal environmental expenditures have significant associations with health expenditures. Counties with higher pollution output tend to have higher per capita HCEs, while those that spend more on defending environmental quality have lower expenditures on health care. CONCLUSIONS: The implications of our findings are twofold. Firstly, sound investments in public health and environmental protection have external benefits in the form of reduced HCEs. Combined with the other benefits such as recreational values, investments in environmental protection probably yield net social benefits. Secondly, health policy that excludes consideration of environmental quality may eventually result in increased expenditures. These results suggest a need to broaden the cost containment debate to ensure environmental determinants of health receive attention as potential complements to conventional cost control policies.

Air Pollution↗
PubMed1978

Expenditures for health care of children and youth in the United States.

This paper describes the expenditures for health care in the United States in fiscal year 1975. Proportionately, health expenditures for children and youth are lower than for other age groups. The average per capita expenditure for children and youth was $212.00. For children and youth public health care expenditures represented 24 per cent of the total; from public funds, Medicaid and the Department of Defense were the largest two programs; from the public sector, the federal government provided two thirds of the total health expenditures. For children and youth, two thirds of all health expenditures were for hospital care and physicians' services.

Adolescent↗
PubMed2000

Does general practitioner gatekeeping curb health care expenditure?

OBJECTIVES: It is generally assumed that health care systems in which specialist and hospital care is only accessible after referral by a general practitioner (GP) have lower total health care costs. In this study, the following questions were addressed: do health care systems with GPs acting as gatekeepers to specialized care have lower health care expenditure than those with directly accessible specialist care? Does health care expenditure increase more rapidly in countries without a referral system than in those with the GP acting as a gatekeeper? METHODS: Multiple regression analyses on total and ambulatory health care expenditure in 18 OECD countries. RESULTS: Analyses showed only one statistically significant effect (P < 0.05) in countries with gatekeeping GPs: ambulatory care expenditure has increased more slowly than in non-gatekeeping systems. No significant effects of gatekeeping were found on the level of ambulatory care costs, or on the level or growth of total health care expenditure. As in earlier studies, the most important factor influencing aggregate health care costs and their growth is gross national product (GNP), followed by the share of public funding. Relationships that exist at a micro level (such as lower costs with a gatekeeping primary care doctor) did not show up in aggregate data at a macro level. CONCLUSIONS: Gatekeeping systems appear to be better able to contain ambulatory care expenditure. More research is necessary to understand micro level mechanisms and to distinguish the effects of gatekeeping from other structural aspects of health care systems.

Cost Control↗
PubMed1997

Medical expenditures for the treatment of osteoporotic fractures in the United States in 1995: report from the National Osteoporosis Foundation.

Osteoporotic fractures are a significant public health problem, resulting in substantial morbidity and mortality. Previous estimates of the economic burden of osteoporosis, however, have not fully accounted for the costs associated with treatment of nonhip fractures, minority populations, or men. Accordingly, the 1995 total direct medical expenditures for the treatment of osteoporotic fractures were estimated for all persons aged 45 years or older in the United States by age group, sex, race, type of fracture, and site of service (inpatient hospital, nursing home, and outpatient). Osteoporosis attribution probabilities were used to estimate the proportion of health service utilization and expenditures for fractures that resulted from osteoporosis. Health care expenditures attributable to osteoporotic fractures in 1995 were estimated at $13.8 billion, of which $10.3 billion (75.1%) was for the treatment of white women, $2.5 billion (18.4%) for white men, $0.7 billion (5.3%) for nonwhite women, and $0.2 billion (1.3%) for nonwhite men. Although the majority of U.S. health care expenditures for the treatment of osteoporotic fractures were for white women, one-fourth of the total was borne by other population subgroups. By site-of-service, $8.6 billion (62.4%) was spent for inpatient care, $3.9 billion (28.2%) for nursing home care, and $1.3 billion (9.4%) for outpatient services. Importantly, fractures at skeletal sites other than the hip accounted for 36.9% of the total attributed health care expenditures nationally. The contribution of nonhip fractures to the substantial morbidity and expenditures associated with osteoporosis has been underestimated by previous researchers.

Aged↗
PubMedDate not supplied

The concentration of health care expenditures, revisited.

In two previous publications, we described the distribution of health care expenditures among the civilian, noninstitutionalized U.S. population, specifically in terms of the share of aggregate expenditures accounted for by the top spenders in the distribution. Our focus revealed considerably skewed distribution, with a relatively small proportion of the population accounting for a large share of expenditures. In this paper we update our previous tabulations (last computed using data more than a decade old) with new data from the 1996 Medical Expenditure Panel Survey (MEPS). Our findings show that the skewed concentration of health care expenditures has remained very stable; 5 percent of the population accounts for the majority of health expenditures.

Age Factors↗
PubMed2002

Private dental coverage: who has it and how does it influence dental visits and expenditures?

BACKGROUND: Dental insurance has had a significant impact on dentistry and dental care use. Dental insurance coverage may influence people's decisions to use dental care. During 1996, 42.9 percent of all dental expenditures were paid by private dental insurance. METHODS: The focus of this analysis is on private dental coverage, use and expenditures for the U.S. civilian community-based population during 1996. The authors provide national estimates for the population with private dental coverage, the population with a dental visit, mean number of dental visits per year and mean total expenditures for several socioeconomic and demographic categories during 1996, using Medical Expenditure Panel Survey, or MEPS, data. RESULTS: Poor and low-income people were less likely to have private dental coverage than were people with higher incomes. People without coverage at all income levels were less likely to report a dental visit than were people with coverage. When they controlled for coverage, the authors found that education at any income level did not appear to affect the likelihood of people's having multiple visits or higher expenditures. CONCLUSION: People with private coverage are more likely to visit a dentist, have a greater number of visits and have higher expenditures than are those without coverage. Private dental insurance coverage, however, is not the only determinant of dental care use. MEPS data also show that other factors play key roles. Comprehensive strategies designed to improve dental care use should keep each of these determinants in mind. PRACTICE IMPLICATIONS: While dentists may have a limited ability to influence people to seek care initially, they may be in a better position to influence the amount of care patients obtain, thereby helping make sure that patients receive the care that they need and want.

Adolescent↗
PubMed2002

The funding of dental services among U.S. children 2 to 17 years old: recent trends in expenditures and sources of funding.

BACKGROUND: This article is the first of two that focus on recent changes in the funding of dental services in the United States. METHODS: This study is based on analyses of data regarding dental expenditures among children 2 to 17 years of age from the 1987 National Medical Expenditure Survey and the 1996 Medical Expenditure Panel Survey. Both of these surveys were designed to produce national estimates of annual medical expenditures in the United States. RESULTS: Overall, real per capita dental expenditures among 2- to 17-year-old children who had had a dental visit fell from $578.05 in 1987 to $498.57 in 1996. Large increases per patient were reported for the poorest children, while decreases were reported for children from families with higher incomes. CONCLUSIONS: Much of the increase from 1987 to 1996 in dental expenditures among economically disadvantaged children who had had a dental visit was due to an increase in care provided by dentists that was not reimbursed. PRACTICE IMPLICATIONS: More needs to be done to increase the number of economically disadvantaged children who visit a dentist. All segments of society must cooperate to achieve this result.

Adolescent↗
PubMed2002

The funding of dental services among U.S. adults aged 18 years and older: recent trends in expenditures and sources of funding.

BACKGROUND: This article is the second in a series of two that focus on recent changes in the funding of dental services in the United States. METHODS: This study is based on the analyses of data regarding dental expenditures among adults aged 18 years and older from the 1987 National Medical Expenditure Survey and the 1996 Medical Expenditure Panel Survey. Both of these surveys were designed to produce national estimates of annual medical expenditures in the United States. RESULTS: Overall, real per-patient dental expenditures among adults aged 18 years and older who had had a dental visit fell from $529.93 in 1987 to $467.29 in 1996. CONCLUSIONS: Recent decreases in dental expenditures may be related to a shift from restorative to diagnostic and preventive services. PRACTICE IMPLICATIONS: In the future, dentists' gross revenues may grow more from an increase in the number of patients seen than from an increase in the average revenue per patient.

Adolescent↗
PubMedDate not supplied

New cardiovascular drugs: patterns of use and association with non-drug health expenditures.

The potential role of new drugs in reducing expenditures for non-drug health services has received considerable attention in recent policy debates. We estimate expenditure models to determine whether the use of newer drugs to treat cardiovascular conditions is associated with lower (or higher) non-drug expenditures for these conditions. We fail to substantiate the findings of previous research that newer drugs are associated with reductions in non-drug expenditures. We find, however, that increases in the number of drugs used, or the mix of drugs of different ages, are associated with increased non-drug expenditures and find that the number or mix of drugs used are important confounders in the estimated association between drug age and non-drug expenditures.

Adult↗