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Business costs include salary, benefits, self-employment tax, and business and office expenses. Salable time does not include holidays, sick or personal days, and vacations. According to fee-setting experts, most self-employed people engage in revenue-generating activities 50% to 75% of their working hours. Fair prices reflect the cost of your business or service, including all your overhead.
We began performing coronary artery bypass grafting for a large health maintenance organization (HMO) in 1974, as the sole provider of their cardiac surgery. The outcomes of our HMO group of patients were compared with those of our patients treated on a fee-for-service (FFS) basis. The HMO system entails preintervention and multidisciplinary screening conferences and is devoid of self-referral and personal financial incentives. Since 1985, the operative mortality for HMO patients has been consistently lower than for FFS patients. There were 8483 operations during this study period: 3168 (37%) were in the HMO group, with an overall operative mortality of 2.7%, and 5315 (63%) were in the FFS group, with an operative mortality of 4.6% (p=0.00002). This difference was investigated with univariate and multivariable analyses. Sixteen factors were found to univariately affect the risk of operative mortality; for five of these risk correlates there was a significant maldistribution between the HMO and FFS patients. Logistic regression was used to explore the influence of this imbalance in risk factors. The model found seven independent risk factors (left ventricular failure, emergency coronary bypass, redo bypass, nonuse of the internal thoracic artery, unstable angina, age, and diabetes) that significantly affected operative mortality. The FFS group variable closely approached independent risk significance at p=0.059. This multivariable model explained only one third of the observed differences in actual mortality between the HMO and FFS groups. The system-wide angioplasty/coronary bypass ratio, which could not be used in a patient-specific model, was 0.6 in the HMO system and 1.5 in the FFS group. Other factors related to the operating structure of a mature, large HMO may account for the remainder of the difference. The HMO referral system, through a powerful selection process, resulted in fewer emergencies, redo bypass operations, and catheterization complications that, in turn, yielded lower operative mortality than a noncoordinated FFS system of cardiovascular management.
The aim of this postal questionnaire study was to measure attitudes to cuts and increased fees in health care in various Finnish population groups. Four groups were identified; a population sample of 2000 subjects, aged 18-70 y; a random sample of 1500 medical doctors of working age; a random sample of 1000 nurses of working age; and a sample of 2200 politicians involved in health and social care administration, mostly at the municipal level (altogether 6700 subjects). The main questionnaire included, among other things, the following questions: (1) Which of 18 specified medical activities at the primary health care level could be cut without causing severe harm to the population? (2) For which of 13 specified medical activities should clients pay at least 50% of the real cost? All the groups indicated the greatest willingness to cut expenditure on health education, occupational health services, hygiene inspection, substance abuse care, rehabilitation services for war veterans, and family planning. All the groups were least willing to make cuts in home care for disabled and elderly people, maternity services and clinics for under-fives. Most respondents in all groups felt that the activities for which clients should pay at least 50% of the cost were visits to physicians, occupational health services and dental services, whereas clinics for under-five and home care for disabled and elderly persons should be kept free of charge. As a conclusion, primary health care and prevention of diseases for small children, mothers, the elderly and disabled persons, were prioritised by all the groups.
To determine whether health outcomes in a health maintenance organisation (HMO) differed from those in the fee-for-service (FFS) system, 1673 individuals ages 14 to 61 were randomly assigned to one HMO or to an FFS insurance plan in Seattle, Washington for 3 or 5 years. For non-poor individuals assigned to the HMO who were initially in good health there were no adverse effects. Health outcomes in the two systems of care differed for high and low income individuals who began the experiment with health problems. For the high income initially sick group, the HMO produced significant improvements in cholesterol levels and in general health ratings by comparison with free FFS care. The low income initially sick group assigned to the HMO reported significantly more bed-days per year due to poor health and more serious symptoms than those assigned free FFS care, and a greater risk of dying by comparison with pay FFS plans.
Taiwan's implementation of the 1997 Air Pollution Emissions Fees Program will conceivably lead to long-term reductions in pollution emissions. The purpose of this paper is to estimate the benefits to Taiwan from the expected reduction in crop losses as a direct result of such a decrease in air pollution. We employ a demand-supply framework for rice production to estimate the change in social welfare resulting from changes in the concentration of certain pollutants in the atmosphere. Our empirical results show that, in the year 1997, social welfare increments resulting from the decline in sulfur dioxide concentrations in the atmosphere ranged between US dollars 946200 and US dollars 2435800. Meanwhile, during the same period, the increase in social welfare due to the decline in the ozone concentration in the atmosphere ranged between US dollars 838100 and US dollars 1927000. The average benefit from the reduction in both sulfur dioxide and ozone concentrations is calculated to be between US dollars 2.67 and US dollars 6.86 per acre (for sulfur dioxide), and from US dollars 2.36 to US dollars 5.43 per acre (for ozone).
During-treatment services and 7-month posttreatment entry outcome of cocaine- or alcohol-dependent men (n = 145) and women (n = 149) Target City patients receiving either standard fee-for-services (n = 183) or managed care treatment funding (n = 111) in nine community outpatient programs were compared. No differences were found in treatment services received by the various subgroups. Regression analyses compared the four described subgroups (Gender x Type of Funding) on their seven Addiction Severity Index composite scores at 7 months postadmission controlling for the respective baseline composite score and several background variables on which the groups differed. Surprisingly few outcome differences were revealed between men and women patients and patients receiving the two forms of treatment funding. The only difference noted was that patients treated via managed care showed more improvement in the drug area. The need for further evaluation of the effects of managed care is emphasized.
OBJECTIVES: This study examined whether hospital readmissions varied among the frail elderly in managed care versus fee-for-service (FFS) systems. SETTING AND PARTICIPANTS: Random sample of 450 patients, aged 65 and over, from a large vertically integrated health care system in San Diego, California. Participants were receiving physician-authorized home health and survived and 18-month follow-up period. MAIN OUTCOME MEASURES: Multiple logistic regression analyses were used to conduct comparisons of readmissions and preventable readmissions by plan type. Two methods to identify preventable readmissions were developed, one based on a computerized algorithm of service use patterns, and another based on blind clinical review. RESULTS: The odds of having a preventable hospital readmission within 90 days of an index admission were 3.51 (P = 0.06) to 5.82 (P = 0.02) times as high for Medicare HMO enrollees compared to Medicare FFS participants, depending on the method used to assess preventability. Readmission patterns were similar for Medicare HMO enrollees and FFS study participants dually enrolled in Medicare and Medicaid. CONCLUSION: In this group of frail elderly Medicare beneficiaries, those enrolled in an HMO were more likely to have a preventable hospital readmission than those receiving care under FFS. These results suggest that policies promoting stringent approaches to utilization control (e.g., early hospital discharge, reduced levels of post-acute care, and restricted use of home health services) may be problematic for the frail elderly.
Understanding consumer expectations is important if orthodontists are to be successful in marketing their elective services. The purpose of this study was to examine the relationship between consumer outcome expectations and treatment variables, including cost of treatment and malocclusion severity. The subjects were parents of patients recruited from 9 private orthodontic practices in southwestern Pennsylvania who were entering a single comprehensive phase of orthodontic treatment, characterized by a full fee and complete fixed appliances. The parents completed a questionnaire regarding outcome expectations for their child's orthodontic treatment. Pretreatment orthodontic study models of each child were evaluated with the peer assessment rating. The results of this study suggest that orthodontic consumers have very high outcome expectations. Also, the parents of patients with severe overall malocclusions, overjet, or midline deviations have expectations that exceed probable treatment outcomes. Orthodontists should consider that consumers seeking their services have increased expectations not related to the treatment outcomes.
ASORN members have the opportunity to influence the new Medicare Fee Schedules by responding to an upcoming Health Care Financing Administration survey. The process used to determine future Medicare reimbursement is one that ophthalmic nurses should understand so that they may increase efficiency and flexibility in their own careers and practices.
OBJECTIVE: To assess the impact of fee-for-service (FFS) versus HMO medical insurance coverage on receipt of aspirin, beta-blockers, and calcium channel blockers at the time of hospital discharge following an acute myocardial infarction. DESIGN: Prospective, population-based study. SETTING: All 16 community and tertiary care hospitals in the metropolitan area of Worcester, Massachusetts. PATIENTS: The study population consisted of patients under 65 years of age hospitalized with a validated acute myocardial infarction in all hospitals in the Worcester (Massachusetts) Standard Metropolitan Statistical Area (1990 census estimate, 437,000) during 1986, 1988, 1990, 1991, and 1993. MEASUREMENTS AND MAIN RESULTS: After adjustment for demographic and clinical variables as well as study year, the odds ratios for receipt of each medication for patients with HMO insurance compared with FFS were 1.05 (95% confidence interval [CI] 0.77, 1.44) for aspirin, 1.32 (95% CI 0.98, 1.76) for beta-blockers, and 0.72 (95% CI 0.54, 0.96) for calcium channel blockers. Examination of temporal trends in utilization of these agents suggests that observed decreases in use of calcium channel blockers and increases in use of beta-blockers over the period under study occurred more rapidly for HMO than for FFS patients. CONCLUSIONS: Overall, use of aspirin and beta-blockers was comparable among HMO and FFS patients and use of calcium channel blockers (deemed less effective or ineffective for secondary prevention) was lower among HMO patients. Differential adoption, over time, of evidence-based prescribing practices for medications between HMO and FFS patients who have had a myocardial infarction warrants further study.
OBJECTIVE: We compare preventive services utilization among privately insured African Americans and Hispanics in managed care organizations (MCOs) versus fee-for-service (FFS) plans. We also examine racial/ethnic disparities in the receipt of preventive services among enrollees in FFS or MCO plans. DESIGN: Analysis of the nationally representative 1996 Medical Expenditure Panel Survey. PARTICIPANTS: Participants included 1,120 Hispanic, 929 African-American, and 6,383 non-Hispanic white (NHW) adults age 18 to 64 years with private health insurance. MEASUREMENTS AND MAIN RESULTS: We examined self-reported receipt of physical examination, blood pressure measurement, cholesterol assessment, Papanicolau testing, screening mammography, and breast and prostate examinations. Multivariate modeling was used to adjust for age, gender, education, household income, and health status. Hispanics in MCOs were more likely than their FFS counterparts to report having preventive services, with adjusted differences ranging from 5 to 19 percentage points (P <.05 for physical examination, blood pressure measurement, breast examination and Pap smear). Among African Americans, such patterns were of a smaller magnitude. In both MCOs and FFS plans the proportion of African Americans reporting preventive services was equal to or greater than NHWs. In contrast, among Hispanic women in FFS, a non-statistically significant trend of fewer cancer screening tests than NHW's was observed (Pap smears 75% vs 80%; mammograms 66% vs 74%, respectively). In both MCO and FFS plans, Hispanics were less likely than NHWs to report having blood pressure and cholesterol measurement (P <.05). CONCLUSIONS: With the demise of traditional MCOs, reform efforts should incorporate those aspects of MCOs that were associated with greater preventive service utilization, particularly among Hispanics. Existing ethnic disparities warrant further attention.
OBJECTIVES: To investigate whether older Medicare beneficiaries enrolled in Medicare risk health maintenance organizations (HMOs) have different rates of disablement than fee-for-service (FFS) beneficiaries. DESIGN: Secondary analysis of annual functional status transitions using the Medicare Current Beneficiary Survey, 1991 to 1996. SETTING: Telephone interviews. PARTICIPANTS: Forty-four thousand seven hundred and sixty-five person-years of annual functional status transitions for noninstitutionalized older Medicare beneficiaries who were either risk HMO enrollees or FFS beneficiaries with or without private supplementary insurance. MEASUREMENTS: Five multinomial logit models were estimated as single-state transition models, with five functional states, death, and censored as outcomes. The probability of being in a certain functional state the following year was specified as a function of individual risk factors and HMO versus FFS supplementary insurance status. RESULTS: Among functionally independent beneficiaries, the odds of becoming disabled in activities of daily living (ADLs) within a year were lower among FFS individuals with supplementary insurance (odds ratios (OR) = 0.67, P <.01) and HMO enrollees (OR = 0.58, P <.01). Among older people who were functionally impaired, neither HMO enrollment nor private supplementary insurance affected the risk of further functional decline or functional improvement. Supplementary insurance, but not HMO enrollment, was associated with lower mortality risk among beneficiaries with functional limitations (OR = 0.65, P <.05) or moderate ADL disability (OR = 0.72, P <.05). CONCLUSION: Medicare risk HMO enrollment and FFS private supplementary insurance convey similar benefits of slowing functional decline and extending life span for nonseverely disabled older people. That no association was found between adverse functional status outcomes and risk HMO enrollment has favorable implications regarding the quality of care of managed care plans.
There have been no published empirical studies comparing the experiences of terminally ill patients in managed care organizations (MCOs) and those in fee for service (FFS). This investigation represents the first empirical study to systematically compare substantive outcomes between populations of terminally ill patients enrolled in MCO and FFS healthcare delivery systems. The investigators interviewed 988 patients whose physicians judged them to be terminally ill and 893 of their caregivers. Outcomes assessments were made in six domains: patient-physician relationship; access to care and use of health care; prevalence of symptoms; and planning for end-of-life care, care needs, and economic burdens. Overall, the two populations of terminally ill patients were found to have comparable outcomes, but several significant differences were present. MCO patients were more likely than their FFS counterparts to use an inconvenient hospital (P =.02), spend more than 10% of their income on medical care (P =.02), and have been bedridden more than 50% of the time during the last 4 weeks of life (P =.03). Caregivers of MCO patients were as likely as the caregivers of FFS patients to report a substantial caregiving burden (P =.59). Despite concerns about the threats of MCOs to the physician-patient relationship, few differences in the quality of the relationship between the two cohorts were found. Finally, terminally ill patients in MCOs did not show better experiences than those in FFS on any outcome measure. Additional research is required to explore how MCOs may improve upon the care available to dying patients.
End-stage renal disease (ESRD) is the only disease entitlement for Medicare; therefore, most patients with ESRD have Medicare coverage. Patients with ESRD are prohibited by law from enrolling in health maintenance organizations (HMOs), the only group prohibited within Medicare. However, they may remain in an HMO if they enrolled in such a plan before their kidneys failed. Thus, it is possible to compare patients with ESRD in HMOs with those in fee-for-service (FFS) plans. To determine whether mortality, transplantation rates, and intermediate outcomes differed between Medicare ESRD beneficiaries enrolled in HMO versus FFS providers, a retrospective cohort analysis was performed of patients with ESRD from three Health Care Financing Administration data sets containing administrative and outcome information for Medicare ESRD beneficiaries from 1990 to 1998. On December 31, 1998, a total of 278,510 prevalent patients with ESRD were in FFS plans, and 18,332 patients were in HMOs. HMO patients were older and more likely to be white and male and have diabetes mellitus and comorbid cardiovascular conditions than FFS patients. Unadjusted 2-year survival rates were 48.4% and 49.3% for FFS and HMO patients, respectively. In a multivariate model, HMO status had no significant effect on mortality, which was greater with older age, male sex, and white race. In 1998, unadjusted renal transplantation rates were 23.5% and 15.5% for FFS and HMO patients, respectively; age adjustment abrogated the apparent difference. For FFS and HMO patients, adequate hemodialysis was delivered to 72% and 82%, and 56% and 62% had hematocrits greater than the benchmark, respectively. There was no statistical difference in these outcomes in multivariate comparison. In conclusion, care by HMO for patients with an expensive chronic illness can achieve outcomes similar to those for FFS patients. Claims of poorer care and worse outcomes for patients with ESRD enrolled onto an HMO, an argument used to justify continued prohibition against widespread participation by patients with ESRD, are not supported.
BACKGROUND: Although utilization review is widely used to control health care costs, its effect on patterns of health care is uncertain. METHODS: In 1989, New York City and its unions temporarily replaced actual utilization review with sham review for half the participants in the city's fee-for-service health insurance plan. We compared the health services provided to 3702 enrollees whose requests were subjected to utilization review (the review group) with the services provided to 3743 enrollees whose requests received sham review and were automatically approved for insurance coverage (the nonreview group). The enrollees, physicians, and hospitals were all unaware of the group assignments. RESULTS: During the study period (mean duration, eight months), the members of the review group underwent 1255 procedures in 20 categories of procedures for which second opinions were required (such as breast, cataract, foot, hernia, and hip-replacement surgery, as well as hysterectomy and coronary bypass surgery), and the members of the nonreview group underwent 1365 procedures (P = 0.02). The members of the review group had 124 fewer procedures in doctors' offices and hospital outpatient departments (P = 0.002). In the following year, the members of the review group underwent 248 procedures from the 20 categories, and the members of the nonreview group underwent 234 (P = 0.46). No other differences in patterns of care were found between the groups, including rates of hospital admission to medical-surgical, substances-abuse, or psychiatric units; average lengths of hospital stay; the percentage of enrollees who received preadmission testing; or rates of use of home care. During the study period, the mean age-adjusted insurance payments per person were $7,355 in the review group and $6,858 in the nonreview group (P = 0.06). CONCLUSIONS: The utilization-review program reduced the performance of diagnostic and surgical procedures for which second opinions were required and did not merely delay them until the following year. Otherwise, the program had little effect. Alternatively, actual review and sham review may both have decreased the use of hospital services, with patients or their physicians choosing more efficient treatment when they believed that care would be reviewed.
BACKGROUND: Policies to concentrate or regionalize invasive procedures at high-volume medical centers are under active consideration. Such policies could improve outcomes among those who undergo procedures while increasing their underuse among those who never reach such centers. We compared the underuse of needed angiography after acute myocardial infarction in a traditional Medicare fee-for-service system with underuse in the regionalized Department of Veterans Affairs (VA) health care system. METHODS: We studied 1665 veterans from 81 VA hospitals and 19,305 Medicare patients from 1530 non-VA hospitals, all of whom were elderly men. We compared adjusted angiography use and one-year mortality among patients for whom angiography was rated as clinically needed. We compared underuse in models before and after controlling for the on-site availability of cardiac procedures. RESULTS: After adjustment for the need for angiography, underuse was present in both groups, but VA patients remained significantly less likely than Medicare patients to undergo angiography (43.9 percent vs. 51.0 percent; odds ratio, 0.75; 95 percent confidence interval, 0.57 to 0.96). After also controlling for on-site availability of cardiac procedures at the admitting hospital, we found no significant difference in the underuse of angiography among VA patients as compared with Medicare patients (odds ratio, 1.02; 95 percent confidence interval, 0.82 to 1.26) or in one-year mortality (odds ratio, 1.08; 95 percent confidence interval, 0.89 to 1.28). CONCLUSIONS: There is underuse of needed angiography after acute myocardial infarction in both the VA and Medicare systems, but the rate of underuse is significantly higher in the VA. These differences appear to be associated with limited on-site availability of cardiac procedures in the regionalized VA health care system. Further work should focus on how regionalization policies could be improved with effective referral and triage processes.
Set to go into effect on October 1, the new Medicare physician-reimbursement system attempts to bring Medicare payments ever closer in line with physicians' actual costs. Among other things, the new fee schedule should eventually reduce the disparity between specialty and family-practice physicians' reimbursements and encourage more med students to enter primary care. Hospitals should be aware, however, that some things--like conflict between their and physicians' financial incentives--will not change.
PURPOSE: This article compares the rehabilitation treatment and outcomes of Medicare managed care organization (MCO) and fee-for-service (FFS) patients in skilled nursing facilities (SNFs). DESIGN AND METHODS: Data on 514 MCO patients and 420 FFS patients treated in four for-profit Southern California-based SNFs between June 1996 and September 1998 were analyzed with bivariate and multivariate regression models. RESULTS: After controlling for time since onset and other sociodemographic and health status characteristics, Medicare MCO patients were found to receive significantly fewer therapy units and have significantly shorter lengths of stay in rehabilitation programs. IMPLICATIONS: The findings may be the result of more global differences in the trajectories of care among MCO and FFS patients treated in SNFs, yet they highlight critical issues related to the spread of Medicare managed care in nursing homes and the dynamic between MCO and FFS reimbursement systems.