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PubMed1996

Variation in patient charges for vaccines and well-child care.

BACKGROUND: Several state and federal programs have attempted to boost immunization rates by reducing or eliminating provider vaccine costs. The relation between patient vaccine and well-child visit charges and vaccine financing systems is unknown. OBJECTIVES: To determine patient charges for vaccines and well-child visits in three states with varying vaccine financing systems and to examine the effects of a short-term reduction in provider vaccine costs. DESIGN: Cross-sectional survey study of a random sample of physicians in three states. PARTICIPANTS: A total of 2797 pediatricians and family physicians in North Carolina, Texas, and Massachusetts were surveyed. MAIN OUTCOME MEASURES: Current charges to patients for diphtheria-tetanus-pertussis vaccine (DTP), measles-mumps-rubella vaccine, Haemophilus influenzae type b vaccine (Hib), and combined DPT-Hib vaccine for well-child visits; changes in charges over the previous 8 months. RESULTS: Response rate was 62%. Vaccine and well-child visit charges were comparable in North Carolina and Texas. Massachusetts' average charges for well-child visits were higher than in the other states, although vaccine charges were lower; with the use of combined DPT-Hib vaccine, total simulated charges for vaccines and well-child care during the first 6 months of life averaged only 10% less in Massachusetts vs Texas and North Carolina. Neither regional variation in cost of living nor Medicaid reimbursement rates explained this difference. CONCLUSIONS: The average cost and composition of charges for well-child care in Massachusetts, a state with universal purchase of vaccines, compared with the other states, warrant further study to explore whether physicians shift costs to other preventive services to compensate for lower allowable immunization charges. If such cost shifting occurs, current federal immunization initiatives that lower or eliminate provider cost may not provide increased access to preventive services.

Child↗
PubMed1998

Evaluating the BMJ guidelines for economic submissions: prospective audit of economic submissions to BMJ and The Lancet.

CONTEXT: Editorial management of articles on health economics may benefit from guidelines for peer review and revision. OBJECTIVE: To assess whether publication (in August 1996) of the BMJ guidelines on peer review of economics submissions made any difference to editorial and peer review processes, quality of submitted manuscripts, and quality of published manuscripts. DESIGN AND SETTING: Before-after study conducted in the editorial offices of BMJ and The Lancet of the effect of the BMJ guidelines on review and revision of economics submissions, defined as those making explicit comments about resource allocation and/or costs of interventions. MAIN OUTCOME MEASURES: Editorial fate and changes in the quality of submissions. RESULTS: A total of 2982 manuscripts were submitted to the 2 journals during the before periods, 105 (3.5%) of which were economics submissions. Of these, 27 (24.3%) were full economics evaluations, and 78 (75.7%) were other economics submissions. Overall acceptance rate was 11.6% (12/105). During the after period 2077 manuscripts were submitted to the 2 journals, 87 (4.2%) of which were economics submissions. Eighteen (20.7%) were full economics evaluations, and 69 (79.3%) were other economics submissions. Overall acceptance rate was 6.9% (6/87). Although a number of manuscripts could not be traced to determine whether they were economics submissions, there appeared to be little difference between the 2 journals in numbers or editorial fate of the manuscripts. There was no change in the quality of submitted manuscripts, but BMJ editors found the guidelines and checklists useful and sent fewer economics submissions for external peer review in the after phase. CONCLUSIONS: Publication of the guidelines helped the BMJ editors improve the efficiency of the editorial process but had no impact on the quality of economics evaluations submitted or published.

Economics↗
PubMed1999

Varying health care provider objectives and cost-shifting: the case of retail pharmacy in the US.

In this paper we investigate the relationship between health care provider objectives, cost-shifting, and prices by exploring the relationship between state Medicaid pharmacy reimbursements and average prices paid by pharmacy retail customers for four distinct pharmaceutical products across the US in 1994. We develop a more general theory than past researchers to enable provider objectives to vary with Medicaid pharmacy reimbursement levels. We find that provider objectives and the direction of relationship between Medicaid pharmacy reimbursements and retail prices vary with Medicaid pharmacy reimbursement levels. At high Medicaid pharmacy reimbursement levels we find a consistent negative relationship across products. At low Medicaid pharmacy reimbursement levels, the direction of the relationship is product-specific. As a result, policy-makers should be aware that policies affecting reimbursements from government-sponsored health insurance will also affect retail customers that include the uninsured. Paradoxically, for certain products if a state cuts a generous Medicaid reimbursement level this could hurt uninsured patients, whereas cuts in a stingy Medicaid reimbursement rate may help uninsured patients.

Cost Allocation↗
PubMed1991

Workers' compensation cost shifting: an empirical study.

It has been suggested that health maintenance organizations (HMOs) overdiagnose work-related injuries and illnesses to increase their income. This study compared the Workers' Compensation experience of 2,176 Boston postal employees enrolled in a large HMO with that of 3,473 employees enrolled in a large fee-for-service health insurance plan. It controlled for the potential confounders of age, gender, job classification, type of injury, and duration of employment. It found no difference in the incidence of injuries: 5.93% for HMO enrollees and 6.25% for fee-for-service plan enrollees. Medical costs averaged $475 for HMO enrollees and $838 for fee-for-service plan enrollees (p = 0.018). Total costs averaged (09 for HMO enrollees and $1388 for fee-for-service plan enrollees (p = 0.063). In our cohort, there was no evidence of cost shifting. It appeared that the HMO provided less expensive medical care for injured postal workers.

Boston↗
PubMed1994

Serious mental illness and capitation financing.

Traditional organization and financing of mental health care has not adequately served the needs of persons with serious mental illness. Capitation financing is being tested in several localities, but little experimental data has been yielded to date, and it is mixed. The results from the Rochester experiment were positive but limited, and some other pilots also reported positive experiences with capitation. Others have ended prematurely or confronted obstacles. Experimental findings are also anticipated from the Philadelphia and California pilots, and others are just beginning. Existing financing mechanisms, cost-shifting efforts, and professional cultures represent powerful obstacles to successfully implementing capitation financing for care of persons with long-term mental illnesses, and potential incentives to underserve enrollees require adequate accountability structures. In spite of obstacles, the goodness of fit between the needs of persons with serious mental illness and capitation flexibility warrant further exploration of this financing modality.

Capitation Fee↗
PubMed2005

The welfare loss from hospital cost-shifting behavior: a partial equilibrium analysis.

Cost shifting occurs when changes in administered prices of one payer lead to compensating changes in prices charged to other payers. Microeconomic theory suggests that cost shifting can take place under limited conditions and some empirical studies indicate that that hospital cost shifting may have actually occurred at various times. This study designs a model to conceptualize and quantify the potential welfare loss caused by hospital cost shifting under idealized yet fairly plausible conditions. The resulting estimate yields only a small efficiency loss of at most, 0.84% of private hospital expenditures in the US for 1992.

Cost Allocation↗
PubMed1988

A case mix simulation decision support system model for negotiating hospital rates.

The institution of prospective payment systems by many health care insurers has drawn increased attention to case-based financial planning in hospitals. When hospital revenues are directly linked to patient diagnoses rather than to the types and quantities of services supplied to patients, managers must be aware of the financial implications of different case mixes and must be prepared to influence insurers' price structures. A case-based financial planning model is presented here for the purpose of assisting managerial decision making in the strategic areas of case mix planning and pricing. The computerized model characterizes hospitals as product manufacturers, the product being discharged patients. Diagnosis serves to differentiate the "products"; however, diagnoses are grouped by payor and similar treatment cost experiences to create a limited set of managerially meaningful case types. Diagnostic and treatment costs are also aggregated to facilitate the modeling of the hospital production process. The computerized model projects the number of patients of each case-type and total patient volume, based on estimated patient volume growth rates. The model also projects prices and contribution margins for each case-type, as well as total contribution to hospital overhead. Testing the model with a hypothetical example of a hospital strategic planning problem demonstrates the model's potential as a decision-making aid in case mix planning and case-type pricing. It also reveals several model shortcomings that require further developmental effort.

California↗
PubMed1987

Net returns, fiscal risks, and the optimal patient mix for a profit-maximizing hospital.

As is well recognized, the provisions of PL98-21 not only transfer financial risks from the Medicare program to the hospital but also induce institutions to adjust the diagnostic mix of Medicare beneficiaries so as to maximize net income or minimize the net loss. This paper employs variation in the set of net returns as the sole measure of financial risk and develops a model that identifies the mix of beneficiaries that maximizes net income, subject to a given level of risk. The results indicate that the provisions of PL98-21 induce the institution to deny admission to elderly patients presenting conditions for which the net return is relatively low and the variance in the cost per case is large. Further, the paper suggests that the treatment of beneficiaries at a level commensurate with previous periods or the preferences of physicians may jeopardize the viability and solvency of Medicare-dependent hospitals.

Cost Allocation↗
PubMed1981

Economic incentives and control: some issues for research in the VA hospital system.

Within the field of economic research on hospital performance there are four major areas of need. These include the estimation of hospital cost functions, the development of new models of the nonprofit hospital, the development of better measures of hospital output, and an analysis of the determinants of hospital use. Within the Veterans Administration there exist a limited number of policy options to study or aim for in further research, but comparison between the system and other systems is possible and the prospective budgeting process in the VA should also be examined. Specific research can be directed at the case mix and the case-specific patterns of use in the VA system. The effects of the teaching requirements of the Va hospitals also can be more closely studied and the effects of physician and hospital characteristics on the length of stay of inpatients is an important question and may have implications for research outside the system. The potential data wealth of the VA Patient Treatment File and its centralized budgeting system can produce much useful research.

Aged↗
PubMed2001

Impact of VA bed closures on use of state psychiatric services.

This study examined whether inpatient bed reductions at a Department of Veterans Affairs (VA) medical center increased VA patients' use of state mental health agency services. Veterans residing in two Connecticut cities who used VA psychiatric services during fiscal years 1993 through 1998 (n = 2,943) were identified from computerized files. Then their records were merged with state files. Coinciding with the time of VA bed closures, the proportion of VA patients who used any state services increased from 2.6%, 2.8%, and 2.7% from 1993 through 1995 to 3.6%, 3.5%, and 3.6% from 1996 through 1998 (p < .03). These changes reflect increased likelihood of state outpatient service use, but not inpatient services. No statistically significant changes occurred in the cost of state services used by VA patients. Bed closure impact may be reflected in increased cross-system service use, which may be a useful indicator of unmet needs resulting from system changes.

Adult↗
PubMed1999

Does managing behavioral health care services increase the cost of providing medical care?

This study examined the possibility that managing behavioral health care services achieves savings by cost shifting--by denying care or impeding access to care--and in that way encouraging patients to seek needed behavioral health care in the medical care system. In 1993, a large industrial company carved out employee behavioral health care from its unmanaged, indemnity medical care benefits and offered employees an enhanced benefit package through a managed behavioral health care company. This study compared the use and cost of behavioral health care and medical care services for two years before the carve-out and for three years afterward. The rate of behavioral health care usage remained the same or increased after the carve-out, while the cost of providing the care decreased. Controlling for trends that began before the inception of managed behavioral health, medical care costs decreased for those using behavioral health care services. No evidence supporting cost shifting was found.

Adolescent↗