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A new "P" for hospital marketing?

The rather abrupt introduction of payors to hospitals and vice versa that started a few years ago has now settled down into a learning situation. To be price competitive in the health insurance marketplace, the payor must obtain full contractual performance in price, administrative and utilization review areas. Hospitals need the patients that payors can refer, but there is only a minimal understanding of how the health insurance industry operates both internally and in the marketplace. By selecting payors and soliciting those selected, hospitals have an excellent chance to accomplish their patient and revenue goals while payors have the opportunity to determine the effectiveness of their various programs to help meet their goals. By making a little effort, hospitals can accomplish a lot by adding this new "P" to their marketing mix.

Cost Allocation↗

The impact of managed care on Massachusetts mental health and substance abuse providers.

Medicaid managed care programs are becoming more widespread. To investigate the clinical, organizational, and financial impacts on service providers, a stratified, random sample of providers in the Massachusetts Managed Mental Health/Substance Abuse Program were surveyed by phone in Years 3 and 4 of the initiative. Providers reported that they were making widespread clinical changes such as more use of group, brief, and episodic therapies. They were increasing utilization review, Total Quality Management, and outcomes measurement. They were increasing in size, affiliating with other agencies, and providing a greater range of services. They were preparing for capitation. Compared to before the program and a year earlier, about 40 percent of providers were doing better financially and a quarter were doing worse. The study documents the hypothesis that a widespread and continuing transformation is taking place in response to managed care.

Cost Control↗

Positive impact of a follow-up phone call to community pharmacies in a medicaid drug utilization program.

OBJECTIVE: To evaluate the impact of including community pharmacists in strategies to alter excessive prescribing of antiulcer medications (AUMs) in a statewide drug utilization review (DUR) program. Mailing educational materials to physicians is a common intervention strategy of retrospective DUR programs. However, pharmacists are typically left out of this process, ignoring a possibly influential healthcare provider. METHODOLOGY: Patients without gastroesophageal reflux disease who received > or = 1.0 normalized therapeutic equivalents (e.g., 1.0 NTE = ranitidine 300 mg/d or omeprazole 20 mg/d) for five of six prior months were included. The pharmacists and physicians of these patients were divided into one of three geographically distinct groups: group 1 physicians received mailed materials only (pharmacists were not contacted); group 2 physicians and pharmacists received mailed materials only; and group 3 physicians and pharmacists received mailed materials, and the pharmacists were contacted by phone. Mean NTE and AUM costs were analyzed six months before and six months following the intervention. RESULTS: One hundred thirty-eight, 329, and 248 patients were included in G1, G2, and G3, respectively. There was a 12.4%, 8.0%, and 14.0% reduction in NTE for G1, G2, and G3, respectively. G1 AUM cost decreased 7.7% ($7710); G2 decreased 6.8% ($14 037); G3 decreased 20.5% ($26722). The total decrease in AUM cost for the entire cohort from before to after the intervention was $48469 (p < 0.05) in the six months following the intervention. CONCLUSIONS: A follow-up phone call to pharmacists in a statewide DUR intervention enhances the effectiveness of DUR interventions under the conditions studied. Enlisting the support of community pharmacists may improve the cost savings of these interventions.

Anti-Ulcer Agents↗

Pharmacy practice acts: a decade of progress.

OBJECTIVE: This 10-year follow-up study of previously published surveys of pharmacy practice acts examines 50 state and the District of Columbia pharmacy practice acts to assess the range of statutory definitions and determine the direction and magnitude of statutory changes since 1988. DATA SOURCES: State codes for 50 states and the District of Columbia, with attention focused on the pharmacy practice acts; Puerto Rico and the Virgin Islands were excluded. DATA EXTRACTION: The focus on each statute was the statutory definition of the "practice of pharmacy." DATA SYNTHESIS: Comparing 1998 with 1988, codification of interpreting and evaluating prescriptions increased 22% (1998; 39/47, four states contain no definition of the practice of pharmacy), compounding 8% (47/47), consultation 19% (41/47), dispensing 2.5% (47/47), drug administration threefold (24/47), drug product selection twofold (45/47), drug utilization review 70% (35/47), patient assessment 6.5-fold (6/47), pharmacokinetic services threefold (3/47), pharmacist prescribing 4.6-fold (15/47), and participation in drug research 10.5-fold (10/47). CONCLUSIONS: Since 1988, state pharmacy practice acts have increased the codification of pharmaceutical care services as integral pharmacy functions. Although substantial progress has been made over the past decade, a number of states have not incorporated definitions of pharmaceutical care functions into their state statutes. Enactment of the National Association Boards of Pharmacy Model State Pharmacy Act is one way for pharmacists' practice to expand with the evolution of the practice of pharmacy.

Humans↗

Potential impact of managed care on national health spending.

Illustrative estimates suggest that if all acute health care services were delivered through staff- or group-model health maintenance organizations (HMOs), national health spending might be almost 10 percent lower. If the delivery of all such services (except those now provided by staff- or group-model HMOs) were subject to utilization review arrangements incorporating precertification and concurrent review of inpatient care, spending might be 1 percent lower. The estimates assume no changes in the health care system apart from expansion of these two forms of managed care to cover all insured persons. They also assume that moving to universal managed care would produce a one-time drop in the level of national health spending with no subsequent effect on spending growth.

Health Expenditures↗

States' embrace of managed mental health care.

Historically, state mental health authorities have dominated public mental health services, operating with fixed resources and responsible for a large population. A good public mental health system has many of the attributes of a well-managed private mental health system. Unfortunately, public systems are not flexible enough to contract creatively with multiple providers; they lack many of the tools of modern managed care. As a consequence, state mental health authorities have begun to contract with private managed care firms to assist them in managing their health care reform efforts, particularly reform of Medicaid. This paper examines the forces shaping managed behavioral health care in the public sector and describes strategies for managing care, such as contracting, utilization review, and monitoring.

Budgets↗

Characteristics of asthma care provided by hospitals in a large metropolitan area: results from the Chicago Asthma Surveillance Initiative.

INTRODUCTION: Little is known of the approaches of United States hospitals to the management of persons with asthma. The purpose of this study is to characterize the extent to which hospitals within a large community have implemented various types of asthma-specific health-care delivery processes. METHODS: A cross-sectional, self-administered survey was mailed to a "key informant" in asthma care at each of the hospitals in the Chicago area. The survey instrument covered the following content areas: asthma-related inpatient services, asthma-related outpatient services, selected asthma-related quality improvement activities, and asthma-related community outreach. The survey was administered between August 1996 and January 1997. RESULTS: Data were collected from respondents at 59 of the 89 eligible hospitals, yielding a response rate of 66.3%. Of the responding hospitals, 42.4% indicated they had clinical practice guidelines for inpatient asthma management, and 37.3% reported using critical pathways. Four selected aspects of bedside care were also explored. All of the responding hospitals reported routine provision of nebulization therapy at the bedside, and nearly all routinely obtained peak flow measurements (96.6%). In the area of patient instruction, 93.2% provided bedside evaluation of proper inhaler technique, and 86.4% routinely provided instruction on the use of peak flowmeters. Only 54.0% of the hospitals reported routinely administering some type of asthma education program prior to discharge. The hospitals with clinical practice guidelines in place were also more likely to have critical pathways (p < 0.01); to have asthma-specific ICU policies/guidelines/critical pathways (p < 0.01); to provide bedside instruction on the use of peak flowmeters (p < 0.01); to provide an asthma education (p < 0.01) prior to discharge; and to conduct utilization review. Very few hospitals indicated that they had community outreach programs for asthma care. CONCLUSION: The results of this survey suggest that among Chicago-area hospitals appropriate bedside care for persons with asthma is provided, but there are large variations in other types of asthma services and programs. The hospitals that have adopted asthma clinical practice guidelines are more likely to have other asthma-specific quality improvement activities than hospitals without guidelines. This relationship between use of guidelines and quality of services needs further exploration, as it may prove to be an important marker for hospitals with staff that are interested in improving asthma care.

Adolescent↗

Children's health care use in the Healthy Kids Program.

BACKGROUND: In 1990, the Florida Legislature established the Florida Healthy Kids Corporation to implement the concept of school enrollment-based health insurance coverage for children. The county school districts are used as a grouping mechanism to negotiate health insurance policies. The Florida Healthy Kids Corporation negotiates contracts with health maintenance organizations (HMOs) to assume financial risk and to provide health care services at each program site. In 1994, there were five sites with four different participating HMOs. Assessing quality of care is particularly important when contracting with HMOs because of the perception that financial and utilization review arrangements may restrict the enrollees' access to needed health care. One essential component of health care quality is the extent to which health care services are used in a manner consistent with the expected pattern of use for the population of enrolled children. The purpose of this study is to compare children's health care use across five different Florida Healthy Kids Program sites. Specifically, we compare the enrollees' actual health care use across HMO settings and program sites to the expected health care use based on the enrollees' case-mix. METHODS: Each HMO provided child-specific health care use data including Physician's Current Procedural Terminology codes and International Classification of Diseases, 9th Revision codes. We used the Ambulatory Care Groups (ACGs) software to compare the children's actual health care use to the expected health care use at each site adjusted for case-mix. Several steps were then taken to determine if the children were receiving the anticipated number of health care visits based on their diagnoses. First, we divided the average number of encounters at each site by the group average across all of the sites, without adjusting for the case-mix of the enrollees. We then divided the average number of visits at each site by the expected number of visits based on the case-mix adjustment. A value of 1.00 means that the actual use and the expected use are identical. Values below 1 indicate underuse and values over 1 indicate overuse of health care services. Statistical comparisons of the actual versus expected average health care use across the five sites were performed by deriving the appropriate chi2 statistics. RESULTS: A census of all children (N = 14 688) enrolled in the Florida Healthy Kids Program at each of the sites for 6 months or longer were included in the analysis. The average number of health care encounters across all sites for a 12-month time period was 2.98 +/- 4.6 visits. After adjusting for the case-mix of the enrollees in each site using the ACG software, several of the five sites differed from one in a statistically significant way. However, these statistical assessments must be tempered with assessing the practical magnitude of the observed differences. CONCLUSIONS: The number of public and private efforts to insure children who are not eligible for Medicaid and whose parents cannot purchase private insurance has grown dramatically. These programs are vital for ensuring financial access to care for uninsured children. However, it is essential that such programs are not viewed as merely cost containment efforts. Assessing the degree to which children receive the health care services they need across multiple delivery settings is an essential yet challenging component of quality assurance. Generally, our analysis indicates that children in the Florida Healthy Kids Program are receiving the amount of health care expected based on their health care needs; which is one component of a high-quality health care program.

Child↗

Policy-relevant research: when does it matter?

Evidence-based medicine is most meaningful to policy makers when research questions are clearly informed by strategic health policy questions. In Washington State workers' compensation, key structural characteristics allow for the conduct of effective policy-relevant research. These include clear authority and a stable funding stream, a formal relationship between a policy agency and a University, development of appropriate research capacity, development of research questions related to strategic goals, and a robust data source. The research conducted relies on computerized medical bills and work disability records, medical records, structured telephone surveys to collect data on pain, functional status, quality of life, and computerized data on employment status. The types of policy-relevant research include identification of factors leading to preventable disability, outcomes research of specific procedures, technology assessment, and "real-time" research that addresses rapidly emerging questions. Health policy changes implemented from research have been substantial in Washington State workers' compensation, including: 1) noncoverage or partial coverage decisions for emerging technologies not proven to be of value to injured workers, 2) formal treatment guidelines and utilization review criteria for invasive, expensive, or marginally effective procedures, 3) disability prevention efforts, and 4) relatively rapid changes in policy as emerging patterns suggest harmful outcomes from existing treatments (e.g., schedule II opioids). Key structural characteristics must be in place to conduct policy-relevant research effectively. The workers' compensation system in Washington State is a single-payer system with other unique properties that have allowed the emergence of these structural characteristics and the conduct of research linked to the strategic goals of policy makers.

Adult↗

Alternate financial incentives in multi-tiered formulary systems to improve accountability for outcomes.

BACKGROUND: Drug manufacturer rebates paid to health plans and pharmacy benefit management companies have come under increased public scrutiny. Over the past several years, numerous articles have appeared in the literature encouraging a shift to a more quality-based decision-making process for health plan drug formularies. OBJECTIVE: To propose a new basis for formulary placement decisions that would include consideration of health-plan-specific measures (clinical outcomes, total cost, adherence, and appropriateness of care) and align incentives for health plans, physicians, pharmacists, and pharmaceutical companies to promote high-quality care. SUMMARY: The proposed approach builds on key components of the Pharmacy's Framework for Drug Therapy Management in the 21st Century and the Academy of Managed Care Pharmacy's Format for Formulary Submission, including a focus on patient outcomes and evidence-based decision making. The proposed approach would lessen the influence of drug manufacturer rebates on formulary placement by shifting the focus to appropriateness of care, clinical outcomes, patient adherence, and total cost of care. Pharmaceutical manufacturers would benefit from the focus on adherence to drug therapy and total cost of care. Health plans and pharmacy benefit management companies would gain in that they may be able to reduce efforts in drug utilization review as pharmaceutical manufacturers are given incentives to market their drugs more appropriately. Physicians and pharmacists would benefit because the rebate money would be used to provide quality-based financial incentives related to adherence and appropriate use of drugs. CONCLUSION: The implementation of this approach would be difficult and require cooperation from employers, pharmacists, pharmaceutical manufacturers, health plans, and pharmacy benefit management companies. Aspects of this approach could be incorporated into existing pharmacy benefit management processes to encourage the delivery of high-quality health care.

Cyclooxygenase Inhibitors↗

Extramedical factors in the decision to hospitalize medical patients.

This study assesses the importance of extramedical factors in the decision to hospitalize medical patients. Residents in a municipal hospital's emergency room completed a questionnaire on 252 consecutive patients at the time of admission. Extramedical factors contributed to the admission decision in 54 patients (21 percent); for twenty of these patients (8 percent of total) extramedical factors were the primary reason for admission. Factors noted most frequently related to patient behavior, such as being unlikely to follow instructions, and to home situations, such as social isolation. For 16 percent of the admissions, physicians felt that treatment outside the hospital was possible if realistic alternatives existed. Results suggest that extramedical factors are important contributors to the need for hospitalization. Attempts to develop quality assurance criteria, such as in utilization review or admission certification, must take such factors into account.

Community Health Services↗

Ambulatory surgery utilization by age level.

We compared ambulatory and inpatient surgery utilization by age level for procedures known to be frequently performed on an ambulatory basis. Our scope of data was the Crouse Irving Memorial Hospital in Syracuse, New York during 1984. The hospital operates one of the largest freestanding ambulatory surgery programs in the United States. The study included 8,348 ambulatory procedures, 42 per cent of all operations performed under the aegis of this institution. At the aggregate, the inpatient surgery included a somewhat lower proportion of young adults and a higher proportion of individuals aged 65 and over did outpatient surgery. For specific procedures, however, age distributions differed. Ambulatory procedures included lower percentages of elderly than did inpatient utilization for inguinal hernia repair, carpal tunnel release, destruction of larynx lesions, hernia repairs, destruction of skin lesions, and other operations, while ambulatory utilization for lens procedures included higher percentages of elderly patients than did inpatient utilization. Physician practice patterns also appeared to influence the setting of certain procedures. The study data suggested that persons involved in health planning should evaluate ambulatory surgery use on an age and procedure-specific basis, and utilization review should evaluate procedures on a case-by-case basis.

Adolescent↗

Medical technology assessment and practice guidelines: their day in court.

There is the expectation that outcomes research and the promulgation of medical practice guidelines will be able to identify and hopefully reduce the amount of unnecessary or inappropriate medical care through a variety of methods, including utilization review. However, past efforts by public and private insurers to deny claims on the basis of formal technology assessments or practice guidelines have frequently been overturned by the courts for multifarious reasons. This paper examines the court's reluctance to accept a variety of technology assessment methods in coverage policy decisions. The paper reviews the options that have been proposed to restrict judicial involvement in the formulation of coverage policy and then proposes a new option that employs a more precise taxonomy of medical practice assessment.

Complementary Therapies↗

Rates, patterns, causes, and costs of hospitalization of nursing home residents: a population-based study.

OBJECTIVES: Hospitalization of nursing home residents is a growing, poorly defined problem. The purposes of this study were to define rates, patterns, costs, and outcomes of hospitalizations from nursing homes and to consider implications for reducing this problem as part of health care reform. METHODS: Communitywide nursing home utilization review and hospital discharge data were used to define retrospectively a cohort of 2120 patients newly admitted to nursing homes; these patients were followed for 2 years to identify all hospitalizations. Resident characteristics were analyzed for predictors of hospitalization. Charges and outcomes were compared with hospitalization of community-dwelling elders. RESULTS: Hospitalization rates were strikingly higher for intermediate vs skilled levels of care (566 and 346 per 1000 resident years, respectively). Approximately 40% of all hospitalizations occurred within 3 months of admission. No strong predictors were identified. Length of stay, charges, and mortality rates were higher than for hospitalizations from the community. CONCLUSIONS: Hospitalizations from nursing homes are not easily predicted but may in large part be prevented through health care reforms that integrate acute and longterm care.

Aged↗

Liability for managed care decisions: the Employee Retirement Income Security Act (ERISA) and the uneven playing field.

As managed care organizations expand their programs of quality assurance and physician evaluation, more medical malpractice lawsuits may be brought against managed care organizations on the ground that, like hospitals, they are legally responsible for negligent corporate acts that injure patients. However, the federal Employee Retirement Income Security Act (ERISA) shields managed care organizations from liability when they are part of an employee group health plan governed by ERISA. Unlike patients with other types of insurance, patients in ERISA health plans do not have a malpractice remedy for a managed care organization's negligence. A few federal appeals courts recently recognized that ERISA plans can be vicariously liable for their physicians' medical malpractice, but only if the physician is the plan's employee or agent. Yet ERISA still prohibits negligence claims against ERISA health plans for injuries resulting from denial of plan benefits, failure to use qualified physicians, utilization review, or improper plan administration. Current managed care operations do not neatly distinguish between administering benefits and controlling quality of care. Neither should the law. ERISA should be amended to provide employees with the same remedies that patients in non-ERISA plans enjoy.

Compensation and Redress↗

The walk-in chains: the proprietarization of ambulatory care.

In this article we examine the previously little-studied development in U.S. health care--the growth of a proprietary ambulatory care system composed of health maintenance organization, urgent care centers, ambulatory surgicenters, ambulatory diagnostic centers, large group practices, and other delivery modalities. The growth of this system as a result of the ease of access to capital, limited or nonexistent regulation through Certificate of Need or other mechanisms, the growing surplus of physicians, decreases in the use of hospitals as a result of changed insurance benefits and inpatient utilization review, new developments in biotechnology, and computerization and miniaturization of new technological advances is discussed. The reasons for the expanded growth of proprietary chains over nonprofit systems of ambulatory care are also discussed. The article concludes with a discussion of the negative consequences for individual health and the health care system that may be generated by the continued growth of proprietary ambulatory care.

Ambulatory Care Facilities↗

Quality assurance issues.

Since 1965, when the Medicare and Medicaid programs were established by amendments to the Social Security Act, there has been an evolution from internal utilization review of hospital care to internal and external review of quality assurance. Hospitalizations for diabetes as a primary diagnosis have decreased over this period, suggesting that more diabetes care is delivered as outpatient care and is therefore not subject to quality assurance review. Although it is difficult to discern the effect of quality assurance programs and case management on the quality of diabetes care, it is certain that these programs will have a major influence in the future.

Diabetes Mellitus↗

Who manages the managers? The 1989 Harvey Cushing oration.

New medical knowledge is emerging at a tremendous rate. Diseases such as Alzheimer's disease. Parkinson's disease, cancer, and others (diseases once considered beyond the scope of medicine) are receiving a great deal of attention. Yet it is a paradox that, at a time when we are learning more about the biology of the human being, it is more difficult to creatively develop the new knowledge into diagnostic tests, surgical interventions, and preventive strategies. The pace of biomedical innovation is being slowed by an increase in the intervention of nonmedical "managers of care." The driving force behind managed care is concern over cost. The managers of medical care have sought to control costs by controlling the doctor's decision making. This is the focus of managed care. The physicians of today, therefore, face a remarkable challenge. They must respond to the needs of patients while being held accountable to an increasing number of overseers in the public and private sectors. These managers of care justify their activities on the notion that the patient will be better off and the cost less if the doctor-patient encounter is regulated by protocols, statistical comparison, utilization review, and fee schedules. While doctor's decisions are being managed by others, who is managing the managers? The answer should be the medical community, principally doctors. Unfortunately, the answer at the moment is the payors--governmental reimbursement agencies, intermediaries, employers, hospitals, or new corporations designed to manage medical costs. The challenge to the physician is to retain the responsibility for those things for which he or she is held accountable. The challenge should not be ignored.

Costs and Cost Analysis↗