Rising hospital Medicare costs defy DRG control.
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Costs and Cost Analysis↗
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Planning for "the technology factor".
Modern medical care technology impacts on decision making in the industry as never before. Whether this impact is more positive than negative is debatable; but the dialogue is of vital interest to hospitals, as technology is the central issue in the current furor over cost control.
Cardiovascular Diseases↗
Growth in Medicare's hospital outpatient care: implications for prospective payment.
Medicare hospital outpatient expenditures are growing rapidly. In response, Congress mandated implementation of a prospective payment system (PPS). The potential cost control effectiveness of a PPS is assessed in this paper by decomposing growth in charges into changes in beneficiaries, prices, case mix, encounters per beneficiary, services per encounter, and intensity per service. This paper examines aggregate growth rates and rates disaggregated by type of service, highlighting rapid growth in surgery and imaging services. Findings indicate that 69% of observed growth is attributable to factors that would be unaffected by an encounter-based PPS (i.e., beneficiaries, prices, case mix, and encounters per beneficiary). We conclude that effective cost containment may require implementation of direct volume controls in addition to a PPS.
Ambulatory Care↗
The consumer and provider: pillars of the new health care system.
Managed care has suffered a public backlash, with complaints increasing across the nation from unhappy patients. The physician community despises the current system and is wrestling for control of clinical decision-making. A health care system that is disliked by the public and is despised by the physician community can never succeed. No health care system or reform is possible without willing or even enthusiastic physician participation because only they can control costs, quality of care, and consumer satisfaction. A successful health care system recognizes that only providers can control quality of care and costs--and will create appropriate incentives that allow physicians to do so without losing the public's trust. The author advocates a new system, where consumers choose provider organizations based on disease expertise and purchase insurance through Internet accessible brokers. Provider organizations assume economic risk and have the detailed know-how to treat a specific disease spectrum better and cheaper. Consumers purchase this new "product" in a competitive market and are the principal benefactors of this market-driven, unmanaged care system.
Attitude of Health Personnel↗
Organizing hospital laboratories for efficiency and quality.
Decreasing revenues from price controls in government programs and discounted fees and below-cost capitation contracts from private insurance companies have made cost control the main factor in laboratory decisions. Consolidation, which is already extensive in Independent Laboratories, is now coming to hospital laboratories. An Integrated Regional Laboratory is an effective way to adapt to these changes. This structure makes possible both cost savings and improved service quality, but significant time, work, and investment are required to establish one.
Cost Savings↗
[The risks of good health in France in the year 2020].
Since 1995 onwards, health cost containment is the order of the day in France. Successively, the Right and the Left were implementing strong policies aimed at curbing hospital costs, controlling drug prescriptions, promoting early retirement of practicing doctors.... As expected, all these actions have encountered hard resistances from health professionals (As a matter of fact, the demand side was not affected by cost containment policies). The inertia of all the system and the resistance from health personnel made it clear that cost containment measures will obtain a significant impact only after 2003 or 2005. Precisely, at that date, or some years later, the medical profession will start a sharp decrease of its numbers as the graduate-boom cohorts of the period 1975-1990 will arrive at retirement age. On the demand side, the French population will accelerate its aging process as the baby-boomers born during the period 1945-1965 will reach successively their 60th anniversary. In other words, the decade 2010-2020 will see a sharp growth of the demand for health services and a decrease in the supply. As cost containment is a painful and long-harvesting process, the health authorities of the decade 2010-2020 will probably not let "the horse run freely again". Most probably, supply of health care will be kept under strict control. Will France then adopt the British model (health expenditures kept at low level and queuing for care)? Or will the nation be innovative enough to invent a new model for its health system?
Adolescent↗
Federal regulation: philosophy and practice.
The philosophy of drug regulation as expressed by Congress has progressively embraced concepts of misbranding and adulteration, safety, efficacy, and, most recently, control of the investigational process. The intent of Congress has been implemented by a series of regulations intended to protect the public health and to assure that available drugs are safe and effective. This has resulted in more centralized, standardized, uniform government control, with a slowdown in the development and approval of new drugs, an increase in the cost of developing and marketing new drugs, and costly control procedures. It is time to ask whether the benefit of more centralized government control is being exceeded by its cost.
Clinical Trials as Topic↗
Food service needs controls to contain costs.
Cost containment can be achieved through the use of methods of measuring, controlling, and modifying food costs and quality, labor costs, and departmental procedures.
California↗
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↗
The cost of medical care for patients with diabetes, hypertension and both conditions: does alcohol use play a role?
OBJECTIVE: To estimate and compare the medical costs of individuals with diabetes and/or hypertension relative to a matched sample of individuals with neither condition, and determine if these costs are significantly influenced by alcohol use. RESEARCH DESIGN AND METHODS: Data were obtained from a sample of 799 patients from eight primary care clinics in south-central Wisconsin between 2001 and 2002. Medical care costs were calculated within four categories [hospital and emergency room (ER) costs, clinic costs, medication costs and total cost] for three chronic disease samples [diabetes only (n = 89), hypertension only (n = 299), and both diabetes and hypertension (n = 209)] as well as a matched sample with neither diabetes nor hypertension (n = 202). Annual medical care costs were estimated using a combination of insurance billing records, self-reported information and chart review. All cost data pertain to a 12-month period in 2001-2002. In addition to a descriptive analysis of costs across medical service categories and samples, we also conducted multivariate analyses of total cost, controlling for patient demographics, education, employment, smoking, and comorbidities, such as heart disease, hyperlipidaemia, liver disease, chronic back pain, asthma, depression, anxiety and bronchitis. RESULTS: The estimated differential in total annual medical cost (relative to the control group) was USD 2183 for diabetes only, USD 724 for hypertension only and USD 3402 for diabetes and hypertension. Alcohol use did not significantly impact medical care costs amongst individuals with diabetes and/or hypertension. CONCLUSIONS: These cost estimates can serve as an important and useful reference source for doctors, insurance companies, health maintenance organizations (HMOs) and policy makers as they try to anticipate the future medical care needs and associated costs for diabetic and hypertensive patients.
Age Factors↗
Pharmacists' views on health care reform.
This study explored pharmacists' opinions on a reformed health care system. Questionnaires were mailed to 523 pharmacists about the structure, funding, cost control mechanisms, benefits, and features to be covered by a national health plan; 57.2% responded. The pharmacists showed no consensus regarding the basic structure of a national health plan. They favored increased taxes on alcohol and cigarettes to fund the plan and adamantly opposed increased individual income or employer payroll taxes. Pharmacists were not convinced that plan costs could be controlled. They strongly supported benefits for preventive services; however, they ranked coverage of outpatient prescription drugs relatively low. Pharmacists' opinions on health care reform differed according to position (e.g., owner or staff) and age.
Attitude of Health Personnel↗
Comparison of the costs of fine-needle aspiration and open surgical biopsy as methods for obtaining a pathologic diagnosis.
BACKGROUND: A pathologic diagnosis is usually required to determine definitive management for a palpable lesion. In this era of cost control, fine-needle aspiration (FNA) provides a low-cost alternative to open excisional biopsy. Using a broad range of cases collected over 20 years, the authors of this study sought to quantify the savings resulting from the use of FNA on superficial palpable lesions to obtain a pathologic diagnosis. METHODS: 12,452 cases collected by the cytopathology service at the Medical College of Virginia during the period 1972-1991 were used to produce a profile of case type, diagnosis, and indication for surgery. Charge-based cost estimations or Relative Value Units were calculated using the 1995 Physicians' Fee Reference or published Medicare participant fees. The charges for the FNA procedure and open surgical biopsy were compared, and all other biopsy-related costs were omitted. RESULTS: FNA provided a sufficient pathologic diagnosis to obviate open surgical biopsy in 63-85% of the cases. Estimation of cost savings on the basis of the distribution of cases and indications for surgery suggested a savings of $250,000 to $750,000 per 1000 FNA performed, or approximately 5500 Relative Value Units. CONCLUSIONS: This study quantifies the substantial savings that result from obtaining a pathologic diagnosis by the FNA procedure rather than open surgical biopsy.
Biopsy↗
Diffusion of innovations: treatment of Alzheimer's disease in Germany.
Systematic barriers seem to slow down the market penetration of innovative acethylcholinesterase (AChE) inhibitors in Alzheimer's disease. The goal of our study was to examine the diffusion of AChE inhibitors into the German market in more detail. On the basis of using the ongoing surveillance panel of the Institute of Medical Statistic (IMS) Health, the prescription patterns of 100 physicians (72 general practitioners, 28 neurologists) were examined. In addition, structured telephone interviews with the same 100 physicians were conducted. The interview included the assessment of a hypothetical treatment situation (i.e. physicians were asked what they would prescribe if a close relative of theirs had Alzheimer's disease) as well as qualitative items examining the physicians' attitudes towards AChE inhibitors and the perceived impact on drug budgets. As a major result, the analysis revealed that neurologists prescribed AChE inhibitors to 44.6% of their patients, while general practitioners only treated 9.0% of their patients with AChE inhibitors. The analysis of the qualitative items revealed positive attitudes regarding the safety and efficacy of AChE inhibitors, but negative attitudes regarding the budgetary limitations to prescribing these drugs. A correlation of r=0.21 (P<0.05) was found between the perceived impact on drug budgets and the adoption of AChE inhibitors and a correlation of r=0.32 (P<0.002) was seen between the physician's specialty and the adoption of AChE inhibitors. These data show that, while the AChE inhibitor adoption process has passed the early stages, various barriers slow down the final stages of AChE inhibitor adoption. The drug budget in particular seems to inhibit the adoption of the innovation by the majority of general practitioners. This leads to a more short-term cost control strategy instead of long-term disease management and cost saving approaches.
Alzheimer Disease↗
Cost-effectiveness of stress echocardiography for assessment of coronary artery disease: what we know and what we need to know.
AIMS: This review explores the balance between the incremental data supplied by stress echocardiography and its cost. This technique is now established as an accurate tool for the diagnosis of coronary artery disease and myocardial viability, but the current medical-economic environment mandates careful consideration of the impact of the results on patient outcomes. METHODS AND RESULTS: The tools for assessment of cost and efficiency are reviewed. Two considerations are explored for controlling costs; avoidance of testing in those who will derive limited incremental data, and appropriate selection of stress echocardiography rather than other stress techniques. The balance between diagnostic accuracy and cost is explored in observational studies and computer models. Finally, the prognostic implications of testing are evaluated and data from the stress testing literature are explored to show that more effective patient selection for interventions may justify greater expenditure on testing. CONCLUSIONS: The appropriate selection of patients for testing has a significant evidence base. The cost of identifying coronary disease has been examined in a number of studies and facilitates the selection between testing modalities. Prognostic data are increasingly available, and further work is needed to combine this with cost analysis in order to show that stress echocardiography, like other stress modalities, may be used to guide therapy and thereby improve cost-effective outcomes.
Computer Simulation↗
Low-osmolality contrast media: premises and promises.
After more than 30 years of experience in the United States with high-osmolality, ionic, radiopaque contrast media (HOCM), low-osmolality contrast media (LOCM), both ionic and nonionic, have recently been introduced into the marketplace. Under the current atmosphere of cost controls (prospective payment system) and consumerism in medicine, the higher cost of these newer agents has sparked heated debate, with the lingering question, "Can we afford to use them?" The new LOCM are not the only "expensive" drugs undergoing an economically constrained introduction into clinical practice, but they represent a significant challenge for radiologists in terms of our doctor-patient relationships and the monetarization of medical care. Review of the extensive literature documenting improvement in patient acceptance, tolerance, and safety, with equal or improved diagnostic efficacy, suggests that the question now at hand is, "Can we afford not to use them?" This premise is discussed with text and references designed to aid the practicing radiologist and referring physician in developing guidelines for utilization of the new LOCM.
Age Factors↗
Coping with SCHIP enrollment caps: lessons from seven states' experiences.
Seven states with separate (as opposed to Medicaid expansion) State Children's Health Insurance Programs (SCHIP) implemented enrollment caps during the 2001-2003 recession. Interviews with SCHIP officials and Covering Kids and Families grantees in these states examined implementation policies and their effects on enrollment, outreach, and public support. Enrollment caps were generally maintained for less than a year and resulted in large spending reductions, but enrollment declined steeply. Most key informants indicated that caps were preferable to reversals of simplified enrollment, comprehensive benefits, and low cost sharing and thus offered policymakers an important tool for controlling costs.
Adolescent↗
Internet availability of prescription pharmaceuticals to the public.
BACKGROUND: The Internet holds great but uncertain promise for increased access and cost control in health care. OBJECTIVE: To determine access to and cost of prescription pharmaceuticals over the Internet. DESIGN: An Internet search conducted during February and March 1999. SETTING: The Philadelphia region. MEASUREMENTS: Data were collected on availability and cost of medications and physician Internet visits, requirements for physician prescriptions, and geographic location of Web-based companies and consulting physicians. Costs of comparable physician visits were obtained from Medicare and managed care organizations in the Philadelphia region. Costs of medications came from five Philadelphia community pharmacies. RESULTS: Forty-six Web sites were identified. Thirty-seven sites (33 based in the United States and 4 based outside the United States) required a prescription from a personal physician or from an Internet physician consultation. Nine sites based outside of the United States did not require a prescription or physician consultation. The median cost of an Internet physician visit was $70 (range, $20 to $90), more than 15% higher than that for a general practice visit in the Philadelphia region. Quality of physician consultation, physician qualifications and specialty, and geographic location were unknown. Median price per pill of the two most commonly offered medications was 10% higher on the Internet (before shipping charges) than at Philadelphia pharmacies ($5.49 and $4.50 for sildenafil; $1.94 and $1.83 for finasteride). CONCLUSIONS: The Internet may expand patient access to health-related services but at overall increased cost. In addition, the quality of physician Internet care is uncertain, and potential for serious abuse exists. Patients can easily provide incorrect or false information to obtain medications. Furthermore, conflict of interest exists for Web-based firms because they profit from selling medications and physician consultations.
Conflict of Interest↗
Aggressive HIV treatment cost-effective.
Early treatment preserves immune function and may lower the probability that drug resistance will develop. Careful evaluation of the patient's actual adherence (dietary requirements, daily routine, attitude) is key to cost control and maintaining viral load reduction. In terms of HIV cost per year of life saved, drug cocktails are more cost-effective than many other common medical interventions such as screening mammography.
Anti-HIV Agents↗