Blue-Shield-pharmacy agreements not exempt from antitrust laws.
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The activities of home-care pharmacists are highlighted, and factors that should be considered in establishing a reimbursement schedule are described. Pharmacists are important members of the home health-care team. Responsibilities of the pharmacist include assisting in the development of a therapeutic plan, reviewing and monitoring drug therapy, and ensuring that appropriate and correctly prepared medications are available to the patient. The degree of pharmaceutical service depends on the therapy prescribed. The traditional type of third-party reimbursement--cost of drug plus dispensing fee--is often inadequate and can discourage pharmacists from becoming involved in home health care or from providing services of optimal quality. An appropriate reimbursement schedule should take into account the variety of pharmaceutical services provided to home-care patients and should give special consideration to activities, such as discontinuation of unneeded drug therapy, that lower medical costs. Whether pharmacists are able to provide high-quality home health-care services may depend on how adequately they are reimbursed.
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This study uses claims data from employers in the Houston Area Health Care Coalition (HAHCC) for 1985 through the first half of 1987 to examine the effect of health care plan attributes on health care costs. Plan attributes affect the site of care and the costs of care. Utilization review clearly was effective in reducing the demand for inpatient services, but that reduction was in large measure matched by increases in care in the outpatient setting. Restrictions on mental health benefits also shifted the site of care. In contrast, neither premium sharing nor the plan's deductible had a significant impact on total plan charges. The study results demonstrate the need to have a comprehensive cost management strategy.
More improvement in the scope than in the quality of private health insurance coverage took place during 1975. Four-fifths of the population under age 65 was covered for hospital and surgical care, and nearly that proportion was protected against the costs of physicians' in-hospital visits, X-ray and laboratory examinations, and prescribed out-of-hospital drugs. The $33.6 billion in premiums paid by consumers resulted in the return of only $28.9 billion in benefits, which covered just 44% of their total personal health care expenditures. Major-medical insurance, held by an estimated 43% of the population, helped to overcome some of the deficiencies of private insurance--dollar limitations on health care services, ceilings on the duration of hospital stays, and exclusions for some types of care. It also provided economic protection against catastrophic expenses. Premiums and subscription income rose faster than benefits as private insurers attempted to keep their coverage in line with rising health care costs. The overall underwriting gain was due largely to a $952.4 million gain in group business by the insurance companies.
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The current status of reimbursement for home health-care (HHC) products and services is described, and the influence of competition and consolidation on the HHC industry is discussed. Despite inadequate financing and reimbursement pressures, the demand for HHC services continues to grow. The degree of competition in the HHC industry is reflected in bundling of services (gathering payments for services into a single per-capita rate), prospective price negotiations, and competitive bidding. This competition within the home-care industry and pressure on operating margins have spawned a flurry of recent mergers, acquisitions, and corporate restructuring. HHC agencies and suppliers, particularly durable medical equipment suppliers, have been squeezed by inadequate Medicare cost-finding methods, low reimbursement rates, and a high number of denials of Medicare coverage. Three important recent federal measures revised definitions of Medicare coverage, established minimum and maximum payment periods for Medicare reimbursement, reduced payments for services and products covered under Medicare Parts A and B, resurrected prospective-pricing demonstration projects, reduced payments for durable medical equipment and home oxygen supplies, and expanded coverage of services for AIDS patients. State Medicaid program budgets are threatened by recurring administration proposals to cap federal matching payments and by the adoption of a competitive-bid approach to health-care contracting. To survive over the next few years, home health agencies and home-care suppliers will need to monitor operating costs even more closely and pay attention to the patient (payer) mix.
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In light of the current debate surrounding the extension of Medicare benefits to cover outpatient drugs, it is important to increase our understanding of the impact of drug payment programs on overall health care outcomes and expenditures. In this retrospective study of health care use among Medicare beneficiaries in New Jersey and eastern Pennsylvania, we studied the impact of New Jersey's Pharmaceutical Assistance for the Aged (PAA) program on health care costs. Using multiple regression analysis, we found that New Jersey Medicare recipients used, on average, $238.50 less in inpatient hospital care under the PAA program than did their counterparts in eastern Pennsylvania, which did not have a drug payment assistance program in place. Although administrative costs may have reduced overall savings, it seems reasonable to conclude that the PAA program resulted in no overall health care cost increases.
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This paper discusses the effects of powerful confounding events on the evaluation of an innovative health care payment program--an experiment with capitation payment for pharmacy services for Medicaid recipients. The research, conducted at the University of Iowa from 1975 to 1982, used a sophisticated experimental design; it was funded by the National Center for Health Services Research, the Health Care Financing Administration, and the State of Iowa, representing an investment of over two million dollars. Despite this investment, and the interest of many at the national level, events in the research environment during this period may well have distorted the conclusions of the research. Thus this case study highlights the problems of conducting evaluation research, particularly social experiments, on innovative programs perceived as threatening to the status quo.
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