Utilization of radiologic services in different payment systems and patient populations

PURPOSE

To report population-based utilization rates and their variability across and within populations, geographic areas, and different payment systems for diagnostic radiology and radiation oncology procedures.

MATERIALS AND METHODS

Aggregated claims data were obtained from four sources for up to nine radiologic modalities. The data cover Medicare, health maintenance organizations (HMOs), and conventional insurance. For some sources, the data were separated into four age groups. All radiologic services, including those provided by nonradiologists, were included.

RESULTS

Average annual ambulatory diagnostic radiology utilization rates ranged from 570 procedures per 1,000 nonelderly persons in an HMO setting to 1,970 per 1,000 for Medicare enrollees. Radiation oncology utilization rate added 11 procedures per 1,000 to the HMO population rate and 260 per 1,000 to the Medicare population rate. In the Medicare data, the diagnostic radiology utilization rate in the 25th percentile state was 78% of the rate in the 75th percentile state. In a small sample of HMOs, the 25th percentile HMO rate was 45% of the 75th percentile HMO rate.

CONCLUSION

Much variability exists in utilization rates. National or regional averages are not a good guide to the utilization rates in a specific patient population and should not be taken as norms. Only actual data from a patient population are likely to provide radiologists with fairly accurate predictions of their future utilization rates.

Physicians and group practice: balancing autonomy with market reality

Developing or joining multispecialty group practices is emerging as a premier competitive strategy for physicians. "Physicians and Group Practice: Balancing Autonomy with Market Reality" explores the driving forces causing the restructure of physician services into multispecialty group practices. The growth and characteristics of group practices are outlined as well as the advantages and trade-offs inherent in a group practice.

Involuntary health plan switching: case study of a corporate health benefits program

This study examined the extent of health plan switching in one large corporation due to changes in employment, compared it with the extent of voluntary switching among continuously employed individuals, and evaluated the risk mix of health plan stayers, voluntary switchers, and involuntary switchers. Of 14,791 workers enrolled in the firm's fee-for-service plan in 1987, only 5,320 remained in 1990. Of the 11,494 employees enrolled in the large health maintenance organization (HMO) and the 7,677 enrolled in the small HMOs in 1987, only 5,299 and 3,026, respectively, remained in their HMOs and insured by the firm in 1990. These large enrollment losses were offset by large enrollment gains from new employees. Health plan leavers were at a lower risk of using medical services than were health plan stayers. The lowest expected annual expenditures were among newly hired health plan joiners.

Assessing the culture of medical group practices

This study was designed to identify the relevant components of the organizational culture of medical group practices and to develop an instrument to measure those cultures. Building on the work of industrial psychologists and organizational sociologists, a 35-item instrument was developed through an iterative process with more than 100 medical groups. The final instrument was tested using responses from physicians practicing in two very different medical groups: one a prepaid group practice with salaried physicians and the other, until recently, a fee-for-service practice. Using stepwise discriminant analysis of the responses to this instrument, more than 90% of the physicians were able to be placed in the appropriate practice setting.

Is referral source a risk factor for coronary surgery? Health maintenance organization versus fee-for-service system

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.

Home health resource utilization. Health maintenance organization versus fee-for-service subscribers

A commonly held belief is that patients enrolled in health maintenance organizations (HMOs) are authorized fewer home health services than patients enrolled in fee-for-service (FFS) plans. This study compared home health resource utilization patterns between patients enrolled in a cost HMO and in FFS plans. Although no significant differences were found, the cost HMO subscribers actually received more services. Despite these similarities, home health administrators need to carefully craft contracts with cost HMOs.

Ambulatory care practice variation within a Medicaid program

STUDY QUESTIONS

What is the extent of variation in patterns of ambulatory care practice across one state's Medicaid program once case mix is controlled for? How much of this variation in resource consumption is explained by factors linked to the provider, patient, and geographic subarea?

DATA SOURCES/STUDY SETTING

Practices of all providers delivering care to persons who were continuously enrolled in the Maryland Medicaid program during FY 1988 were studied. A computerized summary of all services received during this year for 134,725 persons was developed using claims data. We also obtained data from the state's beneficiary and provider files and the American Medical Association's masterfile. Each patient was assigned a "usual source of care" (primary provider) based on the actual patterns of service. The Ambulatory Care Group (ACG) measure was used to help control for case mix.

STUDY DESIGN

This was a cross-sectional study based on the universe of continuously enrolled Medicaid enrollees in one state.

PRINCIPAL FINDINGS

After controlling for case mix, the variation in patient resource use by type of primary provider was 19 percent for ambulatory visits, 46 percent for ancillary testing, 61 percent for prescriptions, and 81 percent for hospitalizations. Across Maryland counties, comparing the low- to high-use jurisdiction, there was 41 percent variation in case mix-adjusted visit rates, 72 percent variation in pharmacy use, and 325 percent variation in hospital days. At the individual practice level, physician characteristics explain up to 17 percent of ambulatory resource use and geographic area explains only a few percent, while patient characteristics explain up to 60 percent of variation.

CONCLUSIONS

Since a large proportion of variation was explained by patient case mix, it is evident that risk adjustment is essential for these types of analyses. However, even after adjustment, resource use varies considerably across types of ambulatory care provider and region, with consequent implications for efficiency of health services delivery.

Shifting the paradigm: monitoring access in Medicare managed care

Medicare managed care enrollment growth points to the need to develop an approach for monitoring access to care for the increasing number of beneficiaries who use these arrangements. This article describes the issues to be addressed in designing a system for monitoring managed care plan enrollees' ability to obtain needed medical care on a timely basis. We review components of the monitoring approach used for traditional fee-for-service (FFS) Medicare, including the conceptual framework, data, measures, and subgroups targeted in monitoring efforts, and discuss the adaptation of that approach for monitoring access in Medicare managed care.

Bringing managed care incentives to Medicare's fee-for-service sector

The Health Care Financing Administration (HCFA) could work with eligible physician organizations to generate savings in total reimbursements for their Medicare patients. Medicare would continue to reimburse all providers according to standard payment policies and mechanisms, and beneficiaries would retain the freedom to choose providers. However, implementation of new financial incentives, based on meeting targets called Group-Specific Volume Performance Standards (GVPS), would encourage cost-effective service delivery patterns. HCFA could use new and existing data systems to monitor access, utilization patterns, cost outcomes and quality of care. In short, HCFA could manage providers, who, in turn, would manage their patients' care.

Health status of Medicare enrollees in HMOs and fee-for-service in 1994

We compared the health status of 863 health maintenance organization (HMO) enrollees with that of 4,576 non-enrollees, controlling for demographics and area of residence, using 1994 data from the Medicare Current Beneficiary Survey (MCBS). HMO respondents were less likely to report fair or poor health, functional impairment, or heart disease. Average predicted costs based on various health-status measures were substantially lower for HMO respondents than for respondents in fee-for-service (FFS) arrangements. The Medicare payment formula for HMOs does not adequately adjust for the better health and consequent lower expected costs of HMO enrollees. The addition of health-status measures would improvement payment accuracy and reduce average HMO payments significantly below current levels.

Do HMOs restrict access to health care among the chronically ill?

Health Maintenance Organizations are enrolling an increasing number of people for the delivery of their health care. Observers are asking whether this trend has resulted in the underprovision of health care to vulnerable population groups. This study asks whether HMOs under-provide care to the chronically ill. We use Ronald Andersen's Behavioral Model to derive predictive expectations about the provision of hospital and physician services to the chronically ill. The results indicate that HMOs do not under-provide health care to the chronically ill, compared to traditional fee-for-service insurance arrangements. We further found that HMOs provide more physician services to those in excellent health, compared to those in fee-for-service arrangements.

Adverse selection among multiple competing health maintenance organizations

This study examines risk selection among nine health plans competing for 16,182 employees of one large firm in 1989: one conventional fee-for-service plan, one group-model health maintenance organization (HMO), and seven network and independent practice model HMOs. We develop and compare measures of risk using weights based on HMO and fee-for-service expenditure data, respectively. We use a multiequation statistical model to develop two sets of utilization and expenditure weights for enrollees in each plan. One set of weights, based on discharge abstracts and outpatient records from the large group-model HMO, measures how much each of the nine groups of employees and dependents would have spent, had they been enrolled in a stringently managed plan with no consumer cost sharing. The other set of weights, based on fee-for-service claims data, measures how much each group would have spent, had it been enrolled in an unmanaged health plan with significant coinsurance and deductibles. Predicted annual expenditures per enrollee exhibit a 23% range from lowest (favorable selection) to highest (adverse selection) risk plans using the HMO weights and a 17% range using fee-for-service weights. The fee-for-service plan and group-model HMO with large enrollments have risk mixes near the center of the spectrum. Smaller HMOs exhibit the extreme forms of both favorable and adverse selection. The statistical methods adopted in this study can be used to risk-adjust capitation payments to competing health plans. As mergers among HMOs and group purchasing arrangements among employers increase the average enrollment in each plan from each payor, however, risk differences among plans will be attenuated and the need to risk-adjust payments will be less severe. Key words: health insurance; adverse selection; managed competition; health maintenance organization.

Effect of utilization review in a fee-for-service health insurance plan

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.

New estimates of the underinsured younger than 65 years

We estimate that at least 29 million Americans with private insurance are underinsured. That figure identifies the underinsured younger than 65 years by the risk of large out-of-pocket expenditures for an unusually expensive, catastrophic illness. A slightly smaller number, about 25 million, are underinsured by an alternate definition: they have insurance that pays a smaller proportion of claims than the plan with the largest enrollment in the federal employee program. The federal employee plan was the insurance standard proposed in several recent health system reform bills. Our estimate of the number of people who are underinsured for catastrophic illness is almost half again larger than the number that was widely cited during last year's debates on health system reform. That estimate was based on the same concept but was projected from a study published 10 years ago.