Quality and provider choice: a multinomial logit-least-squares model with selectivity

A Federal Trade Commission survey of contact lens wearers is used to estimate a multinomial logit-least-squares model of the joint determination of provider choice and quality of care in the contact lens industry. The effect of personal and industry characteristics on a consumer's choice among three types of providers--opticians, ophthalmologists, and optometrists--is estimated via multinomial logit. The regression model of the quality of care has two features that distinguish it from previous work in the area. First, it uses an outcome rather than a structural or process measure of quality. Quality is measured as an index of the presence of seven potentially pathological eye conditions caused by poorly fitted lenses. Second, the model controls for possible selection bias that may arise from the fact that the sample observations on quality are generated by consumers' nonrandom choices of providers. The multinomial logit estimates of provider choice indicate that professional regulations limiting the commercial practices of optometrists shift demand for contact lens services away from optometrists toward ophthalmologists. Further, consumers are more likely to have their lenses fitted by opticians in states that require the licensing of opticians. The regression analysis of variations in quality across provider types shows a strong positive selection bias in the estimate of the quality of care received by consumers of ophthalmologists' services. Failure to control for this selection bias results in an overestimate of the quality of care provided by ophthalmologists.

Physician unions: any doctor can join, but who can bargain collectively?

Employees in the health care industry, including physicians, have recently taken more interest in unions and collective bargaining. At the present time the health care industry is approximately 20 percent unionized. Labor leaders believe that existing conditions are fertile ground for significant union activity that has been on a recent upswing after a decline during the early 1980s. While current attention is being drawn to the shortage of and increased union organizational activities by nurses, physicians may not be far behind. It is conceivable that by the year 2000 the majority of physicians in the United States will work in full-time salaried positions. In addition, the antitrust laws that currently restrain independent physicians from collective bargaining are being challenged and are likely to change as more physicians become salaried and begin to resemble other professional employee groups. The ruling determining that interns and residents are students rather than hospital employees is also certain to be challenged and changed, especially as pressures on the National Labor Relations Board (NLRB) are brought by house staff union organizations. After a 1987 ruling that the NLRB had been improperly interpreting the 1974 amendments to the Taft-Hartley Act, the NLRB was ordered to exercise its rule-making power in defining bargaining units for health care workers in acute care hospitals. Physicians would then be one of eight occupations defined as a separate health care bargaining unit.

Antitrust's recent attack on the peer review practitioner: is the Health Care Quality Improvement Act a viable remedy?

Peer review, an increasingly important function in the hospital setting, is unique in that physicians are granted the task of evaluating and supervising the actions of their counterparts. Regardless of the consequences resulting from the peer-review system now operating within the hospitals, it will continue to be a mainstay until a more workable alternative is proved successful.

Court decisions hold implications for managed care plans--Part one

The managed care industry--and HMOs in particular--is now facing the realities of a maturing business. Maturity has brought a competitive tension to the HMO/managed care field, one consequence of which is increased litigation, not only among HMOs but also between HMOs and their suppliers, customers, and indemnity insurers. Entanglement in the legal system is an outgrowth of efforts to gain or preserve a competitive edge, reduce costs, and attract customers. This article highlights selected legal developments from the past two years that reflect the causes and effects of this environment. Additional cases will be discussed in the March-April 1990 issue of the journal.