Care for the chronically ill: nursing home incentive payment experience

Nursing home reimbursement systems which do not adjust payment levels to patient care needs lead to access problems for heavy-care patients. Unnecessarily long and costly hospital stays may result. A patient-based nursing home incentive reimbursement system has been designed and is being evaluated in a controlled field experiment in 36 California skilled nursing facilities. Incentives are paid for admitting heavy-care patients, meeting outcome goals on some patients, and discharging and maintaining some patients in the community. This article describes a nursing home reimbursement system which is intended to simultaneously mitigate problems of restricted access, inefficient use of beds, and nonoptimal care. It also discusses the approach to evaluating this broad social intervention by application of a controlled experimental design.

Survey-based indices for nursing home quality incentive reimbursement

Incentive payments are a theoretically appealing complement to nursing home quality assurance systems that rely on regulatory enforcement. However, the practical aspects of incentive program design are not yet well understood. After reviewing the rationale for incentive approaches and recent State and Federal initiatives, the article considers a basic program design issue: creating an index of nursing home quality. It focuses on indices constructed from routine licensure and certification survey results because State initiatives have relied heavily on these readily accessible data. It also suggests a procedure for creating a survey-based index and discusses a sampling of implementation issues.

The effects of hospital rate-setting programs on volumes of hospital services: a preliminary analysis

This article describes a preliminary study of the effects of State rate-setting programs on volumes of hospital services, specifically admission rates, occupancy levels, and average lengths of stay. A volume response to rate-setting may be anticipated as a result of program effects on hospital costs or charges as well as on hospitals' behavioral incentives. We analyzed data for samples of hospitals and counties in States with and without rate-setting programs for the 9-year period 1969 to 1978. The results suggested that rate regulation has brought about, in some States, an increase in hospital occupancy by increasing patients' lengths of stay. Few programs have had a measurable effect on the admission rate. Programs that regulate per diem rates seem to produce more consistent and predictable volume effects than those controlling charges. The findings were generally consistent with prior hypotheses and partially account for earlier findings regarding the effects of rate-setting programs on hospital costs.

Variations in physician utilization patterns in a capitation payment IPA-HMO

Health care utilization data, using measures such as rates of hospitalization, physician visits, and specialty referrals, were collected for individual provider offices in an Individual Practice Association-Health Maintenance Organization (IPA-HMO) that used a capitation payment system to reimburse its primary physicians. Variations in health care utilization patterns between IPA offices were identified and examined for possible associations with other characteristics of these medical practices. As on indirect test of the effectiveness of the HMO's incentive system, it was hypothesized that IPA offices with a larger number of HMO subscriber-patients and those with a longer duration of membership in the IPA would exhibit practice patterns that would conform most with the HMO's cost control objectives. Associations were found between health care utilization measures and characteristics such as the specialty of physicians, but size of HMO patient load and length of IPA membership did not have the predicted effect. The findings of this study serve to identify several questions that need to be addressed in further assessments of the performance of IPAs that follow this general model.

Cost-based reimbursement and prospective payment: reassessing the incentives

Prospective payment is distinguished from the imposition of a regulatory ceiling on hospital costs. While a regulatory ceiling could potentially be effective in controlling expenditure growth, its success depends upon the political climate. Prospective payment, as a distinct financial policy, offers little cost-containment potential. It is appropriately evaluated in term of its effects on the distribution of risk between providers and third parties and on the trade-off between investment and current consumption.

DRGs: optional in Maryland's GIR system

Maryland hospitals prefer the guaranteed inpatient revenue system to the DRG method of case mix reimbursement for its flexibility of administration and ease of use in refining case groups.

The primary care network--a new type of HMO for private practice physicians

A new type of health maintenance organization has been developed to encourage primary care physicians in private practice to become coordinators and financial managers for all medical care. Each patient chooses one internist, family or general physician, or pediatrician and must be referred by that physician for all hospital admissions and care by specialists. The primary care physician authorizes all payments from his own account for care provided to his patients. He shares any deficit or surplus remaining at the end of the year. Hospital admission rates and length of stay are lower than those of Blue Cross, with only one of three dollars paid to hospitals. The plan is providing care to 38,000 persons with 750 participating physicians in Northern California, Washington and Utah. This plan represents an attempt by physicians to control costs without government regulation.

Risk differential between Medicare beneficiaries enrolled and not enrolled in an HMO

Medicare provides incentive reimbursements to health maintenance organizations (HMOs) which enroll Medicare beneficiaries on a risk option and provide care at a lower cost than expected. The incentive reimbursements are tied to an actuarial calculation of Medicare Adjusted Average Per Capita Cost (AAPCC). The AAPCC adjusts for a number of variables which affect Medicare reimbursements and for which data are available: place of residence, age, sex, welfare status, and institutional status of beneficiaries. These factors account for much of the expected difference in health care reimbursements. They do not, however, account for differences in health status. Because of this, AAPCC calculations of expected costs may be too high if a selected group of beneficiaries is healthier than average, or too low if the selected group has a poorer health status than average. This case study examines the utilization behavior and reimbursement experience of a group of Medicare beneficiaries prior to their joining an HMO (during an open enrollment period) under a risk-sharing option. Their use was compared with a comparable Medicare population (the comparison group) to determine if their usage rates were greater, equal, or less than average. Results show that beneficiaries who joined during open enrollment had a rate of hospital inpatient use over 50 percent below the comparison group and a reimbursement rate for inpatient services 47 percent below the comparison group. These beneficiaries' use of Part B services also appears to be lower than the comparison group. These results must be interpreted with care. The information came from a single case study. Specific aspects of the open enrollment process, described in the paper, further limit the general liability of the findings. Also, while some studies of the same subject support the results, many others do not.

Cost containment through risk-sharing by primary care physicians: a history of the development of United Healthcare

A new type of independent practice association has been organized to encourage primary care physicians in private practice to become coordinators and financial managers for their patients' medical care. Each patient chooses one internist, family or general physician, or pediatrician and must be referred by that physician for all specialized care. The primary care physician authorizes payment from his/her own account for hospital and referral care provided to patients. He or she shares any deficit or surplus remaining at the end of the year. This is a background paper detailing the history of development and specific features contained in this new concept of putting the physician in charge and "at risk" for the costs of medical care to his/her patients. The plan has been operating in northern California, Washington, and Utah and has 40,000 members and 750 participating physicians. This historical background paper is part of a large project--State Employees' Insurance Benefits Utilization Study (SEIBUS) being done by the University of Washington School of Public Health to evaluate use and costs of medical care under this innovative plan.

[Breast feeding money in Switzerland]

A mailed questionnaire was sent to all sickness-insurances on the subject of breast-feeding premium. 52% of the insurances replied, representing 90% of all insured persons. In 1976 23% of the mothers received the premium, in 1977 27%. This figure increased, as the membership of the insurances decreased. It is therefore thought, that mothers are not properly informed on this subject.