Cost-effectiveness of the non-laboratory based Framingham algorithm in primary prevention of cardiovascular disease: A simulated analysis of a cohort of African American adults

The non-lab Framingham algorithm, which substitute body mass index for lipids in the laboratory based (lab-based) Framingham algorithm, has been validated among African Americans (AAs). However, its cost-effectiveness and economic tradeoffs have not been evaluated. This study examines the incremental cost-effectiveness ratio (ICER) of two cardiovascular disease (CVD) prevention programs guided by the non-lab versus lab-based Framingham algorithm. We simulated the World Health Organization CVD prevention guidelines on a cohort of 2690 AA participants in the Atherosclerosis Risk in Communities (ARIC) cohort. Costs were estimated using Medicare fee schedules (diagnostic tests, drugs & visits), Bureau of Labor Statistics (RN wages), and estimates for managing incident CVD events. Outcomes were assumed to be true positive cases detected at a data driven treatment threshold. Both algorithms had the best balance of sensitivity/specificity at the moderate risk threshold (>10% risk). Over 12years, 82% and 77% of 401 incident CVD events were accurately predicted via the non-lab and lab-based Framingham algorithms, respectively. There were 20 fewer false negative cases in the non-lab approach translating into over $900,000 in savings over 12years. The ICER was -$57,153 for every extra CVD event prevented when using the non-lab algorithm. The approach guided by the non-lab Framingham strategy dominated the lab-based approach with respect to both costs and predictive ability. Consequently, the non-lab Framingham algorithm could potentially provide a highly effective screening tool at lower cost to address the high burden of CVD especially among AA and in resource-constrained settings where lab tests are unavailable.

Validating CPT Typical Times for Medicare Office Evaluation and Management (E/M) Services

Every 5 years, the federal government reviews the Medicare Fee Schedule for changes in the work effort physicians personally devote to office visits. Using physician face-to-face times reported in the Centers for Disease Control and Prevention's National Ambulatory Care Survey (NAMCS), guideline office visit times associated with the 1997-1998 mix of Medicare claims averaged 9 percent longer versus NAMCS; Medicare billed visits with new patients were 32 percent longer. Surgeons and dermatologists had the largest discrepancies in Medicare versus NAMCS times. If CPT guideline times currently in use are now overstated, then intraservice work effort is likely overstated given the high correlation of time with work effort, and Medicare payment levels need to be reduced. Upcoding visit content to higher paid CPT visit codes may also explain seemingly longer Medicare billed times and call for payment reductions as well.

Utilization of epidermal growth factor receptor (EGFR) testing in the United States: a case study of T3 translational research

PURPOSE

We examined hospital use of the epidermal growth factor receptor assay in patients with lung cancer in the United States. Our goal was to inform the development of a model to predict phase 3 translation of guideline-directed molecular diagnostic tests.

METHODS

This was a retrospective observational study. Using logistic regression, we analyzed the association between hospitals' institutional and regional characteristics and the likelihood that an epidermal growth factor receptor assay would be ordered.

RESULTS

Significant institutional predictors included affiliation with an academic medical center (odds ratio, 1.48; 95% confidence interval, 1.20-1.83), participation in a National Cancer Institute clinical research cooperative group (odds ratio, 2.06, 1.66-2.55), and -availability of positron emission tomography scan (odds ratio, 1.44, 1.07-1.94) and cardiothoracic surgery (odds ratio, 1.90, 1.52-2.37) services. Significant regional predictors included metropolitan county (odds ratio, 2.08, 1.48-2.91), population with above-average education (odds ratio, 1.46, 1.09-1.96), and population with above-average income (odds ratio, 1.46, 1.04-2.05). Distance from a National Cancer Institute cancer center was a negative predictor (odds ratio, 0.996, 0.995-0.998), with a 34% decrease in likelihood for every 100 miles.

CONCLUSION

In 2010, only 12% of US acute-care hospitals ordered the epidermal growth factor receptor assay, suggesting that most patients with lung cancer did not have access to this test. This case study illustrated the need for: (i) increased dissemination and implementation research, and (ii) interventions to improve adoption of guideline-directed molecular diagnostic tests by community hospitals.

Results of the Medicare Health Support disease-management pilot program

BACKGROUND

In the Medicare Modernization Act of 2003, Congress required the Centers for Medicare and Medicaid Services to test the commercial disease-management model in the Medicare fee-for-service program.

METHODS

The Medicare Health Support Pilot Program was a large, randomized study of eight commercial programs for disease management that used nurse-based call centers. We randomly assigned patients with heart failure, diabetes, or both to the intervention or to usual care (control) and compared them with the use of a difference-in-differences method to evaluate the effects of the commercial programs on the quality of clinical care, acute care utilization, and Medicare expenditures for Medicare fee-for-service beneficiaries.

RESULTS

The study included 242,417 patients (163,107 in the intervention group and 79,310 in the control group). The eight commercial disease-management programs did not reduce hospital admissions or emergency room visits, as compared with usual care. We observed only 14 significant improvements in process-of-care measures out of 40 comparisons. These modest improvements came at substantial cost to the Medicare program in fees paid to the disease-management companies ($400 million), with no demonstrable savings in Medicare expenditures.

CONCLUSIONS

In this large study, commercial disease-management programs using nurse-based call centers achieved only modest improvements in quality-of-care measures, with no demonstrable reduction in the utilization of acute care or the costs of care.

Missing Productivity Gains in the Medicare Physician Fee Schedule: Where Are They?

The Medicare Fee Schedule with payments for thousands of visits and procedures is updated periodically for the work component of changes in physician relative work. Three 5-year reviews of physician work by Medicare have been biased against finding productivity gains and reductions in physician work relative values. The authors present four studies showing shorter physician times with patients in their offices and in the operating room, increases in surgeons’ self-reported total work in spite of declining operating room times, and growing numbers of costly handoffs to nonsurgeons, while surgeons receive full payment for postoperative follow-up with patients. Substantial savings exist in the fee schedule if productivity gains from greater delegation to ancillary staff and specialists, reengineering of services, and rapid learning by experience with new technologies were integrated into the periodic reviews.

Evaluation of Medicare Health Support chronic disease pilot program

The Medicare Program is conducting a randomized trial of care management services among fee-for-service (FFS) beneficiaries called the Medicare Health Support (MHS) pilot program. Eight disease management (DM) companies have contracted with CMS to improve clinical quality, increase beneficiary and provider satisfaction, and achieve targeted savings for chronically ill Medicare FFS beneficiaries. In this article, we present 6-month intervention results on beneficiary selection and participation rates, mortality rates, trends in hospitalizations, and success in achieving Medicare cost savings. Results to date indicate limited success in achieving Medicare cost savings or reducing acute care utilization.

WY14,643, a PPARalpha ligand, attenuates expression of anti-glomerular basement membrane disease

Peroxisome proliferator-activated receptor alpha (PPARalpha) ligands are medications used to treat hyperlipidaemia and atherosclerosis. Increasing evidence suggests that these agents are immunosuppressive. In the following studies we demonstrate that WY14,643, a PPARalpha ligand, attenuates expression of anti-glomerular basement membrane disease (AGBMD). C57BL/6 mice were fed 0.05% WY14,643 or control food and immunized with the non-collagenous domain of the alpha3 chain of Type IV collagen [alpha3(IV) NC1] in complete Freund's adjuvant (CFA). WY14,643 reduced proteinuria and greatly improved glomerular and tubulo-interstitial lesions. However, the PPARalpha ligand did not alter the extent of IgG-binding to the GBM. Immunohistochemical studies revealed that the prominent tubulo-interstitial infiltrates in the control-fed mice consisted predominately of F4/80(+) macrophages and WY14,643-feeding decreased significantly the number of renal macrophages. The synthetic PPARalpha ligand also reduced significantly expression of the chemokine, monocyte chemoattractant protein (MCP)-1/CCL2. Sera from mice immunized with AGBMD were also evaluated for antigen-specific IgGs. There was a significant increase in the IgG1 : IgG2c ratio and a decline in the intrarenal and splenocyte interferon (IFN)-gamma mRNA expression in the WY14,643-fed mice, suggesting that the PPARalpha ligand could skew the immune response to a less inflammatory T helper 2-type of response. These studies suggest that PPARalpha ligands may be a novel treatment for inflammatory renal disease.

Determining the cost-effectiveness of a computer-based smoking cessation intervention in primary care

PURPOSE

To evaluate the incremental effectiveness and cost-effectiveness of a staged-based, computerized smoking cessation intervention relative to standard care in an urban managed care network of primary care physicians.

DESIGN

Decision-analytic model based on results of a randomized clinical trial.

METHODOLOGY

Patient outcomes and cost estimates were derived from clinical trial data. Effectiveness was measured in terms of 7-day point-prevalence abstinence at 6 months post-intervention. Quality-adjusted life years (QALYs) and cost-effectiveness (CE) were calculated, with CE measured as cost per patient per life year saved and per quality-adjusted life years saved. CE estimates were adjusted to account for partial behavior change as measured in terms of progression in stage of readiness to quit. Sensitivity analyses were conducted to evaluate the robustness of key model assumptions.

PRINCIPAL FINDINGS

Intervention patients were 1.77 times more likely to be smoke-free at 6 months follow-up than those in standard care (p=.078). The intervention generated an additional 3.24 quitters per year. Annualized incremental costs were $5,570 per primary care practice, and $40.83 per smoker. The mean incremental cost-effectiveness ratio was $1,174 per life year saved ($869 per QALY). When the intervention impact on progression in stage of readiness to quit was also considered, the mean incremental cost-effectiveness ratio declined to $999 per life year saved ($739 per QALY).

CONCLUSIONS

From a physician's practice perspective, the stage-based computer tailored intervention was cost-effective relative to standard care. Incorporation of partial behavior change into the model further enhanced favorability of the cost-effectiveness ratio.

Validation of physician survey estimates of surgical time using operating room logs

The Medicare Physician Fee Schedule (MFS) is based on relative value units that represent the costliness of a particular service compared to all other services. Comparison of current surgical time estimates show systematically longer times than those obtained in the original Harvard study more than a decade ago. Any bias in surgical time estimates is likely to distort MFS payments across specialties. This study is the first to use objectively collected intraservice surgical time to validate estimates of time collected from small-group physician surveys. Median intraservice time estimates are significantly longer than intraservice times from operative logs. The average difference across 60 procedures is 31 minutes; the range is from a few minutes to almost 2 hours. Given that half of the studied surgical procedures is a subset of services that anchors the MFS, surgical times for other related services are likely to be overstated as well.

Repricing specialty hospital outpatient services using ambulatory surgery center prices

This article explores whether Medicare pays more for the same outpatient services provided in an acute specialty hospital than in an ambulatory surgery center (ASC). How financially dependent a specialty hospital is on ASC-eligible services is also investigated. Medicare outpatient claims in 43 orthopedic and 12 surgical specialty hospitals in 2004 were repriced using ASC pricing software. Payments for the same surgical procedure were 43 and 64 percent higher in specialty surgical and orthopedic outpatient departments, respectively, compared with simulated ASC payments. Non-ASC-eligible outpatient services were 18-35 percent of all Medicare outpatient payments varying by type of specialty hospital.

Financial gains and risks in pay-for-performance bonus algorithms

Considerable attention has been given to evidence-based process indicators associated with quality of care, while much less attention has been given to the structure and key parameters of the various pay-for-performance (P4P) bonus and penalty arrangements using such measures. In this article we develop a general model of quality payment arrangements and discuss the advantages and disadvantages of the key parameters. We then conduct simulation analyses of four general P4P payment algorithms by varying seven parameters, including indicator weights, indicator intercorrelation, degree of uncertainty regarding intervention effectiveness, and initial baseline rates. Bonuses averaged over several indicators appear insensitive to weighting, correlation, and the number of indicators. The bonuses are sensitive to disease manager perceptions of intervention effectiveness, facing challenging targets, and the use of actual-to-target quality levels versus rates of improvement over baseline.

Economic grand rounds: Variation in staffing and activities in psychiatric inpatient units

In 1999 the Balanced Budget Refinement Act mandated the development of a per diem prospective payment for all psychiatric inpatients. To assist Medicare in developing a per diem patient-based payment system, this study surveyed a representative sample of psychiatric inpatient units in 40 facilities for one week in 2001 through 2003 to determine how units are staffed and how staff members spend their time caring for patients. On general adult units, psychiatric staff averaged ten hours per patient per 24-hour day, roughly 55 percent of staff time was involved in psychiatric care, medical-related nursing and personal care accounted for 10 percent of staff time, and milieu time took up 34 percent of staff time. Small general adult and geriatric units required 50 percent more staff time per patient than large units. More research is needed to determine how recent changes in the method of payment affect these facilities.

Patient casemix classification for medicare psychiatric prospective payment

OBJECTIVE

For a proposed Medicare prospective payment system for inpatient psychiatric facility treatment, the authors developed a casemix classification to capture differences in patients' real daily resource use.

METHOD

Primary data on patient characteristics and daily time spent in various activities were collected in a survey of 696 patients from 40 inpatient psychiatric facilities. Survey data were combined with Medicare claims data to estimate intensity-adjusted daily cost. Classification and Regression Trees (CART) analysis of average daily routine and ancillary costs yielded several hierarchical classification groupings. Regression analysis was used to control for facility and day-of-stay effects in order to compare hierarchical models with models based on the recently proposed payment system of the Centers for Medicare & Medicaid Services.

RESULTS

CART analysis identified a small set of patient characteristics strongly associated with higher daily costs, including age, psychiatric diagnosis, deficits in daily living activities, and detox or ECT use. A parsimonious, 16-group, fully interactive model that used five major DSM-IV categories and stratified by age, illness severity, deficits in daily living activities, dangerousness, and use of ECT explained 40% (out of a possible 76%) of daily cost variation not attributable to idiosyncratic daily changes within patients. A noninteractive model based on diagnosis-related groups, age, and medical comorbidity had explanatory power of only 32%.

CONCLUSIONS

A regression model with 16 casemix groups restricted to using "appropriate" payment variables (i.e., those with clinical face validity and low administrative burden that are easily validated and provide proper care incentives) produced more efficient and equitable payments than did a noninteractive system based on diagnosis-related groups.

BBA impacts on hospital residents, finances, and Medicare subsidies

Concern over rapidly rising Medicare expenditures prompted Congress to pass the 1997 Balanced Budget Act (BBA) that included provisions reducing graduate medical education (GME) payments and capped the growth in residents for payment purposes. Using Medicare cost reports through 2001, we find that both actual and capped residents continued to grow post-BBA. While teaching hospital total margins declined, GME payment reductions of approximately 17 percent had minimal impact on revenue growth (-0.5 percent annually). Four years after BBA, residents remained a substantial line of business for nearly one-half of teaching hospitals with Medicare effective marginal subsidies exceeding resident stipends by nearly $50,000 on average. Coupled with an estimated replacement cost of over $100,000 per resident, it is not surprising that hospitals accepted nearly 4,000 residents beyond their allowable payment caps in just 4 years post-BBA.

Specialty Versus Community Hospitals: Referrals, Quality, And Community Benefits

In this paper we compare physician referral patterns, quality, patient satisfaction, and community benefits of physician-owned specialty versus peer competitor hospitals. Our results are based on evidence gathered from site visits to six markets, 2003 Medicare claims, patient focus groups, and Internal Revenue Service data. Although physician-owners are more likely than others to refer to their own facilities and treat a healthier population, there are rationales for these patterns aside from motives for profit. Specialty hospitals provide generally high-quality care to satisfied patients. Uncompensated care plus specialty hospitals' taxes represent a greater burden, in percentage terms, than community benefits provided by nonprofit providers.

Race/Ethnic Disparities in Utilization of Lifesaving Technologies by Medicare Ischemic Heart Disease Beneficiaries

OBJECTIVE

The objective of this study was to explain race/ethnic disparities in hospitalizations, utilization of high-technology diagnostic and revascularization services, and mortality of elderly ischemic heart disease (IHD) patients.

DESIGN

A longitudinal Medicare claims database of all Part A hospital and Part B physician services provided elderly patients admitted for IHD in 1997 is used to construct admission, utilization, and mortality rates for whites and blacks, Asians, Hispanics, and American Indians. Z-scores are used to test differences in rates between whites and minorities at the 99% confidence level. Logistic and proportional hazard models are used to predict the likelihood of revascularization and its effects on race/ethnic survival 2 years postdischarge.

SETTING

The setting of this study was an acute hospital supplemented by all ambulatory Part B outpatient providers of care.

PATIENTS/PARTICIPANTS

Participants included all 700,000 age 65+ Medicare beneficiaries in fee-for-service identified with IHD as a primary diagnosis on admission in 1997.

MEASUREMENTS AND MAIN RESULTS

Whites were 26% more likely to be admitted for IHD than blacks, 50% more likely than Asians, 5% more than American Indians, but 3% less likely than Hispanics. Once admitted, elderly blacks and American Indians undergo invasive diagnostic and surgical revascularization far less often than whites (P < 0.01), although blacks are equally as likely as whites to be admitted to an open heart hospital. Controlling for other factors, whites reduce their 2-year mortality by 20% by undergoing revascularization 41% of the time. Blacks gain only 11% as a result of much lower rates and gains to revascularization than whites. Asians and Hispanics were slightly more likely than whites to undergo revascularization but gain less than whites from the procedure.

CONCLUSIONS

Despite having similar Medicare health insurance coverage, elderly utilization and IHD mortality rates differ markedly not only between whites and minorities, but within minority groups themselves. A large, nationally representative survey of physicians and patients is needed to distinguish between systemwide "failures to refer" and patient "aversions to surgery" as explanations for lower black rates of surgical interventions.

Variation in patient routine costliness in U.S. psychiatric facilities

BACKGROUND

The Balanced Budget Refinement Act of 1999 included a Congressional mandate to develop a patient-level case mix prospective payment system (PPS) for all Medicare beneficiaries treated in PPS-exempt psychiatric facilities. Payment levels by case mix category have been proposed by the government based on claims and facility cost reports. Because of claims data limitations, these levels do not account for patient-specific staffing costs within a facility's routine units, nor are certain key patient characteristics considered for higher payment.

AIMS OF THE STUDY

This study uses novel primary data to quantify heretofore unmeasured differences in daily staffing intensity on routine units among Medicare patients. The data are used to test for compression (or narrowing) in case mix payment weights that would result from using only Medicare claims and facility cost reports to quantify daily routine costliness.

METHODS

Primary data on patient and staff times in over 20 activities were collected from 40 psychiatric facilities and 66 psychiatric units, nation-wide. Patient times were reported on all inpatients on each shift over a 7-day study period. A resource intensity measure (in Registered Nurse (RN)-equivalent minutes) was constructed on a daily basis for 4,149 Medicare and 4,667 non-Medicare patient days. The routine measure is converted into daily cost using cost report per diems and ancillary costs added using submitted claims. Descriptive tables isolate key cost drivers for Medicare patients. Classification and Regression Trees (CART) clustering identifies 16 potential case mix groups. Multivariate regression is used to compare case mix, day-of-stay, and facility effects using 4 alternative measures of daily routine and ancillary costs.

RESULTS

Patient daily routine intensity of care is found to vary by a factor of 3 or more between the top and bottom 10% of days. Medicare patient days were 12.5% more staff intensive than non-Medicare days, which may have been due to age and other differences. Older dementia and "residual diagnosis" patients are more intensive while schizophrenia and substance-related patients are less intensive. Age, psychiatric and medical severity, deficits in Activities in Daily Living (ADLs), dangerous behaviors, and electroconvulsive therapy (ECT) also contribute substantially to higher staffing intensity. Other patient characteristics were insignificant within broad diagnostic groups. Routine costs based on a single facility per diem produced narrower case mix cost differences--often by a factor of 2 or more--for 10 of 12 groups with significantly higher costs. Adding patient-specific ancillary to uniform per diem costs only marginally decompressed costs. Day of-stay costs were similarly compressed when using only cost reports.

DISCUSSION

Claims-based costing using Medicare cost reports unduly compresses (narrows) estimates of inter-group case mix cost differences. Also, by not capturing ADL deficits and dangerous behaviors, administrative data sets fail to identify small, but very resource intensive, patient groups. ECT treatment regimens, although rare, significantly increase costs on a daily basis.

IMPLICATIONS FOR HEALTH POLICIES

Medicare's recently proposed prospective payment system for psychiatric inpatients uses claims-based costing methods based on widely available administrative data. Consequently, fewer high cost groups are identified due to non-reported patient characteristics such as ADL deficits. Moreover, inter-group relative cost differences are likely understated. It is also possible that any standardized dollar amount applied to group relative weights is understated because Medicare patients appear more intensive per day on routine units.

IMPLICATIONS FOR FUTURE RESEARCH

Larger primary samples of special psychiatric units (e.g., med-psych, child/adolescent) could improve estimates of daily routine costliness. Larger samples could also support stronger tests of case mix and cost differences by facility type and teaching status. Medical records information on non-Medicare patients could quantify any systematic differences in average daily costs holding case mix constant. Similar primary studies of psychiatric patients treated outside PPS-exempt units in acute general hospitals could result in a fully integrated payment system for all mentally ill Medicare patients, thereby avoiding payment inefficiencies and inequities.

Characteristics of high staff intensive Medicare psychiatric inpatients

Previous analyses of the costs of Medicare psychiatric inpatients have been limited by the use of claims and provider cost reports that fail to quantify differences in patient characteristics and routine costs. This article uses new primary data from 66 psychiatric inpatient units in 40 facilities nationwide to measure the times staff spend in therapeutic and other activities caring for Medicare patients. Patient days are divided into two groups of very high and low staff intensity and patient characteristics compared in each group. Results identify key patient characteristics associated with high staffing days, including old age, dementia and cognitive impairment, severe psychiatric diagnosis, deficits in activities of daily living (ADLs), and assaultive or agitated behaviors. Policy implications and suggested enhancements are made with regard to the proposed CMS case-mix classification system based on claims data alone.

Expansion of Medicare's definition of post-acute care transfers

In October 1998, the definition of a transfer in Medicare's hospital prospective payment system was expanded to include several post-acute care (PAC) providers in 10 high-volume PAC diagnosis-related groups (DRGs). In this methodological article, the authors respond to a congressional mandate to consider more DRGs in the definition. Empirical results support expansion to many more DRGs that are split in ways that understate total PAC volumes, including 25 DRG pairs (with/without complications) and DRG bundles (e.g., infections) that together exhibit high PAC volumes. By contrast, some DRGs (e.g., craniotomy) are questionable PAC candidates because of their heterogenous procedure mix.

Pelvic wall involvement denotes a poor prognosis in T4 rectal cancer

PURPOSE

An aggressive surgical approach with en bloc resection of involved structures is often possible with anterior rectal cancers that invade adjacent visceral organs, but is rarely possible in tumors that invade the pelvic wall. However, most staging systems include both situations in the same group of T4 rectal cancers. We performed a retrospective study of patients with stage T4 rectal cancer undergoing surgery to assess the influence of different organ involvement on resectability and survival.

METHODS

A retrospective review was conducted of 84 patients with T4 rectal cancer treated at the University of Minnesota and affiliated hospitals over a ten-year period. Forty-seven patients (56 percent) were staged for local invasion on the basis of final pathology, 19 (23 percent) on the basis of operative findings, and 18 (21 percent) on the basis of ultrasound images. Patients were divided into two groups, those with or without pelvic wall involvement. Resectability, local control, and overall survival were compared between groups. Survival curves were estimated by the Kaplan-Meier method and compared by log-rank test. Multivariate analysis was performed with Cox proportional and logistic regression.

RESULTS

Thirty-one patients (37 percent) had involvement of the pelvic wall, whereas 53 patients (63 percent) had visceral involvement only. All 29 patients with distant metastasis died of their disease. Forty-seven of the 55 patients without distant metastasis underwent tumor resection. Age and pelvic wall involvement were the only two factors independently associated with the probability of resection in logistic regression analysis (P = 0.0067 and P = 0.037, respectively). The only factor that affected median survival in patients without distant metastasis was tumor resection (49.1 months for resection vs. 6.1 months for no resection, P = 0.017). Patients with visceral involvement had a longer median survival (49.2 months) than those with pelvic wall involvement (13.2 months), but the difference did not reach statistical significance (P = 0.058).

CONCLUSION

Rectal cancers with pelvic and visceral involvement have different rates of resectability and median survival. These differences should be reflected in the TNM classification system.

Impact of global bundled payments on hospital costs of coronary artery bypass grafting

The Health Care Financing Administration began the Medicare Participating Heart Bypass Center Demonstration in 1991, in which hospitals and physicians are paid a single negotiated global price for all inpatient care for heart bypass patients. This article analyzed the changes in total and departmental direct variable costs during the 1991-1993 period using micro-cost data. The results indicate that all participating hospitals had significant reductions in total direct variable costs, after controlling for preoperative risk factors and postoperative outcomes. However, the patterns in cost reductions across major departments were different across hospitals. The cost reductions primarily came from nursing intensive care unit, routine nursing, pharmacy, and catheter lab.

Preoperative correlates of the cost of coronary artery bypass graft surgery: comparison of results from three hospitals

This article furthers our understanding of the cost of coronary artery bypass graft (CABG) surgery by analyzing the extent to which preoperative correlates of cost differ among hospitals. A total of 2828 patient who underwent bypass surgery at 3 hospitals (2 teaching and 1 nonteaching) were analyzed. The preoperative correlates of direct variable cost (marginal cost) were determined by ordinary least squares regression. Age, urgent/emergent surgical priority, previous CABG, and chronic obstructive pulmonary disease (COPD) were significant contributors (P < .05) to cost in all hospitals, but overall, there were many differences. The major contributor to cost was non-white race (31.3%) at teaching hospital A, previous CABG (30.5%) at teaching hospital B, and preop insertion of intra-aortic balloon pump (IABP) (35.9%) at the nonteaching hospital. The number of significant risk factors also differed. Preoperative characteristics that contribute to cost can be quite different among hospitals and therefore results from one hospital cannot be broadly generalized to others.

Alternative cost-effective anesthesia care teams

Private and public payers are increasingly seeking an overall per-diem or global surgery rates that put hospitals at significant financial risk for anesthesia services. Other payers are demanding deep discounts in anesthesia fees and negotiating global capitation rates that put both hospitals and physicians at risk for all care including anesthesia. This study examines some of the various organizational models for using physician anesthesiologist (MDA) and nurse anesthetist (CRNA) resources most cost effectively and safely. Variations in percentages of these practitioners can be seen in that California reportedly has 47 MDAs for every 10 CRNAs while Michigan has just 6 MDAs for every 10 CRNAs practicing in that more highly managed care environment. Four various anesthesia practice models are described in detail without declaring any one a universal model. The cost per year for MDAs averages $294,000 while the cost per year for CRNAs is less than half as much.

Barriers to achieving a cost-effective workforce mix: lessons from anesthesiology

As pressures to control health care costs increase, competition among physicians, advanced practice nurses, and other allied health providers has also intensified. Anesthesia care is one of the most highly contested terrains, where the growth in anesthesiologist supply has far outstripped total demand. This article explains why the supply has grown so fast despite evidence that nurse anesthetists provide equally good care at a fraction of the cost. Emphasis is given to payment incentives in the private sector and Medicare. Laudable attempts by the government to make Medicare payments more efficient and equitable by lowering the economic return to physicians specializing in anesthesia have created a hostile work environment. Nurse anesthetists are being dismissed from hospitals in favor of anesthesiologists who do not appear "on the payroll" but cost society more, nonetheless. Claims of antitrust violations by nurse anesthetists against anesthesiologists have not found much support in the courts for several reasons outlined in this essay. HMO penetration and other market forces have begun signaling new domestic physician graduates to eschew anesthesia, but, again, Medicare payment incentives encourage teaching hospitals to recruit international medical graduates to maintain graduate medical education payments. After suggesting desirable but likely ineffective reforms involving licensure laws and hospital organizational restructuring, the article discusses several alternative payment methods that would encourage hospitals and medical staffs to adopt a more cost-effective anesthesia workforce mix. Lessons for other nonphysician personnel conclude the article.

17Beta-estradiol modulates gastroduodenal preneoplastic alterations in rats exposed to the carcinogen N-methyl-N'-nitro-nitrosoguanidine

Gastric cancers are a significant cause of morbidity worldwide. Epidemiological studies and animal models show that males have higher incidences of gastric cancers compared with females, suggesting that sex hormones may modulate gastric cancer risk. An animal model of the initiation phase of gastric cancer was used to determine the effects of systemic estrogen administration on morphological progression of preneoplastic lesions and to define cell populations at which estrogens may act. Preneoplastic progression in antral and duodenal mucosa was examined in male rats that received the chemical carcinogen, N-methyl-N'-nitro-nitrosoguanidine (MNNG), during treatment with implants containing 17beta-estradiol or oil vehicle. Histopathological changes in antral and duodenal gland morphology, numbers of proliferating cells and apoptotic bodies, and antral gastrin cell numbers and protein storage levels were determined 4 weeks later. With MNNG treatment, duodenal villous heights were significantly decreased, and epithelial cells displayed histological features of hyperplasia and dysplasia. Antral glands showed epithelial hyperplasia and dysplasia, increased mucosal height, and decreased mucin levels. Antral gastrin storage protein levels were decreased by MNNG. Systemic treatment with 17beta-estradiol significantly reversed MNNG-induced alterations in duodenal gland heights while increasing mucin and gastrin levels in antral glands. Cell proliferation and apoptosis rates were not significantly different between groups. The present results indicate that systemic 17beta-estradiol treatment influences antral and duodenal gland differentiation during the initiation phase of chemical gastroduodenal carcinogenesis in male rats. These results explain, in part, a potential pathway through which protective effects of estrogens on chemical carcinogenesis are mediated in the upper gastrointestinal tract.

Cost-effectiveness of the clinical practice recommendations in the AHCPR guideline for smoking cessation. Agency for Health Care Policy and Research

CONTEXT

The Agency for Health Care Policy and Research (AHCPR) published the Smoking Cessation: Clinical Practice Guideline in 1996. Based on the results of meta-analyses and expert opinion, the guideline identifies efficacious interventions for primary care clinicians and smoking cessation specialty providers.

OBJECTIVE

To determine the cost-effectiveness of clinical recommendations in AHCPR's guideline.

DESIGN

The guideline's 15 recommended smoking cessation interventions were analyzed to determine their relative cost-effectiveness. Then, using decision probabilities, the interventions were combined into a global model of the guideline's overall cost-effectiveness.

PATIENTS

The analysis assumes that primary care clinicians screen all presenting adults for smoking status and advise and motivate all smokers to quit during the course of a routine office visit or hospitalization. Smoking cessation interventions are provided to 75% of US smokers 18 years and older who are assumed to be willing to make a quit attempt during a year's time.

INTERVENTION

Three counseling interventions for primary care clinicians and 2 counseling interventions for smoking cessation specialists were modeled with and without transdermal nicotine and nicotine gum.

MAIN OUTCOME MEASURE

Cost (1995 dollars) per life-year or quality-adjusted life-year (QALY) saved, at a discount of 3%.

RESULTS

The guideline would cost $6.3 billion to implement in its first year. As a result, society could expect to gain 1.7 million new quitters at an average cost of $3779 per quitter, $2587 per life-year saved, and $1915 for every QALY saved. Costs per QALY saved ranged from $1108 to $4542, with more intensive interventions being more cost-effective. Group intensive cessation counseling exhibited the lowest cost per QALY saved, but only 5% of smokers appear willing to undertake this type of intervention.

CONCLUSIONS

Compared with other preventive interventions, smoking cessation is extremely cost-effective. The more intensive the intervention, the lower the cost per QALY saved, which suggests that greater spending on interventions yields more net benefit. While all these clinically delivered interventions seem a reasonable societal investment, those involving more intensive counseling and the nicotine patch as adjuvant therapy are particularly meritorious.

Programmatic, economic, and demographic forces underlying Medicaid enrollment trends

This article examines the enrollment effects of congressionally mandated Medicaid coverage during the late 1980s. Child-related mandates were found to increase noncash enrollments 37% in states without a medically needy program, while the 1990 Omnibus Budget Reconciliation Acts legislation added another 27%—mostly elderly poor. The evidence suggests states responded to the mandates, in part, by shifting cash welfare children and their families to Medicaid-only status. Without continued mandates, the shift to unrestricted Medicaid block grants will likely raise the number of uninsured (mostly children) 30% or more in nonmedically needy states versus 10% to 20% in other states. Federal Medicaid matching was found to be an inadequate incentive for states to extend health insurance coverage to all of their poor. Cyclic variation in state economies is also found to put the poor at risk of disenrollment given state laws requiring balanced budgets.

Cost savings and physician responses to global bundled payments for Medicare heart bypass surgery

In 1991 the Health Care Financing Administration (HCFA) began the Medicare Participating Heart Bypass Center Demonstration, in which hospitals and physicians are paid a single negotiated global price for all inpatient care for heart bypass patients. During the first 27 months of the demonstration, the Government and beneficiaries together saved more than $17 million on bypass surgery in four participating institutions. Average total cost per case fell in three of the four hospitals during the 1990-93 period as the alignment of physician and hospital incentives resulted in physicians changing their practice patterns to shorten stays and reduce costs.

Changes in the use of diagnostic technologies among Medicare patients, 1985 and 1990

This paper examines changes in the use of selected diagnostic technologies for Medicare patients in 1985 and 1990. The analysis compares patients across five common, medical tracer conditions: acute myocardial infarction (AMI), congestive heart failure (CHF), stroke, pneumonia, and gastrointestinal (GI) hemorrhage. The relationship of hospital characteristics to patterns of technology use was assessed by grouping hospitals by a composite measure of "costliness." The overall use of 21 diagnostic tests rose by 27% over the 5-year period. Increases were most marked among the three cardiovascular tracers and for related technologies, such as cardiac angiography and cardiac ultrasound. There was evidence that newer technologies partially replaced older diagnostic tests that were used for similar indications: rates of noninvasive cerebrovascular imaging rose while rates of cerebral angiography declined. However, for several common, long-established tests, such as electrocardiogram and chest radiograph, there were consistent increases that are unexplained. High-cost hospitals performed diagnostic tests at much higher rates than lower-cost hospitals in both 1985 and 1990, but the rate of increase in test use across the two study years was generally greater for the lower-cost hospitals.

Impact of Medicare payment reductions on access to surgical services

OBJECTIVE

This study evaluates the impact of surgical fee reductions under Medicare on the utilization of surgical services.

DATA SOURCES

Medicare physician claims data were obtained from 11 states for a five-year time period (1985-1989).

STUDY DESIGN

Under OBRA-87, Medicare reduced payments for 11 surgical procedures. A fixed effects regression method was used to determine the impact of these payment reductions on access to care for potentially vulnerable Medicare beneficiaries: joint Medicaid-eligibles, blacks, and the very old.

DATA COLLECTION/EXTRACTION METHODS

Medicare claims and enrollment data were used to construct a cross-section time-series of population-based surgical rates from 1985 through 1989.

PRINCIPAL FINDINGS

Reductions in surgical fees led to small but significant increases in use for three procedures, small decreases in use for two procedures, and no impact on the remaining six procedures. There was little evidence that access to surgery was impaired for potentially vulnerable enrollees; in fact, declining fees often led to greater rates of increases for some subgroups.

CONCLUSIONS

Our results suggest that volume responses by surgeons to payment changes under the Medicare Fee Schedule may be smaller than HCFA's original estimates. Nevertheless, both access and quality of care should continue to be closely monitored.

Equity of the Medicaid program to the poor versus taxpayers

The last 15 years have witnessed explosive growth in State Medicaid programs. This article demonstrates the equalizing impacts of greater spending and recent Federal mandates on the health care coverage of the poor. Large inequalities in generosity still remain, however. Inequalities in taxpayer burdens are also documented, and simulations of alternative Federal sharing algorithms show significant changes that would be required to achieve a more equitable distribution of the program's financial burden.

Hospital department cost and employment increases: 1980-92

Hospital costs have continued to rise at rates well in excess of inflation generally, even after the introduction of Medicare's per case prospective payment system (PPS). This article uses a hospital subscriber microcost reporting system to show trends in costs, wages, labor hours, and outputs for more than 50 individual departments from 1980-92. Descriptive results show dramatic growth in the operating room, catheter lab, and other technologically driven cost centers. Administrative costs also increased rapidly through 1988, but slowed thereafter. The paperwork billing and collection burden of hospitals is estimated to be $6 billion in 1992, or approximately 4 percent of total expenses.

Measuring differences and similarities in hospital caseloads: a conceptual and empirical analysis

OBJECTIVE

This article conceptually and empirically evaluates alternative index measures that have been used to distinguish among hospital caseloads. It introduces two new measures.

DATA SOURCES/STUDY SETTING

The study relies on 1987 Medpar data, which provide a 100 percent sample of Medicare Part A claims for the calendar year.

STUDY DESIGN

Descriptive statistics indicate the sensitivity of alternative caseload measures to hospital bed size, region, and urban/rural location. Multiple regression analysis then examines the ability of the caseload measures to distinguish among hospitals based on hospital- and area-specific characteristics.

DATA COLLECTION/EXTRACTION METHODS

A provider level file containing the number of cases treated by each provider in each DRG was constructed from the Medpar data and merged with data from the American Hospital Association and the Area Resource File.

PRINCIPAL FINDINGS

Different indexes purporting to measure hospital specialization are often evaluating very different aspects of the hospitals' caseloads. Prior work has indicated a specialization among hospitals during the period from 1980 to 1985. Replication of this work using other indexes could verify the increase in specialization and might provide a clearer picture of market or hospital characteristics associated with changing caseloads.

Excluded facility financial status and options for payment system modification

Psychiatric, rehabilitation, long-term care, and children's facilities have remained under the reimbursement system established under the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 (Public Law 97-248). The number of TEFRA facilities and discharges has been increasing while their average profit rates have been steadily declining. Modifying TEFRA would require either rebasing the target amount or adjusting cost sharing for facilities exceeding their cost target. Based on our simulations of alternative payment systems, we recommend rebasing facilities' target amounts using a 50/50 blend of own costs and national average costs. Cost sharing above the target amount could be increased to include more government sharing of losses.

An update on physician practice cost shares

The 1988 physicians' practice costs and income survey (PPCIS) collected detailed costs, revenues, and incomes data for a sample of 3,086 physicians. These data are utilized to update the Health Care Financing Administration (HCFA) cost shares used in calculating the medicare economic index (MEI) and the geographic practice cost index (GPCI). Cost shares were calculated for the national sample, for 16 specialty groupings, for urban and rural areas, and for 9 census divisions. Although statistical tests reveal that cost shares differ across specialties and geographic areas, sensitivity analysis shows that these differences are small enough to have trivial effects in computing the MEI and GPCI. These results may inform policymakers on one aspect of the larger issue of whether physician payments should vary by geographic location or specialty.

CRNA (certified registered nurse anesthetist) manpower forecasts: 1990-2010

The delivery of anesthesia services is at a crossroads in the United States. In 1967, there were two certified registered nurse anesthetists (CRNAs) for every anesthesiologist providing anesthetics, and the numbers are nearly equal today. A CRNA manpower forecasting model is developed in this article that shows CRNA supply and requirements from 1990 through 2010. Two estimates of CRNA shortage are presented, one based on the current trend of anesthesiologists replacing CRNAs and another assuming that CRNAs are involved in every anesthetic under anesthesiologist supervision. The results imply that more than a twofold increase in CRNA school enrollments is needed just to fill conservative baseline needs given the predicted growth in operations in all settings. Limiting anesthesiologists to a supervisory role, at the other extreme, would require a doubling of CRNAs by 2010 and an even greater expansion of CRNA schools. However, it is estimated that reversing CRNA manpower trends could save society between $750 million and $1.2 billion annually.

Report of the National Commission on Nurse Anesthesia Education. Study of nurse anesthesia manpower needs

Nurse anesthesia manpower needs over a 20-year period from 1990 through 2010 are examined using data from a study conducted by Health Economics Research, Inc., which was submitted to Congress in February 1990. Two scenarios were considered: one representing no change in the capacity of the educational system and the other an annual increase. Under either scenario, the U.S. faces a significant shortage of CRNAs, now and in the future. The study points to a $1.2 billion savings to society through the increased use of CRNAs in anesthesia care.

The impact of nurse anesthetists on anesthesiologist productivity

The rapid growth in Medicare Part B spending on physicians has sparked a renewed debate on ways of increasing physician productivity. This study concentrates on anesthesiologists, presenting original survey data on the variation in productivity defined in terms of patients, anesthesia hours, base and time units, and revenues. Supervising nurse anesthetists are estimated to raise anesthesiologist productivity by at least 20%, allowing for downtime and scheduling problems. Greater delegation could save society approximately $500 million annually in anesthesiologist costs, even allowing for an increase in nurse anesthetists. Yet, recent manpower trends show a falling nurse-to-anesthesiologist ratio. The failure to achieve substantial gains is ascribed to a flaw in third-party reimbursement that discourages both hospitals and physicians from substituting nurse for anesthesiologist time.

Are rural referral centers as costly as urban hospitals?

This article evaluates the claim that rural referral centers (RRCs), identified by HCFA criteria for special treatment under Medicare's prospective payment system, have average costs similar to urban hospitals. Multivariate analysis led us to conclude that RRC Medicare costs were 13 percent higher than those of other rural hospitals in 1984, holding constant Medicare case mix, teaching activity, and relative wages. However, RRCs were 9 percent ($200) less costly per case than urban hospitals. Outliers explained most of the cost difference between RRCs and urban hospitals, while transfers were more important in explaining differences between RRCs and other rural hospitals. Given that bed size alone explained all of the RRC-other rural cost difference, paying RRCs the urban rate results in an indirect way of paying them based on bed size. It also gives them an average excess of payment over Medicare cost well above the national rural and urban average.

An analysis of the Prospective Payment System's labor-nonlabor share by diagnosis-related group

When Congress in 1983 legislated a new Prospective Payment System (PPS) for Medicare hospital payment, the payment algorithm was founded on a simplifying assumption of a constant 80-20 percentage share of labor and nonlabor costs across all diagnosis-related groups (DRGs). Using Medicare claims data and hospital cost reports, this study examines the accuracy of this assumption. While a few DRGs are found to vary significantly from the norm, a systematic cancelling out of high and low labor-intensive DRGs results in no material PPS payment bias at the hospital level. Indeed, rural hospitals, if anything, benefit by the assumption. A very small number of outlier DRGs and hospitals are troublesome, nonetheless, implying fine-tuning of the algorithm.

When do anesthesiologists delegate?

Nurse anesthetists (CRNAs) are a lower cost substitute for anesthesiologists in the delivery of anesthesia services. This article addresses the question of when anesthesiologists delegate in a team approach as opposed to using a solo arrangement. Logistic regression analysis was done using data from the 1986 Anesthesia Practice Survey and revealed that the team approach is more likely in areas with a relatively large supply of CRNAs; in hospitals with large surgical volumes, teaching facilities, and public hospitals; during emergency procedures, more lengthy procedures, and less complex surgeries; and among patients with poorer preoperative physical status. However, as the supply of anesthesiologists increases, the probability of CRNA use declines and in areas outside New England the "solo anesthesiologist" arrangement is significantly more common. Medicare and other third-party payers should eliminate regional variations in provider mix that are due to locational preferences and provider attitudes. Delegation to CRNAs can be encouraged by reducing what anesthesiologists are paid for practicing alone.

Trends in hospital labor and total factor productivity, 1981-86

The per-case payment rates of Medicare's prospective payment system are annually updated. As one element of the update factor, Congress required consideration of changes in hospital productivity. In this article, calculations of annual changes in labor and total factor productivity during 1981-86 of hospitals eligible for prospective payment are presented using several output and input variants. Generally, productivity has declined since 1980, although the rates of decline have slowed since prospective payment implementation. According to the series of analyses most relevant for policy, significant hospital productivity gains occurred during 1983-86. This may justify a lower update factor.