Trends in the use of drug therapies in patients with acute myocardial infarction: 1988 to 1992.

OBJECTIVES: In this study, we investigated the use of thrombolytic agents and other cardiac drugs in a national cohort of patients with acute myocardial infarction and assessed the influence of large clinical studies on types of thrombolytic therapy prescribed. BACKGROUND: Information about usage patterns for these drugs is unavailable, and little is known about the impact of large clinical trials on their use. METHODS: We conducted a retrospective cohort study of 65,011 patients who were treated for acute myocardial infarction during fiscal years 1988 to 1992 (October 1, 1987 to September 30, 1992) in hospitals participating in the SMS Corporation's on-line data pool. RESULTS: The overall thrombolysis rate for patients with acute myocardial infarction increased from 11% in fiscal year 1988 to 18% in fiscal year 1990 and has remained approximately at that level since then. In mid-1989, tissue plasminogen activator was used in 90% of the patients receiving thrombolysis, whereas streptokinase was used in only 10%. Since 1991, tissue plasminogen activator has been used in 60% of patients and streptokinase in almost 30%. Much of this change came after presentation and publication of results of the Second Gruppo Italiano per lo Studio Della Sopravvivenza nell'Infarto Miocardico (GISSI-2) and the Third International Study of Infarct Survival (ISIS-3) trials. Over these 5 years, use of beta-adrenergic blocking agents increased steadily, and use of calcium-channel blocking agents declined steadily. CONCLUSIONS: Current usage rates of thrombolytic therapy are lower than expected, but trends in usage rates for beta-blockers and calcium channel blockers reflect their increasing and decreasing approval, respectively. Presentation and publication of results from the Third International Study of Infarct Survival and the Second Gruppo Italiano per lo Studio Della Sopravvivenza nell'Infarto Miocardico trials appear to have influenced the type of thrombolytic agent prescribed.

Some economics of mental health 'carve-outs'.

We discuss the rationale for benefit carve-out contracts in general and for mental health and substance abuse in particular. We focus on the control of adverse selection as a principal explanation and find that this is consistent with the wide-spread use of sole-source contracting with periodic rebidding. We also find that some degree of risk sharing is common; we interpret this as a method of balancing cost-containment incentives with incentives to maintain access and quality on unmeasured dimensions.

Effect of cost-sharing on the use of medical services by children: interim results from a randomized controlled trial.

Health care expenditures of 1,136 children whose families participated in a randomized trial, The Rand Health Insurance Experiment, are reported. Children whose families were assigned to receive 100% reimbursement for health costs spent one third more per capita than children whose families paid 95% of medical expenses up to a family maximum. Outpatient use decreased as cost-sharing rose for a variety of use measures: the probability of seeing a doctor, annual expenditures, number of visits per year, and numbers of outpatient treatment episodes. Hospital expenditures did not vary significantly among children insured with varying levels of cost-sharing. Episodes of treatment for preventive care were as responsive to cost-sharing as episodes for acute or chronic illness. The results give no reason not to insure preventive care as liberally as care for acute illness.

Prepaid group practice effects on the utilization of medical services and health outcomes for children: results from a controlled trial.

A total of 693 children between the ages of 0 and 13 years were randomly assigned to either a staff model HMO or to one of several fee-for-service insurance plans in Seattle to evaluate differences in medical expenditures and health outcomes. Although the fee-for-service plans varied the amount of cost sharing (0% to 95%), all children were covered for the same medical services, for either 3 or 5 years. No differences in imputed total expenditures were observed for children assigned to the HMO or any of the fee-for-service plans. Children with cost-sharing fee-for-service plans, however, had fewer medical contacts and received fewer preventive services than those assigned to the HMO. Nonetheless, children with the cost-sharing fee-for-service plans were perceived (by their mothers) to be in better health overall than those assigned to the HMO. No significant differences regarding physiological outcomes (eg, visual acuity, hemoglobin level) were observed between the two groups. The results of this experiment neither strongly support nor indict fee-for-service or prepaid care for children.

Consequences of cost-sharing for children's health.

Do children whose families bear a percentage of their health care costs reduce their use of ambulatory care compared with those families who receive free care? If so, does the reduction affect their health? To answer these questions, 1,844 children aged 0 to 13 years were randomly assigned (for a period of 3 or 5 years) to one of 14 insurance plans. The plans differed in the percentage of their medical bills that families paid. One plan provided free care. The others required up to 95% coinsurance subject to a +1,000 maximum. Children whose families paid a percentage of costs reduced use by up to one third. For the typical child in the study, this reduction caused no significant difference in either parental perceptions of their child's health or in physiologic measures of health. Confidence intervals are sufficiently narrow for most measures to rule out the possibility that large true differences went undetected. Nor were statistically significant differences observed for children at risk of disease. Wider confidence intervals for these comparisons, however, mean that clinically meaningful differences, if present, could have been undetected in certain subgroups.

Patients at risk: health reform and risk adjustment.

The Clinton proposal recognizes the need for successful risk adjustment and calls for the National Health Board to promulgate a risk adjustment formula by 1 April 1995. Unfortunately, risk adjustment technology is primitive; using observable characteristics such as age only slightly ameliorates the flawed incentives of not adjusting at all. Without major improvements in risk adjustment technology we face a trade-off between giving plans an incentive to select good risks and an incentive to produce at lowest cost. Pure capitation maximizes both incentives; pure fee-for-service minimizes both. I suggest experimentation with paying plans partly on the basis of risk-adjusted capitation and partly on the basis of a fee schedule reflecting actual use (partial capitation). In the draft Clinton plan, the option given to alliances not to offer plans priced above 120 percent of the weighted average premium appears to assume better risk adjustment ability than is now possible. This option should be relaxed or abandoned.

Economists, policy entrepreneurs, and health care reform.

Economists would have formulated several aspects of the health care reform debate differently than policy entrepreneurs did. Economists would have questioned whether health care costs must be contained and whether either competition or global budgets were a "magic bullet" for doing so. They also would have emphasized the distortive costs of subsidies and taxes necessary to reach universal coverage, as well as the shakiness of the arguments about international competitiveness and excess insurance industry profits.

An iconoclastic view of health cost containment.

Calls for medical care cost containment are all around us. Although the evidence that costs are too high is strong, the evidence that they are rising too quickly is much weaker. The principal cause of increasing costs appears to be the increased capabilities of medicine; the scant evidence available suggests that to date the public has wanted to pay for most of these capabilities. Effective global budgets would address the rising opportunity costs of health care. However, they would threaten ongoing innovation and probably would increase distortions from pricing errors.

Medicare: what's right? What's wrong? What's next?

Although future Medicare costs are highly uncertain, reasonable projections of those costs suggest a major financing problem. The Balanced Budget Act of 1997 will provide temporary relief, although it introduced some new problems, including its geographic adjustment of Medicare+Choice rates. For the future we propose a premium-support system and an expanded benefits package. Such a system would provide a more flexible means to adjust the division of the financing burden between the elderly and the nonelderly, potentially gain some efficiencies from greater price competition and less reliance on administered pricing, and partly address the issue of uninsured early retirees.

Paying for graduate medical education: the debate goes on.

The debate over Medicare payments for graduate medical education has been conducted under the premise that such payments cover the added costs of training. Standard economic theory suggests that residents bear the costs of their training, implying that the additional costs of teaching hospitals are not attributable to training per se but to some combination of a different patient care product, unmeasured case-mix differences, and the costs of clinical research. As a result, payment for the additional patient care costs at teaching hospitals should come from the Medicare trust fund; any subsidies for training should come from general revenues.

Is health spending slowing down?

We analyze trends in real per capita health care spending. Using a different and, we believe, more appropriate adjustment for trends in general inflation than the Health Care Financing Administration (HCFA) analysts use, we reach a different conclusion: The purported slowdown in health care spending in the 1990s is modest at best through 1993. Other measures of health care spending, such as the medical care Consumer Price Index, private health care premiums, and hospital cost growth, are unreliable measures of overall health care spending.

Risk contracts in managed mental health care.

Private employers and state Medicaid programs are increasingly writing risk contracts with managed behavioral health care companies to manage mental health and substance abuse benefits. This paper analyzes the case for a carve-out program and makes recommendations about the form of the payer-managed behavioral health care contract. Payers should consider using a "soft" capitation contract in which only some of the claims' risk is transferred to the managed behavioral health care company. To avoid incentives to underserve seriously ill persons, we recommend that payers not allow choice by enrollees among risk contractors.

Risk adjustment and Medicare: taking a closer look.

Medicare's method for reimbursing at-risk managed care plans causes potential problems with selection (when beneficiaries with higher-than-expected costs stay in traditional plans) and stinting (the tendency to underprovide health services). Adjusting payment by diagnosis offers substantial improvement. We favor large-scale demonstrations of diagnosis-based reimbursement. Reducing payment, a Clinton administration proposal, would recoup excess payments in the short run but not address the selection problem, which could reemerge. Selection makes current payments vulnerable to upward spirals. We propose not using traditional Medicare to update reimbursement. Basing some payment on enrollees' actual use addresses selection and stinting. Rather than reinsurance, we propose blending traditional Medicare and risk-adjusted capitation. Ceding some cases to traditional Medicare in advance appears to be useful for terminally ill patients.

Comparison of hospital costs in California, New York, and Canada.

When the components of health care spending are broken down, hospital spending accounts for the largest portion of the total. This DataWatch compares hospital spending in two U.S. states with spending in two Canadian provinces, to gain better understanding of the recurring differences in hospital spending reported by the two countries. To make the data comparable, the study combines different hospital output measures into a composite measure that is converted into U.S. dollars and applied to data from both countries. In 1987 hospital costs per person were about one-third higher in the United States than in Canada. Results suggest that the higher U.S. costs are due primarily to higher unit costs rather than to differences in output.

The Medicare prescription drug benefit: how will the game be played?

Most recent proposals to add a prescription drug benefit to the Medicare program suggest using pharmacy benefit managers (PBMs) to control costs and promote quality. However, the proposals give little detail on the institutional arrangements that would govern PBM operations and drug procurement. The recent Congressional Budget Office cost estimate of the Clinton administration's proposal reflects this lack of detail on how PBMs would function. We sketch an approach for structuring PBM operations that focuses on competition among PBMs, manufacturers, and distributors; incentive pricing; and risk sharing with PBMs.

How well do Americans understand their health coverage?

Data from two surveys are used in this DataWatch to explore Americans' understanding of their health insurance. First, data from a national survey of consumers are used to examine if people with private health insurance correctly report their coverage for six services. Second, information from an evaluation of a pilot project of subsidized insurance in New York is used to investigate how well newly insured persons understand their coverage. Based on these surveys, almost all privately insured people understand the basic elements of their insurance plans but underestimate their coverage for mental health, substance abuse, and prescription drug benefits and overestimate their coverage for long-term care. People who are newly insured in physician networks or health maintenance organizations seem uncertain about what services their plan covers and restrictions on their choice of hospitals.

The new medical marketplace: physicians' views.

The transformation of the medical marketplace has major implications for the physician workforce. Findings are reported here from national surveys of physicians, hospitals, health maintenance organizations (HMOs), preferred provider organizations (PPOs), and medical group practices conducted in 1995 to measure the impact of those changes. Physicians in higher HMO penetration states were more likely to report serious problems with several aspects of medical practice and patient care and were more likely to perceived oversupply in their specialty areas and changes in their practice arrangements. Some divergence is noted in views of supply between physicians and those that employ them. The majority of physicians would still recommend medicine and their specialty as a career.

Incidence of adverse events and negligence in hospitalized patients: results of the Harvard Medical Practice Study I. 1991.

BACKGROUND: As part of an interdisciplinary study of medical injury and malpractice litigation, we estimated the incidence of adverse events, defined as injuries caused by medical management, and of the subgroup of such injuries that resulted from negligent or substandard care. METHODS: We reviewed 30121 randomly selected records from 51 randomly selected acute care, non-psychiatric hospitals in New York State in 1984. We then developed population estimates of injuries and computed rates according to the age and sex of the patients as well as the specialties of the physicians. RESULTS: Adverse events occurred in 3.7% of the hospitalizations (95% confidence interval 3.2 to 4.2), and 27.6% of the adverse events were due to negligence (95% confidence interval 22.5 to 32.6). Although 70.5% of the adverse events gave rise to disability lasting less than 6 months, 2.6% caused permanently disabling injuries and 13.6% led to death. The percentage of adverse events attributable to negligence increased in the categories of more severe injuries (Wald test chi(2) = 21.04, p<0.0001). Using weighted totals we estimated that among the 2671863 patients discharged from New York hospitals in 1984 there were 98609 adverse events and 27179 adverse events involving negligence. Rates of adverse events rose with age (p<0.0001). The percentage of adverse events due to negligence was markedly higher among the elderly (p<0.01). There were significant differences in rates of adverse events among categories of clinical specialties (p<0.0001), but no differences in the percentage due to negligence. CONCLUSIONS: There is a substantial amount of injury to patients from medical management, and many injuries are the result of substandard care.

Did Medicare's prospective payment system cause length of stay to fall?

It is well accepted that the Medicare Payment System caused average length of stay in United States hospitals to fall, but these calculations have been based on patients in short-stay, acute care hospitals. If one considers all patients covered by Medicare, length of stay rose between 1981 and 1984, although the 1985 value was below the 1981 value. The proximate cause was a marked increase in the proportion of patients staying more than 60 days in the hospital. The data are consistent with a shift of such patients from short-stay, acute care hospitals to other, exempt hospitals and units.

Estimating the indirect costs of teaching.

Medicare's Prospective Payment System pays teaching hospitals using a regression coefficient in a log-log cost function. Previous literature showed that this coefficient is sensitive to the covariates included in the function, but specified teaching intensity as the logarithm of one plus the intern and resident-to-bed ratio. Provided the true relationship is log-log, adding one biases the coefficient substantially but not predicted cost. In a re-specified equation that makes this bias negligible, the coefficient is not nearly as sensitive to the inclusion of other covariates. Because further issues remain to be explored, it is premature to use our results for policy purposes.