Practice Expenses Associated with Comprehensive Primary Care Capabilities.

Through the Comprehensive Primary Care (CPC) and Comprehensive Primary Care Plus (CPC+) programs, the Centers for Medicare & Medicaid Services (CMS) has encouraged primary care practices to invest in "comprehensive primary care" capabilities. Empirical evidence suggests these capabilities are under-reimbursed or not reimbursed under prevailing fee-for-service payment models. To help CMS design alternative payment models (APMs) that reimburse the costs of these capabilities, the authors developed a method for estimating related practice expenses. Fifty practices, sampled for diversity across CPC+ participation status, geographic region, rural status, size, and parent-organization affiliation, completed the study. Researchers developed a mixed-methods strategy, beginning with interviews of practice leaders to identify their capabilities and the types of costs incurred. This was followed by researcher-assisted completion of a workbook tailored to each practice, which gathered related labor and nonlabor costs. In a final interview, practice leaders reviewed cost estimates and made any needed corrections before approval. A main goal was to address a persistent question faced by CMS: When practices reported widely divergent costs for a given capability, was that divergence due to practices having different prices for the same capability or from their having substantially different capabilities? The cost estimation method developed in this project collected detailed data on practice capabilities and their costs. However, the small sample did not allow quantitative estimation of the contributions of service level and pricing to the variation in overall costs. This cost estimation method, deployed on a larger scale, could generate robust data to inform new payment models aimed at incentivizing and sustaining comprehensive primary care.

Estimating the Costs of Implementing Comprehensive Primary Care: A Narrative Review.

The performance of the any health-care system relies on a high-functioning primary care system. Increasing primary care practices' adoption of "comprehensive primary care" capabilities might yield meaningful improvements in the quality and efficiency of primary care. However, many comprehensive primary care capabilities, such as care management and coordination, are not compensated via traditional fee-for-service payment. To calculate new payments for these capabilities, policymakers would need estimates of the costs that practices incur when adopting, maintaining, and using the capabilities. We performed a narrative review of the existing literature on the costs of adopting and implementing comprehensive primary care capabilities. These studies have found that practices incur significant costs when adopting and implementing comprehensive primary care capabilities. However, the studies had significant limitations that prevent extensive use of their estimates for payment policy. Particularly, the strongest studies focused on a small numbers of practices in specific geographic areas and the concepts and methods used to assess costs varied greatly across the studies. Furthermore, none of the studies in our review attempted to estimate differences in costs across practices with patients at varying levels of complexity and illness burden which is important for risk-adjusting payments to practices. Therefore, due to the heterogeneous designs and limited generalizability of published studies highlight the need for additional research, especially if payers wish to link their financial support for comprehensive primary care capabilities to the costs of these capabilities for primary care practices.

What are the appropriate methodological standards for international comparisons of health data?

International comparisons of health systems are frequently used to inform national health policy debates. These comparisons can be used to gauge areas of strength and weakness in a health system, and to find potential solutions from abroad that can be applied locally. But such comparisons are methodologically fraught and, if not carefully performed and used, can be misleading.In a recent IJHPR article, Baruch Levi has raised concerns about the use of international comparisons of self-reported health data in health policy debates in Israel. Self-reported health is one of the most robust and frequently used measures of health, and the OECD uses a commonly accepted measure specification, which has five response categories. Israel's survey question, unlike the OECD measure specification, includes only four response categories. While this may be a valid method when applied over time as a scale within Israel, it creates problems for international comparison.To improve comparability, Israel's Central Bureau of Statistics could revise the survey question. However, revising the question would introduce a "break" in the data series that interrupts comparisons within Israel over time. Israeli policymakers therefore face a decision about priorities: is it more important to them to be able to track health status within Israel over time, or to be able to make meaningful comparisons to other countries? If the priority were international comparisons and the Israel survey was revised, a small study could be conducted among a sample of Israeli respondents to enable crosswalking of self-reported health responses from the four-point scale to the five-point scale. If the Central Bureau of Statistics does not revise its survey, the OECD should examine whether a stronger caveat is possible for its comparisons.

A mixed-methods evaluation of an Integrated Medication Management program and implications for implementation.

BACKGROUND: Improving medication adherence is a common and challenging issue. Taking medications as prescribed becomes particularly difficult for individuals with multiple chronic conditions. Poor adherence can lead to exacerbated health issues and prolonged disease severity. Medication Therapy Management is increasingly being used to help clinics improve medication adherence and reduce adverse events, but factors that enable implementation of such programs are not well identified. OBJECTIVE: To describe the factors associated with implementation of an innovative pharmacy program and to measure the impact of the intervention. METHODS: This mixed-methods cohort study in a federal qualified health center with its own pharmacy examined the implementation and the impact of a broad program including MTM. The intervention included appointments with pharmacists, communication between pharmacists and physicians, and, for some, monthly pre-packaged medications. Semi-structured interviews with patients and staff were recorded, transcribed, and analyzed for themes relating to implementation, satisfaction, and challenges. Quantitative methods using data collected by the pharmacists at each visit were used to compare the first visit to those at later visits and provided measures of impact on diabetes control, statin use, and medication-related problems (MRPs). RESULTS: Qualitative interviews identified enabling factors that contributed to successful implementation of this program, including: program factors such as data access, communication with patients, and dedicated staff; organizational factors such as culture of integration, leadership support, and staffing; and lastly, environmental factors such as the availability of 340B funding. Quantitative analyses were limited by poor retention and lack of a similarly-documented comparison group. Health outcomes were not found to be significantly better, though there was a significant decrease in some kinds of MRPs. This program was well received by patients and staff and demonstrated some clinical impact. CONCLUSION: The program's implementation was enabled by design as well as organizational and external factors. Financial and leadership support allowed for flexibility and creativity, which contributed to successful implementation. Alternative delivery models beyond fee-for-service payments may make this kind of program more feasible.

Association Between Patient-Centered Medical Home Capabilities and Outcomes for Medicare Beneficiaries Seeking Care from Federally Qualified Health Centers.

BACKGROUND: Patient-centered medical home (PCMH) models of primary care have the potential to expand access, improve population health, and lower costs. Federally qualified health centers (FQHCs) were early adopters of PCMH models. OBJECTIVE: We measured PCMH capabilities in a diverse nationwide sample of FQHCs and assessed the relationship between PCMH capabilities and Medicare beneficiary outcomes. DESIGN: Cross-sectional, propensity score-weighted, multivariable regression analysis. PARTICIPANTS: A convenience sample of 804 FQHC sites that applied to a nationwide FQHC PCMH initiative and 231,163 Medicare fee-for-service beneficiaries who received a plurality of their primary care services from these sites. MAIN MEASURES: PCMH capabilities were self-reported using the National Committee for Quality Assurance's (NCQA's) 2011 application for PCMH recognition. Measures of utilization, continuity of care, quality, and Medicare expenditures were derived from Medicare claims covering a 1-year period ending October 2011. KEY RESULTS: Nearly 88% of sites were classified as having PCMH capabilities equivalent to NCQA Level 1, 2, or 3 PCMH recognition. These more advanced sites were associated with 228 additional FQHC visits per 1000 Medicare beneficiaries (95% CI: 176, 278), compared with less advanced sites; 0.02 points higher practice-level continuity of care (95% CI: 0.01, 0.03); and a greater likelihood of administering two of four recommended diabetes tests. However, more advanced sites were also associated with 181 additional visits to specialists per 1000 beneficiaries (95% CI: 124, 232) and 64 additional visits to emergency departments (95% CI: 35, 89)-but with no differences in inpatient utilization. More advanced sites had higher Part B expenditures ($111 per beneficiary [95% CI: $61, $158]) and total Medicare expenditures of $353 [95% CI: $65, $614]). CONCLUSIONS: Implementation of PCMH models in FQHCs may be associated with improved primary care for Medicare beneficiaries. Expanded access to care, in combination with slower development of key PCMH capabilities, may explain higher Medicare expenditures and other types of utilization.

The Medicare Access And CHIP Reauthorization Act: Effects On Medicare Payment Policy And Spending.

In 2015, Congress repealed the Sustainable Growth Rate formula for Medicare physician payment, eliminating mandatory payment cuts when spending exceeded what was budgeted. In its place, Congress enacted the Medicare Access and CHIP Reauthorization Act (MACRA), which established a two-track performance-based payment system that encourages physicians to participate in alternative payment models. MACRA could have huge effects on health care delivery, but the nature of those effects is highly uncertain. Using the RAND Corporation's Health Care Payment and Delivery Simulation Model, we estimated the effects of MACRA on Medicare spending and utilization and examined how effects would differ under various scenarios. We estimate that MACRA will decrease Medicare spending on physician services by -$35 to -$106 billion (-2.3 percent to -7.1 percent) and change spending on hospital services by $32 to -$250 billion (0.7 percent to -5.1 percent) in 2015-30. The spending effects are critically dependent on the strength of incentives in the alternative payment models, particularly the incentives for physicians to reduce hospital spending and physician responses to MACRA payment rates.

The Relative Importance of Post-Acute Care and Readmissions for Post-Discharge Spending.

OBJECTIVE: To understand what patterns of health care use are associated with higher post-hospitalization spending. DATA SOURCES: Medicare hospital, skilled nursing, inpatient rehabilitation, and home health agency claims, and Medicare enrollment data from 2007 and 2008. STUDY DESIGN: For 10 common inpatient conditions, we calculated variation across hospitals in price-standardized and case mix-adjusted Medicare spending in the 30 days following hospital discharge. We estimated the fraction of spending differences between low- and high-spending hospitals attributable to readmissions versus post-acute care, and within post-acute care between inpatient rehabilitation facility (IRF) versus skilled nursing facility (SNF) use. For each service, we distinguished between differences in probability of use and spending conditional on use. DATA EXTRACTION METHODS: We identified index hospital claims and examined hospital and post-acute care occurring within a 30-day period following hospital discharge. For each Medicare Severity Diagnosis-Related Group (MS-DRG) at each hospital, we calculated average price-standardized Medicare payments for readmissions, SNFs, IRFs, and post-acute care overall (also including home health agencies and long-term care hospitals). PRINCIPAL FINDINGS: There was extensive variation across hospitals in Medicare spending in the 30 days following hospital discharge. For example, the interquartile range across hospitals ranged from $1,245 for chronic obstructive pulmonary disease to over $4,000 for myocardial infarction MS-DRGs. The proportion of differences attributable to readmissions versus post-acute care differed across conditions. For myocardial infarction, 74 to 93 percent of the variation was due to readmissions. For hip and femur procedures and joint replacement, 72 to 92 percent of the variation was due to differences in post-acute care spending. There was also variation in the relative importance of the type of post-acute spending. For hip and femur procedures, joint replacement, and stroke, whether patients received IRF was the key driver of variation in post-acute care spending In contrast, for pneumonia and heart failure, whether patients received SNF care was the key driver of variation in post-acute spending. CONCLUSIONS: Through initiatives such as bundled payment, hospitals are financially responsible for spending in the post-hospitalization period. The key driver of variation in post-hospitalization spending varied greatly across conditions. For some conditions, the key driver was having a readmission, for others it was whether patients receive any post-acute care, and for others the key driver was the type of post-acute care. These findings may help hospitals implement strategies to reduce post-discharge spending.

Measuring Care Continuity: A Comparison of Claims-based Methods.

BACKGROUND: Assessing care continuity is important in evaluating the impact of health care reform and changes to health care delivery. Multiple measures of care continuity have been developed for use with claims data. OBJECTIVE: This study examined whether alternative continuity measures provide distinct assessments of coordination within predefined episodes of care. RESEARCH DESIGN AND SUBJECTS: This was a retrospective cohort study using 2008-2009 claims files for a national 5% sample of beneficiaries with congestive heart failure, chronic obstructive pulmonary disease, and diabetes mellitus. MEASURES: Correlations among 4 measures of care continuity-the Bice-Boxerman Continuity of Care Index, Herfindahl Index, usual provider of care, and Sequential Continuity of Care Index-were derived at the provider- and practice-levels. RESULTS: Across the 3 conditions, results on 4 claims-based care coordination measures were highly correlated at the provider-level (Pearson correlation coefficient r=0.87-0.98) and practice-level (r=0.75-0.98). Correlation of the results was also high for the same measures between the provider- and practice-levels (r=0.65-0.92). CONCLUSIONS: Claims-based care continuity measures are all highly correlated with one another within episodes of care.

JOURNAL CLUB: Radiologists' Perceptions of Computerized Decision Support: A Focus Group Study From the Medicare Imaging Demonstration Project.

OBJECTIVE: The purpose of this study was to discern radiologists' perceptions regarding the implementation of a decision support system intervention as part of the Medicare Imaging Demonstration project and the effect of decision support on radiologists' interactions with ordering clinicians, their radiology work flow, and appropriateness of advanced imaging. SUBJECTS AND METHODS: A focus group study was conducted with a diverse sample of radiologists involved in interpreting advanced imaging studies at Medicare Imaging Demonstration project sites. A semistructured moderator guide was used, and all focus group discussions were recorded and transcribed verbatim. Qualitative data analysis software was used to code thematic content and identify representative segments of text. Participating radiologists also completed an accompanying survey designed to supplement focus group discussions. RESULTS: Twenty-six radiologists participated in four focus group discussions. The following major themes related to the radiologists' perceptions after decision support implementation were identified: no substantial change in radiologists' interactions with referring clinicians; no substantial change in radiologist work flow, including protocol-writing time; and no perceived increase in imaging appropriateness. Radiologists provided suggestions for improvements in the decision support system, including increasing the usability of clinical data captured, and expressed a desire to have greater involvement in future development and implementation efforts. CONCLUSION: Overall, radiologists from health care systems involved in the Medicare Imaging Demonstration did not perceive that decision support had a substantial effect, either positive or negative, on their professional roles and responsibilities. Radiologists expressed a desire to improve efficiencies and quality of care by having greater involvement in future efforts.

Specialty Payment Model Opportunities and Assessment: Gastroenterology and Cardiology Model Design Report.

Gastroenterology and cardiology services are common and costly among Medicare beneficiaries. Episode-based payment, which aims to create incentives for high-quality, low-cost care, has been identified as a promising alternative payment model. This article describes research related to the design of episode-based payment models for ambulatory gastroenterology and cardiology services for possible testing by the Center for Medicare and Medicaid Innovation at the Centers for Medicare and Medicaid Services (CMS). The authors analyzed Medicare claims data to describe the frequency and characteristics of gastroenterology and cardiology index procedures, the practices that delivered index procedures, and the patients that received index procedures. The results of these analyses can help inform CMS decisions about the definition of episodes in an episode-based payment model; payment adjustments for service setting, multiple procedures, or other factors; and eligibility for the payment model.

Specialty Payment Model Opportunities and Assessment: Oncology Model Design Report.

This article describes research related to the design of a payment model for specialty oncology services for possible testing by the Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS). Cancer is a common and costly condition. Episode-based payment, which aims to create incentives for high-quality, low-cost care, has been identified as a promising alternative payment model for oncology care. Episode-based payment systems can provide flexibility to health care providers to select among the most effective and efficient treatment alternatives, including activities that are not currently reimbursed under Medicare payment policies. However, the model design also needs to ensure that high-quality care is delivered and that beneficial treatments are not withheld from patients. CMS asked MITRE and RAND to conduct analyses to inform design decisions related to an episode-based oncology model for Medicare beneficiaries undergoing chemotherapy treatment for cancer. In particular, this study focuses on analyses of Medicare claims data related to the definition of the initiation of an episode of chemotherapy, patterns of spending during and surrounding episodes of chemotherapy, and attribution of episodes of chemotherapy to physician practices. We found that the time between the primary cancer diagnosis and chemotherapy initiation varied widely across patients, ranging from one day to over seven years, with a median of 2.4 months. The average level of total monthly payments varied considerably across cancers, with the highest spending peak of $9,972 for lymphoma, and peaks of $3,109 for breast cancer and $2,135 for prostate cancer.

Specialty Payment Model Opportunities and Assessment: Oncology Simulation Report.

This article describes the results of a simulation analysis of a payment model for specialty oncology services that is being developed for possible testing by the Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services (CMS). CMS asked MITRE and RAND to conduct simulation analyses to preview some of the possible impacts of the payment model and to inform design decisions related to the model. The simulation analysis used an episode-level dataset based on Medicare fee-for-service (FFS) claims for historical oncology episodes provided to Medicare FFS beneficiaries in 2010. Under the proposed model, participating practices would continue to receive FFS payments, would also receive per-beneficiary per-month care management payments for episodes lasting up to six months, and would be eligible for performance-based payments based on per-episode spending for attributed episodes relative to a per-episode spending target. The simulation offers several insights into the proposed payment model for oncology: (1) The care management payments used in the simulation analysis-$960 total per six-month episode-represent only 4 percent of projected average total spending per episode (around $27,000 in 2016), but they are large relative to the FFS revenues of participating oncology practices, which are projected to be around $2,000 per oncology episode. By themselves, the care management payments would increase physician practices' Medicare revenues by roughly 50 percent on average. This represents a substantial new outlay for the Medicare program and a substantial new source of revenues for oncology practices. (2) For the Medicare program to break even, participating oncology practices would have to reduce utilization and intensity by roughly 4 percent. (3) The break-even point can be reduced if the care management payments are reduced or if the performance-based payments are reduced.

Bundled payment fails to gain a foothold In California: the experience of the IHA bundled payment demonstration.

To determine whether bundled payment could be an effective payment model for California, the Integrated Healthcare Association convened a group of stakeholders (health plans, hospitals, ambulatory surgery centers, physician organizations, and vendors) to develop, through a consensus process, the methods and means of implementing bundled payment. In spite of a high level of enthusiasm and effort, the pilot did not succeed in its goal to implement bundled payment for orthopedic procedures across multiple payers and hospital-physician partners. An evaluation of the pilot documented a number of barriers, such as administrative burden, state regulatory uncertainty, and disagreements about bundle definition and assumption of risk. Ultimately, few contracts were signed, which resulted in insufficient volume to test hypotheses about the impact of bundled payment on quality and costs. Although bundled payment failed to gain a foothold in California, the evaluation provides lessons for future bundled payment initiatives.

Continuity and the costs of care for chronic disease.

IMPORTANCE: Better continuity of care is expected to improve patient outcomes and reduce health care costs, but patterns of use, costs, and clinical complications associated with the current patterns of care continuity have not been quantified. OBJECTIVE: To measure the association between care continuity, costs, and rates of hospitalizations, emergency department visits, and complications for Medicare beneficiaries with chronic disease. DESIGN, SETTING, AND PARTICIPANTS: Retrospective cohort study of insurance claims data for a 5% sample of Medicare beneficiaries experiencing a 12-month episode of care for congestive heart failure (CHF, n = 53,488), chronic obstructive pulmonary disease (COPD, n = 76,520), or type 2 diabetes mellitus (DM, n = 166,654) in 2008 and 2009. MAIN OUTCOMES AND MEASURES: Hospitalizations, emergency department visits, complications, and costs of care associated with the Bice-Boxerman continuity of care (COC) index, a measure of the outpatient COC related to conditions of interest. RESULTS: The mean (SD) COC index was 0.55 (0.31) for CHF, 0.60 (0.34) for COPD, and 0.50 (0.32) for DM. After multivariable adjustment, higher levels of continuity were associated with lower odds of inpatient hospitalization (odds ratios for a 0.1-unit increase in COC were 0.94 [95% CI, 0.93-0.95] for CHF, 0.95 [0.94-0.96] for COPD, and 0.95 [0.95-0.96] for DM), lower odds of emergency department visits (0.92 [0.91-0.92] for CHF, 0.93 [0.92-0.93] for COPD, and 0.94 [0.93-0.94] for DM), and lower odds of complications (odds ratio range, 0.92-0.96 across the 3 complication types and 3 conditions; all P < .001). For every 0.1-unit increase in the COC index, episode costs of care were 4.7% lower for CHF (95% CI, 4.4%-5.0%), 6.3% lower for COPD (6.0%-6.5%), and 5.1% lower for DM (5.0%-5.2%) in adjusted analyses. CONCLUSIONS AND RELEVANCE: Modest differences in care continuity for Medicare beneficiaries are associated with sizable differences in costs, use, and complications.

Option pricing: a flexible tool to disseminate shared savings contracts.

OBJECTIVES: Due to volatility in healthcare costs, shared savings contracts can create systematic financial losses for payers, especially when contracting with smaller providers. To improve the business case for shared savings, we calculated the prices of financial options that payers can "sell" to providers to offset these losses. STUDY DESIGN AND METHODS: Using 2009 to 2010 member-level total cost of care data from a large commercial health plan, we calculated option prices by applying a bootstrap simulation procedure. We repeated these simulations for providers of sizes ranging from 500 to 60,000 patients and for shared savings contracts with and without key design features (minimum savings thresholds,bonus caps, cost outlier truncation, and downside risk) and under assumptions of zero, 1%, and 2% real cost reductions due to the shared savings contracts. RESULTS: Assuming no real cost reduction and a 50% shared savings rate, per patient option prices ranged from $225 (3.1% of overall costs) for 500-patient providers to $23 (0.3%) for 60,000-patient providers. Introducing minimum savings thresholds, bonus caps, cost outlier truncation, and downside risk reduced these option prices. Option prices were highly sensitive to the magnitude of real cost reductions. If shared savings contracts cause 2% reductions in total costs, option prices fall to zero for all but the smallest providers. CONCLUSIONS: Calculating the prices of financial options that protect payers and providers from downside risk can inject flexibility into shared savings contracts, extend such contracts to smaller providers, and clarify the tradeoffs between different contract designs, potentially speeding the dissemination of shared savings.

Accountable care organization formation is associated with integrated systems but not high medical spending.

Medicare's approximately 250 accountable care organizations (ACOs) care for a growing portion of all fee-for-service beneficiaries across the United States. We examined where ACOs have formed and what regional factors are predictive of ACO formation. Understanding these factors could help policy makers foster growth in areas with limited ACO development. We found wide variation in ACO formation, with large areas, such as the Northwest, essentially empty of ACOs, and others, such as the Northeast and Midwest, dense with the organizations. Key regional factors associated with ACO formation include a greater fraction of hospital risk sharing (capitation), larger integrated hospital systems, and primary care physicians practicing in large groups. Area income, Medicare per capita spending, Medicare Advantage enrollment rates, and physician density were not associated with ACO formation. Together, these results imply that underlying provider integration in a region may help drive the formation of ACOs.

Evaluation of a center of excellence program for spine surgery.

BACKGROUND: The Centers for Medicare and Medicaid Services and many private health plans are encouraging patients to seek orthopedic care at hospitals designated as centers of excellence. No evaluations have been conducted to compare patient outcomes and costs at centers of excellence versus other hospitals. The objective of our study was to assess whether hospitals designated as spine surgery centers of excellence by a group of over 25 health plans provided higher quality care. METHODS: Claims representing approximately 54 million commercially insured individuals were used to identify individuals aged 18-64 years with 1 of 3 types of spine surgery in 2007-2009: 1-level or 2-level cervical fusion (referred to as cervical simple fusion), 1-level or 2-level lumbar fusion (referred to as lumbar simple fusion), or lumbar discectomy and/or decompression without fusion. The primary outcomes were any complication (7 complications were captured) and 30-day readmission. The multivariate models controlled for differences in age, sex, and comorbidities between the 2 sets of hospitals. RESULTS: A total of 29,295 cervical simple fusions, 27,214 lumbar simple fusions, and 28,911 lumbar discectomy/decompressions were identified, of which 42%, 42%, and 47%, respectively, were performed at a hospital designated as a spine surgery center of excellence. Designated hospitals had a larger number of beds and were more likely to be an academic center. Across the 3 types of spine surgery (cervical fusions, lumbar fusions, or lumbar discectomies/decompressions), there was no difference in the composite complication rate [OR 0.90 (95% CI, 0.72-1.12); OR 0.98 (95% CI, 0.85-1.13); OR 0.95 (95% CI, 0.82-1.07), respectively] or readmission rate [OR 1.03 (95% CI, 0.87-1.21); OR 1.01 (95% CI, 0.89-1.13); OR 0.91 (95%, CI 0.79-1.04), respectively] at designated hospitals compared with other hospitals. CONCLUSIONS: On average, spine surgery centers of excellence had similar complication rates and readmission rates compared with other hospitals. These results highlight the importance of empirical evaluations of centers of excellence programs.

Impact of socioeconomic adjustment on physicians' relative cost of care.

BACKGROUND: Ongoing efforts to profile physicians on their relative cost of care have been criticized because they do not account for differences in patients' socioeconomic status (SES). The importance of SES adjustment has not been explored in cost-profiling applications that measure costs using an episode of care framework. OBJECTIVES: We assessed the relationship between SES and episode costs and the impact of adjusting for SES on physicians' relative cost rankings. RESEARCH DESIGN: We analyzed claims submitted to 3 Massachusetts commercial health plans during calendar years 2004 and 2005. We grouped patients' care into episodes, attributed episodes to individual physicians, and standardized costs for price differences across plans. We accounted for differences in physicians' case mix using indicators for episode type and a patient's severity of illness. A patient's SES was measured using an index of 6 indicators based on the zip code in which the patient lived. We estimated each physician's case mix-adjusted average episode cost and percentile rankings with and without adjustment for SES. RESULTS: Patients in the lowest SES quintile had $80 higher unadjusted episode costs, on average, than patients in the highest quintile. Nearly 70% of the variation in a physician's average episode cost was explained by case mix of their patients, whereas the contribution of SES was negligible. After adjustment for SES, only 1.1% of physicians changed relative cost rankings >2 percentiles. CONCLUSIONS: Accounting for patients' SES has little impact on physicians' relative cost rankings within an episode cost framework.

The association between health care quality and cost: a systematic review.

BACKGROUND: Although there is broad policy consensus that both cost containment and quality improvement are critical, the association between costs and quality is poorly understood. PURPOSE: To systematically review evidence of the association between health care quality and cost. DATA SOURCES: Electronic literature search of PubMed, EconLit, and EMBASE databases for U.S.-based studies published between 1990 and 2012. STUDY SELECTION: Title, abstract, and full-text review to identify relevant studies. DATA EXTRACTION: Two reviewers independently abstracted data with differences reconciled by consensus. Studies were categorized by level of analysis, type of quality measure, type of cost measure, and method of addressing confounders. DATA SYNTHESIS: Of 61 included studies, 21 (34%) reported a positive or mixed-positive association (higher cost associated with higher quality); 18 (30%) reported a negative or mixed-negative association; and 22 (36%) reported no difference, an imprecise or indeterminate association, or a mixed association. The associations were of low to moderate clinical significance in many studies. Of 9 studies using instrumental variables analysis to address confounding by unobserved patient health status, 7 (78%) reported a positive association, but other characteristics of these studies may have affected their findings. LIMITATIONS: Studies used widely heterogeneous methods and measures. The review is limited by the quality of underlying studies. CONCLUSION: Evidence of the direction of association between health care cost and quality is inconsistent. Most studies have found that the association between cost and quality is small to moderate, regardless of whether the direction is positive or negative. Future studies should focus on what types of spending are most effective in improving quality and what types of spending represent waste. PRIMARY FUNDING SOURCE: Robert Wood Johnson Foundation.