Profit efficiency of physician practices: a stochastic frontier approach using panel data.

While determinants of efficiency have been the subject of a large number of studies in the inpatient sector, relatively little is known about factors influencing efficiency of physician practices in the outpatient sector. With our study, we provide the first paper to estimate physician practice profit efficiency and its' determinants. We base our analysis on a unique panel data set of 4964 physician practices for the years 2008 to 2010. The data contains information on practice costs and revenues, services provided, as well as physician and practice characteristics. We specify the profit function of the physician practice as a translog functional form. We estimated the stochastic frontier using the comprehensive one-step approach for panel data of Battese and Coelli (1995). For estimation of the profit function, we regressed yearly profit on several inputs, outputs and input/output price relationships, while we controlled for a range of control variables such as patients' case-mix or share of patients covered by statutory health insurance. We find that participation in disease management programs and the degree of physician practice specialization are associated with significantly higher profit efficiency. In addition, our analyses show that group practices perform significantly better than single practices.

Start-Up and Ongoing Practice Expenses of Behavioral Health and Primary Care Integration Interventions in the Advancing Care Together (ACT) Program.

PURPOSE: Provide credible estimates of the start-up and ongoing effort and incremental practice expenses for the Advancing Care Together (ACT) behavioral health and primary care integration interventions. METHODS: Expenditure data were collected from 10 practice intervention sites using an instrument with a standardized general format that could accommodate the unique elements of each intervention. RESULTS: Average start-up effort expenses were $44,076 and monthly ongoing effort expenses per patient were $40.39. Incremental expenses averaged $20,788 for start-up and $4.58 per patient for monthly ongoing activities. Variations in expenditures across practices reflect the differences in intervention specifics and organizational settings. Differences in effort to incremental expenditures reflect the extensive use of existing resources in implementing the interventions. CONCLUSIONS: ACT program incremental expenses suggest that widespread adoption would likely have a relatively modest effect on overall health systems expenditures. Practice effort expenses are not trivial and may pose barriers to adoption. Payers and purchasers interested in attaining widespread adoption of integrated care must consider external support to practices that accounts for both incremental and effort expense levels. Existing knowledge transfer mechanisms should be employed to minimize developmental start-up expenses and payment reform focused toward value-based, Triple Aim-oriented reimbursement and purchasing mechanisms are likely needed.

Community oncology in an era of payment reform.

Patients and payers (government and private) are frustrated with the fee-for-service system (FFS) of payment for outpatient health services. FFS rewards volume and highly valued services, including expensive diagnostics and therapeutics, over lesser valued cognitive services. Proposed payment schemes would incent collaboration and coordination of care among providers and reward quality. In oncology, new payment schemes must address the high costs of all services, particularly drugs, while preserving the robust distribution of sites of service available to patients in the United States. Information technology and personalized cancer care are changing the practice of oncology. Twenty-first century oncology will require increasing cognitive work and shared decision making, both of which are not well regarded in the FFS model. A high proportion of health care dollars are consumed in the final months of life. Effective delivery of palliative and end-of-life care must be addressed by practice and by new models of payment. Value-based reimbursement schemes will require oncology practices to change how they are structured. Lessons drawn from the principles of primary care's Patient Centered Medical Home (PCMH) will help oncology practice to prepare for new schemes. PCMH principles place a premium on proactively addressing toxicities of therapies, coordinating care with other providers, and engaging patients in shared decision making, supporting the ideal of value defined in the triple aim-to measurably improve patient experience and quality of care at less cost. Payment reform will be disruptive to all. Oncology must be engaged in policy discussions and guide rational shifts in priorities defined by new payment models.

Accountable care organizations and the allergist: challenges and opportunities.

For decades, health care policy experts have wrestled with ways to solve problems of access, cost, and quality in US health care. The current consensus is that the solution to all three lies in changing financial incentives for providers and delivering care through integrated systems. The currently favored vehicle for this, both in the public and private sectors, is through Accountable Care Organizations (ACOs). Medicare has several models and has fostered rapid growth in the number of operative ACOs. At least an equal number of private ACOs are in operation. Whether or not these organizations will fulfill their promise is unknown but there is reason for cautious optimism. Allergists can and should be part of the process of this transformation in our health care system. They can be integral to helping these organizations save money by reducing hospitalizations and improving the quality of allergy and asthma care in the populations served. In order to accomplish this, allergists must become more involved in their medical communities and hospitals.

How to set up a successful tumor ablation practice.

Tumor ablation services have increased in prevalence across the country and can now be found in modern health care systems of all sizes. These services have become an integral part of the coordinated multidisciplinary approach to patient care that must take place at any oncologic center of excellence. However, building a reputable tumor ablation practice at an institutional level can be a very difficult task as there are many financial, political, and material considerations that must be addressed during the early phases of operation to ensure its success. This article discusses each of these considerations in turn and provides insight into ways to overcome the inherent challenges faced when bringing all of the necessary elements together to create a thriving tumor ablation practice at an institutional level.

The influence of a Vascular Surgery Hospitalist program on physician and patient satisfaction, resident education, and resource utilization.

A number of surgery practice models have been developed to address general and trauma surgeon workforce shortages and on-call issues and to improve surgeon satisfaction. These include the creation of acute or urgent care surgery services and "surgical hospitalist" programs. To date, no practice models corresponding to those developed for general and trauma surgeons have been proposed to address these same issues among vascular surgeons or other surgical subspecialists. In 2003, our practice established a Vascular Surgery Hospitalist program. Since its inception nearly a decade ago, it has undergone several modifications. We reviewed hospital administrative databases and surveys of faculty, residents, and patients to evaluate the program's impact. Benefits of the Vascular Surgery Hospitalist program include improved surgeon satisfaction, resource utilization, timeliness of patient care, communication among referring physicians and ancillary staff, and resident teaching/supervision. Elements of this program may be applicable to a variety of surgical subspecialty settings.

Understanding and surviving the transition to value-based oncology.

This paper and the three presentations it supports are drawn from the theme of the 2012 Cancer Center Business Summit (CCBS): "Transitioning to Value-Based Oncology: Strategies to Survive and Thrive." The CCBS is a forum on oncology business innovation, and the principal question the organizers address each year is "What are the creative, innovative, and best business models and practices that are being conceived or piloted today that may provide a responsible and sustainable platform for the delivery of cancer care tomorrow?" At this moment in health care-when so much is in flux and new business models and solutions abound-the oncology sector has a solemn responsibility: to forge the business models and relationships that will help to define a new cancer care value proposition and a sustainable health care system of tomorrow for the benefit of the patients it serves to get it "right."

Application of Porter's Five Forces Model and generic strategies for vascular surgery: should be stuck in the middle?

There are many stakeholders in the vascular marketplace from clinicians to hospitals, third party payers, medical device manufacturers and the government. Economic stress, threats of policy reform and changing health-care delivery are adding to the challenges faced by vascular surgeons. Use of Porter's Five Forces analysis to identify the sources of competition, the strength and likelihood of that competition existing, and barriers to competition that affect vascular surgery will help our specialty understand both the strength of our current competition and the strength of a position that our specialty will need to move to. By understanding the nature of the Porter's Five Forces as it applies to vascular surgery, and by appreciating their relative importance, our society would be in a stronger position to defend itself against threats and perhaps influence the forces with a long-term strategy. Porter's generic strategies attempt to create effective links for business with customers and suppliers and create barriers to new entrants and substitute products. It brings an initial perspective that is convenient to adapt to vascular surgery in order to reveal opportunities.Vascular surgery is uniquely situated to pursue both a differentiation and high value leadership strategy.

Paying for quality not quantity: a wisconsin health maintenance organization proposes an incentive model for reimbursement of chiropractic services.

OBJECTIVE: The purpose of this study is to describe a reimbursement model that was developed by one Health Maintenance Organization (HMO) to transition from fee-for-service to add a combination of pay for performance and reporting model of reimbursement for chiropractic care. METHODS: The previous incentive program used by the HMO provided best-practice education and additional reimbursement incentives for achieving the National Committee for Quality Assurance Back Pain Recognition Program (NCQA-BPRP) recognition status. However, this model had not leveled costs between doctors of chiropractic (DCs). Therefore, the HMO management aimed to develop a reimbursement model to incentivize providers to embrace existing best-practice models and report existing quality metrics. The development goals included the following: it should (1) be as financially predictable as the previous system, (2) cost no more on a per-member basis, (3) meet the coverage needs of its members, and (4) be able to be operationalized. The model should also reward DCs who embraced best practices with compensation, not simply tied to providing more procedures, the new program needed to (1) cause little or no disruption in current billing, (2) be grounded achievable and defined expectations for improvement in quality, and (3) be voluntary, without being unduly punitive, should the DC choose not to participate in the program. RESULTS: The generated model was named the Comprehensive Chiropractic Quality Reimbursement Methodology (CCQRM; pronounced "Quorum"). In this hybrid model, additional reimbursement, beyond pay-for-procedures will be based on unique payment interpretations reporting selected, existing Physician Quality Reporting System (PQRS) codes, meaningful use of electronic health records, and achieving NCQA-BPRP recognition. This model aims to compensate providers using pay-for-performance, pay-for-quality reporting, pay-for-procedure methods. CONCLUSION: The CCQRM reimbursement model was developed to address the current needs of one HMO that aims to transition from fee-for-service to a pay-for-performance and quality reporting for reimbursement for chiropractic care. This model is theoretically based on the combination of a fee-for-service payment, pay for participation (NCQA Back Pain Recognition Program payment), meaningful use of electronic health record payment, and pay for reporting (PQRS-BPMG payment). Evaluation of this model needs to be implemented to determine if it will achieve its intended goals.

An all-inclusive and transparent view of a vascular program's direct impact on its health system.

OBJECTIVE: This study explores the fiduciary advantage of a Vascular Surgery program to an academic, tertiary care hospital. METHODS: This is a retrospective review of hospital (HealthQuest) and physician (IDX) billing databases from April 2009 to September 2010. We identified all patients interacting with Vascular Surgery (VS) to provide an overview of global finances. Patients introduced solely by VS were identified to minimize confounding of the downstream effect. Outcome measures obtained were revenue, average and total gross margin, relative value unit production, and service utilization. RESULTS: A total of 552 cases were identified demonstrating $13 million in revenue. This translated into a gross margin of $5 million. Examined per surgeon, VS was the most profitable, producing $1.6 million. Lower extremity amputation had the highest average gross margin at $34,000. Notably, $8 million in direct cost is among the highest in the health system. A total of 137 cases unique to VS generated $5 million in total revenue. This patient subset made use of up to 29 physician specialty services. General Medicine and Radiology were the most frequently utilized. CONCLUSION: The overall profitability of a comprehensive vascular program is tremendously positive. This study verifies that new vascular-specific referrals are a significant catalyst for revenue.

Global financial crisis and surgical practice: the Greek paradigm.

Apart from the significant implications of recent financial crisis in overall health indices and mortality rates, the direct effect of health resources redistribution in everyday clinical practice is barely recognized. In the case of Greece, health sector reform and health spending cuts have already had a major impact on costly interventions, particularly in surgical practice. An increase in utilization of public health resources, lack of basic and advanced surgical supplies, salary deductions, and emerging issues in patient management have contributed to serious dysfunction of a public health system unable to sustain current needs. In this context, significant implications arise for the surgeons and patients as proper perioperative management is directly affected by reduced public health funding. The surgical community has expressed concerns about the quality of surgical care and the future of surgical progress in the era of the European Union. Greek surgeons are expected to support reform while maintaining a high level of surgical care to the public. The challenge of cost control in surgical practice provides, nevertheless, an excellent opportunity to reconsider health economics while innovation through a more traditional approach to the surgical patient should not be precluded. A Greek case study on the extent of the current situation is presented with reference to health policy reform, serving as an alarming paradigm for the global community under the pressure of a profound financial recession.