The Comparative Effectiveness and Provider-induced Demand Collaboration Project: A Pioneering Military-Civilian Academic Partnership to Build Health Services Research Capacity for the Military Health System.

INTRODUCTION: Like civilian health systems, the United States Military Health System (MHS) confronts challenges in achieving the aims of reducing cost, and improving quality, access, and safety, but historically has lacked coordinated health services research (HSR) capabilities that enabled knowledge translation and iterative learning from its wealth of data. A military-civilian academic partnership called the Comparative Effectiveness and Provider-Induced Demand Collaboration (EPIC), formed in 2011, demonstrated early proof-of-concept in using the MHS claims database for research focused on drivers of variation in health care. This existing partnership was reorganized in 2015 and its topics expanded to meet the need for HSR in support of emerging priorities and to develop current and HSR capacity within the MHS. MATERIALS AND METHODS: A Donabedian framework of structure, process, and outcomes was applied to support the project, through a core of principal investigators, researchers, analysts, and administrators. Within this framework, new researchers and student trainees learn foundations of HSR while performing secondary analysis of claims data from the MHS Data Repository (MDR) focusing on Health and Readiness, Pediatrics, Policy, Surgery, Trauma, and Women's Health. RESULTS: Since 2015, the project has trained 25 faculty, staff, and providers; 51 students and residents; 21 research fellows across multiple disciplines; and as of 2022, produced 107 peer-reviewed publications and 130 conference presentations, across all five themes and six cores. Research results have been incorporated into Federal and professional policy guidelines. Major research areas include opioid usage and prescribing, value-based care, and racial disparities. EPIC researchers provide direct support to MHS leaders and enabling expertise to clinical providers. CONCLUSIONS: EPIC, through its Donabedian framework and utilization of the MHS Data Repository as a research tool, generates actionable findings and builds capacity for continued HSR across the MHS. Eight years after its reorganization in 2015, EPIC continues to provide a platform for capacity building and knowledge translation.

How does market competition affect supplier-induced demand? An experimental study.

Introduction: This study investigated the impact of competition on supplier-induced demand in medical markets theoretically and experimentally. Methods: We employed the framework of credence goods to describe the information asymmetry between physicians and patients, and theoretically derives predictions of physicians' behaviors in monopolistic and competitive markets. Then we conducted behavioral experiments to empirically test the hypotheses. Results: The theoretical analysis revealed that an honest equilibrium would not exist in a monopolistic market, whereas price competition could induce physicians to reveal their types of treatment cost and provide honest treatments; thus, a competitive equilibrium is superior to that of a monopolistic market. The experimental results only partially supported the theoretical predictions, which showed that the cure rate of patients in a competitive environment was higher than that in a monopolistic market, although supplier-induced demand occurred more frequently. In the experiment, the main channel through which competition improved market efficiency was increased patient consultations through low pricing, as opposed to the theory, which stated that competition would lead to physicians' honest treatment of patients through fair prices. Discussion: We discovered that the divergence between the theory and the experiment stemmed from the theory's reliance on the assumption that humans are rational and self-interested, which means that they are not as price-sensitive as predicted by theory.

Realist analysis of whether emergency departments with primary care services generate 'provider-induced demand'.

BACKGROUND: It is not known whether emergency departments (EDs) with primary care services influence demand for non-urgent care ('provider-induced demand'). We proposed that distinct primary care services in EDs encourages primary care demand, whereas primary care integrated within EDs may be less likely to cause additional demand. We aimed to explore this and explain contexts (C), mechanisms (M) and outcomes (O) influencing demand. METHODS: We used realist evaluation methodology and observed ED service delivery. Twenty-four patients and 106 staff members (including Clinical Directors and General Practitioners) were interviewed at 13 EDs in England and Wales (240 hours of observations across 30 days). Field notes from observations and interviews were analysed by creating 'CMO' configurations to develop and refine theories relating to drivers of demand. RESULTS: EDs with distinct primary care services were perceived to attract demand for primary care because services were visible, known or enabled direct access to health care services. Other influencing factors included patients' experiences of accessing primary care, community care capacity, service design and population characteristics. CONCLUSIONS: Patient, local-system and wider-system factors can contribute to additional demand at EDs that include primary care services. Our findings can inform service providers and policymakers in developing strategies to limit the effect of potential influences on additional demand when demand exceeds capacity.

Induced demand in kidney replacement therapy.

There are three notable aspects of the current kidney replacement therapy program. First, the number of patients on home dialysis has dropped substantially over the last decades. Second, the rate of transplantation has stabilized in recent years. Third, there is variation in referral rate for transplantation among hospitals. These trends are the result of overutilization of in-center dialysis and that demand for kidney replacement therapy is moderated by suppliers. Current healthcare policy leads to overutilization of in-center dialysis and underutilization of home dialysis and transplantation. This overutilization is the result of supplier-induced demand and leads to suboptimal care for patients and excessive healthcare expenditures. The main drivers of this overutilization are the overcapacity of in-center dialysis beds and the high financial disincentives on empty dialysis beds. Policymakers should address this by reducing dialysis capacity and increasing the capacity of transplantation facilities. This is the first attempt to address the overutilization and the nonalignment of supply and demand by looking at the capacity of in-center dialysis and the financial disincentives for physicians on empty in-center dialysis beds. In our analysis, we conclude that limiting the capacity of in-center dialysis beds is the most effective strategy to better align supply and demand, which will result in better patient outcomes and lower societal costs.

A Demand-Centric Repositioning Strategy for Bike-Sharing Systems.

Transport-sharing systems are eco-friendly and the most promising services in smart urban environments, where the booming Internet of things (IoT) technologies play an important role in the smart infrastructure. Due to the imbalanced bike distribution, bikes and stalls in the docking stations could be unavailable when needed, leading to bad customer experiences. We develop a dynamic repositioning strategy for the management of bikes in this paper, which supports dispatchers to keep stations in service. Two open datasets are examined, and the exploratory data analysis presents that there is a significant difference of travel patterns between working and non-working days, where the former has an excess demand at rush hours and the latter is usually at a low demand. To evaluate the effect when the demand outstrips a station's capacity, we propose a non-linear scaling technique to transform demand patterns and perform the clustering analysis for each of five categories obtained from the sophisticated analysis of the dataset. Our repositioning strategy is developed according to the transformed demands. Compared with the previous work, numerical simulations reveal that our strategy has a better performance for high-demand stations, and thus can substantially reduce the repositioning cost, which brings benefit to bike-sharing operators for managing the city bike system.

Medical insurance and physician-induced demand in China: the case of hemorrhoid treatments.

In October 2015, the Guangdong government of China enacted a so-called unified medical insurance payment for patients residing in Guangdong province, which fundamentally simplifies reimbursement procedures of medical insurance for the involved cross-city in-patients. Using a unique confidential dataset from 2013 to 2018 on hemorrhoid treatments at a renowned hospital in Guangzhou, the provincial capital of Guangdong, and exploiting difference-in-differences estimations based on the abovementioned policy, we document that the physicians' incentives are a negative externality of the full medical insurance policy for cross-city in-patients and account for a 49% probability increase in improper treatments; and neither increasing the communication between physicians and patients nor enhancing the education level of patients reduces the physician-induced demand for improper treatments. A series of robustness tests indicate our findings are solid. In summary, we highlight the substantial roles of medical insurance as a driver of physician-induced demand in an emerging economy such as China.

Unnecessary ultrasonography as supplier-induced demand in diagnosis of primary breast cancer in Iran: A cross-sectional study.

BACKGROUND: Supplier-induced demand (SID) refers to the concept that healthcare providers may deliver services that are not medically necessary to patients. An estimation of the extent to which this event has occurred can be insightful for policymaking and guiding health and insurance systems. This study aimed to investigate the extent of SID when performing a diagnostic ultrasonography for primary breast cancer patients and its relationship with socioeconomic factors in Iran. METHODS: Data were obtained using questionnaires from 334 patients referred to the Cancer Research Center. To identify the patients who were candidates for undergoing a necessary diagnostic US, we employed the international clinical guidelines with confirmation of our expert panelists. With their assistance, a comprehensive index was created to screen those 'most probably affected by SID'. RESULTS: 55.9% had undergone an unnecessary diagnostic ultrasonography, and thus were most probably affected by SID. A significant association between socioeconomic factors (education, occupation, and supplemental health insurance) and SID was confirmed (p value ≤ 0.001, 0.002, and 0.039, respectively). CONCLUSION: This study supports the SID hypothesis and the unnecessary demand for diagnostic ultrasonography in primary breast cancer. Also, our evidence indicates imposing excessive costs that can positively influence the policymakers' decision-making in the healthcare systems.

Competition and physician-induced demand in a healthcare market with regulated price: evidence from Ghana.

Using panel data of administrative claims spanning 36 months (2017-2019) and an instrumental variable method, this study examines whether physician-induced demand for hypertension disease care exists in Ghana's healthcare system where price is regulated, and there is no co-payment. We find that an increase in competition-measured as a high doctor-to-population ratio at the district level-leads to an increase in the number of physician visits, suggesting physician-induced demand exists, and that effects are greater for large hospitals and public health providers. This result is further supported by alternative measures and specifications showing that physicians' revenue from medication and gross revenue increase as the physician density increases. These pattern suggest that physicians in high density areas, faced with a decrease in number of patients per physician, make up for the decline in income by inducing more patient visits.

Physician induced demand for knee replacement surgery in Iran.

BACKGROUND: The structure of the Iranian health system has raised this hypothesis that a part of the Knee Replacement Surgery (KRS) services are provided due to Physician-Induced Demand (PID). METHODS: This paper used an unbalanced individual panel data covering the steady-state 15,729 KRSs performed by 995 surgeons provided by the Armed Forces Insurance Organization at the provincial level over the 60 months (2014-2018). We use a generalized method of moment's system (GMM-SYS) to obtain consistent and asymptotically efficient estimates, which provide a vital instrument for our dynamic panel data. RESULTS: The outcomes show that with unequal increasing orthopedic surgeons to population ratio, both the number and size of KRS services were increased significantly at a 1 % level. Given that the positive elasticity obtained for the service size was significantly larger than the number of services, the findings give strong support for the existence of PID in the Iran system for KRS care. Also, the raw and population-adjusted number of KRS, cost, and the surgery per active physician increased significantly at the monthly province level. CONCLUSIONS: This is the first time that the existence of PID in the Iranian health system is investigated using approved econometric models. The findings indicate that the health system structure has been provided the conditions for aggressive, costly, and high-risk services such as KRS to be exposed to PID.

Competition-driven physician-induced demand.

This paper empirically investigates how competition affects physicians' opportunistic behavior in the context of the utilization of MRI scanners. We examine micro-panel data on Japanese hospitals, where we observe how physicians change their usage of MRI scanners in response to MRI adoption by nearby hospitals. We identify competition-driven physician-induced demand: Hospitals lose patients because of MRI adoption by nearby hospitals, and, to compensate for this loss, physicians perform more MRI scans per patient. Although competition may benefit consumers through better access to MRI scanners, it also causes additional physician-induced demand.

An epidemic of avoidable caesarean deliveries in the private sector in India: Is physician-induced demand at play?

PURPOSE AND SETTING OF RESEARCH: Caesarean section (C-section) rates of over 15% suggest overuse of the surgery which may be difficult to justify on medical grounds. One important contributor to the rise in Csection rates is the rapid expansion of unregulated private-sector providers in number of settings. This study analyses the contribution of private sector in the rapid rise in Csection deliveries in India and the extent to which these can be justified on medical grounds. METHODS: This is a cross sectional study design using National Family Health Surveys. Logistic regression and propensity score matching (PSM) analyses are performed. The main outcome measured is avoidable C-sections in the private sector. PRINCIPAL FINDINGS: Our findings suggest that the rising trend in C-section rates in the private sector cannot be explained by medical reasons alone. The odds of C-section among women who chose to deliver in private was over 4 times higher than women who chose to delivery in public facilities. Despite, controlling for medical complications, women's characteristics and preferences, our PSM analysis suggest that the public-private gap has doubled over the years and that the difference cannot be explained by known determinants of C-section. Over supply of avoidable C-section to the extent of 21%, as a result of physician induced demand and perverse financial incentives was observed in the private sector. CONCLUSIONS: This paper attempts to understand the reason for the high C-section rates in the private sector in India and the extent to which these are avoidable. Our analysis supports the assumption that physician induced demand as a result of perverse financial incentives in the private sector is at play.

A moneymaking scan: Dual reimbursement systems and supplier-induced demand for diagnostic imaging.

In complex health systems with growing healthcare spending, combining reimbursement systems that incentivize cost-efficient healthcare provision within and across care sectors is key. This study investigates whether dual reimbursement systems lead hospitals to offset financial pressures in one care sector by inducing demand in another. We find that hospital imaging units induced demand for costly and unnecessary ambulatory imaging examinations reimbursed under fee-for-service, following a reform that introduced prospective payment and increased competition in the inpatient sector in Switzerland in 2012. Market structure, competitive pressures, and price regulations also influence demand inducement by varying the response to the reform. Reimbursement systems can influence supplier-induced demand in other care sectors within hospitals where revenue is tied to the intensity of care provision. In particular, the possibility to self-refer patients to high-margin diagnostic examinations bears negative consequences on healthcare expenditures and potentially patient health.