The marketplace in health care reform. The demographic limitations of managed competition

New reimbursement model in Icelandic primary care in 2017: first-year comparison of public and private primary care

OBJECTIVE

To analyze and compare the effect of a new reimbursement model (based on a modified version of the Swedish free choice reform) on private and public primary care in Iceland during its first year of use.

DESIGN

Descriptive comparison based on official data from the Ministry of Welfare, Directorate of Health, and the Icelandic Health Insurance on payments in the Icelandic primary care system.

SETTING

Primary care system operating in the Reykjavik capital area. Public primary care has dominated the Icelandic health sector. Both public and private primary care is financed by public taxation.

SUBJECTS

Fifteen public and four private primary care centers in the capital region.

MAIN OUTCOME MEASURES

Different indexes used in the reimbursement model and public vs. private primary care costs.

RESULTS

No statistically significant cost differences were found between public and private primary care centers regarding total reimbursements, reimbursements per GP, number of registered patients, or per visit. Two indexes covered over 80% of reimbursements in the model.

CONCLUSION

The cost for Icelandic taxpayers was equal in numerous indexes between public and private primary care centers. Only public centers got reimbursements for the care need index, which considers a patient's social needs, strengths, and weaknesses.KEY POINTSThe Icelandic primary care system underwent a reform in 2017 to improve availability and quality. A new reimbursement model was introduced, and two new private centers opened following a tender.Two out of 14 indexes cover over 80% of total reimbursements from the new model.Only 5 primary care centers, all publicly driven, got reimbursement for the care need index, which is a social deprivation index.Reimbursement systems should mirror the policies of health authorities and empower the workforce.

Rural Hospital Designation Is Associated With Increased Complications and Resource Utilization After Primary Total Hip Arthroplasty: A Matched Case-Control Study

BACKGROUND

As the prevalence of hip osteoarthritis increases, the demand for total hip arthroplasty (THA) has grown. It is known that patients in rural and urban geographic locations undergo THA at similar rates. This study explores the relationship between geographic location and postoperative outcomes.

METHODS

In this retrospective cohort study, the Truven MarketScan database was used to identify patients who underwent primary THA between January 2010 and December 2018. Patients with prior hip fracture, infection, and/or avascular necrosis were excluded. Two cohorts were created based on geographic locations: urban vs rural (rural denotes any incorporated place with fewer than 2500 inhabitants). Age, gender, and obesity were used for one-to-one matching between cohorts. Patient demographics, medical comorbidities, postoperative complications, and resource utilization were statistically compared between the cohorts using multivariate conditional logistic regression.

RESULTS

In total, 18,712 patients were included for analysis (9356 per cohort). After matching, there were no significant differences in comorbidities between cohorts. The following were more common in rural patients: dislocation within 1 year (odds ratio [OR] 1.23, 95% confidence interval [CI] 1.08-1.41, P < .001), revision within 1 year (OR 1.17, 95% CI 1.05-1.32, P = .027), and prosthetic joint infection (OR 1.14, 95% CI 1.04-1.34, P = .033). Similarly, rural patients had higher odds of 30-day readmission (OR 1.31, 95% CI 1.09-1.56, P = .041), 90-day readmission (OR 1.41, 95% CI 1.26-1.71, P = .023), and extended length of stay (≥3 days; OR 1.52, 95% CI 1.22-1.81, P < .001).

CONCLUSION

THA in rural patients is associated with increased cost, healthcare utilization, and complications compared to urban patients. Standardization between geographic areas could reduce this discrepancy.

Diminishing Insurance Choices In The Affordable Care Act Marketplaces: A County-Based Analysis

While the Affordable Care Act has expanded health insurance to millions of Americans through the expansion of eligibility for Medicaid and the health insurance Marketplaces, concerns about Marketplace stability persist-given increasing premiums and multiple insurers exiting selected markets. Yet there has been little investigation of what factors underlie this pattern. We assessed the county-level prevalence of limited insurer participation (defined as having two or fewer distinct participating insurers) in Marketplaces in the period 2014-18. Overall, in 2015 and 2016 rates of insurer participation were largely stable, and approximately 80 percent of counties (containing 93 percent of US residents) had at least three Marketplace insurers. However, these proportions declined sharply starting in 2017, falling to 36 percent of counties and 60 percent of the population in 2018. We also examined county-level factors associated with limited insurer competition and found that it occurred disproportionately in rural counties, those with higher mortality rates, and those where insurers had lower medical loss ratios (that is, potentially higher profit margins), as well as in states where Republicans controlled the executive and legislative branches of government. Decreased competition was less common in states with higher proportions of residents who were Hispanic or ages 45-64 and states that chose to expand Medicaid.

Market-orienting reforms in rural health care in Sweden: how can equity in access be preserved?

BACKGROUND

Health care provision in rural and urban areas faces different challenges. In Sweden, health care provision has been predominantly public and equitable access to care has been pursued mainly through public planning and coordination. This is to ensure that health needs are met in the same manner in all parts of the country, including rural or less affluent areas. However, a marketization of the health care system has taken place during recent decades and the publicly planned system has been partially replaced by a new market logic, where private providers guided by financial concerns can decide independently where to establish their practices. In this paper, we explore the effects of marketization policies on rural health care provision by asking how policy makers in rural counties have managed to combine two seemingly contradictory health policy goals: to create conditions for market competition among health care providers and to ensure equal access to health care for all patients, including those living in rural and remote areas.

METHODS

A qualitative case study within three counties in the northern part of Sweden, characterized by vast rural areas, was carried out. Legal documents, the "accreditation documents" regulating the health care quasi-markets in the three counties were analyzed. In addition, interviews with policy makers in the three county councils, representing the political majority, the opposition, and the political administration were conducted in April and May 2013.

RESULTS

The findings demonstrate the difficulties involved in introducing market dynamics in health care provision in rural areas, as these reforms not only undermined existing resource allocation systems based on health needs but also undercut attempts by local policy makers to arrange for care provision in remote locations through planning and coordination.

CONCLUSION

Provision of health care in rural areas is not well suited for market reforms introducing competition, as this may undermine the goal of equity in access to health care, even in a publicly financed health care system.

"Managed competition" for Ireland? The single versus multiple payer debate

BACKGROUND

A persistent feature of international health policy debate is whether a single-payer or multiple-payer system can offer superior performance. In Ireland, a major reform proposal is the introduction of 'managed competition' based on the recent reforms in the Netherlands, which would replace many functions of Ireland's public payer with a system of competing health insurers from 2016. This article debates whether Ireland meets the preconditions for effective managed competition, and whether the government should implement the reform according to its stated timeline. We support our arguments by discussing the functioning of the Dutch and Irish systems.

DISCUSSION

Although Ireland currently lacks key preconditions for effective implementation, the Dutch experience demonstrates that some of these can be implemented over time, such as a more rigorous risk equalization system. A fundamental problem may be Ireland's sparse hospital distribution. This may increase the market power of hospitals and weaken insurers' ability to exclude inefficient or poor quality hospitals from contracts, leading to unwarranted spending growth. To mitigate this, the government proposes to introduce a system of price caps for hospital services.The Dutch system of competition is still in transition and it is premature to judge its success. The new system may have catalyzed increased transparency regarding clinical performance, but outcome measurement remains crude. A multi-payer environment creates some disincentives for quality improvement, one of which is free-riding by insurers on their rivals' quality investments. If a Dutch insurer invests in improving hospital quality, hospitals will probably offer equivalent quality to consumers enrolled with other insurance companies. This enhances equity, but may weaken incentives for improvement. Consequently the Irish government, rather than insurers, may need to assume responsibility for investing in clinical quality. Plans are in place to assure consumers of free choice of insurer, but a key concern is a potential shortfall of institutional capacity to regulate managed competition.

SUMMARY

Managed competition requires a long transition period and the requisite preconditions are not yet in place. The Irish government should refrain from introducing managed competition until sufficient preconditions are in place to allow effective performance.

[Potential accessibility to mental health services in Montreal: a geographical information system approach]

BACKGROUND

The inequitable spatial distribution of health resources is a major public health problem because it exacerbates the spatial disparities of access and use of health services. However, efforts to quantify the problem and its consequences on public health have been hampered by a lack of adequate measures and methods. This study explores the spatial potential accessibility to mental health services in a heterogeneous urban environment and evaluates inequities in access to services in deprived areas.

METHODS

The study examines the spatial accessibility to mental health services in the Island of Montreal. All mental health services were geocoded from the six-digital postal code using the software ArcGIS 9.3. Accessibility was assessed through the two step floating catchment area method using the shortest route through a road network more often called reticular distance. This method takes into account the whole population, which is considered as the potential demand.

RESULTS

In general, accessibility to mental health services seems high in Montreal. It can be seen that at a distance of 1 km, nearly 90% of the territory is accessible. However, we also note that accessibility scores greatly diminish with distance. At 1 km, there are about 10.05 services for 10,000 persons and at 3 km, there is only 1.12 services for 10,000 persons. Over 50% of non-accessible areas are concentrated in the first quartile of deprivation and less than 10% are found in the fourth quartile, indicating good accessibility in severely deprived areas.

CONCLUSION

Accessibility to health services will always be the dominant issue debate in developing and undeveloped countries over the next decade. It is therefore urgent to develop technical and methodological tools to study and anticipate areas that may face services' shortage.

Impact of family structure on stimulant use among children with attention-deficit/hyperactivity disorder

OBJECTIVE

To examine the impact of family structure on pharmacologic stimulant use among children with attention-deficit/hyperactivity disorder (ADHD).

DATA SOURCE

Nationally representative, population-based sample of the National Health Interview Survey from 1997 to 2003 linked with drug event files from the Medical Expenditure Panel Survey from 1998 to 2005.

STUDY DESIGN

Stepwise multivariate logistic regression was used to examine the likelihood of stimulant use for each individual during 2 years of observation after adjustment for sociodemographic, health, and family characteristics. Stratified analyses were also conducted to examine whether family characteristics had different impacts within single-mother and dual-parent households.

PRINCIPAL FINDINGS

Stimulant use varied based on children's sociodemographic and health characteristics. In multivariate analyses, associations between children's household structure, parental education, and stimulant use appeared to be mediated by children's access to care and health status. However, in full multivariate models, there remained a robust positive association between family size and stimulant use.

CONCLUSIONS

These findings highlight the influence that nonclinical factors such as family size may have in mediating the use of pharmacologic therapies for children.

Privatization in a publicly funded health care system: the U.S. experience

The United States has four decades of experience with the combination of public funding and private health care management and delivery, closely analogous to reforms recently enacted or proposed in many other nations. Extensive research, herein reviewed, shows that for-profit health institutions provide inferior care at inflated prices. The U.S. experience also demonstrates that market mechanisms nurture unscrupulous medical businesses and undermine medical institutions unable or unwilling to tailor care to profitability. The commercialization of care in the United States has driven up costs by diverting money to profits and by fueling a vast increase in management and financial bureaucracy, which now consumes 31 percent of total health spending. The Veterans Health Administration system--a network of government hospitals and clinics--has emerged as the leader in quality improvement and information technology, indicating the potential for public sector excellence and innovation. The poor performance of U.S. health care is directly attributable to reliance on market mechanisms and for-profit firms, and should warn other nations from this path.

Multimethod evaluation of health policy change: an application to Medicaid managed care in a rural state

OBJECTIVE

To answer questions about the impacts of Medicaid managed care (MMC) at the individual, organizational/community, and population levels of analysis.

DATA SOURCES/STUDY SETTING

Multimethod approach to study MMC in New Mexico, a rural state with challenging access barriers.

STUDY DESIGN

Individual level: surveys to assess barriers to care, access, utilization, and satisfaction. Organizational/community level: ethnography to determine changes experienced by safety net institutions and local communities. Population level: analysis of secondary databases to examine trends in preventable adverse sentinel events.

DATA COLLECTION/EXTRACTION METHODS

SURVEY

multivariate statistical methods, including factor analysis and logistic regression. Ethnography: iterative coding and triangulation to assess documents, field observations, and in-depth interviews. Secondary databases: plots of sentinel events over time.

PRINCIPAL FINDINGS

The survey component revealed no consistent changes after MMC, relatively favorable experiences for Medicaid patients, and persisting access barriers for the uninsured. In the ethnographic component, safety net institutions experienced increased workload and financial stress; mental health services declined sharply. Immunization rate, as an important sentinel event, deteriorated.

CONCLUSIONS

MMC exerted greater effects on safety net providers than on individuals and did not address problems of the uninsured. A multimethod approach can facilitate evaluation of change in health policy.

Secret weapon: the "new" Medicare as a route to health security

Over the past twenty years, Medicare has been transformed from a single-payer insurer into a hybrid of complementary public and private insurance arrangements. Despite creating ongoing controversy, these changes have resulted in an ironic and largely overlooked strategic potential: Medicare's evolving hybrid form makes it the most promising vehicle for overcoming the historical obstacles to universal health insurance in the United States. To make this surprising case, we first explore the distinctive political dynamics of programs that, like today's Medicare, are hybrids of public and private arrangements. We then consider how these political dynamics might circumvent past barriers to universal health insurance. Finally, we discuss the strengths and weaknesses of alternative pathways through which Medicare could be expanded to promote health security.

Providers and staff respond to Medicaid managed care: the unintended consequences of reform in New Mexico

In 1997 a new Medicaid managed care (MMC) program called Salud! was implemented by the State of New Mexico. This article serves as an introduction to a special issue of Medical Anthropology Quarterly that assesses the unintended consequences of this reform and its impact on providers and staff who work in clinics, physician offices, and emergency rooms where Medicaid patients are served. MMC fused state and corporate bureaucracies, creating a complex system where enrollment and access was difficult. The special issue focuses on providers' responses to these new structures, including ways in which staff buffer the impact of reform and the role of the discourses of medical necessity and accountability in shaping the way in which MMC functions.

The Federal Employees Health Benefits Program: Model for Competition in Rural America?

CONTEXT

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) created the Medicare Advantage (MA) program, which promotes the entry of private Preferred Provider Organization (PPO) plans into regions that have not previously had Medicare managed care plans. The assumption that a competitive environment will develop is based on experiences in the Federal Employees Health Benefits Program (FEHBP).

PURPOSE

The authors test the hypothesis that the FEHBP has fostered an environment of competing health plans, especially preferred provider organizations (PPOs), in rural areas.

METHODS

Data from the US Office of Personnel Management are used to quantify the number of FEHBP-certified plans in each US county and the number of enrollees in each plan. Data from the Area Resource File are used to measure independent variables in multivariate analysis to account for the number of FEHBP-certified health plans competing in each US county.

FINDINGS

While 98% of all counties have at least 3 plans with enrollment, in many sparsely populated rural areas, only 1 of the plans is an open-enrollment plan (excludes plans for letter carriers). There is a strong relationship between the number of FEHBP plans and areas with high population counts and high population density. In many counties with low population counts (under 3,000), most PPOs are not contracting with the nearest primary care provider.

CONCLUSIONS

The FEHBP is not a perfect predictor of MA plan activity because the MA program does not use the FEHBP approach of certifying regional plans that must offer local access. However, the FEHBP experience indicates that plans are attracted to areas with high population counts and high population density.

Neurosurgical workforce trends in the United States

OBJECT

The purpose of this study was to evaluate the US neurosurgery workforce by reviewing journal recruitment advertisements published during the past 10 years.

METHODS

The number of available academic and private neurosurgical staff positions was determined based on recruitment advertisements in the Journal of Neurosurgery and Neurosurgery for the 10-year period from 1994 to 2003. Advertisements were evaluated for practice venue, subspecialization, and location. The numbers of active neurosurgeons and graduating residents also were reviewed. The number of advertised neurosurgical positions increased from 141.6 +/- 38.2 per year from 1994 through 1998 to 282.4 +/- 13.6 per year from 1999 through 2003 (mean +/- standard deviation, p < 0.05). The mean number of academic positions increased from 50.6 +/- 11.1 to 95 +/- 17.5 (p < 0.05), and the mean number of private positions rose from 91 +/- 30.4 to 187.4 +/- 6.8 (p < 0.05). Subspecialty positions represented a mean of only 15.6 +/- 5% per year during the first time period and 18.8 +/- 3% per year in the second period (p = 0.22), and therefore the majority of positions advertised continued to be those for generalists. The number of practicing neurosurgeons declined after 1998, and by 2002 it was less than it had been in 1991. The numbers of incoming and matriculating residents during the study period were static.

CONCLUSIONS

The number of recruitment advertisements for neurosurgeons during the last 5 years has increased significantly, concomitant with a severe decline in the number of active neurosurgeons and a static supply of residents.

Privatization of Medicare: toward disentitlement and betrayal of a social contract

An intense political battle is being waged over the future of U.S. Medicare. The 40-year social contract established with the nation's elderly and disabled is seriously threatened. The basic issue is whether Medicare will remain a universal entitlement program or be privatized and dismantled as an obligation of government. Faced with the growing costs of the Medicare program, changing demographics of an aging population, and long-term federal deficits, conservative interests are promoting further privatization of the program under the guise of increasing beneficiaries' choice and the claimed efficiency of the private marketplace. Following a historical overview of past efforts to privatize Medicare, this article reviews the track record of private Medicare plans over the last 20 years with regard to choice, reliability, cost containment, benefits, quality of care, efficiency, public satisfaction, and fraud. In all of these areas, privatized Medicare has performed less well than original Medicare. Based on the evidence, one has to conclude that privatization of Medicare is detrimental to the elderly and disabled, the most vulnerable groups in our society, and that the only winners in that transformation are private market interests.

Immunization coverage and Medicaid managed care in New Mexico: a multimethod assessment

BACKGROUND

We wanted to examine the association between Medicaid managed care (MMC) and changing immunization coverage in New Mexico, a predominantly rural, poor, and multiethnic state.

METHODS

As part of a multimethod assessment of MMC, we studied trends in quantitative data from the National Immunization Survey (NIS) using temporal plots, Fisher's exact test, and the Cochran-Armitage trend test. To help explain changes in immunization rates in relation to MMC, we analyzed qualitative data gathered through ethnographic observations at safety net institutions: income support (welfare) offices, community health centers, hospital emergency departments, private physicians' offices, mental health institutions, managed care organizations, and agencies of state government.

RESULTS

Immunization coverage decreased significantly after implementation of MMC, from 80% in 1996 to 73% in 2001 for the 4:3:1 vaccination series (Fisher's exact test, P = .031). New Mexico dropped in rank among states from 30th for this vaccination series in 1996 to 50th in 2001. A significant decreasing trend (Cochran-Armitage P = .025) in coverage occurred between 1996 and 2001. Findings from the ethnographic study revealed conditions that might have contributed to decreased immunization coverage: (1) reduced funding for immunizations at public health clinics, and difficulties in gaining access to MMC providers; (2) informal referrals from managed care organizations and contracting physicians to community health centers and state-run public health clinics; and (3) increased workloads and delays at community health centers, linked partly to these informal referrals for immunizations.

CONCLUSIONS

Medicaid reform in New Mexico did not improve immunization coverage, which declined significantly to among the lowest in the nation. Reduced funding for public health clinics and informal referrals may have contributed to this decline. These observations show how unanticipated and adverse consequences can result from policy interventions in complex insurance systems.

GIS and health care

GIS and related spatial analysis methods provide a set of tools for describing and understanding the changing spatial organization of health care, for examining its relationship to health outcomes and access, and for exploring how the delivery of health care can be improved. This review discusses recent literature on GIS and health care. It considers the use of GIS in analyzing health care need, access, and utilization; in planning and evaluating service locations; and in spatial decision support for health care delivery. The adoption of GIS by health care researchers and policy-makers will depend on access to integrated spatial data on health services utilization and outcomes and data that cut across human service systems. We also need to understand better the spatial behaviors of health care providers and consumers in the rapidly changing health care landscape and how geographic information affects these dynamic relationships.

Medicaid and rural health care

The impact of Medicaid policies on systems of rural health care has typically been understood in terms of payment methods and rates. But Medicaid agencies have multifaceted influences, including service funding, promotion of access and quality, and infrastructure. We present in this article a general framework to explore these facets and examine literature that has attempted to identify and measure the impacts of the Medicaid program on rural health care systems. While the literature is relatively sparse, there is evidence that rural health systems have been both bolstered and challenged by Medicaid policies in several areas. Several contemporary developments in Medicaid, including increased state flexibility, uneven coverage expansion, and aggressive Medicaid purchasing strategies, suggest that tensions between Medicaid policy and rural health care needs could grow in the future. These tensions provide focus for developing a research agenda that explores the intersection of Medicaid and rural concerns; a number of research questions that would be a part of this agenda are presented.

Geography and the debate over Medicare reform

Medicare spending varies more than twofold among regions, and the variations persist even after differences in health are corrected for. Higher levels of Medicare spending are due largely to increased use of "supply-sensitive" services--physician visits, specialist consultations, and hospitalizations, particularly for those with chronic illnesses or in their last six months of life. Also, higher spending does not result in more effective care, elevated rates of elective surgery, or better health outcomes. To improve the quality and efficiency of care, we propose a new approach to Medicare reform based on the principles of shared decision making and the promotion of centers of medical excellence. We suggest that our proposal be tested in a major demonstration project

Work site change and psychosocial well-being among health care personnel in geriatric wards--effects of an intervention program

The study evaluated the effect of a change of work site and organization on work environment and psychosocial parameters: the change involved health care personnel at a geriatric hospital. Another aim of this study was to evaluate the effects of a structured psychoeducational intervention program. The study found few changes in the indices of interest on the experimental and control wards. There were, however, significant improvements in social climate, goal quality, and independence of work on the control ward. The investigators postulated that too much external support hampers a group's ability to actively cope with change and might actually lower a group's ability and self-esteem. In order to achieve successful organizational change, psychosocial intervention programs for personnel must be performed by a well-informed, well-chosen, and experienced counsellor who is well tailored to the local organization.

Safety-net institutions buffer the impact of Medicaid managed care: a multi-method assessment in a rural state

OBJECTIVES

This project used a long-term, multi-method approach to study the impact of Medicaid managed care.

METHODS

Survey techniques measured impacts on individuals, and ethnographic methods assessed effects on safety-net providers in New Mexico.

RESULTS

After the first year of Medicaid managed care, uninsured adults reported less access and use (odds ratio [OR] = 0.46; 95% confidence interval [CI] = 0.34, 0.64) and worse barriers to care (OR = 6.60; 95% CI = 3.95, 11.54) than adults in other insurance categories. Medicaid children experienced greater access and use (OR = 2.11; 95% CI = 1.21, 3.72) and greater communication and satisfaction (OR = 3.64; 95% CI = 1.13, 12.54) than children in other insurance categories; uninsured children encountered greater barriers to care (OR = 6.29; 95% CI = 1.58, 42.21). There were no consistent changes in the major outcome variables over the period of transition to Medicaid managed care. Safety-net institutions experienced marked increases in workload and financial stress, especially in rural areas. Availability of mental health services declined sharply. Providers worked to buffer the impact of Medicaid managed care for patients.

CONCLUSIONS

In its first year, Medicaid managed care exerted major effects on safety-net providers but relatively few measurable effects on individuals. This reform did not address the problems of the uninsured.

DRG-related prices applied in a public health care system--can Finland learn from Norway and Sweden?

In the early 1990s, DRG based hospital financing was introduced into some hospital districts in Finland. The 1993 state subsidy reform decentralising all hospital financing to municipalities, and the aim of improving productivity, were the driving forces for introducing DRG. This study addresses the pros and cons of DRG in hospital financing in the Finnish health care system and puts forward several solutions to avoid potential problems. We consider the objectives and optimal features of hospital financing systems in the context of the public health care system, where the public sector owns and finances hospitals. We analyse impacts of introducing different types of DRG based hospital financing systems, taking into account earlier experiences in countries such as Sweden and Norway, as well as Finnish system specific features. DRG could assist the Finnish municipalities to compare quality, costs and prices of services between hospitals, and related cost information might help them budget expenditure more accurately. System specific features mean that traditional uses of DRG in hospital pricing are not feasible in Finland. But some benefits of DRG could be exploited, for instance in the controlled contracts between municipalities and hospitals.

Availability of child care in the United States: a description and analysis of data sources

Lack of high-quality, affordable, and accessible child care is an often-cited impediment to a manageable balance between work and family. Researchers, however, have been restricted by a scarcity of data on the availability of child care across all U.S. communities. In this paper we describe and evaluate several indicators of child care availability that have been released by the U.S. Census Bureau over the last 15 years. Using community- and individual-level analyses, we find that these data sources are useful for indicating child care availability within communities, even though they were collected for other purposes. Furthermore, our results generally suggest that the data on child care availability are equally valid across communities of different urbanicity and average income levels, although it appears that larger geographic areas more accurately capture the child care market of centers than that of family day care providers. Our analyses indicate that center child care is least available in nonmetropolitan, poor communities, and that family day care is most available in nonmetropolitan, mixed-income communities. We discuss the benefits and limitations of the data sources, and point to directions for future data developments and research.

The changing nature of rural health care

The rural health care system has changed dramatically over the past decade because of a general transformation of health care financing, the introduction of new technologies, and the clustering of health services into systems and networks. Despite these changes, resources for rural health systems remain relatively insufficient. Many rural communities continue to experience shortages of physicians, and the proportion of rural hospitals under financial stress is much greater than that of urban hospitals. The health care conditions of selected rural areas compare unfavorably with the rest of the nation. The market and governmental policies have attempted to address some of these disparities by encouraging network development and telemedicine and by changing the rules for Medicare payments to providers. The public health infrastructure in rural America is not well understood but is potentially the most fragile aspect of the rural health care continuum.

Using quality management to balance the economic and humane imperatives in behavioral health care

The authors describe how quality management can be used to achieve an ethical balance between economic pressures and high-quality patient care.

The impact of managed care on the mix of vulnerable populations served by community health centers

This article examined the impact of managed care involvement on vulnerable populations served by community health centers (CHCs), while controlling for center rural-urban location and size, and found that centers involved in managed care have served a significantly smaller proportion of uninsured patients but a higher proportion of Medicaid users than those not involved in managed care. The results suggest that the increase in Medicaid managed care patients may lead to a reduced capacity to care for the uninsured, thus hampering CHCs from expanding access to health care for the medically indigent.

Assessing the impact of health plan choice

Many health policy researchers have argued that increased insurance plan choice will enhance the efficiency of the health care system. However, relatively little is known about plan choice and its association with insurance coverage and access to and satisfaction with health care. Using data from the 1996 Medical Expenditure Panel Survey, we find that 55 percent of workers had plan choice in that year. Approximately 26 percent of workers with choice obtained it through a family member. Controlling for other factors, plan choice is associated with higher levels of employment-based insurance coverage and a greater likelihood that workers are satisfied that their families' health care needs are being met.

Selection of a cardiac surgery provider in the managed care era

OBJECTIVE

Many health planners promote the use of competition to contain cost and improve quality of care. Using a standard econometric model, we examined the evidence for "value-based" cardiac surgery provider selection in eastern Massachusetts, where there is significant competition and managed care penetration.

METHODS

McFadden's conditional logit model was used to study cardiac surgery provider selection among 6952 patients and eight metropolitan Boston hospitals in 1997. Hospital predictor variables included beds, cardiac surgery case volume, objective clinical and financial performance, reputation (percent out-of-state referrals, cardiac residency program), distance from patient's home to hospital, and historical referral patterns. Subgroup analyses were performed for each major payer category.

RESULTS

Distance from patient's home to hospital (odds ratio 0.90; P =.000) and the historical referral pattern from each patient's hometown (z = 45.305; P =.000) were important predictors in all models. A cardiac surgery residency enhanced the probability of selection (odds ratio 5.25; P =.000), as did percent out-of-state referrals (odds ratio 1.10; P =.001). Higher mortality rates were associated with decreased probability of selection (odds ratio 0.51; P =.027), but higher length of stay was paradoxically associated with greater probability (odds ratio 1.72; P =.000). Total hospital costs were irrelevant (odds ratio 1.00; P =.179). When analyzed by payer subgroup, Medicare patients appeared to select hospitals with both low mortality (odds ratio 0.43; P =.176) and short length of stay (odds ratio 0.76; P =.213), although the results did not achieve statistical significance. The commercial managed care subgroup exhibited the least "value-based" behavior. The odds ratio for length of stay was the highest of any group (odds ratio = 2.589; P =.000) and there was a subset of hospitals for which higher mortality was actually associated with greater likelihood of selection.

CONCLUSIONS

The observable determinants of cardiac surgery provider selection are related to hospital reputation, historical referral patterns, and patient proximity, not objective clinical or cost performance. The paradoxic behavior of commercial managed care probably results from unobserved choice factors that are not primarily based on objective provider performance.

Is premium support the right medicine for Medicare?

This paper assesses the desirability of transforming Medicare into a premium-support system. I focus on three areas crucial to the future of Medicare: cost savings, beneficiary choice, and the stability of traditional Medicare. Based on my analysis of the Bipartisan Commission on the Future of Medicare plan, I find substantial problems with adopting premium support for Medicare. In particular, projections of premium-support savings are based on questionable assumptions that the slowdown in health spending during 1993-1997 can be sustained and extrapolated to future Medicare performance. Consequently, premium support may inadvertently destabilize public Medicare and erode beneficiary choice without achieving substantial savings.

Managed care and community health centers

This study has two objectives: (1) to examine the relationship between the involvement of community health centers (CHCs) in managed care and various center characteristics, including patient, provider, services, and financial characteristics, that are critically linked with the fulfillment of their mission and (2) to identify factors significantly associated with CHCs' involvement in managed care. Regarding the first objective, the study indicates that CHCs involved in managed care have more diversified sources of revenue and depend less on grant funding than other CHCs, and they serve a significantly smaller proportion of uninsured and homeless patients. Involvement in managed care is also associated with greater financial vulnerability, reflected in higher costs and net revenue deficits. Regarding the second objective, the study finds that CHCs have become involved in managed care largely in response to external market pressures, such as the prospect of reduced federal grant funding. Other significant factors include center size, location, and the percentage of users who are Medicaid patients.

The longitudinal study of surgical residents, 1994 to 1996

BACKGROUND

The American College of Surgeons (ACS) has conducted a detailed annual survey of residents enrolled in surgical graduate medical education (GME) programs since 1982 and has regularly published the resulting data as the Longitudinal Study of Surgical Residents. This report documents surgical resident enrollment and graduation for the academic years 1994-95 and 1995-96.

STUDY DESIGN

The Medical Education Research and Information Database of the American Medical Association was supplemented by the existing ACS Resident Masterfile and by personal contact with program directors and their staffs to verify accuracy and completeness of reporting. Each resident was tracked individually through surgical GME.

RESULTS

The total number of surgical residents graduating from surgical GME in 1995 and 1996 has not changed since 1982. Most graduates of surgical residency programs are in obstetrics and gynecology, followed by general surgery; demographic analysis of the graduating cohort shows that most are Caucasian male graduates of US or Canadian medical schools, and that their age at graduation is 33 to 35 years. International medical graduates (IMG) make up 8.9% of entering surgical residents and 6% of graduates. Osteopathic medical school graduates account for 1.2% to 1.3% of entering and graduating surgical residents. Women represent 27% of entering and 23% to 24% of graduates of surgical GME. The largest number and proportion of women in surgical GME are enrolled in obstetrics and gynecology residency programs, where they make up the majority of entering and graduating classes. When all other surgical residency program enrollments are considered together, women make up 17% and 16% of entering residents in 1994 and 1995, respectively, and 13% and 14% of graduates in those years.

CONCLUSIONS

Surgical GME enrollment and graduation is stable. Few women and ethnic minorities are enrolled in surgical residency programs. IMG enrollment and graduation in surgical GME is low.

Urban and rural differences in health insurance and access to care

This study considers differences in access to health care and insurance characteristics between residents of urban and rural areas. Data were collected from a telephone survey of 10,310 randomly selected households in Minnesota. Sub-samples of 400 group-insured, individually insured, intermittently insured, and uninsured people, were asked about access to health care. Those with group or individual insurance were also asked about the costs and characteristics of their insurance policies. Rural areas had a higher proportion of uninsured and individually insured respondents than urban areas. Among those who purchased insurance through an employer, rural residents had fewer covered benefits than urban residents (5.1 vs 5.7, P < 0.01) and were more likely to have a deductible (80% versus 40%, P < 0.01). In spite of this, rural uninsured residents were more likely to have a regular source of care than urban residents (69% versus 51%, P < 0.01), and were less likely to have delayed care when they thought it was necessary (21% versus 32%, P < 0.01). These differences were confirmed by multivariate analysis. Rural residents with group insurance have higher out-of-pocket costs and fewer benefits. Uninsured rural residents may have better access to health care than their urban counterparts. Attempts to expand access to health care need to consider how the current structure of employment-based insurance creates inequities for individuals in rural areas as well as the burdens this structure may place on rural providers.

Legislative and policy strategies for supporting rural health network development: lessons from the 103rd Congress

There was considerable support in most major health reform bills considered by the 103rd Congress for the development of rural integrated service networks. The demise of comprehensive health reform, together with the pace of current market-driven changes in the health care system, suggests the need to assess the impact of specific policy strategies considered in the last Congress on rural integrated service network development. Toward this end, this article evaluates the rural health policy strategies of the major bills in relation to three essential preconditions for the development of rural integrated service networks: (1) the need for a more stable financial base for rural providers; (2) the need for administrative, service and clinical capacity to mount a successful network; and finally, (3) the need for appropriate market areas to ensure fair competition among networks and plans. Key policy strategies for supporting rural network development include reform of insurance and payment policies, expansion of targeted support and technical assistance to the underserved, limited-capacity rural areas, and policies governing purchasing groups or alliances that will ensure appropriate treatment of rural providers and networks.

Re-forming medical delivery systems: economic organization and dynamics of regional planning and managed competition

This paper compares structural components of medical delivery in two major systemwide reform strategies in the United States. Commonly portrayed in terms of opposing ideologies of planning vs. market reform, regional organization and managed competition have promoted similar structural elements and geographic configurations. They both support growth of institution-based specialized teams and hospital consolidation. They both differentiate hospital care into vertically integrated levels, and develop regions as the key production and market area for organized delivery systems. System-wide management or regulation in each has tried to control allocation of resources, capital investment, and competition. Developed in the context of large-scale industrial production, these components have inherent economic dynamics and together they shape the market structure of medical care. The final section briefly considers the locus of power in the two reform approaches and the implication for choosing mechanisms of reform. It also notes that despite their rhetoric, the two strategies do not shape their services according to information about population benefit. The conclusion points out that the commonalities in structure and power demonstrate the dominance of economic organization in medical reform and contribute to the wide acceptance of this business form of organization as an international model.

Primary care reform: a three country comparison of 'budget holding'

Governments in most developed nations have been looking to organisational and financial reform of health systems over the last decade. Although the structure and problems of the health care sector in each country may differ, with countries correspondingly adopting different reform agendas, there has been some element of commonality in reforms: that of (managed) competition. Of particular importance in such reforms has been the strengthening of primary care. General practitioners and primary care physicians, as 'gatekeepers' to the health system, are increasingly being called upon to be accountable; not only for their patients' health but also for the wider resource implications of any treatments prescribed. In some countries this role has been formalised through establishing 'budget holding' for general practitioners and primary care physicians, for example, through general practice 'fund holding' in the UK, Health Maintenance Organisations in the USA, and Independent Practice Associations in New Zealand. This paper examines: (i) what such budget holding seeks to achieve; (ii) the effectiveness of the budget holding experience to date in achieving these objectives; and (iii) factors which appear to determine the success of budget holding in achieving its objectives.

State funding of comprehensive primary medical care service programs for medically underserved populations

OBJECTIVES

This study examined the availability of state funding for comprehensive primary care programs and the need for primary care subsidies for medically underserved communities.

METHODS

A brief questionnaire was used to ask health agencies in all 50 states whether their state funded a program that met our definition of comprehensive primary medical care practice programs. An in-depth written survey instrument was then administered to the states with programs.

RESULTS

Almost half of all states provide some funds for the development and/or operation of comprehensive primary medical care practices. Expenditures in most states were found to be relatively modest in comparison with both federal funding and the total level of unmet need for primary care. States that subsidize primary care practices tend to follow the model established under the federal health centers program.

CONCLUSIONS

The findings suggest the continued viability of the health center model of care, as well as the presence of some state support for such a program. However, in light of limited state resources for the development and operation of comprehensive practices, a continued and significant federal effort is imperative.

Demand-based assessment of workforce requirements for orthopaedic services

On the basis of an analysis of the supply of and demand for orthopaedic surgeons, we projected that there will be 21,134 full-time-equivalent orthopaedists in the year 2010 if training continues at current levels. We estimated a demand-based requirement of 17,012 full-time-equivalent orthopaedic surgeons, indicating a surplus of 4122 full-time equivalents. In terms of orthopaedist-to-population ratios, we estimated that there will be 7.5 full-time-equivalent orthopaedists per 100,000 population in 2010 compared with a demand-based requirement of 6.0 full-time equivalents. However, we did not include estimates of the demand for orthopaedic surgeons as assistants in the operating room in our model. If an assistant orthopaedic surgeon is required for all procedures, an additional 3906 full-time-equivalent orthopaedists would be demanded, thus eliminating the surplus. The demand for an assistant orthopaedic surgeon in only half of the procedures would still lead to a sizable reduction in the surplus.

A comparison of ambulatory care and selected procedure rates in the health care systems of the Province of Manitoba, Canada; Kaiser Permanente Health Maintenance Organization; and the United States

To determine if there are differences in physician services in different health care systems, we compared ambulatory visit rates and procedure rates for three surgical procedures in the province of Manitoba, Canada; Kaiser Permanente Health Maintenance Organization; and the United States. The KP system, with its single payer and low financial barriers, is not unlike the Canadian system. But, for most of the United States, the primary payment mechanism is fee-for-service, with the patient paying a significant amount, thereby militating against preventive and early primary care. Manitoba and KP data were extracted from computerized administrative records. U.S. data were obtained from publicly available reports. Manitoba provides 1.8 times and KP 1.2 times (1.4 when allied health visits are included) as many primary care physician visits as the United States. For the surgical procedures studied, U.S. rates were higher than those in either the KP HMO or in Manitoba. We conclude that (1) the U.S. system leads to more surgical intervention, and (2) removal of financial barriers leads to higher use of primary care services where more preventive and ameliorative care can occur.

What surgeons need to know to help patients receive quality medical care in managed care settings

BACKGROUND

Americans spend more than $3,300 per person per year on health care, an amount businesses, government, and citizens alike consider too high.

MATERIAL REVIEWED

Managed care attempts to offer services at a lower cost, about 10% below that of indemnity insurance, and attempts to controls costs by modifying decisions historically made by physician and patient. Many techniques have been used to modify the decision-making process, with varying effects on quality.

CONCLUSIONS

Surgeons can help sustain easily accessible, high-quality care through various personal behaviors and through choosing their managed care partners well.

Community control in a world of regional delivery systems

The pell-mell restructuring of health care into massive regional delivery systems has disrupted long-standing relationships between local leaders and residents and their community health care systems. This diminished role of communities in our new world of health care is ironic. As control within large regions in this country becomes concentrated within the operation of three or four health plans, we become increasingly dependent upon oligopolies for our market solutions. As economic arrangements, all that oligopolies can offer are indeterminate outcomes. Some may be good for consumers, others disastrous. Without the countervailing influence of nonmarket community interests, individuals may find their satisfaction with the health care system greatly diminished.

Managed care merged with the German model

The cutbacks in Medicare and Medicaid reimbursement, and the Republican takeover of Capitol Hill and the state legislatures as a result of recent elections, suggest that the payer-driven forces of managed care, capitated payment, and the regional networks (alliances) will serve as centerpieces to improve the organization, financing, and delivery of America's health services. These "voluntary" alliances that are now being forged as an amalgam of health providers and insurance underwriters, often foreshadow the powerful, geographically linked regional health networks that are evolving into oligopolies throughout the United States. As the Department of Justice and the Federal Trade Commission are unable to appropriately analyze the efficacy of most prospective mergers, the American health field increasingly can expect monopolistic environments. In this process, the public eventually may demand the formation of state health services commissions. Within this framework, the German decentralized, multipayer, multitier approach, which historically is self-governing and allows for negotiating reimbursement rates between insurers and providers, offers a preferred option to the traditional American public utility model.

Managed competition in California's small-group insurance market

This paper describes the early experience of the Health Insurance Plan of California (the HIPC), a small-employer purchasing cooperative established in 1993. The plan's experience is consistent with the predictions of advocates of market-oriented health care reform: The program's design has encouraged cost-conscious choice by enrollees, which in turn has generated price competition among plans. Differences across the HIPC's six rating regions conform with the notion that health care competition is less viable is sparsely populated areas. Evidence on risk selection suggests that while the HIPC as a whole has not experienced adverse selection, certain plans within the program have received a disproportionate share of high-cost enrollees.

Academic cardiology division in the era of managed care. A paradigm for survival

The ability of academic divisions of cardiology to pursue educational and research missions in an era of market-driven managed care is being increasingly jeopardized. Indeed, several academic medical centers have been sold to for-profit entities, and many cardiology divisions have been forced to decrease staff and faculty reimbursements. Despite these threats, the academic division has unique strengths: (1) premium quality of care, (2) a single employer, (3) a somewhat uniform practice culture, (4) high-volume operators performing interventional procedures, (5) expertise in highly technical aspects of cardiology, and (6) the availability of physicians for outreach ventures. Therefore, we hypothesized that the cardiology division could be strengthened by collaborating with the medical center in the development of an aggressive and proactive managed care strategy. To this end, we developed a cardiovascular network having the academic center as its central focus but including a group of high-quality and geographically dispersed community-based physicians. These physicians were attracted by an economic package that provided protection from downside risk, participation in our managed care initiatives, and geographic exclusivity in an over-crowded market. In turn, the community-based physicians increasingly used the academic medical center for tertiary care, resulting in increased volumes and incremental profitability. Using this paradigm, we have now recruited approximately 40 community cardiologists. The resulting network provides access to a university cardiologist in most of the surrounding urban and rural counties and will allow us to compete effectively for capitated contracts.