Health system integration with physician specialties varies across markets and system types

OBJECTIVE

To examine system integration with physician specialties across markets and the association between local system characteristics and their patterns of physician integration.

DATA SOURCES

Data come from the AHRQ Compendium of US Health Systems and IQVIA OneKey database.

STUDY DESIGN

We examined the change from 2016 to 2018 in the percentage of physicians in systems, focusing on primary care and the 10 most numerous nonhospital-based specialties across the 382 metropolitan statistical areas (MSAs) in the US. We also categorized systems by ownership, mission, and payment program participation and examined how those characteristics were related to their patterns of physician integration in 2018.

DATA COLLECTION/EXTRACTION METHODS

We examined local healthcare markets (MSAs) and the hospitals and physicians that are part of integrated systems that operate in these markets. We characterized markets by hospital and insurer concentration and systems by type of ownership and by whether they have an academic medical center (AMC), a 340B hospital, or accountable care organization.

PRINCIPAL FINDINGS

Between 2016 and 2018, system participation increased for primary care and the 10 other physician specialties we examined. In 2018, physicians in specialties associated with lucrative hospital services were the most commonly integrated with systems including hematology-oncology (57%), cardiology (55%), and general surgery (44%); however, rates varied substantially across markets. For most specialties, high market concentration by insurers and hospital-systems was associated with lower rates of physician integration. In addition, systems with AMCs and publicly owned systems more commonly affiliated with specialties unrelated to the physicians' potential contribution to hospital revenue, and investor-owned systems demonstrated more limited physician integration.

CONCLUSIONS

Variation in physician integration across markets and system characteristics reflects physician and systems' motivations. These integration strategies are associated with the financial interests of systems and other strategic goals (eg, medical education, and serving low-income populations).

Characteristics of Academic-Affiliated Health Systems

PURPOSE

Changing market forces increasingly are leading academic medical centers (AMCs) to form or join health systems. But it is unclear how this shift is affecting the tripartite academic mission of education, research, and high-quality patient care. To explore this topic, the authors identified and characterized the types of health systems that owned or managed AMCs in the United States in 2016.

METHOD

The authors identified AMCs as any general acute care hospitals that had a resident-to-bed ratio of at least 0.25 and that were affiliated with at least one MD- or DO-granting medical school. Using the Agency for Healthcare Research and Quality 2016 Compendium of U.S. Health Systems, the authors also identified academic-affiliated health systems (AHSs) as those health systems that owned or managed at least one AMC. They compared AMCs and other general acute care hospitals, AHSs and non-AHSs, and AHSs by type of medical school relationship, using health system size, hospital characteristics, undergraduate and graduate medical education characteristics, services provided, and ownership.

RESULTS

Health systems owned or managed nearly all AMCs (361, 95.8%). Of the 626 health systems, 230 (36.7%) met the definition of an AHS. Compared with other health systems, AHSs included more hospitals, provided more services, and had a lower ratio of primary care doctors to specialists. Most AHSs (136, 59.1%) had a single, shared medical school relationship, whereas 38 (16.5%) had an exclusive medical school relationship and 56 (24.3%) had multiple medical school relationships.

CONCLUSIONS

These findings suggest that several distinct types of relationships between AHSs and medical schools exist. The traditional vision of a medical school having an exclusive relationship with a single AHS is no longer prominent.

Methodological Approaches to Understanding Causes of Health Disparities

Understanding health disparity causes is an important first step toward developing policies or interventions to eliminate disparities, but their nature makes identifying and addressing their causes challenging. Potential causal factors are often correlated, making it difficult to distinguish their effects. These factors may exist at different organizational levels (e.g., individual, family, neighborhood), each of which needs to be appropriately conceptualized and measured. The processes that generate health disparities may include complex relationships with feedback loops and dynamic properties that traditional statistical models represent poorly. Because of this complexity, identifying disparities' causes and remedies requires integrating findings from multiple methodologies. We highlight analytic methods and designs, multilevel approaches, complex systems modeling techniques, and qualitative methods that should be more broadly employed and adapted to advance health disparities research and identify approaches to mitigate them.

Malpractice Claim Fears and the Costs of Treating Medicare Patients: A New Approach to Estimating the Costs of Defensive Medicine

OBJECTIVE

To estimate the cost of defensive medicine among elderly Medicare patients.

DATA SOURCES

We use a 2008 national physician survey linked to respondents' elderly Medicare patients' claims data.

STUDY DESIGN

Using a sample of survey respondent/beneficiary dyads stratified by physician specialty, we estimated cross-sectional regressions of annual costs on patient covariates and a medical malpractice fear index formed from five validated physician survey questions. Defensive medicine costs were calculated as the difference between observed patient costs and those under hypothetical alternative levels of malpractice concern, and then aggregated to estimate average defensive medicine costs per beneficiary.

DATA COLLECTION METHODS

The physician survey was conducted by mail. Patient claims were linked to survey respondents and reweighted to approximate the elderly Medicare beneficiary population.

PRINCIPAL FINDINGS

Higher levels of the malpractice fear index were associated with higher patient spending. Based on the measured associations, we estimated that defensive medicine accounted for 8 to 20 percent of total costs under alternative scenarios. The highest estimate is associated with a counterfactual of no malpractice concerns, which is unlikely to be socially optimal as some extrinsic incentives to avoid medical errors are desirable. Among specialty groups, primary care physicians contributed the most to defensive medicine spending. Higher costs resulted mostly from more hospital admissions and greater postacute care.

CONCLUSIONS

Although results are based on measured associations between malpractice fears and spending, and may not reflect the true causal effects, they suggest defensive medicine likely contributes substantial additional costs to Medicare.

Leveraging Diverse Data Sources to Identify and Describe U.S. Health Care Delivery Systems

Health care delivery systems are a growing presence in the U.S., yet research is hindered by the lack of universally agreed-upon criteria to denote formal systems. A clearer understanding of how to leverage real-world data sources to empirically identify systems is a necessary first step to such policy-relevant research. We draw from our experience in the Agency for Healthcare Research and Quality's Comparative Health System Performance (CHSP) initiative to assess available data sources to identify and describe systems, including system members (for example, hospitals and physicians) and relationships among the members (for example, hospital ownership of physician groups). We highlight five national data sources that either explicitly track system membership or detail system relationships: (1) American Hospital Association annual survey of hospitals; (2) Healthcare Relational Services Databases; (3) SK&A Healthcare Databases; (4) Provider Enrollment, Chain, and Ownership System; and (5) Internal Revenue Service 990 forms. Each data source has strengths and limitations for identifying and describing systems due to their varied content, linkages across data sources, and data collection methods. In addition, although no single national data source provides a complete picture of U.S. systems and their members, the CHSP initiative will create an early model of how such data can be combined to compensate for their individual limitations. Identifying systems in a way that can be repeated over time and linked to a host of other data sources will support analysis of how different types of organizations deliver health care and, ultimately, comparison of their performance.

Physician Self-Referral of Physical Therapy Services for Patients with Low Back Pain: Implications for Use, Types of Treatments Received and Expenditures

Prior research on treatment of low back pain has documented large increases in use of spinal surgery, MRIs and lumbosacral injections linked to physician self-referral arrangements. No recent research has examined whether physician ownership of physical therapy services results in greater use of physical therapy to treat low back pain. The objective of this study is to investigate whether physician ownership of physical therapy services affects frequency of use, visits and types of physical therapy services received by patients with low back pain. Using claims records from insured patients covered by Blue Cross Blue Shield of Texas (2008-2011) we compared several metrics of use of physical therapy services for low back pain episodes controlling for self-referral status. We identified 158,151 low back pain episodes, 27% met the criteria to be classified as "self-referral." Only 10% of "non-self-referral" episodes received physical therapy compared to 26% of self-referral episodes (p<0.001). The unadjusted and regression adjusted self-referral effect was identical - about 16 percentage point difference (p<0.001). Among patients who received some physical therapy, self-referral episodes were comprised of 2.26 fewer visits and 11 fewer physical therapy service units (p<0.001). Non-self-referring episodes included a significantly higher proportion of "active" (hands on or patient engaged) as opposed to "passive" treatments (p<0.001). The regression-adjusted difference was 30 percentage points when measured as actual counts and 29 percentage points when measured in RVUs (p<0.001). Total spending on back-related care was 35% higher for self-referred episodes compared to their non-self-referred counterparts (p<0.001). Ownership of physical therapy services influence physicians' referral to initiate a course of physical therapy to treat low back pain, but also affect the types of physical therapy services a patient receives.

Why Do Hispanics Have So Little Employer-Sponsored Health Insurance?

This paper investigates low rates of employer health insurance coverage among Hispanics using national data from the Community Tracking Study Household Survey. Interview language served as a proxy for the degree of assimilation. Findings indicate that English-speaking Hispanics are more similar to whites in their labor market experiences and coverage than they are to Spanish-speaking Hispanics. Spanish-speakers' very low human capital (including their inability to speak English) results in much less access to job-based insurance. Though less important, Spanish-speaking Hispanics' demand for employer-sponsored insurance appears lower than that of English-speaking Hispanics or whites. Results suggest that language and job training may be the most effective way to bolster Hispanics' insurance coverage.

The role of internal medicine subspecialists in patient care management

OBJECTIVES

To understand the clinical roles in which internal medicine (IM) subspecialists engage, especially those involving ongoing patient management.

STUDY DESIGN

Measures of physician clinical roles were based on survey responses collected from 8020 mid-career IM subspecialists who registered for the American Board of Internal Medicine maintenance of certification program (86% registration/response rate) between 2009 and 2013.

METHODS

Each subspecialist reported their percentage of clinical time in 5 clinical roles: primary, principal, longitudinal consultative, medical consultative, and procedural care. We characterized an IM subspecialist's clinical role focus as those roles that composed a majority of their clinical time.

RESULTS

Most IM subspecialists reported spending a majority of their time performing 1 (65%) or 2 (31%) clinical roles. Most (54%) reported a clinical role focused on ongoing patient care management roles, including principal care (eg, total responsibility for a specific condition, 23%), longitudinal consultative care (eg, shared care, 21%); or a mixed clinical role focus composed of both principal and longitudinal consultative care (8%). We also found that physicians focused on ongoing patient care management roles represent a significant percentage of physicians within most IM subspecialties (ranging from 19% to 88% across subspecialties).

CONCLUSIONS

A subspecialist's clinical role focus is an important practice characteristic, and many subspecialists perceive themselves as playing a significant role in care management. These findings suggest there are opportunities to incorporate subspecialists into newer payment and care delivery reforms; they also bring to light reasons that training and certification programs should consider the different clinical role foci subspecialists adopt.

After the "Doc Fix": Implications of Medicare Physician Payment Reform for Academic Medicine

The Medicare Access and CHIP Reauthorization Act (MACRA) introduces incentives for clinicians serving Medicare patients to move away from traditional "fee-for-service" and into alternative payment models (APMs) such as accountable care organizations and bundled payment arrangements. Thus, MACRA creates strong reasons for various teaching clinical services to participate in APMs, not only for Medicare patients but for other public and private payers as well. Unfortunately, different APMs may be more or less applicable to the diverse teaching physician roles, academic clinical programs, and patient populations served by medical schools and teaching hospitals. Therefore, this time of transition will complicate the work of academic clinical program leaders endeavoring to sustain the tripartite mission of patient care, health professional education, and research. Nonetheless, payment reforms promoted by MACRA can reward efforts to reinvent medical education to better incorporate value into medical decision making, as well as to give clinical learners the tools and insights needed to recognize their personal financial (and other) conflicts and navigate these to meet their patients' needs. This post-MACRA environment may intensify the need for researchers in academic medicine to stay independent of the short-term financial interests of affiliated clinical institutions. Health sciences scholars must be able to study effectively and speak forcefully regarding the actual benefits, risks, and costs of health care services so that educators and clinicians can identify high-value care and deliver it to their patients.

Quality of Board and Care Homes Serving Low-Income Elderly: Structural and Public Policy Correlates

From data on 205 board and care homes that serve the poor elderly in seven states, structural and process variables were used to construct seven indexes covering dimensions of quality that contribute to the safety and quality of life of residents. Systematic differences were found in the indexes among homes of differing size and staffing patterns, as well as between proprietary and nonprofit facilities. For several dimensions of quality, state funding appears to result in improved quality. Overall, governmental regulatory policies did not significantly effect board and care home quality.

Use of Physical Therapy Following Total Knee Replacement Surgery: Implications of Orthopedic Surgeons' Ownership of Physical Therapy Services

OBJECTIVE

To examine whether the course of physical therapy treatments received by patients who undergo total knee replacement (TKR) surgery differs depending on whether the orthopedic surgeon has a financial stake in physical therapy services.

DATA

Sample of Medicare beneficiaries who underwent TKR surgery during the years 2007-2009.

STUDY DESIGN

We used regression analysis to evaluate the effect of physician self-referral on the following outcomes: (1) time from discharge to first physical therapy visit; (2) episode length; (3) number of physical therapy visits per episode; (4) number of physical therapy service units per episode; and (5) number of physical therapy services per episode expressed in relative value units.

PRINCIPAL FINDINGS

TKR patients who underwent physical therapy treatment at a physician-owned clinic received on average twice as many physical therapy visits (8.3 more) than patients whose TKR surgery was performed by a orthopedic surgeon who did not self-refer physical therapy services (p < .001). Regression-adjusted results show that TKR patients treated at physician-owned clinics received almost nine fewer physical therapy service units during an episode compared with patients treated by nonself-referring providers (p < .001). In relative value units, this difference was 4 (p < .001). In contrast, episodes where the orthopedic surgeon owner does not profit from physical therapy services rendered to the patient look virtually identical to episodes where the TKR surgery was performed by a surgeon nonowner.

CONCLUSIONS

Physical therapists not involved with physician-owned clinics saw patients for fewer visits, but the composition of physical therapy services rendered during each visit included more individualized therapeutic exercises.

Factors Contributing to Variations in Physicians' Use of Evidence at The Point of Care: A Conceptual Model

There is ample evidence that many clinical decisions made by physicians are inconsistent with current and generally accepted evidence. This leads to the underuse of some efficacious diagnostic, preventive or therapeutic services, and the overuse of others of marginal or no value to the patient. Evolving new payment and delivery models place greater emphasis on the provision of evidence-based services at the point of care. However, changing physician clinical behaviors is likely to be difficult and slow. Policy makers therefore need to design interventions that are most effective in promoting greater evidence-based care. To help identify modifiable factors that can influence clinical decisions at the point of care, we present a conceptual model and literature review of physician decision making. We describe the multitude of factors--drawn from different disciplines--that have been shown to influence physician point-of-care decisions. We present a conceptual framework for organizing these factors, dividing them into patient, physician, practice site, physician organization, network, market, and public policy influences. In doing so, we review some of the literature that speak to these factors. We then identify areas where additional research is especially needed, and discuss the challenges and opportunities for health services and policy researchers to gain a better understanding of these factors, particularly those that are potentially modifiable by policymakers and organizational leaders.

Solving the Sustainable Growth Rate formula conundrum continues steps toward cost savings and care improvements

Congress is again attempting to repeal the Sustainable Growth Rate (SGR) formula. The formula is a failed mechanism intended to constrain Medicare Part B physician spending by adjusting annual physician fee updates. Congress has averted formula-driven physician fee cuts each year beginning in 2003 by overriding the SGR, usually accompanied with last-minute disputes about how these overrides should be paid for. Last year Congress achieved bipartisan and bicameral agreement on legislation to replace the SGR—the SGR Repeal and Medicare Provider Payment Modernization Act of 2014, which we refer to as the "2014 SGR fix"—but was unable to find a way to pay for the legislation under current budget rules. Current congressional deliberations appear focused on how to pay for the fix, with wide consensus that the 2014 legislation should remain the basic model for reform. We describe key features of the 2014 SGR fix, place it in the context of both past and ongoing Medicare health policy, assess its strengths and weaknesses as a mechanism to foster improved care and lower costs in Medicare, and suggest further actions to ensure success in meeting these goals.

Childhood Cancer Survivor Study participants' perceptions and understanding of the Affordable Care Act

PURPOSE

The Patient Protection and Affordable Care Act (ACA) established provisions intended to increase access to affordable health insurance and thus increase access to medical care and long-term surveillance for populations with pre-existing conditions. However, childhood cancer survivors' coverage priorities and familiarity with the ACA are unknown.

METHODS

Between May 2011 and April 2012, we surveyed a randomly selected, age-stratified sample of 698 survivors and 210 siblings from the Childhood Cancer Survivor Study.

RESULTS

Overall, 89.8% of survivors and 92.1% of siblings were insured. Many features of insurance coverage that survivors considered "very important" are addressed by the ACA, including increased availability of primary care (94.6%), no waiting period before coverage initiation (79.0%), and affordable premiums (88.1%). Survivors were more likely than siblings to deem primary care physician coverage and choice, protections from costs due to pre-existing conditions, and no start-up period as "very important" (P < .05 for all). Only 27.3% of survivors and 26.2% of siblings reported familiarity with the ACA (12.1% of uninsured v 29.0% of insured survivors; odds ratio, 2.86; 95% CI, 1.28 to 6.36). Only 21.3% of survivors and 18.9% of siblings believed the ACA would make it more likely that they would get quality coverage. Survivors' and siblings' concerns about the ACA included increased costs, decreased access to and quality of care, and negative impact on employers and employees.

CONCLUSION

Although survivors' coverage preferences match many ACA provisions, survivors, particularly uninsured survivors, were not familiar with the ACA. Education and assistance, perhaps through cancer survivor navigation, are critically needed to ensure that survivors access coverage and benefits.

Association between imposition of a Maintenance of Certification requirement and ambulatory care-sensitive hospitalizations and health care costs

IMPORTANCE

In 1990, the American Board of Internal Medicine (ABIM) ended lifelong certification by initiating a 10-year Maintenance of Certification (MOC) program that first took effect in 2000. Despite the importance of this change, there has been limited research examining associations between the MOC requirement and patient outcomes.

OBJECTIVE

To measure associations between the original ABIM MOC requirement and outcomes of care.

DESIGN, SETTING, AND PARTICIPANTS

Quasi-experimental comparison between outcomes for Medicare beneficiaries treated in 2001 by 2 groups of ABIM-certified internal medicine physicians (general internists). One group (n = 956), initially certified in 1991, was required to fulfill the MOC program in 2001 (MOC-required) and treated 84 215 beneficiaries in the sample; the other group (n = 974), initially certified in 1989, was grandfathered out of the MOC requirement (MOC-grandfathered) and treated 69 830 similar beneficiaries in the sample. We compared differences in outcomes for the beneficiary cohort treated by the MOC-required general internists before (1999-2000) and after (2002-2005) they were required to complete MOC, using the beneficiary cohort treated by the MOC-grandfathered general internists as the control.

MAIN OUTCOMES AND MEASURES

Quality measures were ambulatory care-sensitive hospitalizations (ACSHs), measured using prevention quality indicators. Ambulatory care-sensitive hospitalizations are hospitalizations triggered by conditions thought to be potentially preventable through better access to and quality of outpatient care. Other outcomes included health care cost measures (adjusted to 2013 dollars).

RESULTS

Annual incidence of ACSHs (per 1000 beneficiaries) increased from the pre-MOC period (37.9 for MOC-required beneficiaries vs 37.0 for MOC-grandfathered beneficiaries) to the post-MOC period (61.8 for MOC-required beneficiaries vs 61.4 for MOC-grandfathered beneficiaries) for both cohorts, as did annual per-beneficiary health care costs (pre-MOC period, $5157 for MOC-required beneficiaries vs $5133 for MOC-grandfathered beneficiaries; post-MOC period, $7633 for MOC-required beneficiaries vs $7793 for MOC-grandfathered beneficiaries). The MOC requirement was not statistically associated with cohort differences in the growth of the annual ACSH rate (per 1000 beneficiaries, 0.1 [95% CI, -1.7 to 1.9]; P = .92), but was associated with a cohort difference in the annual, per-beneficiary cost growth of -$167 (95% CI, -$270.5 to -$63.5; P = .002; 2.5% of overall mean cost).

CONCLUSION AND RELEVANCE

Imposition of the MOC requirement was not associated with a difference in the increase in ACSHs but was associated with a small reduction in the growth differences of costs for a cohort of Medicare beneficiaries.

Physician compensation strategies and quality of care for Medicare beneficiaries

OBJECTIVES

To examine the relationship between the compensation strategies of primary care physicians (PCPs) and the quality and outcomes of care delivered to Medicare beneficiaries.

STUDY DESIGN

Cross-sectional analysis of physician survey data linked to Medicare claims. We used a previously constructed typology that was developed based on the survey to categorize physician compensation strategies.

METHODS

We combined data from the 2004-2005 Community Tracking Study Physician Survey on PCP compensation methods with administrative claims from the Medicare program. We analyzed the proportion of eligible beneficiaries receiving each of 7 preventive services and rates of preventable admissions for acute and chronic conditions. We measured the latter using Prevention Quality Indicators (PQIs), available from the Agency for Healthcare Research and Quality.

RESULTS

The 2211 PCP respondents included 937 internists and 1274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Employed physicians with productivity and other incentives were more likely to deliver care of high quality when compared with salaried physicians. For instance, the odds of appropriate monitoring for diabetics ranged from 1.26 to 1.47 (all P < .01). Physicians in highly capitated environments had similar or better quality compared with physicians in other environments across most measures. The association between compensation strategies and outcomes of care as measured by PQIs was inconsistent, although owners with no other incentives had consistent higher rates of acute and chronic PQI admission (eg, for the chronic PQI composite: odds ratio = 1.07; 95% CI, 1.02-1.12).

CONCLUSIONS

Physician compensation strategies are associated with the quality of preventive services delivered to Medicare patients, but inconsistently associated with outcomes of care. Increasing use of global payment strategies is not likely to lead to lower quality.

Higher practice intensity is associated with higher quality of care but more avoidable admissions for medicare beneficiaries

BACKGROUND

The relationship between practice intensity and the quality and outcomes of care has not been studied.

OBJECTIVE

To examine the relationship between primary care physicians' costliness both for defined episodes of care and for defined patients and the quality and outcomes of care delivered to Medicare beneficiaries.

STUDY DESIGN

Cross sectional analysis of physician survey data linked to Medicare claims. Physician costliness measures were calculated by comparing the episode specific and overall costs of care for their patients with the care delivered by other physicians.

PARTICIPANTS

We studied physicians participating in the 2004-2005 Community Tracking Study Physician Survey linked with administrative claims from the Medicare program for the years 2004-2006.

MAIN MEASURES

Proportion of eligible beneficiaries receiving each of seven preventive services and rates of preventable admissions for acute and chronic conditions.

KEY RESULTS

The 2,211 primary care physician respondents included 937 internists and 1,274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Patients treated by more costly physicians (whether measured by the overall costliness index or the episode-level index) were more likely to receive recommended preventive services, but were also more likely to experience preventable admissions. For instance, physicians in the lowest quartile of costliness performed appropriate monitoring for hemoglobin A1C for diabetics 72.8% of the time, as compared with 81.9% for physicians in the highest quartile of costliness (p < 0.01). In contrast, patients treated by the physicians in the lowest quartile of episode costliness were admitted at a rate of 1.8/100 for both acute and chronic Prevention Quality Indicators (PQIs), as compared with 2.9/100 for both acute and chronic PQIs for those treated by physicians in the highest quartile of costliness (p < 0.001).

CONCLUSIONS

Physician practice patterns are associated with the quality of preventive services delivered to Medicare patients. Ongoing efforts to influence physician practice patterns may have differential effects on different aspects of quality.

Factors associated with geographic variation in cost per episode of care for three medical conditions

OBJECTIVE

To identify associations between market factors, especially relative reimbursement rates, and the probability of surgery and cost per episode for three medical conditions (cataract, benign prostatic neoplasm, and knee degeneration) with multiple treatment options.

METHODS

We use 2004-2006 Medicare claims data for elderly beneficiaries from sixty nationally representative communities to estimate multivariate models for the probability of surgery and cost per episode of care as a function local market factors, including Medicare physician reimbursement for surgical versus non-surgical treatment and the availability of primary care and specialty physicians. We used Symmetry's Episode Treatment Groups (ETG) software to group claims into episodes for the three conditions (n = 540,874 episodes).

RESULTS

Higher Medicare reimbursement for surgical episodes and greater availability of the relevant specialists are significantly associated with more surgery and higher cost per episode for all three conditions, while greater availability of primary care physicians is significantly associated with less frequent surgery and lower cost per episode.

CONCLUSION

Relative Medicare reimbursement rates for surgical vs. non-surgical treatments and the availability of both primary care physicians and relevant specialists are associated with the likelihood of surgery and cost per episode.

High physician concern about malpractice risk predicts more aggressive diagnostic testing in office-based practice

Despite widespread agreement that physicians who practice defensive medicine drive up health care costs, the extent to which defensive medicine increases costs is unclear. The differences in findings to date stem in part from the use of two distinct approaches for assessing physicians' perceived malpractice risk. In this study we used an alternative strategy: We linked physicians' responses regarding their levels of malpractice concern as reported in the 2008 Health Tracking Physician Survey to Medicare Parts A and B claims for the patients they treated during the study period, 2007-09. We found that physicians who reported a high level of malpractice concern were most likely to engage in practices that would be considered defensive when diagnosing patients who visited their offices with new complaints of chest pain, headache, or lower back pain. No consistent relationship was seen, however, when state-level indicators of malpractice risk replaced self-rated concern. Reducing defensive medicine may require approaches focused on physicians' perceptions of legal risk and the underlying factors driving those perceptions.

High and varying prices for privately insured patients underscore hospital market power

Across 13 selected U.S. metropolitan areas, hospital prices for privately insured patients are much higher than Medicare payment rates and vary widely across and within markets, according to a study by the Center for Studying Health System Change (HSC) based on claims data for about 590,000 active and retired nonelderly autoworkers and their dependents. Across the 13 communities, aver­age hospital prices for privately insured patients are about one-and-a-half times Medicare rates for inpatient care and two times what Medicare pays for outpa­tient care. Within individual communities, prices vary widely, with the highest-priced hospital typically paid 60 percent more for inpatient services than the lowest-priced hospital. The price gap within markets is even greater for hospital outpatient care, with the highest-priced hospital typically paid nearly double the lowest-priced hospital. In contrast to the wide variation in hospital prices for pri­vately insured patients across and within markets, prices for primary care physi­cian services generally are close to Medicare rates and vary little within markets. Prices for specialist physician services, however, are higher relative to Medicare and vary more across and within markets. Of the 13 markets, five are in Michigan, which has an unusually concentrated private insurance market, with one insurer commanding a 70-percent market share. Despite the presence of a dominant insurer, almost all Michigan hospi­tals command prices that are higher than Medicare, and some hospitals com­mand prices that are twice what Medicare pays. In the eight markets outside of Michigan, private insurers generally pay even higher hospital prices, with even wider gaps between high- and low-priced hospitals. The variation in hospital and specialist physician prices within communities underscores that some hospitals and physicians have significant market power to command high prices, even in markets with a dominant insurer.

Geographic variations in the cost of treating condition-specific episodes of care among Medicare patients

OBJECTIVES

To measure geographic variations in treatment costs for specific conditions, explore the consistency of these patterns across conditions, and examine how service mix and population health factors are associated with condition-specific and total area costs.

DATA SOURCES

Medicare claims for 1.5 million elderly beneficiaries from 60 community tracking study (CTS) sites who received services from 5,500 CTS Physician Survey respondents during 2004-2006.

STUDY DESIGN

Episodes of care for 10 costly and common conditions were formed using Episode Treatment Group grouper software. Episode and total annual costs were calculated, adjusted for price, patient demographics, and comorbidities. We correlated episode costs across sites and examined whether episode service mix and patient health were associated with condition-specific and total per-beneficiary costs.

PRINCIPAL FINDINGS

Adjusted episode costs varied from 34 to 68 percent between the most and least expensive site quintiles. Area mean costs were only weakly correlated across conditions. Hospitalization rates, surgery rates, and specialist involvement were associated with site episode costs, but local population health indicators were most related to site total per-beneficiary costs.

CONCLUSIONS

Population health appears to drive local per-beneficiary Medicare costs, whereas local practice patterns likely influence condition-specific episode costs. Reforms should be flexible to address local conditions and practice patterns.

Geographic variation in fee-for-service medicare beneficiaries' medical costs is largely explained by disease burden

Control for area differences in population health (casemix adjustment) is necessary to measure geographic variations in medical spending. Studies use various casemix adjustment methods, resulting in very different geographic variation estimates. We study casemix adjustment methodological issues and evaluate alternative approaches using claims from 1.6 million Medicare beneficiaries in 60 representative communities. Two key casemix adjustment methods-controlling for patient conditions obtained from diagnoses on claims and expenditures of those at the end of life-were evaluated. We failed to find evidence of bias in the former approach attributable to area differences in physician diagnostic patterns, as others have found, and found that the assumption underpinning the latter approach-that persons close to death are equally sick across areas-cannot be supported. Diagnosis-based approaches are more appropriate when current rather than prior year diagnoses are used. Population health likely explains more than 75% to 85% of cost variations across fixed sets of areas.

Physicians' fears of malpractice lawsuits are not assuaged by tort reforms

Physicians contend that the threat of malpractice lawsuits forces them to practice defensive medicine, which in turn raises the cost of health care. This argument underlies efforts to change malpractice laws through legislative tort reform. We evaluated physicians' perceptions about malpractice claims in states where more objective indicators of malpractice risk, such as malpractice premiums, varied considerably. We found high levels of malpractice concern among both generalists and specialists in states where objective measures of malpractice risk were low. We also found relatively modest differences in physicians' concerns across states with and without common tort reforms. These results suggest that many policies aimed at controlling malpractice costs may have a limited effect on physicians' malpractice concerns.

Durable medical equipment and home health among the largest contributors to area variations in use of Medicare services

Most analyses of geographic variation in Medicare spending have focused on total spending. However, focusing on the volume and intensity of specific categories of services delivered to patients could help identify ways to lower costs without having a negative impact on care. We investigated how utilization in thirteen medical service categories in Medicare Parts A and B (for hospital and physician insurance, respectively) varied across sixty communities nationwide. We found considerable geographic variation in the use of some service categories, although not all. We also found that local communities used very different combinations of types of services to produce medical care, that some service categories were substituted for others, and that the mix of service categories differed even among sites with high or low total medical utilization levels. Home health and durable medical equipment were major drivers of total geographic service use variation because of their variation across sites. They may therefore be appropriate targets for policy interventions directed at increasing efficiency.

Paying more for primary care: can it help bend the Medicare cost curve?

The health reform law boosted Medicare fees for primary care ambulatory visits by 10 percent for five years starting in 2011. Using a simulation model with real-world parameters, we evaluate the effects of a permanent 10 percent increase in these fees. Our analysis shows the fee increase would increase primary care visits by 8.8 percent, and raise the overall cost of primary care visits by 17 percent. However, these increases would yield more than a sixfold annual return in lower Medicare costs for other services—mostly inpatient and postacute care—once the full effects on treatment patterns are realized. The net result would be a drop in Medicare costs of nearly 2 percent. These findings suggest that, under reasonable assumptions, promoting primary care can help bend the Medicare cost curve.

Following the money: factors associated with the cost of treating high-cost Medicare beneficiaries

OBJECTIVE

To identify factors associated with the cost of treating high-cost Medicare beneficiaries.

DATA SOURCES

A national sample of 1.6 million elderly, Medicare beneficiaries linked to 2004-2005 Community Tracking Study Physician Survey respondents and local market data from secondary sources.

STUDY DESIGN

Using 12 months of claims data from 2005 to 2006, the sample was divided into predicted high-cost (top quartile) and lower cost beneficiaries using a risk-adjustment model. For each group, total annual standardized costs of care were regressed on beneficiary, usual source of care physician, practice, and market characteristics.

PRINCIPAL FINDINGS

Among high-cost beneficiaries, health was the predominant predictor of costs, with most physician and practice and many market factors (including provider supply) insignificant or weakly related to cost. Beneficiaries whose usual physician was a medical specialist or reported inadequate office visit time, medical specialist supply, provider for-profit status, care fragmentation, and Medicare fees were associated with higher costs.

CONCLUSIONS

Health reform policies currently envisioned to improve care and lower costs may have small effects on high-cost patients who consume most resources. Instead, developing interventions tailored to improve care and lowering cost for specific types of complex and costly patients may hold greater potential for "bending the cost curve."

The relationship between physician compensation strategies and the intensity of care delivered to Medicare beneficiaries

OBJECTIVE

To examine the relationship between primary care physicians' (PCPs) payment arrangements and the total costs and intensity of care for specific episodes of care for Medicare beneficiaries.

DATA SOURCES/STUDY SETTING

We combined data from the 2004 to 2005 Community Tracking Study Physician Survey on PCP compensation methods with administrative data from the Medicare program for beneficiaries to whom these physicians provided services over the time period 2004-2006.

STUDY DESIGN

Cross-sectional analysis of physician survey data linked to Medicare claims.

PRINCIPAL FINDINGS

The 2,211 PCP respondents included 937 internists and 1,274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Most physicians (62 percent) had been in practice for 11 or more years and 87 percent were board certified. The total spending models show that for both employed physicians and owners, those in highly capitated practice environments had the lowest risk adjusted spending per beneficiary, whereas those receiving just productivity payments had the highest spending. These physicians also had lower intensity of care for episodes of care.

CONCLUSIONS

Physicians in highly capitated practices had the lowest total costs and intensity of care, suggesting that these physicians develop an overall approach to care that also applies to their FFS patients.

Referral and consultation communication between primary care and specialist physicians: finding common ground

BACKGROUND

Communication between primary care physicians (PCPs) and specialists regarding referrals and consultations is often inadequate, with negative consequences for patients. We examined PCPs' and specialists' perceptions of communication regarding referrals and consultations. We then identified practice characteristics associated with reported communication.

METHODS

We analyzed the nationally representative 2008 Center for Studying Health System Change Health Tracking Physician Survey of 4720 physicians providing at least 20 hours per week of direct patient care. Outcome measures were physician reports of communication regarding referrals and consultations.

RESULTS

Perceptions of communication regarding referrals and consultations differed. For example, 69.3% of PCPs reported "always" or "most of the time" sending notification of a patient's history and reason for consultation to specialists, but only 34.8% of specialists said they "always" or "most of the time" received such notification. Similarly, 80.6% of specialists said they "always" or "most of the time" send consultation results to the referring PCP, but only 62.2% of PCPs said they received such information. Physicians who did not receive timely communication regarding referrals and consultations were more likely to report that their ability to provide high-quality care was threatened. The 3 practice characteristics associated with PCPs and specialists reporting communication regarding referrals and consultations were "adequate" visit time with patients, receipt of quality reports regarding patients with chronic conditions, and nurse support for monitoring patients with chronic conditions.

CONCLUSIONS

These modifiable practice supports associated with communication between PCPs and specialists can help inform the ways that resources are focused to improve care coordination.

Creating a parsimonious typology of physician financial incentives

In order to create an empirically derived parsimonious typology of physician financial incentives that will be useful for future research, we used data from the nationally representative 2004-2005 Community Tracking Study Physician Survey (N = 6,628). Linear regression analyses informed by economic theory were used to identify the combinations of incentives associated with an overall financial incentive to expand services to individual patients. The approach was validated using two nonparametric methods (CART analysis and data mining techniques) and by examining the relationship between the resulting typology and other measures of physician behavior including hours worked, visit volume, and specialty-adjusted income. Of the 6,628 physicians surveyed, approximately 25% (1,605) reported an overall incentive to increase services and 75% (5,023) reported either neutral incentives or incentives to decrease services. Men, who were approximately 75% of respondents, were slightly more likely to report incentives to increase services (P < 0.05). There were no differences in reported incentives according to specialty. We created two typologies (one with eleven categories and the other with a collapsed set of six categories) based on combinations of variables measuring ownership, base compensation methods, and financial incentives. The percentage with an overall incentive to increase services ranges from 6% for employed physicians compensated via fixed salary to 36.7% for owners in low capitation environments with either individual or practice level productivity incentives. The criterion validity of the typology was established by examining the relationship with adjusted physician income, hours worked, and visit volume, which showed generally consistent relationships in the expected direction. A parsimonious typology consisting of six mutually exclusive groups reasonably captures the continuum of incentives to increase service delivery experienced by physicians.

Modest and uneven: physician efforts to reduce racial and ethnic disparities

While nearly half of U. S. physicians identify language or cultural communication barriers as obstacles to providing high-quality care, physician adoption of practices to overcome such barriers is modest and uneven, according to a new national study by the Center for Studying Health System Change (HSC). Despite broad consensus among the medical community about how physicians can help to address and, ultimately, reduce racial and ethnic disparities, physician adoption of several recommended practices to improve care for minority patients ranges from 7 percent reporting they have the capability to track patients' preferred language to 40 percent reporting they have received training in minority health issues to slightly more than half reporting their practices provide some interpreter services. The challenges physicians face in providing quality health care to all of their patients will keep mounting as the U.S. population continues to diversify and the minority population increases

Rapidity and modality of imaging for acute low back pain in elderly patients

BACKGROUND

Most quality metrics focus on underuse of services, leaving unclear what factors are associated with potential overuse.

METHODS

We analyzed Medicare claims from 2000-2002 and 2004-2006 for 35 039 fee-for-service Medicare beneficiaries with acute low back pain (LBP) who were treated by 1 of 4567 primary care physicians responding to the 2000-2001 or 2004-2005 Community Tracking Study Physician Surveys. We modified a measure of inappropriate imaging developed by the National Committee on Quality Assurance. We characterized the rapidity (<28 days, 29-180 days, none within 180 days) and modality of imaging (computed tomography or magnetic resonance imaging [CT/MRI], only radiograph, or no imaging). We used ordered logit models to assess relationships between imaging and patient demographics and physician/practice characteristics including exposure to financial incentives based on patient satisfaction, clinical quality, cost profiling, or productivity.

RESULTS

Of 35 039 beneficiaries with LBP, 28.8% underwent imaging within 28 days and an additional 4.6% between 28 and 180 days. Among patients who received imaging, 88.2% received radiography, while 11.8% received CT/MRI as their initial study. White patients received higher levels of imaging than black patients or those of other races. Medicaid patients received less rapid or advanced imaging than other patients. Patients had higher levels of imaging if their primary care physician worked in large practices. Compared with no incentives, clinical quality-based incentives were associated with less advanced imaging (10.5% vs 1.4% for within 28 days; P < .001), whereas incentive combinations including satisfaction measures were associated with more rapid and advanced imaging. Results persisted in multivariate analyses and when the outcome was redefined as the number of imaging studies performed.

CONCLUSIONS

Rapidity and modality of imaging for LBP is associated with patient and physician characteristics but the directionality of associations with desirable care processes is opposite of associations for measures targeting underuse. Metrics that encompass overuse may suggest new areas of focus for quality improvement.

Access to prescription drugs for Medicare beneficiaries

Despite the introduction of a Medicare outpatient prescription drug benefit in January 2006, roughly the same proportion of elderly Medicare beneficiaries in 2003 and 2007--about 8 percent--skipped filling at least one prescription drug because of cost concerns, according to a new national study by the Center for Studying Health System Change (HSC). However, over the same period, more working-age adults went without a prescribed drug because of cost, suggesting the new Medicare drug benefit may have prevented a similar deterioration in access for the elderly. But, the proportion of seniors dually eligible for Medicare and Medicaid who went without a prescribed medicine almost doubled between 2003 and 2007--from 10.8 percent to 21.3 percent. And, the new Medicare drug benefit did little to close large, longstanding prescription drug access gaps between elderly white and African-American beneficiaries, healthier and sicker beneficiaries, and lower-income and higher-income beneficiaries. For example, three times as many elderly African-American beneficiaries (17.6%) went without a prescribed medication in 2007 as white beneficiaries (6.2%). In addition, Medicare beneficiaries under age 65--typically eligible because of permanent disability or severe kidney disease--had more than three times the prescription drug access problems (27.5%) as elderly beneficiaries in 2007.

More nonelderly Americans face problems affording prescription drugs

More children and working-age Americans are going without prescription drugs because of cost concerns, according to a new national study by the Center for Studying Health System Change (HSC). In 2007, one in seven Americans under age 65 reported not filling a prescription in the previous year because they couldn't afford the medication, up from one in 10 in 2003. Rising prescription drug costs and less generous drug coverage likely contributed to the growth in nonelderly Americans--from 10.3 percent in 2003 to 13.9 percent in 2007--who went without a prescribed medication. The most vulnerable people--those with low incomes, chronic conditions and the uninsured--continue to face the greatest unmet prescription drug needs. Uninsured, working-age Americans saw the biggest jump in unmet prescription drug needs between 2003 and 2007, with the proportion rising from 26 percent to almost 35 percent. At the same time, a growing proportion of working-age Americans with employer-sponsored insurance reported going without prescription medications. The number of Americans who cannot afford prescription medications is likely to grow as the economy continues to decline and the ranks of the uninsured grow.

Predictors of the growing influence of clinical practice guidelines

BACKGROUND

Despite the proliferation of clinical practice guidelines (CPGs), physicians have been slow to adopt them.

OBJECTIVE

Describe changes in the reported effect of CPGs on physicians' clinical practice over the past decade, and identify the practice characteristics associated with those changes.

DESIGN AND PARTICIPANTS

Longitudinal and cross-sectional analyses of rounds 1-4 of the Community Tracking Study Physician Survey, a nationally representative survey, conducted periodically between 1996 and 2005.

MEASUREMENTS

The cross-sectional outcome was the reported effect of CPGs on the physician's practice (very large, large, moderate, small, very small, and no effect). The longitudinal outcome was the change in reported effect of CPGs between two consecutive rounds for panel respondents. Independent variables included changes in physicians' practice characteristics (size, ownership, capitation, availability of information technology (IT) to access guidelines, whether quality measures and profiling affect compensation, and revenue sources).

RESULTS

The proportion of primary care physicians reporting that CPGs had a very large or large effect on their practice increased significantly from 1997 to 2005, from 16.4% to 38.7% (P < .0001). The corresponding change for specialists was 18.9% to 28.2% (P < .0001). In longitudinal multivariate analyses, practice characteristics associated with an increase in effect of CPGs included acquiring IT to access guidelines, an increase in the impact that quality measures and profiling have on compensation, and an increase in the proportion of practice revenue under capitation or derived from Medicaid.

CONCLUSIONS

Promotion of wider adoption of health IT, and financial incentives linked to validated quality measures, may facilitate further growth in the impact of CPGs.

Insurance premiums and insurance coverage of near-poor children

States increasingly are using premiums for near-poor children in their public insurance programs (Medicaid/SCHIP) to limit private insurance crowd-out and constrain program costs. Using national data from four rounds of the Community Tracking Study Household Surveys spanning the seven years from 1996 to 2003, this study estimates a multinomial logistic regression model examining how public and private insurance premiums affect insurance coverage outcomes (Medicaid/SCHIP coverage, private coverage, and no coverage). Higher public premiums are significantly associated with a lower probability of public coverage and higher probabilities of private coverage and uninsurance; higher private premiums are significantly related to a lower probability of private coverage and higher probabilities of public coverage and uninsurance. The results imply that uninsurance rates will rise if both public and private premiums increase, and suggest that states that impose or increase public insurance premiums for near-poor children will succeed in discouraging crowd-out of private insurance, but at the expense of higher rates of uninsurance. Sustained increases in private insurance premiums will continue to create enrollment pressures on state insurance programs for children.

Why employer-sponsored insurance coverage changed, 1997-2003

Four and a half million Americans gained employer-sponsored health insurance coverage during 1997-2001, while nearly nine million lost coverage in the ensuing economic downturn (2001-2003), after population growth was accounted for. Macroeconomic trends affecting employment, job quality, and incomes drove most of the coverage changes, although key factors varied during the two periods. Take-up rates affected coverage, mostly reflecting the interaction of premium cost trends and labor-market tightness, but take-up also was influenced by the implementation of the State Children's Health Insurance Program (SCHIP) during 1997-2001. Coverage among low-income people was most affected by economic conditions and premium costs.

Medicare fees and physicians' medicare service volume: beneficiaries treated and services per beneficiary

Using merged physician survey and Medicare claims data, this study analyzes how fee levels, market factors, and financial incentives affect physicians' fee-for-service Medicare service volume. We find that Medicare fees are positively related to both the number of beneficiaries treated (eta = 0.12 to 0.61) and service intensity (eta = 1.04-1.71). Physicians with apparent incentives to induce demand appear to manipulate the mix of services provided in order to increase the effective Medicare fee. Finally, several market factors appear to influence the quantity of Medicare services physicians provide. Results highlight limitations of the present system for compensating physicians in Medicare's fee-for-service program.

Effects of compensation methods and physician group structure on physicians' perceived incentives to alter services to patients

OBJECTIVE

To examine how health plan payment, group ownership, compensation methods, and other practice management tools affect physician perceptions of whether their overall financial incentives tilt toward increasing or decreasing services to patients.

DATA SOURCE

Nationally representative data on physicians are from the 2000-2001 Community Tracking Study Physician Survey (N=12,406).

STUDY DESIGN

Ordered and multinomial logistic regression were used to explore how physician, group, and market characteristics are associated with physician reports of whether overall financial incentives are to increase services, decrease services, or neither.

PRINCIPAL FINDINGS

Seven percent of physicians report financial incentives are to reduce services to patients, whereas 23 percent report incentives to increase services. Reported incentives to reduce services were associated with reports of lower ability to provide quality care. Group revenue in the form of capitation was associated with incentives to reduce services whereas practice ownership and variable compensation and bonuses for employee physicians were mostly associated with incentives to increase services to patients. Full ownership of groups, productivity incentives, and perceived competitive markets for patients were associated with incentives to both increase and reduce services.

CONCLUSIONS

Practice ownership and the ways physicians are compensated affect their perceived incentives to increase or decrease services to patients. In the latter case, this adversely affects perceived quality of care and satisfaction, although incentives to increase services may also have adverse implications for quality, cost, and insurance coverage.

No exodus: physicians and managed care networks

After remaining stable since 1996-97, the percentage of U.S. physicians who do not contract with managed care plans rose from 9.2 percent in 2000-01 to 11.5 percent in 2004-05, according to a national study from the Center for Studying Health System Change (HSC). While physicians have not left managed care networks in large numbers, this small but statistically significant increase could signal a trend toward greater out-of-pocket costs for patients and a decline in patient access to physicians. The increase in physicians without managed care contracts was broad-based across specialties and other physician and practice characteristics. Compared with physicians who have one or more managed care contracts, physicians without managed care contracts are more likely to have practiced for more than 20 years, work part time, lack board certification, practice solo or in two-physician groups, and live in the western United States. The study also found substantial variation in the proportion of physicians without managed care contracts across communities, suggesting that local market conditions influence decisions to contract with managed care plans.

Leaving medicine: the consequences of physician dissatisfaction

BACKGROUND

During the past decade, a confluence of forces has changed the practice of medicine in unprecedented ways. Anecdotal reports suggest that, in response, some physicians are leaving the practice of medicine or retiring earlier than they otherwise would have.

OBJECTIVE

We sought to examine how physician demographic characteristics, practice characteristics, and career satisfaction are related to physician decisions to leave the practice of medicine or substantially cut back their practice hours.

DESIGN

Data for this study are from the first 2 rounds of the Community Tracking Study (CTS) Physician Survey, a series of nationally representative telephone surveys of physicians first conducted in 1996. Subsequent rounds of the survey included physicians sampled in the previous round, which allowed us to ascertain their career status 2 years after their initial interviews.

SUBJECTS

Primary care and specialist physicians initially spending at least 20 hours per week in direct patient care activities were studied.

MAIN OUTCOMES MEASURES

Physicians cutting back their practice hours to less than 20 hours per week or leaving the practice of medicine altogether.

RESULTS

Of the 16,681 physicians interviewed for whom we also had information about their career status 2 years later, 462 (2.8%) had retired and 499 (3.0%) had reduced time spent in patient care to less than 20 hours per week. In multinomial logistic analyses that examined both outcomes, full- or part-owners of practices were both less likely to retire and to cut back hours. Internal medicine specialists and psychiatrists were less likely to retire (odds ratio [OR] 0.69, 95% confidence interval [CI] 0.48-0.99 and OR 0.33, 95% CI 0.18-0.60 respectively) whereas surgical specialists were more likely to retire (OR 1.6, 95% CI 1.1-2.2). Physician satisfaction was strongly related to both outcomes. For instance, very dissatisfied physicians were both more likely to retire (OR 2.34, 95% CI 1.6-3.5) and cut back on their hours (OR 3.6, 95% CI 2.32-5.6).

CONCLUSIONS

Our findings demonstrate that dissatisfied physicians were 2 to 3 times more likely to leave medicine than satisfied physicians. These findings have implications for physician manpower projections and quality of care.

Access and quality: does rural America lag behind?

Numerous state and federal programs and policies aim to improve rural health care. This study compares access to and quality of medical care in urban and rural areas from the perspective of physicians and patients, using a broad set of indicators taken from the 2000-2001 Community Tracking Study (CTS) Physician and Household Surveys. Across most dimensions examined, access and quality in rural areas-even rural counties not adjacent to metropolitan areas-were either equivalent or superior to that provided in urban areas. However, rural residents have greater difficulty obtaining mental health services and generally face greater financial barriers to care.

Physicians' views of formularies: implications for Medicare drug benefit design

As Congress considers introducing a drug benefit for Medicare, it will more than likely adopt a program that uses a formulary. We examined data from the Community Tracking Study Physicians Survey, a large, nationally representative study of physicians, to learn about physicians' views of formularies. Our results suggest that several aspects of formularies are associated with physicians' positive views about them. Policymakers should consider imposing limits on the number of competing Medicare formularies operating in a particular area, promoting the adoption and use of information technology, and incorporating financial incentives for physicians to adhere to formularies.

Physician incomes in rural and urban America

Amid concerns that too few physicians practice in many rural areas, lower income potential is cited as one obstacle to attracting and retaining rural physicians. Congress has responded by increasing Medicare payment rates to virtually all physicians practicing in rural areas. However, average physician incomes in rural and urban areas do not differ significantly, even after accounting for differences in physician work effort, specialty, and other physician and practice characteristics, according to a new national study by the Center for Studying Health System Change (HSC). Moreover, after accounting for the local cost of living, rural physician incomes on average provide about 13 percent more purchasing power than urban physician incomes.

The effect of tax credits for nongroup insurance on health spending by the uninsured

We compare out-of-pocket spending for health care by lower-income uninsured people with their net spending on insurance and health care if they took up each of three hypothetical tax credits. Because of nongroup policies' high cost and low benefits, nearly all would spend more, often much more, under a tax credit similar to that proposed by the Bush administration. When viewed in the context of other research on low-income people's demand for health insurance, the results suggest that sizable reductions in the number of uninsured will require more generous tax credits than those in current proposals.

Trends in U.S. health insurance coverage, 2001-2003

Against the backdrop of a sluggish economy and rapidly rising health insurance premiums, the proportion of Americans under age 65 covered by employer-sponsored insurance fell dramatically from 67 percent to 63 percent between 2001 and 2003. Although the decline in employer coverage could have spurred a large increase in the uninsured, the proportion of Americans without health insurance did not increase significantly, according to findings from the Center for Studying Health System Change's (HSC) Community Tracking Study Household Survey. Expansion of public health insurance--including Medicaid and the State Children's Health Insurance Program (SCHIP)--forestalled a significant increase in the uninsured, as the proportion of the under-65 population enrolled in public coverage increased from 9 percent to 12 percent.

Health and the cost of nongroup insurance

This analysis estimates a selection-adjusted model of the premium for nongroup insurance to measure the effect of health status on the cost of nongroup insurance. Using data from two recent national surveys, the probability of buying nongroup insurance is about 50% lower for people in fair or poor health compared to similar people in excellent health. Correcting for selection, premiums are about 15% higher for people with modest health problems, and 43% to 50% higher for people with major health problems compared to those in excellent health. We use the selection-corrected premiums to simulate the effects on the price and affordability of nongroup insurance for the uninsured under two recent tax credit proposals.