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The prices that insurers pay physicians ultimately affect beneficiaries' health insurance premiums. Using 2014 claims data from three major insurers, we analyzed the prices insurers paid in their Medicare Advantage (MA) and commercial plans for 20 physician services, in and out of network, and compared those prices with estimated amounts that Medicare's fee-for-service (FFS) program would pay for the same service. MA prices paid by those insurers were close to Medicare FFS prices, varied minimally, and were similar in and out of network. In contrast, commercial prices paid by the same insurers were substantially higher than FFS, varied widely, and were up to three times higher out of network than in network. Those results suggest that insurers can use statutory limits on out-of-network charges in MA to negotiate lower in-network prices in those plans. In contrast, without those limits on out-of-network prices, in-network prices in commercial plans are much higher.

Importance: Nearly one-third of Medicare beneficiaries are enrolled in a Medicare Advantage (MA) plan, yet little is known about the prices that MA plans pay for physician services. Medicare Advantage insurers typically also sell commercial plans, and the extent to which MA physician reimbursement reflects traditional Medicare (TM) rates vs negotiated commercial prices is unclear., Objective: To compare prices paid for physician and other health care services in MA, traditional Medicare, and commercial plans., Design, Setting, and Participants: Retrospective analysis of claims data evaluating MA prices paid to physicians and for laboratory services and durable medical equipment between 2007 and 2012 in 348 US core-based statistical areas. The study population included all MA and commercial enrollees with a large national health insurer operating in both markets, as well as a 20% sample of TM beneficiaries., Exposures: Enrollment in an MA plan., Main Outcomes and Measures: Mean reimbursement paid to physicians, laboratories, and durable medical equipment suppliers for MA and commercial enrollees relative to TM rates for 11 Healthcare Common Procedure Coding Systems (HCPCS) codes spanning 7 sites of care., Results: The sample consisted of 144 million claims. Physician reimbursement in MA was more strongly tied to TM rates than commercial prices, although MA plans tended to pay physicians less than TM. For a mid-level office visit with an established patient (Current Procedural Terminology [CPT] code 99213), the mean MA price was 96.9% (95% CI, 96.7%-97.2%) of TM. Across the common physician services we evaluated, mean MA reimbursement ranged from 91.3% of TM for cataract removal in an ambulatory surgery center (CPT 66984; 95% CI, 90.7%-91.9%) to 102.3% of TM for complex evaluation and management of a patient in the emergency department (CPT 99285; 95% CI, 102.1%-102.6%). However, for laboratory services and durable medical equipment, where commercial prices are lower than TM rates, MA plans take advantage of these lower commercial prices, ranging from 67.4% for a walker (HCPCS code E0143; 95% CI, 66.3%-68.5%) to 75.8% for a complete blood cell count (CPT 85025; 95% CI, 75.0%-76.6%)., Conclusions and Relevance: Traditional Medicare's administratively set rates act as a strong anchor for physician reimbursement in the MA market, although MA plans succeed in negotiating lower prices for other health care services for which TM overpays. Reforms that transition the Medicare program toward some premium support models could substantially affect how physicians and other clinicians are paid.

This study assessed the extent to which differences in patients' preferences across geographic areas explained differences in traditional fee-for-service Medicare spending across Dartmouth Atlas of Health Care Hospital Referral Regions (HRRs). Preference measures were based on results of a survey that asked patients questions about their physicians, their own health status, and the care they would want in their last six months of life. We found that patients' preferences explained 5 percent of the variation across HRRs in total Medicare spending. In comparison, supply factors, such as the number of physicians, specialists, and hospital beds, explained 23 percent, and patients' health and income explained 12 percent. We also explored the relative importance of preferences in determining three components of total spending: spending at the end of life, inpatient spending, and spending on physician services. Relative to supply factors, health, and income, patients' preferences explained the largest share of variation in end-of-life spending and the smallest share of variation in spending on physician services. We conclude that variation in preferences contributes to differences across areas in Medicare spending. Medicare policy must consider both supply factors and patients' preferences in deciding how much to accommodate area variation in spending and the extent to which that variation should be subsidized by taxpayers., (Project HOPE—The People-to-People Health Foundation, Inc.)

Growth in Medicare expenditures has forced legislators and policymakers to look for ways to slow spending and get more value for their money. This article reviews previous federal efforts to control Medicare costs as well as current ones required by the Patient Protection and Affordable Care Act. It also describes a proposal for value-based purchasing that the authors developed under contract to the Centers for Medicare and Medicaid Services. This approach uses two measurement systems-one for physicians who practice primarily in outpatient settings and one for physicians who practice primarily in the hospital.

Patients with advanced illness often spend time in an ICU, while nearly one-third of patients with advanced cancer who receive Medicare die in hospitals, often with failed ICU care. For most, death occurs following the withdrawal or withholding of life-sustaining treatments. The integration of palliative care is essential for high-quality critical care. Although palliative care specialists are becoming increasingly available, intensivists and other physicians are also expected to provide basic palliative care, including symptom treatment and communication about goals of care. Patients who are critically ill are often unable to make decisions about their care. In these situations, physicians must meet with family members or other surrogates to determine appropriate medical treatments. These meetings require clinical expertise to ensure that patient values are explored for medical decision making about therapeutic options, including palliative care. Meetings with families take time. Issues related to the disease process, prognosis, and treatment plan are complex, and decisions about the use or limitation of intensive care therapies have life-or-death implications. Inadequate reimbursement for physician services may be a barrier to the optimal delivery of high-quality palliative care, including effective communication. Appropriate documentation of time spent integrating palliative and critical care for patients who are critically ill can be consistent with the Current Procedural Terminology codes (99291 and 99292) for critical care services. The purpose of this article is to help intensivists and other providers understand the circumstances in which integration of palliative and critical care meets the definition of critical care services for billing purposes.

Context: Payers, policy makers, and professional organizations have launched a variety of initiatives aimed at improving hospital quality with inpatient surgery. Despite their obvious benefits for patients, the likely impact of these efforts on health care costs is uncertain. In this context, we examined relationships between hospital outcomes and expenditures in the US Medicare population., Methods: Using the 100% national claims files, we identified all US hospitals performing coronary artery bypass graft, total hip replacement, abdominal aortic aneurysm repair, or colectomy procedures between 2005 and 2007. For each procedure, we ranked hospitals by their risk- and reliability-adjusted outcomes (complication and mortality rates, respectively) and sorted them into quintiles. We then examined relationships between hospital outcomes and risk-adjusted, 30-day episode payments., Results: There was a strong, positive correlation between hospital complication rates and episode payments for all procedures. With coronary artery bypass graft, for example, hospitals in the highest complication quintile had average payments that were $5353 per patient higher than at hospitals in the lowest quintile ($46,024 vs $40,671, P < 0.001). Payments to hospitals with high complication rates were also higher for colectomy ($2719 per patient), abdominal aortic aneurysm repair ($5279), and hip replacement ($2436). Higher episode payments at lower-quality hospitals were attributable in large part to higher payments for the index hospitalization, although 30-day readmissions, physician services, and postdischarge ancillary care also contributed. Despite the strong association between hospital complication rates and payments, hospital mortality was not associated with expenditures., Conclusions: Medicare payments around episodes of inpatient surgery are substantially higher at hospitals with high complications. These findings suggest that local, regional, and national efforts aimed at improving surgical quality may ultimately reduce costs and improve outcomes.

Purpose: Earlier studies have reported wide regional variability in glaucoma procedure rates, suggesting nonclinical factors influencing procedure rates. This study was designed to investigate the possible influence of fees on procedure rates., Methods: Databases were accessed to obtain yearly provincial population, procedure and ophthalmologist numbers, and physician fees for trabeculoplasties, trabeculectomies, and glaucoma drainage device (GDD) implantations from 1992 to 2007. Regression models using generalized estimating equation methods were used to evaluate the influence of fees on procedure rates after adjusting for temporal trends and the number of ophthalmologists per 1000 persons with glaucoma., Results: Trends in glaucoma procedure rates and fees varied widely among provinces: decrease of 98% to an increase of 380% for trabeculoplasties, decrease of 72% to an increase of 42% for trabeculectomies, and decrease of 32% to an increase of 1292% for GDD. In 2007, provincial remuneration varied from $125 to $553 for trabeculoplasties, $370 to $748 for trabeculectomies, and $426 to $956 for GDD. The regression models found for every 1000 persons with glaucoma, a $100 increase in fee was associated with 0.68 more trabeculoplasties (P=0.94), 1.2 fewer trabeculectomies (P=0.17), and 0.18 more GDD implantations (P=0.18); and for every additional ophthalmologist per 1000 persons with glaucoma, 53.8 more trabeculoplasties (P=0.24), 0.34 more trabeculectomies (P=0.86), and 0.79 more GDD implantations (P=0.0004). A regression model examining procedure substitution effect did not find any association between relative remuneration and procedure rate., Conclusion: Our analysis did not show an influence of physician remuneration fee on procedure rates in Canada during the study period.

This paper reviews the existing empirical micro-level models of demand for out-patient physician services where the size of patient payment is included either directly as an independent variable (when a flat-rate co-payment fee) or indirectly as a level of deductibles and/or co-insurance defined by the insurance coverage. The paper also discusses the relevance of these models for the assessment of patient payment policies. For this purpose, a systematic literature review is carried out. In total, 46 relevant publications were identified. These publications are classified into categories based on their general approach to demand modeling, specifications of data collection, data analysis, and main empirical findings. The analysis indicates a rising research interest in the empirical micro-level models of demand for out-patient physician services that incorporate the size of patient payment. Overall, the size of patient payments, consumer socio-economic and demographic features, and quality of services provided emerge as important determinants of demand for out-patient physician services. However, there is a great variety in the modeling approaches and inconsistencies in the findings regarding the impact of price on demand for out-patient physician services. Hitherto, the empirical research fails to offer policy-makers a clear strategy on how to develop a country-specific model of demand for out-patient physician services suitable for the assessment of patient payment policies in their countries. In particular, theoretically important factors, such as provider behavior, consumer attitudes, experience and culture, and informal patient payments, are not considered. Although we recognize that it is difficult to measure these factors and to incorporate them in the demand models, it is apparent that there is a gap in research for the construction of effective patient payment schemes.

Objective: This study determined whether persons with major depressive disorder who switch or augment antidepressant therapy have higher health care costs and productivity losses than those who do not., Methods: Data from July 1, 2002, through June 30, 2006, were taken from a national employment-based medical and pharmacy claims database. Participants were required to have filled an antidepressant prescription, be treatment naïve six months before the index prescription, be continuously enrolled in the benefits plan at least six months before and 12 months after the index prescription, and have at least one outpatient-based medical claim for major depressive disorder. Participants were categorized according to whether they switched, augmented, or maintained (that is, neither switched nor augmented) their antidepressant therapy in the 12 months after the index prescription. Productivity losses were defined as days absent from work for medical visits multiplied by average daily wage. Multivariate analyses (generalized linear models) were used to compare costs per person in the year after the index prescription, and univariate analyses (Wilcoxon tests) were used to compare productivity losses per person., Results: Of the 7,273 individuals who met study criteria, 40.3% switched, 1.5% augmented, and 58.2% maintained the index antidepressant therapy. After the analyses controlled for baseline characteristics, mean total and depression-related health care costs, respectively, in the year after the index prescription were significantly greater for switchers ($9,288 and $1,388 per person) and for augmenters ($9,350 and $1,027) than for maintainers ($6,151 and $723). Mean total and depression-related productivity losses, respectively, were significantly greater for switchers ($2,081 and $680) and augmenters ($2,010 and $587) than for maintainers ($1,424 and $437)., Conclusions: Persons with major depressive disorder who switched or augmented antidepressant therapy within 12 months of treatment initiation had higher resource costs and productivity losses than those who did not.

Purpose: In 2007, Medicare implemented the Physician Quality Reporting Initiative (PQRI), which provides financial incentives to physicians who report their performance on certain quality measures. PQRI measure #74 recommends radiotherapy for patients treated with conservative surgery (CS) for invasive breast cancer. As a first step in evaluating the potential impact of this measure, we assessed baseline use of radiotherapy among women diagnosed with invasive breast cancer before implementation of PQRI., Methods and Materials: Using the SEER-Medicare data set, we identified women aged 66-70 diagnosed with invasive breast cancer and treated with CS between 2000 and 2002. Treatment with radiotherapy was determined using SEER and claims data. Multivariate logistic regression tested whether receipt of radiotherapy varied significantly across clinical, pathologic, and treatment covariates., Results: Of 3,674 patients, 94% (3,445) received radiotherapy. In adjusted analysis, the presence of comorbid illness (odds ratio [OR] 1.69; 95% confidence interval [CI], 1.19-2.42) and unmarried marital status were associated with omission of radiotherapy (OR 1.65; 95% CI, 1.22-2.20). In contrast, receipt of chemotherapy was protective against omission of radiotherapy (OR 0.25; 95% CI, 0.16-0.38). Race and geographic region did not correlate with radiotherapy utilization., Conclusions: Utilization of radiotherapy following CS was high for patients treated before institution of PQRI, suggesting that at most 6% of patients could benefit from measure #74. Further research is needed to determine whether institution of PQRI will affect radiotherapy utilization.

Objective: To develop and test an explanatory model of the impact of managed care on physicians' decisions to manipulate reimbursement rules for patients., Methods: A self-administered mailed questionnaire of a national random sample of 1124 practicing physicians in the USA. Structural equation modelling was used. The main outcome measure assessed whether or not physicians had manipulated reimbursement rules (such as exaggerated the severity of patients conditions, changed billing diagnoses, or reported signs or symptoms that the patients did not have) to help patients secure coverage for needed treatment or services., Results: The response rate was 64% (n = 720). Physicians' decisions to manipulate reimbursement rules for patients are directly driven not only by ethical beliefs about gaming the system but also by requests from patients, the perception of insufficient time to deliver care, and the proportion of Medicaid patients. Covert advocacy is also the indirect result of utilization review hassles, primary care specialty, and practice environment., Conclusions: Managed care is not just a set of rules that physicians choose to follow or disobey, but an environment of competing pressures from patients, purchasers, and high workload. Reimbursement manipulation is a response to that environment, rather than simply a reflection of individual physicians' values.

While insurers last week were trumpeting the third straight year of slower growth in premiums, providers weren't exactly celebrating. That's because of huge mergers, which give insurers far more leverage and have led to reimbursements being cut back even more. "What's worrying us is that there's a growing segment (of insurers) that aren't going to budge an inch, no matter what," says Russ Weaver, left.

Two main developments will dominate the future of gastroenterology in the United States. The first is changing demography, and the second is revolutionary change in the structure of health insurance, that is, the advent of consumer-driven health care. This article details some of the demographic and insurance changes that gastroenterologists will have to contend with in the future and outlines some of the opportunities and challenges that lie ahead.

In recent years, some commercial health plans have instituted privileging and site accreditation programs for providers of diagnostic imaging. This article describes how these programs work and points out that they can help restrict self-referral and the overutilization that accompanies it. Another advantage is that they can help eliminate low-quality providers. Radiologists should encourage health plans in their area to develop and implement these measures.

Study Objective: The impact of isolated gate-keeping on health care costs remains unclear. The aim of this study was to assess to what extent lower costs in a gate-keeping plan compared with a fee for service plan were attributable to more efficient resource management, or explained by risk selection., Design: Year 2000 costs to the Swiss statutory sick funds and potentially relevant covariates were assessed retrospectively from beneficiaries participating in an observational study, their primary care physicians, and insurance companies. To adjust for case mix, two-part regression models of health care costs were fitted, consisting of logistic models of any costs occurring, and of generalised linear models of the amount of costs in persons with non-zero costs. Complementary data sources were used to identify selection effects., Setting: A gate-keeping plan introduced in 1997 and a fee for service plan, in Aarau, Switzerland., Participants: Of each plan, 905 randomly selected adult beneficiaries were invited. The overall participation rate was 39%, but was unevenly distributed between plans., Main Results: The characteristics of gate-keeping and fee for service beneficiaries were largely similar. Unadjusted total costs per person were Sw fr 231 (8%) lower in the gate-keeping group. After multivariate adjustment, the estimated cost savings achieved by replacing fee for service based health insurance with gate-keeping in the source population amounted to Sw fr 403-517 (15%-19%) per person. Some selection effects were detected but did not substantially influence this result. An impact of non-detected selection effects cannot be ruled out., Conclusions: This study hints at substantial cost savings through gate-keeping that are not attributable to mere risk selection.

Aim: To document the change in pattern of glaucoma treatment in Australia over the decade 1994-2003., Methods: Observational study: retrospective data audit., Results: The total number of prescriptions for glaucoma items has increased in this time period from 1.9 million to 3.3 million, with a cost increase to the Pharmaceutical Benefits Scheme (PBS) of in excess of 50m dollars. The largest increase has been in the class of prostaglandin analogues, which now comprise 49% of all glaucoma topical therapy prescriptions. Rates of laser trabeculoplasty and trabeculectomy surgery have fallen by 60% and 58%, respectively. Rates for secondary procedures such as repeat trabeculectomy, drainage implant devices and cycloablation have remained stable, although with some variation between Australian states., Conclusions: The introduction of multiple new medications has resulted in a decline in the amount of glaucoma surgery and laser trabeculoplasty performed. There has been an associated increase in the total number of glaucoma prescription items dispensed, and a large increase in the cost to the PBS of this change. Outcome measures of the benefit of these changes are lacking.

Background: It is widely believed that appropriate use of prescription medicines can reduce avoidable hospitalizations and more expensive nonpharmacologic therapies, but identifying such cost offsets in operational programs is elusive. Any possible impact would be most apparent in patients with medication-sensitive disease conditions, such as chronic obstructive pulmonary disease (COPD)., Objective: The goals of this study were to develop an observational study design appropriate for estimating potential cost savings in the US Medicare budget as a result of extending drug coverage to persons with particular chronic diseases and to apply these study methods, in an exploratory analysis, to a sample of Medicare beneficiaries with COPD., Methods: Spending for drugs, hospitalizations, and physician services was compared for COPD patients with and without prescription coverage using data from the 1999 and 2000 US Medicare Current Beneficiary Survey. To control for channeling bias, multivariate matching on observable variables was combined with tests for missing variable bias. The matching algorithm used propensity score weighting to ensure comparability between the 2 groups on all observed characteristics at baseline., Results: Our sample comprised 462 beneficiaries with prevalent COPD in the year 2000: 384 (83.1%) had prescription coverage the entire year and 78 (16.9%) had no coverage. After adjustment, drug coverage was associated with 61% higher spending on medications and 29% lower spending on physician services (both, P < 0.05). Hospital costs appeared slightly lower for those with drug benefits, but the difference was not statistically significant. No statistically significant effects were found for services specific to COPD. However, effect sizes were large even for nonsignificant findings., Conclusions: Although this analysis did not establish a strong causal link between drug benefits and lower costs, 11 of our 12 comparisons had signs consistent with the cost-offset hypothesis.

This study provides a comprehensive picture of the organization and delivery of ambulatory health care services in Poland. A main finding of the study is that, following the introduction of health insurance in 1999, the newly introduced Sickness Funds have become the main players in the medical services market, introducing new bidding procedures and contracts for provision of medical services. Contracts, and negotiations which precede them, have introduced elements of market competition, which has affected the number and types of services provided by health care centers operating under a contract. The health financing reforms have led to an even playing field for public and non-public providers, marked by a proliferation of structurally smaller health units. The introduction of a market environment has changed the way in which providers are compensated, with a discernible shift away from salary-based systems to capitation and fee-for-service compensation. The analysis of the provider market for outpatient care underscores the importance of understanding the organization and supply of health services, particularly insofar as it relates to the design of appropriate financial and other incentives for providers of health services and of policy interventions necessary for achieving systemic changes.

Components of the contract specifications (also known as model purchasing specifications) for diabetes care that were developed by George Washington University (Washington, D.C.) and the Centers for Disease Control and Prevention were applied to 20 health plans from two Fortune 500 companies as well as the Federal Employee Health Benefits Plan to investigate the extent of diabetes-related benefits available to employees. Diabetes-related benefits covered a range of services and supplies that include insulin, physician visits, immunizations, diabetes preventive assessments, foot and eye exams, hemoglobin A1c tests, orthotics, diabetes self-management education, case management, smoking cessation, obesity treatment, and exercise training. The 20 health plans included health maintenance organizations, preferred provider organizations, point of service plans, and one indemnity plan. Services and supplies were assigned to three tiers: tier 1, general diabetes care; tier 2, specialty diabetes care; tier 3, lifestyle services. Services and supplies were considered covered even if they required authorization by the provider (e.g., doctor referral, recommendation, or prescription) or the health plan. Tier 1 services and supplies received more comprehensive coverage by all health plans. Differences in coverage were more notable in tiers 2 and 3 than in tier 1. Tier 3 (lifestyle services) received less coverage than tiers 1 and 2.

Objective: To better understand the relationship between glaucoma management and economic incentives, we examined the volume and the reimbursement of argon laser trabeculoplasty (ALT) and trabeculectomy in a 5% random sample of the Medicare population from 1995 to 1998., Design: Retrospective cohort study., Participants: Subjects in a 5% random sample of the Medicare population who had ALT and trabeculectomy from 1995 to 1998., Methods: Using the Health Care Financing Administration (HCFA) Physician/Supplier Part-B files for a 5% random sample of the Medicare population, we identified all subjects who had ALT and trabeculectomy from 1995 to 1998. Descriptive summaries (the number of surgeries and the mean and the standard deviation of reimbursement per surgery) were calculated for each year. Analysis of variance was used to test for differences in reimbursement per surgery across years. Chi-square tests were used to assess any associations between the changing numbers of ALTs and trabeculectomies over the study period and both age and race., Main Outcome Measures: We assessed the number of ALTs and trabeculectomies and the allowed charges for each surgery in the 5% random sample of the Medicare population from 1995 to 1998., Results: The volume of both ALTs and trabeculectomies declined during the study period. Reimbursement per surgery for both ALT and trabeculectomy varied significantly across years (P < 0.001). Significant associations were found between the changing number of ALTs and both age and race., Conclusions: Changing numbers of ALT and trabeculectomy seem unrelated to reimbursement rates. Rather, these changes are more likely driven by new developments in the clinical management of glaucoma, among other factors.

This study examined the test-retest reliability of physicians' self-reported manipulation of reimbursement rules for patients. The test-retest reliability of self-report of three specific tactics were examined: (1) exaggerating the severity of patients' conditions, (2) changing a patient's official (billing) diagnosis, and (3) reporting signs or symptoms that patients did not have. The reliability of a scaled summary measure of physicians' manipulation of reimbursement rules was also assessed. Overall, the authors found high levels of test-retest agreement across all three items and the summary measure. These findings suggest that self-report can be used to produce reliable data on this controversial issue. Specifically, the three items reported here can be used to produce a reliable summary measure of physicians' manipulation of reimbursement rules to help patients obtain care that physicians perceive as necessary.

One of the objectives of managed care organizations (MCOs) has been to reduce the rate of growth of health care expenditures, including that of physician fees. Yet, due to a lack of data, no one has been able to determine whether MCOs have been successful in encouraging the growth of price competition in the market for physician services in order to slow the growth in physician fees. This study uses a unique, national-level data set to determine what factors influenced the physician fees that MCOs negotiated during the 1990-92 period. The most influential characteristics were physician supply and managed care penetration, which suggest that the introduction of competition into the health care market was an effective force in reducing physician fees.

Objective: To compare asthma-related health-care utilization and expenditures for patients prescribed one of three dual-controller therapies: fluticasone plus salmeterol, inhaled corticosteroids (ICS) [excluding fluticasone] plus salmeterol, and ICS plus a leukotriene modifier (LTM)., Materials and Methods: Asthma-related medical claims from two major health plans were obtained for the 12 months before and after the initiation of dual therapy. A total of 1,325 patients > or = 12 years old with no claims for COPD or respiratory tract cancer were selected from the approximately 3.5 million lives covered. Multivariable regression was used to assess differences in asthma-related expenditures. To compensate for positive skew, all cost variables were log-transformed., Results: Risk-adjusted total asthma-related costs for the fluticasone-plus-salmeterol cohort (n = 121), the ICS-plus-salmeterol cohort (n = 844), and the ICS-plus-LTM cohort (n = 360) [corrected] were $975, $1,089, and $1,268, respectively. Risk-adjusted pharmacy costs were $813, $841, and $996, respectively. Generalized linear modeling, controlling for baseline covariates, indicated that compared to ICS-plus-LTM therapy, fluticasone-plus-salmeterol therapy was associated with a significant reduction in asthma-related total (p = 0.0014) and pharmacy (p = 0.001) costs. Similar results were found when the ICS-plus-salmeterol group and the ICS-plus-LTM group were compared (p = 0.0001). The number of inpatient, outpatient, and emergency department visits and their corresponding costs were lower for the fluticasone-plus-salmeterol cohort, but were not statistically significant (p > 0.05)., Conclusion: Results from managed-care practice suggest that treatment with fluticasone plus salmeterol, and more broadly ICS plus salmeterol, yield important cost savings when compared to treatment with ICS plus LTM.

Background: Atopic dermatitis/eczema (AD/E) is a common disease. Few studies have attempted to quantify the cost to third-party payers., Objective: Our purpose was to identify the annual cost of medical services and prescription drugs for the treatment of AD/E to private insurance and Medicaid payers in the United States., Methods: We used a retrospective study design employing claims data from 1997 and 1998 from a private insurer and a state Medicaid program to analyze costs incurred. Beneficiaries were considered to have AD/E if they had at least one claim in 1997 with a primary or secondary listing of 1 of 3 diagnosis codes: 691.8, other atopic dermatitis and related conditions; 692.9, contact dermatitis and other eczema when no cause is specified; or 373.3, noninfectious dermatoses of eyelid. Patients who did not meet the diagnosis criteria served as a control group in each payer for comparisons of expenditures with the AD/E group., Results: Disease prevalence was 2.4% (private insurer) to 2.6% (Medicaid) of all eligible beneficiaries, and 3.5% to 4.1% of patients submitted at least one health care claim during the study period. Medicaid-insured patients used outpatient hospital visits and hospitalizations at a greater rate than did privately insured patients; neither used emergency departments extensively. The third-party payer cost of illness for AD/E ranged from $0.9 billion to $3.8 billion when projected across the total number of persons younger than 65 years insured by private insurers and Medicaid in the United States. More than one fourth of all health care costs for patients with AD/E may be attributed to AD/E and co-morbid conditions., Conclusions: Annual costs of AD/E are similar to those of other diseases such as emphysema, psoriasis, and epilepsy. Patients incur significant costs associated with AD/E and co-morbid conditions.

Is there a lesson? Famed investor Warren Buffet claims he never buys a company unless he personally understands the business. He admits he has missed a few real opportunities in the high technology sector. However, he is pleased to have avoided many disasters. Many physicians entered into PPMC deals without completely understanding the concept. Perhaps the lesson is to simply avoid a deal that does not make sense. Understand the market. Understand the business. If you, as a buyer, seller or partner cannot clearly understand how a transaction creates value that you can capture, walk away.

The textbook model of monopsony that is typically employed in analyzing health insurer monopsony power does not adequately describe the supply decision of physicians confronting a dominant health insurer. Rather than restricting purchases in order to extract a lower price for provider services, monopsonistic insurers are able to obtain discounts from providers without experiencing a decrease in quantity when physicians are forced to operate along their "all-or-none" supply curve. The welfare effects of the all-or-none model of monopsony are compared to those implied by the traditional model.

This document amends VA's medical regulations to set forth a mechanism for determining copayments for inpatient hospital care and outpatient medical care. This is necessary to implement provisions of the Veterans Millennium Health Care and Benefits Act and to set forth exemptions from copayment requirements as mandated by statute.

Background: Future general practice funding is much debated but public opinion has not previously been reported., Aim: To survey public opinion on existing fee structures in general practice and on an insurance-based primary care scheme that would entitle members to free GP services at the point of use, upon payment of an annual premium., Methods: An interviewer administered questionnaire-based cross-sectional survey in four locations: Dublin north city; Dublin south city; Dublin suburban; and a rural town centre., Results: Of 384 people surveyed, 83% had visited a GP in the previous year, and 79% usually paid for consultations. The median fee was IEP20.00. Almost 50% felt that this was excessive. Of those who did not have to pay, 91% expressed willingness to pay (median IEP15.00). Sixty-two per cent had medical insurance and 83% said they would be willing to join an insurance-based primary care scheme. The amount people would pay to join this scheme exceeded what interviewees were currently paying for general practice services., Conclusions: There is dissatisfaction with existing GP fees and support for a scheme entitling free primary care. The amount of money people are willing to pay exceeds their current annual expenditure on GP services.

This study examines the effects of a change in Medicaid fees on the volume of physician services provided to beneficiaries. The data set includes price and volume at the procedure-level for Medicaid physician services in Texas in 1991, 1993, and 1995. The empirical analysis compares the volume of services provided to Medicaid participants before and after a 1992 change in reimbursement method. The results indicate that, over the period 1991 to 1993, the change in Texas Medicaid physician fees did not have a statistically significant effect on the volume of services provided. When measured over a longer period of time (1991-1995), however, volume increased significantly when price decreased, but, when price increased, there was no significant effect on volume. The results thus provide empirical support for the behavioural offset assumption underlying the switch to Medicare's Resource-Based Relative Value Scale (RBRVS) method of physician payment. A key policy implication is that reduced fees did not lead to a lower volume of physician services provided to Medicaid patients at least over the period of analysis. However, the new Medicaid fee schedule did not have the desired effect of controlling Medicaid expenditures on physician services.