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We investigate the role of physician agency in determining health care sup-ply and patient outcomes. We show that an increase in health care supplydue to a change in private physician incentives has a theoretically ambiguous impact on patient welfare. The increase can reflect either induced demand for ineffective care or a reduction in prior rationing of effective care. Furthermore, physician market structure matters in determining the welfare effects of changes in private physician incentives. We then analyze a change to Medicare fees that caused physicians to increase their provision of chemotherapy. We find that this increase in treatment improved patient survival, extending median life expectancy for lung cancer patients by about 18%. Consistent with the model, we find that while the treatment response was larger in less concentrated markets, survival improvements were larger in more concentrated markets.

We investigate the role of physician agency in determining health care sup-ply and patient outcomes. We show that an increase in health care supplydue to a change in private physician incentives has a theoretically ambiguous impact on patient welfare. The increase can reflect either induced demand for ineffective care or a reduction in prior rationing of effective care. Furthermore, physician market structure matters in determining the welfare effects of changes in private physician incentives. We then analyze a change to Medicare fees that caused physicians to increase their provision of chemotherapy. We find that this increase in treatment improved patient survival, extending median life expectancy for lung cancer patients by about 18%. Consistent with the model, we find that while the treatment response was larger in less concentrated markets, survival improvements were larger in more concentrated markets.

© 2015, BMJ Publishing Group. All rights reserved.The Family Smoking Prevention and Tobacco Control Act of 2009 gave the Food and Drug Administration (FDA) regulatory authority over cigarettes and smokeless tobacco products and authorised it to assert juri

Assesses the usefulness of frontier estimation in health economics. Popularity of the technique in health care; Applicability of stochastic frontier estimation in assessing the efficiency of a hospital or a nursing home; Similarity between the Data Envelopment Analysis and the stochastic frontier estimation method.

Objective: To determine the effect of more intensive treatments on mortality in elderly patients with acute myocardial infarction (AMI).Design: Analysis of incremental treatment effects using differential distances as instrumental variables to account for unobserved case-mix variation (selection bias) in observational Medicare claims data (1987 through 1991).Main Outcome Measures: Survival to 4 years after AMI.Results: Patients who receive different treatments differ in observable and unobservable health characteristics, biasing estimates of treatment effects based on standard methods of adjusting for observable differences. Patients' differential distances to alternative types of hospitals are strong independent predictors of how intensively an AMI patient will be treated and appear uncorrelated with health status. Thus, differential distances approximately randomize patients to different likelihoods of receiving intensive treatments. Comparisons of patient groups that differ only in differential distances show that the impact on mortality at 1 to 4 years after AMI of the incremental ("marginal") use of invasive procedures in Medicare patients was at most 5 percentage points; this gain was achieved during the first day of hospitalization and therefore appears attributable to treatments other than the procedures. Admission to a hospital treating a high volume of AMI patients was associated with an effect on mortality at 4 years of less than 1 percentage point, again arising on day 1. Patients living in rural areas experienced acute mortality that was an additional 0.6 percentage-point higher, after controlling for less access to intensive treatments.Conclusions: For elderly patients with AMI, the aspects of treatment most affecting long-term survival relate to care within the first 24 hours of admission. The survival benefits from greater use of catheterization and revascularization procedures appear minimal in marginal patients. [ABSTRACT FROM AUTHOR]

Data on efficiency, costs, and profits of 15 internal medicine outpatient group practices in university hospitals were collected for 9 months from interviews, a time-motion study, observations, and reviews of bills. Charges for a follow-up visit were about 25% higher than Medicare's allowable charges, but differed threefold across practices. Physicians spent more than half their allocated patient care or supervision time in other activities and 14% of nursing time was used for direct patient care. Visits to second- and third-year residents cost one half of those to faculty. Faculty supervision of second- and third-year residents was limited; it was, on average, 2 minutes per follow-up visit. Despite these inefficiencies, bad debts, and educational costs, practices appeared to break even financially. We conclude it is financially feasible for university hospitals to provide primary care to disadvantaged populations. [ABSTRACT FROM AUTHOR]

In a previous comparison of persons between 14 and 62 years of age randomly assigned to receive care through a fee-for-service system (n = 784) or through a health maintenance organization (HMO) (n = 738) in Seattle, Washington, persons in the HMO had much lower hospital expenditures and admissions, more bed days, a higher prevalence of serious symptoms, and less satisfaction with care. We report an examination of 20 additional health status measures. Our results are consistent with a hypothesis of no differences in health status measures between the two systems. In addition, a comparison of nine health practices between the systems also indicated no overall differences. Most physiologic measures and health practices for a typical person were not affected by care received through the fee-for-service system or the HMO. However, we are less certain of this result in specific subgroups, such as persons of lower income initially at elevated risk, because confidence intervals are necessarily wider. We conclude that the cost savings achieved by this HMO through lower hospitalization rates were not reflected in lower levels of health status. [ABSTRACT FROM AUTHOR]

Objective: To investigate changes between 1987 and 1990 in the care and outcomes associated with acute myocardial infarction (AMI) in elderly patients.Design: Retrospective cohort study using a longitudinal database created from Medicare administrative files.Patients: Cohorts comprising a total of 856,847 AMI patients insured by Medicare between 1987 and 1990.Main Outcome Measures: Annual rates of mortality at 30 days and 1 year following AMI, and the use of coronary angiography, coronary artery bypass graft surgery, and percutaneous transluminal coronary angioplasty during the first 90 days after a new AMI.Results: Between 1987 and 1990, mortality rates decreased 10% overall from 26% to 23% at 30 days (P < .001) and from 40% to 36% at 1 year following AMI (P < .001). Declines in mortality and adjusted risks of 1-year mortality were similar in men and women and in blacks and whites, but mortality declines were more evident in those younger than 85 years. Meanwhile, the proportion of elderly AMI patients having angiography within the first 90 days after their index admission increased from 24% to 33% (P < .001); proportions increased for both genders and all races. The proportion of patients undergoing revascularization procedures increased from 13% to 21%; while rates of bypass surgery increased from 8% to 11%, rates of angioplasty doubled from 5% to 10% (all P < .001).Conclusions: Between 1987 and 1990, survival of elderly patients following AMI improved significantly. While changes in patient treatment may be responsible, the increased use of thrombolytic therapy appears to be only a partial explanation. Also, while the use of coronary angiography and revascularization procedures increased dramatically, the degree to which it caused the improvement in survival could not be determined. [ABSTRACT FROM AUTHOR]

Objective: To describe the process of care and clinical outcomes associated with acute myocardial infarction (AMI) in the Medicare population, and to examine differences in process of care and outcome of care as a function of patient age, gender, and race.Design: Retrospective cohort study using a longitudinal database created from Medicare utilization and administrative files. PATIENT POPULATIONS: A cohort of AMI patients covered by Medicare in 1987 and a random sample of Medicare patients without AMI. MAIN PROCESS AND OUTCOME MEASUREMENTS: (1) The use of coronary angiography, coronary artery bypass graft surgery, and percutaneous transluminal coronary angioplasty during the first 90 days after a new AMI; (2) mortality at 30 days, 1 year, and 2 years; (3) reinfarction rates; and (4) reoperation rates for coronary artery bypass graft surgery and percutaneous transluminal coronary angioplasty.Main Results: Mortality rates were high: 26% at 30 days, 40% at 1 year, and 47% at 2 years. They varied greatly by age, less so by gender and race, and were high even among patients who survived the first 30 days. Compared with mortality, reinfarction was uncommon, occurring in 7.3% of patients. During the first 90 days, 23% of all patients underwent angiography and 13% underwent coronary revascularization (coronary artery bypass graft surgery, 8%; percutaneous transluminal coronary angioplasty, 5%). The use of all three procedures decreased with age and was less common among women and blacks than among men and whites. Differential use by age and race was greater for angiography than for revascularization procedures.Conclusions: The prognosis following AMI in patients aged 65 years and above is much worse than is commonly realized. Procedure use in these patients varies as a function of gender and race, even though mortality does not. Further research is needed to reduce the mortality of elderly patients with AMI and to understand the significance of differences in procedure use on the basis of sociodemographic characteristics. [ABSTRACT FROM AUTHOR]

Background: There has been little research into the actual economic consequences of medical injuries. This inhibits informed discussion of alternatives to malpractice litigation. For example, the cost of no-fault medical accident insurance has been thought to be prohibitive.Method: As part of a comprehensive analysis of medical injury and litigation, we interviewed a random sample of 794 individuals who had suffered medical adverse events in New York hospitals in 1984 and used their responses to calculate the cost of injuries. We then estimated the costs of a simulated no-fault insurance program that would operate as a second payer to direct insurance sources and would compensate for all financial losses attributed to medical injury.Results: The estimated costs that would be paid by a simulated no-fault program were $161 million for medical care, $276 million for lost wages, and $441 million in lost household production, or a total of $878 million in 1989 dollars for the cohort of patients who were injured in 1984.Conclusion: Although our estimate does not include administrative costs, it nonetheless indicates that a no-fault program would not be notably costlier than the more than $1 billion New York physicians now spend annually on malpractice insurance. [ABSTRACT FROM AUTHOR]

Per capita hospital expenditures in the United States exceed those in Canada, but little research has examined differences in outcomes. We used insurance databases to compare postsurgical mortality for 11 specific surgical procedures, both before and after adjustment for case mix, among residents of New England and Manitoba who were over 65 years of age. For low- and moderate-risk procedures, 30-day mortality rates were similar in both regions, but 6-month mortality rates were lower in Manitoba. For the two high-risk procedures, concurrent coronary bypass/valve replacement and hip fracture repair, both 30-day and 6-month mortality rates were lower in New England. Although no consistent pattern favoring New England for cardiovascular surgery was found, the increased mortality following hip fracture in Manitoba was found for all types of repair and all age groups. We conclude that for low- and moderate-risk procedures, the higher hospital expenditures in New England were not associated with lower perioperative mortality rates. [ABSTRACT FROM AUTHOR]

We estimate the lifetime, discounted costs that smokers and drinkers impose on others through collectively financed health insurance, pensions, disability insurance, group life insurance, fires, motor-vehicle accidents, and the criminal justice system. Although nonsmokers subsidize smokers' medical care and group life insurance, smokers subsidize nonsmokers' pensions and nursing home payments. On balance, smokers probably pay their way at the current level of excise taxes on cigarettes; but one may, nonetheless, wish to raise those taxes to reduce the number of adolescent smokers. In contrast, drinkers do not pay their way: current excise taxes on alcohol cover only about half the costs imposed on others. [ABSTRACT FROM AUTHOR]