Choosing a Health Care Provider: The Role of Quality Information

Reviews research on the adequacy of the information available on provider quality; the type of information consumers seek in choosing physicians, physician groups, and hospitals; and their attitudes about, awareness of, and use of that information

Does How Much and How You Pay Matter? Evidence from the Inpatient Rehabilitation Facility Prospective Payment System

We use the implementation of a new prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) to investigate the effect of changes in marginal and average reimbursement on costs. The results show that the IRF PPS led to a significant decline in costs and length of stay. Changes in marginal reimbursement associated with the move from a cost based system to a PPS led to a 7 to 11% reduction in costs. The elasticity of costs with respect average reimbursement ranged from 0.26 to 0.34. Finally, the IRF PPS had little or no impact on costs in other sites of care, mortality, or the rate of return to community residence.

How Much is Post-Acute Care Use Affected by Its Availability?

To assess the relative impact of clinical factors versus non-clinical factors such as post acute care (PAC) supply - in determining whether patients receive care from skilled nursing facilities (SNFs) or inpatient rehabilitation facilities (IRFs) after discharge from acute care. Medicare acute hospital, IRF and SNF claims provided data on PAC choices; predictors of site of PAC chosen were generated from Medicare claims, provider of services, enrollment file, and Area Resource File data. We used multinomial logit models to predict post-acute care use by elderly patients after hospitalizations for stroke, hip fractures, or lower extremity joint replacements. A file was constructed linking Medicare acute and post-acute utilization data for all sample patients hospitalized in 1999. PAC availability is a more powerful predictor of PAC use than the clinical characteristics in many of our models. The effects of distance to providers and supply of providers are particularly clear in the choice between IRF and SNF care. The farther away the nearest IRF is, and the closer the nearest SNF is, the less likely a patient is to go to an IRF. Similarly, the fewer IRFs, and the more SNFs, there are in the patient's area the less likely the patient is to go to an IRF. In addition, if the hospital from which the patient is discharged has a related IRF or a related SNF the patient is more likely to go there. We find that the availability of PAC is a major determinant of whether patients use such care and which type of PAC facility they use. Further research is needed in order to evaluate whether these findings indicate that a greater supply of PAC leads to both higher use of institutional care and better outcomes or whether it leads to unwarranted expenditures of resources and delays in returning patients to their homes.

How much should be paid for specialised treatment?

English health policy has moved toward establishing specialist multi-disciplinary teams to care for patients suffering rare or particularly complex conditions. But the healthcare resource groups (HRGs), which form the basis of the prospective payment system for hospitals, do not explicitly account for specialist treatment. There is a risk, then, that hospitals in which specialist teams are based might be financially disadvantaged if patients requiring specialised care are more expensive to treat than others allocated to the same HRG. To assess this we estimate the additional costs associated with receipt of specialised care. We analyse costs for 12,154,599 patients treated in 163 English hospitals according to the type of specialised care received, if any. We account for the distributional features of patient cost data, and estimate ordinary least squares and generalised linear regression models with random effects to isolate what influence the hospital itself has on costs. We find that, for nineteen types of specialised care, patients do not have higher costs than others allocated to the same HRG. However, costs are higher if a patient has cancer, spinal, neurosciences, cystic fibrosis, children’s, rheumatology, colorectal or orthopaedic specialised services. Hospitals might be paid a surcharge for providing these forms of specialised care. We also find substantial variation in the average cost of treatment across the hospital sector, due neither to the provision of specialised care nor to other characteristics of each hospital’s patients

Using Survey Measures to Assess Risk Selection among Medicare Managed Care Plans

This paper quantifies risk selection among competing Medicare managed care plans, using beneficiary survey data from the Consumer Assessments of Health Plans Survey®. Selection, measured by variation in plan-level prevalence of health conditions and predicted costs, was substantial. A plan with moderate (one standard deviation) adverse selection would have predicted costs 11.6% above an average plan. Only a small part of this variation was explained by the geographical differences in the prevalence of health conditions among or within Metropolitan Statistical Areas, indicating that the selection was driven by plan attributes. Plans serving members with greater health needs have the potential to establish programs to serve these sick members well, yet this places plans at financial risk. Hence, improved risk adjustment for chronic conditions may be warranted. Moreover, survey measures have the potential to measure the prevalence of such conditions reliably and consistently across plans

Does how much and how you pay matter? Evidence from the inpatient rehabilitation care prospective payment system

We use the implementation of a new prospective payment system (PPS) for inpatient rehabilitation facilities (IRFs) to investigate the effect of changes in marginal and average reimbursement on costs. The results show that the IRF PPS led to a significant decline in costs and length of stay. Changes in marginal reimbursement associated with the move from a cost-based system to a PPS led to a 7-11% reduction in costs. The elasticity of costs with respect to average reimbursement ranged from 0.26 to 0.34. Finally, the IRF PPS had little or no impact on mortality or the rate of return to community residence.