Organizational boundaries of medical practice: the case of physician ownership of ancillary services

Physician ownership of in-office ancillary services (IOASs) has come under increasing scrutiny. Advocates of argue that IOASs allow physicians to supervise the quality and coordination of care. Critics have argued that IOASs create financial incentives for physicians to increase ancillary service volume. In this paper we develop a conceptual framework to evaluate the tradeoffs associated with physician ownership of IOASs. There is some evidence supporting the existence of scope and transaction economies in IOASs. Improvement in flow and continuity of care are likely to generate scope economies and improvements in quality monitoring and reductions in consumer transaction costs are likely to generate transaction economies. Other factors include the capture of upstream and downstream profits, but these incentives are likely to be small compared to scope and transaction economies. Policy debates on the merits of IOASs should include an explicit assessment of these tradeoffs. This research was supported in part by funding from the American Association of Orthopaedic Surgeons (AAOS)

Economic evaluation of procalcitonin-guided antibiotic therapy in acute respiratory infections: a US health system perspective

Background: Whether or not antibiotic stewardship protocols based on procalcitonin levels results in cost savings remains unclear. Herein, our objective was to assess the economic impact of adopting procalcitonin testing among patients with suspected acute respiratory tract infection (ARI) from the perspective of a typical US integrated delivery network (IDN) with a 1,000,000 member catchment area or enrollment. Methods: To conduct an economic evaluation of procalcitonin testing versus usual care we built a cost-impact model based on patient-level meta-analysis data of randomized trials. The meta-analytic data was adapted to the US setting by applying the meta-analytic results to US lengths of stay, costs, and practice patterns. We estimated the annual ARI visit rate for the one million member cohort, by setting (inpatient, ICU, outpatient) and ARI diagnosis. Results: In the inpatient setting, the costs of procalcitonin-guided compared to usual care for the one million member cohort was $2,083,545, compared to$2,780,322, resulting in net savings of nearly $700,000 to the IDN for 2014. In the ICU and outpatient settings, savings were$73,326 and $5,329,824, respectively, summing up to overall net savings of$6,099,927 for the cohort. Results were robust for all ARI diagnoses. For the whole US insured population, procalcitonin-guided care would result in $1.6 billion in savings annually. Conclusions: Our results show substantial savings associated with procalcitonin protocols of ARI across common US treatment settings mainly by direct reduction in unnecessary antibiotic utilization. These results are robust to changes in key parameters, and the savings can be achieved without any negative impact on treatment outcomes

Outcomes of Surgeries Performed in Physician Offices Compared With Ambulatory Surgery Centers and Hospital Outpatient Departments in Florida

Background: The proportion of outpatient surgeries performed in physician offices has been increasing over time, raising concern about the impact on outcomes. Objective: To use a private insurance claims database to compare 7-day and 30-day hospitalization rates following relatively complex outpatient surgical procedures across physician offices, freestanding ambulatory surgery centers (ASCs), and hospital outpatient departments (HOPDs). Methods: A multivariable logistic regression model was used to compare the risk-adjusted probability of hospitalization among patients after any of the 88 study outpatient procedures at physician offices, ASCs, and HOPDs over 2008-2012 in Florida. Results: Risk-adjusted hospitalization rates were higher following procedures performed in physician offices compared with ASCs for all procedures grouped together, for most procedures grouped by type, and for many individual procedures. Conclusions: Hospitalizations following surgery were more likely for procedures performed in physician offices compared with ASCs, which highlights the need for ongoing research on the safety and efficacy of office-based surgery

Online Simulation Model to Estimate the Total Costs of Tobacco Product Waste in Large U.S. Cities.

Tobacco product waste (TPW) is one of the most ubiquitous forms of litter, accumulating in large amounts on streets, highways, sidewalks, beaches, parks, and other public places, and flowing into storm water drains, waste treatment plants, and solid waste collection facilities. In this paper, we evaluate the direct and indirect costs associated with TPW in the 30 largest U.S. cities. We first developed a conceptual framework for the analysis of direct and indirect costs of TPW abatement. Next, we applied a simulation model to estimate the total costs of TPW in major U.S. cities. This model includes data on city population, smoking prevalence rates, and per capita litter mitigation costs. Total annual TPW-attributable mean costs for large US cities range from US$4.7 million to US$90 million per year. Costs are generally proportional to population size, but there are exceptions in cities that have lower smoking prevalence rates. The annual mean per capita TPW cost for the 30 cities was US$6.46, and the total TPW cost for all 30 cities combined was US$264.5 million per year. These estimates for the TPW-attributable cost are an important data point in understanding the negative economic externalities created by cigarette smoking and resultant TPW cleanup costs. This model provides a useful tool for states, cities, and other jurisdictions with which to evaluate a new economic cost outcome of smoking and to develop new laws and regulations to reduce this burden