A Cautious Path Forward on Accountable Care Organizations

The wave of new Accountable Care Organizations (ACOs), spurred by financial incentives in the Affordable Care Act, could become the latest chapter in the steady accumulation of market power by hospitals, health care systems, and physician groups. The main purpose behind forming many ACOs may not be to achieve cost savings but instead to strengthen negotiating power over purchasers in the private sector. This would be an unfortunate sequel to the waves of mergers in the 1990s when health care entities sought to counter market pressure from managed care organizations. The possibility that ACOs might further concentrate health care markets brings new urgency to understanding why provider monopolies are pernicious and to considering how government can ensure that ACOs pursue efficiency rather than market power

Overregulation of Health Care: Musings on Disruptive Innovation Theory

Disruptive innovation theory provides one lens through which to describe how regulations may stifle innovation and increase costs. Basing their discussion on this theory, Curtis and Schulman consider some of the effects that regulatory controls may have on innovation in the health sector

Pharmaceutical M&A Activity: Effects on Prices, Innovation, and Competition

The rise of blockbuster pharmaceutical acquisitions has prompted fears that unprecedented market concentration will weaken competition. Two of the most prominent concerns focus on the upstream and downstream ends of the pharmaceutical industry: (1) the concern that these mergers will concentrate the market for discovery and will therefore lead to fewer discoveries; and (2) the concern that merging large marketing, sales, and distribution forces will strengthen the hands of select pharmaceutical manufacturers and weaken downstream competition. Having considered potential dynamic effects in the industry and conducted a series of preliminary interviews with knowledgeable observers, though, this Article argues that neither of these common fears is systematically warranted. There are, however, potential dangers in market concentration at an intermediate stage during the discovery-to-development path: the stage for regulatory approval. These preliminary findings are a product of dramatic changes that are currently reshaping the structure of the pharmaceutical industry. This Article discusses how these structural changes contribute to the current merger wave, how dynamic responses by industry players in response to the merger wave mitigate the potential harm from competition, and how the political arena might still offer threats to market concentration

Overbilling and Informed Financial Consent — A Contractual Solution

U.S. hospitals and physicians regularly charge uninsured patients and patients receiving care outside their health-plan networks far more what most health insurers pay and far more than their actual costs. Such practices have triggered over 100 lawsuits and prompted calls for pricing transparency in Congress and price regulation in several states. This Perspective argues that the theory of implied contracts, a foundation in most first-year courses in contract law, offers a useful legal and ethical mechanism for handling these troubling problems in health care billing

Lessons From India in Organizational Innovation: A Tale of Two Heart Hospitals

Recent discussions in health reform circles have pinned great hopes on the prospect of innovation as the solution to the high-cost, inadequate-quality U.S. health system. But U.S. health care institutions--insurers, providers and specialists--have ceded leadership in innovation to Indian hospitals such as Care Hospital in Hyderabad and the Fortis Hospitals around New Delhi, which have U.S.-trained doctors and can perform open heart surgery for $6000 (compared to$100,000 in the United States). The Indian success is a window into America\u27s stalemate with inflating costs and stagnant innovation

Medical errors: how the US Government is addressing the problem

November's Institute of Medicine (IOM) report on medical errors has sparked debate among US health policy makers as to the appropriate response to the problem. Proposals range from the implementation of nationwide mandatory reporting with public release of performance data to voluntary reporting and quality-assurance efforts that protect the confidentiality of error-related data. Any successful safety program will require a national effort to make significant investments in information technology infrastructure, and to provide an environment and education that enables providers to contribute to an active quality-improvement process

AIDS and New England Hospitals

The Centers for Disease Control projects that nine thousand persons with AIDS will be alive in New England in 1991, representing a sevenfold increase from 1986. Our analysis indicates that more than 2 percent of medical/surgical beds in New England will be used for AIDS care by 1991, representing 766 fully occupied hospital beds. The direct cost of providing hospital care to New England\u27s AIDS patients is projected to be $195.2 million in 1991, reflecting 3 percent of all hospital inpatient costs in the region. AIDS treatment is very unevenly distributed among hospitals in New England. Just twenty hospitals (8 percent of short-term general hospitals in the region) provided over 60 percent of the care required by all AIDS patients in New England in 1986. If this trend continues, nearly 5 percent of all the beds available in these twenty institutions will be required for AIDS care by 1991. Alternatives to inpatient care are an important means of limiting the demands the AIDS epidemic places on inpatient care facilities. A number of outpatient AIDS clinics have been established in New England hospitals, including clinics at Yale-New Haven Hospital and Rhode Island Hospital. However, skilled nursing facilities in New England, as in other parts of the country, are not prepared to care for AIDS patients. Similarly, the development of in-home services for AIDS patients is just beginning in New England. Hospital planning for New England should begin addressing the need to expand alternative care services. Hospitals may begin by developing an integrated system of inpatient care with outpatient clinics and by designing units or multidisciplinary teams to care for AIDS patients. But even the best case management and discharge planning efforts cannot succeed if there is no place outside the hospital for AIDS patients to go. Each state needs to look closely at its capacity to provide long-term care, hospice care, and home care in order to fill gaps where they exist

Analytic Considerations in Economic Evaluations of Multinational Cardiovascular Clinical Trials

OBJECTIVES: The growing number of economic evaluations that use data collected in multinational clinical trials raises numerous questions regarding their execution and interpretation. Although recommendations for conducting economic evaluations have been widely disseminated, relatively little guidance has been given for conducting economic evaluations alongside clinical trials, particularly multinational trials. METHODS: Building on a literature review that was conducted in preparation for an expert workshop, we evaluated a subset of methodological issues related to conducting economic evaluations alongside multinational clinical trials. RESULTS: We found wide variation in the types of costs included as part of the analyses and in the methods used to assign costs to hospitalization events. Furthermore, we found that the extrapolation of costs and survival outcomes beyond the trial period is an inconsistent practice and is often not dependent on whether a survival benefit was observed in the trial or on the epidemiology or practice patterns in the country to which the findings are directed. CONCLUSIONS: Although the limited sample size precluded a quantitative analysis of trial characteristics and their associations with the methodologies employed, our findings highlight the need for more guidance to analysts regarding the execution of economic evaluations using data from multinational clinical trials. As the research community grapples with the complexities of methodological and logistical issues involved in multinational economic evaluations, the development of a standardized format to report the basic methodological characteristics of such studies would help to improve transparency and comparability for other analysts and decision-makers