Jack Zwanziger

The effects of hospital competition and the Medicare PPS program on hospital cost behavior in California

Previous studies of hospital competition have found that greater competition leads to higher hospital costs. In this paper we report how the behavior of Californias hospitals has changed since the introduction of programs intended to contain the rate of increase of hospital costs. Using data that cover the period preceding and following the introduction of these programs, we found that hospitals in more competitive markets have lowered their costs significantly.

The Cost-effectiveness of Automatic Implantable Cardiac Defibrillators:: Results From MADIT

BACKGROUNDnThe recently reported Multicenter Automatic Defibrillator Implantation Trial (MADIT) showed improved survival in selected asymptomatic patients with coronary disease and nonsustained ventricular tachycardia. The economic consequences of defibrillator management in this patient population are unknown.nnnMETHODS AND RESULTSnPatients were followed up to quantify their use of healthcare services, including hospitalizations, physician visits, medications, laboratory tests, and procedures, during the trial. The costs of these services, including the costs of the defibrillator, were determined in patients randomized to defibrillator and nondefibrillator therapy. Incremental cost-effectiveness ratios were calculated by relating these costs to the increased survival associated with the use of the defibrillator. The average survival for the defibrillator group over a 4-year period was 3.66 years compared with 2.80 years for conventionally treated patients. Accumulated net costs were

The effects of market structure and bargaining position on hospital prices

97,560 for the defibrillator group compared with

The changing effects of competition on non-profit and for-profit hospital pricing behavior

75,980 for individuals treated with medications alone. The resulting incremental cost-effectiveness ratio of

Why Do Physicians Vary So Widely in Their Referral Rates

27,000 per life-year saved compares favorably with other cardiac interventions. Sensitivity analyses showed that the incremental cost-effectiveness ratio would be reduced to approximately

Is travel distance a barrier to veterans' use of VA hospitals for medical surgical care?

23,000 per life-year saved if transvenous defibrillators were used instead of the older devices, which required thoracic surgery for implantation.nnnCONCLUSIONSnAn implanted cardiac defibrillator is cost-effective in selected individuals at high risk for ventricular arrhythmias.

Price competition and hospital cost growth in the United States (1989–1994)

PPOs and HMOs have gained widespread acceptance due in part to the belief that excess capacity and competitive market conditions can be leveraged to negotiate lower prices with health care providers. We investigated prices obtained in different types of markets by the largest PPO in California. Our findings indicate that greater hospital competition leads to lower prices. Furthermore, as the importance of a hospital to the PPO in an area increases, the price rises substantially. Our testing of alternative methods for defining hospital geographic markets reveals that the common practice of using counties to define the market leads to an underestimate of the price-increasing effects of a merger.

The Critical Shortage of Geriatrics Faculty

Has the nature of hospital competition changed from a medical arms race in which hospitals compete for patients by offering their doctors high quality services to a price war for the patients of payors? This paper uses time-series cross-sectional methods on California hospital discharge data from 1986-1994 to show the association of hospital prices with measures of market concentration changed steadily over this period, with prices now higher in less competitive areas, even for non-profit hospitals. Regression results are used to simulate the price impact of hypothetical hospital mergers.

How Many Physicians Will Be Needed to Provide Medical Care for Older Persons? Physician Manpower Needs for the Twenty-First Century

AbstractOBJECTIVE: To determine which physician practice and psychological factors contribute to observed variation in primary care physicians’ referral rates.n DESIGN: Cross-sectional questionnaire-based survey and analysis of claims database.n SETTING: A large managed care organization in the Rochester, NY, metropolitan area.n PARTICIPANTS: Internists and family physicians.n MEASUREMENTS AND MAIN RESULTS: Patient referral status (referred or not) was derived from the 1995 claims database of the managed care organization. The claims data were also used to generate a predicted risk of referral based on patient age, gender, and case mix. A physician survey completed by a sample of 182 of the physicians (66% of those eligible) included items on their practice and validated psychological scales on anxiety from uncertainty, risk aversiveness, fear of malpractice, satisfaction with practice, autonomous and controlled motivation for referrals and test ordering, and psychosocial beliefs. The relation between the risk of referral and the physician practice and psychological factors was examined using logistic regression. After adjustment for predicted risk of referral (case mix), patients were more likely to be referred if their physician was female, had more years in practice, was an internist, and used a narrower range of diagnoses (a higher Herfindahl index, also derived from the claims data). Of the psychological factors, only greater psychosocial orientation and malpractice fear was associated with greater likelihood of referral. When the physician practice factors were excluded from the analysis, risk aversion was positively associated with referral likelihood.n CONCLUSIONS: Most of the explainable variation in referral likelihood was accounted for by patient and physician practice factors like case mix, physician gender, years in practice, speciality, and the Herfindahl index. Relatively little variation was explained by any of the examined physician psychological factors.

Hospital competition, resource allocation and quality of care

Lengthy travel distances may explain why relatively few veterans in the United States use VA hospitals for inpatient medical/surgical care. We used two approaches to distinguish the effect of distance on VA use from other factors such as access to alternatives and veterans characteristics. The first approach describes how disparities in travel distance to the VA are related to other characteristics of geographic areas. The second approach involved a multivariate analysis of VA use in postal zip code areas (ZCAs). We used several sources of data to estimate the number of veterans who had priority access to the VA so that use rates could be estimated. Access to hospitals was characterized by estimated travel distance to inpatient providers that typically serve each ZCA. The results demonstrate that travel distance to the VA is variable, with veterans in rural areas traveling much farther for VA care than veterans in areas of high population density. However, Medicare recipients also travel farther in areas of low population density. In some areas veterans must travel lengthy distances for VA care because VA hospitals which were built over the past few decades are not located close to areas in which veterans reside in the 1990s. The disparities in travel distance suggest inequitable access to the VA. Use of the VA decreases with increases in travel distance only up to about 15 miles, after which use is relatively insensitive to further increases in distance. The multivariate analyses indicate that those over 65 are less sensitive to distance than younger veterans, even though those over 65 are Medicare eligible and therefore have inexpensive access to alternatives. The results suggest that proximity to a VA hospital is only one of many factors determining VA use. Further research is indicated to develop an appropriate response to the needs of the small but apparently dedicated group of VA users who are traveling very long distances to obtain VA care.