W. Pete Welch

CONTRACTUAL ARRANGEMENTS BETWEEN HMOS AND PRIMARY CARE PHYSICIANS : THREE-TIERED HMOS AND RISK POOLS

Concern about certain contractual arrangements between health maintenance organizations (HMOs) and primary care physicians has led policymakers to consider curbing these arrangements; one law has already been passed. However, these arrangements are complex and their impact is neither obvious nor well understood. This article first presents a conceptual approach to understanding the relationship between HMOs and primary care physicians and discusses how they influence the locus of financial risk and managerial control. It then refines understanding of two critical dimensions (three-tiered HMOs and risk pools) by examining survey responses of 260 HMOs (representing over 50% of total HMO enrollment.) Results of the evaluation led to the conclusion that primary care physicians in three-tiered HMOs are sheltered from some of the financial incentives and contractual arrangements enacted by the HMO and that the reason for using risk pools may be due more to peer group effects or interaction with other incentives, rather than the direct financial implications of the risk pool on individual physicians. These concepts and observations have relevance for other types of health care systems in this country and elsewhere. Policymakers risk enacting misguided policies unless they understand the details of these arrangements.

Proportion Of Physicians In Large Group Practices Continued To Grow In 2009–11

Payers and advocates for improved health care quality are raising expectations for greater care coordination and accountability for care delivery, and physician groups may be responding by becoming larger. We used Medicare claims from the period 2009-11, merged with information from the Medicare provider enrollment database, to measure whether physician group sizes have been increasing over time and in association with physician characteristics. All US physicians serving Medicare fee-for-service patients in any practice setting were included. The percentage of physicians in groups of more than fifty increased from 30.9 percent in 2009 to 35.6 percent in 2011. This shift occurred across all specialty categories, both sexes, and all age groups, although it was more prominent among physicians under age forty than those age sixty or older. The movement of physicians into groups is not a new phenomenon, but our data suggest that the groups are larger than surveys have previously indicated. Questions for future studies include whether there are significant cost savings or quality improvements associated with increased practice size.

Should Medicare Compensate Hospitals for Administratively Necessary Days

Days that a patient remains in a hospital due to inability to secure nursing home placement are termed administratively necessary days (ANDs). Some hospitals under Medicares prospective payment system have incurred discharge delays of this kind. Nursing home bed supply is one major problematic factor; others include adequacy of Medicare nursing home reimbursement rates relative to nursing home costs in an area, the willingness of facilities in an area to serve those needing skilled care, and stringency of relevant Medicaid reimbursement policy. Two promising approaches for dealing with ANDs are increasing nursing home reimbursement rates, and adjusting Medicare payments for exceptionally long-staying patients or those requiring exceptionally intensive care in hospitals.

Geographic variations in physician service utilization.

This article investigates the geographic variation in Medicare physician services by type of service. Using 1990 Medicare beneficiary samples, age-sex-race adjusted population based physician service rates are computed. Physician services are measured using relative value units (RVUs)from the Medicare feeschedule. There is substantial variation across the states in utilization levels (Florida 38 percent above the U.S. mean; Vermont and Montana 29 percent below the mean) and a much greater range at the metropolitan area level. With the exception of major surgery, urban area benefciaries generally receive higher amounts of most evaluation and management services (particularly consultations), imaging services, and diagnostic testing. If volume performance standards (or an entitlement cap) were established at a state or area level, policymakers would have to address issues of geographic variation.

Mandatory HMO Enrollment in Medicaid: The Issue of Freedom of Choice

In areas where HMOs have enrolled a small proportion of the general population, physician participation is less in mandatory HMO programs for Medicaid beneficiaries than in fee-for-service Medicaid. But where HMOs have enrolled over one-quarter of the general population, participation rates are indistinguishable under the two systems. In those areas, mandatory enrollment restricts freedom of choice of provider. A plausible reason for this is that individual practice associations, which contract with large numbers of physicians with both fee-for-service and HMO patients, are becoming the lead form of HMO.

Use of Hospitalists by Medicare Beneficiaries: A National Picture

OBJECTIVE To describe the characteristics of hospitalists serving Medicare beneficiaries. DATA SOURCES Medicare claims from 2009 and 2011 merged with the Provider Enrollment, Chain, and Ownership System file for physician characteristics. STUDY DESIGN Our construction of the Medicare Data on Physician Practice and Specialty (MD-PPAS) enabled identification of hospitalists based on the attending physician for Medicare admissions (medical and surgical) in 2009 and 2011. PRINCIPAL FINDINGS In 2011, hospitalists constituted 13.3% of physicians who designated their specialty as primary care and 4.4% of all physicians serving Medicare beneficiaries. Compared to other physicians, hospitalists were more likely to be female, under forty, and in large practices. More than a quarter of Medicare admissions had a hospitalist as the attending physician, though the rate was substantially higher for medical than surgical admissions (31.8% versus 11.3%). Between 2009 and 2011, the percentage of medical admissions with a hospitalist as the attending physician increased by roughly a quarter (from 25.7% to 31.8%). CONCLUSIONS This analysis provides a more current and complete estimate of the use of hospitalists by the Medicare population than is available from prior studies. The ability to identify hospitalists from claims data will facilitate research on the impact of hospitalist use on quality and cost.

The Growth of Physician Services for the Elderly in the United States and Canada: 1987-1992

The authors compared the growth of expenditures, prices, and volume and intensity of physician services delivered to the elderly in the United States and Canada from 1987 to 1992 using claims-level data from U.S. Medicare and from Ontario, Quebec, and British Columbia. Services were classified into clinical categories and per capita annualized expenditure, price, and volume growth ratios were calculated for each category. The expenditure growth rate is higher in the United States than in Canada for evaluation and management services (8.8 percent versus 4.5 percent), but it is lower for procedures (2.9 percent in the United States versus 4.8 percent in Canada). For procedures, prices decreased 2.4 percent per year in the United States but increased 1 .0 percent per year in Canada, while volume increased faster in the United States (5.4 percent versus 3.8 percent in Canada). In both countries, high volume growth rates are observed in categories containing newly emerging procedures. Although policies to control prices appear easier to implement than policies to control the volume and intensity of medical care, their success in controlling expenditures is uncertain. Nonetheless, Canada has been more successful at controlling the growth in the volume of procedures than the United States.

STATE BORDER CROSSING FOR MEDICARE HOSPITAL ADMISSIONS

The purpose of this analysis was to determine the extent of state border crossing by Medicare beneficiaries to obtain inpatient hospital care. Estimating state border crossing for inpatient admissions is important for both policy and research reasons. From a policy perspective, Congress has mandated that the Secretary of Health and Human Services explore the establishment of Volume Performance Standards (VPS) at the subnational level. The state has received attention as a