Is technological change in medicine worth it?

Medical technology is valuable if the benefits of medical advances exceed the costs. We analyze technological change in five conditions to determine if this is so. In four of the conditions--heart attacks, low-birthweight infants, depression, and cataracts--the estimated benefit of technological change is much greater than the cost. In the fifth condition, breast cancer, costs and benefits are about of equal magnitude. We conclude that medical spending as a whole is worth the increased cost of care. This has many implications for public policy.     

Mental health and substance abuse parity: a case study of Ohio's state employee program

BACKGROUND: In the United States, insurance benefits for treating alcohol, drug abuse and mental health (ADM) problems have been much more limited than medical care benefits. To change that situation, more than 30 states were considering legislation that requires equal benefits for ADM and medical care ("parity") in the past year. Uncertainty about the cost consequences of such proposed legislation remains a major stumbling block. There has been no information about the actual experience of implementing parity benefits under managed care or the effects on access to care and utilization. AIMS OF THE STUDY: Document the experience of the State of Ohio with adopting full parity for ADM care for its state employee program under managed care. Ohio provides an unusually long time series with seven years of managed behavioral health benefits, which allows us to study inflationary trends in a plan with unlimited ADM benefits. METHODS: Primarily a case study, we describe the implementation of the program and track utilization, and costs of ADM care from 1989 to 1997. We use a variety of administrative and claims data and reports provided by United Behavioral Health and the state of Ohio. The analysis of the utilization and cost effect of parity and managed care is pre-post, with a multiyear follow-up period. RESULTS: The switch from unmanaged indemnity care to managed carve-out care was followed by a 75% drop in inpatient days and a 40% drop in outpatient visits per 1000 members, despite the simultaneous increase in benefits. The subsequent years saw a continuous decline in inpatient days and an increased use of intermediate services, such as residential care and intensive outpatient care. The number of outpatient visits stabilized in the range of 500-550 visits per 1000. There was no indication that costs started to increase during the study period; instead, costs continued to decline. A somewhat different picture emerges when comparing utilization under HMOs with utilization under a carve-out with expanded benefits. In that case, the expansion of benefits led to a significant jump in outpatient utilization and intermediate services, while there was a small decrease in inpatient days. Insurance payments in 1996/1997 were almost identical to the estimated costs under HMOs in 1993. CONCLUSIONS: In contrast to the emerging inflation anxiety regarding overall health care costs, managed care can provide long-run cost containment for ADM care even when patient copayments are reduced and coverage limits are lifted. This may differentiate ADM care from medical care and reasons for this difference include the state of management techniques (more advanced for ADM care), complexity of treatments (much higher technology utilization in medical care) and demographic factors (medical, but not behavioral health, costs increase as the population ages). IMPLICATIONS FOR HEALTH POLICY: The experience of the state of Ohio demonstrates that parity level benefits for ADM care are affordable under managed care. It suggests that the concerns about costs that have stymied ADM policy proposals are unfounded, as long as one is willing to accept managed care. IMPLICATIONS FOR RESEARCH: The continuing decline in costs raises concerns that levels of care may become insufficient. While concerns about costs being too high dominate the policy hurdle for parity legislation at this moment, the next step in research is to address quality of care or health outcomes, areas about which even less is known than about costs.     

President Clinton's Health Security Act: a financial perspective

The loftiness of President Clinton's goals may not survive the devil in the details, suggests the author of this article, who identifies four fundamental flaws in the Health Security Act of 1993. First, the act does not link the benefit package of coverage offered to all Americans with the funding available from employers or government to pay for these benefits; second, the act does not provide incentives for consumers to use health resources wisely; third, the act relies too much on government regulation; and fourth, the act provides few incentives for medical research, new drugs, and improved technology.     

Algorithms in medicine.

The ever rising costs of health care in Western countries necessitate some form of cost control. Restrictions can be and will be imposed externally by, for instance, the government. These measures will probably lead to a decrease in quality of health care and the profession should therefore seek ways to prevent outside interference by developing an internal means of cost control. On short terms a form of internal control with preservation of the quality of care would be the introduction and widespread use of algorithms, restricting the use of useless and unnecessary tests and therapies. For long term results education must take on new tasks leading to a better understanding of costs an benefits of medical activities. The development of algorithms is hindered by the lack of common consensus of optimal care, the lack of relevant data and the inefficient way data are managed. When introduced the algorithm, especially when compulsory, will engender much resistance and unhappily, ways must be found to overcome them by sanctions. The profession must realise that if they do not do anything it will be done for them.     

The value of medical care for health promotion.

A "rediscovery" of the value of prevention in the 1970s has led to the denigration of medical care, which had been occurring also for other reasons--aversion to high technology, demonstrable abuses, spiraling medical costs, etc. The achievements of prevention in conquering infectious diseases had long been recognized, and preventive strategies in the 1970s and 1980s were beginning to show reductions in mortality from the non-communicable chronic diseases as well. Yet the benefits of medical care in extending life expectancy over recent decades have often been overlooked. The quality of life in the later years has also been substantially improved by effective medical care. Most important, access to medical care has definite value in facilitating the prevention of disease and the promotion of health, both in developing and developed countries. It is too often forgotten that prevention embodies a range of activities, merging from general health promotion through specific disease prevention and early case-detection to rehabilitation and prevention of disability. Medical care, in other words, should not be counterposed to prevention, but rather should be integrated with it for the benefit of both health strategies.     

Separate spheres and indirect benefits

On any plausible account of the basis for health care resource prioritization, the benefits and costs of different alternative resource uses are relevant considerations in the prioritization process. Consequentialists hold that the maximization of benefits with available resources is the only relevant consideration. Non-consequentialists do not reject the relevance of consequences of benefits and costs, but insist that other considerations, and in particular the distribution of benefits and costs, are morally important as well. Whatever one's particular account of morally justified standards for the prioritization of different health interventions, we must be able to measure those interventions' benefits and costs.There are many theoretical and practical difficulties in that measurement, such as how to weigh extending life against improving health and quality of life as well as how different quality of life improvements should be valued, but they are not my concern here. This paper addresses two related issues in assessing benefits and costs for health resource prioritization. First, should benefits be restricted only to health benefits, or include as well other non health benefits such as economic benefits to employers from reducing the lost work time due to illness of their employees? I shall call this the Separate Spheres problem. Second, should only the direct benefits, such as extending life or reducing disability, and direct costs, such as costs of medical personnel and supplies, of health interventions be counted, or should other indirect benefits and costs be counted as well? I shall call this the Indirect Benefits problem. These two issues can have great importance for a ranking of different health interventions by either a cost/benefit or cost effectiveness analysis (CEA) standard.     

The economics of prevention: a critique.

A recent claim that "few preventive programmes, if any, reduce medical expenditures" is critically reviewed with specific reference to the health value of regular exercise. It is argued that a focus upon medical expenditures biases the argument in favour of acute care by neglecting much of the investment in research, training and construction, and ignoring differences in the quality of life between fit and marginally healthy individuals. By focussing on a specific clinical condition, the widespread benefits of exercise are also overlooked, and by equating costs with the consumer price index, errors from differential inflation are ignored. Discounting of benefits weighs heavily against prevention, but is an inappropriate tactic in a steady-state situation. Likewise, the levying of incidental medical charges for an extended lifespan is inappropriate when the individual concerned is also contributing to society. Limited recruitment and poor adherence are the main current weaknesses of preventive medicine, but their impact should be reduced when a preventive philosophy becomes the norm for both the patient and his or her medical adviser. The collection of appropriate and unbiased estimates of costs and benefits is an important first step towards this objective.     

农民对合作医疗保健制度的认知缺陷与对策

建立和完善以合作医疗为主体的健康保障制度已被确立为我国农村卫生工作的战略重点。但受主客观条件限制,不少农民对合作医疗保健制度的优越性认识不足,因而严重削弱了其参加合作医疗的积极性。文章从预付保障金、定点就诊和转诊、资金的不平均使用、适宜技术、监督管理制度、服务态度、保健成本及健康收益等方面分析了农民对合作医疗的偏见或错误看法及其成因,并提出了有针对性的合作医疗宣传教育措施,以消除这些认知缺陷。     

创新医疗领域社会管理 有效控制医疗费用

随着中国社会变革的发展,各种社会问题不断出现,其中,医疗费用增长过快,老百姓"看病难、看病贵"是尤为突出的社会问题之一。医疗费用增长过快,老百姓"看病难、看病贵"问题涉及到国家对卫生事业的财政投入、医疗管理制度、药品管理制度、社区医疗服务等方面。解决医疗费用增长过快,"看病难、看病贵"问题必须创新医疗管理决策、制定配套的管理政策,只有这样,才能使医疗回归公益性,适宜人民需求,让人民安居乐业,促进社会和谐快速发展。     

Telemedicine is poised to revolutionize the practice of medicine

Telemedicine--the application of audiovisual technology to patient care and medical education--has tremendous potential benefits, especially in linking doctors in remote rural locations to specialists in urban areas. The technology permits remote examinations and diagnoses of patients and continuing education for rural doctors. And there's potential for long-term savings by eliminating some hospital stays and reducing transportation costs. Telemedicine projects are multiplying as they become more economically feasible, thanks to new technology.     

The world economic crisis. Part 2. Health manpower out of balance.

As outlined in the first part of this article in the last issue of the journal, many countries are facing severe constraints on health expenditure at the same time as they are trying to work towards Health for All by the Year 2000. Health manpower needs to be planned to secure maximum benefits from the limited resources available. Many medical schools train more doctors than are needed because quotas on medical places are either non-existent or set too high. Medical training may be oriented to high-technology, curative care and produce doctors ill equipped to fulfil the role demanded of them in the primary health care approach. Educational courses for paramedics and nurses are often insufficient and inappropriate. Countries which have previously lost trained doctors to attractive posts abroad now face the prospect of a flood of doctors looking for work in their home countries, now that opportunities for work abroad are being reduced. Such countries will find it difficult to reverse the bias in policy towards medical professionals, despite the waste caused by unemployment and inappropriate training among doctors. With limited budgets, there is a need for countries to plan ahead. To do this they must find ways of estimating future effective demand. The future balance of staff can then be planned on the basis of resources available and the relative costs of deploying various categories of health staff.     

Private finance and sustainable growth of national health expenditures

This analysis explores the role of the private sector relative to all health spending among Organization for Economic Cooperation and Development (OECD) countries. Bi-variate regression was employed for 31 countries using current data. It was found that the share of GDP allocated to health varies among countries, ranging from 5 percent in Turkey to 14 percent in the United States. Variation in per capita income explains much of this difference but other factors are important too. One appears to be the role of the private sector in financing health expenditures. Our analysis concludes that concern about rising health sector costs should be placed in a larger context: rising health care costs may be justified if benefits are large enough and cover the opportunity costs of alternative uses of resources.     

Paying for health services: A public health view

Several factors are shaping the need and demand for health care; these include demographic change, the differential improvement in the survival of those with chronic conditions, and the mismatch between personal income and health. Also, medical uncertainty results in vast variations in medical practice and costs. The scope for increasing the supply of medical care, selectively to the rich or across the board, is already vast and growing. It is argued that efficient financing systems can operate only at a level at which the health benefits of interventions are measurable, i.e. the population level. Systems of individual payment are based on inevitable ignorance about expected benefits and must therefore introduce perverse (and necessarily inefficient) incentives. Population based monitoring of outcome, with coupled incentives to efficient producers, would appear to be the only method of encouraging the production of maximum social benefit from the resources used for health.     

How to present the business case for healthcare quality to employers

Many employers in the US are investing in new programmes to improve the quality of medical care and simultaneously shifting more of the healthcare costs to their employees without understanding the implications on the amount and type of care their employees will receive. These seemingly contradictory actions reflect an inability by employers to accurately assess how their health benefit decisions affect their profits. This paper proposes a practical method that employers can use to determine how much they should invest in the health of their workers and to identify the best benefit designs to encourage appropriate healthcare delivery and use. This method could also be of value to employers in other countries who are considering implementing programmes to improve employee health. The method allows a programme that improves workers' health to generate four financial benefits for an employer - reduced medical costs, reduced absences, improved on-the-job productivity, and reduced turnover - and uses accurate estimates of the benefits of reducing absences and improving productivity.     

The role of perceived benefits and costs in patients’ medical decisions

Background Many decisions can be understood in terms of actors’ valuations of benefits and costs. The article investigates whether this is also true of patient medical decision making. It aims to investigate (i) the importance patients attach to various reasons for and against nine medical decisions; (ii) how well the importance attached to benefits and costs predicts action or inaction; and (iii) how such valuations are related to decision confidence. Methods In a national random digit dial telephone survey of U.S. adults, patients rated the importance of various reasons for and against medical decisions they had made or talked to a health‐care provider about during the past 2 years. Participants were 2575 English‐speaking adults age 40 and older. Data were analysed by means of logistic regressions predicting action/inaction and linear regressions predicting confidence. Results Aggregating individual reasons into those that may be regarded as benefits and those that may be regarded as costs, and weighting them by their importance to the patient, shows the expected relationship to action. Perceived benefits and costs are also significantly related to the confidence patients report about their decision. Conclusion The factors patients say are important in their medical decisions reflect a subjective weighing of benefits and costs and predict action/inaction although they do not necessarily indicate that patients are well informed. The greater the difference between the importance attached to benefits and costs, the greater patients’ confidence in their decision.     

Whither primary care in the academic health science center?

Five forces that shape the form and function of the future academic health center are a mandate to decrease health care costs, a surplus of physicians, intense competition for the provision of tertiary medical care, a suboptimal diagnosis-related group (DRG) case mix, and decreasing funding for manpower training and research. All five forces cause the academic health center to be much more in need of strong primary medical care services. This article describes the current relationship between primary care and the academic medical center, new contributions that primary care can make to the academic medical center, and the benefits that would accrue to both the academic medical center and primary care should a closer working relationship develop. These benefits include increased outpatient volume and revenue, a more balanced inpatient case mix, better primary medical care education, an enhanced community reputation, and greater influence by primary care on academic medical center policies. Published and personal case study experiences that show some of the potential problems with a closer working relationship between primary care and the academic medical center are described.     

Exploiting subjective information to understand impoverished children's use of health care

Understanding what drives households to seek medical services is challenging because the factors affecting the perceived benefits and costs of professional health care can be the same. In this paper, we disentangle the channels through which different factors affect the use of medical services, whether through perceived benefits and/or costs. We do this by exploiting data on why individuals have not visited a health care professional. Amongst a sample of impoverished Colombian households, we find that health knowledge reduces the use of medical services through decreasing mothers’ perceived benefits of seeking professional care for ill children; birth parity, distance to health facilities and violent shocks all decrease medical care use due to increasing the perceived costs; and education decreases both the perceived benefits and costs, with no overall effect on use. We propose two specification tests, both of which our model passes, as well as a series of robustness checks.     

The difference between disability and impairment: A distinction worth making

American employers pay far too much for workplace disability. In part, disability expenditures continue to increase because key decision-makers in work organizations do not understand the difference between impairment and disability. Impairment is a medical issue. Disability is a non-medical concept; a vocational issue. Disability can be managed like any other vocational problem. Managing disability in the workplace is a function of employer commitment and planned team effort. Managing disability can save employers substantial costs.     

Physician leaders of medical groups face increasing challenges

Physician leadership has emerged as one of the biggest challenges and opportunities for medical group success. The environment for medical groups has become increasingly complex as the result of five major factors: 1) varying reimbursement methods, 2) growth in the size of groups, 3) technology investments, 4) sale and merger of groups, and 5) regulatory and legal issues. Striking the right balance between too little or too much physician involvement in leading medical groups is a key business decision. Most large, successful businesses view investment in their leaders as critical for success. Medical groups can learn from other businesses that investment in education, coaching, and succession planning for leaders is a key to long-term success.     

The future of employment-based health insurance

A transformation of employment-connected health insurance from a defined benefit to defined contribution arrangement is projected based on new economic realities affecting the competitiveness of the business environment. This article discusses those new realities along with the future of employment-based health insurance. The business of American business is profits, but, to the detriment of that goal, for the past half century business has also been in the business of providing health insurance for workers. However, in light of previously unencountered pressures on profits, employers are realizing they cannot afford to continue the practice of paying for and overseeing the provision of healthcare benefits to employees amid increasing premiums, state and federal mandates, the overbearing cost of managing healthcare benefits, and the threat of loss of protection under ERISA. Yet, the political and social pressures on businesses to continue to provide health insurance are formidable, perhaps impregnable, barriers to complete withdrawal of what has come to be thought of as a "right" of employees. Companies are anxious to find alternatives to the status quo, but any feasible alternative must cost less, require less administrative oversight, and ensure that employees still maintain a measure of choice. Two possible solutions for American businesses are adoption of (1) a "medical savings account" system, or (2) a "voucher" system. Either system would result in lower costs and greater fiscal stability for both employers and employees. They would also remove much of the responsibility for healthcare decisions from employers and place it in the hands of the employees. But, perhaps the greatest contribution of either system would be the reduction in moral hazard and its inflationary effect on medical costs.