Applying disease management strategies to Medicare.

Medicare coverage begins for many when they have already developed one or more chronic diseases, and it often pays for the latest and costliest phases. Population-based disease modeling, patient screening, and monitoring would be appropriate interventions for chronic renal disease. Patients who have not yet advanced to end-stage renal disease would benefit from management of diabetes and hypertension, avoidance of nephrotoxic substances, and better preparation for dialysis. Administrative support could take the form of clinical guidelines, physician-led multidisciplinary teams, integrated delivery systems, provider and patient education, and new information technologies. Medicare reflects the long-term public perspective, and thus should further this new direction by supporting education, reimbursing for prevention efforts and allied health services, encouraging efficiency, and monitoring cost and quality outcomes.

Physician profiling in group practices.

Profiling is a technique that large, multispecialty group practices, like many insurers, can use to monitor and improve quality and efficiency. Groups can examine physician performance by calculating ratios of medical inputs to patient or population outputs. Physician control can help to achieve balance between clinical benefits and economic considerations. Profiles need to reflect a group's multiple missions, such as clinical care, research, and education; philosophy of care; and organizational ethos regarding physician compensation systems. Groups may need to customize standard approaches because of their emphasis on early utilization of specialists and the atypical case mixes often found in referral practices.

Bringing managed care incentives to Medicare's fee-for-service sector.

The Health Care Financing Administration (HCFA) could work with eligible physician organizations to generate savings in total reimbursements for their Medicare patients. Medicare would continue to reimburse all providers according to standard payment policies and mechanisms, and beneficiaries would retain the freedom to choose providers. However, implementation of new financial incentives, based on meeting targets called Group-Specific Volume Performance Standards (GVPS), would encourage cost-effective service delivery patterns. HCFA could use new and existing data systems to monitor access, utilization patterns, cost outcomes and quality of care. In short, HCFA could manage providers, who, in turn, would manage their patients' care.

Setting priorities for the Children's Vaccine Initiative: a cost-effectiveness approach.

To help the Children's Vaccine Initiative (CVI) achieve its goal of new and improved children's vaccines, we developed and applied a cost-effectiveness model to set priorities for vaccine development. The model measures the health benefits in additional Quality-Adjusted Life Years (QALYs) gained by the combined birth cohorts of all developing countries over an assumed useful life of a proposed vaccine (generally 10 years). It measures costs as the net cost of developing, procuring, and administering the vaccine to the same population and time frame compared to the status quo (the current vaccine, if any). It weights each dollar of in-kind allocation of the existing health infrastructure less heavily than a dollar cash outlay to purchase new vaccine to reflect severe constraints on foreign exchange and non-personnel costs. It expresses cost-effectiveness as the net cost per QALY. The model was applied to 13 candidate vaccines selected by the CVI for initial analysis on the basis of their near-term feasibility. The five most cost-effective improvements, each of which could generate a QALY inexpensively (below $25 per QALY), were an early-administration or an early two-dose measles vaccine, slow release tetanus toxoid (for women), improved typhoid vaccine, and hepatitis B combined with diphtheria-tetanus-pertussis vaccine.