Treatments and Health Outcomes of Medicare Patients With Back Pain.

Back pain treatments are costly and frequently involve use of procedures that may have minimal benefit on improving patients' functional status. Two recent studies evaluated adverse outcomes (mortality and major medical complications) following receipt of spinal surgery but neither examined whether such treatments affected functional ability. Using a sample composed of Medicare patients with persistent back pain, we examined whether functional ability improved after treatment, comparing patients treated with back surgery or spinal injections to nonrecipients. We analyzed four binary variables that measure whether the ability to perform routine tasks improved. We used instrumental variables analysis to address the nonrandom selection of treatment received due to unobservable confounding. Contrary to the observational results, the instrumental variable estimates suggest that receipt of either back surgery or spinal injections does not improve back patients' functional ability. Failure to account for selection into treatment can lead to overestimating the benefits of specific treatments.

Physician compensation strategies and quality of care for Medicare beneficiaries.

OBJECTIVES: To examine the relationship between the compensation strategies of primary care physicians (PCPs) and the quality and outcomes of care delivered to Medicare beneficiaries. STUDY DESIGN: Cross-sectional analysis of physician survey data linked to Medicare claims. We used a previously constructed typology that was developed based on the survey to categorize physician compensation strategies. METHODS: We combined data from the 2004-2005 Community Tracking Study Physician Survey on PCP compensation methods with administrative claims from the Medicare program. We analyzed the proportion of eligible beneficiaries receiving each of 7 preventive services and rates of preventable admissions for acute and chronic conditions. We measured the latter using Prevention Quality Indicators (PQIs), available from the Agency for Healthcare Research and Quality. RESULTS: The 2211 PCP respondents included 937 internists and 1274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Employed physicians with productivity and other incentives were more likely to deliver care of high quality when compared with salaried physicians. For instance, the odds of appropriate monitoring for diabetics ranged from 1.26 to 1.47 (all P < .01). Physicians in highly capitated environments had similar or better quality compared with physicians in other environments across most measures. The association between compensation strategies and outcomes of care as measured by PQIs was inconsistent, although owners with no other incentives had consistent higher rates of acute and chronic PQI admission (eg, for the chronic PQI composite: odds ratio = 1.07; 95% CI, 1.02-1.12). CONCLUSIONS: Physician compensation strategies are associated with the quality of preventive services delivered to Medicare patients, but inconsistently associated with outcomes of care. Increasing use of global payment strategies is not likely to lead to lower quality.

Factors associated with geographic variation in cost per episode of care for three medical conditions.

OBJECTIVE: To identify associations between market factors, especially relative reimbursement rates, and the probability of surgery and cost per episode for three medical conditions (cataract, benign prostatic neoplasm, and knee degeneration) with multiple treatment options. METHODS: We use 2004-2006 Medicare claims data for elderly beneficiaries from sixty nationally representative communities to estimate multivariate models for the probability of surgery and cost per episode of care as a function local market factors, including Medicare physician reimbursement for surgical versus non-surgical treatment and the availability of primary care and specialty physicians. We used Symmetry's Episode Treatment Groups (ETG) software to group claims into episodes for the three conditions (n = 540,874 episodes). RESULTS: Higher Medicare reimbursement for surgical episodes and greater availability of the relevant specialists are significantly associated with more surgery and higher cost per episode for all three conditions, while greater availability of primary care physicians is significantly associated with less frequent surgery and lower cost per episode. CONCLUSION: Relative Medicare reimbursement rates for surgical vs. non-surgical treatments and the availability of both primary care physicians and relevant specialists are associated with the likelihood of surgery and cost per episode.

Higher practice intensity is associated with higher quality of care but more avoidable admissions for medicare beneficiaries.

BACKGROUND: The relationship between practice intensity and the quality and outcomes of care has not been studied. OBJECTIVE: To examine the relationship between primary care physicians' costliness both for defined episodes of care and for defined patients and the quality and outcomes of care delivered to Medicare beneficiaries. STUDY DESIGN: Cross sectional analysis of physician survey data linked to Medicare claims. Physician costliness measures were calculated by comparing the episode specific and overall costs of care for their patients with the care delivered by other physicians. PARTICIPANTS: We studied physicians participating in the 2004-2005 Community Tracking Study Physician Survey linked with administrative claims from the Medicare program for the years 2004-2006. MAIN MEASURES: Proportion of eligible beneficiaries receiving each of seven preventive services and rates of preventable admissions for acute and chronic conditions. KEY RESULTS: The 2,211 primary care physician respondents included 937 internists and 1,274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Patients treated by more costly physicians (whether measured by the overall costliness index or the episode-level index) were more likely to receive recommended preventive services, but were also more likely to experience preventable admissions. For instance, physicians in the lowest quartile of costliness performed appropriate monitoring for hemoglobin A1C for diabetics 72.8% of the time, as compared with 81.9% for physicians in the highest quartile of costliness (p < 0.01). In contrast, patients treated by the physicians in the lowest quartile of episode costliness were admitted at a rate of 1.8/100 for both acute and chronic Prevention Quality Indicators (PQIs), as compared with 2.9/100 for both acute and chronic PQIs for those treated by physicians in the highest quartile of costliness (p < 0.001). CONCLUSIONS: Physician practice patterns are associated with the quality of preventive services delivered to Medicare patients. Ongoing efforts to influence physician practice patterns may have differential effects on different aspects of quality.

Geographic variations in the cost of treating condition-specific episodes of care among Medicare patients.

OBJECTIVES: To measure geographic variations in treatment costs for specific conditions, explore the consistency of these patterns across conditions, and examine how service mix and population health factors are associated with condition-specific and total area costs. DATA SOURCES: Medicare claims for 1.5 million elderly beneficiaries from 60 community tracking study (CTS) sites who received services from 5,500 CTS Physician Survey respondents during 2004-2006. STUDY DESIGN: Episodes of care for 10 costly and common conditions were formed using Episode Treatment Group grouper software. Episode and total annual costs were calculated, adjusted for price, patient demographics, and comorbidities. We correlated episode costs across sites and examined whether episode service mix and patient health were associated with condition-specific and total per-beneficiary costs. PRINCIPAL FINDINGS: Adjusted episode costs varied from 34 to 68 percent between the most and least expensive site quintiles. Area mean costs were only weakly correlated across conditions. Hospitalization rates, surgery rates, and specialist involvement were associated with site episode costs, but local population health indicators were most related to site total per-beneficiary costs. CONCLUSIONS: Population health appears to drive local per-beneficiary Medicare costs, whereas local practice patterns likely influence condition-specific episode costs. Reforms should be flexible to address local conditions and practice patterns.

Geographic variation in fee-for-service medicare beneficiaries' medical costs is largely explained by disease burden.

Control for area differences in population health (casemix adjustment) is necessary to measure geographic variations in medical spending. Studies use various casemix adjustment methods, resulting in very different geographic variation estimates. We study casemix adjustment methodological issues and evaluate alternative approaches using claims from 1.6 million Medicare beneficiaries in 60 representative communities. Two key casemix adjustment methods-controlling for patient conditions obtained from diagnoses on claims and expenditures of those at the end of life-were evaluated. We failed to find evidence of bias in the former approach attributable to area differences in physician diagnostic patterns, as others have found, and found that the assumption underpinning the latter approach-that persons close to death are equally sick across areas-cannot be supported. Diagnosis-based approaches are more appropriate when current rather than prior year diagnoses are used. Population health likely explains more than 75% to 85% of cost variations across fixed sets of areas.

Medicare spending, mortality rates, and quality of care.

We applied instrumental variable analysis to a sample of 388,690 Medicare beneficiaries predicted to be high-cost cases to estimate the effects of medical care use on the relative odds of death or experiencing an avoidable hospitalization in 2006. Contrary to conclusions from the observational geographic variations literature, the results suggest that greater medical care use is associated with statistically significant and quantitatively meaningful health improvements: a 10% increase in medical care use is associated with a 8.4% decrease in the mortality rate and a 3.8% decrease in the rate of avoidable hospitalizations.

The relationship between physician compensation strategies and the intensity of care delivered to Medicare beneficiaries.

OBJECTIVE: To examine the relationship between primary care physicians' (PCPs) payment arrangements and the total costs and intensity of care for specific episodes of care for Medicare beneficiaries. DATA SOURCES/STUDY SETTING: We combined data from the 2004 to 2005 Community Tracking Study Physician Survey on PCP compensation methods with administrative data from the Medicare program for beneficiaries to whom these physicians provided services over the time period 2004-2006. STUDY DESIGN: Cross-sectional analysis of physician survey data linked to Medicare claims. PRINCIPAL FINDINGS: The 2,211 PCP respondents included 937 internists and 1,274 family or general physicians who were linked to more than 250,000 Medicare enrollees. Most physicians (62 percent) had been in practice for 11 or more years and 87 percent were board certified. The total spending models show that for both employed physicians and owners, those in highly capitated practice environments had the lowest risk adjusted spending per beneficiary, whereas those receiving just productivity payments had the highest spending. These physicians also had lower intensity of care for episodes of care. CONCLUSIONS: Physicians in highly capitated practices had the lowest total costs and intensity of care, suggesting that these physicians develop an overall approach to care that also applies to their FFS patients.

Medical spending and the health of the elderly.

OBJECTIVE: To estimate the relationship between variations in medical spending and health outcomes of the elderly. DATA SOURCES: 1992-2002 Medicare Current Beneficiary Surveys. STUDY DESIGN: We used instrumental variable (IV) estimation to identify the relationships between alternative measures of elderly Medicare beneficiaries' medical spending over a 3-year observation period and health status, measured by the Health and Activity Limitation Index (HALex) and survival status at the end of the 3 years. We used the Dartmouth Atlas End-of-Life Expenditure Index defined for hospital referral regions in 1996 as the exogenous identifying variable to construct the IVs for medical spending. DATA COLLECTION/EXTRACTION METHODS: The analysis sample includes 17,438 elderly (age >64) beneficiaries who entered the Medicare Current Beneficiary Survey in the fall of each year from 1991 to 1999, were not institutionalized at baseline, stayed in fee-for-service Medicare for the entire observation period, and survived for at least 2 years. Measures of baseline health were constructed from information obtained in the fall of the year the person entered the survey, and changes in health were from subsequent interviews over the entire observation period. Medicare and total medical spending were constructed from Medicare claims and self-reports of other spending over the entire observation period. PRINCIPAL FINDINGS: IV estimation results in a positive and statistically significant relationship between medical spending and better health: 10 percent greater medical spending over the prior 3 years (mean=U.S.$2,709) is associated with a 1.9 percent larger HALex value (p=.045; range 1.2-2.2 percent depending on medical spending measure) and a 1.5 percent greater survival probability (p=.039; range 1.2-1.7 percent). CONCLUSIONS: On average, greater medical spending is associated with better health status of Medicare beneficiaries, implying that across-the-board reductions in Medicare spending may result in poorer health for some beneficiaries.

Following the money: factors associated with the cost of treating high-cost Medicare beneficiaries.

OBJECTIVE: To identify factors associated with the cost of treating high-cost Medicare beneficiaries. DATA SOURCES: A national sample of 1.6 million elderly, Medicare beneficiaries linked to 2004-2005 Community Tracking Study Physician Survey respondents and local market data from secondary sources. STUDY DESIGN: Using 12 months of claims data from 2005 to 2006, the sample was divided into predicted high-cost (top quartile) and lower cost beneficiaries using a risk-adjustment model. For each group, total annual standardized costs of care were regressed on beneficiary, usual source of care physician, practice, and market characteristics. PRINCIPAL FINDINGS: Among high-cost beneficiaries, health was the predominant predictor of costs, with most physician and practice and many market factors (including provider supply) insignificant or weakly related to cost. Beneficiaries whose usual physician was a medical specialist or reported inadequate office visit time, medical specialist supply, provider for-profit status, care fragmentation, and Medicare fees were associated with higher costs. CONCLUSIONS: Health reform policies currently envisioned to improve care and lower costs may have small effects on high-cost patients who consume most resources. Instead, developing interventions tailored to improve care and lowering cost for specific types of complex and costly patients may hold greater potential for "bending the cost curve."

Comparative effectiveness of prostate cancer treatments: evaluating statistical adjustments for confounding in observational data.

BACKGROUND: Using observational data to assess the relative effectiveness of alternative cancer treatments is limited by patient selection into treatment, which often biases interpretation of outcomes. We evaluated methods for addressing confounding in treatment and survival of patients with early-stage prostate cancer in observational data and compared findings with those from a benchmark randomized clinical trial. METHODS: We selected 14 302 early-stage prostate cancer patients who were aged 66-74 years and had been treated with radical prostatectomy or conservative management from linked Surveillance, Epidemiology, and End Results-Medicare data from January 1, 1995, through December 31, 2003. Eligibility criteria were similar to those from a clinical trial used to benchmark our analyses. Survival was measured through December 31, 2007, by use of Cox proportional hazards models. We compared results from the benchmark trial with results from models with observational data by use of traditional multivariable survival analysis, propensity score adjustment, and instrumental variable analysis. RESULTS: Prostate cancer patients receiving conservative management were more likely to be older, nonwhite, and single and to have more advanced disease than patients receiving radical prostatectomy. In a multivariable survival analysis, conservative management was associated with greater risk of prostate cancer-specific mortality (hazard ratio [HR] = 1.59, 95% confidence interval [CI] = 1.27 to 2.00) and all-cause mortality (HR = 1.47, 95% CI = 1.35 to 1.59) than radical prostatectomy. Propensity score adjustments resulted in similar patient characteristics across treatment groups, although survival results were similar to traditional multivariable survival analyses. Results for the same comparison from the instrumental variable approach, which theoretically equalizes both observed and unobserved patient characteristics across treatment groups, differed from the traditional multivariable and propensity score results but were consistent with findings from the subset of elderly patient with early-stage disease in the trial (ie, conservative management vs radical prostatectomy: for prostate cancer-specific mortality, HR = 0.73, 95% CI = 0.08 to 6.73; for all-cause mortality, HR = 1.09, 95% CI = 0.46 to 2.59). CONCLUSION: Instrumental variable analysis may be a useful technique in comparative effectiveness studies of cancer treatments if an acceptable instrument can be identified.

Clarifying sources of geographic differences in Medicare spending.

BACKGROUND: Although geographic differences in Medicare spending are widely considered to be evidence of program inefficiency, policymakers need to understand how differences in beneficiaries' health and personal characteristics and specific geographic factors affect the amount of Medicare spending per beneficiary before formulating policies to reduce geographic differences in spending. METHODS: We used Medicare Current Beneficiary Surveys from 2000 through 2002 to examine differences across geographic areas (grouped into quintiles on the basis of Medicare spending per beneficiary over the same period). We estimated multivariate-regression models of individual spending that included demographic and baseline health characteristics, changes in health status, other individual determinants of demand, and area-level measures of the supply of health care resources. Each group of variables was entered into the model sequentially to assess the effect on geographic differences in spending. RESULTS: Unadjusted Medicare spending per beneficiary was 52% higher in geographic regions in the highest spending quintile than in regions in the lowest quintile. After adjustment for demographic and baseline health characteristics and changes in health status, the difference in spending between the highest and lowest quintiles was reduced to 33%. Health status accounted for 29% of the unadjusted geographic difference in per-beneficiary spending; additional adjustment for area-level differences in the supply of medical resources did not further reduce the observed differences between the top and bottom quintiles. CONCLUSIONS: Policymakers attempting to control Medicare costs by reducing differences in Medicare spending across geographic areas need better information about the specific source of the differences, as well as better methods for adjusting spending levels to account for underlying differences in beneficiaries' health measures.

Creating a parsimonious typology of physician financial incentives.

In order to create an empirically derived parsimonious typology of physician financial incentives that will be useful for future research, we used data from the nationally representative 2004-2005 Community Tracking Study Physician Survey (N = 6,628). Linear regression analyses informed by economic theory were used to identify the combinations of incentives associated with an overall financial incentive to expand services to individual patients. The approach was validated using two nonparametric methods (CART analysis and data mining techniques) and by examining the relationship between the resulting typology and other measures of physician behavior including hours worked, visit volume, and specialty-adjusted income. Of the 6,628 physicians surveyed, approximately 25% (1,605) reported an overall incentive to increase services and 75% (5,023) reported either neutral incentives or incentives to decrease services. Men, who were approximately 75% of respondents, were slightly more likely to report incentives to increase services (P < 0.05). There were no differences in reported incentives according to specialty. We created two typologies (one with eleven categories and the other with a collapsed set of six categories) based on combinations of variables measuring ownership, base compensation methods, and financial incentives. The percentage with an overall incentive to increase services ranges from 6% for employed physicians compensated via fixed salary to 36.7% for owners in low capitation environments with either individual or practice level productivity incentives. The criterion validity of the typology was established by examining the relationship with adjusted physician income, hours worked, and visit volume, which showed generally consistent relationships in the expected direction. A parsimonious typology consisting of six mutually exclusive groups reasonably captures the continuum of incentives to increase service delivery experienced by physicians.

Medicare fees and the volume of physicians' services.

This paper estimates the relationship between Medicare fees and quantities provided by physicians for eight specific services. It uses data for 13,707 physicians who responded to surveys in 2000/2001 and/or 2004/2005 and were linked to all Medicare claims for their Medicare patients. Results show that Medicare fees are positively related to quantity provided for all eight services, and are significantly different from zero and elastic for five of them. The findings are consistent with the general economic proposition that supply curves for medical services are positively sloped, and provide no evidence of volume-offset behavior for the services examined. These results also imply that Medicare could influence volume growth for specific services by varying their fee changes, and that uniform fee changes will have differential effects on service volume because of variation in underlying supply elasticities.

Covering the uninsured in 2008: current costs, sources of payment, and incremental costs.

People uninsured for any part of 2008 spend about $30 billion out of pocket and receive approximately $56 billion in uncompensated care while uninsured. Government programs finance about 75 percent of uncompensated care. If all uninsured people were fully covered, their medical spending would increase by $122.6 billion. The increase represents 5 percent of current national health spending and 0.8 percent of gross domestic product. However, it is neither the cost of a specific plan nor necessarily the same as the government's costs, which could be higher, depending on plans' financing structures and the extent of crowd-out.

Effects of changes in incomes and practice circumstances on physicians' decisions to treat charity and Medicaid patients.

CONTEXT: The decline over the past decade in the percentage of physicians providing care to charity and Medicaid patients has been attributed to both financial pressure and the changing practice environment. Policymakers should be concerned about these trends, since private physicians are a major source of medical care for low-income persons. This study examines how changes in physicians' practice income, ownership, and size affect their decisions to stop or start treating charity care and Medicaid patients. METHODS: This study uses panel data from four rounds of the Community Tracking Study Physician Survey. The dependent variables are the likelihood of physicians' (1) dropping charity care, (2) starting to provide charity care, (3) no longer accepting new Medicaid patients, and (4) starting to accept new Medicaid patients. The primary independent variables are changes in physicians' practice income, ownership, and practice type/size. Multivariate analysis controls for the effects of other physician practice characteristics, health policies, and health care market factors. FINDINGS: A decline in physicians' income increased the likelihood that a physician would stop accepting new Medicaid patients but had no effect on his or her decision to provide charity care. Those physicians who switched from being owners to employees or from small to larger practices were more likely to drop charity care and to start accepting Medicaid patients, and physicians who made the opposite practice changes did the reverse. CONCLUSIONS: Changes in their income and practice arrangements make physicians less willing to accept Medicaid and uninsured patients. Moreover, physicians moving into different practice arrangements treat charity and Medicaid patients as substitutes rather than as similar types of patients. To reverse these trends, policymakers should consider raising Medicaid reimbursement rates and subsidizing organizations that encourage private physicians to provide charity care.

Why do Hispanics have so little employer-sponsored health insurance?

This paper investigates low rates of employer health insurance coverage among Hispanics using national data from the Community Tracking Study Household Survey. Interview language served as a proxy for the degree of assimilation. Findings indicate that English-speaking Hispanics are more similar to whites in their labor market experiences and coverage than they are to Spanish-speaking Hispanics. Spanish-speakers' very low human capital (including their inability to speak English) results in much less access to job-based insurance. Though less important, Spanish-speaking Hispanics' demand for employer-sponsored insurance appears lower than that of English-speaking Hispanics or whites. Results suggest that language and job training may be the most effective way to bolster Hispanics' insurance coverage.

Differences between symptom-specific and general survey questions of unmet need in measuring insurance and racial/ethnic disparities in access to care.

OBJECTIVE: To examine differences in insurance and racial/ethnic disparities in access to care between a single-item measure of general unmet medical need and a multi-item measure of symptom-specific unmet medical need. DATA SOURCE: The 2003 Community Tracking Study Household Survey, which included both a single question about any unmet medical needs over the last year, and a measure of unmet medical need keyed to the recent occurrence of 1 of 15 symptoms that a panel of physicians considered serious enough to warrant seeking medical care. STUDY DESIGN/METHODS: We constructed 3 measures of unmet need (general perceived unmet need, perceived unmet need for a specific new symptom, and actual unmet need for the new symptom). We used multivariate logistic regression analysis to determine whether the measures have similar implications for access disparities by insurance status and by race/ethnicity, while controlling for income, health, and other sociodemographic characteristics. PRINCIPAL FINDINGS: Uninsured people are consistently more likely than privately insured people to have unmet medical needs across the 3 measures of unmet need, and these differences were not due to differences in the perceived need for care. However, racial/ethnic disparities were apparent only for the symptom-specific measures of unmet need, and not the general measure of unmet need. CONCLUSIONS: Using a symptom-specific measure of unmet medical need is probably not worth the added survey complexity and cost if the primary objective is to measure access disparities by insurance coverage. However, a general measure of unmet medical needs may not adequately capture racial/ethnic disparities in access.

Setting a standard of affordability for health insurance coverage.

Recently, Massachusetts passed landmark legislation designed to expand health insurance coverage. This legislation includes a requirement that all adults enroll in a health insurance plan. This mandate takes effect only if an "affordable" plan is available. The definition of affordability for individuals and families of different incomes or circumstances is a critical decision in implementation and is relevant to any state or federal reform requiring individual premium or cost-sharing contributions, or both. This analysis was done to assist the policy design process in Massachusetts and delineates an empirically based approach to setting affordability standards.

Identifying affordable sources of medical care among uninsured persons.

OBJECTIVE: To examine the effects of policy, health system, and sociodemographic characteristics on the likelihood that uninsured persons pay a lower price at their regular source of care, or that they are aware of lower priced providers in their community. DATA SOURCES: The 2003 Community Tracking Study household survey, a nationally representative sample of the U.S. population and 60 randomly selected communities. STUDY DESIGN: The survey asked uninsured persons if they paid full or reduced cost at their usual source of medical care, or if they were aware of providers in their community that charge less for uninsured people. We use binomial and multinomial logistic regression analysis to examine the effects of various policy, health system, and sociodemographic characteristics on use and awareness of lower priced providers. We focus especially on the effects of safety-net capacity, measured by safety-net hospitals, community health centers, physicians' charity care, and Community Access Program (CAP) grants. PRINCIPAL FINDINGS: Less than half of the uninsured (47.5 percent) reported that they used or were aware of a lower priced provider in their community. Multivariate regression analysis shows that greater safety-net capacity is associated with a higher likelihood of having a lower priced provider as the regular source of care and greater awareness of lower priced providers. Lower incomes and racial/ethnic minorities also had a higher likelihood of having a lower priced provider, although health status did not have statistically significant effects. CONCLUSION: Although increased safety-net capacity may lead to more uninsured having a lower priced provider, many uninsured who live near safety-net providers are not aware of their presence. Greater outreach designed to increase awareness may be needed in order to increase the effectiveness of safety-net providers in improving access to care for the uninsured.