The cost and cost-effectiveness of an enhanced intervention for people with substance abuse problems at risk for HIV.

OBJECTIVE: To estimate the costs, effectiveness, and cost-effectiveness of prevention interventions for out-of-treatment substance abusers at risk for HIV. This is the first cost-effectiveness study of an AIDS intervention that focuses on drug use as an outcome. STUDY DESIGN: We examined data from the North Carolina Cooperative Agreement site (NC CoOp). All individuals in the study were given the revised NIDA standard intervention and randomly assigned to either a longer, more personalized enhanced intervention or no additional intervention. We estimated the cost of each intervention and, using simple means analysis and multiple regression models, estimated the incremental effectiveness of the enhanced intervention relative to the standard intervention. Finally, we computed cost-effectiveness ratios for several drug use outcomes and compared them to a "back-of-the-envelope" estimate of the benefit of reducing drug use. PRINCIPAL FINDINGS: The estimated cost of implementing the standard intervention is $187.52, and the additional cost of the enhanced intervention is $124.17. Cost-effectiveness ratios range from $35.68 to $139.52 per reduced day of drug use, which are less than an estimate of the benefit per reduced drug day. CONCLUSIONS: The additional cost of implementing the enhanced intervention is relatively small and compares favorably to a rough estimate of the benefits of reduced days of drug use. Thus, the enhanced intervention should be considered an important additional component of an AIDS prevention strategy for out-of-treatment substance abusers.

Expectations among the elderly about nursing home entry.

OBJECTIVE: To assess whether the covariates that explain expectations of nursing home entry are consistent with the characteristics of those who enter nursing homes. DATA SOURCES: Waves 1 and 2 of the Assets and Health Dynamics Among the Oldest Old (AHEAD) survey. STUDY DESIGN: We model expectations about nursing home entry as a function of expectations about leaving a bequest, living at least ten years, health condition, and other observed characteristics. We use an instrumental variables and generalized least squares (IV-GLS) method based on Hausman and Taylor (1981) to obtain more efficient estimates than fixed effects, without the restrictive assumptions of random effects. PRINCIPAL FINDINGS: Expectations about nursing home entry are reasonably close to the actual probability of nursing home entry. Most of the variables that affect actual entry also have significant effects on expectations about entry. Medicaid subsidies for nursing home care may have little effect on expectations about nursing home entry; individuals in the lowest asset quartile, who are most likely to receive these subsidies, report probabilities not significantly different from those in other quartiles. Application of the IV-GLS approach is supported by a series of specification tests. CONCLUSIONS: We find that expectations about future nursing home entry are consistent with the characteristics of actual entrants. Underestimation of risk of nursing home entry as a reason for low levels of long-term care insurance is not supported by this analysis.

Is provider capitation working? Effects on physician-hospital integration and costs of care.

BACKGROUND: Capitation holds health providers fiscally responsible for the services they deliver or arrange and thus provides strong motivation for physicians and hospitals to integrate activities and reduce costs of care. OBJECTIVES: The objective of this study was to assess 2 potential effects of capitation: (1) its effects on the integration of functional, financial, and clinical processes between hospitals and physicians and (2) its effects, in conjunction with process integration, on hospital costs. STUDY DESIGN: We studied a 1995 American Hospital Association (AHA) special survey that has information on 44 different physician-hospital integrative activities and on global capitation contracts held by management service organizations, physician-hospital organizations, and other similar entities. These data were combined with the AHA's Annual Survey of Hospitals, InterStudy HMO data, the area resource file, and state regulation data. Multivariate analysis was used to assess the relationship between capitation and integration and then to examine the influence of these factors and others on hospital costs. We studied 319 urban hospitals with complete data. FINDINGS: Provider capitation was found to promote integration between hospitals and physicians in relation to administrative/practice management, physician financial risk sharing, joint ventures to create new services, computer linkages, and an overall measure of physician-hospital integration. However, anticipated effects of integration and capitation on hospital costs were not evident. CONCLUSIONS: Global capitation is motivating tighter integration between physicians and hospitals in a number of respects. Although capitation is currently having the intermediate effect of encouraging process integration, it is not yet having the ultimate anticipated effect of lowering hospital costs.

Healthcare use among U.S. women aged 45 and older: total costs and costs for selected postmenopausal health risks.

The purpose of this study is to estimate the level of healthcare use and costs incurred by postmenopausal women overall and for these selected conditions: cardiovascular disease, osteoporosis, breast cancer, and gynecological cancers. National healthcare survey and discharge data were used to estimate healthcare use by women aged 45 and older. Clinical Classification for Health Policy Research (CCHPR) codes were used to identify patients whose primary diagnosis or procedure corresponded with the selected conditions. National weights were used to estimate resource use. Treatment costs were estimated using cost/charge ratios or the Medicare fee schedule to calculate costs for each individual procedure. Estimated total annual medical care treatment costs for women 45 and older were about $186 billion in 1997 dollars, including about $60.4 billion for cardiovascular disease, $12.9 billion for osteoporosis, and $5.0 billion for breast and gynecological cancers. For each condition, estimated resource use and costs are reported for hospitalization, outpatient, nursing home, and home healthcare services. Resource use and costs are also reported by age and expected source of payment. The economic burden of disease for conditions commonly affecting postmenopausal women is substantial. Prior research establishes that hormone replacement therapy (HRT) may be effective in reducing the burden of disease among women who continue preventive therapy for many years, but few at-risk women do so. New alternatives for prevention, such as selective estrogen receptor modulators (SERMs), may be effective in reducing the burden of disease among postmenopausal women.

A prospective cost-consequence analysis of adding lamivudine to zidovudine-containing antiretroviral treatment regimens for HIV infection in the US.

BACKGROUND: Healthcare resource use data were collected for 1 year as part of the CAESAR (Canada, Australia, Europe, South Africa) clinical trial, which evaluated the effect of adding lamivudine to treatment regimens containing zidovudine in patients with HIV infection. This study showed that lamivudine-containing regimens reduced HIV disease progression to AIDS or death, in addition to significantly reducing the number of hospital stays, unscheduled outpatient visits, and medications for HIV-related illness. Estimates of US unit costs for each healthcare service were derived from nationally representative data sources, and were used to determine the costs of treatment during the trial period for the treatment and control groups. RESULTS: A cost-consequence analysis showed that, in addition to the health benefits associated with the lamivudine regimen, costs for treating HIV-related illness and adverse events were lower with the lamivudine regimen. The average decrease in costs per patient for the 1-year period ranged from $US1922 to $US2645, depending on the data source used to estimate hospital length of stay. The incremental cost of lamivudine therapy for the 1-year period was $US2293. The estimated difference in total costs for the 2 treatment regimens thus ranged from an increase of $US371 to a cost saving of $US353. CONCLUSIONS: Our findings indicate that treatments which slow the progression of HIV infection have the potential to reduce the monthly costs associated with HIV-related illness and adverse events during the time period that progression is slowed.

Cost-shifting in manged care.

We conducted a study of the change from fee-for-service to managed care for mental health services in the Massachusetts Medicaid program, which occurred in fiscal year 1993. We estimated the effect of managed care on total public expenditures over both the short and the long term. Per person expenditures were lower by 24% in the first year of managed care but only lower by 5% in the second and third years. We also tested for cost-shifting by estimating expenditures for five specific services paid by three public agencies. Expenditures on services paid by the managed care vendor decreased, expenditures paid by Medicaid increased, and expenditures paid by the Department of Mental Health decreased. We discuss the implications for both cost-shifting and quality of care improvements. The results from two-part expenditure models indicate that some cost-shifting may be related to quality improvement. The effects are generally stronger for the beneficiaries in the highest quartile of expenditures.

Controlling for the endogeneity of peer substance use on adolescent alcohol and tobacco use.

This study examines whether the effects of peer substance use on adolescent alcohol and tobacco use are due to endogeneity of adolescents selecting their peer group. We analyzed data collected for a longitudinal analysis of a drug-use prevention programme for upper elementary school students. We used a two-step probit regression to control for the potentially endogenous explanatory variable peer substance use. Rigorous tests of endogeneity and the validity of the instrumental variables showed that controlling for the endogeneity of peer substance use to reduce bias is not worth the reduction in mean squared error in these data. Peer substance use has a positive and significant effect on adolescent substance use for both drinking and smoking. These results imply that peer influence is empirically more important than peer selection (endogeneity) in our sample of adolescents in grades 6-9. Living in a single-parent family was by far the strongest predictor of adolescent drinking and smoking.

Medicare's demonstration of competitive bidding for clinical laboratory services: what it means for clinical laboratories.

The purpose of Medicare's Demonstration of Competitive Bidding for Clinical Laboratory Services is to determine whether competitive bidding can be used to provide quality laboratory services at prices below current Medicare reimbursement rates. Here, we present key features of the preliminary design for the demonstration. The following areas are covered: scope of the demonstration, bidding process, selection of winners, reimbursement, quality, and administration and monitoring. The role of the Health Care Financing Administration's Laboratory Technical Advisory Committee is also described, and the future of competitive bidding in a Medicare managed care environment is evaluated. We close with some brief comments on how to succeed in competitive bidding for Medicare services.

How managed care organizations develop selective contracting networks for psychiatric inpatient care: a Massachusetts case study.

Medicaid agencies recently have adopted selective contracting to control use and costs of publicly financed behavioral health care. This case study describes formation of an inpatient network for serving psychiatrically disabled Medicaid beneficiaries in Massachusetts. Network formation is seen as a two-stage process: hospitals first decide to bid for a contract, and form a pool from which the managed care organization chooses hospitals. We used logit models to predict how hospital experience with Medicaid patients, competition, prior reimbursement rates, and geographic distribution affected these two stages. Hospitals are more likely to bid if they have treated more psychiatric inpatients and more disabled Medicaid inpatients receiving Supplemental Security Income. Managed care organizations take into account hospitals' experience with Medicaid patients and geographic dispersion, but not prior reimbursement rates.

Cost shifting in a mental health carve-out for the AFDC population.

This study tests whether the managed care vendor shifted costs to Medicaid-reimbursed medical care after the start of the mental health carve-out for the Aid to Families with Dependent Children (AFDC) population in Massachusetts. We used claims data over a 4-year period to estimate expenditures for four types of health services, two of which were paid for by the managed care vendor and two by Medicaid. Total per person public expenditures declined by only about 3 percent. Inpatient psychiatric services were replaced by outpatient psychiatric services and some pharmaceuticals, but overall there was little or no evidence of cost shifting to the medical sector. These results are in contrast to what was found in a sample of Medicaid beneficiaries eligible due to a mental health disability.

School and neighborhood characteristics associated with school rates of alcohol, cigarette, and marijuana use.

Previous research has noted that schools vary in substance use prevalence rates, but explanations for school differences have received little empirical attention. We assess variability across elementary schools (N = 36) in rates of early adolescent alcohol, cigarette, and marijuana use. Characteristics of neighborhoods and schools potentially related to school prevalence rates are examined, as well as whether these characteristics have independent effects or whether neighborhood characteristics are mediated by school characteristics. Neighborhood and school characteristics were measured using student, parent, and archival data. The findings show substantial variation across schools in substance use. Attributes of neighborhoods and schools are statistically significantly related to school rates of lifetime alcohol use, lifetime cigarette use, and current cigarette use. Contrary to expectations, lifetime alcohol and cigarette use rates are higher in schools located in neighborhoods having greater social advantages as indicated by the perceptions of residents and archival data. Neighborhood effects are expressed both directly and indirectly through school characteristics. The findings are discussed in light of contagion and social disorganization theories.