Newness of drugs and use of HMO services by asthma patients.

OBJECTIVE: To define newness of drug technology and show associations between two measures of newness and health service utilization. METHODS: Healthcare use and changes in severity at each office visit were assessed for 1309 asthma patients from six health maintenance organizations (HMOs) during 1992. The age of each drug product, derived by subtracting its Food and Drug Administration (FDA) approval date from January 1, 1992, was used to construct two newness measures: the average age of all asthma drugs and, separately, all non-asthma drugs a patient used during the year and the percentages of a patient's asthma drugs from each of four time intervals of asthma drug breakthroughs. Service utilization variables included all primary care provider (PCP) visits, total prescription costs, emergency department (ED) visits, and hospitalizations. RESULTS: Using either measure of drug newness, multivariate analyses showed an association between greater use of newer asthma drugs and lower overall drug costs and fewer PCP visits. A trend was found between greater use of newer asthma drugs and fewer hospitalizations and ED visits. Newer non-asthma medications were associated with fewer ED visits. CONCLUSIONS: After controlling for patient and site variables, greater use of newer asthma drugs was associated with significantly lower drug costs and fewer PCP visits; associations with hospitalization rates and ED visits, although lower, were not significant.

Opportunities and challenges in Medicaid managed care: the experience in Maryland.

OBJECTIVE: The effects of the Maryland Medicaid mandatory managed care programs on Medicaid beneficiaries are examined with the main objective of gaining insight into the initial experience and beneficiary satisfaction with Maryland's Medicaid program. The background of the Maryland Medicaid system, initial implementation, results of beneficiary satisfaction surveys, and future concerns are discussed. STUDY DESIGN: An observational study based on survey data. DATA AND METHODS: Beneficiary surveys mailed to adult and child participants in HealthChoice and the Rare and Expensive Case Management (REM) Medicaid programs in Maryland are analyzed. Descriptive univariate and bivariate data statistics are used. RESULTS: The 4 questions rating satisfaction with primary care provider (PCP), relevant specialists, all providers, and the overall health plan indicate high levels of satisfaction in both adult and child populations. CONCLUSIONS: The Maryland Medicaid programs appear to have met the goal of providing a comprehensive, coordinated healthcare system of quality care during their first year of operation. The satisfaction of these beneficiaries suggests that with an appropriate risk-adjusted capitation approach, managed care organizations (MCOs) can successfully provide for even the most complex needs of Medicaid members.

Continuity of care: is it cost effective?

OBJECTIVE: To examine the association between the degree of healthcare provider continuity and healthcare utilization and costs. STUDY DESIGN: A longitudinal, prospective, observational study. PATIENTS AND METHODS: Data on patients with arthritis, asthma, epigastric pain/peptic ulcer disease, hypertension, and otitis media were collected at each of 6 health maintenance organizations (HMOs). Outcome variables included the number of prescriptions for the target disease and the cost, total number of prescriptions and the cost, the number of outpatient visits, and the number of hospital admissions. Disease-specific severity of illness, type of visit, and provider information were obtained at each encounter. HMO profit status, visit copay, gatekeeper strictness, formulary limitations, use of multisource (generic) drugs, gender, number of months in the study, age, and severity of illness were controlled in the analyses. RESULTS: There were 12,997 patients followed for more than 99,000 outpatient visits, 1000 hospitalizations, and more than 240,000 prescriptions. Increasing the number of primary or specialty care providers a patient encountered during the study generally was associated with increased utilization and costs when HMO and patient characteristics were controlled. The number of specialty care providers also increased as the number of primary care providers increased. The incremental increase in pharmacy costs per patient per year with each additional provider ranged between $19 in subjects with otitis media to $58 in subjects with hypertension. CONCLUSIONS: Continuity of care was associated with a reduction in resource utilization and costs. As healthcare delivery systems are designed, care continuity should be promoted.

Formulary limitations and the elderly: results from the Managed Care Outcomes Project.

OBJECTIVE: To examine whether restrictive formularies are associated with differences in healthcare resource utilization, including number of office visits, prescriptions, and hospitalizations, and whether this association varies by age. STUDY DESIGN: Cross-sectional, longitudinal study. PATIENTS AND METHODS: Patients enrolled in one of six health maintenance organizations in six different states, three in the eastern and three in the western United States, were eligible for the study. Data from between 1309 and 3938 patients were available for analysis for each of the five diseases studied, for a total of 12,997 patients across all study diseases. Healthcare utilization by patients in the study included more than 99,000 office visits, 1000 hospitalizations, and 240,000 prescriptions. We used severity-adjusted prescription counts, prescription costs, office visit counts, and measures of inpatient hospital utilization to assess the effects of formulary limitations. RESULTS: We found positive, significant associations between the independent variable formulary limitations in drug class and the dependent variables measuring resource utilization. These associations were sometimes significantly greater for elderly patients after controlling for severity of illness and other variables. CONCLUSIONS: Common strategies for decreasing drug expenditures may be associated with higher severity-adjusted resource utilization. In specific areas, this association is more pronounced in the elderly.

Postoperative management of cataract surgery patients by ophthalmologists and optometrists.

OBJECTIVES: To assess the frequency and content of post-operative examinations by ophthalmologists and optometrists for cataract surgery patients without operative complications and to assess the referral patterns of optometrists when complications are identified. DESIGN: In 1992 we conducted a survey of randomly selected members of the American Academy of Ophthalmology and American Optometric Association. Responses were obtained from 538 (82%) of 655 eligible ophthalmologists and 130 (84%) of 154 eligible optometrists. RESULTS: Eighty-eight percent of responding ophthalmologists reported that patients had 4 or more visits within 4 months after surgery, 97% of ophthalmologists performed the first postoperative examination on their cataract surgery patients, and 60% of ophthalmologists reported that no other eye professional saw their patients postoperatively. Forty-six percent of responding optometrists participated in postoperative care of cataract surgery patients, and usually performed their first postoperative examination 7 days after surgery; 78% of these optometrists reported that they saw patients 3 or more times after surgery. Postoperatively, 83% of ophthalmologists and 75% of optometrists usually performed at least 1 dilated fundus examination, 87% of ophthalmologists and 47% of optometrists performed 4 or more slit-lamp examinations, 74% of ophthalmologists and 42% of optometrists performed 4 or more tonometry tests, and 83% of both groups performed 2 or more refractions. More than 80% of responding optometrists involved in postoperative care of cataract surgery patients immediately refer a patient to an ophthalmologist if there is evidence of acute glaucoma or an unexplained decrease in vision in the eye that was operated on. For less urgent complications, most optometrists promptly make a referral to an ophthalmologist. CONCLUSIONS: In 1992, a small percentage of ophthalmologists and optometrists were performing fewer follow-up examinations and tests for cataract patients than recommended by the American Academy of Ophthalmology. Not all optometrists immediately refer to an ophthalmologist any acute complication that they identify postoperatively.

Do ophthalmologists, anesthesiologists, and internists agree about preoperative testing in healthy patients undergoing cataract surgery?

To assess variation in reported use of preoperative medical tests in patients undergoing cataract surgery and to identify factors that influence test use by different physician groups we performed a national survey of ophthalmologists, anesthesiologists, and internists. Participants included randomly selected members of American professional societies who provided care to one or more patients undergoing cataract surgery in 1991. Responses were obtained from 538 (82%) of 655 eligible ophthalmologists, 109 (76%) of 143 anesthesiologists, and 54 (44%) of 122 internists. Fifty percent of ophthalmologists, 40% of internists, and 33% of anesthesiologists frequently or always obtained a chest x-ray film, while 20% of ophthalmologists, 27% of internists, and 37% of anesthesiologists never obtained a chest x-ray film for patients being considered for cataract surgery who had no history of major medical problems (P < .01 for differences between ophthalmologists and the other groups). Similarly, 70% to 90% of ophthalmologists, 73% to 79% of internists, and 41% to 79% of anesthesiologists frequently or always obtained a complete blood cell count, electrolyte panel, and electrocardiogram, while 4% to 11% of ophthalmologists, 13% to 17% of internists, and 9% to 28% of anesthesiologists never obtained these tests for such patients. Many respondents (32% to 80%) believed tests were unnecessary but cited multiple reasons for obtaining tests (eg, medicolegal concerns and institutional requirements). Many physicians in each group viewed preoperative evaluations as screening opportunities or believed that one of the other two types of physicians "required" tests. We conclude that marked variation exists within and across physician specialties in the use and rationale for use of medical tests in patients undergoing cataract surgery.

Effect of patient factors on hospital costs for major bowel surgery: implications for managed health care.

BACKGROUND: We examined the effects of patient factors on hospital resource consumption for patients who had undergone major bowel operation (diagnosis-related groups [DRGs] 148 and 149) at an urban, university hospital. METHODS: We performed cross-sectional analysis of computerized hospital discharge abstracts and charts of 491 consecutive discharges in these DRGs. Total hospital charges and length of stay were dependent variables. Independent variables included admission status, admission service, previous admissions, payer type, service type, diagnosis, reoperation, and death. RESULTS: Patient factors accounted for significant variability in resource consumption. By univariate analysis all of the above variables significantly affected total charges, and all but service type significantly affected length of stay. By multivariate analysis DRGs 148/149 alone explained 4.2% of the variance, whereas all the variables together increased R2 to 52.1%. Logistic regression of reoperation and of death as dependent variables suggested that patient factors also accounted for significant variance in these outcomes. CONCLUSIONS: Because patient factors may not be directly controllable by hospitals or physicians, differences among hospitals in costs and in "quality" may relate more to differences in patient mix than to efficiency. DRGs alone are not a sufficient management tool, and additional measures are needed to adequately measure both efficiency and quality.

The content and cost of cataract surgery.

Although more than 1 million cataract surgeries are performed annually in the United States, little is known about the frequency of use or cost of various services provided in connection with this procedure. To assess the frequency with which various ophthalmic, optometric, anesthesia, and medical services are provided in conjunction with cataract surgery and to estimate the cost to Medicare associated with those services, we analyzed 1985 through 1988 Medicare claims records of a nationally representative 5% sample of Medicare beneficiaries. The experience of 57,103 Medicare beneficiaries who underwent extracapsular cataract surgery in 1986 or 1987 that was not combined with another ophthalmologic procedure formed the basis of our analysis. Projections for current costs were performed using 1991 charges allowed by Medicare for physician services. We estimate that the median charge allowed by Medicare for a "typical" episode of cataract surgery in 1991 was approximately $2500. In addition to the $3.4 billion that Medicare spent in 1991 on such "typical" episodes, Medicare spent more than $39 million on miscellaneous "atypical" preoperative ophthalmologic tests, such as specular microscopy (14% of cases) and potential acuity testing (8% of cases), more than $7 million on postoperative ophthalmologic diagnostic tests, such as fluorescein angiography (3% of cases), and more than $18 million on perioperative medical services (most commonly electrocardiography and chest roentgenography). The major determinants of the cost to Medicare associated with cataract surgery are the rate of performance of cataract surgery and neodymium-YAG laser capsulotomy and the charges allowed for these procedures.(ABSTRACT TRUNCATED AT 250 WORDS)

Classifying patients with burns for hospital reimbursement: diagnosis-related groups and modifications for severity.

This study was designed to evaluate the relative severity and resource consumption of hospitalized patients with burns in a national cross section of hospitals, both with and without burn centers. We investigated to determine whether clinical variables or severity of illness measures not recorded in the Uniform Hospital Discharge Data Set are significant in explaining variation in length of stay, total cost, and mortality for patients with burns. The ability of the six burn diagnosis-related groups (DRGs) to explain variation in patients' length of stay was 20% and their ability to predict total costs was 24%. For the same patient population, the explanatory power of the DRGs improved to 54% for length of stay and 44% for costs when these variables were adjusted by the Severity of Illness Index. We also investigated whether hospitals with burn centers treated a more severely ill population of patients with burns than did hospitals without such centers. Significantly higher levels of severely ill patients with burns (p less than or equal to 0.0001) were found at burn center hospitals. Other patients or treatment variables, combined with a case-mix severity measure, were evaluated for their ability to further increase the explanatory power of DRGs. We also discuss here the use of the study results for reevaluating reimbursement policy.

The relationship between severity of illness and hospital length of stay and mortality.

To address the question of quantification of severity of illness on a wide scale, the Computerized Severity Index (CSI) was developed by a research team at the Johns Hopkins University. This article describes an initial assessment of some aspects of the validity and reliability of the CSI on a sample of 2,378 patients within 27 high-volume DRGs from five teaching hospitals. The 27 DRGs predicted 27% of the variation in LOS, while DRGs adjusted for Admission CSI scores predicted 38% and DRGs adjusted for Maximum CSI scores throughout the hospital stay predicted 54% of this variation. Thus, the Maximum CSI score increased the predictability of DRGs by 100%. We explored the impact of including a 7-day cutoff criterion along with the Maximum CSI score similar to a criterion used in an alternative severity of illness measure. The DRG/Maximum CSI score's predictive power increased to 63% when the 7-day cutoff was added to the CSI definition. The Admission CSI score was used to predict in-hospital mortality and correlated R = 0.603 with mortality. The reliability of Admission and Maximum CSI data collection was high, with agreement of 95% and kappa statistics of 0.88 and 0.90, respectively.

Psychiatric severity of illness. A case mix study.

This study was undertaken to determine if a measure of severity of illness for psychiatric patients, the Psychiatric Severity of Illness Index, could produce psychiatric case mix groups that are more homogeneous with respect to resource use than the diagnosis-related groups (DRGs). Psychiatric Severity of Illness data were collected on 1,672 cases in ten hospitals of various types. Of these cases, 1,418 had enough information in the medical record to be scored using the Psychiatric Severity Index, 1,173 of which were in MDC 19 (mental diseases and disorders). We found that four Psychiatric Severity of Illness groups explained between 34% and 50% of the variation in length of stay of the combined hospital data in MDC 19, whereas nine DRGs explained between 6% and 14%. DRGs subdivided by Psychiatric Severity of Illness groups explained between 40% and 54% of the variation in length of stay. The implications of these results for cross-hospital comparisons are discussed.

Severity of illness within DRGs. Homogeneity study.

The authors assess the ability of the Severity of Illness Index to explain variability of resource use within each DRG. The data came from 15 hospitals, all of which had a HCFA DRG case mix index greater than 1. The data set comprised approximately 106,000 discharges, for which discharge abstract data, financial data, and Severity of Illness data were available. To pool the data over the 15 hospitals, the authors converted all charges to costs and normalized them to fiscal year 1983. Adjustments were also made for medical education and wage levels. The Severity of Illness Index explained more than 10% of the variability in resource use in 94% of the DRGs, which contained 97% of the patients, and more than 50% of the variability in resource use in 36% of the DRGs, which contained 24% of the patients. For the whole data set, DRGs explained 28% of the variability in resource use, and severity-adjusted DRGs explained 61% of the variability in resource use. Thus the Severity of Illness Index explained a large amount of the variability in resource use within individual DRGs as well as in the whole data set. This explanatory power remained when outliers were removed. These results go beyond previous studies that were based on six disease conditions and/or were analyzed only within individual hospitals. The findings indicate that the phenomenon of severity of illness differences within DRGs, and the corresponding differences in resource use, is consistent across 15 hospitals that represent all sections of the United States and all teaching types.

Misclassification problems in diagnosis-related groups. Cystic fibrosis as an example.

Under the Medicare prospective payment system, which is based on diagnosis-related groups, patients with certain diseases may be inappropriately classified. To study this problem using cystic fibrosis as an example, we examined discharge-abstract data from 14 cystic fibrosis centers in a comparison of resource-use requirements by patients with cystic fibrosis and other patients in the same diagnosis-related group. There were 1763 patients with cystic fibrosis and 25,628 other patients in the 87 diagnosis-related groups that contained at least one patient with cystic fibrosis. For the eight diagnosis-related groups in which patients with cystic fibrosis were classified most often, the average length of stay of patients with cystic fibrosis was 14.9 days, as compared with an average of 8.3 days for the other patients (P less than 0.001). For three hospitals, we were able to convert charges to costs. The average cost of treating patients with cystic fibrosis was $7,262, as compared with $2,908 for all other patients in the same diagnosis-related group (P less than 0.001). The ratio between the costs of treating patients with cystic fibrosis and other patients (2.5) was greater than the ratio between the lengths of stay for the two groups (1.8), reflecting the more intense use of resources by the patients with cystic fibrosis. A possible solution to the problem of misclassification is to define one or more new diagnosis-related groups for cases of cystic fibrosis or determine a new location within the diagnosis-related group system so that patients with cystic fibrosis can be classified with patients who use similar amounts of resources.

Severity of illness within DRGs: impact on prospective payment.

This study compares the financial impact of a Diagnosis Related Group (DRG) prospective payment system with that of a Severity of Illness-adjusted DRG prospective payment system. The data base of about 106,000 discharges is from 15 hospitals, all of which had a Health Care Financing Administration (HCFA) DRG case mix index greater than 1. In order to pool the data over the 15 hospitals, all charges were converted to costs, normalized to Fiscal Year 1983, and adjusted for medical education and wage levels. The findings showed that, for the study population as a whole, DRGs explained 28 per cent of the variability in resource use per case while Severity of Illness-adjusted DRGs explained 61 per cent of the variability in resource use per case. When we simulated prospective payment systems based on DRGs and on Severity-adjusted DRGs, we found that the financial impact of the two systems differed by very little in some hospitals and by as much as 35 per cent of total operating costs in other hospitals. Thus, even with a data set that is relatively homogeneous (with respect to the HCFA DRG case mix index definition of hospitals), we found substantial inequities in payment when DRGs were not adjusted for Severity of Illness. These findings suggest that, with a more representative set of hospitals, the difference between unadjusted and Severity-adjusted DRG-based prospective payment could be greater than 35 per cent of a hospital's total operating costs.

Interhospital differences in severity of illness. Problems for prospective payment based on diagnosis-related groups (DRGs).

We evaluated the ability of the diagnosis-related-group (DRG) classification system to account adequately for severity of illness and, by implication, for the costs of medical care. Hospital inpatients on medicine, surgery, obstetrics/gynecology, and pediatrics services in six hospitals were evaluated to provide a spectrum of patient and hospital characteristics. This evaluation was based on data from a generic index of severity of illness obtained by trained personnel from a review of hospital charts after patient discharge. Within each DRG, substantial differences were found in the distribution of severity of illness in different hospitals. Some hospitals treated larger proportions of severely ill patients and had a wide range of severity within each DRG, but these differences did not always agree with the teaching classification or the Health Care Financing Administration's case-mix index. These findings suggest that patient classification by means of unadjusted DRGs does not adequately reflect severity of illness, and they indicate that prospective payment programs based on DRGs alone may unfairly and adversely discriminate against certain hospitals.

The Severity of Illness Index as a severity adjustment to diagnosis-related groups.

This article discusses the Severity of Illness case-mix groups, and suggests a refinement to diagnosis-related groups (DRG's) designed to accommodate the important element of patient severity. An application of the suggested refinement is presented in a discussion of the efficient production of hospital services. The following areas are addressed. A brief summary of the goals and development of the Severity of Illness Index, and the methodology used to collect severity of illness data on hospital inpatients. Comparative analyses of the resulting case-mix groups within hospitals, and an application of severity-adjusted diagnosis-related groups case-mix definitions. The contribution of the variation in physician practice patterns to the variation in resource use per patient within a hospital. Cross-hospital comparisons. Some of the consequences of incorporating a patient severity refinement into the prospective payment system.

Measuring severity of illness to predict patient resource use within DRGs.

We describe a new Severity of Illness Index which predicts patient resource use within DRGs and within broad diagnostic categories. Resource use is defined by total charges, length of stay, laboratory charges, radiology charges, and routine charges. Within broad diagnostic categories, the Index explains much more variation in resource utilization than do other case mix grouping methods such as DRGs, generalized patient management paths, and staging groups. Within DRGs, the Index also predicts much of the variation in resource use. We discuss use of the Index to price cases and predict resource use in a hospital.