Physician Induced Demand: The Empirical Evidence of Angiography for Suspected Coronary Artery Disease.

Background: We aimed to investigate the existence of unnecessary demand for angiography and the factors affecting it to provide evidence for decision makers. Methods: This longitudinal panel study was conducted in public hospitals in Tehran, Iran by using 2458 patients' records that were undergoing angiography for suspected coronary artery disease 2013-2015. To modeling the physicians' behavior based on physician-induced demand (PID), the patients were classified as appropriate, uncertain, and inappropriate and then Hierarchical Linear Modeling (HLM) model besides the physician ethic index was developed and finally the existence of PID showed based on three scenarios. Results: Angiographies were performed inappropriately in 23.8% of 2458 patients as well 46.7% were uncertain, and 29.5% were appropriate. According to the HLM model, the physician-to-population ratio (δ0= -0.161) and the interaction variable coefficient are higher than zero and significant (δ1 = 253). The results of the physician ethic index showed that most physicians were at a moderate rate, meaning that their utility was a combination of both pecuniary and non-pecuniary profits (0 < | ɛpδ |<1). Considering the HLM model and the medical ethics index together has almost shown the condition of PID (the necessary condition δ1> 0 and the sufficient condition (1 ≤ |ɛpδ|)) existed for about 26% of all studied physicians who had pure profit maximizer. Conclusion: To reduce induced demand and improve medical ethics adherence in cardiologist, policy makers should develop native guidelines, rules, and instructions besides policies related to education, and increasing patients' awareness.

Publicly funded health insurance schemes and demand for health services: evidence from an Indian state using a matching estimator approach.

Using Demographic and Health Survey data (2015-16) from the state of Andhra Pradesh, we estimate the differential probability of hysterectomy (removal of uterus) for women (aged 15-49 years) covered under publicly funded health insurance (PFHI) schemes relative to those not covered. To reduce the extent of selection bias into treatment assignment (PFHI coverage) we use matching methods, propensity score matching, and coarsened exact matching, achieving a comparable treatment and control group. We find that PFHI coverage increases the probability of undergoing a hysterectomy by 7-11 percentage points in our study sample. Sub-sample analysis indicates that the observed increase is significant for women with lower education levels and higher order parity. Additionally, we perform a test of no-hidden bias by estimating the treatment effect on placebo outcomes (doctor's visit, health check-up). The robustness of the results is established using different matching specifications and sensitivity analysis. The study results are indicative of increased demand for surgical intervention associated with PFHI coverage in our study sample, suggesting a need for critical evaluation of the PFHI scheme design and delivery in the context of increasing reliance on PFHI schemes for delivering specialised care to poor people, neglect of preventive and primary care, and the prevailing fiscal constraints in the healthcare sector.

Roadmaps to managed competition: to what extent does South Africa meet the preconditions for equity and efficiency?

South Africa offers universal health coverage through large public and private systems. The private system is characterised by a regulated market for health insurance, referred to domestically as medical schemes. From 2000, the private system was undergoing a reform process consistent with theoretical approaches for regulated competition for health insurance. However, from 2008, the reform process was interrupted, leaving in place a partial framework which included open enrolment, community rating and regulated minimum benefits but excluded, inter alia, risk equalisation. The incomplete reform, however, provides an opportunity to examine the system outcomes that result from a partial approach. This paper therefore reviews the system outcomes of the partial reform using a descriptive data analysis. The findings then inform an evaluation of the extent to which the preconditions for regulated competition have been met as indicated by the theory of regulated competition in healthcare. The paper therefore highlights the areas where regulatory interventions need to be prioritised in South Africa to achieve the objectives of regulatory competition that are able to achieve access, fairness and efficiency. The analysis points to significant failures at the level of health insurance competition in South Africa with resulting outcomes consistent with the theory of regulated competition.

New evidence on supplier-induced demand in China's public tertiary hospitals: is the cost of hospitalization higher in the off-season?

Supplier-induced demand (SID) is a long-standing concern in health economics and health system studies; however, empirical evidence on SID-critical to the development of health policy-is difficult to obtain, especially from China. This study, therefore, aims to add new evidence on SID in China's public tertiary hospitals and facilitates the development of evidence-based health policies in China and other countries with similar healthcare systems. For this study, we used patient-level electronic medical records (EMRs) collected from the information systems of tertiary hospitals in a western province in China. From 11 tertiary hospitals, we collected 274,811 hospitalization records dated between 15 February and 30 November 2019. Total expenditure on hospitalization and length of admission of each patient were the primary metrics for measuring SID. We constructed a character indicator to measure the high-season or off-season status of hospitals, and log-linear estimations were applied to estimate the "off-season effect" on hospitalized expenditures and length of admission. We find that the cost of hospitalization is indeed higher in the off-season in China's public tertiary hospitals; specifically, expenditures for patients admitted in the off-season increased by an average of 5.3-7.9% compared to patients admitted in the peak season, while the length of admission in the hospital increased by an average of 6.8% to 10.2%. We also checked the robustness of our findings by performing subgroup analyses of EMRs in the city-level hospitals and surgical group. We name this phenomenon the "hospital off-season effect" and suggest that the main reason for it is inappropriate financial incentives combined with a Fee-For-Services payment method. We suggest that China should work to reform inappropriate financial incentives in public hospitals to eliminate SID by changing its payment and financing compensation system.

How does market competition affect supplier-induced demand? An experimental study.

Introduction: This study investigated the impact of competition on supplier-induced demand in medical markets theoretically and experimentally. Methods: We employed the framework of credence goods to describe the information asymmetry between physicians and patients, and theoretically derives predictions of physicians' behaviors in monopolistic and competitive markets. Then we conducted behavioral experiments to empirically test the hypotheses. Results: The theoretical analysis revealed that an honest equilibrium would not exist in a monopolistic market, whereas price competition could induce physicians to reveal their types of treatment cost and provide honest treatments; thus, a competitive equilibrium is superior to that of a monopolistic market. The experimental results only partially supported the theoretical predictions, which showed that the cure rate of patients in a competitive environment was higher than that in a monopolistic market, although supplier-induced demand occurred more frequently. In the experiment, the main channel through which competition improved market efficiency was increased patient consultations through low pricing, as opposed to the theory, which stated that competition would lead to physicians' honest treatment of patients through fair prices. Discussion: We discovered that the divergence between the theory and the experiment stemmed from the theory's reliance on the assumption that humans are rational and self-interested, which means that they are not as price-sensitive as predicted by theory.

How Do Primary Care Providers Respond to Reimbursement Cuts? Evidence From the Termination of the Primary Care Incentive Program.

The Primary Care Incentive Payment Program (PCIP) provided a 10% bonus payment for Evaluation and Management (E&M) visits for eligible primary care providers (PCPs) from 2011 to 2015. Using a 2012 to 2017 sample of continuously eligible PCPs (the treatment group) and ineligible specialists with historically similar provision of billed services (the control group), this study is the first to examine how PCPs responded to the program's termination. Using inverse probability of treatment weighted difference-in-differences models that control for inter-temporal changes in provider-specific beneficiary characteristics, individual provider fixed effects, and zip code by year fixed effects, it finds that providers responded to the removal of the 10% bonus payments by increasing their billing of bonus payment eligible E&M relative value units (RVUs) by 3.7%. This response is consistent with supplier-induced demand and suggests a 46% offsetting response consistent with actuarial assumptions by the Centers for Medicare & Medicaid Services when assessing reimbursement reductions.

Unnecessary ultrasonography as supplier-induced demand in diagnosis of primary breast cancer in Iran: A cross-sectional study.

BACKGROUND: Supplier-induced demand (SID) refers to the concept that healthcare providers may deliver services that are not medically necessary to patients. An estimation of the extent to which this event has occurred can be insightful for policymaking and guiding health and insurance systems. This study aimed to investigate the extent of SID when performing a diagnostic ultrasonography for primary breast cancer patients and its relationship with socioeconomic factors in Iran. METHODS: Data were obtained using questionnaires from 334 patients referred to the Cancer Research Center. To identify the patients who were candidates for undergoing a necessary diagnostic US, we employed the international clinical guidelines with confirmation of our expert panelists. With their assistance, a comprehensive index was created to screen those 'most probably affected by SID'. RESULTS: 55.9% had undergone an unnecessary diagnostic ultrasonography, and thus were most probably affected by SID. A significant association between socioeconomic factors (education, occupation, and supplemental health insurance) and SID was confirmed (p value ≤ 0.001, 0.002, and 0.039, respectively). CONCLUSION: This study supports the SID hypothesis and the unnecessary demand for diagnostic ultrasonography in primary breast cancer. Also, our evidence indicates imposing excessive costs that can positively influence the policymakers' decision-making in the healthcare systems.

Healthcare utilization at retirement in China.

Previous studies, mostly analyzing data from high-income economies, present mixed evidence on the relationship between retirement and healthcare utilization. This study leverages administrative data for over 80,000 urban Chinese workers to explore the effect of retirement on outpatient and inpatient care utilization using a fuzzy regression discontinuity design. The analyses of medical claims from a large city in China complement and extend the current literature by providing evidence of potential mechanisms underlying increased short-run utilization. In this relatively well-insured population, annual total healthcare expenditures significantly increase primarily because of more intensive use of outpatient care at retirement, especially at the right tail of the distribution of outpatient visits. This increase in outpatient care appears to stem from a decline in the patient cost-sharing rate and the reduced opportunity cost of time upon retirement, interacting with supplier-induced demand, not from any sudden impact on health. We do not find evidence of change in inpatient care at retirement. The results hold for both females and males, and are robust to a number of sensitivity analyses.

Organising Research and Development for evidence-informed health care: some universal characteristics and a case study from the UK.

Research and Development (R&D) in health and health care has several intriguing characteristics which, separately and in combination, have significant implications for the ways in which it is organised, funded and managed. We review the characteristics, some of which apply under most circumstances and others of which may be context-specific, explore their implications for the organisation and management of health-related R&D, and illustrate the main features from the UK experience in the 1990s.

Geographic variation in Part B reimbursement and physician offsetting behavior: a physician matching approach.

Historically, Medicare has operated under the assumption that providers respond to reductions in reimbursement through increased provision of services in an effort to offset declining practice revenue; however, some recent empirical work examining fee reductions has found evidence of either small offsetting effects or reductions in the quantity supplied. Using a distance matching approach that matches practices to nearby practices that are subject to different reimbursement rates, we find overall evidence in support of Medicare's offsetting assumption collectively for all services and for evaluation and management services. We also find evidence consistent with a traditional volume response for imaging and testing services.

Deterrence effects of antifraud and abuse enforcement in health care.

Estimates of the benefits of antifraud enforcement in health care typically focus on direct monetary damages. Deterrence effects are acknowledged but unquantified. We evaluate the impact of a Department of Justice investigation of hospitals accused of billing Medicare for unnecessary implantable cardiac defibrillator (ICD) procedures on their use. Using 100 % inpatient and outpatient procedure data from Florida, we estimate that the investigation caused a 22 % decline in ICD implantations. The present value of savings nationally over a 10 year period is $2.7 billion, nearly 10 times larger than the $280 million in settlements the Department of Justice recovered from hospitals. The investigation had a large and long-lasting effect on physician behavior, indicating the utility of antifraud enforcement as a tool for reducing wasteful medical care.

A moneymaking scan: Dual reimbursement systems and supplier-induced demand for diagnostic imaging.

In complex health systems with growing healthcare spending, combining reimbursement systems that incentivize cost-efficient healthcare provision within and across care sectors is key. This study investigates whether dual reimbursement systems lead hospitals to offset financial pressures in one care sector by inducing demand in another. We find that hospital imaging units induced demand for costly and unnecessary ambulatory imaging examinations reimbursed under fee-for-service, following a reform that introduced prospective payment and increased competition in the inpatient sector in Switzerland in 2012. Market structure, competitive pressures, and price regulations also influence demand inducement by varying the response to the reform. Reimbursement systems can influence supplier-induced demand in other care sectors within hospitals where revenue is tied to the intensity of care provision. In particular, the possibility to self-refer patients to high-margin diagnostic examinations bears negative consequences on healthcare expenditures and potentially patient health.

Assessing variability in surgical decision making among attending neurosurgeons at an academic center.

OBJECTIVE: Although it is known that intersurgeon variability in offering elective surgery can have major consequences for patient morbidity and healthcare spending, data addressing variability within neurosurgery are scarce. The authors performed a prospective peer review study of randomly selected neurosurgery cases in order to assess the extent of consensus regarding the decision to offer elective surgery among attending neurosurgeons across one large academic institution. METHODS: All consecutive patients who had undergone standard inpatient surgical interventions of 1 of 4 types (craniotomy for tumor [CFT], nonacute redo CFT, first-time spine surgery with/without instrumentation, and nonacute redo spine surgery with/without instrumentation) during the period 2015-2017 were retrospectively enrolled (n = 9156 patient surgeries, n = 80 randomly selected individual cases, n = 20 index cases of each type randomly selected for review). The selected cases were scored by attending neurosurgeons using a need for surgery (NFS) score based on clinical data (patient demographics, preoperative notes, radiology reports, and operative notes; n = 616 independent case reviews). Attending neurosurgeon reviewers were blinded as to performing provider and surgical outcome. Aggregate NFS scores across various categories were measured. The authors employed a repeated-measures mixed ANOVA model with autoregressive variance structure to compute omnibus statistical tests across the various surgery types. Interrater reliability (IRR) was measured using Cohen's kappa based on binary NFS scores. RESULTS: Overall, the authors found that most of the neurosurgical procedures studied were rated as "indicated" by blinded attending neurosurgeons (mean NFS = 88.3, all p values < 0.001) with greater agreement among neurosurgeon raters than expected by chance (IRR = 81.78%, p = 0.016). Redo surgery had lower NFS scores and IRR scores than first-time surgery, both for craniotomy and spine surgery (ANOVA, all p values < 0.01). Spine surgeries with fusion had lower NFS scores than spine surgeries without fusion procedures (p < 0.01). CONCLUSIONS: There was general agreement among neurosurgeons in terms of indication for surgery; however, revision surgery of all types and spine surgery with fusion procedures had the lowest amount of decision consensus. These results should guide efforts aimed at reducing unnecessary variability in surgical practice with the goal of effective allocation of healthcare resources to advance the value paradigm in neurosurgery.

Testing the myth of fee-for-service and overprovision in health care.

Paying on the basis of fee-for-service (FFS) is often associated with a risk of overprovision. Policymakers are therefore increasingly looking to other payment schemes to ensure a more efficient delivery of health care. This study tests whether context plays a role for overprovision under FFS. Using a laboratory experiment involving medical students, we test the extent of overprovision under FFS when the subjects face different fee sizes, patient types, and market conditions. We observe that decreasing the fee size has an effect on overprovision under both market conditions. We also observe that patients who are harmed by excess treatment are at little risk of overprovision. Finally, when subjects face resource constraints but still have an incentive to overprovide high-profit services, they hesitate to do so, implying that the presence of opportunity costs in terms of reduced benefits to other patients protects against overprovision. Thus, this study provides evidence that the risk of overprovision under FFS depends on fee sizes, patients' health profiles, and market conditions.

Geographical Variation in Psychiatric Admissions Among Recipients of Public Assistance.

BACKGROUND: Understanding the area-specific resource use of inpatient psychiatric care is essential for the efficient use of the public assistance system. This study aimed to assess the geographical variation in psychiatric admissions and to identify the prefecture-level determinants of psychiatric admissions among recipients of public assistance in Japan. METHODS: We identified all recipients of public assistance who were hospitalized in a psychiatric ward in May 2014, 2015, or 2016 using the Fact-finding Survey on Medical Assistance. The age- and sex-standardized number of psychiatric admissions was calculated for each of the 47 prefectures, using direct and indirect standardization methods. RESULTS: A total of 46,559 psychiatric inpatients were identified in May 2016. The number of psychiatric admissions per 100,000 population was 36.6. We found a 7.1-fold difference between the prefectures with the highest (Nagasaki) and lowest (Nagano) numbers of admissions. The method of decomposing explained variance in the multiple regression model showed that the number of psychiatric beds per 100,000 population and the number of recipients of public assistance per 1,000 population were the most important determinants of the number of psychiatric admissions (R2 = 28% and R2 = 23%, respectively). The sensitivity analyses, using medical cost as the outcome and data from different survey years and subgroups, showed similar findings. CONCLUSIONS: We identified a large geographical variation in the number and total medical cost of psychiatric admissions among recipients of public assistance. Our findings should encourage policy makers to assess the rationale for this variation and consider strategies for reducing it.

Supplier-induced demand for urgent after-hours primary care services.

Australia is one of nine Organisation for Economic Co-operation and Development (OECD) countries that utilise deputising services to provide after-hours primary care. While the provision of this service is supposed to be on behalf of regular general practitioners, businesses have adapted to the financial incentives on offer and are directly advertising their services to consumers emphasising patient convenience and no copayments. The introduction of corporate entities has changed the way that deputising services operate. We use a difference-in-difference approach to estimate the amount of growth in urgent after-hours services that was not warranted by urgent medical need. These estimates are calculated by comparing the growth in urgent attendances that occurred during times of the day that are classified as "after-hours" (e.g., 6 pm-11 pm Monday to Friday) with those that are classified as "unsociable-hours" (e.g., 11 pm-7 am Monday to Friday). For the national level, we estimate that 593,141 unwarranted attendances were induced as urgent after-hours consultations in a single year. This corresponds to a national estimate of the total benefits paid for unwarranted demand of approximately $77 million. While deputising services have filled a short-fall in after-hours services, the overuse of urgent items has meant that that this has been achieved at a considerable cost to the Australian Government.

The Probability of Hospitalizations for Mild-to-Moderate Injuries by Trauma Center Ownership Type.

OBJECTIVE: To corroborate anecdotal evidence with systematic evidence of a lower threshold for admission among for-profit hospitals. DATA SOURCES: The study used Florida emergency department and hospital discharge datasets for 2012 to 2014. The treatment variable of interest was for-profit-designated trauma center status. The dependent variable indicated whether a patient with mild-to-moderate injuries was admitted after presenting as a trauma alert and then discharged to home. A separate analysis was conducted of discharges that had a 1-day length of stay. STUDY DESIGN: Generalized estimation equations with logistic distribution models were used to control for the confounding influences and developed for four groups of patients: ICISS = 1 (no probability of mortality), ICISS ≥ 0.99, ICISS ≥ 0.95, and ICISS ≥ 0.85 (zero to 15 percent probability of mortality, which includes all mild and moderate injury patients). PRINCIPAL FINDINGS: For the ICISS = 1 and ICISS ≥ 0.99 models, the centers' for-profit status was the most important predictor. In the ICISS ≥ 0.95 and ICISS ≥ 0.85 models, injury type played a more important role, but for-profit status remained important. For patients with a 1-day stay, for-profit status was associated with an even higher probability of hospitalization. CONCLUSIONS: Considerable differences exist between for-profit and not-for-profit trauma centers concerning hospitalization among the study population, which may be explained by supplier-induced demand.

Explaining regional variation in home care use by demand and supply variables.

In the Netherlands, home care services like district nursing and personal assistance are provided by private service provider organizations and covered by private health insurance companies which bear legal responsibility for purchasing these services. To improve value for money, their procurement increasingly replaces fee-for-service payments with population based budgets. Setting appropriate population budgets requires adaptation to the legitimate needs of the population, whereas historical costs are likely to be influenced by supply factors as well, not all of which are necessarily legitimate. Our purpose is to explain home care costs in terms of demand and supply factors. This allows for adjusting historical cost patterns when setting population based budgets. Using expenses claims of 60 Dutch municipalities, we analyze eight demand variables and five supply variables with a multiple regression model to explain variance in the number of clients per inhabitant, costs per client and costs per inhabitant. Our models explain 69% of variation in the number of clients per inhabitant, 28% of costs per client and 56% of costs per inhabitant using demand factors. Moreover, we find that supply factors explain an additional 17-23% of variation. Predictors of higher utilization are home care organizations that are integrated with intramural nursing homes, higher competition levels among home care organizations and the availability of complementary services.

Examining the role of the physician as a source of variation: Are physician-related variations necessarily unwarranted?

RATIONALE, AIMS, AND OBJECTIVES: The physician is often implicated as an important cause of observed variations in health care service use. However, it is not clear if physician-related variation is problematic for patient care. This paper illustrates that observed physician-related variation is not necessarily unwarranted. METHODS: This is a narrative review. RESULTS: Many studies have attributed observed variations to the physician, but little attention is given towards discriminating between those variations that exist for good reasons and those that are unwarranted. Two arguments can be made for why physician-related variation is unwarranted. The first posits that physician-related factors should not play a role in management of care decisions because such decisions should be driven by science (which is imagined to be definitive). The second considers the possibility of supplier-induced demand as a factor driving observed variations. We show that neither argument is sufficient to rule out that physician-related variations may be warranted. Furthermore, the claim that such variations are necessarily problematic for patients has yet to be substantiated empirically. CONCLUSIONS: It is not enough to simply show that physician-related variation can exist-one must also show where it is unwarranted and what is the magnitude of unwarranted variations. Failure to show this can have significant implications on how we interpret and respond to observed variations. Improved measurement of the sources of variation, especially with respect to patient preferences and context, may help us start to disentangle physician-related variation that is desirable from that which is unwarranted.

The Impact of Diagnostic Imaging Fee Changes to Medical Provider Behavior: Focused on the Number of Exams of Computed Tomograph / 보건행정학회지

BACKGROUND: Diagnostic imaging fee had been reduced in May 2011, but it was recovered after 6 months because of strong opposition of medical providers. This study aimed to analyze the behavior of medical providers according to fee changes. METHODS: The National Health Insurance claims data between November 2010 and December 2012 were used. The number of exams per computed tomography was analyzed to verify that the fee changes increased or decreased the number of exams. Multivariate regression model were applied. RESULTS: The monthly number of exams increased by 92.5% after fee reduction, so the diagnostic imaging spending were remained before it. But medical provider decreased the number of exams after fee return. After adjusting characteristic of hospitals, fee reduction increased the monthly number of exams by 48.0% in a regression model. Regardless type of hospitals and severity of disease, the monthly number of exams increased during period of fee reduction. The number of exams in large-scaled hospitals (tertiary and general hospital) were increased more than those of small-scaled hospitals. CONCLUSION: Fee-reduction increased unnecessary diagnostic exams under the fee-for-service system. It is needed to define appropriate exam and change reimbursement system on the basis of guideline.