Prospective Payment System Research Articles

Comparison of Medicaid Payments Relative to Medicare Using Inpatient Acute Care Claims from the Medicaid Program: Fiscal Year 2010-Fiscal Year 2011.

To compare Medicaid fee-for-service (FFS) inpatient hospital payments to expected Medicare payments. Medicaid and Medicare claims data, Medicare's MS-DRG grouper and inpatient prospective payment system pricer (IPPS pricer). Medicaid FFS inpatient hospital claims were run through Medicare's MS-DRG grouper and IPPS pricer to compare Medicaid's actual payment against what Medicare would have paid for the same claim. Average inpatient hospital claim payments for Medicaid were 68.8 percent of what Medicare would have paid in fiscal year 2010, and 69.8 percent in fiscal year 2011. Including Medicaid disproportionate share hospital (DSH), graduate medical education (GME), and supplemental payments reduces a substantial proportion of the gap between Medicaid and Medicare payments. Medicaid payments relative to expected Medicare payments tend to be lower and vary by state Medicaid program, length of stay, and whether payments made outside of the Medicaid claims process are included.

Less Intense Postacute Care, Better Outcomes For Enrollees In Medicare Advantage Than Those In Fee-For-Service.

Traditional fee-for-service (FFS) Medicare's prospective payment systems for postacute care provide little incentive to coordinate care or control costs. In contrast, Medicare Advantage plans pay for postacute care out of monthly capitated payments and thus have stronger incentives to use it efficiently. We compared the use of postacute care in skilled nursing and inpatient rehabilitation facilities by enrollees in Medicare Advantage and FFS Medicare after hospital discharge for three high-volume conditions: lower extremity joint replacement, stroke, and heart failure. After accounting for differences in patient characteristics at discharge, we found lower intensity of postacute care for Medicare Advantage patients compared to FFS Medicare patients discharged from the same hospital, across all three conditions. Medicare Advantage patients also exhibited better outcomes than their FFS Medicare counterparts, including lower rates of hospital readmission and higher rates of return to the community. These findings suggest that payment reforms such as bundling in FFS Medicare may reduce the intensity of postacute care without adversely affecting patient health.

Impact of the 2015 CMS Inpatient Psychiatric Facility Quality Reporting Rule on Tobacco Treatment.

In its fiscal year 2015 final rule, the Centers for Medicare & Medicaid Services (CMS) required reporting of tobacco treatment quality measures as part of the Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS). This pre-intervention, post-intervention policy analysis evaluates the impact of that policy at a large academic medical center that opted to improve performance as it implemented reporting measures. Electronic medical record data were collected retrospectively for all adult (≥18 years) inpatient psychiatric admissions from January 1, 2014 to December 31, 2015. Data from admissions were analyzed to determine changes in the provision of tobacco treatment including the proportions of patients screened for tobacco use, receiving tobacco cessation counseling, and receiving tobacco cessation medication(s) using a chi-square test. Covariate analysis of treatment differences based on psychiatric diagnosis was analyzed using Cochran-Mantel-Haenszel and Breslow-Day test. Post-policy screening for admissions increased significantly (85% vs. 97%; p < .001). Referral to cessation counseling increased 18-fold (4% vs. 74%; p < .001). Receipt of Counselling (8% vs. 67%; p < .001) and referral for cessation medication (32% vs. 68%; p < .001) also increased dramatically. Though statistically non-significant, the number of tobacco users who actually received medications increased markedly between 2014 and 2015, 24% versus 35%. Gains in screening, referral, and treatment did not differ by psychiatric diagnosis. The Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program resulted in a 10-fold increase in the number of smokers who received inpatient tobacco treatment. Should CMS link prospective payment to performance, it could have a major impact on quality of care for tobacco dependence. This is the first study to examine the implementation and impact of new 2015 IPFQR program tobacco measures. This study may illustrate the potential effect that performance based penalties can have should facilities be required to do more than simply report on these tobacco measures. This study exemplifies the impact these new reporting measures can have when psychiatric facilities move beyond letter of the policy, to continually assess organizational performance and implement changes to improve treatment delivery.

Impact of the End Stage Renal Disease Prospective Payment System on the Use of Peritoneal Dialysis

IntroductionThe End Stage Renal Disease (ESRD) Prospective Payment System (PPS), implemented by the Centers for Medicare and Medicaid Services in January 2011, encouraged use of peritoneal dialysis (PD) through various financial incentives. Our goal was to determine whether PPS effectively increased PD use in incident dialysis patients.MethodsOur study used the United States Renal Data System (USRDS) to identify 430,927 adult patients who initiated dialysis between 2009 and 2012. The interrupted time series method was used to evaluate the association Centers for Medicare and Medicaid Services of PPS with PD use at dialysis initiation. We further stratified by patient demographics, predialysis care, and facility chain and profit status.ResultsInterrupted time series analysis indicated PPS was associated with increased PD use in the 2-year period after PPS (change in slope = 0.04, P < 0.0001), although there was no immediate change in the level of PD use at the beginning of PPS (P = 0.512). Stratified analyses indicated PPS led to increased PD use across all age, race, and sex groups (P < 0.05) although marginally among females (P = 0.09). Notably, small dialysis organizations and nonprofit organizations appeared to increase use of PD faster compared to large dialysis organizations and for-profit units, respectively.DiscussionImplementation of the Centers for Medicare and Medicaid Services ESRD payment reform was associated with an increased use of PD in the 2 years after PPS. Our findings highlight the role of financial incentives in changing practice patterns to increase use of a dialysis modality considered to be both more cost-effective and empowering to ESRD patients. However, even after PPS, rates of PD use remain low among the dialysis population in the USA.

The CreG (Chronic Related Group) model to prompt integrated chronic care management: the experience of Lombardy Region

Nearly one-third of the population live with some chronic conditions in Lombardy (3.5 millions out of more than 10 million residents), while expenditure on chronic diseases in the region accounts for about 75% of the of the Region’s overall health care spending. In order to improve chronic care management through a population-based approach, in 2011 the Region launched a new model for chronic care, named CReG (Chronic Related Groups), starting with five Local Health Authorities (LHAs) as piloting settings, built on a health-based risk-adjusted capitated payment system, and on the provision of integrated and personalised care pathways (PCP). The paper presents the most significant achievements of the CReG model, and highlights the main methodological and organisational challenges, in comparison with similar experience at international level. The CReG clinical-risk adjustment model is built on three fundamental steps: classification of diseases, a grouping system, and a tariff rate estimation and validation model. Chronic patients to be enrolled in the pilot study were identified through disease-specific algorithms combining data on inpatient diagnosis/procedures (ICD-9-CM), outpatient drug delivery and services, systematically collected by the regional administrative databases (the BDA or ‘Banca Dati Assistito’). All diagnoses were ranked based on the overall associated costs to the Regional Healthcare Service (RHS). The hierarchical grouping system (CReG grouper) relied on this ranking, providing a classification of the regional population into clinically-homogeneous categories (approximately 200), each corresponding to mono- or polypathologic conditions, according to a decreasing order of disease severity and costs. A prospective payment system was set up for each CReG Category, to provide an overall bundle tariff accounting for a one-year period of care (including pharmacy and outpatient services). The pilot programme has been managed in the Primary Care setting, through GP-cooperatives (CReG Manager) with several tools supporting care planning activities and the actual implementation of integrated clinical pathways (ICPs), based on prospective and flexible Personalized Care Plans (PCP), in particular: - Evidence-Based Clinical Pathways (EBCPs), - the so-called ‘Expected Healthcare Service List’ (EHSL), statistically estimated on the basis of 1-year historical consumptions, - an IT system developed ad-hoc, - a Care Management Service (CMS), set up by the GP-Cooperatives to support the implementation of PCPs, and ensure patients’ compliance and adherence to care plans. The paper discusses the results of a prospective matched-cohort study, based on patients registered with 484 participating GPs, used as the base-line ‘CReG cohort’, and a control sample of patients registered with GPs from the same 5 LHAs, but not managed according to the CReG protocol. More than 60.000 patients were enrolled and followed up for three years (2010-2013). Preliminary study results suggest the effectiveness of the CReG model on reducing hospitalization rates and risk of admissions to emergency departments, even though a longer observational period is needed to draw conclusions about the impact of CReG on quality and overall costs of care. The paper provides insights on the regional strategy to set up the CReG model and to handle the change management process, with the adoption of a new payment system. The CReG model has been fully developed internally, relying on a consolidated regional information system, which allows record linkage at individual level of administrative data on healthcare services and users’ consumptions data, taking into account both mono- and polypathological conditions. The historical amount of available data sustained the set-up of a robust and promising model for clinical risk adjustment at the individual level. The CReG Prospective Payment System indeed was introduced as a mean to overcome service delivery fragmentation and to promote better care coordination across the whole care pathway. While the proposed care delivery innovations were properly accomplished by GPs Cooperatives, with the assistance of Care Management Services, some conflicts arose during the contract management process between the GPs Cooperatives and the LHAs. Finally, the paper discusses the current challenges for future developments of the CReG-model in Primary Care, and also for exporting the CReG experience on prospective payment systems to other chronic care settings, in the context of current trends due to a Regional healthcare reform Act, issued in August 2015.

Effects of Continuity of Treatment for Rural Hypertension Population: Evidence from a Case Control Intervention Study

Background : Continuity of Care (COC) is considered one of the most relevant indicators representing both output and input of the care continuum during organizational integration. Previous studies usually center on the personal continuity of care-giving, and the theoretical and practical evidence on Continuity of Treatment (COT) for chronic patients between primary- and professional-level are insufficient. In this study, we firstly defined the COT as the continuity of inter-professional collaborative behavior on sequential treatment between community and hospital, and then evaluated the COT and explored into the influential factors through an intervention trial designed using different integration strategies. Methods : A case control study was designed and implemented in a rural pilot place in China from July 2012 to Dec 2014; all doctors in 6 towns randomly sampled and assigned into 3 groups who were intervened either with single intervention of Multi-disciplinary Team (MDT) or double intervention of MDT and integrated prospective payment system, providing them both behavior instructions and motivations. Together 279 medical records mainly concerning hypertension and concurrent diseases were sampled at the baseline and endpoint under certain inclusion/exclusion criteria, and COT was measured and compared using Triple Differences Regression Model. Three control variables included were “pre and post intervention”, “single/double treatment group and control group”, “continuous or discontinuous referral”, and the influential factors were “quality of first-stage treatment” and “continuous information delivery”. Results : 85 records were collected from the control group (38 pre/47 post); 103 from the single treatment group (51 pre/52 post); 91 from double treatment group (39 pre/52 post). After intervention, the total COT was 10.4% higher than before (P Discussion : The referral manner plays an essential role in improving the COT for hypertension patients, and the professional collaborative behavior is mainly affected by the quality of the first-stage treatment no matter the patient information is immediately transferred or not. Conclusion : Integration intervention has been proved to be effective for rural hypertension population. The MDT strategy cannot work without proper incentive provision in successful professional collaboration, and the quality of treatment in community primary care is suggested to give the policy priority across care continuum.

Imaging Surveillance in Patients After a Benign Fine-Needle Aspiration Biopsy of the Thyroid: Associated Cost and Incidence of Subsequent Cancer.

The objective of our study was to determine patterns and cost of imaging tumor surveillance in patients after a benign fine-needle aspiration (FNA) biopsy of the thyroid in a large teaching hospital as well as the rate of subsequent cancer detection. This cohort study was approved by the appropriate institutional review board and complied with HIPAA. All patients who had a benign thyroid FNA biopsy between January 1, 1999, and December 31, 2003, were identified from an institutional pathology database. We gathered information from electronic medical records on imaging tumor surveillance and subsequent cancer detection. Cost was determined using the facility total relative value unit and the 2014 Hospital Outpatient Prospective Payment System conversion factor. Between January 1, 1999, and December 31, 2003, 1685 patients had a benign thyroid FNA biopsy, 800 (47.5%) of whom underwent follow-up imaging. These patients underwent 2223 thyroid ultrasound examinations, 606 ultrasound-guided thyroid FNA biopsies, 78 thyroid scintigraphy examinations, 168 neck CTs, and 53 neck MRIs at a cost of $529,874, $176,157, $39,622, $80,580, and $53,114, respectively, for a total cost of $879,347 or $1099 per patient. The mean length of follow-up was 7.3 years, during which time 19 (2.4%) patients were diagnosed with thyroid cancer at a cost of $46,281 per cancer. Seventeen (89.5%) were diagnosed with papillary carcinoma and two (10.5%) with Hurthle cell carcinoma. Over a 5-year period, about half of the patients who had a benign thyroid FNA biopsy underwent follow-up imaging at considerable cost with a small rate of subsequent malignancy.

Competition and Gaming Behavior by Medicare Home Health Agencies in the United States

Under the Medicare home health prospective payment system, agencies could make large profits by targeting the 10th therapy visit. The objective of this study is to examine the influence of market competition on home health agencies’ targeting the 10th therapy visit. This article uses changes in competition rates within each market over time to examine whether home health agencies were more likely to target the 10th visit under greater competition. No significant associations were found between competition and agencies’ targeting behavior on average, but competition effects on targeting behavior were significantly greater for freestanding agencies that were likely to be in relatively financially disadvantageous positions. These findings suggest that competition might increase financially unstable agencies’ 10th-visit targeting behavior, potentially leading to unnecessary Medicare spending.

Testing for cost efficiency differences between two groups of rural hospitals

Critical Access Hospitals (CAHs) receive cost-based reimbursement for services provided to Medicare patients, while the prospective payment system (PPS) pays non-CAH rural hospitals a fixed price per case. However, the two reimbursement models may provide different incentives for hospitals. The PPS may motivate hospitals to keep their unit costs below the reimbursement rates in order to make profits. Cost-based reimbursement, which pays CAHs for the total cost of services, may provide a disincentive for cost control. We statistically test the hypothesis that CAHs are less cost efficient than non-CAH rural hospitals. Recent methodological advancements as well as traditional approaches were used with 3 years of data jointly to assess cost efficiency differences between the two groups of rural hospitals. Data envelopment analysis (DEA) showed that, on average, CAHs were less cost efficient than non-CAH rural hospitals. Density analysis of DEA cost efficiency scores also showed that CAHs were less cost efficient than non-CAH rural hospitals. Marginal effects of environmental variables, estimated using bootstrapped truncated regression, tobit, and stochastic frontier analysis, suggested that CAHs were less cost efficient than non-CAH rural hospitals, although tobit showed statistical insignificance. Overall, the results of our analysis support the hypothesis that CAHs are less cost efficient than non-CAH rural hospitals.

The Cost, Quality and Spillover Effects of Specialization Strategies in Hospitals An Analysis of the Patient's Value Chain

High-powered reimbursement systems such as capped budgets or prospective payment systems offer powerful incentives to hospitals to reduce their expenses, particularly in high cost areas such as operating rooms (ORs). Specialization is one prominent response strategy to such pressures. This study aims to explore how isolated specialization-based cost-reduction strategies in high cost areas affect the entire value chain. Our proxy for the follow-up costs of a patient’s case – and therefore of the value chain as a whole – is the probability of a patient experiencing a complication in the post anesthesia care unit (PACU). We focus on a specialization strategy that may result in individual (isolated) and/or organizational learning effects in the OR and/or lower costs from economies of scale. We found that this economic response strategy and short-term quality offered our hospital strategic complements, as specialization increased quality by reducing the probability of complications in the PACU, thus lowering follow-up costs. Notably, this finding held for both specialized and other types of surgery, which suggests the presence of spillover or organizational learning effects, thus confirming a decrease in overall costs by reducing overall follow-up costs. Thus, we find no evidence that specialization-based cost-reduction strategies threaten the overall development of value chain costs.

Average-Cost Pricing and Dynamic Selection Incentives in the Hospital Sector.

This study investigates dynamic incentives to select patients for hospitals that are remunerated according to a prospective payment system of the diagnosis-related group (DRG) type. Using a model with patients differing in severity within a DRG, we show that price dynamics depend on the extent of hospital altruism and the relation between patients' severity and benefit. Upwards and downwards price movements over time are both possible. In a steady state, DRG prices are unlikely to give optimal incentives to treat patients. Depending on the level of altruism, too few or too many patients are treated. DRG pricing may also give incentives to treat low-severity patients even though high-severity patients should be treated. Copyright © 2016 John Wiley & Sons, Ltd.

Using Predicted Therapy Visits in the Medicare Home Health Prospective Payment System

A criticism of Medicare’s home health prospective payment system is its partial reliance on cost-based reimbursement of therapy services provided by home health agencies (HHAs) to Medicare fee-for-service (FFS) beneficiaries, potentially overincentivizing the provision of therapy services. Using Medicare FFS home health claims and assessment data, we estimated a model to predict therapy use as a proxy for clinical need and replace actual therapy use with the prediction in the home health payment system. We estimated a $1.178 billion (95% confidence interval, $1.171-$1.184) decrease in home health payments relative to levels under the current system. The majority of the decrease was due to the model predicting fewer high therapy episodes than actually occurred. It may therefore be more appropriate to predict both therapy and nontherapy use, requiring an overhaul of the current system.

Hospitalization Cost Model of Pediatric Surgical Treatment of Chiari Type 1 Malformation

To develop a cost model for hospitalization costs of surgery among children with Chiari malformation type 1 (CM-1) and to examine risk factors for increased costs. Data were extracted from the US National Healthcare Cost and Utilization Project 2009 Kids' Inpatient Database. The study cohort was comprised of patients aged 0-20 years who underwent CM-1 surgery. Patient charges were converted to costs by cost-to-charge ratios. Simple and multivariable generalized linear models were used to construct cost models and to determine factors associated with increased hospital costs of CM-1 surgery. A total of 1075 patients were included. Median age was 11 years (IQR 5-16 years). Payers included public (32.9%) and private (61.5%) insurers. Median wage-adjusted cost and length-of-stay for CM-1 surgery were US $13 598 (IQR $10 475-$18 266) and 3 days (IQR 3-4 days). Higher costs were found at freestanding children's hospitals: average incremental-increased cost (AIIC) was US $5155 (95% CI $2067-$8749). Factors most associated with increased hospitalization costs were patients with device-dependent complex chronic conditions (AIIC $20 617, 95% CI $13 721-$29 026) and medical complications (AIIC $13 632, 95% CI $7163-$21 845). Neurologic and neuromuscular, metabolic, gastrointestinal, and other congenital genetic defect complex chronic conditions were also associated with higher hospital costs. This study examined cost drivers for surgery for CM-1; the results may serve as a starting point in informing the development of financial risk models, such as bundled payments or prospective payment systems for these procedures. Beyond financial implications, the study identified specific risk factors associated with increased costs.

Prospective payment in French post-acute care: Comparison to international funding of rehabilitation systems

In all countries, the boundaries are ambiguous between acute and post-acute as well as defining the dimensions of care. The aim of this study is to analyze relations between segmentation of care and payment systems. In the new prospective payment system implemented in French SSR, the grouping unit is inpatient stay and the week for day hospitalization. In 1991, the field of SSR mixed structures as diverse in their purposes as public or private hospital units of rehabilitation and “nursing homes”. A case payment must necessarily be based on a classification describing homogeneous procedures and costs involved. The post-acute care systems in Anglophone and Francophone countries were compared using 5 dimensions: segmentation of care, orientation criteria, information tools, case mix classifications and performance criteria. Most countries segment hospital stays in acute and post-acute. The graduation of post-acute care levels is primarily based on the potential for rehabilitation. The specific and very specific levels are specialized by pathology, by type of disability or social inclusion goals. Most systems distinguish missions of rehab centers including geriatric vocation, focusing on functional status and nursing homes for intermediate or transitional care. They hybridize financing cases tailored to rehabilitation programs and funding to the weighted day with activity, for the unstable patients with less predictable lengths of stay for other non-acute care purposes. Bundled payments are under consideration in the US. France has segmented the SSR in a vertical integration with the categories of acute care. Graduation is ambiguous. The current segmentation fails to articulate a case mix classification system to a meaningful scale of tariffs, lack of grouping into homogeneous. A per case payment implies a redefinition of SSR distinguishing the relevance of functional restoration centered care, intermediate care or medical and social transition.

Strategic Patient Discharge: The Case of Long-Term Care Hospitals

Medicare's prospective payment system for long-term acute-care hospitals (LTCHs) provides modest reimbursements at the beginning of a patient's stay before jumping discontinuously to a large lump-sum payment after a prespecified number of days. We show that LTCHs respond to the financial incentives of this system by disproportionately discharging patients after they cross the large-payment threshold. We find this occurs more often at for-profit facilities, facilities acquired by leading LTCH chains, and facilities colocated with other hospitals. Using a dynamic structural model, we evaluate counterfactual payment policies that would provide substantial savings for Medicare.

Reimbursement of care for severe trauma under SwissDRG.

Treatment of patients with severe injuries is costly, with best results achieved in specialised care centres. However, diagnosis-related group (DRG)-based prospective payment systems have difficulties in depicting treatment costs for specialised care. We analysed reimbursement of care for severe trauma in the first 3 years after the introduction of the Swiss DRG reimbursement system (2012-2014). The study included all patients with solely basic insurance, hospital admission after 01.01.2011 and discharge in 2011 or 2012, who were admitted to the resuscitation room of the University Hospital of Zurich, aged ≥16 years and with an injury severity score (ISS) ≥16 (n = 364). Clinical, financial and administrative data were extracted from the electronic medical records. All cases were grouped into DRGs according to different SwissDRG versions. We considered results to be significant if p ≤0.002. The mean deficit decreased from 12 065 CHF under SwissDRG 1.0 (2012) to 2 902 CHF under SwissDRG 3.0 (2014). The main reason for the reduction of average deficits was a refinement of the DRG algorithm with a regrouping of 23 cases with an ISS ≥16 from MDC 01 to DRGs within MDC21A. Predictors of an increased total loss per case could be identified: for example, high total number of surgical interventions, surgeries on multiple anatomical regions or operations on the pelvis (p ≤0.002). Psychiatric diagnoses in general were also significant predictors of deficit per case (p<0.001). The reimbursement for care of severely injured patients needs further improvement. Cost neutral treatment was not possible under the first three versions of SwissDRG.

Assessing the Utilization of Total Ankle Replacement in the US

Category: Ankle Arthritis Introduction/Purpose: While total ankle arthroplasty has been shown to be a cost-effective procedure relative to conservative management and ankle arthrodesis, implant costs and complications have the potential to increase the overall financial burden of performing TAR. The purpose of this investigation is to analyze the overall cost and utilization of total ankle arthroplasty. Methods: Our analytical sample consisted of Inpatient Prospective Payment System hospitals from 2011 and 2012 Medicare claims data and the 2011-2012 Medicare Inpatient Limited Data Sets. Outcome variables of interest were the likelihood of a hospital performing TAR and the volume of TAR cases, conditional on a hospital having performed at least 1 TAR in a year. Data from the 2010 Cost Report and from Medicare inpatient claims were utilized to compute average margins for TAR cases and overall hospital margins. TAR cost was calculated based upon the all payer cost-to-charge ratio for each hospital provided by the Healthcare Cost and Utilization Project. The FY2015 Impact File was used to gather data on hospital-level characteristics, such as bed size, census region, teaching status, and urban/rural location. Hospital ownership data were obtained from the CMS Hospital Compare Database. Nationwide Inpatient Sample (NIS) data was used to generate descriptive statistics on all TAR patients. Results: Medicare participants accounted for 47.5% of the overall population of patients. Orthopaedic specialty hospitals are four times more likely to perform TAR than a non-orthopedic specialty hospital. Average implant cost was $13,034, which accounted for approximately 70% of the total all-payer cost. With respect to teaching versus non-teaching hospitals, the average cost per case is $18,331 and $19,303 respectively. Compared to nonprofitable hospitals, profitable hospitals performing TAR in 2011 had lower total costs ($14,425 vs. $19,884) and higher payments ($19,631 vs. $13,640), leading to a difference in profit of approximately $11,000 from TAR surgeries between profitable and nonprofitable hospitals. Approximately, one-third of hospitals were profitable with respect to TAR. No difference was noted with respect to length of stay or number of cases performed between profitable and nonprofitable hospitals. Conclusion: There is an overall significant financial burden associated with performing total ankle replacement with many health systems failing to demonstrate profitability despite its increased utilization. Profitable hospitals are more likely to have lower cost per day and prosthesis costs and higher payments compared to nonprofitable hospitals. While additional factors such as improved patient outcomes are driving utilization of TAR, financial barriers exist that can affect utilization of TAR across health systems.

Does the Extent of per Case Payment System Affect Hospital Efficiency?

Recently increasing public pressure to contain costs in the health care sector has led many national governments to introduce some type of prospective payment system and reduce the scope of global budgeting. This study investigates the extent to which the reimbursement systems of the Italian hospital sector have an impact on hospitals’ technical efficiency. Because of high variation in the financing and provision of health care services among regions and hospitals, Italy represents an interesting case study to test these effects. A two-stage data envelopment analysis was employed, in which the efficiency scores of all Italian hospitals were first calculated and then regressed on different environmental variables to capture the role of reimbursement systems. The results found a significant impact of the use of diagnostic-related group-based prospective payment systems on hospitals’ efficiency.

Effects of the prospective payment system on anemia management in maintenance dialysis patients: implications for cost and site of care

BackgroundThe 2011 expanded Prospective Payment System (PPS) and contemporaneous Food and Drug Administration label revision for erythropoiesis-stimulating agents (ESAs) were associated with changes in ESA use and mean hemoglobin levels among patients receiving maintenance dialysis. We aimed to investigate whether these changes coincided with increased red blood cell transfusions or changes to Medicare-incurred costs or sites of anemia management care in the period immediately before and after the introduction of the PPS, 2009–2011.MethodsFrom US Medicare end-stage renal disease (ESRD) data (Parts A and B claims), maintenance hemodialysis patients from facilities that initially enrolled 100 % into the ESRD PPS were identified. Dialysis and anemia-related costs per-patient-per-month (PPPM) were calculated at the facility level, and transfusion rates were calculated overall and by site of care (outpatient, inpatient, emergency department, observation stay).ResultsMore than 4100 facilities were included. Transfusions in both the inpatient and outpatient environments increased. In the inpatient environment, PPPM use increased by 11–17 % per facility in each quarter of 2011 compared with 2009; in the outpatient environment, PPPM use increased overall by 5.0 %. Site of care for transfusions appeared to have shifted. Transfusions occurring in emergency departments or during observation stays increased 13.9 % and 26.4 %, respectively, over 2 years.ConclusionsInpatient- and emergency-department-administered transfusions increased, providing some evidence for a partial shift in the cost and site of care for anemia management from dialysis facilities to hospitals. Further exploration into the economic implications of this increase is necessary.

New cooperative medical scheme decreased financial burden but expanded the gap of income-related inequity: evidence from three provinces in rural China.

BackgroundSubsidizing healthcare costs through insurance schemes is crucial to overcome financial barriers to health care and to avoid high medical expenditures for patients in China. The health insurance could decrease financial risk by less out-of-pocket (OOP) payment, but not promise the protection equity. With the growth of New Cooperative Medical Scheme (NCMS) financing and coverage since 2008, the protection effectiveness and equity of the modified NCMS policies on financial burden should be further evaluated.MethodsA cross-sectional household survey was conducted in Zhejiang, Hubei, and Chongqing provinces by multi-stage stratified random sampling in 2011. A total of 1,525 households covered by the NCMS were analyzed. The protection effectiveness and protection equity of NCMS was analyzed by comparing the changes in health care utilization and medical expenditures, and the changes in the prevalence of catastrophic health expenditure (CHE) and its concentration indices (CIs) between pre- and post-NCMS reimbursement, respectively.ResultsThe medical financial burden was still remarkably high for the low income rural residents in China due to high OOP payment, even after NCMS reimbursement. In Hubei province, the OOP payment of the poorest quintile was almost same as their households’ annual expenditures. Even it was higher than their annual expenditures in Chongqing municipality. Effective reimbursement ratio of both outpatient and inpatient services were far lower than nominal reimbursement ratio originally designed by NCMS plans. After NCMS reimbursement, the prevalence of CHE was considerably high in all three provinces, and the absolute values of CIs were even higher than those before reimbursement, indicating the inequity exaggerated.ConclusionPolicymakers should further modify NCMS policy in rural China. The high OOP payment could be decreased by expanding the drug list and check directory for benefit package of NCMS to minimize the gap between nominal reimbursement ratio and effective reimbursement ratio. And the increase in medical expenditures should be controlled by monitoring excess demand from both medical service providers and patients, and changing fee-for-service payment for providers to a prospective payment system. Service accessibility and affordability for vulnerable rural residents should be protected by modifying regressive financing in NCMS, and by providing extra financial aid and reimbursement from government.