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Hospitals' bargaining effectiveness with health insurers has diminished over time

Health insurers are constantly looking for ways to lower costs through effective bargaining with hospitals and other health care providers. Anecdotal evidence suggests that insurance companies are becoming more aggressive and more successful at obtaining price discounts from hospitals; a recent study by current and former Agency for Health Care Policy and Research investigators lends support for this view. Using actual payments for appendectomy as an example of negotiated prices, the study shows that hospitals' bargaining effectiveness has diminished over time. Yet, certain hospital affiliations, greater health maintenance organization (HMO) penetration, and greater hospital concentration improve hospitals' bargaining position.

Herbert S. Wong, Ph.D., of the Agency for Health Care Policy and Research's Center for Organization and Delivery Studies, and former AHCPR staff members John M. Brooks, Ph.D., of the University of Iowa, and Avi Dor, Ph.D., of Case Western Reserve University conducted the study. They developed a model of the hospital-insurer bargaining process and quantified the relative bargaining power of both players. The empirical model was estimated using data from several sources, including the MEDSTAT Marketscan database from 1988 to 1992 (which contains inpatient records of large self-insured firms), data from AHCPR's Healthcare Cost and Utilization Project (HCUP-3), and data from the American Hospital Association's annual survey of hospitals. The researchers controlled for variations in patient case mix and hospital medical practices.

On average, hospitals had relatively more bargaining power than insurers during the 1988 to 1992 period, but this power declined by 3 percent each year. Also, bargaining power varied by State, with New York hospitals having significantly less bargaining power than hospitals in other States. This suggests that hospital bargaining power may be affected by the State-specific regulatory environment, notes Dr. Wong. Greater HMO penetration in a market led to greater hospital bargaining power with fee-for-service plans. Hospitals in areas of increased hospital concentration (fewer hospitals having a greater share of inpatient stays), hospitals within multi-hospital systems, and public or voluntary hospitals (vs. for-profit hospitals) had more bargaining power. However, the bargaining power of hospitals decreased as the size of the insurer in the market increased.

For more details, see "Hospital-insurer bargaining: An empirical investigation of appendectomy pricing," by John M. Brooks, Ph.D., Avi Dor, Ph.D., and Dr. Wong, in the Journal of Health Economics 16, pp. 417-434, 1997. Reprints (AHCPR Publication No. 97-R089) are available from the AHCPR Publication Clearinghouse.

HMO copayments for emergency care don't delay people from seeking treatment for heart attack symptoms

Some health maintenance organizations (HMOs) have begun requiring copayments for emergency care in order to reduce inappropriate and expensive visits to the emergency department. Concerns have been raised that these copayments may delay or dissuade persons who really need emergency care from seeking it. Apparently this is not the case for individuals with heart attack symptoms, for whom prompt medical attention in the first hours can save lives and reduce the extent of heart damage. A recent study found that privately insured HMO patients with heart attack symptoms who paid fixed copayments of $25 to $100 for emergency care did not delay seeking emergency treatment.

The study, supported in part by the Agency for Health Care Policy and Research (Cardiac Arrhythmia Management Patient Outcomes Research Team [PORT], HS08362), found that the time from onset of heart attack symptoms to hospital arrival was 2.25 hours for patients enrolled in the Group Health Cooperative of Puget Sound, whether they had a copayment for emergency care or not. However, copayments may result in longer delays in seeking emergency care for patients with less easily recognizable conditions or those with higher copayments or deductibles for emergency services, cautions David J. Magid, M.D., M.P.H., of the University of Colorado Health Sciences Center and the Colorado Permanente Medical Group, Denver.

Dr. Magid and colleagues examined ambulance and hospital records for the length of time from symptom onset to hospital arrival for all patients enrolled in the HMO in King County, WA, from 1989 through 1994; 602 patients' health insurance required a copayment for emergency department care, and 729 patients had plans with no copayment. The age-adjusted median time to hospital arrival was 136 minutes for those with no copayment, 135 minutes for those with a $25 copayment, and 138 minutes for those with a copayment of $50 or more. Although the researchers expected that copayments would be more burdensome to lower income individuals, they found no significant interaction between income and effect of a copayment requirement on seeking emergency care. They do suggest, however, that this finding be viewed with caution, since few indigent people were enrolled in the HMO studied.

Details are in "Absence of association between insurance copayments and delays in seeking emergency care among patients with myocardial infarction," by Dr. Magid, Thomas D. Koepsell, M.D., M.P.H., Nathan R. Every, M.D., M.P.H., and others, in the June 12, 1997, New England Journal of Medicine 336, pp. 1722-1729.

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Health Care Delivery

Inappropriate lab testing in the ICU remains a problem

Unwarranted laboratory testing of patients in hospital intensive care units (ICUs) continues to be a problem. Repeated blood testing can be so excessive as to cause anemia and the need for blood transfusions. The amount of blood drawn is primarily determined by the patients severity of illness and diagnosis at ICU admission, but it varies substantially among ICUs across the country, according to a study supported in part by the Agency for Health Care Policy and Research (HS05787). This analysis is part of the Acute Physiology and Chronic Health Evaluation (APACHE) III study of ICU outcomes and resource use.

The study reveals that more severely ill patients had three times as many samples drawn for testing than less ill patients. The mean number of samples drawn on ICU day 2 increased from 3 for patients who were moderately ill (APACHE III scores of 20 to 39) on ICU day 1 to 10 for severely ill patients (scores of 100 to 119).

The number of blood samples drawn for nonsurgical patients was greatest for those with sepsis, and the fewest samples were drawn for patients with drug overdose. Among surgical patients, the most blood samples were drawn for patients who underwent cardiac valvular surgery, and the fewest were drawn for those who had carotid endarterectomy.

Even after accounting for patient characteristics, the amount of blood drawn for lab testing among ICUs varied widely, ranging from 240 mL to 944 mL per patient during a week in the ICU. Estimated blood loss per sample was 6.8 mL on ICU day 1, 6.1 mL on ICU day 2, and 5.9 mL during ICU days 2 to 7 for patients with a standard arterial catheter.

Based on these estimates, mean blood loss for laboratory testing among patients treated in teaching ICUs (which was twice as high as in nonteaching ICUs) would be 222 mL during ICU days 1 to 7, 86 mL on ICU day 1, and 46 mL on ICU day 2. These losses would be reduced by 25 percent to 38 percent with use of blood conservation devices for all patients, notes Jack E. Zimmerman, M.D., of the George Washington University Medical Center.

Dr. Zimmerman and his colleagues suggest that ICUs could increase patient safety and reduce the cost of care by improving the appropriateness of test ordering and reducing the amount of blood required for each test ordered. They evaluated laboratory blood sampling of 17,440 patients admitted between May 1988 and February 1990 to 42 ICUs in the United States.

For more details, see "Evaluating laboratory usage in the intensive care unit: Patient and institutional characteristics that influence frequency of blood sampling," by Dr. Zimmerman, Michael G. Seneff, M.D., Xiaolu Sun, M.D., and others, in Critical Care Medicine 25(5), pp. 737-748, 1997.

Male and female physicians have very different patterns of communication with their pediatric patients

Female physicians spend more time with and generally provide more encouragement and feedback to children during an office visit. This makes them more popular with girls, but boys still seem to prefer male doctors. Like adults, children communicate more with female than with male physicians, but they are more satisfied with physicians of the same sex, concludes a study supported in part by the Agency for Health Care Policy and Research (HS05408).

The researchers videotaped communication between 212 children (aged 4 to 14 years), parents, and physicians during health visits at a university-based pediatric practice. They found that visits with female physicians were 29 percent longer than those with male physicians. Female physicians engaged in 41 percent more social exchange, and they offered more encouragement and reassurance. Female physicians also communicated more than male physicians during the physical examination, and they gathered more information from the children. Male and female physicians spent a similar amount of time discussing illness management. Parents (more mothers than fathers) were more satisfied with female physicians (56 percent) than male physicians (44 percent).

Both male and female doctors spent less time with girls than boys. Female physicians spent 33 minutes with boys and 30 minutes with girls, compared with male physicians, whose visits lasted 26 minutes with boys and 22 minutes with girls. It is unclear whether such communication differences established during childhood form the basis of physician-patient communication differences as adults, note the researchers.

Further details are in "Gender differences in physician-patient communication," by Jane Bernzweig, Ph.D., John I. Takayama, M.D., M.P.H., Ciaran Phibbs, Ph.D., and others, in the June 1997 Archives of Pediatric and Adolescent Medicine 151, pp. 586-591.

Greater pediatric experience generally denotes facilities that provide more appropriate care for children on dialysis

Children with end-stage renal disease (ESRD) due to problems ranging from congenital anomalies and AIDS to metabolic diseases often must undergo long-term dialysis before they can obtain a kidney transplant. These children are more apt to receive the recommended peritoneal dialysis (PD) rather than hemodialysis (HD) when cared for at dialysis facilities more experienced with pediatric patients than at centers that care mostly for adults, according to a study supported in part by the Agency for Health Care Policy and Research (HS08365).

In PD, which can be administered at home, a thin plastic tube is threaded into a small incision in the child's abdomen to permit removal of wastes and maintenance of stable electrolyte levels. With HD, the patient is treated in a center where he or she is hooked up to a kidney machine via needles inserted into a surgically enlarged vein. PD offers many other advantages over HD, including improved growth, better metabolic control, more liberal diet, improved school attendance, and less depression. The fact that adult-focused centers are less likely to offer this more appropriate treatment to children suggests that subspecialists trained in adult medicine do not provide care to children with ESRD that is comparable to the care provided by pediatric subspecialists, conclude Neil R. Powe, M.D., M.P.H., M.B.A., and his Johns Hopkins University colleagues. Their findings are based on a 1990 study of 1,256 children (mostly boys 14 years of age and older) identified from the Medicare ESRD registry who underwent HD or PD at one of the outpatient dialysis facilities throughout the United States.

The researchers found that children treated at facilities with more than 10 percent pediatric patients were 60 percent more likely to be treated with PD instead of HD than children treated at facilities with less than 1 percent pediatric patients. This was true even after controlling for patient age, race, income, education, cause and duration of ESRD, and facility characteristics.

Medicare reimbursement is equal for HD and PD. However, with the growth of capitation for patient care, pressure to refer children within the organizational umbrella of a particular health maintenance organization or preferred provider network may result in referral to adult subspecialists, who greatly outnumber pediatric subspecialists in many fields. This study questions the benefit of this approach for children with ESRD, one-third of whom were treated at adult-focused centers.

Details are in "Does greater pediatric experience influence treatment choices in chronic disease management?" by Susan L. Furth, M.D., Dr. Powe, Wenke Hwang, M.S., and others, in the June 1997 Archives of Pediatric and Adolescent Medicine 151, pp 545-550.

Most patients with dyspepsia credit gastrointestinal medicines or dietary changes for improvement

Dyspepsia is a common problem seen by primary care physicians. It typically involves upper abdominal pain or discomfort accompanied by fullness, burning, belching, bloating, nausea, vomiting, fatty food intolerance, or difficulty completing a meal. This problem may be related to conditions ranging from ulcers and irritable bowel syndrome to heartburn.

Dyspepsia is usually treated initially with acid-reducing drugs, and this is a good approach, concludes a study supported by the Agency for Health Care Policy and Research (HS07257). It shows that 75 percent of patients who recovered from gastrointestinal (GI) problems or whose symptoms improved credited taking GI medicine, including anti-ulcer medication, with 44 percent crediting a change in diet.

John H. Kurata, Ph.D., M.P.H., of the University of California, Los Angeles, School of Medicine, and colleagues analyzed medical chart and billing data for 545 adult patients who visited 5 family health centers for digestive complaints during 1993. The researchers later surveyed 288 of the patients to elicit the patients' views of the causes of dyspepsia, procedures they received, and reasons for improvement. Of the surveyed patients, 48 percent reported improvement in symptoms or recovery since the initial visit; 43 percent reported no change, and 8 percent reported a worsening of their condition. Abdominal pain, experienced by 65 percent of patients, and heartburn (51 percent of patients) were the two symptoms reported most often. The two most common causes of GI problems cited by patients were stress or anxiety (58 percent of patients) and diet (46 percent), followed by alcohol (8 percent) and nonsteroidal antiinflammatory drugs (8 percent).

Patients who cited stress or anxiety as a cause often reported a change in personal habits as a reason for improvement or recovery, while those who gave diet as a cause cited changes in diet as a reason for improvement. These findings suggest that determining patients' perceptions of the causes of their specific complaints and tailoring treatment regimens to address these perceptions may contribute to improvement of health complaints. Finally, about 66 percent of patients were satisfied with overall care. Satisfaction was not associated with insurance coverage, procedures done, race, treatment with antiulcer medication, diagnosis, general health status, or sex. Not surprisingly, patients who improved were more satisfied with their medical care than those who didn't improve.

See "Dyspepsia in primary care: Perceived causes, reasons for improvement, and satisfaction with care," by Dr. Kurata, Aki N. Nogawa, M.S., Yang K. Chen, M.D., and others, in the Journal of Family Practice 44(3), pp. 281-288, 1997.

Continuity of care is strongly influenced by the nature of the provider-patient relationship

Continuity of care—that is, seeing the same provider in an office or clinic setting for regular, ongoing care—has positive effects on both patients and providers. Patients with regular providers are more likely to feel satisfied with the services they receive, and physicians with this type of relationship are more likely to state that the results of the care they provided were closer to their expectations. In a recent study supported by the Agency for Health Care Policy and Research (HS08104), Llewellyn J. Cornelius, Ph.D., of the University of Maryland, assessed the Nation's progress in achieving continuity of care for blacks and Latinos.

Dr. Cornelius found no difference in continuity of care between blacks and whites, but Latinos were more likely than whites to have a high degree of continuity of care with their regular physicians (66 percent vs. 54 percent, respectively). Individuals with low continuity of care reported higher total health care expenditures for dental services, prescription medicines, physician visits, and hospital stays during 1987.

Latinos and blacks whose regular physician was a specialist or of their race had less continuity of care than Latinos or blacks whose regular physician was in primary care or was of another race. Whites whose regular physician was female, black, or a specialist had less continuity of care than other whites. This suggests that patients may be reluctant to regularly rely on physicians who are traditionally underrepresented in the health profession. This is in spite of the fact that blacks and Latinos are four times more likely to be treated by black or Latino physicians than by a white physician and despite the fact that female physicians spend more time with their patients and provide more positive statements than male physicians.

Given the commitment of minority and female providers, patient education may be in order, notes Dr. Cornelius. His findings are based on an analysis of data from questionnaires on health status, usual source of care, and sociodemographic, medical, and insurance characteristics, that were part of AHCPR's 1987 National Medical Expenditure Survey of a national probability sample of 15,000 households.

For more information, see "The degree of usual provider continuity for African and Latino Americans," by Dr. Cornelius, in the Journal of Health Care for the Poor and Underserved 8(2), pp. 170-185, 1997.

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