2011 Potpourri XIII

The AHA hired an economics firm to show that the rapid increase in hospital prices over the last few years was justified by increases in costs of care and got exactly what they paid for.  The non-independent study asserts that when carefully analyzed, different prices in different or in the same market are largely related to differences in the cost of providing services, including labor costs.  Of course the economic consultants may have the relationship backwards, perhaps when you can charge higher prices you spend more on seven-figure management salaries and other costs.   The AHA can buy all the studies it wants, we will take, and we will hope the policymakers take, the results of independent studies, all of which have shown that market power plays a significant role in the pricing used by hospitals and that excessive hospital price increases are responsible for much of the overall growth in health spending.   (AHA Study)

Many studies have been released recently on apparent geographic variation in health use and spending.  Pursuant to a request by the Institute of Medicine, which is looking into the issue, CMS created some new datasets.  According to a Kaiser Foundation story, these new data sets suggest that the highest spending markets may not be so expensive on an adjusted basis.  The data adjusts for illness severity and local costs and when that adjustment is performed, a number of apparently higher-than-average regions become lower-than-average and even more flip the over way.   (KFF Story)

The Medical Group Management Association’s latest survey of academic practice physician compensation reveals that between 2009 and 2010 primary care pay rose to an average of $163,700 per year, a 3.47% increase.  Internal medicine doctors got a 6.8% increase and pediatricians only 2.2%.  For specialists the average compensation rose to $241,959 or 2.7%, with cardiologists up 6.7% and pulmunary physcians getting a 7.4% increase.  Faculty practices say it is getting harder to find primary care physicians.   (MGMA Release)

The New England Journal of Medicine looks at the Dutch experience with bundled payments, which may be relevant given the intention of several US payers to implement this approach.  In the Netherlands, the private sickness funds made a single, negotiated payment to a provider or provider group for the care of a person with certain chronic diseases.   The care group provides certain services itself and subcontracts to other providers as well.  The price was negotiated and was highly variable across the country.  Care processes and information availability appear to have improved.   Improvement in outcomes has not been shown to date and some subcontracted caregivers are unhappy with their payments.  Overall, a mixed experience to date.  (NEJM Commentary)

The current Health Affairs issue is focused on innovations in health care and one program featured attempts to help patients manage end-of-life care better.  The Sutter system in California has a program called Advanced Illness Management that provides counseling to late stage chronic diseases patients along with palliative care and attempts to encourage greater use of hospice and fewer hospitalizations.  The program has achieved a 68% fewer hospitalizations record and a cost of $2000 less per month.  It also has increased hospice utilization from 20% to 47%.   (Health Affairs Article)

The Guided Care model developed at Johns Hopkins to care for older patients with chronic disease is establishing a good research record supporting the results of the program.  The latest research, a randomized clinical trial stretching over 20 months, suggests that patients in the program had 21% fewer hospital readmissions, 8% fewer skilled nursing facility admissions and 16% less SNF days and 30% fewer home health episodes.  (Johns Hopkins Release)