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Global Health, Health Costs, Health Policy, Medicine and Society, Research

Chinese clinicians use inpatient visits to compensate for drug revenue loss

Chinese clinicians use inpatient visits to compensate for drug revenue loss

For decades, many doctors in rural China boosted their incomes by both recommending and selling drugs, often at steep markups. With mounting evidence of overprescription, in 2009 the Chinese national government largely banned markups, undermining doctors’ financial incentive to over-provide them. Instead, the government provided physicians with a subsidy to compensate for the loss in profits.

Since then, a number of scholars have examined the effects of the policy. But no one has looked at the unintended consequences — until now.

In a study published today in Health Affairs, a team of researchers found the policy had the unintended consequence of boosting hospitalizations and the provision of inpatient care.

“When you have a regulation that affects pricing, it’s like pushing a balloon in in one place — then it pops out in another,” said Grant Miller, PhD, director of the Stanford Center for International Development, senior fellow at the Freeman Spogli Institute for International Studies and an associate professor of medicine. The first author is Hongmei Yi, PhD, program manager of FSI’s Rural Education Action Program in China.

The team, which also includes Scott Rozelle, a senior fellow at FSI, examined data from rural Chinese clinics between 2007 and 2011. They found clinics that were most heavily reliant on drug revenues before the policy change more than doubled their provision of inpatient services when compared with the clinics least reliant on drug revenues before the change. These centers also experienced little change in revenue, which indicates they were able to offset the losses of drug revenue with income from inpatient stays.

Based on their analysis, the team also believes that this increase is not driven by demand for inpatient services, Miller said.

By also surveying and conducting follow-up phone interviews with patients, the researchers also found some evidence that clinics may be artificially boosting their inpatient tallies to increase their compensation from the government.

He said he was not surprised the policy had unexpected ramifications. “Humans are adaptive creatures and doctors are not categorically different than the rest of us. If you take away a source of livelihood, it’s not surprising they found another way to make it up.”

Rural primary care doctors in China “are also not at the top of the economic pyramid,” Miller said.

Health-care reform is on the national agenda in China and it’s possible that this study could inform future policies, Miller said. “It raises a much broader set of questions about how you design in a more holistic way a proper set of incentives for providers,” he said.

Previously: Seeking solutions to childhood anemia in China, Better school lunches — in China and Stanford India Health Policy Initiative fellows are in Mumbai — come follow along

Aging, Health Costs, Health Policy, Patient Care

A look back at Medicare’s 50 years

Hand in HandOn Friday, KQED’s Forum offered a look at Medicare and Medicaid to mark the programs’ 50-year anniversary. Stanford health policy researcher Laurence Baker, PhD, participated in the discussion, which covered issues such as how the programs drive the way prices for care are negotiated with medical providers, how the large population of Baby Boomers will affect the system, and how reimbursement rates affect the kind of care Medicare and Medicaid patients receive.

The panel also discussed the gaps in coverage — services like dental care are not covered by Medicare — and the challenges they create. Medicare coverage has grown from the narrow set of conditions it first covered, and Baker thinks the conditions are right to begin a new national conversation about expanding coverage:

One of the things that’s really ripe for discussion is how this country is going to handle the long-term care issues. Medicare’s got to be at the center of that. And it almost feels like the time is coming that we’re going to have to think about that much more seriously.

And when host Mina Kim asked Baker the question that’s on a lot of people’s mind — Is Medicare sustainable for the long term? — Baker noted:

The program is pretty important; it’s clearly something the country values across the political spectrum. Lots of people want to see it sustained. It may not be a pretty process. It might not be fun to watch the politics of how we work all this out, but there are lots of ways to keep the program solvent, so I’m optimistic.

Previously: Competition keeps health-care costs low, Stanford study findsWhat’s the going rate? Examining variations in private payments to physiciansCheck the map – medical procedure rates vary widely across CaliforniaMedicare payment reform shown to cut costs and improve patient care and KQED health program focuses on baby boomers and the future of Medicare
Photo by Garry Knight

Addiction, Emergency Medicine, Health Costs, Patient Care, Research

Questionnaire bests blood test at identifying patients with risky drinking behaviors

Questionnaire bests blood test at identifying patients with risky drinking behaviors

3144132736_9de39a590d_zAs many as half of the patients who visit the emergency room with traumatic injuries have alcohol in their bloodstream, and roughly 10 percent of these patients will return to the ER within a year. Today, many emergency rooms use blood alcohol tests to screen for patients with risky drinking behaviors. Yet a new study by researchers from Loyola University Medical Center suggests that a questionnaire may be a better way to identify at-risk patients.

In the study, researchers reviewed 222 records from patients 18 years of age and older that were admitted to Loyola University Medical Center’s level I trauma center between May 2013 and June 2014. Each of the patients in the study had a blood alcohol test and had answered the World Health Organization‘s 10-point questionnaire, called the Alcohol Use Disorders Identification Test (AUDIT). The research team compared the results of the blood test to that of the AUDIT test and found that the questionnaire was 20 percent more effective at identifying at-risk patients with dangerous drinking habits than the blood test.

As the researchers explain in their study, blood alcohol tests only provide “a snapshot of the patient’s recent drinking behaviors” by measuring of the amount of alcohol in the patient’s system at the instant the test is taken. In contrast, the questionnaire assesses the patient’s overall drinking behaviors by asking questions such as, how often they drink, how much they drink per day and if they have feelings of guilt or remorse after drinking.

These findings are significant because blood alcohol tests are often the only tool used to assess at-risk drinking behavior in ER patients. Their findings call this common practice into question and suggest that the AUDIT questionnaire may be a better way to identify, and ultimately prevent, potentially dangerous drinking behaviors.

Previously: Alcohol-use disorder can be inherited: But why?Could better alcohol screening during doctor visits reduce underage drinking? and How to make alcoholics in recovery feel welcome this holiday season
Via: Business Wire
Photo by: Julie °_°

Health Costs, Health Policy, Medicine and Society, Orthopedics, Research, Stanford News

When physicians work together, costs can rise

When physicians work together, costs can rise

97187153_16040f08b7_zOnce upon a time, patients received care from a local doctor, who usually worked alone or with a few partners. Now, most physicians belong to large practices, which have standardized procedures and costs.

These mergers have been greeted warmly by regulators and the public, who believe that larger groups can take advantage of economies of scale. But these alignments could also give physicians greater bargaining power with insurers, a move that could push costs up, according to a new study by Stanford researchers.

Eric Sun, MD, an instructor of anesthesiology, perioperative and pain medicine, working with senior author Laurence Baker, PhD, investigated the fees charged by orthopedic surgeons for knee replacements between 2001 and 2010. They also ranked how concentrated physicians’ health-care markets scored on a commonly used index.

They found that physicians’ fees in markets with a high concentration of physician groups rose $168 compared to fees in the least concentrated markets — a jump of 7 percent.

The research has implications for the Affordable Care Act, which encourages physicians to join alliances. “The point is not to say that consolidation is a bad thing,” Sun concluded in our press release on the study. “But as we think about encouraging these kinds of mergers, we really want to weigh the costs against the benefits.”

The study appears in the June issue of Health Affairs.

Previously: Health-care policy expert Arnold Milstein weighs in on Medicare’s plan to prioritize “value over volume”, Steven Brill’s Bitter Pill and What’s the going rate? Examining variations in private payments to physicians
Photo by Waldo Jaquith

Emergency Medicine, Health Costs, In the News, Research, Stanford News

Thinking twice before doing blood transfusions improves outcomes, reduces costs

Thinking twice before doing blood transfusions improves outcomes, reduces costs

7413610060_317879301e_zStanford Hospital has figured out that doing fewer blood transfusions saves lives – and millions of dollars annually. In two studies headed by Stanford’s Lawrence Goodnough, MD, professor of pathology and hematology, doctors were gently nudged by a computer program to think twice before performing a blood transfusion. The impressive results were discussed in a Nature news feature published Tuesday:

The number of red-blood-cell transfusions dropped by 24% between 2009 and 2013, representing an annual savings of $1.6 million in purchasing costs alone. And as transfusion rates fell, so did mortality, average length of stay and the number patients who needed to be readmitted within 30 days of a transfusion. By simply asking doctors to think twice about transfusions, the hospital had not only reduced costs, but also improved patient outcomes.

Transfusions are common procedures in industrialized countries, but scientists are finding that they’re overused. More research needs to be done to determine when, exactly, transfusions cross the line between helpful and harmful. They do save lives, but probably only for the most critically ill patients.

Decades of established practice and protocol are hard to change, though. Clinicians acting in the moment refer to their experience, not to guidelines. That’s one reason Stanford’s simple computer innovation is so important. Goodnough, quoted in Nature, speculates about why it succeeded: Not only did alerts remind doctors about the guidelines and provide links to the relevant literature, they forced them to slow down and think instead of running with the default. The alerts may have provided an opening for more individualized discussion among caregivers:

‘Maybe the intern, who was ordering the blood because they were told to, goes back to the team and says, “I have to give a reason”, and then they discuss it,’ Goodnough says. The clinicians might decide to order the blood anyway, of course. Or they might stop, consider the evidence, and come to agree with what Goodnough believes is its clear message. ‘The safest blood transfusion,’ he says, ‘is the one not given.’

Check out the article for more on the history of blood transfusions, other research into their optimal use, and new practices being pioneered around the world.

Previously: Fewer transfusions means better patient outcomes, lower mortality, Stanford Hospital trims use of blood supplies, Stanford test a landmark in the blood banking industry and Should the US create a national blood transfusion reporting system?
Related: Against the flow: What’s behind the decline in blood transfusions?
Photo by Banc de Sang i Teixits

Health Costs, Health Policy, In the News, Patient Care, Public Health

Health-care policy expert Arnold Milstein weighs in on Medicare’s plan to prioritize “value over volume”

Health-care policy expert Arnold Milstein weighs in on Medicare's plan to prioritize "value over volume"

8266476742_4967a82707_zAmerican health-care spending is the highest in the world, yet some question whether that money really leads to improved patient outcomes. But significant reforms taking place within Medicare, the US’s biggest healthcare payer, over the next few years aim to quell these concerns and reduce costs while improving quality of care.

Health policy experts explained the context of these changes last week in a webinar hosted by Reporting on Health and supported by the NIH’s Health Care Management Foundation. The panel featured Stanford’s Arnold Milstein, MD, MPH, director of the Clinical Excellence Research Center, as well as health economist Austin Frakt, PhD, professor at Boston University School of Medicine, and Jordan Rau, a correspondent for Kaiser Health News.

Health-care’s dominant “fee for service” (FFS) model has been around “since doctors were getting paid in chickens,” said Rau in the webinar, but it has no link whatsoever to quality. Many think this model needs to be changed because it incentivizes physicians to do more (and more expensive) procedures, regardless of the effect they have on patient outcomes. “Better, less expensive care is a national imperative,” said Milstein. “The cost to society of inefficiently delivered care is creating enormous opportunity cost.”

Starting in 2011, Medicare began to tie payments to quality: Doctors get paid 2 percent more if quality goes up, and 6 percent less when it goes down, based on patient ratings and rates of readmission and infection. In 2014, quality-linked FFS accounted for around 80 percent of care, of which around 20 percent featured some more radical change. The new plan is that 50 percent of payments will be non-FFS by 2018.

Options to reform this model could include bundled fees (a flat rate per “episode” that includes all complications and follow-up care), accountable care organizations (ACOs) that take responsibility for all patient needs and costs, incentives for cross-provider cooperation, and population-based payment in which doctors receive a set fee for any patient (currently being pioneered in Maryland).

How will we know which changes to push? Milstein used a graph to indicate “positive value outliers,” institutions with high quality and low cost, whose strategies and techniques will be emulated to see if they can be effective elsewhere. He explained what researchers found makes them different:

[Positive value outliers] tended to have deeper, more personal relationship with their patients; their patients trusted that if they called these doctors on nights and weekends, someone who knew something about them would be rapidly responsive. Doctors’ vision of their responsibility to their patients extended far beyond producing a perfect office visit; it really meant being a steward for their patients’ best interests as their patients traversed emergency room doctors, hospitalists and medical specialists. And lastly, these doctors were not trying to be solo heroes – they did a wonderful job hiring and training medical assistants and taking advantage of a team… and it was associated with a substantial improvement in value. Our next step is to splice this DNA into average performing primary care practices and verify that this is indeed the right stuff.

Some other ideas for achieving the targets were mentioned, such as sending physicians to homes so patients don’t get admitted, or in the longer term, having an intensive-care unit (ICU) “airline control tower” with more perspective than those on the “frontline” of critical care, an idea Milstein said was studied across 56 American ICUs and resulted in a 25 percent mortality reduction.

Milstein said such approaches could lower baseline health-care costs by 30 percent, but moreover could slow the rate at which health-care spending outgrows the economy, which is the real measure of success. Innovators in this area, he said, will need to draw from behavioral and computer science to think about problems differently.

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Events, Global Health, Health Costs, Health Disparities, Health Policy, Stanford News

Global health expert: Economic growth provides opportunity to close the “global health gap”

Yamey talkStanford’s Center for Innovation in Global Health hosted a recent seminar for Stanford students and faculty with global health-policy expert Gavin Yamey, MD, MPH. The discussion focused on the disparity in heath care between higher- and lower-income countries and how economic growth in lower-income countries could set the stage for big improvements in global health.

During the talk, Yamey explained that millions of lives could be saved if economic gains in low- and lower-middle-income countries were invested in health care. “I can’t think of any other investment on the planet that could improve human welfare in such a huge way,” Yamey told the audience.

As described in an online story on the event, Yamey cited Rwanda – a country that rebuilt its economy and healthcare after the 1994 genocide – as an example of how this scenario could play out elsewhere:

Over the past decade, Rwanda has experienced significant drops in mortality associated with HIV, malaria and maternal death, and achieved the greatest drop in child mortality rates in recorded history. While scholars acknowledge several factors that contributed to such an extraordinary rebound, government spending on public health, the smart use of aid, and economic growth were all integral to the equation.

“We have an extraordinary opportunity to bring down maternal, newborn and infectious disease deaths to universally low levels everywhere,” Yamey said. “But for that to happen, we need an aggressive scale up of existing tools and interventions, investment in new tools and a build-up of delivery systems.”

Previously: Minimum wage: More than an economic principle, a driver of healthHealth care in Haiti: “At risk of regressing”Child-mortality gap narrows in developing countries and Stanford general surgeon discusses the importance of surgery in global health care
Photo, of Gavin Yamey (left) and moderator Paul Costello, courtesy of the Center for Innovation in Global Health

Health Costs, Health Policy, In the News, Medicine and Society

“From volume to value:” Stanford expert to discuss Medicare reform in free webinar

Big changes are ahead for Medicare, the largest payer in the U.S. health-care system. By 2018, Medicare aims to tie at least half of all payments to the quality or value of care received, not the quantity of services rendered. Many critics of the existing system claim that it incentivizes doctors to do more procedures, which do not in the end improve health.

A panel of experts will discuss changes in how we pay for care, and whether payment reforms can improve quality while lowering costs, in a free public webinar this Thursday at 10 AM Pacific time. Heading the panel is Stanford’s Arnold Milstein, MD, MPH, director of the Clinical Excellence Research Center. That center focuses on new methods of health-care delivery that substantially reduce health spending while improving outcomes.

More details, including the link to register, can be found on the Reporting on Health website. The webinar is free and made possible by the National Institute for Health Care Management Foundation.

Previously: Medicare reforms cut costs and improve patient careExperts discuss high costs of healthcare and what it will take to improve the systemAnalysis: the Supreme Court upholds the health reform act (really) and Views on costs and reform from the “dean of American health economists” and New Stanford center to address inefficient health care delivery

Health Costs, In the News, Mental Health, Research, Stanford News

Exploring the costs and deaths associated with workplace stress

Exploring the costs and deaths associated with workplace stress

6273248505_43d0b56424_oMany of us know that a stressful job or work environment can be hard on our physical and mental health. But what is less known – and less studied – is how work-related stress translates into deaths and dollars spent on health care. According to new research, work-related stress may be linked to more than 120,000 deaths per year and about $190 billion in health-care costs in the United States alone.

In a study submitted to Management Science, former Stanford doctoral student Joel Goh, PhD, and Stanford professors Jeffrey Pfeffer, PhD, and Stefanos A. Zenios, PhD, reviewed 228 studies to explore the relationships between ten common sources of workplace stress, mortality and healthcare expenses in the U.S.

The researchers found that a lack of health insurance and job insecurity were among the top stressors linked to poor physical and emotional health. From a recent Stanford Business story:

Job insecurity increased the odds of reporting poor health by 50%, while long work hours increased mortality by almost 20%. Additionally, highly demanding jobs raised the odds of a physician-diagnosed illness by 35%.

“The deaths are comparable to the fourth- and fifth-largest causes of death in the country — heart disease and accidents,” says Zenios, a professor of operations, information, and technology. “It’s more than deaths from diabetes, Alzheimer’s, or influenza.”

Perhaps the most surprising result, the researchers explain, was the strong effect of psychological stressors on overall health:

Employees who reported that their work demands prevented them from meeting their family obligations or vice versa were 90% more likely to self-report poor physical health, the researchers note. And employees who perceive their workplaces as being unfair are about 50% more likely to develop a physician-diagnosed condition.

The researchers acknowledge that the study has some limitations. For example, they were unable to make strong causal links between work-related stress, mortality and health-care expenses; and they only examined 10 sources of stress. The importance of the study, Pfeffer explains, is that it draws attention to the need to create positive work environments where people feel good about themselves and their work.

Previously: How the stress of our “always on” culture can impact performance, health and happinessStudy finds happy employees are 12 percent more productiveWorkplace stress and how it influences health and How work stress affects wellness, health-care costs
Photo by Bernard Goldbach

Aging, Health Costs, Medicine and Society, Ophthalmology, Research, Stanford News

Factors driving prescription decisions for macular degeneration complex – and costly

Factors driving prescription decisions for macular degeneration complex - and costly

5197694152_fbbfe73c21_zFor the last decade or so of her life, my grandma was basically blind. Her eyes, like those of many seniors, suffered from macular degeneration, a progressive disorder that affects the macula, a small spot near center of the retina critical for clear vision.

She lived her last years in a nursing home in Iowa and I honestly don’t know what drugs, if any, she took for this condition, much less how much they cost.

But multiplied by millions (macular degeneration is the most common cause of visual impairment in older adults), the costs are a big deal. That’s why Stanford researchers set out to understand why doctors would prescribe one drug, ranibizumab (let’s call it r) at a cost of $2,000 a dose over bevacizumab (b), which runs $50 a dose.

They published their findings in Health Affairs today.

Both drugs are equally effective and have similarly severe side effects. And, according to a 2011 report, if all Medicare doctors had prescribed b rather than r in 2011, the system would have saved $1.1 billion.

Stanford researchers hypothesized that Medicare physicians — who face a financial incentive to prescribe more expensive drugs — would be more inclined to prescribe r than Veterans Affairs physicians, who don’t have the same incentive.

Instead, as health economist Kate Bundorf, PhD, told me, it’s much more complex.

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