Coverage, technology assessment, and the courts

Coverage decisions by third-party payers are relying more and more heavily on the conclusions of technology assessment programs about the safety and effectiveness of technologies applied in specific clinical situations. Assessment programs vary markedly in the sophistication and rigor of their methodology. Payers differ as to how such assessment information is integrated into their decision-making processes. Finally, coverage decisions about a specific technology can vary widely across the country.     

Defined contribution health care: future direction or fantasy?

Will payers embrace defined contribution plans as an alternative to traditional health insurance or is this new approach a pipe dream? Are consumers truly ready to make informed decisions on purchasing their own health care? This article explores barriers to defined contribution health plans, including consumer reluctance to take ownership of buying insurance and a preference for the cost predictability of liberal coverage in employer-sponsored programs versus MSAs or higher co-payment arrangements. For the ultimate form of defined contribution health care to work, several tax and insurance barriers must be overcome. As a practical matter, the author argues that the current employer-sponsored approach is the most efficient system for large employers.     

Reducing health care costs using claims adjudication software

An important area for reduction in health care costs is incorrect coding of physician services. Current software systems provide high-volume, consistent claims review with substantial savings for payers. The third generation of such systems offers comprehensive coverage across clinical disciplines, across individual claims, and across an entire history of claims. It is likely that these systems will be useful to both nontraditional payers, such as physician groups and hospital-based networks, and traditional payers seeking to reduce costs and enhance competitiveness.     

Forschungsziele der Betriebswirtschaftlichen Steuerlehre in der Kritik

In this article the understanding of the scientific functions of business taxation represented by Jochen Hundsdoerfer, Dirk Kiesewetter and Caren Sureth is critically analyzed. It is argued that hypotheses on the influence of taxes on decisions, as far as they are based on neoclassical models, are not applicable to explain the actions of tax payers. These arguments at the same time object the realization of a neutral tax system. They further contradict the realization of a tax system, which is supposed to have an impact or which avoids taxes to have an effect on decisions, provided that the criticized hypotheses are used as a basis. Fiscal law standards should rather fulfil the principle of equability of taxation. It is supposed that such fiscal law standards have an effect on decisions of tax payers, which are contradictory to the aim of an equable taxation. Therefore hypotheses from scientific experience of the actual effect of taxes on decisions must be taken into account. Hence the object of this analysis is to investigate the real influence of taxes on decisions detached from neo-classical models.     

Health care trends, Part 2. The new health care team. Panel discussion

In Part 2 of this third annual panel discussion, six experts talk about the growing diversity of health care providers and what it means for consumers and physicians. Americans are getting their wellness and health care services from a wider variety of non-physician practitioners than ever before. The number of allied health and alternative providers with direct patient access is likely to continue growing. This trend is being driven by consumer demand, by the lobbying efforts of non-physician providers, and by federal, state, and private payers who see the potential for reduced health care spending, greater consumer satisfaction, and better outcomes. In practice, this means physicians and non-physician providers, some of whom may not be sanctioned by the medical establishment, are obligated to collaborate as a team. Members of this new provider team will have to communicate effectively (with each other, with consumers, and with payers) and make evidence-based clinical decisions. Physicians may have to share decision-making with other members of this new health care team.     

California's Wickline decision revisited

In a recent California appellate decision, Wilson v. Blue Cross of Southern California, 222 Cal. App 3d 660, 271 Cal Rptr 876 (2d Dist., 1990), the court cut back on its earlier decision in Wickline v. State of California, 192 Cal. App. 3d 1630, 239 Cal Rptr 810 (2d Dist. 1986), which had provided substantial protection for third-party payers against liability for utilization review decisions. The Wilson decision not only limits Wickline to its particular facts, but also criticizes some of its rationale.     

The MBA mystique

Is an MBA the solution for you? Do physician executives need to have a business degree to compete in today's competitive marketplace? What are clients looking for when they make hiring decisions? The answers may surprise you. This column is an attempt to dispel myths about physician executives and the MBA degree. Clients want to attract and hire physician executives who possess sometimes intangible skills--with or without the MBA credential. These intangible skills include the ability to educate other physicians to the new health care realities, a sales orientation emphasizing effective communication that focuses on patients and payers as customers, comfort with ambiguity, flexibility, and tact and sensitivity in negotiations.     

Informed decision making: the new paradigm

Health care cannot survive in its present form. It is becoming unaffordable for a large share of the country's population. Its quality and effectiveness inexplicably vary between communities and across time. With all these problems, the process of health care can be understood. All that are needed are good, basic data; its access, management, and analysis; and then presentation of facts and observations. Together, these functions describe the translation of data into information--the field of medical informatics. Information about such management concerns as clinical efficiency (which largely is related to appropriateness and cost-effectiveness) and about the realities of day-to-day medical practice can be used to improve the value of health care. Informed decision making is based solely on confidence that, given the right information and understanding, we can all make the right decisions. The right decisions mean better patient acceptance and satisfaction, a sense of value enhancement by payers, and support of the Hippocratic tradition.     

Severity-of-illness systems. An overview for medical directors--Part one

To a baseball fan, the weight of a player's bat is not very important, and the grace with which it is swung has only slightly more appeal. Both these factors matter far less than how often and with what results the bat meets the ball. Similarly, in today's competitive health care environment, the medical director has to focus on results. Not only external demands from constituencies such as insurers, payers, consumers, and regulators, but also internal pressures for sound management decisions require accurate information about the outcomes of care. In this two-part article, the authors examine the contributions that severity-of-illness systems can make to outcomes monitoring.     

Will physicians replace MHAs?: reflections from Australia

Tom Weil, in the preceding article, sees the physician executive playing an increasingly significant role in negotiations between payers and service providers, in offering the public acceptable explanations for the inevitable changes in the provision of care, and in developing more cost-effective methods of delivering high-quality health care at affordable prices. Effective involvement of physician executives will be facilitated by their having received professional training somewhat different from that of the traditional MHA. How do these prognostications relate to the health care scene in Australia? Factors that must be taken into account in considering their applicability to Australia include differences in the structure and management of the Australian health care system, the current state of that system, the background of the leadership that makes the key managerial decisions in the Australian system, and emerging trends within the system.     

An investigation of company product decision making

This article is concerned with an investigation of the approaches taken by companies in making product decisions. The first part is concerned with a review of the range of product decisions as presented within the literature. This range is established within the context of corporate planning, with a major split between long term strategic planning product decisions, and short term operational planning product decisions. The second part of the article is concerned with the results of a survey that was designed to investigate the criteria that companies use within their product decision making. These criteria included those applicable to strategic planning, but also incorporated a range of criteria applicable to short term operational planning, as proposed in a recent article by Greenley [8]. The overall conclusion to the survey results was that a common and universal approach to product decision making cannot be identified within this sample of companies. A low level of agreement as to the relative degree of importance of the criteria was evident, and, little attention to differentiating product decisions with time was also evident. The results also challenge the importance given by the literature to the concepts of product life cycle, portfolio analysis and synergy. Finally, the author suggests two implications as a consequence of these results.     

Evaluating risk: global fees and episodic care

In 1999, two articles in The Physician Executive -- "Part I: Global Theory and the Nature of Risk (July-August)." and "Part II: Towards a Choice-Based Model of Managed Care (October-November)" -- outlined the flaws of orthodox managed care theory and highlighted the unique advantages of moving to a genuinely market-based model, which included the concept of direct contracting for integrated episodes of care. This follow-up focuses on comparing an episode contracting system to a traditional capitated program and outlines the features that make this approach much more attractive to physicians, payers, and most importantly patients.     

董事会里的"战争"——序贯与惩罚机制下董事会决策行为的实验分析

本文利用实验研究方法首次在独立董事人数占优的董事会中引入序贯和惩罚机制,探讨了董事会科学决策的促成因素及制度环境.实验结果发现,序贯与惩罚机制引入后,董事决策正确率较静态实验分别提高了39.09%和34.26%,但两者的作用原理不同:序贯机制着力于改善董事会的私人信息结构,通过将独立董事"知情化",从而使决策行为独立于董事类型;惩罚机制则是利用独立董事的社会偏好进行治理,使决策行为与项目类型无关.与Gillette等人的研究结果不同,好项目的通过率并不是100%,原因可能与序贯时的针锋相对策略、惩罚时的社会偏好存在有关.     

Medically necessary?

Coverage decisions can ultimately be traced back to three words in the original health policy contract: medically necessary and investigational. Investigational as a coverage exclusion applies to the minority of cases, in which there is inadequate data to validate the effectiveness of the intervention. In contrast, the majority of coverage decisions are based on medical necessity. Over the years the concept of medical necessity has evolved to encompass a multitude of medical management strategies. This discussion highlights the variable uses of the concept of medical necessity in terms of: (1) Determining the most appropriate intensity of service and place of service; (2) determining whether the proposed therapy is medically appropriate for the patient's condition; (3) distinguishing between medically necessary services and those that are performance enhancing or discretionary in nature; (4) making a distinction between medically necessary, cosmetic, and reconstructive services; and (5) defining medical necessity in accordance with generally accepted principles of good medical practice.     

Capitation and informatics

When physicians, hospitals, and allied health professionals bill for services they render, their information processing requirements are relatively simple, at least compared to those of capitated organizations. When payers (insurers or employers) accept financial risk for the health care services of beneficiaries, they have usually invested in claims processing, membership tracking, and, under managed care, utilization review and provider profiling systems. But payers, for the most part, have not invested in electronic collection of clinical information about beneficiaries, nor have they tended to keep all claims they have processed in electronic form for study after accounts are settled and payments disbursed. In this article, we will explore why informatics is so important to capitated organizations and why payers that have traditionally taken financial risk for insuring the health care costs of populations are also learning about the importance of informatics.     

The age of accountability

The advent of accountability and evidence-based medicine set a new standard, suggesting that new medical technologies should require validation of their safety and effectiveness through controlled studies prior to their broad dissemination. Certainly, the concept of evidence-based medicine appears to be rational, objective, and consistent. However, the process can become extremely messy in its application to coverage decisions. After all, the coverage decision is really one of the most basic elements of health care. The following discussion represents a week in the life of a mythical medical director who is attempting to implement his or her company's evidence-based coverage policies.     

Liability crisis: the insurer's point of view.

Insurers now find themselves caught in the negative results of business and investment decisions made during times of high interest rates. High premiums and low coverage have been the tactic for recovery, but it ill-behooves insurance buyers to now forget that they benefited from that period of low premiums and easy access to insurance.     

Physician leadership. The time is now

During the past 30 years, third party payers have imposed virtually every imaginable form of external cost controls on the traditional health care system. All have failed. And now those paying the bills--the large-scale health care purchasers--have finally seized control. They are fomenting fundamental structural change in the health care system. In order to continue doing business with these purchasers, health care providers are finding that they must form alliances to present a comprehensive "package" of health services for the constituents of these purchasers. In short, they must form integrated delivery systems. Current developments have created a unique opportunity for physician leaders to take a commanding role in shaping the emerging American health care system.     

Enhancing efficiency: step by step

The debate over which mechanism for health care delivery will provide the widest, most efficient access has reached a crescendo. While the debate on the macro level accelerates, many significant approaches continue to be discussed and implemented on a micro level. Among these activities are imminent release of the final rule on "Criteria and Procedures for Making Medical Services Coverage Decisions that Relate to Health Care Technology--Medicare," implementation of the Safe Medical Devices Act of 1990 by the FDA, and a proposal that payers establish a cooperative national technology assessment program.