2056
SOCIOECONOMIC FACTORS, UROLOGICAL EPIDEMIOLOGY AND PRACTICE PATTERNS
Outcomes/Epidemiology/Socioeconomics Urological Survey
Socioeconomic Factors, Urological Epidemiology and Practice Patterns Re: Changes in Health Care Spending and Quality 4 Years into Global Payment Z. Song, S. Rose, D. G. Safran, B. E. Landon, M. P. Day and M. E. Chernew Department of Medicine, Massachusetts General Hospital, Department of Health Care Policy, Harvard Medical School, Blue Cross Blue Shield of Massachusetts, Department of Medicine, Tufts University School of Medicine and Department of Medicine, Beth Israel Deaconess Medical Center, Boston and National Bureau of Economic Research, Cambridge, Massachusetts N Engl J Med 2014; 371: 1704e1714.
Abstract for this article http://dx.doi.org/10.1016/j.juro.2015.03.040 available at http://jurology.com/ Editorial Comment: Global budgets, risk sharing and value based purchasing are key components of the Affordable Care Act. In theory payers and providers develop a global budget to cover health care costs for a defined group of patients for a set period. If the care costs are lower than budgeted, the providers realize a gain. If they are higher, the providers accept the risk and realize a loss. This approach only works if the payer sets reasonable expectations around the quality of care provided and ensures that a minimum standard is met. This study explores the impact of global payments on cost and quality in Massachusetts from 2009 to 2012. The authors note an average annual cost savings varying from 5.8% to 9.1% during the study period. They also note improvements in quality during the study period. There is no debate that capitation is an effective cost control mechanism. The concern is that quality will suffer and that necessary care will not be provided to save money. This study implies that this outcome has not occurred in Massachusetts. However, in a study of this nature it is relatively easy to measure financial costs but much more difficult to measure quality. The authors use HEDIS (Healthcare Effectiveness Data and Information Set) measures in this instance. Are these truly meaningful measures of the quality of care? There are certainly people who would argue that they are not. That being said, this study provides promising but preliminary indications that this approach to health care cost control may be a viable alternative going forward. David F. Penson, MD, MPH
Re: Association between Hospital Conversions to For-Profit Status and Clinical and Economic Outcomes K. E. Joynt, E. J. Orav and A. K. Jha Departments of Health Policy and Management, and Biostatistics, Harvard School of Public Health, Divisions of Cardiovascular Medicine and General Internal Medicine, Department of Medicine, Brigham and Women’s Hospital, and VA Healthcare System, Boston, Massachusetts JAMA 2014; 312: 1644e1652.
Abstract for this article http://dx.doi.org/10.1016/j.juro.2015.03.041 available at http://jurology.com/ Editorial Comment: The hospital industry has undergone major changes in the last decade. There has been marked consolidation, and many hospitals have changed from not-for-profit to for-profit
SOCIOECONOMIC FACTORS, UROLOGICAL EPIDEMIOLOGY AND PRACTICE PATTERNS
status in an effort to be more competitive. It is not unreasonable to worry that this change in status may be accompanied by a change in primary focus from delivering high quality care to maximizing profits. This study compares costs and outcomes in 237 hospitals that converted to for-profit status from 2003 to 2010 with 631 matched control hospitals. The authors found that the hospitals that converted to for-profit status improved their total operating margins an average of 2.2% during the study period (compared to 0.4% in the matching hospitals). The converting hospitals also improved their quality metrics compared to controls, while not experiencing different clinical outcomes or changing their patient mix. These findings are likely to motivate more hospitals to consider converting to for-profit status. For the model to work these hospitals must exercise tighter cost control and no doubt will pressure providers to comply with standardized local protocols and/or reduce variation in costs among similar cases. In some cases hospitals may elect to purchase practices and restrict privileges to selected providers. Urologists need to be aware of this possibility and be proactive in their dealings with these hospitals. David F. Penson, MD, MPH
Re: Physician Practice Competition and Prices Paid by Private Insurers for Office Visits L. C. Baker, M. K. Bundorf, A. B. Royalty and Z. Levin Stanford University School of Medicine, Stanford, California, National Bureau of Economic Research, Cambridge, Massachusetts, and Indiana University-Purdue University Indianapolis, Indianapolis, Indiana JAMA 2014; 312: 1653e1662.
Abstract for this article http://dx.doi.org/10.1016/j.juro.2015.03.042 available at http://jurology.com/ Editorial Comment: This interesting study underscores the paradoxical nature of a key component of the health care reform bill. On the one hand the Affordable Care Act indirectly encourages consolidation by proposing the formation of accountable care organizations and bundled payments for episodes of care. On the other hand consolidation, by its nature, discourages competition and effectively improves the bargaining power of the consolidated entity. In the current study the authors assess the relationship between the price of outpatient office visits and the degree of physician competition in 1,058 urban United States counties. They explore this relationship in total and by specialty, including urology. Not surprisingly, in counties where there is less physician competition (meaning greater provider consolidation) the price of an outpatient visit paid by private payers was higher, reflecting increased physician bargaining power. For large urological practices this is certainly good financial news. For policy makers the initial response will be to try to limit further physician consolidation, although this may not be the right thing to do. If a goal of health care reform is to create entities that exercise greater cost control while maintaining or improving the quality of care, then policy makers may have to accept the harms of less market competition for the benefits of greater centralization and coordination of care. David F. Penson, MD, MPH
2057
SOCIOECONOMIC FACTORS, UROLOGICAL EPIDEMIOLOGY AND PRACTICE PATTERNS
Outcomes/Epidemiology/Socioeconomics Urological Survey
Socioeconomic Factors, Urological Epidemiology and Practice Patterns Re: Changes in Health Care Spending and Quality 4 Years into Global Payment Z. Song, S. Rose, D. G. Safran, B. E. Landon, M. P. Day and M. E. Chernew Department of Medicine, Massachusetts General Hospital, Department of Health Care Policy, Harvard Medical School, Blue Cross Blue Shield of Massachusetts, Department of Medicine, Tufts University School of Medicine and Department of Medicine, Beth Israel Deaconess Medical Center, Boston and National Bureau of Economic Research, Cambridge, Massachusetts N Engl J Med 2014; 371: 1704e1714.
Abstract for this article http://dx.doi.org/10.1016/j.juro.2015.03.040 available at http://jurology.com/ Editorial Comment: Global budgets, risk sharing and value based purchasing are key components of the Affordable Care Act. In theory payers and providers develop a global budget to cover health care costs for a defined group of patients for a set period. If the care costs are lower than budgeted, the providers realize a gain. If they are higher, the providers accept the risk and realize a loss. This approach only works if the payer sets reasonable expectations around the quality of care provided and ensures that a minimum standard is met. This study explores the impact of global payments on cost and quality in Massachusetts from 2009 to 2012. The authors note an average annual cost savings varying from 5.8% to 9.1% during the study period. They also note improvements in quality during the study period. There is no debate that capitation is an effective cost control mechanism. The concern is that quality will suffer and that necessary care will not be provided to save money. This study implies that this outcome has not occurred in Massachusetts. However, in a study of this nature it is relatively easy to measure financial costs but much more difficult to measure quality. The authors use HEDIS (Healthcare Effectiveness Data and Information Set) measures in this instance. Are these truly meaningful measures of the quality of care? There are certainly people who would argue that they are not. That being said, this study provides promising but preliminary indications that this approach to health care cost control may be a viable alternative going forward. David F. Penson, MD, MPH
Re: Association between Hospital Conversions to For-Profit Status and Clinical and Economic Outcomes K. E. Joynt, E. J. Orav and A. K. Jha Departments of Health Policy and Management, and Biostatistics, Harvard School of Public Health, Divisions of Cardiovascular Medicine and General Internal Medicine, Department of Medicine, Brigham and Women’s Hospital, and VA Healthcare System, Boston, Massachusetts JAMA 2014; 312: 1644e1652.
Abstract for this article http://dx.doi.org/10.1016/j.juro.2015.03.041 available at http://jurology.com/ Editorial Comment: The hospital industry has undergone major changes in the last decade. There has been marked consolidation, and many hospitals have changed from not-for-profit to for-profit
SOCIOECONOMIC FACTORS, UROLOGICAL EPIDEMIOLOGY AND PRACTICE PATTERNS
status in an effort to be more competitive. It is not unreasonable to worry that this change in status may be accompanied by a change in primary focus from delivering high quality care to maximizing profits. This study compares costs and outcomes in 237 hospitals that converted to for-profit status from 2003 to 2010 with 631 matched control hospitals. The authors found that the hospitals that converted to for-profit status improved their total operating margins an average of 2.2% during the study period (compared to 0.4% in the matching hospitals). The converting hospitals also improved their quality metrics compared to controls, while not experiencing different clinical outcomes or changing their patient mix. These findings are likely to motivate more hospitals to consider converting to for-profit status. For the model to work these hospitals must exercise tighter cost control and no doubt will pressure providers to comply with standardized local protocols and/or reduce variation in costs among similar cases. In some cases hospitals may elect to purchase practices and restrict privileges to selected providers. Urologists need to be aware of this possibility and be proactive in their dealings with these hospitals. David F. Penson, MD, MPH
Re: Physician Practice Competition and Prices Paid by Private Insurers for Office Visits L. C. Baker, M. K. Bundorf, A. B. Royalty and Z. Levin Stanford University School of Medicine, Stanford, California, National Bureau of Economic Research, Cambridge, Massachusetts, and Indiana University-Purdue University Indianapolis, Indianapolis, Indiana JAMA 2014; 312: 1653e1662.
Abstract for this article http://dx.doi.org/10.1016/j.juro.2015.03.042 available at http://jurology.com/ Editorial Comment: This interesting study underscores the paradoxical nature of a key component of the health care reform bill. On the one hand the Affordable Care Act indirectly encourages consolidation by proposing the formation of accountable care organizations and bundled payments for episodes of care. On the other hand consolidation, by its nature, discourages competition and effectively improves the bargaining power of the consolidated entity. In the current study the authors assess the relationship between the price of outpatient office visits and the degree of physician competition in 1,058 urban United States counties. They explore this relationship in total and by specialty, including urology. Not surprisingly, in counties where there is less physician competition (meaning greater provider consolidation) the price of an outpatient visit paid by private payers was higher, reflecting increased physician bargaining power. For large urological practices this is certainly good financial news. For policy makers the initial response will be to try to limit further physician consolidation, although this may not be the right thing to do. If a goal of health care reform is to create entities that exercise greater cost control while maintaining or improving the quality of care, then policy makers may have to accept the harms of less market competition for the benefits of greater centralization and coordination of care. David F. Penson, MD, MPH
2057
