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An update on physician practice cost shares.

D A Dayhoff1, J Cromwell, M L Rosenbach

  • 1Health Economics Research, Inc., Waltham, MA 02154.

Health Care Financing Review
|January 3, 1994
PubMed
Summary

The 1988 Physicians' Practice Costs and Income Survey (PPCIS) found that while physician cost shares vary by specialty and location, the differences are too small to significantly impact Medicare Economic Index (MEI) and Geographic Practice Cost Index (GPCI) calculations.

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Area of Science:

  • Health Economics
  • Medical Practice Management
  • Healthcare Policy

Background:

  • Physician practice costs and income data are crucial for updating economic indices used in Medicare reimbursement.
  • The Health Care Financing Administration (HCFA) relies on accurate cost shares for the Medicare Economic Index (MEI) and Geographic Practice Cost Index (GPCI).

Purpose of the Study:

  • To update HCFA cost shares using data from the 1988 Physicians' Practice Costs and Income Survey (PPCIS).
  • To assess the impact of specialty and geographic variations in cost shares on MEI and GPCI calculations.

Main Methods:

  • Analysis of detailed cost, revenue, and income data from 3,086 physicians surveyed in 1988.
  • Calculation of cost shares for national, specialty, urban/rural, and regional samples.

Related Experiment Videos

  • Sensitivity analysis to evaluate the effect of cost share variations on MEI and GPCI.

    • Main Results:

    • Cost shares were calculated across various physician specialties and geographic divisions.
    • Statistical tests confirmed differences in cost shares among specialties and regions.
    • Sensitivity analysis indicated that these differences have a trivial effect on MEI and GPCI computations.

    Conclusions:

    • Observed variations in physician practice cost shares across specialties and geographic areas do not significantly alter MEI and GPCI values.
    • Findings suggest that the current methods for calculating MEI and GPCI are robust to these variations.
    • Results provide insights for policymakers regarding physician payment adjustments based on geography or specialty.