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Physician charges in the hospital. Exploring episodes of care for controlling volume growth
1Urban Institute, Washington, DC 20037.
Insights
Medicare physician payments are rising due to increased service volume. This study analyzes physician charges around hospital stays to inform new volume control policies for Medicare physician payments.
Area of Science:
- Health Economics
- Healthcare Policy
- Medical Economics
Background:
- Medicare physician payments are increasing, with significant growth attributed to higher service volumes.
- Current reforms link physician fee increases to volume growth, but national risk pools may be unworkable.
- Alternative strategies involve hospital-specific volume performance standards and defined service bundles.
Purpose of the Study:
- To analyze physician service charges during and around hospital stays.
- To provide data for designing effective volume control policies for Medicare.
- To evaluate the feasibility of defining in-hospital physician care episodes.
Main Methods:
- Analysis of 1987 Medicare physician charge data.
- Calculation of average charges during the hospital stay and within one-month pre- and post-stay windows.
- Assessment of charge distribution for surgical versus medical admissions.
- Physician panel review of the clinical appropriateness of one-month windows.
Main Results:
- 85% of physician charges occur during the hospital stay, with 15% in the surrounding one-month windows.
- Volume of charges in windows differs between surgical (9%) and medical (23%) admissions.
- Average daily charges increase before admission and decrease after discharge.
- A physician panel found defining in-hospital episodes of care feasible.
Conclusions:
- Data on physician charges around hospital stays are crucial for developing effective volume control policies.
- Defined windows around hospital stays can capture significant physician service volumes.
- The concept of hospital-specific volume performance standards for physician services is clinically feasible.
Abstract:
Medicare physician payments are growing rapidly. At least 40% of the annual growth is due to volume increases. Reforms passed in 1989 include volume performance standards that attempt to control volume by linking future physician fee increases to volume growth. There is concern that defining the entire nation as the risk pool will result in an unworkable volume performance standard. One way to improve incentives is to create a separate volume performance standard for in-hospital physician services, define bundles of services related to the hospital stay, and place the medical staff of the hospital at risk for volume growth. To forestall the unbundling of services outside the stay, windows could be defined around the stay. This study reports physician services during the stay and in windows around the stay. In so doing, the study creates the knowledge base necessary to design better volume control policies and judge among alternative window definitions. Using 1987 data, this study presents average physician charges by type of service during: 1) the hospital stay; and 2) 1-month windows before and after the stay. For all admissions, 85% of charges occur during the stay and 15% occur during the windows (windows for surgical admissions and medical admissions are 9% and 23%, respectively). Pre- and postwindows are roughly symmetrical and average charges per day gradually increase before the admission and decline after discharge. A small physician panel commented on the clinical appropriateness of the one month windows. The panel indicates that defining in-hospital episodes of physician care is feasible.