From the N.Y. Times:

The national Caesarean rate, 31.8 percent, has been rising steadily for the last 11 years and is fed by repeat patients. Critics say that doctors are performing too many Caesareans, needlessly exposing women and infants to surgical risks and running up several billion dollars a year in excess bills, precisely the kind of overuse that a health care overhaul is supposed to address.

In fact, the rate of vaginal birth after Caesarean (VBAC) is now below 10%.  Some doctors claim that VBACs risk tearing the mother’s scar tissue on her uterus, but others–including the profiled women on a Navajo reservation–successfully undergo multiple VBACs.  Why are the rates VBAC rates so low?

• Fears of malpractice
• Physicians make more money Caesarean rather than a vaginal birth
• Caesarean’s use fewer physician hours than vaginal births
• Fewer expected number of pregnancies
• Patient demand

Why are Caesarean rates so much lower on the Navajo reservation?  On the reservation, physicians are federally insured against malpractice, are paid a salary, and the use of midwives is much more common.  Additionally, Navajo “couples often want more than two children, but repeated Caesareans increase the risk of each pregnancy, so doctors and patients are motivated to avoid the surgery.”

To see further evidence of how different physician compensation methods can alter surgery rates, see my own study in Health Economics.

A recent study found that “Acupuncture is an effective treatment for chronic back pain. People receiving acupuncture are more likely to get better.”

How does it work? The treatment’s placebo effect explains the study’s findings. Researchers found that acupuncture was effective whether or not the skin was punctured.

In the UK, a dental clinic has opened in a Sainsbury’s grocery store.  The grocery store dental clinics aim to fill a patient need caused by the shortage of dentists in the UK.   BBC News reports,

“Dentist Lance Knight said the practice aimed at “making dental healthcare more accessible and convenient to better meet patients’ needs.”

The private surgery will go head to head with the NHS, charging £16 for a check up, which is slightly less than NHS fees.”

• Hat tip: Carpe Diem

The Carpe Diem looks at who is going to retail health care clinics.

“Roughly 90% of the patients came for one of 10 relatively simple treatments… ‘Most of the conditions cared for in retail clinics likely do not require the level of training of a physician.’”

Insurance companies are starting to support these retail health clinics.  Insurance paid for 67% of visits.

• Original Article: Mehrota et al. (2008) “Retail Clinics, Primary Care Physicians, And Emergency Departments: A Comparison Of Patients’ Visits,” Health Affairs27(5): 1272-1282.

The Boston Globe reports that some of Massachusetts largest insurers are beginning to cover medical visits made at retail clinics at CVS and Walgreens drug stores.  Blue Cross/Blue Shield of Minnesota is waiving copays for visits to retail clinics.  The American Association of Family Physicians (AAFP) is not happy about this.

Carpe Diem says the AAFP’s resistance to accept retail clinics can be understood follows: “The family doc cartel is worried about increased competition.”

Most people believe that vaccines are for kids. The CDC and public health departments have done a good job of keeping vaccination rates high for children. With the advent of new vaccines for adults, the key now is to increase vaccination rates for these older groups.

The Wall Street Journal (“Get your shots“) details a few of the vaccines that adults should receive.

Not included in the list is the HPV vaccine against cervical cancer.

Another point of interest is that it is increasingly difficult for physicians to supply vaccines to patients. With so many vaccines, the logistics of ordering all these perishable vaccines is very difficult. Further, as vaccines costs have increased, physicians will have to invest more and more capital into vaccine inventory.

For this reason, alternative providers such as pharmacies may a solution. With a vast experience in storage of drugs and supply chain management, pharmacies can easily absorbed the increased adult vaccine demand.

In the Wall Street Journal article, we have the following story:

The doctor didn’t have the shingles vaccine in stock, and recommended they try a walk-in clinic at a nearby drugstore, where the nurse practitioner provided a two-page handout on the vaccine and answered some of their questions. Though the price was about $219 each, all but $40 was covered by their drug benefit plan.

The next time you get a shot, it may be at your local CVS or Walgreens and not at the doctor’s office.

David Williams of the Health Business Blog reviews an article from the Boston Globe (“Immigrants…“)  stating that immigrants reduce the cost of health care.  How can this be with so many immigrants relying on government programs and free clinics to receive their care?

While it is true that immigrants are consumers of medical care, they are also producers as well.  A study of the health care workforce in Massachusetts finds that 40% of pharmacists, 28% of physician assistants, 22% of opticians, 21% of licensed practical and vocational nurses, 17% of dentists and 14% of paramedics are foreign born workers.  Twenty-eight percent of physicians and surgeons are foreign born.

An increased supply of health care workers from foreign countries can help decrease labor costs for medical care.

Looks like the convenience clinic trend is coming to my neck of the woods in Southern California.  According to the San Diego Union-Tribune (“Are retail clinics a healthy choice?“) six Minute Clinics are opening in San Diego county with ten more on the way before year’s end.

These clinics likely will lower the cost of obtaining a flu shot.  Not only will providing the flu shot be less expensive for the provider, the patient will have fewer time costs waiting for a doctor or driving to an inconvenient physician location.  These clinics are likely just as safe as a physician’s office if the patient is healthy.  However, if a patient has multiple diseases and needs a more in depth check-up, these convenience clinics will be poor substitutes in terms of quality.  There is always a tradeoff.

Many health care policy researchers believe that non-physician clinicians, such as physician assistants, nurse practitioners and midwives can help to reduce cost while maintaining quality. Midwifery has gained in popularity over recent years. Groups such as the American Public Health Association, Public Citizen and the National Organization for Women all support increased access to midwifery care.

The question remains whether or not midwife care during pregnancy is inferior, equivalent, or superior to physician care. Amalia R. Miller attempts to answer this question in her 2006 B.E. Press paper.

Differences between midwives and physicians

• Skills: Physicians receive an MD while midwife training is comparable to a nursing background. Only physicians can preform surgery such as a cesarean delivery.
• Financial Incentives: Physicians have a financial incentive to recommend cesareans since they will reap the financial rewards of preforming the surgery. Since midwives do not receive any compensation from surgery, they may be more likely to look out for the best interest of the patient.
• Attitude toward childbirth: The midwifery model of care views birth as a natural process and gives the mother more input towards shaping the birth experience. The physician’s medial approach “…highlights the risks of childbirth, viewing the event as inherently medical, even pathological, requiring hospital admission and technological intervention.”

Quality

One problem with measuring the quality of care received by those who use midwives is that of selection bias. For instance, healthy women may be more likely to use a midwife. Pregnant women with serious complications will be more likely to use physicians. Thus, a researcher may erroneously conclude that pregnant women treated by physicians are more likely to have cesareans, when a more appropriate conclusion would be that physicians treat a less healthy patient base and thus preform more cesareans.

The best study preformed to date is a Chambliss et al. (1992) paper. The authors conducted “[a] randomized blinded clinical trial was conducted in which 492 low-risk patients were assigned to either physician or midwifery management.” Unlike most non-randomized trials, the authors found a small positive relationship between midwifery and cesarean rates.

Methods

The Miller (2006) paper looks at how midwifery affects cesarean rates. They use 1989-1999 Natality Detail Files as well as the 1989-1999 March Current Population Surveys (CPS) as her data source. The author considers a simple OLS regression using cesarean rates as the dependent variable and the use of midwifery–along with other covariates–as the independent variables. The problem of selection bias remains.

Thus, the authors use the enactment of Any Willing Provider laws as a proxy for state-wide midwifery usage. These laws “prohibit discrimination against a class of providers.” While Any Willing Provider laws are not directly related to midwives, the authors also use specific state midwifery reimbursement laws to proxy for midwifery usage. The claim made by Ms. Miller is that these laws are exogenously enacted; this creates a natural experiment and allows a difference-in-difference regression.

Results

Ms. Miller finds that midwifery reimbursement laws, unsurprisingly, do increase midwifery usage by pregnant women but more general Any Willing Provider laws do not alter midwifery usage rates. The authors continues to state that “…The main finding of the Chambliss et al. (1992) study is confirmed: there is no evidence that the expansion of midwifery led to a reduction in cesarean section rates. Hence, the results from the small randomized trial appear to generalize to the population at large, while the non-random trials likely suffered from selection bias due to inadequate controls for patient health and preferences. ”

• Miller, Amalia R. (2006) “The Impact of Midwifery-Promoting Public Policies on Medical Interventions and Health Outcomes,” Advances in Economic Analysis & Policy: Vol. 6 : Iss. 1, Article 6.
• Chambliss LR, Daly C, Mederaris AL, Ames M, Kayne M, Paul R (1992) “The role of selection bias in comparing cesarean birth rates between physician and midwifery management” Obstetrics and gynecology, v80(2) pp. 161-165.

What has happened to physician assistant (PA) education in recent years? An article by P. Eugene Jones (Academic Medicine 2007) enlightens readers with the latest information.

The states with the most PA programs are: New York (19), Pennsylvania (15) California (10), Texas (8) and Florida (6). Alaska, Delaware, Hawaii, Mississippi, Vermont and Wyoming all have zero PA programs. Unsurprisingly, PA concentrations are highest in the states with the highest population.

For the 2002-2003 academic year, one year of PA education costs $36,000 for residents and $44,000 for non-residents. These figures include tuition costs and student fees plus expenses for books and equipment.

The most surprising finding of the article is that there is a trend for PAs to choose jobs outside the primary care fields. I once thought that PAs could be a replacement for primary care doctors when: 1) a patient was healthy or had a disease which was relatively simple to diagnose and treat, and/or 2) when patients wished to spend more time with their medical provider. In fact, Dr. Jones cites an article which claims that PA productivity is 84% of that of a FTE family medicine physician.

Nevertheless, Dr. Jones finds “…the distribution of PAs in the primary care settings of family medicine, general internal medicine, and general pediatrics was 50.8% in 1996. By 2006, only 36.1% were reportedly practicing in theses settings.”

• Jones, PE (2007) “Physician Assistant Education in the United States” Academic Medicine, 82(9) pp. 882-887.

Much has been written on this site about the growth of convenience clinics (see posts on July 25, April 26, and April 17).  The Economist’s Free exchange blog adds to the discussion (“A spoonful of monopoly…“).  It warns how the AMAs monopoly powers may be a threat to convenience clinics such as Medical Marts.

“The fact that there is a shortage of family physicians in many areas did not stop the AMA from trying to stem the growth of these clinics by passing a resolution in June that asked government authorities to investigate the possibility of a conflict of interest in clinic-housing drug store chains that, in effect, both write and fill prescriptions.”

Free exchange agrees with the opinions stated previously on Healthcare Economist.  Convenience clinics should expand choice, offer a low cost alternative, reduce waiting times, make available expanded hours of operation, and should maintain high quality standards for basic ailments.  The Free exchange blog concludes:

“However, it seems the AMA would like to make sure its members profit no matter what choice you make. As it happens, nurse practitioners are required by law to practise under the supervision of a physician in 28 states — including in Illinois. I’ll swallow a stethoscope if the AMA didn’t have more than a little to do with the existence of those laws. “

Earlier this month, VentureBeat reported that QuickHealth, a Burlingame, Calf. company that operates walk-in medical clinics, said it has raised an $8.5 million in a second round of financing.  The company’s report states the following:

Take Care Health Systems LLC, an operator of retail clinics predominantly in the Midwest, completed its sale to Walgreen Co. in May for undisclosed terms…CVS Corp. completed the acquisition of MinuteClinic in September 2006 for undisclosed terms….America Online Inc. founder Steve Case, through Revolution Health, has backed InterFit Health Inc.’s RediClinics chain. Wal-Mart Stores Inc. formed an agreement with SmartCare Family Medical Centers in 2006 to include its retail clinics in stores in Colorado, Nevada and Arizona. SmartCare is backed by the Colorado Fund I and individual investors.

It looks like investors see lots of potential for these convenience clinics.

As my colleague Mike Ewens wrote to me: “Monopolists hate competitors and have to use the government to keep them away.”

An example that takes center stage can be found in a recent Chicago Tribune article (“AMA takes on Retail Clinics“) . Some doctors have asked the AMA to ban on in-store clinics currently being opened by companies such as Wal-Mart and Walgreens.

Why would doctors want to do this? Likely this is to protect their ability to charge high prices to their patients. How can they justify their demands to the public? They claim in-store clinics put patient’s health at risk.

The article concludes:

“We would be disappointed if the AMA adopted a policy that is counter to what patients are demanding, which is more accessible and affordable health care that reduces overall costs,” Walgreens spokesman Michael Polzin said in a statement. “It would be hard to argue against those principles. The bottom line is, retail clinics are improving health-care access and health outcomes while keeping the patient’s doctor informed as the patient desires.”

I see no reason to outlaw in-store clinics. Giving consumers more choice is always a good thing.

“Can you imagine if a Wal-Mart store operated like America’s health care system? You would walk into the store and there would be a huge array of merchandise. But you would not be able to tell the products apart. You would not know how much they cost. And in the end, you would not know the total bill — just a predetermined fraction of itâ€?

This quotation is from a speech by Wal-Mart CEO Lee Scott at the World Health Care Congress (full text available here). In the speech Mr. Scott gave his vision of how to improve health care going forward.

$4 Generics

Wal-Mart offers many generic drugs for $4. Mr. Scott has claimed that this pricing strategy has saved Wal-Mart customers millions of dollars. I myself was wondering how Wal-Mart could offer the pharmaceuticals at such low prices. Here’s how:

• Wal-Mart is a huge company and can use its buying power to reduce the price it pays for most of the pharmaceuticals.
• Having $4 prescription drugs is good public relations for Wal-Mart. It is possible that they would lose a small amount of money in exchange for the good PR.
• Most importantly, I believe, is that people with high drug costs will shop around to buy their prescriptions at the lowest cost. Wal-Mart may be using $4 generics as a ‘loss leader.’ The low price on pharmaceuticals will draw more people into the store, who will purchase more non-pharmaceutical products. Further, the low price of prescription drugs will also build customer brand loyalty. For instance, discounted toothpaste does not engender the same consumer loyalty as offering life-saving drugs at low prices.

Wal-Clinics

According to the speech and a Reuters article, Wal-Mart will open 400 in-store clinics in the next 2-3 years. This news gives more evidence that the trend towards convenience clinics–which I documented earlier in the month–is here to stay. Mr. Scott gives some more details regarding the Wal-Mart in-store clinic model:

“The providers running the clinics will determine what services to offer, which will generally include preventive and routine care for conditions such as allergies and sinus infections, as well as basic services such as cholesterol screenings and school physicals at affordable prices. They will be staffed by either certified nurse practitioners or physicians.”

There is an interesting post at GoozNews (“Getting Doctors to Compete“) in which Merrill Goozner comments on Harvard Business School professor Michael Porter’s belief that competition and integrated care are the solutions to the nation’s health care woes.

“Where we need to go is an integrated practice model,” he said. His model entails patient-focused practice groups that knit together every specialty needed to treat an individual’s medical condition. It’s not that physicians will no longer specialize; it’s that they’re no longer going to practice in specialty silos divorced or only marginally connected to all the other people providing that particular patient’s care.

Competition enters this new system by giving individuals information about the relative performance of these integrated practices.

About a year ago (“Attention Shoppers“), this blog noted the rapid expansion of walk-in health clinics staffed by nurse practitioners. This week, the Economist magazine (“McClinics“) highlights growing popularity of walk-in clinics such as RediClinic, MinuteClinic, and Health Stop. Patients appreciate the convenient locations, shorter wait times, and lower costs.  More information can be found at the Health Care Law Blog.

One final example of licensure’s impact on quality is given by a 1978 study of the quality of contact lens fitting.  The study looked at 502 households who had been fitted for contacted lenses in the previous three years and were still wearing contacts.  The study was conducted with the cooperation of the American Academy of Ophthalmology, the American Optometric Association and the Opticians Association of America and representatives from these groups examined the survey participants to determine the quality of contact lens fitting without any knowledge of which type of provider had rendered the service. 

The study looks at five different groups: ophthalmologists, Noncommercial optometrists, commercial optometrists, unclassified optometrists, and opticians.  Ophthalmologists receive the most training and opticians receive the least.  Statistical tests showed that commercial optometrists tended to outperform noncommercial optometrists; optometrists as a whole preformed similarly to ophthalmologists.  Opticians also were found to have similar overall quality scores to ophthalmologists and optometrists. 

Despite quality similarities, there were significant cost differentials between the five groups:

What can we conclude from this study?  First, if there were licensure requirements that mandated that only ophthalmologists could prescribe and fit contact lenses, this would likely create a welfare loss to society.  Opticians, optometrists, and ophthalmologists preformed similarly on quality measures, however, optometrists and opticians had significantly lower prices than ophthalmologists.  This study shows that licensing to too high a quality standard is not optimal.

This study, however, is limited by the fact that 1) quality is relatively easy to observe for patients in the case of contact lens fitting and 2) contact lens fitting is a less technically complicated procedure than say cataract surgery or the treatment of glaucoma.  Procedures in which patients can easily observe physician quality and providers do not need a high technical skill level are not good candidates for licensure requirements.  One would expect to encounter different findings if the study was based on a procedure with 1) more uncertainty in the quality measurement and 2) more technical skill needed to perform the procedure accurately.  For instance, one would likely find significant quality differences between the three groups in the case of cataract surgery (even though currently only ophthalmologists are certified to conduct surgery).

Study: Hailey; Bromberg; Mulholland; (1983) A comparative analysis of cosmetic contact lens fitting by ophthalmologists, optometrists, and opticians, Federal Trade Commission, Bureau of Consumer Protection.  Study summary found in: Frech, H.E. Regulating Doctors Fees, Chapter 4 “Licensure and Competition in Medical Markets” by Lee Bernham, pp. 87-90.

Many studies have claimed that Nurse Practitioners (NPs)–as well as Physician Assistants (PAs)–are adequate substitutes for primary care physicians.  Researchers claim that NPs can perform a great majority of the tasks currently carried out by primary care physicians, and should be used more frequently since NP and PA salaries are usually half of primary care physicians.  The Bureau of Labor Statistics reports that the median PA income in 2004 was $69,410, as compared to a family practice doctor with less than two years of specialization who would earn a median salary of $137,199.  

Two of the more reliable studies which analyze the cost-effectiveness of Nurse Practitioners are those of Mundinger, et al. (2000) and Ettner, et al. (2005).  In the Mundinger study, individuals were randomly assigned to one of two clinics.  The first clinic was staffed with nurse practitioners and the other clinic was staffed by primary care physicians.  Both clinics had access to the same pool of specialists, inpatient units, and emergency departments.  A follow-up survey was conducted after six months.  The study concludes that:

• There is no significant difference in patient health status, with the exception that in patients with hypertension, the diastolic value was statistically significantly lower for NP patients.
• There were no significant differences in utilization rates between the two clinics.
• There were no significant differences in patients satisfaction, with the exception that after 6 months, the patients rated physicians higher (4.2 vs. 4.1 on a scale of 1-5; P=.05) in the category of provider attributes.

There were some problems with this study however.  First, the patient base was almost exclusively Dominican immigrants on Medicaid.  Thus, it would be difficult to generalize these findings (especially those on patient satisfaction) to the wider U.S. population.  Secondly, it is possible that the physicians were of superior quality, but because measuring the true value of medical inputs on patient health is difficult, this might have caused the lack of any statistically significant difference.  Otherwise, this study is fairly robust.

In Ettner, et al. (2006), the researchers divided the 5th floor of an academic medical center into two wings.  In the West wing medical personnel used a traditional style of care but in the East wing there was an intervention which “…consisted of adding a nurse practitioner (NP) to each of the 2 general medicine teams on 5E” as well as some other changes in care practices.  The authors find the following:

•  Intervention costs were $1187 per patients but savings were $3331 per patient resulting in a net benefit per patient of $1484. 
• Of the total savings amount ($3331), $1947 was due to reduced cost during the impatient stay and the remainder was due to decreased hospital utilization after the discharge.
• The authors re-run the analysis to take into account the possibility of attrition bias and find that the net benefits are still $947/patient.

The biggest problem with this study is that it analyzes a Multi-Disciplinary Doctor-NP Model (MDNP) model which involves a variety of changes in how provider teams treat patients.  It is difficult to analyze how much of the net savings is from the use of a nurse practitioner and how much of the savings is through more effective management of medical personnel.  Also, one must worry that the Hawthorne effect and not MDNP may have been the cause of additional worker productivity in the East wing.  The study does use robust statistical methods and puts forth a convincing argument for the use of MDNP in more hospitals. 

Mundinger, Kane, Lenz, Totten, Tsai, Cleary, Friedewald, Siu, Shelanski (2000); “Primary care outcomes in patients treated by nurse practitioners of physicians: A randomized trial,” JAMA, Vol 283(1), pp. 59-68.

Ettner, Kotlerman, Afifi, Vazirani, Hays, Shapiro, Cowan (2006); “Reducing the costs of patient care? A controlled trial of the Multi-Disciplinary Doctor-Nurse Practitioner (MDNP) model,” Medical Decision Making, Jan-Feb; pp. 9-17.

Can consumer-driven health care (CDHC) really work?  According to the New York Times, many entrepreneurs believe it can. In “Attention Shoppers,” the newspaper details how Wal-Mart, CVS and other chain stores are opening walk-in health clinics. The clinics are staffed by Nurse Practitioners and operated independently of the chain store. The benefits of the walk-in clinic are: 1) shorter waiting times, 2) more convenient locations, and 3) lower prices. What about quality? Princeton economist Uwe Reinhardt assuages fears of a low standard of care. He state that with a their reputation on the line, chain stores have an incentive to maintain a high level of care.

This concept is an economists dream. I believe this model will be very successful, though limited in scope. These clinics work where the medical services market does not have many imperfections. Patients generally will know what treatment they seek (flu shots, ear infection treatment, etc) so there is not problem of asymmetric information. Since many of these clinics will presumably open, there will be significant market competition and patients will only return to these clinics if they receive good service. I also believe moral hazard problems will be minimal since patients will still owe a co-pay even if they are insured and the co-pay will be a significant portion of the fee.

I do not, however, believe these clinics will reverse the trend of increasing healthcare costs. The clinics are narrow in their scope; they only will stock basic medical equipment and all cases with complications will be referred to a physician. People with serious diseases will still seek specialist care. Nevertheless, this innovation should make the provision of primary care services more cost effective and convenient.

The Independent of the UK reports (“Childbirth revolution“) that the British government is “planning a ’strategic shift’ in childbirth policy away from hospital delivery and towards births in the home.” Instead of having doctors supervise the birth, midwives will deliver the child.

On one hand, I commend the British government for this policy change. The majority of births need not occur in a hospital setting; the new policy is much more cost effective. A market pricing mechanism, however, would be a more efficient means for determining the hospital-home decision. If the patient paid the full cost, only those with a high demand for hospital services would choose that option since home delivery would be cheaper. In an environment with private or public insurance, the insurance could cover the cost of a home birth, but if the mother wanted a hospital birth they could to pay extra. Having the government dictate where you have to give birth to your child is just one of the costs of having healthcare run by a centralized government.

The concept of the Physician Assistant gained its inspiration from 17th century Europe where feldshers were used in the 17th century Russian Army. In the 1960s, China employed over 1.3 million “barefoot doctors” to improve delivery of health care, especially in rural areas. Not until the mid 1960s did the U.S. begin to use Physician Assistants to deliever medical care due to a shortage of primary care doctors.

In the United States, Physician Asssitants (PAs) must be associated with a physician and must practice in an interdependent role. The partner physician, however, does not need to be physically present during a PA examination of a patient. PAs routinely deal with uncomplicated sprains, strains, hypertension, bronchitis, depression, allergies, asthma, gynecological problems, family planning and trauma. Approximately 55% of all physician assistants practice in primary care.

In order to become a Physician Assistant, the average PA spends 25 months studying an intensive core curriculum. In 2001, there were 130 training programs in universities, medical schools, colleges, and the armed forces. PAs learn the broad topics related to primary care and rotate through the major specialties. Nurse practitioners, on the other hand, traditionally are trained in one specialty (pediatrics, women’s health, etc.).
The following are some summary data for Physician Assistant which comes from the American Academy of Physician Assistants 2005 Census.
Number of Physician Assistants by Disorder in 2005

BY PRIMARY EMPLOYER

BY GENERAL SPECIALTY PRACTICED

ANNUAL INCOME (Full-time workers only)

AAPA 2005 Census

Mittman, Cawley, Fenn; (2002) “Physician Assistants in the United States,”British Medical Journal, Vol 325, 31 August 2002.

Most people intuitively believe that having more nurses on staff at a hospital improves health outcomes. After reading Money Magazine’s report that an average RN earns approximately $70,000 per year, relying on ‘intuition’ may not be the most appropriate manner to judge a nurse’s cost effectiveness. Do health outcomes really improve to justify this cost?

Needleman, Buerhaus, Mattke, Stewart, and Zelevinsky (2002) provide convincing evidence that nurses do improve health outcomes in hospitals. The study examines 799 hospitals in eleven states and tests to see how variation in nurse staffing or nurses hours worked changes health care outcomes. The first stage of their analysis runs a logistic regression. The health outcome for each patient was regressed on patient diagnosis related group (DRG), age, sex, primary insurer, state of residence, a dummy for emergency admission and the presence of any chronic diseases. These factors were added up and each hospital was assigned a risk factor. The second stage uses an ordinary least squares (OLS) regression to calculate the difference between the expected health outcome and the actual outcome using hospital dummies, nurse staffing and hours, the number of beds, etc.

Below is a table of their results. All coefficients less then 1.00 indicate that health outcomes improved. Outcomes statistically different from 1 at the 5% level receive a star (*).

Since outcomes improve in all six of the seven categories under the first model and in four of seven categories under the second model, it seems that nurses do have a positive effect on health.

I find two possible problems with the study:

1. Nurses may be a proxy for quality. Good hospitals may have better technology, more qualified doctors, and more nurses. The superior health outcomes may not be due to the nurse staffing at all but to other factors which are correlated with the number of RN work hours.

2. The first stage logistic regression may have omitted variables. For instance, if rich people have better health outcomes—due to lifestyle choices—and are able to afford hospitals with more nurses, we would find a spurious correlation between health and nurse staffing, since nurse staffing level is simply a proxy for inherently healthier patients.

Despite these two problems, the evidence does seem convincing. As standard economic theory would predict, increasing inputs (nurses) will lead to increased outputs (health) ceteris paribus.  Future research needs to determine more precisely what is a nurse’s cost benefit ratio in order for hospitals to ascertain the appropriate RN staffing.

Needleman, J; Buerhaus, P; Mattke, S; Stewart, M; Zelevinsky, K (2002); “Nurse Staffing Levels and the Quality of Care in Hospitals,” New England Journal of Medicine, Vol 346 (22).

Economists typically believe that there is too much regulation in the medical field. Due to problems of asymetric information in determining doctor quality, economists believe there is a role for certification and licensure, but these requirements are currently too strict. For instance, many routine procedures could be preformed by a Nonphysician Clinician (NPC) such as a Physician Assitant (PA) or a Nurse Practioner (NP) at a lower cost with a small reduction in quality.
According to the American Academy of Physician Assistants (AAPA), there were 66,111 physician assistants practicing in the United states in 2005. Physician’s Assistants have varying levels of autonomy and prescription permission (see the DEA website) depending on the state legislation.

Below I will briefly outline the development of the position of the physician assistant.  There is a more complete timeline located at the Physician Assistant History Center.

Timeline

• 1964: Dr. Eugene Stead, Jr., disillusioned by organized nursing rejection of the nurse clinician program, decides that ex-military corpsmen with their previous training and experience would be suitable candidates for his two-year experimental program.
• 1966: Allied Health Professions Personnel Act (PL-751) promotes the development of programs to train new types of primary care providers.
• 1968: Health Manpower Act (PL-490) funds the training of a variety of health providers; American Association of Physician’s Assistants (AAPA) is incorporated
• 1970: Kaiser Permanente becomes first HMO to employ PA.
• 1972: National Board of Medical Examiners begins developing a certification examination for accredited PA educational program.
• 1976: Federal support of PA education continues under grants from Health Professions Assistance Act (PL94-484).
• 1977: Rural Health Clinic Services Act (PL95-210) provides Medicare reimbursement of PA and nurse practitioner (NP) services in rural clinics.
• 1986: Omnibus Budget Reconciliation Act PL 99-210 allows Medicare Part B to pay for PA services in hospitals and nursing homes
• 1987: Additional Medicare coverage of PA services in rural and underserved areas approved by Congress
• 1997: Balanced Budget Act of 1997- Congress increases PAs reimbursement rate to 85% of physician cost (previously 75% in hospitals, 65% for assisting at surgery, and 85% in nursing facilities)
• 2000: Mississippi is last state to enact legislation authorizing PAs to practice

The use nonphysician clinicians (NPCs) in the provision of medical care has grown over the years. Although physicians still dominate the medical field, there were over 66,000 Physician Assistants in the United States in 2005. Before Physician Assistants (PAs) and
Nurse Practitioners (NPs) were licensed, physicians were the only individuals permitted by law to perform a variety of medical procedures. Most people would agree that the use of PAs and NPs can reduce medical costs. The more important question is how much quality (if any) is sacrificed when NPCs are used instead of MDs. It is my hypothesis that certain more ‘routine’ procedure could be done more cost effectively using NPCs, and the change in health outcomes would be negligible.

[See full paper proposal below]
Paper Proposal: Physician Assistants