Unbiased Analysis of Today's Healthcare Issues

Drug approval and reimbursement when clinical trials use surrogate endpoints

An interesting paper from some of my colleagues at Precision Health Economics: Approval of new drugs is increasingly reliant on “surrogate endpoints,” which correlate with but imperfectly predict clinical benefits. Proponents argue surrogate endpoints allow for faster approval, but critics charge they provide inadequate evidence. We develop an economic framework that addresses the value of […]

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FFS vs. Capitation Reimbursement: Responses by Physicians and Medical Students

How do people respond to financial incentives?  In the medical world, physicians often are paid fee-for-service (FFS) or capitation.  Physicians receiving FFS reimbursement receive additional compensation for each additional service they do.  For instance, physicians under FFS receive twice as much compensation for 2 office visits as they would for 1 office visit.  On the other hand, […]

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Effect of Physician Reimbursement Rates on Medicaid Take-up

Only about 50% to 60% of individuals eligible for Medicaid actually take-up the coverage.  Why is this case?  Many people claim that individuals only take up Medicaid insurance when they get sick.  Others claim that state outreach efforts have been subpar.  Youjin Hahn, however, offers another explanation rates: Medicaid insurance is just not that valuable. The […]

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Medicare reducing reimbursement for low-quality docs

In 2015, Medicare will begin implementing a value-based purchasing (VPB) program for physicians.  Initially the program will target only certain physicians and groups of physicians, but by 2017 all physicians is participate in this program. The VBP program will evaluate physicians along two broad dimensions: quality and cost.  In the final rule: Section 1848(p) of […]

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Medicare Reimbursement Information VIII

The Medicare Reimbursement series continues with a look at physician reimbursement in more detail. The source of this information is MedPAC’s Payment Basics. Physician Reimbursement Physicians payment is based on 3 factors: RVU, GPCI and the MEI conversion factor. Relative value units (RVUs) measure the relative costliness of three types of resources used to provide […]

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Medicare Reimbursement Information VII

The Medicare Reimbursement series continues with the big money payments: acute inpatient hospital care, long-term care facilities and critical access hospitals. The sources of this information is MedPAC’s Payment Basics. Hospital Acute Inpatient Services Payments made under the acute inpatient prospective payment system (IPPS) totaled $105 billion and accounted for about 25 percent of Medicare […]

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Medicare Reimbursement Information VI

The Medicare Reimbursement series continues with today’s focus on outpatient care. The sources of this information is MedPAC’s Payment Basics. Outpatient Hospital Services Outpatient hospital procedures range from injections to complex surgical procedures that require anesthesia. Outpatient hospital care accounted for $19 billion of total Medicare spending in 2007. Currently, outpatient hospital reimbursement is based […]

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Medicare Reimbursement Information V

Medicare reimburses providers based on the type of service they provide. In the Medicare claims data there are three types of procedure codes: Current Procedural Terminology (CPT): CPT codes are designed by the American Medical Association. They describe medical, surgical, and diagnostic services and are designed to communicate uniform information about medical services and procedures […]

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Medicare Reimbursement Information IV

The Medicare Reimbursement Series Continues. The sources of this information is MedPAC’s Payment Basics. Clinical Laboratory Services: Under Part B, Medicare covers medically diagnostic and monitoring laboratory services ordered by a physician. Medicare does not cover routine screening tests except for cholesterol and blood lipid tests, fecal occult blood testing, Pap smear tests, prostate-specific antigen […]

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Medicare Reimbursement Information I

This week, I will be discussing Medicare Reimbursement in detail.  The Medicare Payment Advisory Commission (MedPAC) has a high-quality series of reports analyzing Medicare’s reimbursement system. Findings from these reports includes: Physician Services In 2006, about 569,000 physicians billed Medicare. In 2007, Medicare paid $60 billion for physician services. All physician services are reported to […]

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