By Florien M. Kruse, MPP; Stef Groenewoud, PhD; Femke Atsma, PhD; Onno P. van der Galiën, MSc; Eddy M. M. Adang, PhD; Patrick P. T. Jeurissen, PhD
HSR – Health Services Research, August 20, 2019
Objective: To identify differences between independent treatment centers (ITCs) and general hospitals (GHs) regarding costs, quality of care, and efficiency.
Data Sources: Anonymous claims data (2013‐2015) were used. We also obtained quality indicators from a semipublic platform.
Study Design: This study uses a comparative multilevel analysis, controlling for case mix, to evaluate the performance of ITCs and GHs for patients diagnosed with cataract.
Data Collection: Reimbursement claims were extracted from existing claims databases of the largest Dutch health insurer. Quality indicators were obtained by external agencies through a mixed‐mode survey.
Principal Findings: There are no stark differences in complexity of cases for cataract care. ITCs seem to perform surgeries more frequently per care pathway, but conduct a lower number of health care activities per surgical claim. Total average costs are lower in ITCs compared with GHs, but when adjusted for case mix, the differences in costs are lower. The findings with the adjusted quality differences suggest that ITCs outperform GHs on patient satisfaction, but patients’ outcomes are similar.
Conclusion: This finding supports the postulation—based on the focus factory theory—that ITCs can provide more value for cataract care than GHs.
Selected quotes from the Introduction:
In several health care systems, ITCs are more profit‐oriented than general hospitals (GHs).
ITCs seem to embody to a greater extent the theoretical concept of the focus factory. This theory postulates that harmonizing the care portfolio and specialization would lead to better performance due to repetition, experience, and homogeneity of tasks.
ITCs would theoretically achieve more value for the same procedure compared with full‐service hospitals.
In many countries… policy makers became more receptive toward ITCs, since many health care systems opted for a more market‐driven system.
In the United States, the number of Medicare‐certified ITCs (called independent Ambulatory Surgery Centers in the US) doubled between 1991 and 2001 (1460‐3371), but recently this growth has slowed down.
Some empirical evidence on the relative performance of ITCs exists, most of which comes from the United States. However, comparative studies scrutinizing cost and quality simultaneously are lacking. The studies that analyzed quality of care either find equivocal results or find no clear medical quality advantages for ITCs over full‐service hospitals.
Findings from both the UK and the US suggest that ITCs might be cherry‐picking and treat less‐complex patients compared with hospitals.
From the demand side, it seems that the characteristics of patients seeking care from ITCs differ from those of patients seeking care from hospitals. The independent sector in the UK historically serves the interests of private practices of NHS consultants and target a more affluent clientele with additional amenities and shorter waiting lists.3, 20 Also in the United States, patients who are not insured via Medicaid more often chose to visit an ITC.
People with an indemnity health care insurance package will probably be more inclined to opt for ITCs. These insurance packages cover ITC care even when the ITC has no contract from this respective health insurer. From this perspective, people who could afford a more indemnity health care insurance package—people with a higher socioeconomic status (SES)—might have better access to ITCs. However, a recent report found no relationship between income and the choice for those insurance coverage that limits the choice of health care providers. Another reason why there might be a certain selection of patients visiting ITCs is that, according to guidelines set by the Dutch health care inspectorate, ITCs should refrain from treating patients of ASA (American Society of Anesthesiologists) type III, which are patients with severe systemic diseases.
In 2006, the Netherlands implemented a number of market‐oriented reforms of the health care system and the ITC enterprises subsequently grew. The focus factory theory would predict that ITCs would provide better value, but there remains uncertainty as to whether ITCs really do outperform GHs.
Selected quotes from the Results:
Patient characteristic statistics illustrate that there are small differences in the complexity of patients for cataract care between ITCs and GHs. The mean age is lower in ITCs. The percentage of patients who are 85 years or older is much lower in ITCs than GHs. The average number of chronic conditions illustrate that ITCs’ patients have less comorbidity, and the average number of patients with diabetes indicates possible lower ocular comorbidity. The average SES (socioeconomic status) of patients going to ITCs is higher compared with GHs. Glaucoma is the only indicator that suggests that ITCs might be treating a more complex patient group since in ITCs the number of patients with glaucoma is higher compared with GHs.
The DRG prices, which the insurer negotiates with ITCs, are substantially lower for cataract surgery than prices for GHs: on average 85.9 euros less for standard cataract surgery and 140 euros for complex cataract surgery. For patients with one cataract operation, the total cost differences are on average 94 euros per care pathway, and for patients with two cataract operations, this gap widens to 187 euros—both accounting for approximately 8 percent in cost savings.
Efficiency in this study is defined as the number of activities in a surgical claim, where fewer activities are perceived as more efficient. Results in Table 3 suggest that ITCs are more efficient in providing cataract surgery. ITCs carry out fewer health care activities within each surgical cataract DRG compared with GHs.
ITCs seem to perform better on patient satisfaction compared with GHs, but there are no differences in the patient‐reported outcomes after cataract surgery.
Selected quotes from the Discussion:
Total costs of cataract claims are lower for ITCs compared with GHs, although the adjusted cost differences are somewhat smaller than the unadjusted costs. Lower costs seem to be partly driven by lower negotiated prices, since ITCs tend to have a slightly higher number of claims per cataract care pathway. Our findings suggest that ITCs are able to offer those lower prices for cataract surgery, due to performing less health care activities within cataract surgical claims and through more intense use of optometrists. In addition, lower fixed costs (eg, lower overhead) and perhaps lower margins could be other reasons why cataract ITCs are able to offer lower prices.
The quality indicators used in this study were not optimal.
There is a risk that our proxy for efficiency—the number of health care activities—might not fully capture the differences in the resources used since this could vary by the different health care activities.
…whether suppliers induce demand. Several studies from the United States have indicated that this is sometimes the case, particularly among physician‐owned health care providers. Based on our own estimation, of the ITCs contracted for cataract care, 68 percent are physician‐owned. The phenomenon of supplier‐induced demand could very well affect the Dutch physician owners.
… we have found that ITCs more often carry out two cataract operations per care pathway than GHs. It is beyond the scope of this study to assess whether this indicates that ITCs are undertaking unnecessary cataract operations but it does raise concerns which merits further investigation.
This study cannot exclude the possibility of upcoding practices. Our findings do hint toward concerns of this sort.
The role of ITCs within future health care systems is still up for debate. Currently, GHs need to continue providing elective ambulatory care surgery if they are to ensure their long‐term financial survival; therefore, GHs will likely resist the reallocation of these services to ITCs.
For those interested in more details, this is an open access article available at the following link:
By Don McCanne, M.D.
Those supporting market approaches for health care financing frequently cite shopping for Lasik eye surgery as an example of how well the market works in supposedly keeping prices down, though this is not really a good example to study the role of ambulatory surgical centers since Lasik is not covered by insurers. However, cataract surgery is an essential health care service and is covered by private and public health plans, so this study gives us a better idea about the role of ambulatory surgical centers as opposed to general hospitals. So what are we learning here?
Costs might be slightly lower in the surgical centers and the results on quality remain inconclusive. Just as we’ve known from past experience the centers tend to care for less complex patients who are younger and healthier and have a higher socioeconomic status – features that improve the bottom line for these largely for-profit facilities. Also they do not have to produce higher margins that the general hospitals must have to meet the institutional costs of a full service facility.
A well designed single payer system uses central planning with separate budgeting of capital improvements. It is in this process where appropriate decisions can be made that best serve the interests of the community. If there is a rationale for a surgical suite in a large urban ophthalmology practice it should not be based on cherry-picking, cream-skimming, lemon-dropping, or profit-potential in a patient population limited to those with a higher socioeconomic status, with unprofitable, more complicated patients of lower socioeconomic status being dumped on the community hospital. If the ophthalmologists want a state-of-the-art operation suite, they need to make sure that it is available for all ophthalmology patients, and all credentialed ophthalmologists, wherever it is located.
And Lasik patients? Until it is decided that Lasik should be a benefit that is covered by a universal public program, no public funds – directly or indirectly – should be used to care for them. They can go out and see what the market can do for them (but, warning, without federal funds, it will be very expensive).
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