Publications

Comparing Recent Health Care Proposals: From building on the ACA to Medicare for All

Democratic lawmakers in Congress have made a variety of proposals to strengthen or reform the United States health care system. These proposals range from building upon the Affordable Care Act (ACA) to fully transitioning the U.S. to a single-payer system.

This fact sheet categorizes and compares the major provisions of these proposals, including possible implications for consumers, health care providers, and federal and state governments.

Read Comparing recent health care proposals: From building on the ACA to Medicare for All.

Michigan Physician Survey – Primary Care Physicians in Michigan

CHRT has been surveying primary care physicians (PCPs) in Michigan since 2012—tracking key trends in practice patterns, capacity, payer mix and care team composition. Our latest survey also asked physicians about care continuity and Medicaid work requirements legislation (a full analysis can be found here).

PCPs are a key component of a successful, high quality healthcare system. As the baby-boomer generation ages and the needs of this cohort increase, there is ongoing concern about how well the healthcare workforce can meet the increasing demands of an older and presumably sicker population. Additionally, primary care is on the front lines of improving care delivery, such as increasing care management for complex cases, integration of behavioral health care and identifying and addressing social determinants of health.

To review the full report, click here.

Cover Michigan Survey: Use of Health Care Benefits in Michigan

Data from the Center for Health and Research Transformation’s (CHRT) 2018 Cover Michigan Survey show health benefits that Michiganders with health insurance coverage have used in the past year (1)Survey participants were asked whether or not they or other family members covered by their plans used each health care benefit in the past 12 months.. Detail on the Cover Michigan Survey and analysis methodology can be found on CHRT’s website. In addition to findings on overall use of health care benefits, this brief focuses on three key areas: dental and vision, reproductive health, and mental health care.

Nearly all Michiganders used some kind of health benefit over the last year. To understand differences in the use of health care benefits, several variables were examined including gender, age, race, insurance type, income, and employment status.

  • Preventive care: The highest utilized benefit was routine, preventive primary care This was consistent across all groups.
  • Dental and vision care: There is high use of these benefits even though they are not generally core offerings of most insurance
  • Reproductive health care: Women, especially younger women, use these benefits at a significantly higher rate than men and older Reproductive health care represents 11 percent of younger women’s health care utilization.
  • Mental health care: Younger women and people who are unemployed reported significantly higher use of their mental health care or substance use treatment coverage.

Other findings include:

  • Aside from dental and inpatient care, women consistently utilized more health care benefits than men.
  • African Americans were the least likely to visit a doctor and use vision care benefits compared to other races, while white Michiganders were the most likely to use inpatient services.
  • Regardless of insurance type, respondents use doctor visits at similar rates, however those with employer-provided insurance were the most likely to use dental care benefits.
  • Medicaid beneficiaries had the highest utilization of pediatric care, contraceptive/family planning, mental health/substance use, and maternity/newborn care benefits; and Medicare beneficiaries made the most use of the prescription drug benefit. These differences are likely due to the unique populations that make up membership in these plans.
  • Compared to those with lower household income, Michiganders with incomes of $50,000 or more per year were far more likely to use dental care, doctor visits, and vision benefits.
  • The unemployed population was more likely to use inpatient care, mental health/substance abuse services, and maternity/newborn care than those who are working/in school.

Read the full report, Use of Health Care Benefits in Michigan, and download a full analysis.

References   [ + ]

1. Survey participants were asked whether or not they or other family members covered by their plans used each health care benefit in the past 12 months.

Flu Vaccination in Michigan: Opportunities for Improvement

 

Introduction

Approximately 6,000 Americans die of influenza every year,(1)Centers for Disease Control and Prevention, “Estimates of Deaths Associated with Seasonal Influenza — United States, 1976–2007,” Morbidity and Mortality Weekly Report (MMWR), Aug. 27, 2010, 59(33): 1057–62: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5933a1.htm (accessed 6/25/15) and almost 800 people were hospitalized during the 2014–2015 flu season in the four Michigan counties that report flu hospitalizations (Clinton, Eaton, Genesee, and Ingham counties).(2)Michigan Department of Health & Human Services, “Influenza Surveillance Report for the Week Ending June 13, 2015,” MI Flu Focus, Influenza Surveillance Updates, (Lansing, MI: Michigan Department of Health & Human Services, Bureaus of Epidemiology and Laboratories, June 24, 2015), 12(23): http://www.michigan.gov/documents/mdch/MIFF_6-24-15_492747_7.pdf (accessed 6/25/15). Although the Centers for Disease Control and Prevention (CDC) Advisory Committee on Immunization Practices recommends that all adults and children over the age of six months receive an annual flu vaccination,(3)Centers for Disease Control and Prevention, Advisory Committee on Immunization Practices (ACIP) Reaffirms Recommendation for Annual Influenza Vaccination (Atlanta, GA: CDC, Feb. 26, 2015): http://www.cdc.gov/media/releases/2015/s0226-acip.html (accessed 6/25/15). only 42 percent of American adults were vaccinated against the flu during the 2013–2014 flu season.(4)Centers for Disease Control and Prevention, Flu Vaccination Coverage, United States, 2013–14 Influenza Season (Atlanta, GA: CDC, September 14, 2014): http://www.cdc.gov/flu/fluvaxview/coverage-1314estimates.htm (accessed 9/1/15). Michigan’s vaccination rate during the 2013–2014 flu season was slightly lower than the national average at 40 percent.(5)Centers for Disease Control and Prevention, 2013–14 State, Regional, and National Vaccination Report II (Atlanta, GA: CDC, N.D.): http://www.cdc.gov/flu/fluvaxview/reportshtml/reporti1314/reportii/index.html (accessed 9/1/15). Effectiveness of the flu vaccine varies greatly from year to year based on the annual vaccine’s match with strains of flu virus circulating at the time as well as other factors. Nevertheless, even the 2014–2015 vaccine, which was not as well matched to the predominant strains during that season as some previous vaccines, was able to reduce the odds of influenza infection by almost one-fourth among those vaccinated in the United States.(6)Centers for Disease Control and Prevention, “Early Estimates of Seasonal Influenza Vaccination Effectiveness—United States, January 2015,” Morbidity and Mortality Weekly Report (MMWR), Jan. 16, 2015, 64(01): 10–15: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6401a4.htm (accessed 6/25/15).

Michiganders insured through Medicaid or the Healthy Michigan Plan (the state’s expanded Medicaid program) are able to receive annual flu vaccination without a copay.(7)Michigan Department of Community Health, MSA Bulletin 10-30 (Lansing, MI: Michigan Department of Community Health, Medical Services Administration, Aug. 10, 2010): https://michigan.fhsc.com/Downloads/ MSA_10-30_330003_7.pdf (accessed 8/20/15). The Healthy Michigan Plan encourages beneficiaries to choose vaccination by reducing annual out-of-pocket contributions by 50 percent for those with an annual household income above the federal poverty level who complete a Health Risk Assessment with their primary care office/clinic and identify a health behavior goal such as receiving a flu shot.(8)State of Michigan, Healthy Michigan Plan, MI Health Account (Lansing, MI: Healthy Michigan Plan, 2015): http://www.michigan.gov/healthymiplan/0,5668,7-326-67957_69564—,00.html (accessed 8/20/15). Because Healthy Michigan Plan beneficiaries whose income is below the federal poverty level are not required to make out-ofpocket contributions, many plans instead provide them with a $50 prepaid card or gift card for completing the Health Risk Assessment.(9)U nitedHealthcare, Healthy Michigan Plan – Health Risk Assessment
Provider FAQ’s (Southfield, MI: United Healthcare, April 2014): http://www.uhccommunityplan.com/content/dam/communityplan/healthcareprofessionals/providerinformation/MI-Provider-Information/MI_Healthy_Incentive_FAQ.pdf (accessed 8/20/15).
,(10)HealthPlus Partners Healthy Michigan, HealthPlus Partners will reward you for taking steps toward getting and staying healthy! (N.P.: HealthPlus, April 8, 2014): https://www.healthplus.org/uploadedFiles/PDFs/Healthy_Michigan/HMP%20HRA%20Member%20Incentives%20Letter%20050514.pdf (accessed 8/20/15). As one of the Affordable Care Act’s preventive health services, annual flu vaccinations are also available without a copay or deductible to many Michiganders with private insurance.(11)U .S. Centers for Medicare & Medicaid Services, Preventive Health Services for Adults (Baltimore, MD: U.S. Centers for Medicare and Medicaid Services, N.D.): https://www.healthcare.gov/preventive-care-benefits/ (accessed 6/25/15). This brief examines the factors affecting flu vaccination in Michigan and how current and future policy initiatives could improve vaccination rates.

The brief is based on data from the Center for Healthcare Research & Transformation’s 2014 Cover Michigan Survey of Michigan adults, fielded between September and November 2014. All reported differences are statistically significant at the p ≤ 0.05 level.

Key Findings

  • Less than half (45 percent) of Michigan adults surveyed reported having received a flu vaccination in the past 12 months, a proportion similar to the national average.
  • Only 37 percent of African-American respondents reported having been vaccinated against the flu in the 12 months prior to the survey, compared to 47 percent of white respondents.
  • Women were more likely than men to report having received the flu vaccine: 48 percent of women reported having been vaccinated as compared to only 42 percent of men.
  • About one in three respondents under the age of 40 (34 percent) reported having been vaccinated, compared to more than two-thirds (70 percent) of those over 65.
  • Only 22 percent of respondents with Medicaid and 19 percent of uninsured respondents reported having received the flu vaccine in the past 12 months, about half the rate of respondents with employer-sponsored or individually purchased insurance.
  • Forty-eight percent of respondents who usually sought care at a doctor’s office reported having been vaccinated, compared to only 35 percent of those whose usual source of care was an urgent care clinic and 30 percent of those whose usual source of care was an emergency department.

    Demographic Predictors of Vaccination

Forty-five percent of Michigan residents surveyed reported having received a flu vaccination in the 12 months before the survey. Forty-seven percent of white respondents reported having been vaccinated in the year leading up to the survey, compared to only 37 percent of African-American respondents.

Only one-third of those whose income was less than $30,000 had been vaccinated, compared to half of those with an income above $30,000. Figure 1

CT958-CMS-Influenza-FIG1

Perceived household financial status had an even stronger relationship with flu vaccination than did reported household income. Those who rated their household financial status as “excellent” were more than twice as likely to report having received a flu shot than were those who rated their household financial status as “poor.” Figure 2

CT958-CMS-Influenza-vFIG2

Michiganders over the age of 65 were twice as likely to report having received a flu vaccine as those under 40. Only 34 percent of those between the ages of 18 and 39 reported having been vaccinated in the past year. Figure 3

CT958-CMS-Influenza-vFIG3

 

Insurance Status and Vaccination

Survey respondents reported wide variations in vaccination rates varied based on insurance status. Only 19 percent of uninsured respondents reported that they had been vaccinated in the past year, compared to 48 percent of insured respondents. Michiganders with Medicare were most likely to report having received the flu vaccine, while those who were uninsured or had Medicaid were least likely to report having been vaccinated. Respondents with employer-sponsored or individually purchased insurance were almost twice as likely as those with Medicaid to report having received a flu vaccine. Less than one-quarter of respondents with Medicaid reported having been vaccinated in the 12 months prior to the survey. Figure 4

CT958-CMS-Influenza-FIG4

 

Source of Care and Vaccination

Half of Michiganders who reported that they had a primary care provider received a flu vaccine, compared to only 28 percent of respondents who did not have a primary care provider. Those who reported that they usually went to a doctor’s office when they were sick or needed medical advice were more likely to have been vaccinated than those who reported usually receiving care at an emergency department or urgent care clinic. Figure 5

CT958-CMS-Influenza-FIG5

 

Conclusion

Despite recommendations that all individuals six months and older be vaccinated against the flu each year, less than half of Michigan adults surveyed reported having been vaccinated in the year leading up to this survey. Michigan residents whose income was less than $30,000 per year, those without a primary care provider and/or who relied on urgent care facilities or emergency departments for care, and those who had Medicaid or were uninsured were least likely to have been vaccinated. The low vaccination rates among these groups suggest a need for targeted future interventions. These data were collected too early in 2014 to fully reflect vaccination rates during the 2014–2015 flu season and therefore do not assess effectiveness of the Healthy Michigan Plan’s potential to effect changes in vaccination rates. It is possible that Michigan vaccination rates may increase as more Michiganders gain insurance coverage through the Medicaid expansion and the insurance marketplace, and as participation in the Healthy Michigan Plan’s incentive program expands.

Methodology

The survey data presented in this brief were produced from a series of survey questions added to the Michigan State University Institute for Public Policy and Social Research (IPPSR) quarterly State of the State Survey. The survey was fielded between September and November 2014 and included a sample of 1,002 Michigan adults, with a 20.2 percent response rate. The margin of error for the entire sample was ±3.9 percent. The sampling design, a random stratified sample based on regions within the state, was a telephone survey of Michigan residents conducted via landline and cellular phones.

For analytical purposes, survey data were weighted to adjust for the unequal probabilities of selection for each stratum of the survey sample (for example, region of the state, listed vs. unlisted telephones). Additionally, data were weighted to adjust for non-response based on age, gender, and race according to population distributions from 2009–2013 American Community Survey data. Respondents who reported both Medicare and Medicaid coverage or who reported coverage through the Healthy Michigan Plan were considered Medicaid recipients for the purpose of this analysis. Due to the timing of the survey, reported vaccination may have occurred during either the 2013–2014 flu season or during the 2014–2015 flu season. Results were analyzed using SAS 9.3 software. Statistical significance of bivariate relationships was tested using z tests or chi-square tests for independence. All comparison tables are statistically significant at the p ≤ 0.05 level unless otherwise noted. A full report of the IPPSR State of the State Survey methodology can be found at: http://ippsr.msu.edu/soss/.


Suggested Citation: Mary L. Smiley, Melissa Riba, and Marianne Udow-Phillips, Flu Vaccination in Michigan:
Opportunities for Improvement. Cover Michigan Survey 2014 (Ann Arbor, MI: Center for Healthcare Research & Transformation, October 2015).

Acknowledgements: The staff at the Center for Healthcare Research & Transformation would like to thank Thomas Buchmueller, Matthew M. Davis, Robert Goodman, Helen Levy, Renuka Tipirneni, and the staff of the Institute for Public Policy and Social Research (IPPSR) at Michigan State University for their assistance with the design and analysis of the survey.

References   [ + ]

1. Centers for Disease Control and Prevention, “Estimates of Deaths Associated with Seasonal Influenza — United States, 1976–2007,” Morbidity and Mortality Weekly Report (MMWR), Aug. 27, 2010, 59(33): 1057–62: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5933a1.htm (accessed 6/25/15)
2. Michigan Department of Health & Human Services, “Influenza Surveillance Report for the Week Ending June 13, 2015,” MI Flu Focus, Influenza Surveillance Updates, (Lansing, MI: Michigan Department of Health & Human Services, Bureaus of Epidemiology and Laboratories, June 24, 2015), 12(23): http://www.michigan.gov/documents/mdch/MIFF_6-24-15_492747_7.pdf (accessed 6/25/15).
3. Centers for Disease Control and Prevention, Advisory Committee on Immunization Practices (ACIP) Reaffirms Recommendation for Annual Influenza Vaccination (Atlanta, GA: CDC, Feb. 26, 2015): http://www.cdc.gov/media/releases/2015/s0226-acip.html (accessed 6/25/15).
4. Centers for Disease Control and Prevention, Flu Vaccination Coverage, United States, 2013–14 Influenza Season (Atlanta, GA: CDC, September 14, 2014): http://www.cdc.gov/flu/fluvaxview/coverage-1314estimates.htm (accessed 9/1/15).
5. Centers for Disease Control and Prevention, 2013–14 State, Regional, and National Vaccination Report II (Atlanta, GA: CDC, N.D.): http://www.cdc.gov/flu/fluvaxview/reportshtml/reporti1314/reportii/index.html (accessed 9/1/15).
6. Centers for Disease Control and Prevention, “Early Estimates of Seasonal Influenza Vaccination Effectiveness—United States, January 2015,” Morbidity and Mortality Weekly Report (MMWR), Jan. 16, 2015, 64(01): 10–15: http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6401a4.htm (accessed 6/25/15).
7. Michigan Department of Community Health, MSA Bulletin 10-30 (Lansing, MI: Michigan Department of Community Health, Medical Services Administration, Aug. 10, 2010): https://michigan.fhsc.com/Downloads/ MSA_10-30_330003_7.pdf (accessed 8/20/15).
8. State of Michigan, Healthy Michigan Plan, MI Health Account (Lansing, MI: Healthy Michigan Plan, 2015): http://www.michigan.gov/healthymiplan/0,5668,7-326-67957_69564—,00.html (accessed 8/20/15).
9. U nitedHealthcare, Healthy Michigan Plan – Health Risk Assessment
Provider FAQ’s (Southfield, MI: United Healthcare, April 2014): http://www.uhccommunityplan.com/content/dam/communityplan/healthcareprofessionals/providerinformation/MI-Provider-Information/MI_Healthy_Incentive_FAQ.pdf (accessed 8/20/15).
10. HealthPlus Partners Healthy Michigan, HealthPlus Partners will reward you for taking steps toward getting and staying healthy! (N.P.: HealthPlus, April 8, 2014): https://www.healthplus.org/uploadedFiles/PDFs/Healthy_Michigan/HMP%20HRA%20Member%20Incentives%20Letter%20050514.pdf (accessed 8/20/15).
11. U .S. Centers for Medicare & Medicaid Services, Preventive Health Services for Adults (Baltimore, MD: U.S. Centers for Medicare and Medicaid Services, N.D.): https://www.healthcare.gov/preventive-care-benefits/ (accessed 6/25/15).

Primary Care Physician Perspectives on Innovative Compensation Models

Cover Michigan Survey June 2015 copy

 

 

 

 

 

 

 

Introduction

One goal of the Affordable Care Act (ACA) is to “reduce the growth of health care costs while promoting high-value, effective care.”(1)U .S. Department of Health & Human Services. Strategic Goal 1: Strengthen Health Care. (accessed 2/16/15). Provisions of the ACA encourage providers to engage in alternatives to traditional fee-for-service compensation models with a focus on value-based purchasing through a variety of mechanisms.(2)U .S. Department of Health & Human Services. Key Features of the Affordable Care Act By Year. (accessed 1/21/15). The U.S. Department of Health and Human  Services also recently announced the goal of directing 30 percent of fee-for-service Medicare payments to these kinds of models by 2016 and 50 percent by 2018, up from 20 percent in 2015.(3)US. Department of Health & Human Services. Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value. Jan. 26, 2015. http://www.hhs.gov/news/press/2015pres/01/20150126a.html (accessed 1/28/15). In order to understand how physicians in Michigan see the trajectory for change in compensation, the Center for Healthcare Research & Transformation (CHRT) collaborated with University of Michigan faculty to survey primary care physicians statewide about their practices and compensation models. The survey findings show that physicians across the state are actively anticipating significant changes in approaches to compensation and are already participating in many initiatives that begin the shift from straight fee-for-service payment to other models.

Key Findings

  • 28 percent of Michigan primary care physicians reported participation in at least one innovative compensation model.
  • 41 percent of physicians reported expecting fee-for-service payments to decline, while 44 percent and 42 percent reported expecting fee-for-service with incentives and bundled payments (respectively) to increase as a percentage of their practice revenue over the next 1–3 years.
  • The Michigan Primary Care Transformation Project (MiPCT) was the value-based payment initiative that physicians in Michigan reported participating in most frequently in 2014.
  • Bundled payments were uncommon at the time of the survey: on average, physicians reported that only 3 percent of their practice revenue came from bundled payments, and only 5 percent of physicians reported participation in the Bundled Payments for Care Improvement initiative.

    Current Revenue Structures

    Physicians reported that the majority of their practice revenue came from fee-for-service payments and salary (37 and 35 percent of practice revenue, respectively). While physicians reported that 21 percent of their practice revenue came from fee-for-service with incentive payments for meeting quality goals and 7 percent came from capitation (an arrangement in which physicians are pre-paid per enrolled member per month regardless of the number of services used), bundled payments for episodes of care made up only 3 percent of practice compensation, on average. Figure 1

 

CT934 CMS-Physician Survey Fig1

 

Participation in Innovative Compensation Models

Twenty-eight percent of Michigan primary care physicians reported participation in at least one initiative that includes a compensation model that differs from straight fee-for-service. These models included the Michigan Primary Care Transformation Project (MiPCT)(4)Michigan Primary Care Transformation Project (MiPCT) Demonstration Project. http://www.mipct.org (accessed 5/27/15)., Organized Systems of Care (OSCs)(5)Blue Cross Blue Shield of Michigan Value Partnerships. Organized Systems of Care. http://www.valuepartnerships.com/vp-program/organized-systems-of-care/ (accessed 5/27/15)., and the Bundled Payments for Care Improvement initiative (BPCI).(6)Centers for Medicare & Medicaid Services. Bundled Payments for Care Improvement (BPCI) Initiative: General Information. http://www.innovation.cms.gov/initiatives/bundled-payments/ (accessed 5/27/15). Almost one-quarter of physicians reported participation in MiPCT, 9 percent reported participation in an OSC, and 5 percent reported participation in BPCI. Figure 2

 

CT934 CMS-Physician Survey Fig2

 

Anticipated Changes in Physician Compensation

A substantial share of Michigan primary care physicians reported anticipating a shift from fee-forservice to other forms of payment in the near future. When asked about expectations for changes in sources of practice revenue over the next 1–3 years, 54 percent of physicians expected at least one alternative to fee-for-service to increase. Thirty-seven percent of respondents reported receiving at least half their practice revenue from fee-for-service payments at the time of the survey and expected fee-for-service to comprise a similar or greater share of their practice revenue in the future.

Fourty-four percent of respondents expected fee-for-service with incentives to increase, 31 percent of respondents expected capitation to increase, 42 percent of respondents expected bundled payments to increase, and 41 percent of respondents expected fee-forservice to decline. Figure 3

Physicians who reported participating in MiPCT were 51 percent more likely to expect a decline in fee-for-service payments than those not participating in MiPCT.

CT934 CMS-Physician Survey Fig3

 

Conclusion

Most Michigan primary care physicians reported fee-for-service as their primary form of reimbursement in 2014 and nearly 40 percent expected the majority of their practice revenue to continue to come from fee-for-service payments over the next 1–3 years. Nevertheless, more than half of physicians surveyed reported expecting alternatives to fee-for-service to grow as a share of practice revenue in the near future.

Methodology

The survey data presented in this brief were produced from a mail survey of 1,000 primary care physicians practicing in Michigan, conducted between December 2013 and April 2014. Potential respondents received up to three mailings, with $5 included in the first mailing to encourage response.

The physician sample was randomly generated from the American Medical Association (AMA) Physician Masterfile, a comprehensive list that includes both AMA members and non-members. The final sample included physicians from two primary care specialties: family medicine and internal medicine. The survey had a response rate of 36 percent (317 physicians) and has a margin of error of ±5.5 percent. Physicians who responded but reported they were no longer practicing primary care were removed from the analysis. Physicians who reported that they were unsure whether they participated in an innovative compensation model or that they were not participating at the time of the survey but planned to do so in the future were considered as non-participants for the purpose of this analysis. Results were analyzed using SAS 9.3 software.

Statistical significance of bivariate relationships was tested using z tests or chi-square tests for independence. All reported differences are statistically significant at p ≤ 0.05 unless otherwise noted.


Suggested Citation: Smiley, Mary L.; Ndukwe, Ezinne G.; Riba, Melissa; Udow-Phillips, Marianne. Primary Care Physician Perspectives on Innovative Compensation Models. 2014 Michigan Physician Survey (Ann Arbor, MI: Center for Healthcare Research and Transformation, 2015).

Acknowledgements: The staff at the Center for Healthcare Research & Transformation would like to thank Thomas Buchmueller, Matthew M. Davis, Robert Goodman, Helen Levy, Renuka Tipirneni, and the staff of the Institute for Public Policy and Social Research (IPPSR) at Michigan State University for their assistance with the design and analysis of the survey.

References   [ + ]

1. U .S. Department of Health & Human Services. Strategic Goal 1: Strengthen Health Care. (accessed 2/16/15).
2. U .S. Department of Health & Human Services. Key Features of the Affordable Care Act By Year. (accessed 1/21/15).
3. US. Department of Health & Human Services. Better, Smarter, Healthier: In historic announcement, HHS sets clear goals and timeline for shifting Medicare reimbursements from volume to value. Jan. 26, 2015. http://www.hhs.gov/news/press/2015pres/01/20150126a.html (accessed 1/28/15).
4. Michigan Primary Care Transformation Project (MiPCT) Demonstration Project. http://www.mipct.org (accessed 5/27/15).
5. Blue Cross Blue Shield of Michigan Value Partnerships. Organized Systems of Care. http://www.valuepartnerships.com/vp-program/organized-systems-of-care/ (accessed 5/27/15).
6. Centers for Medicare & Medicaid Services. Bundled Payments for Care Improvement (BPCI) Initiative: General Information. http://www.innovation.cms.gov/initiatives/bundled-payments/ (accessed 5/27/15).

Community Mental Health Services: Coverage and Delivery in Michigan

 

 

 

 

 

 

 

State and Federal Legislative History

Michigan’s publicly funded mental health system has its origins in Public Act 54, signed in April 1963. This state law permitted counties to form Community Mental Health (CMH) boards to support and treat people with severe mental illness, developmental disabilities and substance abuse disorders outside of psychiatric hospitals and institutions.(1)Community Mental Health Services Program (Public Act 54 of 1963). Michigan Legislature. Accessed 23 July 2012. Under this law, counties could create CMHs in conjunction with other counties or on their own. CMH funding was 60 percent local and 40 percent state.(2)P.A. 54. Oakland County was the first Michigan county to establish a CMH and held their first board meeting in December 1963.(3)Financial Statements 2007-08. February 3, 2009.Oakland County Community Mental Health Authority. (accessed 7/23/12).

At the federal level, President Kennedy signed the Community Mental Health Act (CMHA) in October 1963. The CMHA provided federal funding for the establishment of community mental health centers.(4)Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963 (Sections 200-207 Brief title: Community Mental Health Act of 1963). (PL 88-164, 31 Oct. 1963)..(accessed 7/24/12). The Act appropriated funds for the construction of CMHs on the basis of population health need and the financial need of states.(5)P.L. 88-164. Section 202. The Act was intended to help states “provide for adequate community mental health centers to furnish needed services for persons unable to pay therefor.”(6)P.L. 88-164. Section 203. The CMHA started the trend toward deinstitutionalizing mental health patients.

In 1974, Michigan’s P.A. 54 was repealed and replaced with Michigan P.A. 258, the Mental Health Code.(7)P.A. 54.,(8)Mental Health Act (Public Act 258 of 1973). Michigan Legislature. (accessed 7/24/12). The Michigan Mental Health Code is the basis for Michigan’s publicly funded mental health system today, allowing the creation of CMH agencies in single counties and CMH organizations in two or more counties. P.A. 258 further defined the role of CMHs and increased state matching funds to 90 percent.(9)P.A. 258 Chapter 3, Section 302. In 1981, the Michigan Department of Mental Health (MDMH) created shared and full management contracts with CMHs.(10)Financial Statements 2007-08. February 3, 2009. Oakland County Community Mental Health Authority.,(11)(12)Bay Arenac Behavioral Health Association. 2011. History of Organization.(accessed 7/24/12).,(13)Michigan Mental Health Commission. October 15, 2004. Final Report.(accessed 7/24/12). In shared management contracts, MDMH and individual CMHs shared responsibility for planning and coordinating mental health services in a county. Under full management contracts, CMHs would take full responsibility for administering mental health services in their area. Previously, the state was responsible for all mental health services. Both of these provisions served to shift the responsibility for public mental health services to CMHs from MDMH. Under such contracts, CMHs were given more funding but assumed more responsibility for mental health care. CMHs were thus responsible for allocating state funding for services at state-run hospitals and centers and at community-based organizations.

Public Act 368 of 1978 amended the Public Health Code to create Substance Abuse Coordinating Agencies (CAs) in the state.(14)Public Health Code (Public Act 368 of 1978, Article 6). Michigan Legislature. http://legislature.mi.gov/doc.aspx?mcl-368-1978-6-62 (accessed 7/24/12). CAs do not deliver care directly but plan for and oversee public services for substance use disorders in the counties they serve.

In 1995, Public Act 290 repealed four of the Mental Health Code’s (P.A. 258) original 26 sections.(15)Amendment to the Mental Health Act. (Public Act 290 of 1995). Michigan Legislature. http://legislature.mi.gov/doc.aspx?1995-SB-0525 (accessed 7/24/12). Notably, P.A. 290 created an alternative designation for CMHs to exist as a government entity, independent from the county or counties that founded them. Initially, all CMHs were county agencies. The new designation would be known as a Community Mental Health Authority. Authorities were afforded powers that were not available to agencies such as owning and maintaining property, and constructing and operating facilities. Furthermore, employees of a CMH authority are employees of the CMH authority itself and not of the county that created it. As such, authorities could operate independently from county government, reporting to a 12-member board appointed by county commissioners.

In the mid-1990s, Michigan began to transition Medicaid recipients to managed care. At that time, the state elected to create a “carve-out” for behavioral health services.(16)MHC Executive Report 2004. The behavioral health carve out was created under federally approved waivers 1915(b) and 1915(c) under the Home and Community Based Services Waiver to the Social Security Act. By 1998, these carve-outs became known as Prepaid Inpatient Health Plans.(17)Financial Statements 2007-08. February 3, 2009.. Oakland County Community Mental Health Authority. The PIHP model is a federal designation that exists in 20 states, including Michigan. PIHPs must provide coverage for Medicaid recipients suffering from mental health issues, developmental disabilities, substance abuse or serious emotional disturbances. Each PIHP must cover at least 20,000 Medicaid beneficiaries.

In 2000, Public Act 130 amended P.A. 258 to expand the definition of a CMH organization known as a “CMHSP Organization” under the Urban Cooperation Act.(18)Public Act 130 of 2000. Michigan Legislature. http://legislature.mi.gov/doc.aspx?2000-SB-1006 (accessed 7/23/12). CMH organizations could now be formed between one or more counties and an institute of higher education with a medical school. The organization would still be a governmental entity separate from the bodies that formed it. This amendment was put in place specifically to enable the formation of the Washtenaw Community Health Organization. Appendix A provides more detail on the distinction between authorities, agencies and organizations.

Most recently, in 2012, Public Acts 500 and 501 amended P.A. 258 to require that by October 1, 2014, all CAs will be merged with PIHPs in the state, reducing the number of CAs in the state to 10.(19)Public Act 500 and Public Act 501, Michigan Legislature. http://legislature.mi.gov/doc.aspx?2012-PA-0501 (accessed 11/21/2013).

Overview of Current Structure of Public Mental Health Care in Michigan

Mental health care delivery in the state has changed forms many times since the early 1960s. In 1965, the state of Michigan operated 41 psychiatric hospitals and centers for persons with developmental disabilities, serving approximately 29,000 residents. As a result of deinstitutionalization, by 1991, 29 state hospitals and centers served 3,054 residents+. As of March 2014, only five state-operated psychiatric hospitals and centers were operating in Michigan.(20)Haveman, J., Zeller, L, and Becker, T. 2014. Michigan Behavioral Health Developmental Disabilities Administration.http://www.michigan.gov/documents/mdch/BHDDA_Budget_FY2015_-_HOUSE_-_FINAL_449479_7.pdf

Since 1965, the number of CMHs has increased from 12 covering 16 counties to 46 covering all 83 counties in the state.(21)Haveman, Zeller and Becker, 2014. Today, Medicaid is the major source of most funding for Michigan’s publicly funded mental health system, and care at CMHs is an entitled benefit under Medicaid. As such, individuals with Medicaid coverage are more likely to receive care through CMHs than uninsured and underinsured individuals. Furthermore, CMHs providing care for non-Medicaid covered individuals must use limited state general fund dollars to cover their care.

State general fund dollars are allocated to each CMH based on historical funding formulas that are modified at the state’s discretion. Changes to the allocations have related to administrative expenses, previous general fund transfers between CMHs (under Public Act 236), and an effort to bring all CMHs to the same level of funds based on county populations. Beginning in 2014, general fund dollars to CMHs were reduced substantially as a result of the state’s decision to expand Medicaid under the Patient Protection and Affordable Care Act.(22)Patient Protection and Affordable Care Act. 2010, Pub. L. No. 111-148, 124 Stat. 119. http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf (accessed 10/28/14). Medicaid funds are allocated monthly to each CMH through PIHPs according to the number of Medicaid beneficiaries in the PIHP’s service area. Decreases in general funds in recent years have threatened the ability of CMHs to deliver care to many of those in need. (See Appendix B for details about the flow of funding streams.) That is, only non-Medicaid patients with the most severe mental illness or developmental disabilities (“priority populations” under the Michigan Mental Health Code) receive care through CMHs. Non-Medicaid eligibles may also be subject to waiting lists at CMHs, while individuals covered by Medicaid are not.(23)J. Taylor. N.d. CMH Financing History: Summary of 20 Years of the State Financing Strategy for CMH. www.michigan.gov/documents/ CMH_FINANCING_HISTORY_92807_7.doc (accessed 8/16/12). Emergency cases are an exception, and are treated immediately regardless of a person’s ability to pay. Of the 227,020 people served at CMHs in Michigan in 2010, 69 percent were covered by Medicaid.(24)Dazzo, Lyon, and Becker, 2012.

Administrative Bodies

Three different types of organizations manage and administer Michigan’s publicly funded mental health system: Prepaid Inpatient Health Plans (PIHPs), Community Mental Health Services Programs (CMHs), and Substance Abuse Coordinating Agencies (CAs). Each type of organization is described below. (See Appendix C for current CMHSPs, and Appendix D for PIHP and CA areas as of January 2014.)

PIHPs are Medicaid behavioral health managed care organizations that administer capitated funds, bear risk for Medicaid patients (7.5 percent for regular Medicaid beneficiaries and 100 percent for those covered under the Adult Benefit Waiver program), and manage Medicaid patients’ behavioral health care. Medicaid funds are allocated to PIHPs based on the number of Medicaid beneficiaries in the PIHP service area, and PIHPs pay providers directly. Providers include CMHs themselves as well as community-based providers under contract with a CMH or CA. PIHPs receive monthly, capitated payments from MDCH for the Medicaid Managed Mental Health Care Program. In addition to issuing Medicaid payments to doctors, hospitals, other community providers and CMHs, PIHPs may perform gate keeping and authorization services and monitor health outcomes and standards of care.

Currently there are 10 PIHPs throughout Michigan, and each PIHP is affiliated with at least one CMH. The 10 PIHPs oversee the 46 CMHs that serve all 83 counties in the state. Each PIHP is responsible for an area with at least 20,000 Medicaid beneficiaries. Three (3) PIHPs are responsible for one county and a corresponding CMH. Seven (7) PIHPs are responsible for 4 to 21 counties. (See Appendix F for PIHP funding and spending in 2010.) Beginning January 2014, the previous 18 PIHPs were consolidated to the 10 new PIHP regions in the state.

CMHs provide direct mental health care or contract with community providers to do so. Although each CMH is affiliated with a PIHP, the structure of each CMH varies throughout the state (see Appendices C and D for CMH, PIHP, and CA coverage areas, respectively). Of the 46 CMHs, 37 are designated as Authorities, seven as Agencies of county government, and two as Organizations. The two CMH organizations are the Washtenaw Community Health Organization (WCHO) and the Central Wellness Network in Manistee/Benzie counties. WCHO was the first CMH to become an organization under the Urban Cooperation Act.

CAs provide comprehensive planning for substance abuse treatment, rehabilitation (recovery) and prevention services, but are prohibited from directly providing services. Instead, CAs contract with community providers for service delivery. When CAs merge with the 10 realigned PIHPs in October 2014, all PIHPs will be responsible for the coordination of substance use disorder services. (25)Financial Year 2008 Appropriation Bill (Public Act 123 of 2007). Michigan Legislature. http://www.michigan.gov/documents/mdch/4702 _5_1_08_246082_7.pdf or http://legislature.mi.gov/doc.aspx?2007-HB-4344 (Act in full), accessed 7/24/12.,[footnote]Financial Year 2012 Appropriation Bill (Public Act 63 of 2011). Michigan Legislature. http://www.michigan.gov/documents/mdch/4074_04_01_12_382343_7.pdf or http://legislature.mi.gov/doc.aspx?2011-HB-4526 (Act in full).

Emerging Models: Integrated Care for Dual Eligibles—Michigan’s Demonstration Pilot Proposal

Dual eligibles, persons eligible for both Medicare and Medicaid, present some of the most complex and costly cases in the Medicaid system. In 2011, the Centers for Medicare and Medicaid Services selected Michigan as a demonstration site to integrate care for dual eligible individuals, and a Memo of Understanding was signed between CMS and MDCH in April 2014. The new plan, designed as a three-year pilot starting in July 2014, will be implemented in four regions of the state: a region in the southwest part of state including Barry, Berrien, Branch, Calhoun, Cass, Kalamazoo, St. Joseph, and Van Buren counties; Macomb County; Wayne County; and the entire Upper Peninsula. The pilot program will create a delivery and payment model that will integrate clinical, long‐term care, behavioral and support services into a managed care model, a major change from the current fee-for-service system. All dual eligibles can opt out of the pilot and continue their current fee-for-service care.

With regard to mental health services, PIHPs in Michigan will continue their current responsibilities for meeting dual eligibles’ behavioral health needs. However, clinical and long term care will be managed by Integrated Care Organizations (ICOs) that contract with PIHPs. Under the pilot, ICOs and PIHPs will work together via a “Care Bridge” to coordinate behavioral, clinical and long term care supports and services with a goal to provide higher quality and more efficient care. Each multi-disciplinary team that makes up a Care Bridge will be led by a services or support coordinator who will coordinate all care according to each individual’s particular needs. The coordinator will be associated with either the PIHP or ICO, depending on the individual’s needs. For example, if a person has a developmental disability, the coordinator of their Care Bridge team would likely be associated with the PIHP. See Appendix E to view the Care Bridge model.

The demonstration will create a three-way contract between: (1) ICOs and PIHPs, (2) the state, and (3) the federal government to manage, coordinate, and pay for all services for dual eligibles. Capitation payments to PIHPs will be based on three separate rate structures for mild to moderate mental health needs, intellectual/developmental disability, and serious mental illness.

Appendix A: Structure of Community Mental Health Agencies, Authorities, and Organizations

 CMH AgencyCMH AuthorityCMH Organization
LegalFormed by one or more counties and is an entity of the county. Agency employees are county employees.Formed by one or more counties as a non-profit, and is legally separate from the county or counties that formed it. Authorities may own property and enter into contracts. Authority employees work for the Authority itself, not the counties.Formed by two or more counties or at least one county and an institute of higher education. Legally separate from the bodies that formed it. Organizations may own property and enter into contracts. Employees work directly for Organizations, not for counties.
Governance12-member board, appointed by county commissioners or county CEO in charter counties.12-member board, appointed by county commissioners or county CEO in charter counties.12-member board, with equal representation from each governing body.
Financial ReportingReported as a special revenue fund of the county and included as a portion of county financial statements.Reported as separate entity from counties and has its own financial statements. May be considered as a component unit of a county and included on county financial statements.
Funding SourcesState contracts and external grantors, general taxes or special taxes appropriated for CMHs, general obligation or revenue bonds subject to municipal finance act, fundraising and donations.State contracts and external grantors, county appropriations, installment purchase agreements and revenue anticipations (cannot issue bonds), fundraising and donations.

Unlike agencies, counties with authorities and organizations cannot levy taxes to directly support CMH.

Authorities have a limit on county matching funds that is not imposed on Organizations
SOURCE: Center for Healthcare Research & Transformation

Appendix B: Funding Streams for Michigan’s Public Mental Health System

Pages from Community Mental Health Services Coverage and Delivery in Michigan_CHARTSOURCE: Center for Healthcare Research & Transformation

Appendix C: CMHSP Boards

The map below shows which CMHs currently cover each county in Michigan. CMHs that are responsible for a single county are shown in beige. Colored counties are covered by a multi-county CMH. There are 46 CMHs covering all 83 Michigan counties.

appendix-cSOURCE: Michigan Department of Community Health, Behavioral Health Developmental Disabilities Administration
https://www.michigan.gov/documents/mdch/BHDDA_Budget_FY2014_-_Senate_412754_7.pdf

Appendix D: PIHP and Coordinating Agency Coverage in Michigan

The map below shows the new PIHP and CA coverage areas in Michigan, beginning January 1, 2014. Currently there are 10 PIHPs that are responsible for 46 CMHs covering all 83 Michigan counties.

appendix-dSOURCE: Michigan Department of Community Health, Behavioral Health Developmental Disabilities Administration
https://www.michigan.gov/documents/mdch/BHDDA_Budget_FY2014_-_Senate_412754_7.pdf

Appendix E: The Care Bridge Model

The figure below displays the Care Bridge model from the MDCH dual eligibles pilot. The shapes in the diagram represent PIHPs, ICOs and the Care Bridge team between them. The text inside each shape delineates the services each entity will be responsible for managing under the pilot. In short, ICOs will be responsible for long term and primary care for dual eligibles while PIHPs will manage the behavioral health services for this population. Care Bridge teams will be responsible for coordinating care between PIHPs and ICOs.

appendix-gSOURCE: Michigan’s Proposal: Integrated Care for People who are Medicare-Medicaid Eligible http://www.chcs.org/usr_doc/MichiganProposal.pdf.

Appendix F: PIHP Funding and Spending, 2010

The table below shows Medicaid funds available and expenditures for each PIHP in 2010 (most recent data available).

PIHP Funding and Spending, 2010
Medicaid MH/DD/SA Total ExpendituresMedicaid Managed Care MH/DD/SA Administration Expenditures
PIHPFY10 Available Medicaid ResourcesTotal MH/DD/SA Medicaid CasesAmount$$/ ConsumerAmountPercentage of Total Medicaid Resources$$/ ConsumerSavings at Year EndInternal Services Fund (ISF)Lapse
Access Alliance$87,198,7568,014$84,571,899$10,553$7,473,0718.57%$933$2,205,809$6,261,007
CMH Affiliation of Mid-MI$109,330,2398,964$107,022,366$11,939$4,491,2124.11%$501$2,074,621$1,804,896
CMH for Central Michigan$69,241,3876,983$65,674,490$9,405$5,147,4667.43%$737$3,622,818
Detroit-Wayne$443,214,22145,875$405,512,284$8,840$36,500,2298.24%$796$19,014,210$14,695,815
Genesee$103,951,26910,029$101,386,874$10,109$6,525,7636.28%$651$3,640,193
Lakeshore Affiliation$72,168,6566,063$68,532,038$11,303$3,699,8625.13%$610$4,510,373$3,118,643
Lifeways$40,853,1174,758$38,443,266$8,080$3,831,6729.38%$805$2,232,200$189,593
Macomb$160,816,94311,688$151,726,419$12,981$7,513,2814.67%$643$5,680,327$11,990,437
Network 180$98,242,61510,148$98,160,847$9,673$7,031,4167.16%$693$2,461,985
Northcare$90,074,7155,192$85,554,326$16,478$2,658,3532.95%$512$5,516,613$6,141,798$1,246,328
Northern Affiliation$68,081,9345,835$64,534,532$11,060$2,804,7014.12%$481$516,787$3,307,474
Northwest$55,175,3335,581$52,006,623$9,319$3,156,5875.72%$566$784,075$4,112,671
Oakland$240,336,06512,952$232,721,264$17,968$12,489,7285.20%$964$6,339,727$16,426,546
Saginaw$44,536,7033,915$44,998,094$11,494$2,802,2576.29%$716
Southeast Partnership$112,318,5478,521$103,164,712$12,107$5,233,7994.66%$614$2,692,005$6,663,245
Southwest Affiliation$91,352,9288,052$90,395,055$11,226$7,528,2668.24%$935$6,630,595
Thumb Alliance$80,324,4365,696$75,741,050$13,294$2,706,9493.37%$475$3,850,562$5,735,854$26,658
Venture$92,769,04310,467$88,508,248$8,456$5,791,9206.24%$553$3,885,795$4,889,408
State Total$2,060,016,906178,733$1,958,654,384$10,959$127,386,5326.18%$713$59,393,105$101,233,387$1,462,579
SOURCE: Michigan Department of Community Health, 2011 Fingertip Report: PIHP Medicaid Cost Summary
http://www.michigan.gov/documents/mdch/A_-_MH_DD_SA_Cost_Summary_FY10_362802_7.pdf.

References   [ + ]

1. Community Mental Health Services Program (Public Act 54 of 1963). Michigan Legislature. Accessed 23 July 2012.
2, 7. P.A. 54.
3. Financial Statements 2007-08. February 3, 2009.Oakland County Community Mental Health Authority. (accessed 7/23/12).
4. Mental Retardation Facilities and Community Mental Health Centers Construction Act of 1963 (Sections 200-207 Brief title: Community Mental Health Act of 1963). (PL 88-164, 31 Oct. 1963)..(accessed 7/24/12).
5. P.L. 88-164. Section 202.
6. P.L. 88-164. Section 203.
8. Mental Health Act (Public Act 258 of 1973). Michigan Legislature. (accessed 7/24/12).
9. P.A. 258 Chapter 3, Section 302.
10. Financial Statements 2007-08. February 3, 2009. Oakland County Community Mental Health Authority.
11. [footnote]Bay Arenac Behavioral Health Association. 2011. History of Organization.(accessed 7/24/12).
12. Bay Arenac Behavioral Health Association. 2011. History of Organization.(accessed 7/24/12).,[footnote]Michigan Mental Health Commission. October 15, 2004. Final Report.(accessed 7/24/12).
13. Michigan Mental Health Commission. October 15, 2004. Final Report.(accessed 7/24/12). In shared management contracts, MDMH and individual CMHs shared responsibility for planning and coordinating mental health services in a county. Under full management contracts, CMHs would take full responsibility for administering mental health services in their area. Previously, the state was responsible for all mental health services. Both of these provisions served to shift the responsibility for public mental health services to CMHs from MDMH. Under such contracts, CMHs were given more funding but assumed more responsibility for mental health care. CMHs were thus responsible for allocating state funding for services at state-run hospitals and centers and at community-based organizations.

Public Act 368 of 1978 amended the Public Health Code to create Substance Abuse Coordinating Agencies (CAs) in the state.[footnote]Public Health Code (Public Act 368 of 1978, Article 6). Michigan Legislature. http://legislature.mi.gov/doc.aspx?mcl-368-1978-6-62 (accessed 7/24/12).

14. Public Health Code (Public Act 368 of 1978, Article 6). Michigan Legislature. http://legislature.mi.gov/doc.aspx?mcl-368-1978-6-62 (accessed 7/24/12). CAs do not deliver care directly but plan for and oversee public services for substance use disorders in the counties they serve.

In 1995, Public Act 290 repealed four of the Mental Health Code’s (P.A. 258) original 26 sections.[footnote]Amendment to the Mental Health Act. (Public Act 290 of 1995). Michigan Legislature. http://legislature.mi.gov/doc.aspx?1995-SB-0525 (accessed 7/24/12).

15. Amendment to the Mental Health Act. (Public Act 290 of 1995). Michigan Legislature. http://legislature.mi.gov/doc.aspx?1995-SB-0525 (accessed 7/24/12). Notably, P.A. 290 created an alternative designation for CMHs to exist as a government entity, independent from the county or counties that founded them. Initially, all CMHs were county agencies. The new designation would be known as a Community Mental Health Authority. Authorities were afforded powers that were not available to agencies such as owning and maintaining property, and constructing and operating facilities. Furthermore, employees of a CMH authority are employees of the CMH authority itself and not of the county that created it. As such, authorities could operate independently from county government, reporting to a 12-member board appointed by county commissioners.

In the mid-1990s, Michigan began to transition Medicaid recipients to managed care. At that time, the state elected to create a “carve-out” for behavioral health services.[footnote]MHC Executive Report 2004.

16. MHC Executive Report 2004. The behavioral health carve out was created under federally approved waivers 1915(b) and 1915(c) under the Home and Community Based Services Waiver to the Social Security Act. By 1998, these carve-outs became known as Prepaid Inpatient Health Plans.[footnote]Financial Statements 2007-08. February 3, 2009.. Oakland County Community Mental Health Authority.
17. Financial Statements 2007-08. February 3, 2009.. Oakland County Community Mental Health Authority. The PIHP model is a federal designation that exists in 20 states, including Michigan. PIHPs must provide coverage for Medicaid recipients suffering from mental health issues, developmental disabilities, substance abuse or serious emotional disturbances. Each PIHP must cover at least 20,000 Medicaid beneficiaries.

In 2000, Public Act 130 amended P.A. 258 to expand the definition of a CMH organization known as a “CMHSP Organization” under the Urban Cooperation Act.[footnote]Public Act 130 of 2000. Michigan Legislature. http://legislature.mi.gov/doc.aspx?2000-SB-1006 (accessed 7/23/12).

18. Public Act 130 of 2000. Michigan Legislature. http://legislature.mi.gov/doc.aspx?2000-SB-1006 (accessed 7/23/12). CMH organizations could now be formed between one or more counties and an institute of higher education with a medical school. The organization would still be a governmental entity separate from the bodies that formed it. This amendment was put in place specifically to enable the formation of the Washtenaw Community Health Organization. Appendix A provides more detail on the distinction between authorities, agencies and organizations.

Most recently, in 2012, Public Acts 500 and 501 amended P.A. 258 to require that by October 1, 2014, all CAs will be merged with PIHPs in the state, reducing the number of CAs in the state to 10.[footnote]Public Act 500 and Public Act 501, Michigan Legislature. http://legislature.mi.gov/doc.aspx?2012-PA-0501 (accessed 11/21/2013).

19. Public Act 500 and Public Act 501, Michigan Legislature. http://legislature.mi.gov/doc.aspx?2012-PA-0501 (accessed 11/21/2013).

Overview of Current Structure of Public Mental Health Care in Michigan

Mental health care delivery in the state has changed forms many times since the early 1960s. In 1965, the state of Michigan operated 41 psychiatric hospitals and centers for persons with developmental disabilities, serving approximately 29,000 residents. As a result of deinstitutionalization, by 1991, 29 state hospitals and centers served 3,054 residents+. As of March 2014, only five state-operated psychiatric hospitals and centers were operating in Michigan.[footnote]Haveman, J., Zeller, L, and Becker, T. 2014. Michigan Behavioral Health Developmental Disabilities Administration.http://www.michigan.gov/documents/mdch/BHDDA_Budget_FY2015_-_HOUSE_-_FINAL_449479_7.pdf

20. Haveman, J., Zeller, L, and Becker, T. 2014. Michigan Behavioral Health Developmental Disabilities Administration.http://www.michigan.gov/documents/mdch/BHDDA_Budget_FY2015_-_HOUSE_-_FINAL_449479_7.pdf

Since 1965, the number of CMHs has increased from 12 covering 16 counties to 46 covering all 83 counties in the state.[footnote]Haveman, Zeller and Becker, 2014.

21. Haveman, Zeller and Becker, 2014. Today, Medicaid is the major source of most funding for Michigan’s publicly funded mental health system, and care at CMHs is an entitled benefit under Medicaid. As such, individuals with Medicaid coverage are more likely to receive care through CMHs than uninsured and underinsured individuals. Furthermore, CMHs providing care for non-Medicaid covered individuals must use limited state general fund dollars to cover their care.

State general fund dollars are allocated to each CMH based on historical funding formulas that are modified at the state’s discretion. Changes to the allocations have related to administrative expenses, previous general fund transfers between CMHs (under Public Act 236), and an effort to bring all CMHs to the same level of funds based on county populations. Beginning in 2014, general fund dollars to CMHs were reduced substantially as a result of the state’s decision to expand Medicaid under the Patient Protection and Affordable Care Act.[footnote]Patient Protection and Affordable Care Act. 2010, Pub. L. No. 111-148, 124 Stat. 119. http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf (accessed 10/28/14).

22. Patient Protection and Affordable Care Act. 2010, Pub. L. No. 111-148, 124 Stat. 119. http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf (accessed 10/28/14). Medicaid funds are allocated monthly to each CMH through PIHPs according to the number of Medicaid beneficiaries in the PIHP’s service area. Decreases in general funds in recent years have threatened the ability of CMHs to deliver care to many of those in need. (See Appendix B for details about the flow of funding streams.) That is, only non-Medicaid patients with the most severe mental illness or developmental disabilities (“priority populations” under the Michigan Mental Health Code) receive care through CMHs. Non-Medicaid eligibles may also be subject to waiting lists at CMHs, while individuals covered by Medicaid are not.[footnote]J. Taylor. N.d. CMH Financing History: Summary of 20 Years of the State Financing Strategy for CMH. www.michigan.gov/documents/ CMH_FINANCING_HISTORY_92807_7.doc (accessed 8/16/12).
23. J. Taylor. N.d. CMH Financing History: Summary of 20 Years of the State Financing Strategy for CMH. www.michigan.gov/documents/ CMH_FINANCING_HISTORY_92807_7.doc (accessed 8/16/12). Emergency cases are an exception, and are treated immediately regardless of a person’s ability to pay. Of the 227,020 people served at CMHs in Michigan in 2010, 69 percent were covered by Medicaid.[footnote]Dazzo, Lyon, and Becker, 2012.
24. Dazzo, Lyon, and Becker, 2012.

Administrative Bodies

Three different types of organizations manage and administer Michigan’s publicly funded mental health system: Prepaid Inpatient Health Plans (PIHPs), Community Mental Health Services Programs (CMHs), and Substance Abuse Coordinating Agencies (CAs). Each type of organization is described below. (See Appendix C for current CMHSPs, and Appendix D for PIHP and CA areas as of January 2014.)

PIHPs are Medicaid behavioral health managed care organizations that administer capitated funds, bear risk for Medicaid patients (7.5 percent for regular Medicaid beneficiaries and 100 percent for those covered under the Adult Benefit Waiver program), and manage Medicaid patients’ behavioral health care. Medicaid funds are allocated to PIHPs based on the number of Medicaid beneficiaries in the PIHP service area, and PIHPs pay providers directly. Providers include CMHs themselves as well as community-based providers under contract with a CMH or CA. PIHPs receive monthly, capitated payments from MDCH for the Medicaid Managed Mental Health Care Program. In addition to issuing Medicaid payments to doctors, hospitals, other community providers and CMHs, PIHPs may perform gate keeping and authorization services and monitor health outcomes and standards of care.

Currently there are 10 PIHPs throughout Michigan, and each PIHP is affiliated with at least one CMH. The 10 PIHPs oversee the 46 CMHs that serve all 83 counties in the state. Each PIHP is responsible for an area with at least 20,000 Medicaid beneficiaries. Three (3) PIHPs are responsible for one county and a corresponding CMH. Seven (7) PIHPs are responsible for 4 to 21 counties. (See Appendix F for PIHP funding and spending in 2010.) Beginning January 2014, the previous 18 PIHPs were consolidated to the 10 new PIHP regions in the state.

CMHs provide direct mental health care or contract with community providers to do so. Although each CMH is affiliated with a PIHP, the structure of each CMH varies throughout the state (see Appendices C and D for CMH, PIHP, and CA coverage areas, respectively). Of the 46 CMHs, 37 are designated as Authorities, seven as Agencies of county government, and two as Organizations. The two CMH organizations are the Washtenaw Community Health Organization (WCHO) and the Central Wellness Network in Manistee/Benzie counties. WCHO was the first CMH to become an organization under the Urban Cooperation Act.

CAs provide comprehensive planning for substance abuse treatment, rehabilitation (recovery) and prevention services, but are prohibited from directly providing services. Instead, CAs contract with community providers for service delivery. When CAs merge with the 10 realigned PIHPs in October 2014, all PIHPs will be responsible for the coordination of substance use disorder services. [footnote]Financial Year 2008 Appropriation Bill (Public Act 123 of 2007). Michigan Legislature. http://www.michigan.gov/documents/mdch/4702 _5_1_08_246082_7.pdf or http://legislature.mi.gov/doc.aspx?2007-HB-4344 (Act in full), accessed 7/24/12.

25. Financial Year 2008 Appropriation Bill (Public Act 123 of 2007). Michigan Legislature. http://www.michigan.gov/documents/mdch/4702 _5_1_08_246082_7.pdf or http://legislature.mi.gov/doc.aspx?2007-HB-4344 (Act in full), accessed 7/24/12.,[footnote]Financial Year 2012 Appropriation Bill (Public Act 63 of 2011). Michigan Legislature. http://www.michigan.gov/documents/mdch/4074_04_01_12_382343_7.pdf or http://legislature.mi.gov/doc.aspx?2011-HB-4526 (Act in full).

Physician Ownership in Hospitals and Outpatient Facilities

Cover CHRT_Physician-Ownership-in-Hospitals-and-Outpatient-Facilities

 

 

 

 

 

 

 

Introduction

Federal law generally prohibits physicians from referring Medicare and Medicaid patients to facilities in which the physicians have financial ownership. Despite these federal restrictions and many similar state laws restricting referral of privately insured patients, physician ownership in specialty hospitals and outpatient facilities grew rapidly in the past decade. Prior to 2002 there were fewer than 50 physician-owned specialty hospitals, yet today there are perhaps as many as 235 nationwide.(1)Physician Hospitals of America. May 17, 2013. Press Release: Physician Hospitals of America Visits Capitol Hill to Share Government Study supporting Physician-Owned Hospitals. Media contact: Leslie Folley. (2)Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to the Congress: Physician-Owned Specialty Hospitals Revisited. (Washington, D.C.: MEDPAC). (accessed 5/23/13). Moreover, a 2008 national survey found that one in six physicians owned or leased advanced imaging equipment, and nearly one in seven owned or leased three or more types of medical equipment.(3)J. Reschovsky, A. Cassil, and H. Pham. December 2010. Physician Ownership of Medical Equipment. Data Bulletin No. 36. (Washington, D.C.: Center for Studying Health System Change). (accessed 5/23/13).

When physicians refer patients to facilities in which they have ownership (“self-referral”), the physicians receive payment for their professional services and share in the profits of the facilities they own. Those in favor of physician ownership argue that such arrangements provide financial security to facilities and physicians, and convenient access to high-quality, one-stop services for patients. They suggest that physician-owned hospitals and outpatient facilities introduce important competition into the health care market and allow for early initiation of treatment. However, many from both sides of the political aisle suggest that ownership arrangements between facilities and physicians and the resulting self-referrals create inherent conflicts of interest since physicians directly benefit financially from services provided by these facilities. This has been an issue of concern for many years and resulted in the passage of a series of laws beginning in 1989 with the “Stark Law,”(4)The first Stark Law, 42 U.S.C.§ 1395nn, was introduced by former U.S. Representative Pete Stark, D-California. to regulate self-referral.

More recently, passage of the Patient Protection and Affordable Care Act in March 2010 curtailed growth in physician ownership by effectively prohibiting both the creation of new and the expansion of existing physician-owned hospitals and outpatient facilities after March, 2010.(5)Patient Protection and Affordable Care Act. H.R. 3590, Section 6001, Pub. Law No. 111-148, 111th Congress, 2010. Not surprisingly, this new limiting provision in the law is being challenged by advocates of physician ownership, and the American Medical Association, among other groups, supports efforts to repeal the new ban.(6)D. Glendinning. March 31, 2011. House Bills would lift ban on physician-owned hospitals. American Medical Association, American Medical News (amednews.com). (accessed 5/23/13). The American Hospital Association and other hospital groups oppose the repeal efforts.(7)Federation of American Hospitals, American Hospital Association, and Coalition of Full Service Community Hospitals. April 6, 2011. Letter to House Members in opposition to H.R. 1159 and H.R. 1186. (accessed 5/23/13).

The purpose of this paper is to review trends in physician ownership, the regulatory history related to physician ownership, and the evidence concerning the impact of physician ownership on costs, quality, and access to care.

Trends in Physician Ownership

Physician ownership is prominent primarily in specialty hospitals, ambulatory services centers, and in independent diagnostic testing facilities.

Physician-Owned Specialty Hospitals

Specialty hospitals that provide primarily cardiac, orthopedic, or surgical procedures are generally partially or fully owned by physicians. In February 2003, the U.S. Government Accountability Office (GAO) estimated that specialty hospitals represented less than 2 percent of the short-term, acute care hospitals nationwide. The same report suggested that in 2000, specialty hospitals accounted for only about 1 percent of Medicare spending for inpatient services.(8)U.S. General Accounting Office. April 7, 2006. General Hospitals: Operational & Clinical Charges Largely Unaffected by Presence of Competing Specialty Hospitals, GAO-06-520 (Washington, D.C.: GAO). (accessed 5/23/13) and April 18, 2003, Specialty Hospitals: Information on National Market Share, Physician Ownership, and Patients Served, GAO-03-683R (Washington, D.C.: GAO). (accessed 5/23/13).

A 2003 GAO survey found that approximately 70 percent of specialty inpatient hospitals were at least partially physician-owned,(9)U.S. General Accounting Office. April 18, 2003. Specialty Hospitals: Information on National Market Share, Physician Ownership and Patients Served. and the upward trend in ownership in recent years has been dramatic. In 2002, there were a total of 46 physician-owned specialty hospitals, and by 2007 that number had more than doubled to 109.(10)L. Casalino. June 2008. Physician Self-Referral and Physician-Owned Specialty Facilities, Research Synthesis Report No. 15 (Princeton, N.J.: Robert Wood Johnson Foundation). (accessed 5/23/13). Today, according to the Physician Hospitals of America, an advocacy group for physician ownership, there may be as many as 235 physician-owned specialty hospitals in the United States, although there is no clear mechanism for identifying and tracking these hospitals (see Figure 1).(11)Physician Hospitals of America. May 27, 2011. Press Release: Physician Hospitals of America and Texas Spine and Joint Hospital Appeal Federal Court Judgment Decision. (accessed 5/23/13). Physician-owned hospitals are most common in areas of the country with weak or no Certificate of Need Laws (for example, Texas, Louisiana, and Oklahoma).(12)American Hospital Association. April 2008. Trendwatch: Physician Ownership and Self-Referral in Hospitals: Research on Negative Effects Grows (Washington, D.C.: AHA). (accessed 5/23/13).

FIGURE 1: Physician-Owned Specialty Hospitals in U.S., 2002–2011

 2002200420072013
Total4689109235
Cardiac122520NA
Orthopedic/Surgical346489NA
Source: 2002 and 2004 data from Medpac, and 2007 data from DHHS Office of Inspector General, as published in Casalino, 2008. 2013 data from Physician Hospitals of America.

Ambulatory Surgical Centers

Surgery is increasingly being conducted in ambulatory surgical centers (ASCs) that specialize in elective, same-day, or outpatient surgical procedures. Since the early 1980s Congress has authorized Medicare to cover the facility costs of certain procedures in ASCs to encourage the shift of surgical procedures from inpatient to less costly ambulatory settings. Between 2003 and 2011, the number of Medicare-certified ASCs grew from 3,779 to 5,344.(13)Medicare Payment Advisory Commission (MEDPAC). June 2011. A Data Book: Health Care Spending and the Medicare Program (Washington, D.C.: MEDPAC). (accessed 5/23/13); March 2013. Report to the Congress: Medicare Payment Policy (Washington, D.C.: MEDPAC). (accessed 5/23/13). In 2010, approximately 90 percent of ASCs were owned by physicians alone or through a joint venture with a hospital or corporation.(14)Medicare Payment Advisory Commission. March 2010. Report to the Congress: Medicare Payment Policy, Section 2C: Ambulatory Surgical Centers (Washington, D.C.: MEDPAC). (accessed 5/23/13).

While total spending estimates were not available with respect to ASCs, national data for Medicare beneficiaries indicate that the volume of services provided in ASCs increased rapidly, at rates of over 10 percent per year, from 2003 to 2008. From 2006 to 2010, the volume of services grew by 5.7 percent per year, and by 1.9 percent in 2011.(15)Medicare Payment Advisory Commission, March 2010; Medicare Payment Advisory Commission, March 2013.

Medicare payments to ASCs grew an average of 6.5 percent per year from 2003 to 2010, including the implementation of a new payment system in 2008. From 2006 through 2010, Medicare payments per fee-for-service beneficiary increased at an average annual rate of 5.1 percent but slowed to 2.2 percent in 2011.(16)Medicare Payment Advisory Commission, June 2011; Medicare Payment Advisory Commission, March 2013.

Imaging in Physicians’ Offices and Independent Diagnostic Testing Facilities

The volume of imaging services such as CT, MRI, and PET scans has grown in recent years more quickly than the volumes of other physician services. Medicare costs for imaging more than doubled between 1999 and 2004, and grew on average 17 percent per year from 2000 to 2006.(17)Casalino, 2008. (18)J. Inglehart. March 5, 2009. Health Insurers and Medical-Imaging Policy – A Work in Progress. New England Journal of Medicine 360(10): 1030-7. Much of this increase is attributable to services that involve physician self-referral.(19)W. Hendee, G. Becker, J. Borgstede, et al. October 2010. Addressing Overutilization in Medical Imaging. Radiology 257(1): 240-5. (accessed 5/23/13). In addition, growth in volume of imaging services by non-radiologists has been particularly high. One study using Medicare Part B claims data found that from 2000 to 2005, MRI in private offices increased 83 percent for radiologists compared to 254 percent for non-radiologists (such as orthopedic surgeons).

Independent diagnostic testing facilities (IDTFs) are not affiliated with hospitals or physicians’ offices, and have technicians administering imaging studies. In 2006, there were approximately 5,800 IDTFs owned by physicians and for-profit companies, nearly double the number ten years earlier.(20)J. Iglehart. June 29, 2006. The New Era of Medical Imaging: Promises and Pitfalls. New England Journal of Medicine 354(26): 2822-8. Although the total proportions of imaging services conducted in physician-owned facilities is not known, one study using data from a large private insurer found that 33 percent of providers billing for MRI, 22 percent billing for CT, and 17 percent billing for PET scans were categorized as “self-referral.”(21)J. Mitchell. 2007. The Prevalence of Physician Self-Referral Arrangements after Stark II: Evidence from Advanced Diagnostic Imaging. Health Affairs, web exclusive.

Legislative History

Concerns that physician ownership drives inappropriate use of services has led to several legislative efforts to restrict or regulate physician ownership, including: the “Stark Law” and subsequent amendments, which regulate physician self-referral; certificate of need laws, which limit the supply of health care; certification and/or licensing requirements; and most recently, the Patient Protection and Affordable Care Act (ACA), which further restricts new construction and expansion of physician-owned hospitals.

Regulatory policies enacted prior to the ACA to discourage inappropriate use of services

  • Anti-self-referral legislation: In 1989, in response to research that showed physicians who owned physical therapy or laboratory facilities referred patients for these services at much higher rates than other physicians, Congress passed the “Stark Law” to regulate self-referral of Medicare beneficiaries for clinical lab services. This law, which has been amended over the years, has been expanded to cover Medicaid beneficiaries and additional services beyond lab services (for example, inpatient and outpatient hospital services, radiology services, and home health services). These laws (referred to here as the Stark Laws) do not, however, ban self-referral to ASCs or specialty hospitals, or to services provided within a physicians’ practice.(22)Casalino, 2008.

    The Stark laws included important exceptions to self-referral limits, including allowance for services that are provided in physicians’ offices or practices, and for ownership in a whole hospital, not just a specific part of a hospital (referred to as the “Whole Hospital Exception”). In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which amended the Stark Law’s whole hospital exception to include an 18-month moratorium on physician ownership in specialty hospitals. The moratorium continued until 2006, when the Centers for Medicare and Medicaid Services (CMS) delivered a final report detailing physician ownership in specialty hospitals.(23)C. Conway. N.d. Physician Ownership of Hospitals Significantly Impacted by Health Care Reform Legislation (Houston, Tex.: University of Houston Law Center). (accessed 5/23/13).

    In addition to federal regulation of self-referral for services paid by Medicare and Medicaid, about half of the states also have some type of self-referral law in place that applies restrictions similar to those in the Stark Law on physician self-referral in the privately insured population.

  • Certificate of need (CON) laws: The purpose of CON laws is to eliminate duplication of health care resources by governing new construction and expansion of hospitals and the purchase of expensive equipment. States with weak or no CON laws (such as Texas) have many more specialty hospitals than other states. From 1990 to 2003, 96 percent of specialty hospitals that opened were in states without CON laws.(24)U.S. General Accounting Office. October 22, 2003. Specialty Hospitals: Geographic Location, Services Provided, and Financial Performance, GAO-04-167 (Washington, D.C.: GAO). (accessed 5/23/13). (25)Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to the Congress: Physician-Owned Specialty Hospitals Revisited.

Federal Health Reform: The Patient Protection and Affordable Care Act (ACA)

The Stark Laws were intended to provide clear rules for limiting physician self-referral; however, the complexity of the laws, which include major exceptions, has resulted in unclear boundaries and variable interpretations, making compliance and enforcement difficult. Section 6001 of the ACA addressed some of these limitations by:

  • Immediately prohibiting future physician investment and capping existing physician investment in hospitals, establishing an immediate (March 23, 2010) cap on physician ownership
  • Allowing existing physician-owned hospitals to continue if they had physician investment and a Medicare provider agreement in place as of December 31, 2010
  • Restricting the “Whole Hospital Exception” by excluding from the exception hospitals that were converted from ASCs after the ACA was passed
  • Expanding disclosure requirements by requiring that physicians inform patients that they can obtain services (such as MRI, CT, and PET scans) from other providers and provide patients with a list of other providers in their area

The final rules for Section 6001 of the ACA were promulgated in November 2010.

Today, there are reports of physician-owned facilities finding other ways to increase their business without expanding beds, including scheduling surgeries during later and week-end hours and replacing beds with procedure rooms for imaging. Some facilities are seeking waivers from CMS to allow expansion, and some have stopped accepting Medicare payments to eliminate the restrictions on expansion.(26)A. Mundy. May 13, 2013. Doc-Owned Hospitals Prep to Fight. Wall Street Journal, Business section.

Summary of the Research

Various studies have examined the direct and indirect effects of physician-owned facilities on use of services, access, patient mix, and quality of services. While there is a substantial body of research assessing utilization of services in physician-owned facilities, less is known about the quality of services they provide.

Utilization and Costs

The system costs associated with physician ownership and self-referral are a function of the volume, price, and efficiency with which services are provided. Numerous studies have found that the volume of services provided is higher in areas with physician-owned specialty hospitals than in areas without specialty hospitals. A 2007 study by Mitchell found that rates of complex spinal fusion surgery and epidural procedures for workers with back injuries increased significantly as physician ownership increased from 1999 to 2004. The same study found that rates of complex spinal fusion surgery were higher for Medicare beneficiaries living in areas with physician-owned hospitals (Oklahoma, Kansas, South Dakota, and Arizona) compared to areas without physician ownership (northeastern states).(27)J. Mitchell. August 2007. Utilization Changes Following Market Entry by Physician-Owned Specialty Hospitals. Medical Care Research and Review 64(4): 395-415. A 2006 Medpac report focusing on physician-owned specialty hospitals found that rates of coronary artery bypass graft surgery for Medicare beneficiaries grew faster in areas that gained a physician-owned cardiac hospital.(28)Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to Congress: Physician-Owned Specialty Hospitals Revisited. Two other studies in 2006 reported similar growth in utilization in areas after specialty cardiac hospitals opened compared to cardiac programs in general hospitals.(29)B. Nallamothus, M. Rogers, M. Chernew, et al. March 7, 2007. Opening of Specialty Cardiac Hospitals and Use of Coronary Revascularization in Medicare Beneficiaries. Journal of the American Medical Association 297(9): 962-8. (30)J. Stensland and A. Winter. Jan-Feb 2006. Do Physician-Owned Cardiac Hospitals Increase Utilization? Health Affairs 25(1): 119-29.

One study by Hollingsworth et al. (2010) analyzed the volume of services provided in ambulatory surgical centers (ASCs) in Florida from 2003 to 2005. The authors reported greater use of five common outpatient procedures in physician-owned ambulatory surgical centers compared to non-physician-owned ASCs. After accounting for baseline differences in volume, surgeons that acquired ownership in ASCs increased their volume of services compared to before they held ownership.(31)J. Hollingsworth, Z. Ye, S. Strope, et al. April 2010. Physician-Ownership of Ambulatory Surgery Centers Linked to Higher Volume of Surgeries. Health Affairs 29(4): 683-9.

The growth in the volume of advanced imaging services is also positively associated with physician ownership. A study by Baker (2010) found that once physicians began billing for the technical component of MRI services (that is, once they purchased or leased MRI equipment), they ordered more scans for their patients than they had before they owned or leased the equipment. The study also showed that total Medicare spending per patient increased once physicians owned or leased the equipment.(32)L. Baker. December 2010. Acquisition of MRI Equipment by Doctors Drives Up Imaging Use and Spending. Health Affairs 29(12): 2252-9. Numerous older studies highlight the relationship between ownership of imaging equipment and increased utilization. A national random sample of physicians surveyed revealed that non-radiologists with imaging facilities on-site had rates of utilization 1.2–1.7 times as high, depending on specialty, as those without such facilities.(33)S. Radecki and J. Steele. February 1990. Effect of on-site facilities on use of diagnostic radiology by non-radiologists. Investigative Radiology 25(2): 190–193 Hillman and colleagues found that doctors who owned imaging equipment ordered 4.5 times as many imaging procedures as physicians who referred their patients to radiologists and had far higher charges per episode of treatment.(34)B. Hillman, G. Olson, P. Griffith, et al. October 21, 1992. Physicians’ Utilization and Charges for Outpatient Diagnostic Imaging in a Medicare Population. Journal of the American Medical Association 268(15): 2050–4.

In addition to studies that focused on changes in the volume of services related to physician ownership, Medpac reports in 2005 and 2006 also compared discharge costs for inpatient services delivered to Medicare beneficiaries in specialty hospitals compared to those in community hospitals. While specialty cardiac hospitals had shorter lengths of stay, they did not typically have lower discharge costs than community hospitals. Specialty orthopedic hospitals had higher costs per discharge than community hospitals.(35)Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to Congress: Physician-Owned Specialty Hospitals Revisited. (36)Medicare Payment Advisory Commission (MEDPAC). March 2005. Report to Congress: Physician-Owned Specialty Hospitals (Washington, D.C.: MEDPAC). (accessed 5/23/13).

Access

One of the main justifications for allowing physician self-referral in certain circumstances is the expectation that referrals for services within a physician’s practice or in another facility in which a physician has ownership may provide patients with convenient, same-day, or “one-stop” access to services. However, studies found that same-day referral was quite low for advanced imaging services. A 2010 study by Sunshine and Bhargavan found that Medicare beneficiaries received same-day service for 74 percent of x-rays but only 15 percent of CTs and MRIs.(37)J. Sunshine and M. Bhargavan. December 2010. The Practice of Imaging Self-Referral Doesn’t Produce Much One-Stop Service. Health Affairs 29(12): 2237-43. Similarly, a 2010 Medpac report found that less than half of advanced imaging services were performed on the same day as office visits for Medicare beneficiaries.(38)Medicare Payment Advisory Commission (MEDPAC). June 2010. Report to Congress: Aligning Incentives in Medicare (Washington, D.C.: MEDPAC). (accessed 5/23/13).

Specialty hospitals often do not have access to emergency services, a requirement in some states for all hospitals. A 2008 report by the Office of Inspector General of the U.S. Department of Health and Human Services found that just over half of physician-owned specialty hospitals had an emergency department, and more than half of those that did had only one emergency bed.(39)U.S. Department of Health and Human Services, Office of the Inspector General. January 2008. Physician-Owned Specialty Hospitals’ Ability to Manage Medicare Emergencies, (Washington, D.C.: HHS). (accessed 5/23/13). Similarly, a 2003 GAO report showed that specialty hospitals were much less likely to have emergency departments than community hospitals; only 45 percent of specialty hospitals had emergency departments compared to 92 percent of general community hospitals.(40)U.S. General Accounting Office. October 22, 2003. Specialty Hospitals: Geographic Location, Services Provided, and Financial Performance.

Patient Mix, Competition, and Quality

Patients with less severe conditions are likely to recover quickly from surgeries, without complications, and are, therefore, generally more profitable for hospitals reimbursed through prospective payment systems.(41)In 1983, CMS put a prospective payment system in place for inpatient hospitalizations in which all cases were categorized into diagnosis-related groups, each with an associated payment weight based on average resources used for such cases. Most insurers today have also adopted prospective payment methods. Hospitals are generally paid a predetermined amount per case, regardless of length of stay (except for particularly expensive outlier cases). Several studies provide evidence that more profitable patients are often referred to physician-owned specialty hospitals and ASCs, leaving less profitable patients for care in community hospitals.

A study by Hollingsworth and colleagues noted statistically significantly lower severity in patients treated in physician-owned ASCs in Florida compared to patients treated in facilities not owned by physicians, although absolute differences were small.(42)Hollingsworth, et al., April 2010. In a study of practice patterns of providers in physician-owned specialty hospitals in Arizona, physician-owners treated proportionately more “minor” surgical cases compared to non-owners, and treated fewer “moderate” or “major” surgical cases. Physician owners also, on average, treated patients with fewer comorbid conditions.(43)J. Mitchell. October 25, 2005. Effects of Physician-Owned Limited-Service Hospitals: Evidence from Arizona. Health Affairs, doi:10.1377/hlthaff.w5.481 A 2003 GAO study compared severity of patients at specialty hospitals with patients at general hospitals providing short-term, acute care in the same urban areas. Consistent with later studies, the GAO found that specialty hospitals treated a lower percentage of patients who were severely ill than did the general hospitals.(44)U.S. General Accounting Office, 2003. A study by Winter demonstrated that more medically complex patients tended to receive treatment at hospital outpatient centers rather than ASCs.(45)A. Winter. November-December 2003. Comparing the Mix of Patients in Various Outpatient Surgery Settings. Health Affairs 22(6): 68-75

Among payers, Medicaid payment for services is generally lower than either Medicare or private insurance payments for the same services, so hospitals treating higher proportions of Medicaid patients may be at competitive disadvantages in their market areas. Gabel and colleagues found that physicians who owned ASCs were more likely to refer patients covered by Medicaid to community hospitals, and more likely to refer privately insured patients to the facilities they owned.(46)J. Gabel, C. Fahlman, R. Kang, et al. May-June 2008. Where Do I Send Thee? Does Physician-Ownership Affect Referral Patterns to Ambulatory Surgery Centers? Health Affairs 27(3): w165-74 According to data in a 2005 Medpac report, Medicaid beneficiaries comprised 13 percent of a community hospital’s patients, but only 2 percent of orthopedic and surgical hospital patients, and 3 percent of cardiac hospital patients.(47)Medicare Payment Advisory Commission. March 2005. Report to the Congress: Physician-Owned Specialty Hospitals.

While many assume that quality of care may be improved in specialty hospitals because of the narrow focus on a limited set of procedures, few studies assess quality of care in addition to patient mix. One study by Cram and colleagues analyzed claims data to evaluate outcomes from major joint replacement surgery in specialty orthopedic hospitals and in general hospitals. They found that patients in the specialty hospital had fewer comorbidities (such as diabetes, congestive heart failure, and renal failure) and lived in wealthier areas than those in general hospitals. After adjusting for patient characteristics and hospital volume, the study found that specialty orthopedic hospitals had better patient outcomes, as determined by claims data, than did the general hospitals.(48)P. Cram, M. Vaughan-Sarrazin, B. Wolf, J. Katz, and G. Rosenthal. August 2007. Comparison of Total Hip and Knee Replacement in Specialty and General Hospitals. The Journal of Bone and Joint Surgery, American volume 89(8): 1675-1684 Another study comparing death rates in patients receiving percutaneous coronary intervention (PCI) or coronary artery bypass grafting (CABG) had more complex findings. The study showed that patients in the specialty cardiac hospitals had lower unadjusted mortality rates, but when analyses adjusted for patient characteristics, the odds of death after PCI were similar but the odds of death after CABG were significantly lower in specialty hospitals. When analyses adjusted for volume of procedures, differences in mortality were not statistically significant. More research is needed to understand the contribution of comorbidities and procedure volumes to patient outcomes vis-à-vis claims of higher quality in specialty facilities.(49)P. Cram, G. Rosenthal, and M. Vaughan-Sarrazin. April 7, 2005. Cardiac Revascularization in Specialty and General Hospitals. New England Journal of Medicine 352: 1454-1462.

Beginning in January 2013, CMS began adjusting payments to approximately 3,000 hospitals based on quality scores through a new Hospital Value-Based Purchasing Program. Approximately 52 percent of hospitals received a payment increase in the first year. A recent Wall Street Journal article noted that approximately half of the top 100 facilities receiving bonuses were physician-owned facilities.(50)Mundy, May 13, 2013.

Conclusion

For decades physician ownership has caused many to worry that profit incentives could negatively affect the care patients receive. Today, a substantial body of research shows that ownership and self-referral are associated with increased utilization and higher system costs, low same-day referral, and diversion of complex patients and Medicaid beneficiaries away from physician-owned facilities. More research is needed to support the claim that specialization of hospitals and outpatient services improves quality or patient outcomes. Important provisions in the ACA substantially strengthen existing laws against physician self-referral by both deterring future growth in ownership and by providing patients with more information about options for services.

References   [ + ]

1. Physician Hospitals of America. May 17, 2013. Press Release: Physician Hospitals of America Visits Capitol Hill to Share Government Study supporting Physician-Owned Hospitals. Media contact: Leslie Folley.
2. Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to the Congress: Physician-Owned Specialty Hospitals Revisited. (Washington, D.C.: MEDPAC). (accessed 5/23/13).
3. J. Reschovsky, A. Cassil, and H. Pham. December 2010. Physician Ownership of Medical Equipment. Data Bulletin No. 36. (Washington, D.C.: Center for Studying Health System Change). (accessed 5/23/13).
4. The first Stark Law, 42 U.S.C.§ 1395nn, was introduced by former U.S. Representative Pete Stark, D-California.
5. Patient Protection and Affordable Care Act. H.R. 3590, Section 6001, Pub. Law No. 111-148, 111th Congress, 2010.
6. D. Glendinning. March 31, 2011. House Bills would lift ban on physician-owned hospitals. American Medical Association, American Medical News (amednews.com). (accessed 5/23/13).
7. Federation of American Hospitals, American Hospital Association, and Coalition of Full Service Community Hospitals. April 6, 2011. Letter to House Members in opposition to H.R. 1159 and H.R. 1186. (accessed 5/23/13).
8. U.S. General Accounting Office. April 7, 2006. General Hospitals: Operational & Clinical Charges Largely Unaffected by Presence of Competing Specialty Hospitals, GAO-06-520 (Washington, D.C.: GAO). (accessed 5/23/13) and April 18, 2003, Specialty Hospitals: Information on National Market Share, Physician Ownership, and Patients Served, GAO-03-683R (Washington, D.C.: GAO). (accessed 5/23/13).
9. U.S. General Accounting Office. April 18, 2003. Specialty Hospitals: Information on National Market Share, Physician Ownership and Patients Served.
10. L. Casalino. June 2008. Physician Self-Referral and Physician-Owned Specialty Facilities, Research Synthesis Report No. 15 (Princeton, N.J.: Robert Wood Johnson Foundation). (accessed 5/23/13).
11. Physician Hospitals of America. May 27, 2011. Press Release: Physician Hospitals of America and Texas Spine and Joint Hospital Appeal Federal Court Judgment Decision. (accessed 5/23/13).
12. American Hospital Association. April 2008. Trendwatch: Physician Ownership and Self-Referral in Hospitals: Research on Negative Effects Grows (Washington, D.C.: AHA). (accessed 5/23/13).
13. Medicare Payment Advisory Commission (MEDPAC). June 2011. A Data Book: Health Care Spending and the Medicare Program (Washington, D.C.: MEDPAC). (accessed 5/23/13); March 2013. Report to the Congress: Medicare Payment Policy (Washington, D.C.: MEDPAC). (accessed 5/23/13).
14. Medicare Payment Advisory Commission. March 2010. Report to the Congress: Medicare Payment Policy, Section 2C: Ambulatory Surgical Centers (Washington, D.C.: MEDPAC). (accessed 5/23/13).
15. Medicare Payment Advisory Commission, March 2010; Medicare Payment Advisory Commission, March 2013.
16. Medicare Payment Advisory Commission, June 2011; Medicare Payment Advisory Commission, March 2013.
17, 22. Casalino, 2008.
18. J. Inglehart. March 5, 2009. Health Insurers and Medical-Imaging Policy – A Work in Progress. New England Journal of Medicine 360(10): 1030-7.
19. W. Hendee, G. Becker, J. Borgstede, et al. October 2010. Addressing Overutilization in Medical Imaging. Radiology 257(1): 240-5. (accessed 5/23/13).
20. J. Iglehart. June 29, 2006. The New Era of Medical Imaging: Promises and Pitfalls. New England Journal of Medicine 354(26): 2822-8.
21. J. Mitchell. 2007. The Prevalence of Physician Self-Referral Arrangements after Stark II: Evidence from Advanced Diagnostic Imaging. Health Affairs, web exclusive.
23. C. Conway. N.d. Physician Ownership of Hospitals Significantly Impacted by Health Care Reform Legislation (Houston, Tex.: University of Houston Law Center). (accessed 5/23/13).
24. U.S. General Accounting Office. October 22, 2003. Specialty Hospitals: Geographic Location, Services Provided, and Financial Performance, GAO-04-167 (Washington, D.C.: GAO). (accessed 5/23/13).
25. Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to the Congress: Physician-Owned Specialty Hospitals Revisited.
26. A. Mundy. May 13, 2013. Doc-Owned Hospitals Prep to Fight. Wall Street Journal, Business section.
27. J. Mitchell. August 2007. Utilization Changes Following Market Entry by Physician-Owned Specialty Hospitals. Medical Care Research and Review 64(4): 395-415.
28, 35. Medicare Payment Advisory Commission (MEDPAC). August 2006. Report to Congress: Physician-Owned Specialty Hospitals Revisited.
29. B. Nallamothus, M. Rogers, M. Chernew, et al. March 7, 2007. Opening of Specialty Cardiac Hospitals and Use of Coronary Revascularization in Medicare Beneficiaries. Journal of the American Medical Association 297(9): 962-8.
30. J. Stensland and A. Winter. Jan-Feb 2006. Do Physician-Owned Cardiac Hospitals Increase Utilization? Health Affairs 25(1): 119-29.
31. J. Hollingsworth, Z. Ye, S. Strope, et al. April 2010. Physician-Ownership of Ambulatory Surgery Centers Linked to Higher Volume of Surgeries. Health Affairs 29(4): 683-9.
32. L. Baker. December 2010. Acquisition of MRI Equipment by Doctors Drives Up Imaging Use and Spending. Health Affairs 29(12): 2252-9.
33. S. Radecki and J. Steele. February 1990. Effect of on-site facilities on use of diagnostic radiology by non-radiologists. Investigative Radiology 25(2): 190–193
34. B. Hillman, G. Olson, P. Griffith, et al. October 21, 1992. Physicians’ Utilization and Charges for Outpatient Diagnostic Imaging in a Medicare Population. Journal of the American Medical Association 268(15): 2050–4.
36. Medicare Payment Advisory Commission (MEDPAC). March 2005. Report to Congress: Physician-Owned Specialty Hospitals (Washington, D.C.: MEDPAC). (accessed 5/23/13).
37. J. Sunshine and M. Bhargavan. December 2010. The Practice of Imaging Self-Referral Doesn’t Produce Much One-Stop Service. Health Affairs 29(12): 2237-43.
38. Medicare Payment Advisory Commission (MEDPAC). June 2010. Report to Congress: Aligning Incentives in Medicare (Washington, D.C.: MEDPAC). (accessed 5/23/13).
39. U.S. Department of Health and Human Services, Office of the Inspector General. January 2008. Physician-Owned Specialty Hospitals’ Ability to Manage Medicare Emergencies, (Washington, D.C.: HHS). (accessed 5/23/13).
40. U.S. General Accounting Office. October 22, 2003. Specialty Hospitals: Geographic Location, Services Provided, and Financial Performance.
41. In 1983, CMS put a prospective payment system in place for inpatient hospitalizations in which all cases were categorized into diagnosis-related groups, each with an associated payment weight based on average resources used for such cases. Most insurers today have also adopted prospective payment methods. Hospitals are generally paid a predetermined amount per case, regardless of length of stay (except for particularly expensive outlier cases).
42. Hollingsworth, et al., April 2010.
43. J. Mitchell. October 25, 2005. Effects of Physician-Owned Limited-Service Hospitals: Evidence from Arizona. Health Affairs, doi:10.1377/hlthaff.w5.481
44. U.S. General Accounting Office, 2003.
45. A. Winter. November-December 2003. Comparing the Mix of Patients in Various Outpatient Surgery Settings. Health Affairs 22(6): 68-75
46. J. Gabel, C. Fahlman, R. Kang, et al. May-June 2008. Where Do I Send Thee? Does Physician-Ownership Affect Referral Patterns to Ambulatory Surgery Centers? Health Affairs 27(3): w165-74
47. Medicare Payment Advisory Commission. March 2005. Report to the Congress: Physician-Owned Specialty Hospitals.
48. P. Cram, M. Vaughan-Sarrazin, B. Wolf, J. Katz, and G. Rosenthal. August 2007. Comparison of Total Hip and Knee Replacement in Specialty and General Hospitals. The Journal of Bone and Joint Surgery, American volume 89(8): 1675-1684
49. P. Cram, G. Rosenthal, and M. Vaughan-Sarrazin. April 7, 2005. Cardiac Revascularization in Specialty and General Hospitals. New England Journal of Medicine 352: 1454-1462.
50. Mundy, May 13, 2013.

Variation in Interventional Cardiac Care in Michigan

issue-brief-2012-04-cover

 

 

 

 

 

 

 

 

Introduction

An extensive body of research has identified and examined the wide geographic variation in Medicare utilization and spending in the United States. A small but growing number of studies also assess such variation in commercially insured populations. Our previous report on health care variation (CHRTBook: Health Care Variation in Michigan(1)Udow-Phillips, M., Ogundimu, T., Ehrlich, E., Kofke-Egger, H., and Stock, K. 2010 CHRTbook: Health Care Variation in Michigan. Center for Healthcare Research & Transformation. Ann Arbor, MI.) described geographic variation in the use of cardiac procedures in Blue Cross Blue Shield of Michigan (BCBSM) members in Michigan.

This report focuses on coronary revascularization procedures, specifically coronary artery bypass grafts (CABG) and percutaneous coronary interventions (PCI), and explores possible explanations for variation in observed rates of these procedures in the BCBSM commercial enrollment (ages 18 to 64). The report looks first at the issue of elective PCI—a procedure that should be based on patient preferences—as a possible driver of variation. It then examines whether the supply of facilities or providers influences rates of cardiac intervention. Next, it explores the influence of disease burden (heart attack rates) and health risk factors in the population. Finally, it examines the relationship between coronary revascularization and health outcomes (cardiac mortality).

Findings of particular note in this report include:

  • Rates of PCI and CABG declined from 1997 to 2008 among BCBSM’s commercial enrollment, but variation in rates increased. Coronary revascularization declined by 19 percent statewide; variation increased from a 1.8-fold difference between the highest and lowest-use areas in 1997 to a 2.4 fold difference in 2008.
  • More than 40 percent of PCI procedures performed among BCBSM’s commercial enrollment in 2008 could be considered elective. Areas of the state with lower total PCI rates generally had a lower percentage of elective PCI, while those with higher overall PCI rates generally had a greater percentage of elective PCI.
  • Higher rates of combined cardiac interventions appeared to be associated with a greater supply of cardiac catheterization laboratories to diagnose disease and conduct treatment in the state.
  • Clinician supply of cardiovascular/thoracic surgeons did not appear to be clearly associated with intervention rates. Supply varied greatly among areas of the state, but there was no consistent trend with variation in PCI and CABG.
  • Health status and behaviors, including rates of acute myocardial infarction (heart attack), smoking, diabetes, obesity and hypertension showed no clear relationship to combined cardiac intervention rates.
  • Among BCBSM and Medicare enrollees, PCI and CABG rates remained relatively constant, though mortality due to cardiac disease has declined 17 percent from 1997 to 2008. A major reason for the decline in cardiac mortality may be the reduction in smoking over this 10-year time span. In addition, the reduction in mortality has likely resulted both from successful medical management of cardiovascular diseases, and for patients with acute myocardial infarction (heart attack), the successful use of primary PCI.

Background

Almost 40 years ago, researchers at Dartmouth College pioneered the study of small-area analysis to evaluate population rates of health care utilization. Certain health care services, particularly those considered sensitive to physician discretion and patient preference, show wide and persistent variation in utilization.(2)Wennberg, D. and Birkmeyer, J. The Dartmouth Atlas of Cardiovascular Health Care. 1999; Cardiac Surgery. Center for the Evaluative Clinical Sciences, Dartmouth Atlas. This report focuses on one such clinical category: coronary revascularization (restoration of circulation to the heart).

Some have wondered whether these variations exist as a result of differences in the underlying illness burden of the population, but research shows persistent differences in utilization, which holds true even with robust risk adjustment.(3)Zuckerman, S., Waidmann, T., Berenson, R., & Hadley, J. 2010. Clarifying Sources of Geographic Differences in Medicare Spending. New England Journal of Medicine, 363, 54–62. doi:10.1056/NEJMsa0909253 (4)MedPAC. January 2011. Report to the Congress: Regional Variation in Medicare Service Use.

Previous research on fee-for-service Medicare beneficiaries has shown less than one-half, and possibly much less of the observed variation in utilization can be explained by population health status.(5)Congressional Budget Office, 2008. Geographic Variation in Health Care Spending. Publication # 2978. This remaining variation is generally attributed to a variety of factors, including patient and physician preferences, capacity of local health care systems, and uncertainty about the best course of treatment. Variation in the use of health care services is likely a function of interactions between patients, providers, and the communities in which they are located.

In the past, most research on geographic variation has been based on data from the fee-for-service Medicare population. In Michigan, we have had the opportunity to analyze health care utilization in the under-65 commercially insured population, and those analyses found patterns of variation similar to those in the Medicare population.(6)Dartmouth Atlas of Health Care in Michigan.

In our previous report, CHRTBook: Health Care Variation in Michigan, utilization rates for selected procedures declined from 1997 to 2008 in the commercial population, though very high use rates persisted in some areas of the state.(7)Udow-Phillips et al., 2010. In particular, utilization rates for interventional cardiac care—including CABG and PCI—declined overall, but variation in utilization actually increased.

While the indications for PCI or CABG are clear for some clinical conditions (e.g. acute coronary syndrome), use in other conditions is much more discretionary. Variation in the use of these procedures is not necessarily of concern in and of itself. Variation is of concern, however, when it appears to be driven by factors other than individual patient characteristics and fully-informed decisions about the relative risks and benefits of invasive vs. noninvasive treatments.

Hospital Referral Region (HRR) Map for Reference

michigan-hrr-reference-map

Variation in Interventional Cardiac Care

National Trends

In the United States, cardiovascular disease is the leading cause of death, accounting for 25 percent of total deaths in 2009.(8)Centers for Disease Control and Prevention, National Vital Statistics Report. March 16, 2011. Deaths: Preliminary Data for 2009. Vol. 59 (4). Treatment options are medical management and coronary revascularization; coronary revascularization includes coronary artery bypass grafts (CABG) and percutaneous coronary interventions (PCI). Nationally, rates of combined cardiac interventions (CABG and PCI) for all age groups performed in hospitals increased from 4.8 procedures per 1,000 in 1997 to 5.3 per 1,000 in 2007.(9)Centers for Disease Control and Prevention, National Health Statistics Report, National Hospital Discharge Survey. As shown in Figure 1, the change from 1997 to 2007 reflected a decrease in CABG procedures (down 40 percent), but an increase in PCI (up 54 percent).

Overall, from 1997 to 2007, combined inpatient cardiac procedures increased by 10 percent, although there was a more recent and notable 11 percent decrease in combined cardiac interventions from 2006 to 2007. Date for the Medicare population alone show a similar decrease from 2006 to 2007. Possible explanations for this decline in coronary revascularization rates include reductions in risk factors (such as smoking), improved preventive care, increased use of primary medical management, and increased use of drug-eluting stents, which reduce the need for repeat revascularization and thus decrease the rate of PCI and CABG procedures.(10)Riley, R., et al. Trends in coronary revascularization in the U.S. from 2001 to 2009: recent declines in percutaneous coronary intervention volumes. Circ Cardiovasc Qual Outcomes 2011;4:193–197; originally published online February 8, 2011.

FIGURE 1: Rates of Combined Cardiac Intervention per 1,000, United States, 1997–2007

figure-1-a

Rates of Combined Cardiac Intervention per 1,000, BCBSM, 1997 and 2008


figure-1-b
 U.S.U.S.U.S.BCBSMBCBSMBCBSM
CABGPCITotal Combined Cardiac Intervention RatesCABGPCITotal Combined Cardiac Intervention Rates
19972.252.544.791.22.53.7
19982.033.395.42
19992.073.885.95
20001.873.695.56
20011.823.715.53
20021.794.195.98
20031.614.275.88
20041.464.375.83
20051.584.295.87
20061.494.415.9
20071.353.925.27
20080.662.353.01

Source: U.S. National Hospital Discharge Summaries, 1997–2007 and BCBSM Special Data Request

Michigan Trends

Declining Utilization

In 2008, rates of combined cardiac interventions varied widely across Michigan. A ratio of rates* analysis indicated that four hospital referral regions (HRRs) were approximately 25 percent to 50 percent higher than the state average in 2008 (see Figures 2 and 3). There were only two HRRs in 1997 (Saginaw and Dearborn) that were notably higher than the state average. In the BCBSM data, the use of both CABG and PCI procedures declined from 1997 to 2008, in contrast to an increase for the U.S. overall in a similar time period.(11)Though not reflected here, coronary revascularization in Michigan’s Medicare population actually increased by 7 percent from 1997 to 2007 (Dartmouth Atlas). Combined cardiac intervention (CABG and PCI procedures) rates declined 19 percent in the BCBSM under-65 population from 1997 to 2008. While the changes during this time period were not statistically significant, the direction of the change was consistent in all but one of the HRRs in the state. Among the state’s 15 HRRs, St. Joseph alone showed an increased rate of combined cardiac interventions, with increases in both CABG and PCI; in Muskegon and Dearborn, combined cardiac intervention rates decreased more than 30 percent, as shown in Figure 3.

FIGURE 2: Combined Cardiac Interventions, BCBSM, by HRR, 2008

figure-2

* Ratio of rates is the HRR’s rate divided by the state average rate for BCBSM members.
Source: Dartmouth Atlas of Health Care in Michigan and BCBSM Special Data Request

For the BCBSM commercial enrollment, most of the decrease in combined cardiac intervention rates resulted from decreasing CABG rates. CABG rates declined in all but one HRR—St. Joseph—between 1997 and 2008, while PCI rates increased in seven HRRs and decreased in eight HRRs over the same time period.

FIGURE 3: Rates of Combined Cardiac Interventions per 1,000, BCBSM, by HRR, 1997–2008

 199720082008% Change in Interventions, 1997-2008*
HRRCABGPCICombined Cardiac InterventionsCABGPCICombined Cardiac InterventionsRatio of Rates to the Michigan Average
St. Joseph0.833.81.073.164.231.4111%
Flint1.41.93.30.612.593.201.07-3%
Kalamazoo1.12.940.922.953.871.29-3%
Saginaw1.53.34.81.043.394.431.48-8%
Pontiac12.53.50.522.683.201.07-9%
Traverse City1.32.84.11.132.583.711.24-9%
Marquette1.11.930.542.102.640.88-12%
Grand Rapids1.11.72.80.361.902.260.75-19%
Petoskey1.12.23.30.701.962.650.88-20%
Lansing1.12.13.20.561.962.520.84-21%
Ann Arbor1.42.13.50.691.912.610.87-26%
Royal Oak1.12.73.80.552.232.770.92-27%
Detroit1.23.24.40.652.543.191.06-28%
Muskegon11.72.70.631.251.880.63-31%
Dearborn1.63.14.70.512.192.700.90-43%
BCBSM Average1.22.53.70.662.353.001.00-19%
* The percent changes in interventions 1997-2008 were not statistically significant.
Source: Dartmouth Atlas of Health Care in Michigan and BCBSM Special Data Request
Increasing Variation

Though rates of coronary revascularization decreased in almost all HRRs between 1997 and 2008, geographic variation in procedure rates increased over the same time period.

In 1997, the rate of combined cardiac interventions varied by a factor of 1.8 among all HRRs, from 30 percent above the state average to 27 percent below it. By 2008, the rate of combined cardiac interventions varied by a factor of 2.4, with a range of 48 percent above average to 37 percent below average. From 1997 to 2008, Saginaw remained the HRR with the highest procedure use rates, while Muskegon remained the HRR with the lowest use rates.

Two HRRs—Dearborn and Royal Oak—went from above-average rates in 1997 to below-average rates in 2008, while two other HRRs—Pontiac and Flint—moved from below-average to above-average rates. The remaining 11 HRRs trended in the same direction both years, although the magnitude of the differences changed in some HRRs. One HRR, St. Joseph, went from a slightly above-average rate in 1997 to the second-highest rate in 2008. As shown in Figure 3, St. Joseph is the only HRR that did not see a decrease in combined cardiac intervention rates in that period.

FIGURE 4: Percentage Difference from BCBSM Average: Rate of Combined Cardiac Interventions, by HRR, 1997 and 2008

figure-4

 

Elective PCI

In 2009, a coalition of clinical experts published appropriateness criteria for revascularization to assist patients and clinicians with treatment decision-making. For certain scenarios, the clinical benefit of revascularization was weighed against the possible negative consequences. In general, revascularization was found to be appropriate for patients presenting with acute myocardial infarction (AMI) or unstable angina. In asymptomatic patients, or those with low-risk findings for coronary artery disease (CAD), revascularization was considered to be uncertain or inappropriate.(12)Patel, M. et al. ACCF/SCAI/STS/AATS/AHA/ASNC 2009 Appropriateness Criteria for Coronary Revascularization. J Am Coll Cardiol 2009;53:530–553.

A clinical trial published in March 2007 (the “COURAGE” trial) showed that an initial course of treatment of either PCI with medical therapy or medical therapy alone produced equivalent outcomes for patients with stable CAD and no recent AMI. During follow-up, the study authors found that early PCI did not decrease population mortality or risk of major cardiovascular events—including AMI.(13)Katritsis, D. and Ioannidis, J. Percutaneous coronary intervention versus conservative therapy in nonacute coronary artery disease: a meta-analysis. Circ 2005;111(22):2906–2012. (14)Boden, W., et al. Optimal medical therapy with or without PCI for stable coronary disease. N Eng J Med 2007 Apr 12; 356(15): 1503–1516. In patients with stable CAD, PCI offered better symptom relief initially when compared with medical management alone, though this difference was not significant within a few years.(15)Weintraub WS, et al. Effect of PCI on quality of life in patients with stable coronary disease. N Eng J Med 2008 Aug 14;359(7):677–87. For many patients, they concluded, it would be clinically appropriate to consider medical therapy first. The COURAGE trial found that only one-third of patients who received medical therapy as an initial treatment subsequently needed PCI in the 4.6-year follow-up period. Because the two treatment options have relatively similar outcomes for many patients, but different risk/ benefit ratios, patient and/or physician preferences are the main factors determining the course of care. There are considerable cost differences between the two treatment options: over three years, the average cost of medical intervention is approximately $25,000 compared to almost $35,000 for surgical intervention, a difference of $10,000 per episode of care.(16)Weintraub, W., Boden, W., Zhang, Z., et al. 2008. Cost-Effectiveness of Percutaneous Coronary Intervention in Optimally Treated Stable Coronary Patients / CLINICAL PERSPECTIVE. Circulation: Cardiovascular Quality and Outcomes, 1(1), 12–20.

Similar to the COURAGE trial findings, a recent meta-analysis of randomized controlled trials included studies comparing effectiveness of PCI (with stents in at least 50 percent of cases) to medical therapy. The authors concluded there was little evidence of greater benefit of stent implantation compared to medical therapy for preventing death, nonfatal myocardial infarction, unplanned revasuclarization or angina.(17)Stergiopoulos, K. and Brown, D. 2012. Initial Coronary Stent Implantation with Medical Therapy vs. Medical Therapy Alone for Stable Coronary Artery Disease. Archives of Internal Medicine. Vol. 172(4):312–319

In the BCBSM commercial enrollment in 2008, 43.4 percent of PCI procedures were classified as elective, as shown in Figure 5. We defined elective PCI in claims data as PCI for a patient without a diagnosis of acute myocardial infarction, acute coronary syndrome, or unstable angina.(18)AMI, unstable angina, and acute coronary syndrome were identified with the following ICD-9 codes: 410, 410.01, 410.1, 410.11, 410.2, 410.21, 410.3, 410.31, 410.4, 410.41, 410.5, 410.51, 410.6, 410.61, 410.7, 410.71, 410.8, 410.81, 410.9, 410.91, 411. It is important to emphasize that this study was done with access to claims data alone. Although the absolute percentages of elective vs. non-elective procedures could be different if we had had access to clinical data, it is likely that claims data alone provide a good picture of the degree of variability in elective procedures by region.

The St. Joseph HRR had the highest rate of elective PCI and the second highest rate of total PCI in the state. Six of the eight HRRs with the highest rates of elective PCI also had total PCI rates above the Michigan average, as shown in Figure 6. Similarly, among the seven HRRs with the lowest rates of elective PCI, six had total PCI rates below the Michigan average. In other words, the variation in PCI use across HRRs is driven in large part by the use of elective procedures.

FIGURE 5: Percentage of PCI Procedures Considered Elective, BCBSM, by HRR, 2008

figure-5
HRRTotal PCI per 1,000Percentage of PCIs Considered Elective*
St. Joseph3.1655.4%
Pontiac2.6849.5%
Flint2.5947.9%
Detroit2.5445.9%
Grand Rapids1.9045.7%
Royal Oak2.2345.0%
Traverse City2.5843.9%
Saginaw3.3942.0%
Ann Arbor1.9141.8%
Kalamazoo2.9541.8%
Lansing1.9639.9%
Petoskey1.9638.9%
Dearborn2.1935.3%
Marquette2.1035.2%
Muskegon1.2518.8%
BCBSM Average2.3543.4%

* PCI without a diagnosis of acute myocardial infarction, acute coronary syndrome, or unstable angina considered elective.
Source: BCBSM Special Data Request

FIGURE 6: Percentage Difference from BCBSM Average: Total PCI Rate per 1,000 and Percentage Considered Elective, by HRR, 2008

figure-6

Source: BCBSM Special Data Request

Supply Forces

Facility Supply Factors

Catheterization laboratories are the setting for both coronary angiography—the diagnostic procedure to determine whether patients have cardiovascular disease and therefore may need revascularization—and PCI to treat the disease. Previous national research demonstrated a moderately strong relationship between the number of cardiac catheterization laboratories and rates of cardiac interventions.(19)Wennberg et al. The relationship between the supply of cardiac catheterization laboratories, cardiologists and the use of invasive cardiac procedures in northern New England. J Health Serv Res Policy 1997 Apr;2(2):75–80.

Some cardiologists believe that the discovery of coronary artery disease while a patient is in a catheterization laboratory almost inevitably leads to a PCI.(20)Lin, Grace A. et al. Cardiologists’ use of percutaneous coronary interventions for stable coronary artery disease. Arch Intern Med. 2007;167(15):1604–1609. This is often referred to as the “diagnostic-therapeutic cascade.” That is, the more tests that are done, the more likely procedural intervention will result. Researchers refer to an “oculostenotic reflex,” defined more than 15 years ago as an “irresistible temptation” on the part of interventional cardiologists to expand narrowed coronary arteries, despite evidence-based guidelines or objective evidence of need.(21)Topol, Eric J. and Steven E. Nissen. Our preoccupation with coronary luminology. Arch Intern Med. 1995;92:2333–2342.

Although the number of observations is too small to report on the statistical significance of the correlation between the rate of catheterization labs and combined cardiac intervention rates in Michigan, our BCBSM data supports a consistent directional association similar to national studies done in this regard, as shown in Figure 8.

The HRRs with cardiac intervention rates the furthest below the Michigan average also have below-average or average numbers of cardiac catheterization laboratories. Similarly, among the five HRRs with the highest intervention rates, three also have above-average rates of cardiac catheterization laboratories.

Royal Oak is a notable exception to this directional trend. While the cardiac intervention rate is only slightly below the state average, the rate of laboratories per 100,000 residents is almost twice the Michigan average. William Beaumont Hospital, in Royal Oak, with 11 cardiac catheterization laboratories, has the largest number of cardiac catheterization laboratories of any facility in the state.

FIGURE 7: Percentage Difference from Average: Combined Cardiac Interventions per 1,000 and Cardiac Catheterization Laboratories per 100,000, by HRR, 2008

figure-7

Source: Michigan Department of Community Health Certificate of Need Program and BCBSM Special Data Request

FIGURE 8: Rate of Combined Cardiac Interventions per 1,000 and Cardiac Catheterization Laboratories per 100,000, by HRR, 2008

figure-8
HRRCatheterization Laboratories per 100,000Combined Cardiac Interventions per 1,000 (BCBSM)
Royal Oak3.622.77
Saginaw3.194.43
Petoskey2.172.65
Traverse City2.143.71
Marquette2.002.64
St. Joseph1.994.23
Dearborn1.952.70
Flint1.843.20
Detroit1.833.19
Kalamazoo1.633.87
Ann Arbor1.622.61
Pontiac1.473.20
Lansing1.442.52
Grand Rapids1.102.26
Muskegon1.091.88
Average1.873.00

Source: Michigan Department of Community Health Certificate of Need program and BCBSM Special Data Request

Workforce Supply Factors

Patients with cardiovascular disease may be referred to medical cardiologists, interventional cardiologists, and/or cardiovascular surgeons for treatment. While prior research has shown no significant correlation between the number of cardiologists in a region and rates of cardiac interventions, researchers at Dartmouth found a moderate positive correlation between the prevalence of interventional cardiologists and coronary angiography.(22)Wennberg, D. and Birkmeyer, J., 1999. (23)Hannan, Edward L, Chuntao Wu and Mark R Chassin. Differences in per capita rates of revascularization and in choice of revascularization procedure for eleven states. BMC Health Services Research 2006 March 16;6:35. This is informative because coronary angiography is a diagnostic tool used to determine whether a patient has a cardiovascular condition, and the performance of angiography has been found to be closely related with the performance of PCI and CABG procedures.(24)Wennberg, D. and Birkmeyer, J., 1999. Other research has also found that the rate of cardiovascular surgeons per 100,000 population had a strong positive correlation with total revascularization rates.(25)Hannan, Edward L, Chuntao Wu and Mark R Chassin. Differences in per capita rates of revascularization and in choice of revascularization procedure for eleven states. BMC Health Services Research 2006 March 16;6:35. In addition, qualitative research found that physician characteristics and interactions with patients, legal concerns, and technological advances all influence medical or interventional cardiologists’ propensity to perform or recommend PCI, regardless of the evidence of benefit to a patient.(26)Lin, Grace A. et al. Cardiologists’ use of percutaneous coronary interventions for stable coronary artery disease. Arch Intern Med. 2007;167(15):1604–1609.

In Michigan, the average rate of cardiovascular/thoracic surgeons per 100,000 residents was 1.24. In five of the 15 HRRs in Michigan, the number of these surgeons varied from the state average by more than 25 percent, and two varied by more than 50 percent, as shown in Figures 9 and 10. The relationship between the number of cardiac surgeons and the number of combined cardiac interventions per 1,000 in Michigan was unclear. For instance, the two HRRs with the highest procedure rates—Saginaw and St. Joseph—had dramatically different rates of surgeons (0.75 and 2.20 per 100,000 residents, respectively). Lansing had a notably high rate of surgeons, but a below-average intervention rate. Among the BCBSM commercial enrollment, a consistent trend between cardiovascular/thoracic surgeons and combined cardiac interventions did not emerge. However, given the great variation in the number of surgeons in select HRRs, a more in-depth investigation of local practice patterns might be illuminating.

FIGURE 9: Percentage Difference from BCBSM Average: Combined Cardiac Interventions per 1,000 and Cardiovascular/Thoracic Surgeons per 100,000, by HRR

figure-9

Source: The Dartmouth Atlas and BCBSM Special Data Request

FIGURE 10: Combined Cardiac Interventions per 1,000 and Cardiovascular/Thoracic Surgeons per 100,000, by HRR

HRRCombined Cardiac Interventions per 1,000Cardiovascular/Thoracic Surgeons per 100,000
Saginaw4.430.75
St. Joseph4.232.20
Kalamazoo3.871.28
Traverse City3.711.24
Flint3.201.58
Pontiac3.201.39
Detroit3.191.20
Royal Oak2.771.34
Dearborn2.701.10
Petoskey2.651.16
Marquette2.641.30
Ann Arbor2.611.19
Lansing2.521.89
Grand Rapids2.260.89
Muskegon1.881.34
Average 3.00 1.24
Source: The Dartmouth Atlas and BCBSM Special Data Request

Health Status

Disease Burden

Rates of admissions to hospitals for acute myocardial infarctions (AMI) are thought to closely reflect the occurrence rates of AMI in the population, and can be used as a marker for population rates of coronary artery disease. However, previous research found no correlation between AMI and coronary revascularization, indicating that disease incidence does not fully explain variability in intervention rates.(27)Wennberg, David E. and John D. Birkmeyer. The Dartmouth Atlas of Cardiovascular Care. 1999; “Cardiac Surgery.” Center for the Evaluative Clinical Sciences, Dartmouth Atlas.

Among commercial BCBSM enrollees in Michigan, variation rates differ dramatically for combined cardiac intervention and AMI. Combined cardiac intervention rates vary by a factor of 2.4 across HRRs, while AMI rates vary only 1.5-fold. In HRRs with the highest rates of interventions, AMI incidence is only slightly above the state average. This variation between rates may indicate that rates of combined cardiac interventions are not driven primarily by differences in the number of heart attacks. This data provides additional support for the finding noted on page 9 that regional variation in these procedures is principally the result of variation in elective procedures rather than by health status.

FIGURE 11: Rate of Combined Cardiac Interventions and Acute Myocardial Infarction per 1,000, BCBSM, by HRR, 2008

figure-11
HRRCombined Cardiac Interventions per 1,000Rate of AMI per 1,000
Saginaw4.431.70
St. Joseph4.231.54
Kalamazoo3.871.52
Traverse City3.711.90
Flint3.201.54
Pontiac3.201.35
Detroit3.191.33
Royal Oak2.771.23
Dearborn2.701.72
Petoskey2.651.48
Marquette2.641.86
Ann Arbor2.611.25
Lansing2.521.34
Grand Rapids2.261.33
Muskegon1.881.54
BCBSM Average3.001.43

Risk Factors

Smoking, diabetes, obesity, and hypertension are known modifiable risk factors for cardiovascular disease and AMI. Other risk factors are also predictive of cardiovascular disease and AMI, such as age, gender, family history, and cholesterol level.(28)Yusuf, Salim et al. Effect of potentially modifiable risk factors associated with myocardial infarction in 52 countries (the INTERHEART study): case-control study. Lancet 2004;364:937–52. Therefore, in addition to looking at the rates of heart attacks to determine whether the use of CABG and PCI was related to health status in a region, we also looked for any relationship between intervention rates and cardiovascular risk factors.

Overall there was no clear pattern between health risk factors and combined cardiac intervention rates. In some HRRs, risk factors and intervention rates were directionally similar, in others, they were not. In the Saginaw HRR, rates of hypertension and diabetes were close to the state average, and smoking rates 15 percent higher, but combined cardiac intervention rates were almost 50 percent higher than the state average. Similarly, the St. Joseph HRR had a much higher intervention rate relative to the state average than its population health status would predict. Royal Oak—with a much lower rate of risk factors than average—had only slightly lower intervention rates than the state overall; one might expect the rate to be lower. In contrast, Muskegon had a notably low rate of combined cardiac interventions, though its population appeared to have worse-than-average rates of risk factors.

FIGURE 12: Percentage Difference from Average: Combined Cardiac Interventions per 1,000, 2008; and Percentage with Selected Risk Factors for Heart Disease, by HRR, 2008–2009

figure-12

Source: BCBSM Special Data Request and Michigan Behavioral Risk Factor Surveillance System (Michigan BRFSS)

FIGURE 13: Combined Cardiac Interventions per 1,000, 2008; and Percentage with Selected Risk Factors for Heart Disease, 2008–2009

figure-13
 BCBSMMichigan BRFSS
HRRCombined Cardiac Interventions per 1,000% Smokers% with Hypertension% Obese% with Diabetes
Saginaw4.432725.336.76.9
St. Joseph4.2318.328.629.65.5
Kalamazoo3.872724.832.27.8
Traverse City3.7126.923.427.15.5
Flint3.2023.425.639.87.9
Pontiac3.2021.527.529.26.2
Detroit3.1925.228.734.17.7
Royal Oak2.7712.91724.45.9
Dearborn2.7023.924.328.48.1
Marquette2.6431.328.628.37
Petoskey2.652924.435.76.4
Lansing2.5222.82230.85.6
Ann Arbor2.6118.919.127.56.2
Grand Rapids2.2620.721.2286.7
Muskegon1.8822.129.935.17.6
Average3.0023.424.731.16.7

Source: BCBSM Special Data Request and Michigan Behavioral Risk Factor Surveillance System (Michigan BRFSS)

Cardiac Mortality

Many factors contribute to the overall cardiac mortality rate. CABG and emergency PCI both reduce mortality due to heart attacks and coronary artery disease. Elective PCI, on the other hand, has been shown to improve some symptoms, but does not reduce cardiac mortality.(29)Weintraub et al., 2008. (30)Katritsis and Ioannidis, 2005. If variation in cardiac interventions was due to the number of lifesaving CABG and emergency PCI procedures being performed in a region, we would expect that high rates of cardiac interventions would be correlated with lower rates of cardiac mortality. Conversely, if most of the variation is due to differences in the rates of elective PCI, there may not be a correlation between intervention rates and cardiac mortality.

Data on cardiac mortality rates further supports our earlier finding that variation in combined cardiac intervention rates is primarily driven by differences in the elective PCI rate. The change in cardiac mortality in geographic regions is not correlated with the change in combined cardiac intervention rates.

From 1997 to 2008, mortality due to cardiac disease declined 17 percent in Michigan, from 3.67 deaths to 3.04 deaths per 1,000, as shown in Figures 14 and 15. At the same time, rates of coronary revascularization among BCBSM commercial enrollees fell from 3.7 interventions to 3.0 interventions per 1,000—a 19 percent decrease from 1997 to 2008. Intervention rates among Medicare enrollees rose by 7 percent between 1997 and 2007, for a combined increase of 3 percent (BCBSM and Medicare enrollees combined). Though trends vary between the BCBSM and Medicare populations, overall this indicates a relatively stable trend in cardiac interventions statewide. This indicates that the relative stability of combined cardiac interventions in the state did not negatively affect cardiac mortality.

Additionally, while variation in combined cardiac interventions has been increasing, variation in cardiac mortality has actually decreased. In 1997, cardiac mortality varied by a factor of 2.6 between the highest and lowest HRR. In 2008, it varied by a factor of only 1.7. Declines in cardiac mortality could be attributed to more effective surgical intervention for heart attacks, more effective medical management of heart disease or lifestyle/ behavioral changes such as reductions in smoking rates, that prevent the onset of cardiovascular disease.

FIGURE 14: Cardiac Mortality Rate per 1,000 and Combined Cardiac Interventions Rate per 1,000, by HRR, 1997 and 2008

figure-14-a figure-14-bSource: BCBSM Special Data Request, The Dartmouth Atlas, and Michigan Department of Community Health Vital Statistics

FIGURE 15: Cardiac Mortality Rate per 1,000 and Combined Cardiac Interventions, by HRR, 1997 and 2008

 19972008
HRRCardiac Mortality Rate per 1,000Combined Cardiac Interventions per 1,000, BCBSMCombined Cardiac Interventions per 1,000, MedicareTotal Combined Cardiac Interventions per 1,000 (BCBSM and Medicare)Cardiac Mortality Rate per 1,000Combined Cardiac Interventions per 1,000, BCBSMCombined Cardiac Interventions per 1,000, Medicare*Total Combined Cardiac Interventions per 1,000 (BCBSM and Medicare)
Marquette6.373.0013.216.23.802.6412.8015.44
St. Joseph5.353.8018.722.53.274.2322.2026.43
Petoskey4.863.3014.017.33.442.6516.0018.65
Saginaw4.324.8019.324.13.794.4324.1028.53
Detroit4.224.4019.323.73.543.1919.4022.59
Traverse City4.124.1017.922.03.223.7119.0022.71
Dearborn3.944.7018.122.83.852.7022.9025.60
Muskegon3.892.7010.913.63.031.8810.0011.88
Kalamazoo3.604.0018.322.32.853.8719.9023.77
Flint3.343.3014.818.13.013.2017.0020.20
Ann Arbor3.323.5013.917.42.652.6113.6016.21
Royal Oak3.233.8017.621.42.982.7716.4019.17
Grand Rapids3.022.8012.014.82.282.2612.2014.46
Lansing2.943.2015.919.12.662.5216.0018.52
Pontiac2.483.5014.417.92.483.2015.8019.00
Average3.673.7016.219.93.043.0017.4020.40
* Medicare rates reflect 2007 data and are the most recently available.
Source: BCBSM Special Data Request, The Dartmouth Atlas, and Michigan Department of Community Health Vital Statistics

Limitations

While geographic variation studies are useful for revealing large trends, they are not as useful for understanding what is going on at the individual provider or patient level. For example, within one region, there will also be variation between providers in the frequency of their recommendations for services such as elective PCI, and also variation in the choices that patients make in similar circumstances.

This study was conducted using data from 2008 or earlier, after the publication of the COURAGE trial, but before the revision of PCI guidelines. It is possible that practice patterns have changed since the guidelines were revised and the COURAGE results widely disseminated. One study found that although the publication of COURAGE did not affect PCI rates, PCI was used less often for patients with stable angina after the revision of the PCI guidelines.(31)Ahmed, B., Dauerman, H. L., Piper, W. D., Robb, J. F., Verlee, M. P., Ryan, T. J., Goldberg, D., et al. (2011). Recent Changes in Practice of Elective Percutaneous Coronary Intervention for Stable Angina. Circulation: Cardiovascular Quality and Outcomes. doi:10.1161/CIRCOUTCOMES.110.957175 More studies are needed to see if this decrease in elective PCI also decreases geographic variation in cardiac procedures.

Conclusion

We have examined a number of explanatory clinical factors that could be related to the observed geographic variation associated with cardiac care in Michigan. Our analysis concluded that several of these factors showed no connection to this variation. First and foremost, the geographic variation we observed does not appear to be connected to health status. Our study found little association between combined cardiac intervention rates and rates of both acute myocardial infarction (heart attack) and rates of risk factors. The rate of heart attack does not vary much between regions, an indicator that the underlying burden of disease is similar among regions.

In addition, the reduction in cardiac mortality in the past decade was not correlated with the change in the rates of combined cardiac interventions. While cardiac surgery can be a lifesaving procedure in the right circumstances, advances in medical treatment of coronary artery disease appear to have had a large impact on morbidity and mortality as well.

Facility supply appears to have a directional relationship with variation of combined cardiac intervention in Michigan. Indeed, areas of the state with higher rates of cardiac catheterization laboratories tend to have higher rates of combined cardiac interventions, whereas areas with lower rates of laboratories have lower rates of combined cardiac interventions. Workforce supply, on the other hand, appears to have no significant influence on variation. The number of cardiovascular/thoracic surgeons in an area correlated weakly with combined cardiac interventions, but no discernible trend emerged.

Overall, our analysis shows that much of the variation in the rate of combined cardiac interventions is due to the variation in rates of elective PCI—that is, PCI that is not needed immediately to resolve a life-threatening situation. While this variation could be due to differences in patient preferences, it is most likely that a large amount of the variation is driven by physician practice patterns. Given the clinical evidence that population outcomes for patients with stable coronary artery disease are comparable across medical and surgical treatments, patients should be able to elect PCI based on a fully informed understanding of the risks and benefits of each procedure. It would appear that we are far from that ideal state today. Getting closer to that goal has the potential to both improve patient satisfaction and reduce health care spending without compromising patient health. This is one area of medical care where there are opportunities to achieve improvements in quality, satisfaction, and cost.

Methodology & Sources

This report is focused on the geographical units called hospital referral regions (HRRs), developed by researchers with the Dartmouth Atlas. HRRs are aggregations of hospital service areas, a collection of zip codes wherein most hospitalizations occur in hospitals within that area. HRRs represent regional health care markets for tertiary medical care. Unlike the Dartmouth Atlas, this report focuses mainly on BCBSM commercially insured, non-elderly adults (ages 18 to 64). However, Medicare data was used to assess cardiac mortality.

We aggregate rates of CABG and PCI surgeries to measure a combined coronary revascularization rate. Although certain patients may be clinically indicated only for one type of procedure or the other, the combined measure provides an indication of the intensity of cardiac interventions for coronary revascularization. Surgical rates are not risk adjusted in this report.

BCBSM Special Data Request: Data on AMI and surgical interventions was provided by Blue Cross Blue Shield of Michigan. The data cover calendar year 2008 and are for members ages 18 to 64. BCBSM also provided membership counts for each HRR, which were used in calculating the rates per 1,000. Specific codes used in the data request are available upon request.

The Dartmouth Atlas of Health Care in Michigan: Comparison data from 1997 came from a previously published study that was produced by Dartmouth researchers in collaboration with BCBSM. Definitions used in our current study were kept as similar as possible to the 1997 definitions to ensure comparability. (http://www.bcbsm.com/atlas/foreword.shtml)

The Dartmouth Atlas: The Dartmouth Atlas project is an ongoing research project conducted by researchers at Dartmouth. We used several data resources from the Dartmouth Atlas in this report, including physician supply by HRR and the Medicare comparison rates for cardiac surgery. (http://www.dartmouthatlas.org/)

National Hospital Discharge Summaries: The National Hospital Discharge Survey is a national study of discharges from non-federal short stay hospitals in the United States. It is conducted by the Centers for Disease Control and Prevention (CDC). We used the summaries of results to examine trends in inpatient cardiac surgical procedures nationally. (http://www.cdc.gov/nchs/nhds.htm)

Michigan Department of Community Health Certificate of Need Commission: The Certificate of Need Commission approves new healthcare facilities and resources in Michigan. Data from the Certificate of Need Commission were used to identify the number and location of cardiac catheterization labs in Michigan. (http://www.michigan.gov/mdch/1,1607,7-132-2945_5106—,00.html)

Michigan Behavioral Risk Factor Surveillance System: The Behavioral Risk Factor Surveillance System (BRFSS) is an annual telephone survey of health status and health risk behaviors conducted by each state. Data from the 2008 and 2009 Michigan BRFSS were used to examine health risk factors in the geographic regions. (http://www.cdc.gov/brfss/)

Michigan Department of Community Health Vital Statistics: The Division of Vital Statistics within the Michigan Department of Community Health collects data on births, deaths, marriages and divorces. We used death data obtained from Vital Statistics to examine the cardiac mortality rate by region. All deaths with a code from chapter 7 of the ICD 9 manual and chapter 10 of the ICD 10 manual (Diseases of the Circulatory System) were considered a cardiac death for purposes of calculating the cardiac mortality rate. (http://www.michigan.gov/mdch/0,1607,7132-2944_4669—,00.html)

Suggested citation: Brown, Ruth; Kofke-Egger, Heather; Hemmings, Brandon; Udow-Phillips, Marianne. Variation in Interventional Cardiac Care in Michigan. 2012. Center for Healthcare Research & Transformation. Ann Arbor, MI.

The staff at the Center for Healthcare Research & Transformation would like to thank Kim Eagle, Hitinder Gurm, and Sharon Kardia at the University of Michigan for their assistance in formulating and reviewing this report. Special thanks to Robyn Rontal, Christine Doring, Newelle Nielsen, and the entire data team at BCBSM for their work in pulling the data and creating the maps for this report; and thanks to Chris Fussman at the Michigan Department of Community Health for compiling Behavioral Risk Factor Surveillance System (BRFSS) data into hospital referral regions for us. Special thanks also to Jonathan Skinner at the Dartmouth Institute for Health Policy & Clinical Practice for thoughtful review and comments.

 

References   [ + ]

1. Udow-Phillips, M., Ogundimu, T., Ehrlich, E., Kofke-Egger, H., and Stock, K. 2010 CHRTbook: Health Care Variation in Michigan. Center for Healthcare Research & Transformation. Ann Arbor, MI.
2. Wennberg, D. and Birkmeyer, J. The Dartmouth Atlas of Cardiovascular Health Care. 1999; Cardiac Surgery. Center for the Evaluative Clinical Sciences, Dartmouth Atlas.
3. Zuckerman, S., Waidmann, T., Berenson, R., & Hadley, J. 2010. Clarifying Sources of Geographic Differences in Medicare Spending. New England Journal of Medicine, 363, 54–62. doi:10.1056/NEJMsa0909253
4. MedPAC. January 2011. Report to the Congress: Regional Variation in Medicare Service Use.
5. Congressional Budget Office, 2008. Geographic Variation in Health Care Spending. Publication # 2978.
6. Dartmouth Atlas of Health Care in Michigan.
7. Udow-Phillips et al., 2010.
8. Centers for Disease Control and Prevention, National Vital Statistics Report. March 16, 2011. Deaths: Preliminary Data for 2009. Vol. 59 (4).
9. Centers for Disease Control and Prevention, National Health Statistics Report, National Hospital Discharge Survey.
10. Riley, R., et al. Trends in coronary revascularization in the U.S. from 2001 to 2009: recent declines in percutaneous coronary intervention volumes. Circ Cardiovasc Qual Outcomes 2011;4:193–197; originally published online February 8, 2011.
11. Though not reflected here, coronary revascularization in Michigan’s Medicare population actually increased by 7 percent from 1997 to 2007 (Dartmouth Atlas).
12. Patel, M. et al. ACCF/SCAI/STS/AATS/AHA/ASNC 2009 Appropriateness Criteria for Coronary Revascularization. J Am Coll Cardiol 2009;53:530–553.
13. Katritsis, D. and Ioannidis, J. Percutaneous coronary intervention versus conservative therapy in nonacute coronary artery disease: a meta-analysis. Circ 2005;111(22):2906–2012.
14. Boden, W., et al. Optimal medical therapy with or without PCI for stable coronary disease. N Eng J Med 2007 Apr 12; 356(15): 1503–1516.
15. Weintraub WS, et al. Effect of PCI on quality of life in patients with stable coronary disease. N Eng J Med 2008 Aug 14;359(7):677–87.
16. Weintraub, W., Boden, W., Zhang, Z., et al. 2008. Cost-Effectiveness of Percutaneous Coronary Intervention in Optimally Treated Stable Coronary Patients / CLINICAL PERSPECTIVE. Circulation: Cardiovascular Quality and Outcomes, 1(1), 12–20.
17. Stergiopoulos, K. and Brown, D. 2012. Initial Coronary Stent Implantation with Medical Therapy vs. Medical Therapy Alone for Stable Coronary Artery Disease. Archives of Internal Medicine. Vol. 172(4):312–319
18. AMI, unstable angina, and acute coronary syndrome were identified with the following ICD-9 codes: 410, 410.01, 410.1, 410.11, 410.2, 410.21, 410.3, 410.31, 410.4, 410.41, 410.5, 410.51, 410.6, 410.61, 410.7, 410.71, 410.8, 410.81, 410.9, 410.91, 411.
19. Wennberg et al. The relationship between the supply of cardiac catheterization laboratories, cardiologists and the use of invasive cardiac procedures in northern New England. J Health Serv Res Policy 1997 Apr;2(2):75–80.
20, 26. Lin, Grace A. et al. Cardiologists’ use of percutaneous coronary interventions for stable coronary artery disease. Arch Intern Med. 2007;167(15):1604–1609.
21. Topol, Eric J. and Steven E. Nissen. Our preoccupation with coronary luminology. Arch Intern Med. 1995;92:2333–2342.
22, 24. Wennberg, D. and Birkmeyer, J., 1999.
23, 25. Hannan, Edward L, Chuntao Wu and Mark R Chassin. Differences in per capita rates of revascularization and in choice of revascularization procedure for eleven states. BMC Health Services Research 2006 March 16;6:35.
27. Wennberg, David E. and John D. Birkmeyer. The Dartmouth Atlas of Cardiovascular Care. 1999; “Cardiac Surgery.” Center for the Evaluative Clinical Sciences, Dartmouth Atlas.
28. Yusuf, Salim et al. Effect of potentially modifiable risk factors associated with myocardial infarction in 52 countries (the INTERHEART study): case-control study. Lancet 2004;364:937–52.
29. Weintraub et al., 2008.
30. Katritsis and Ioannidis, 2005.
31. Ahmed, B., Dauerman, H. L., Piper, W. D., Robb, J. F., Verlee, M. P., Ryan, T. J., Goldberg, D., et al. (2011). Recent Changes in Practice of Elective Percutaneous Coronary Intervention for Stable Angina. Circulation: Cardiovascular Quality and Outcomes. doi:10.1161/CIRCOUTCOMES.110.957175

Health Care Use Variation in Michigan

For more than 20 years, researchers at Dartmouth Institute for Health Policy and Clinical Practice have been sharing data on regional variation in the use of health care services: variation that does not seem to be explained by health status or other relevant differences among the populations studied. Most of work done on geographic variation has been done on the Medicare population, and some could argue that the phenomenon of variation is unique to a senior population or some specific attribute of the Medicare structure. However, just over 10 years ago, we in Michigan were fortunate to have the opportunity to collaborate with our colleagues at Dartmouth to look at this same kind of data in the commercial Blue Cross and Blue Shield of Michigan (BCBSM) population. Our findings then showed that patterns of geographic variation in the commercial population were similar to those found in the Medicare population.

Read the full report, “Health Care Variation in Michigan.”

In this report, we are again comparing the commercial BCBSM population to the Medicare population, but we are also looking at changes within the commercial population in overall use and geographic variation over the past 10 years. Overall, this report depicts an improving picture in some key areas, showing notable reductions in overall use for some procedures often considered to be “over-utilized”—particularly in cardiac care and ambulatory care sensitive conditions. And, these trends look different (and better) for the BCBSM population than they do nationally.

Even among procedures with improving overall trends, however, some areas of the state continue to have very high use rates and unexplained variation. And some procedures often considered to be over-utilized do not show improving trends between 1997 and 2008; notably, Cesarean section, computed tomography (CT) scans of the low back, and back surgery. Finally, while there are some important exceptions, patterns of regional variation are similar between BCBSM and Medicare; that is, areas with high use rates in Medicare tend to have high use rates for BCBSM. And, for the most part, areas that had high use in 1997 still had relatively high use in 2008.

Findings of particular note in this report are:

  • The “Thumb”/Saginaw area had among the highest use for all procedures we studied.
  • The proportion of births delivered by Cesarean section increased considerably between 1997 and 2008 to more than one third of all BCBSM births.
  • Grosse Pointe, Michigan had the lowest rates of hysterectomy in the state in 1997. Today, their rates are even lower. In contrast, Monroe, Michigan had use rates more than 70 percent higher than the state average in both 1997 and 2008.
  • Overall use rates for interventional cardiology services declined between 1997 and 2008, but the high use area for coronary artery bypass graft (CABG) shifted greatly: St. Joseph went from being the lowest area in 1997 to one of the highest in 2008.
  • Use rates for angiography and angioplasty (PCI) among the BCBSM population declined over the last 10 years, in contrast to recently reported national trends of rising use rates for these same cardiac procedures.
  • As The Dartmouth Atlas of Health Care in Michigan found in 1997, there is a direct correlation between the use of diagnostic and interventional procedures (sometimes known as the diagnostic-therapeutic cascade), i.e., areas of the state with high rates of CT scans for the low back had high rates of back surgery; areas with high rates of angiography also had high rates of PCI/coronary artery bypass graft (CABG).
  • Overall rates of care for ambulatory care sensitive conditions (ACSCs) dropped dramatically among the BCBSM population between 1997 and 2008.
  • Nationally, use rates for drugs to treat attention deficit hyperactivity disorder (ADHD) increased since 1997, but the debate continued about whether or not there is over-treatment with these drugs. There continues to be great variability in the rates of use of ADHD drugs in Michigan. As in 1997, Grosse Pointe, Grand Haven and Kalamazoo had the highest reported use rates in the state for the BCBSM population in 2008.

Cover Michigan 2010: The State of Health Care Coverage in Michigan

cover-michigan-2010-cover2Cover Michigan 2010 is CHRT’s annual report of health care coverage in the U.S. and Michigan, including data on the uninsured, publicly and privately insured, premiums and cost-sharing, the health care safety net and, new for this year, health reform (also available separately in the CHRT Issue Brief, Impact of Health Reform on Coverage in Michigan).

Cover Michigan 2010 presents the most recent comparative data available for the U.S. and Michigan: 2008 data for the U.S. and 2007/2008 two-year pooled data for Michigan. Michigan data are pooled to ensure an adequate sample size; some demographic data are reported as three-year pooled averages. Where possible, more recent data are included.

The Cover Michigan 2010 report and the Cover Michigan Survey 2010 (released in March 2010) both reveal continued upward trends in areas of concern from our 2009 report: more people lacking insurance, more employers dropping coverage, higher costs for those who have insurance, and a growing strain on the health care safety net.

Important trends noted in Cover Michigan 2010 include:

  • The numbers of uninsured and publicly insured in our state have been growing. More than 3.8 million Michigan citizens were either uninsured or covered by a public program (Medicare, Medicaid, military)—almost 39 percent of the state’s population;
  • Despite the growth in public coverage, many of the poor did not have coverage at all: 37 percent of those with incomes below the poverty line did not have coverage in 2007/2008;
  • While Michigan still has a higher percentage of those with private coverage than most states (ranking ninth highest), businesses in Michigan have been dropping coverage at a faster rate than the U.S. overall and the percent of Michigan’s population with private coverage was 4.5 percent lower in 2007/2008 than it was in 2003/2004;
  • Average Michigan family premiums continue to be less than the U.S. average, at $11,321 compared to $12,298—making Michigan the ninth lowest state in average family premiums in 2008;
  • Reflecting the increase in the number of uninsured in the state and the increase in copayments and deductibles faced by those with insurance, uncompensated care in hospitals increased in 2008 to $2 billion, a 94 percent increase since 2004;
  • “Safety net” providers in Michigan are critically important for many of those most in need, but these providers are challenged to meet demand for their services . Also, Michigan has fewer such providers than many other states: Michigan ranked 31st in the nation for the number of federally qualified health center sites per 10,000 uninsured.

We predict these 2008 trends will continue in the 2009 data. If anything, given the dramatic economic events of 2009, they will likely reflect even steeper changes in the same directions. There is no question the trends evident in this report depict both the reasons health reform was a major national policy issue in 2009 and some of the challenges it will face.