Managed Health Home
Why Choose MHI?
Our Services
Past Communications
Contact Us
Cost Control, OSHA Z Tables, Compensation Study - Dec. 1992
December 31, 1992
Occupational Health Contacts
Dear Colleague,
This communication deals primarily with issues of cost control. Our customers often are surprised when we recommend against contracting services with physicians who have on-site rehabilitation facilities. We take a similar stand regarding physicians who have an interest in diagnostic imaging or radiation therapy facilities. The American Medical Association has concerns along the same logic as we.
Three of the articles from The New England Journal of Medicine and The Journal of the American Medical Association show why. Whether we are talking about workers' compensation or health benefits plan costs, unnecessary utilization is the usual outcome. Unfortunately, these higher costs can be associated with poorer quality, although only one of these papers deals with that issue.
More down to earth is an article from The Wall Street Journal on control of workers' compensation costs. It was written by a hospital administrator, who is even more businesslike than most managers in his response to this problem.
Of general interest is the article showing that cycles of weight loss and subsequent return to obesity are risky. For success, obese employees must commit to a substantial caloric consumption through exercise. Otherwise we recommend that they be satisfied with the small but permanent reduction resulting from a healthy low fat diet, i.e., if exercise is rejected, it is healthier to stay fat. Also included is an article that every health professional should be aware of. It shows how effective medical therapy can be in treating early prostatism. Please pass it on to your medical staff.
You will recall that last July, the 11th U.S. Circuit Court overturned OSHA's adoption of the American Council of Governmental Industrial Hygienists (ACGIH) exposure limits for the lengthy Z table of airborne contaminants. OSHA is continuing to enforce this standard in spite of the Court's action. Enclosed find their instructions to field inspectors. Please advise us if you are cited under the contested standard.
Finally, one of our clients participated in a survey of compensation of occupational health professionals and shared the results with us. It involved over 140 organizations, many in the Fortune 100. We have summarized results of the survey.
Ruth McElroy, R.N.
Three articles from The New England Journal of Medicine and The Journal of the American Medical Association
TITLE: Physician Ownership of Physical Therapy Services. Effects on Charges, Utilization, Profits, and Service Characteristics.
AUTHOR: Mitchell JM; Scott E
AUTHOR AFFILIATION: Department of Economics, Florida State University, Tallahassee.
SOURCE: JAMA 1992 Oct 21;268(15):2055-9
NLM CIT. ID: 93021563
OBJECTIVE--To evaluate the effects of physician ownership of freestanding physical therapy and rehabilitation facilities on utilization, charges, profits, and three measures of service characteristics for physical therapy treatments.
DESIGN--Statistical comparison by physician joint ventureownership status of freestanding physical therapy andcomprehensive rehabilitation facilities providing physical therapy treatments in Florida. PARTICIPANTS--A total of 118outpatient physical therapy facilities and 63 outpatientcomprehensive rehabilitation facilities providing services in Florida during 1989. The data from the facilities were collected under a legislative mandate.
MAIN OUTCOME MEASURES--Visits per patient, average revenue per patient, percent operating income, percent markup, profits per patient, licensed therapist time per visit, and licensed and nonlicensed medical worker time per visit. RESULTS--Visits per patient were 39% to 45% higher in joint venture facilities. Both gross and net revenue per patient were 30% to 40% higher in facilities owned by referring physicians. Percent operating income and percent markup were significantly higher in joint venture physical therapy and rehabilitation facilities. Licensed physical therapists and licensed therapist assistants employed in non-joint venture facilities spend about 60% more time per visit treating physical therapy patients than licensed therapists and licensed therapist assistants working in joint venture facilities. Joint ventures also generate more of their revenues from patients with well-paying insurance.
CONCLUSION--Our results indicate that utilization, charges per patient, and profits are higher when physical therapy and rehabilitation facilities are owned by referring physicians. With respect to service characteristics, joint venture firms employ proportionately fewer licensed therapists and licensed therapist assistants to perform physical therapy, so that licensed professionals employed in joint venture businesses spend significantly less time per visit treating patients. These results should be of interest to the medical profession, third-party payers, and policymakers, all of whom are concerned about the consequences of physician self-referral arrangements.
TITLE: Consequences of Physicians' Ownership of Health Care Facilities--Joint Ventures in Radiation Therapy (see comments)
Mitchell JM; Sunshine JH
Graduate Public Policy Program, Georgetown University,
Washington, DC 20007
N Engl J Med 1992 Nov 19;327(21):1497
N Engl J Med 1992 Nov 19;327(21):1522-4
Physicians are increasingly the owners of health care facilities to which they refer patients for services but at which they do not practice. We studied such ownership arrangements, known as "joint ventures," in the field of radiation therapy, examining their effects on access, use of services, costs, and quality.
METHODS. Because 44 percent of free-standing facilities providing radiation therapy in Florida in 1989 were joint ventures, as compared with 7 percent elsewhere (95 percent confidence interval, 3 to 10 percent), we compared data for Florida with comparable data for the remainder of the United States. We also compared radiation-therapy facilities in Florida that were established as joint ventures with those that were not. Since most data were derived from entire populations rather than from samples, any differences found were of necessity statistically significant. RESULTS. No joint-venture facilities providing radiation therapy were located in inner-city neighborhoods or rural areas, but 11 percent of other free-standing facilities and hospital-based facilities were located in such areas. Among free-standing facilities, joint ventures received 39 percent of their revenues from patients with well-paying insurance coverage, as compared with 31 percent for facilities that were not joint ventures (P < 0.01). The frequency and costs of radiation-therapy treatments at free-standing centers were 40 to 60 percent higher in Florida than in the rest of the United States; there was no below-average use of radiation therapy at hospitals or higher cancer rates that explained the higher rates of use or higher costs in Florida. Radiation physicists at joint-venture facilities (the principal personnel involved in quality control other than physicians) spent 18 percent less time with each patient over the course of treatment than did their counterparts at free-standing facilities that were not joint ventures (P < 0.05). Mortality among patients with cancer in Florida was not lower than the U.S. average, even though joint ventures are much more common in that state.
CONCLUSIONS. Joint ventures in radiation therapy appear to have adverse effects on patients' access to care. They also appear to increase the use of services and costs substantially. Some indicators show that joint ventures cause either no improvement in quality or a decline. Our results add to the evidence indicating that physicians' self-referral generally has negative consequences. We recommend legislation to ban ownership of joint ventures by referring physicians. Such legislation needs to be carefully designed in order to achieve its objectives and forestall new, financially abusive arrangements.
TITLE: Physicians' Utilization and Charges for Outpatient Diagnostic Imaging in a Medicare Population [see comments]
AUTHOR: Hillman BJ; Olson GT; Griffith PE; Sunshine JH; Joseph CA; Kennedy SD; Nelson WR; Bernhardt LB
AUTHOR AFFILIATION: Department of Radiology, University of Virginia School of Medicine, Charlottesville.
SOURCE: JAMA 1992 Oct 21;268(15):2050-4
NLM CIT. ID: 93021562
COMMENT: JAMA 1993 Apr 7;269(13):1633; discussion 1634~ JAMA 1993 Apr 7;269(13):1633-4
OBJECTIVES AND RATIONALE--For 10 common clinical presentations, we assessed differences in physicians' utilization of and charges for diagnostic imaging, depending on whether they performed imaging examinations in their offices (self-referral) or referred their patients to radiologists (radiologist-referral).
METHODS--Using previously developed methodologies, we generated episodes of medical care from an insurance claims database. Within each episode, we determined whether diagnostic imaging had been performed, and if so, whether by a self-referring physician or a radiologist. For each of the 10 clinical presentations, we compared the mean imaging frequency, mean imaging charges per episode of care, and mean imaging charges for diagnostic imaging attributable to self- and radiologist-referral.
RESULTS--Depending on the clinical presentation, self-referral resulted in 1.7 to 7.7 times more frequent performance of imaging examinations than radiologist-referral (P < .01, all presentations). Within all physician specialties, self-referral uniformly led to significantly greater utilization of diagnostic imaging than radiologist-referral. Mean imaging charges per episode of medical care (calculated as the product of the frequency of utilization and mean imaging charges) were 1.6 to 6.2 times greater for self-referral than for radiologist-referral (P < .01, all presentations). When imaging examinations were performed--including those performed in both physicians' offices and hospital outpatient departments--mean imaging charges were significantly greater for radiologists than for self-referring physicians in seven of the clinical presentations (P < .01). This result is related to the high technical charges of hospital outpatient departments; in office practice, radiologists' mean charges for imaging examinations were significantly less than those of self-referring physicians for seven clinical presentations (P < .01).
CONCLUSIONS--Nonradiologist physicians who operate diagnostic imaging equipment in their offices perform imaging examinations more frequently, resulting in higher imaging charges per episode of medical care. These results extend our previous research on this subject by their focus on a broader range of clinical presentations; a mostly elderly, retired population; and the inclusion of higher-technology imaging examinations.
General Interest
TITLE: Change in Body Weight and Longevity [see comments]
AUTHOR: Lee IM; Paffenbarger RS Jr
AUTHOR AFFILIATION: Department of Epidemiology, Harvard University School of Public Health, Boston, Mass 02115.
SOURCE: JAMA 1992 Oct 21;268(15):2045-9
NLM CIT. ID: 93021561
COMMENT: JAMA 1993 Mar 3;269(9):1116
OBJECTIVE--To investigate the effect of body weight change on longevity. DESIGN--Cohort analytic study, following men from 1977 through 1988.
SETTING--The study was conducted among Harvard University alumni with mean age of 58 years.
PATIENTS--Alumni, free of cardiovascular disease and cancer, completed questionnaires on weight, height, cigarette habit, and physical activities in 1962 or 1966 and in 1977 (n = 11,703). We assessed weight change between questionnaires, based on self-reported weights. MAIN
OUTCOME MEASURE--Mortality from all causes (n = 1441), coronary heart disease (n = 345), and cancer (n = 459), determined from death certificates.
RESULTS--Lowest all-cause mortality was among alumni maintaining stable weight (+/- 1 kg).With this category as referent (relative risk = 1.00), relative risks of death associated with losing more than 5 kg, losing between 1 and 5 kg, (more than 1 kg and up to 5 kg) gaining between 1 and 5 kg (more than 1 kg and up to 5 kg), and gaining more than 5 kg were 1.57 (95% confidence interval, 1.34 to 1.84), 1.26 (1.10 to 1.46), 1.06 (0.90 to 1.24), and 1.36 (1.11 to 1.66), respectively. For coronary heart disease mortality, relative risks were 1.75 (1.26 to 2.43), 1.43 (1.05 to 1.93), 1.28 (0.91 to 1.80), and 2.01 (1.36 to 2.97), respectively. Weight change did not predict cancer mortality. Findings were not explained by cigarette habit, physical activity, or body mass index. We observed similar trends for follow-up between 1977 and 1982 and between 1983 and 1988. Those losing or gaining more weight also reported greater total lifetime weight loss, which may indicate weight cycling.
CONCLUSIONS--Both body weight loss and weight gain are associated with significantly increased mortality from all causes and from coronary heart disease but not from cancer.
TITLE: The Effect of Finasteride in Men with Benign Prostatichyperplasia. The Finasteride Study Group [see comments]
AUTHOR: Gormley GJ; Stoner E; Bruskewitz RC; Imperato-McGinley J; Walsh PC; McConnell JD; Andriole GL; Geller J; Bracken BR; Tenover JS; et al
AUTHOR AFFILIATION: Merck Research Laboratories, Rahway, NJ 07065.
SOURCE: N Engl J Med 1992 Oct 22;327(17):1185-91 NLM CIT. ID: 93024703
COMMENT: N Engl J Med 1992 Oct 22;327(17):1234-6~ N Engl J Med 1993 Feb11;328(6):442-3~ N Engl J Med 1993 Feb 11;328(6):443
BACKGROUND. Benign prostatic hyperplasia is a progressive, androgen-dependent disease resulting in enlargement of the prostate gland and urinary obstruction. Preventing the conversion of testosterone to its tissue-active form, dihydrotestosterone, by inhibiting the enzyme 5 alpha-reductase could decrease the action of androgens in their target tissues; in the prostate the result might be a decrease in prostatic hyperplasia and therefore in symptoms of urinary obstruction.
METHODS. In a double-blind study, we evaluated the effect of two doses of finasteride (1 mg and 5 mg) and placebo, each given once daily for 12 months, in 895 men with prostatic hyperplasia. Urinary symptoms, urinary flow, prostatic volume, and serum concentrations of dihydrotestosterone and prostate-specific antigen were determined periodically during the treatment period. RESULTS. As compared with the men in the placebo group, the men treated with 5 mg of finasteride per day had a significant decrease in total urinary-symptom scores (P less than 0.001), an increase of 1.6 ml per second (22 percent, P less than 0.001) in the maximal urinary-flow rate, and a 19 percent decrease in prostatic volume (P less than 0.001). The men treated with 1 mg of finasteride per day did not have a significant decrease in total urinary-symptom scores, but had an increase of 1.4 ml per second (23 percent) in the maximal urinary-flow rate, and an 18 percent decrease in prostatic volume. The men given placebo had no changes in total urinary-symptom scores, an increase of 0.2 ml per second (8 percent) in the maximal urinary-flow rate, and a 3 percent decrease in prostatic volume. The frequency of adverse effects in the three groups was similar, except for a higher incidence of decreased libido, impotence, and ejaculatory disorders in the finasteride-treated groups.
CONCLUSIONS. The treatment of benign prostatic hyperplasia with 5 mg of finasteride per day results in a significant decrease in symptoms of obstruction, an increase in urinary flow, and a decrease in prostatic volume, but at a slightly increased risk of sexual dysfunction.
October 29,1992
SUBJECT: Recent Court Decision and Enforcement of1910.000
The Eleventh Circuit Court of Appeals denied the Department of Labor's request for a rehearing concerning the court's decision that OSHA's standards for 428 toxic substances, 29 CFR 1910.000 were invalid.
The Solicitor of Labor will file a motion for a 30-day delay in issuing the mandat of the court's July 7, 1992 decision. This delay will enable the Department to review its options and respond accordingly.
In the interim, and until a mandate is issued, the standard remains in effect, and OSHA enforcement of the standard is to continue.
We request the state designees be notified accordingly.
cc: Directorate Heads
Ann Rosenthal
State Designees
Median Total Compensation of Occupational Health Professionals
Median Total Compensation of Occupational Health Professionals (All figures in dollars)
Entry Nurse  26,000  32,800  42,300
Experienced Nurse  28,600  37,200  52,000
Supervisory Nurse  28,000  40,500  60,700
Plant Physician  81,000  101,700  114,300
Corporate Medical Director (Physician)  100,000  144,900  262,000
* Compensation for nurses reports base salary. If included in profit sharing or bonus eligible, figures were higher. Physicians' compensation include bonus. Department of Labor Occupational Safety and Health Administration Washington, D.C. 20210