Information Needs Associated with the Changing Organization and Delivery of Health Care: Summary of Perceptions, Activities, Key Gaps, and Priorities. 2. Costs of Care

04/30/1997

There is considerable interest in understanding cost trends, particularly with the shift toward managed care and more ambulatory based delivery using competitive models. Current spending categories provide limited insight on key questions. For example, consolidation is occurring with managed care, but existing systems provide only limited information that can be used to assess whether bigger scale is more efficient. Because spending data has been captured by setting rather than service, there are considerable barriers to assessing the extent of change. The development of capitated systems will make these gaps even larger to the extent that it leads to an erosion of data previously collected centrally to support fee-for-service billing. For example, if one wants to estimate resources devoted to ambulatory care, the fact that resources for hospital outpatient services are included in total hospital spending is a key gap in creating estimates of ambulatory spending. Capitated arrangements may make it more difficult to isolate spending on physicians, an issue of concern to those representing physicians, interested in how much is spent for their services. More generally, there is limited information that could be used to assess the effects of managed care on costs and how this may change over time, since neither costs nor characteristics of managed care are captured on any consistent, comprehensive, or timely basis. While this is a public policy issue, it is also of great concern to both providers or health plans with a stake in particular approaches, and to purchasers who want to “buy right.”

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