Steven Andes, PhD, CPA
Research Assistant and Professor at the University of Illinois at Chicago, Director of Physician Information and Research, American Osteopathic Association, Chicago, Ill.
Lawrence M. Metzger, PhD, CPA
Professor of Accounting, Loyola University Chicago, Chicago, Ill.
John Kralewski, PhD
Wallace Professor of Health Research and Policy, School of Public Health, University of Minnesota, Minneapolis, Minn.
David Gans, MSHA
Survey Operations Director, Medical Group Management Association, Englewood, Colo.


Purpose: Medical-group practices are becoming increasingly commonplace, with more than a third of licensed physicians in the United States currently working in this mode. While previous studies have focused on physician practices, little attention has been focused specifically on the contribution of internal organizational factors to overall physician practice efficiency. This paper develops a model to help determine best practices of efficient physician offices while allowing for choices between inputs. Measuring how efficient practices provide services yields useful information to help improve performance of less efficient practices.

Design: Data for this study were obtained from the 1999 Medical Group Management Association (MGMA) Cost Report. In this study, 115 primary care physician practices are analyzed. Outputs are defined as gross charges; inputs include square footage and medical, technical, and administrative support personnel.

Methodology: Data envelopment analysis (DEA) is used in this study to develop a model of practice outputs and inputs to help identify the most efficient medical groups. DEA is a linear programming technique that converts multiple input and output measures to a single comprehensive measure of efficiency. These practices are used as a reference set for comparisons with less efficient ones.

Conclusion: The overall results indicate that size of physician practice does not increase efficiency. There does not appear to be extensive substitution among inputs. Compared to other practices, efficient practices seem to manage each input well.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.