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Physician and clinic charges for diagnosing growth hormone deficiency
SESSION V: DECISIONS REGARDING THE USE OF GROWTH HORMONE THERAPY: DIAGNOSIS AND TREATMENT Presented at the National Cooperative Growth Study Ninth Annual Investigators Meeting, supported by an educational grant from Genentech, Inc.
Physician and clinic charges for diagnosing growth hormone deficiency John Kirkland, MD, Paul Saenger, MD,a Margaret MacGillivray, MD, Stephen LaFranchi, MD,b and Robert Rosenfield, MD From the Departments of Pediatrics, Baylor College of Medicine, Houston, Texas,Albert Einstein College of Medicine, Bronx, New York, Children's Hospital of Buffalo, New York, Oregon Health Sciences University, Port!and, and University of Chicago, Illinois
Physician and clinic charges for diagnosing growth hormone deficiency (GHD) in children are not generally known, whereas the charges for purchasing growth hormone (GH) are known. We recently surveyed the charges submitted to thirdparty payers for diagnosing GHD in five pediatric endocrine clinics throughout the United States: the Albert Einstein College of Medicine, Baylor College of Medicine, Health Science Schools of the State University of New York at Buffalo, Oregon Health Sciences University, and the University of Chicago. The financial data analyzed included charges for physician services and for GH testing. Different approaches to the medical examination of children with suspected GHD at these clinics prevented any comparison of physician or GH testing charges. However, the charges for diagnosing GHD could be determined for each pediatric endocrine clinic if the methods of examination were not considered. Contractual adjustments, net revenues, costs, and net margins were not surveyed. Subjective comments from the study sites suggest significantly reduced reimbursement amounts. We conclude that the total charges for diagnosing GHD submitted to third-party payers at these institutionsaveraged $1719. (J Pediatr 1996; 12B:$61-2)
Most children with growth failure resulting from growth hormone deficiency respond to growth hormone treatment with excellent results. The financial impact of GH treatment on the health care budget is a function of the costs of GH and of physician and hospital services. The cost of GH is known to the health care industry because pharmaceutical companies report details of their sales and earnings. The costs of
physician and hospital services are not known for several reasons, a primary one being federal regulations regarding antitrust laws. These guidelines, which are enforced by the Department of Justice and the Federal Trade Commission, strictly regulate fee-related information and price and cost surveys.1 Another reason these costs are not known is the GH GIlD
Reprint requests: John Kirkland, MD, Department of Pediatrics, Baylor College of Medicine, One Baylor Plaza, Houston, TX 77030. aPaul Saenger, MD, is the recipient o f a research grant from Genentech, Inc. bStephen LaFranchi, MD, is a Clinical Investigator for Genentech, Inc. Copyright © 1996 by Mosby-Year Book, Inc. 0022-3476/96/$5.00 + 0 9/0/72336
1 |
Growthhormone Growthhormone deficiency
J
proprietary nature of physician and hospital charges, which is promulgated by both physicians and hospital administrators. The lack of knowledge about the charges for examining children with suspected GHD prompted us to determine the mean charges at pediatric endocrine clinics in six academic centers in the United States. Distinct contractual agreements between payers and institutions plus differences
$61
S62
Kirkland et al.
The Journal of Pediatrics May 1996
2500] 2025
20004
[]
Physician
•
Growth hormone testing 1719
#=~ v
¢"
o
1500
1000
500
0
A
B
C
D
E
Mean
Institution
Figure. Total physician and GH testing charges. Physician charges are for an initial visit and any follow-up visits required for the examination of a child in whom GHD is suspected. GH testing charges include those for equipment and supplies. in fixed and variable costs hindered our efforts to determine margin revenues or costs. MATERIAL
AND METHODS
A financial spreadsheet sent to six institutions for completion enabled data accumulation and analysis. One of the six institutions did not respond. The spreadsheet had two parts, each of which assumed the most likely clinical pathway at each clinic for a child in whom short stature resulting from GHD was suspected. The first part requested the physician charges for an initial examination and follow-up visits. The second part requested information about the charges for GH testing, including those for equipment, supplies, drugs, nursing charges, and facility fees, as well as physician charges for attendance and interpretation. The lack of uniformity both in the levels of physician services and in the testing methods used at each institution prevented a comparison of specific charges but did not prevent a calculation of the total charges for diagnosing GHD. Each institution was labeled as A through E to ensure confidentiality. RESULTS The physician charges and the charges made by physicians and clinics for GH testing at each institution are shown in the Figure. The charges made by the physicians for the clinical examination of a child in whom short stature resulting from GHD is suspected ranged from $335 to $537 (mean: $453), and the charges for GH testing ranged from $793 to $1545 (mean: $1266). The total charges ranged from $1221 to $2025, with a mean of $1719.
DISCUSSION Information about physician and clinic charges for evaluating a specific medical problem is difficult to obtain and analyze. Federal law prohibits collection and distribution of certain fee-related information. Institutional and clinic selfinterest may prevent the publication of this financial informarion. Difficulty in analyzing the data arises from the lack of consistent medical standards for the examination of children in whom GHD is suspected. However, it is likely that the health care insurance industry has this financial information, because it frequently reduces payments on the basis of percentiles of other physician and clinic charges. The physicians in this study noted significantly reduced payments by third-party payers, The amount of these reductions was not determined in this study. Physicians must become more knowledgeable about financial information as it becomes more likely that cost and benefit analyses by nonmedical personnel will direct the future of health care for children. For example, the magnitude of the range of the costs reported in this study might indicate inappropriate medical decisions to a cost analyst, but not to a physician. Future studies performed with physician participation should analyze financial data, including reimbursement patterns, so that pertinent medical information is included in cost and benefit proclamations. REFERENCE
1. Antitrust implications of endocrinologists' responses to managed care. Washington, DC: Hogan & Hartson LLP, 1995.
Physician and clinic charges for diagnosing growth hormone deficiency John Kirkland, MD, Paul Saenger, MD,a Margaret MacGillivray, MD, Stephen LaFranchi, MD,b and Robert Rosenfield, MD From the Departments of Pediatrics, Baylor College of Medicine, Houston, Texas,Albert Einstein College of Medicine, Bronx, New York, Children's Hospital of Buffalo, New York, Oregon Health Sciences University, Port!and, and University of Chicago, Illinois
Physician and clinic charges for diagnosing growth hormone deficiency (GHD) in children are not generally known, whereas the charges for purchasing growth hormone (GH) are known. We recently surveyed the charges submitted to thirdparty payers for diagnosing GHD in five pediatric endocrine clinics throughout the United States: the Albert Einstein College of Medicine, Baylor College of Medicine, Health Science Schools of the State University of New York at Buffalo, Oregon Health Sciences University, and the University of Chicago. The financial data analyzed included charges for physician services and for GH testing. Different approaches to the medical examination of children with suspected GHD at these clinics prevented any comparison of physician or GH testing charges. However, the charges for diagnosing GHD could be determined for each pediatric endocrine clinic if the methods of examination were not considered. Contractual adjustments, net revenues, costs, and net margins were not surveyed. Subjective comments from the study sites suggest significantly reduced reimbursement amounts. We conclude that the total charges for diagnosing GHD submitted to third-party payers at these institutionsaveraged $1719. (J Pediatr 1996; 12B:$61-2)
Most children with growth failure resulting from growth hormone deficiency respond to growth hormone treatment with excellent results. The financial impact of GH treatment on the health care budget is a function of the costs of GH and of physician and hospital services. The cost of GH is known to the health care industry because pharmaceutical companies report details of their sales and earnings. The costs of
physician and hospital services are not known for several reasons, a primary one being federal regulations regarding antitrust laws. These guidelines, which are enforced by the Department of Justice and the Federal Trade Commission, strictly regulate fee-related information and price and cost surveys.1 Another reason these costs are not known is the GH GIlD
Reprint requests: John Kirkland, MD, Department of Pediatrics, Baylor College of Medicine, One Baylor Plaza, Houston, TX 77030. aPaul Saenger, MD, is the recipient o f a research grant from Genentech, Inc. bStephen LaFranchi, MD, is a Clinical Investigator for Genentech, Inc. Copyright © 1996 by Mosby-Year Book, Inc. 0022-3476/96/$5.00 + 0 9/0/72336
1 |
Growthhormone Growthhormone deficiency
J
proprietary nature of physician and hospital charges, which is promulgated by both physicians and hospital administrators. The lack of knowledge about the charges for examining children with suspected GHD prompted us to determine the mean charges at pediatric endocrine clinics in six academic centers in the United States. Distinct contractual agreements between payers and institutions plus differences
$61
S62
Kirkland et al.
The Journal of Pediatrics May 1996
2500] 2025
20004
[]
Physician
•
Growth hormone testing 1719
#=~ v
¢"
o
1500
1000
500
0
A
B
C
D
E
Mean
Institution
Figure. Total physician and GH testing charges. Physician charges are for an initial visit and any follow-up visits required for the examination of a child in whom GHD is suspected. GH testing charges include those for equipment and supplies. in fixed and variable costs hindered our efforts to determine margin revenues or costs. MATERIAL
AND METHODS
A financial spreadsheet sent to six institutions for completion enabled data accumulation and analysis. One of the six institutions did not respond. The spreadsheet had two parts, each of which assumed the most likely clinical pathway at each clinic for a child in whom short stature resulting from GHD was suspected. The first part requested the physician charges for an initial examination and follow-up visits. The second part requested information about the charges for GH testing, including those for equipment, supplies, drugs, nursing charges, and facility fees, as well as physician charges for attendance and interpretation. The lack of uniformity both in the levels of physician services and in the testing methods used at each institution prevented a comparison of specific charges but did not prevent a calculation of the total charges for diagnosing GHD. Each institution was labeled as A through E to ensure confidentiality. RESULTS The physician charges and the charges made by physicians and clinics for GH testing at each institution are shown in the Figure. The charges made by the physicians for the clinical examination of a child in whom short stature resulting from GHD is suspected ranged from $335 to $537 (mean: $453), and the charges for GH testing ranged from $793 to $1545 (mean: $1266). The total charges ranged from $1221 to $2025, with a mean of $1719.
DISCUSSION Information about physician and clinic charges for evaluating a specific medical problem is difficult to obtain and analyze. Federal law prohibits collection and distribution of certain fee-related information. Institutional and clinic selfinterest may prevent the publication of this financial informarion. Difficulty in analyzing the data arises from the lack of consistent medical standards for the examination of children in whom GHD is suspected. However, it is likely that the health care insurance industry has this financial information, because it frequently reduces payments on the basis of percentiles of other physician and clinic charges. The physicians in this study noted significantly reduced payments by third-party payers, The amount of these reductions was not determined in this study. Physicians must become more knowledgeable about financial information as it becomes more likely that cost and benefit analyses by nonmedical personnel will direct the future of health care for children. For example, the magnitude of the range of the costs reported in this study might indicate inappropriate medical decisions to a cost analyst, but not to a physician. Future studies performed with physician participation should analyze financial data, including reimbursement patterns, so that pertinent medical information is included in cost and benefit proclamations. REFERENCE
1. Antitrust implications of endocrinologists' responses to managed care. Washington, DC: Hogan & Hartson LLP, 1995.