This study used 1982-1986 data on 262 private community hospitals to evaluate the effects of selective contracting for inpatient services by California's Medicaid program. Selective contracting by Medicaid significantly reduced the rate of inflation in average costs per admission and per patient day, while slightly increasing average lengths of patient stays. Private sector contracting also reduced cost inflation rates significantly and caused small, non-significant, reductions in lengths of stays. Hospital savings in 1986 due to Medicaid selective contracting were $836 million, 7.6% of what hospital expenditures would have been in the absence of contracting.

It is plausible that distance, quality, and hospital charges all influence which hospital patients (and their referring physicians) choose. Several researchers have estimated conditional choice models that explicitly incorporate the existence of competing hospitals. To be useful for hospital administrators, health planners and insurers, however, estimates must be made for specific types of patients and include entire market areas. Data sets meeting these requirements have many combinations of hospitals and locations with zero patients. This raises computational difficulties with the linear estimation techniques used previously. In this paper, we use data on patients undergoing cardiac catheterization in several market areas to assess alternative estimation techniques. First, we estimate the conditional choice model with the two techniques used previously to transform the non-linear choice model. These involve using as a reference (1) a single hospital, or (2) the geometric mean of all the hospitals in the market. When there are many zeros, these techniques require extensive adjustments to the data which may lead to biased estimators. We then compare these results with maximum likelihood estimates. The latter results are substantively and significantly different from those using traditional techniques. More importantly, the linear estimates are much more sensitive to the proportion of zeros. We thus conclude that maximum likelihood estimates are preferable when there are many zeros.

Technology assessment can lead to the rapid application of essential diagnostic technologies and prevent the wide diffusion of marginally useful methods. In both of these ways, it can increase quality of care and decrease the cost of health care. This comprehensive monograph carefully explores methods of and barriers to diagnostic technology assessment and describes both the rationale and the guidelines for meaningful evaluation. While proposing a multi-institutional approach, it emphasizes some of the problems involved and defines a mechanism for improving the evaluation and use of medical technology and essential resources needed to enhance patient care.

Most pesticide illnesses go untreated. Many are nor serious enough to require medical attention, others are not treated because agricultural workers lack access to health care. Additional analysis of physical report of occupational injuries and illnesses in California agriculture continues to rise. Only a fraction of these reports involve pesticides. Surveys of field workers indicate that there are many more pesticide illnesses than are reported by physicians. Most survey methods can report symptoms, but cannot confirm the incidence of illness. Some studies have found seasonal depression in the blood cholinesterase of field workers, but the physiological significance of such depression is uncertain.

Clinical tests and specific antidotes are needed to treat illnesses induced by pesticides other than cholinesterase inhibitors. The clinical significance of pesticide residues in human fluids and tissue has yet to be defined. Research is needed to standardize cholinesterase testing, and to find the means to assay the enzyme independent of its activity, so that baseline tests will not be needed. Research is needed on the neurotoxic effects of organophosphate insecticides, including the use of psychological tests and evaluation with EMG and EEG.

Field workers reentry standards are based on studies of foliar induced, and extrapolation forma few evaluation of human health effects. Research is needed to see if current standards are adequate, and to evaluate the risk assessment models used in setting reentry intervals. More research is needed to develop methods and equipment which better protect the pesticide applicator.

There are few studies which suggests that pesticides cause adverse long-term health effects in human populations, including cancer and birth defects. Such research is fraught with methodological difficulties. Research is needed to evaluate the new California program which is attempting to close the date gap of tests involving experimental animals.

Questions of equity and efficiency have always plagued our national health-care system. Not all the billions spent in this area go for actual restoration of health. Many of the expenditures are for various procedures, tests, prescriptions, etc., that may or may not be necessary. How can we determine the optimum system of health care? Fuchs thinks that the application of the principles of economics can help in arriving at the right mix of market competition, government regulation, and professional control. He also devotes special attention to the impact of the increasing number of programs in health education and promotion. A topical analysis, which should be required reading for policymakers. Recommended for academic and large public libraries. - M. Balachandran, Univ. of Illinois Lib., Urbana-Champaign