INTRODUCTION: Many surgical suites allocate operating room (OR) block time to individual surgeons. If block time is allocated to services/groups and yet the same surgeon invariably operates on the same weekday, for all practical purposes block time is being allocated to individual surgeons. Organizational conflict occurs when a surgeon with a relatively low OR utilization has his or her allocated block time reduced. The authors studied potential limitations affecting whether a facility can accurately estimate the average block time utilizations of individual surgeons performing low volumes of cases. METHODS: Discrete-event computer simulation. RESULTS: Neither 3 months nor 1 yr of historical data were enough to be able to identify surgeons who had persistently low average OR utilizations. For example, with 3 months of data, the widths of the 95% CIs for average OR utilization exceeded 10% for surgeons who had average raw utilizations of 83% or less. If during a 3-month period a surgeon's measured adjusted utilization is 65%, there is a 95% chance that the surgeon's average adjusted utilization is as low as 38% or as high as 83%. If two surgeons have measured adjusted utilizations of 65% and 80%, respectively, there is a 16% chance that they have the same average adjusted utilization. Average OR utilization can be estimated more precisely for surgeons performing more cases each week. CONCLUSIONS: Average OR utilization probably cannot be estimated precisely for low-volume surgeons based on 3 months or 1 yr of historical OR utilization data. The authors recommend that at surgical suites trying to allocate OR time to individual low-volume surgeons, OR allocations be based on criteria other than only OR utilization (e.g., based on OR efficiency).

Previous research suggests that "direct" reforms to the liability system - reforms designed to reduce the level of compensation to potential claimants - reduce medical expenditures without important consequences for patient health outcomes. We extend this research by identifying the mechanisms through which reforms affect the behavior of health care providers. Although we find that direct reforms improve medical productivity primarily by reducing malpractice claims rates and compensation conditional on a claim, our results suggest that other policies that reduce the time spent and the amount of conflict involved in defending against a claim can also reduce defensive practices substantially. In addition, we find that "malpractice pressure" has a larger impact on diagnostic rather than therapeutic treatment decisions. Our results provide an empirical foundation for simulating the effects of untried malpractice reforms on health care costs and outcomes, based on their predicted effects on the malpractice pressure facing medical providers.

Medical Necessity was not a problematic issue when remote third party payers rarely challenged physicians' decisions and reimbursed physicians for whatever procedures they chose to order and perform. Over the past several decades, the term medical necessity has served as an innocuous placeholder, enabling insurance plans and physicians to make judgments about coverage that were usually unchallenged. The fact that individual physicians practiced differently and that some practice variation may be inappropriate was revealed by the path breaking work of John Wennberg, MD and colleagues at Dartmouth Medical School. Awareness of these differences, combined with rising costs, drew attention to the way decisions were being made. Until recently, neither consumers nor their physicians were fully aware of the power of the term medical necessity to deny care. The idiosyncratic way that coverage decisions are made in health care organizations has led to variation that creates inequity for consumers, greater cause for appeal of denials, and more litigation.

The California HealthCare Foundation funded research at Stanford University's Center for Health Policy to help clarify the coverage decision making process and to identify variation in the way medical necessity is defined and used in making coverage decisions in California. This information was intended to help promote greater clarity and consistency in decision making and to reduce conflict and litigation.

This book presents cutting edge thinking on the management of health care organizations. Practical and conceptual skills are taught to help students focus on more efficient health care delivery. Also covered is development of leadership skills, future trends in health care management, guidelines for designing effective work groups and a section on managing conflict.

We develop a model of imperfectly competitive insurers that compete with HMOs for consumers who have private information about their health status. We illustrate two conflicting effects of increasing HMO activity on conventional insurance premiums. We term these effects market discipline - HMO competition may limit the ability of insurers to exercise market power, thus driving prices down - and market segmentation - HMOs may skim the healthiest patients, thus driving insurers' costs and prices up. We empirically examine the relative importance of these effects using data from a firm-level survey that provides data on premiums, together with market-level measures of HMO activity. Our results suggest that the market segmentation effect is important, and that increases in HMO activity may increase insurance premiums.