OBJECTIVE: To investigate recent national trends in nonsteroidal antiinflammatory drug (NSAID) and acetaminophen use for osteoarthritis (OA).

METHODS: Using data from the 1989-98 National Ambulatory Medical Care Survey, a representative sample of US office based physician visits, we assessed 4471 visits by patients 45 years or older with a diagnosis of OA. We examined cross sectional and longitudinal patterns of OA pharmacotherapy. The independent effects of patient and physician characteristics on NSAID and acetaminophen use were examined using multiple logistic regression analysis.

RESULTS: Pharmacological treatment for OA (either NSAID, acetaminophen, or both) has steadily decreased from 49% of visits (1989-91) to 46% (1992-94) to 40% (1995-98) (p = 0.001). Reduced NSAID use over this time period (46% to 33%; p = 0.001) was partially offset by a modest increase in acetaminophen use (5% to 10%; p = 0.001). Among individual NSAID, ibuprofen (5.7% of OA visits), nabumetone (4.9%), naproxen (4.6%), and aspirin (4.4%) were the most frequently reported in 1995-98. For patient visits in 1995-98, 45 to 59-year-olds (38%) received NSAID more often than 60 to 74-year-olds (34%) or patients older than 75 (28%; p = 0.029). Other possible predictors of OA therapy included patient race and physician specialty.

CONCLUSION: The decline in the use of NSAID from 1989 to 1998, especially among elderly patients, and the frequent selection of safer medications may reflect awareness of the literature citing the risks of nonsteroidals for OA. However, variations in prescribing patterns among different patient populations and the modest use of acetaminophen, despite evidence supporting its efficacy, suggest that better assimilation of the literature into medical practice is needed to optimize OA therapy.

PURPOSE: To determine if greater managed care market share is associated with greater use of recommended therapies for fee-for-service patients with acute myocardial infarction.

SUBJECTS AND METHODS: We examined the care of 112,900 fee-for-service Medicare beneficiaries aged > or = 65 years who resided in one of 320 metropolitan statistical areas and who were admitted with an acute myocardial infarction between February 1994 through July 1995. Use of recommended medical treatments and 30-day survival were determined for areas with low (<10%), medium (10% to 30%), and high (>30%) managed care market share.

RESULTS: After adjustment for severity of illness, teaching status of the admission hospital, and area characteristics, areas with high levels of managed care had greater use of beta-blockers (relative risk [RR] for greater use = 1.18; 95% confidence interval [CI]: 1.06 to 1.29) and aspirin at discharge (RR = 1.05; 95% CI: 1.02 to 1.07), but less appropriate coronary angiography (RR = 0.93; 95% CI: 0.86 to 1.01) and reperfusion (RR = 0.95; 95% CI: 0.85 to 1.03) when compared with areas with low levels of managed care.

CONCLUSIONS: Medicare beneficiaries with fee-for-service insurance who resided in areas with high managed care activity were more likely to have received appropriate treatment with beta-blockers and aspirin, and less likely to have undergone coronary angiography following admission for myocardial infarction. Thus, the effects of managed care may not be limited to managed care enrollees.

A holistic approach to the financial problems of the elderly focuses simultaneously on their expenditures that are self financed as well as those that are financed by transfers from the young (under age65). It also focuses simultaneously on paying for health care and paying for other goods and services. The income and health care expenditures not paid from personal income, provides a useful framework for empirical application of the holistic approach. In 1997, approximately 35 percent of the elderly's full income was devoted to health care; 65 percent to other goods and services. Approximately 56 percent of full income was provided by transfers from the young and 44 percent by the elderly themselves. The paper shows how these percentages might change under alternative assumptions about the growth of health care relative to other goods and services and the effect of these changes on the need for more saving and more work prior to retirement.

Because the optimal level of medical malpractice liability depends on the incentives provided by the health insurance system, the rise of managed care in the 1990s may affect the relationship between liability reform and defensive medicine. In this paper, we assess empirically the extent to which managed care and liability reform interact to affect the cost of care and health outcomes of elderly Medicare beneficiaries with cardiac illness. Malpractice reforms that directly reduce liability pressure - such as caps on damages - reduce defensive practices both in areas with low and with high levels of managed care enrollment. In addition, managed care and direct reforms do not have long-run interaction effects that are harmful to patient health. However, at least for patients with less severe cardiac illness, managed care and direct reforms are substitutes, so the reduction in defensive practices that can be achieved with direct reforms is smaller in areas with high managed care enrollment. We consider some implications of these results for the current debate over the appropriateness of extending malpractice liability to managed care organizations.

Medicare Reform - the first volume in a new series sponsored by the George Bush School of Government and Public Policy at Texas A&M University - tackles the current Medicare predicament head-on, delving into the fundamental issues surrounding the reorganization of the system: whether to allocate Medicare's growing financial load to current workers in the form of higher taxes, shift the onus to future generations, or shortchange both the expectations and care of present recipients by substantially cutting benefits. This volume assembles a group of the most highly respected analysts of health issues to consider the economic forces impacting the surging health care market.

Written for the general reader and offering innovative ideas for policy revision along with critical new data on health care economics, this comprehensive volume provides a timely and thoughtful deliberation on the precarious future of Medicare.

Available as NBER working paper 6642.