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.

Japanese and American economists assess the present economic status of the elderly in the United States and Japan, and consider the impact of an aging population on the economies of the two countries.

With essays on labor force participation and retirement, housing equity and the economic status of the elderly, budget implications of an aging population, and financing social security and health care in the 1990s, this volume covers a broad spectrum of issues related to the economics of aging. Among the book's findings are that workers are retiring at an increasingly earlier age in both countries and that, as the populations age, baby boomers in the United States will face diminishing financial resources as the ratio of retirees to workers sharply increases.

President Clinton's Health Security Act relies on government regulation, not market forces, to control costs. The act creates an entitlement to comprehensive benefits and places the federal budget at risk for total health care costs in order to achieve universal coverage; it creates a system of new state purchasing monopsonies; and it attempts to control costs with price controls on health plan premiums, set and administered by a National Health Board that would be part of the executive branch, not insulated from political considerations. We believe there is a better way.

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.