With the backlash against managed care, medical necessity has become the focus of increasing controversy. California's health care marketplace has provided some unique opportunities to understand the role of medical necessity in managed care decisionmaking, as the legislature and stakeholders have discovered how little consensus there is on itsmeaning, ownership, and application. Nevertheless , many decisionmakers agree that medical necessity decisions generally involve authorizing treatment for an individual patient. These differ from coverage decisions, which set organizational policies regarding the coverage of treatments for populations of patients with similar conditions. Both types of decisions require medical judgment, and thus both mix considerations of payment and clinical factors.3 Differences in coverage policies and in the application of those policies to individual decisions contribute to variation in managed care decision making.

Previous research has found considerable variation in the process and criteria used for decision making in both public and private plans. The aim of our research was to understand more precisely what type of variation exists and whether more clarity and consistency in medical necessity decision making could make a difference to consumers and providers. We sought to document differences in decision-making criteria and to explain the relationship between contractual definitions and the way decisions are made in practice. Given the lack of existing information on how medical necessity decisions are made in managed care organizations, we believed that describing "best practices" as well as unacceptable variations could play a powerful role, along with consumer choice and regulatory fiat, in improving the process. Finally, we sought to produce, with stakeholders' involvement, a model contractual definition and decision-making process based on best-practices models.

Lengthy travel distances may explain why relatively few veterans in the United States use VA hospitals for inpatient medical/surgical care. We used two approaches to distinguish the effect of distance on VA use from other factors such as access to alternatives and veterans' characteristics. The first approach describes how disparities in travel distance to the VA are related to other characteristics of geographic areas. The second approach involved a multivariate analysis of VA use in postal zip code areas (ZCAs). We used several sources of data to estimate the number of veterans who had priority access to the VA so that use rates could be estimated. Access to hospitals was characterized by estimated travel distance to inpatient providers that typically serve each ZCA. The results demonstrate that travel distance to the VA is variable, with veterans in rural areas traveling much farther for VA care than veterans in areas of high population density. However, Medicare recipients also travel farther in areas of low population density. In some areas veterans must travel lengthy distances for VA care because VA hospitals which were built over the past few decades are not located close to areas in which veterans reside in the 1990s. The disparities in travel distance suggest inequitable access to the VA. Use of the VA decreases with increases in travel distance only up to about 15 miles, after which use is relatively insensitive to further increases in distance. The multivariate analyses indicate that those over 65 are less sensitive to distance than younger veterans, even though those over 65 are Medicare eligible and therefore have inexpensive access to alternatives. The results suggest that proximity to a VA hospital is only one of many factors determining VA use. Further research is indicated to develop an appropriate response to the needs of the small but apparently dedicated group of VA users who are traveling very long distances to obtain VA care.

Few large institutions have changed as fully and dramatically as the U.S. healthcare system since World War II. Compared to the 1930s, healthcare now incorporates a variety of new technologies, service-delivery arrangements, financing mechanisms, and underlying sets of organizing principles.

This book examines the transformations that have occurred in medical care systems in the San Francisco Bay area since 1945. The authors describe these changes in detail and relate them to both the sociodemographic trends in the Bay Area and to shifts in regulatory systems and policy environments at local, state, and national levels. But this is more than a social history; the authors employ a variety of theoretical perspectives - including strategic management, population ecology, and institutional theory - to examine five types of healthcare organizations through quantitative data analysis and illustrative case studies.

Providing a thorough account of changes for one of the nation's leading metropolitan areas in health service innovation, this book is a landmark in the theory of organizations and in the history of healthcare systems.

This book received the Max Weber Award from the American Sociological Association, Section on Organizations, Occupations and Work for best scholarly book in 2001

The 35 chapters of The Handbook of Health Economics provide an up-to-date survey of the burgeoning literature in health economics. As a relatively recent subdiscipline of economics, health economics has been remarkably successful. It has made or stimulated numerous contributions to various areas of the main discipline: the theory of human capital; the economics of insurance; principal-agent theory; asymmetric information; econometrics; the theory of incomplete markets; and the foundations of welfare economics, among others. Perhaps it has had an even greater effect outside the field of economics, introducing terms such as opportunity cost, elasticity, the margin, and the production function into medical parlance. Indeed, health economists are likely to be as heavily cited in the clinical as in the economics literature. Partly because of the large share of public resources that health care commands in almost every developed country, health policy is often a contentious and visible issue; elections have sometimes turned on issues of health policy. Showing the versatility of economic theory, health economics and health economists have usually been part of policy debates, despite the vast differences in medical care institutions across countries. The publication of the first Handbook of Health Economics marks another step in the evolution of health economics.

In recent years, the hospital industry has been undergoing massive change and reorganization with technological innovations and the spread of managed care. As a result, the total number of hospitals countrywide has been declining, and a growing number of not-for-profit hospitals have converted to for-profit status. These changes raise two fundamental questions: What determines a hospital's choice of for-profit or not-for-profit organizational form? And how does that form affect patients and society?

This timely volume provides a factual basis for discussing for-profit versus not-for-profit ownership of hospitals and gives a first look at the evidence about new and important issues in the hospital industry. The Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions will have significant implications for public-policy reforms in this vital industry and will be of great interest to scholars in the fields of health economics, public finance, hospital organization, and management; and to health services researchers.

In recent years, the hospital industry has been undergoing massive change and reorganization with technological innovations and the spread of managed care. As a result, the total number of hospitals countrywide has been declining, and a growing number of not-for-profit hospitals have converted to for-profit status. These changes raise two fundamental questions: What determines a hospital's choice of for-profit or not-for-profit organizational form? And how does that form affect patients and society?

This timely volume provides a factual basis for discussing for-profit versus not-for-profit ownership of hospitals and gives a first look at the evidence about new and important issues in the hospital industry. iThe Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions will have significant implications for public-policy reforms in this vital industry and will be of great interest to scholars in the fields of health economics, public finance, hospital organization, and management; and to health services researchers.

To understand "managed care," one needs to understand the traditional model of health care organization and finance that managed care was intended to replace. That model was aptly characterized "Guild Free Choice" by Charles Weller to indicate that "free choice" was being used as a restraint of trade to block the emergence of any form of economic competition among doctors. Its principles were: "Free choice of doctor at all times;" "free choice of treatment, i.e. nobody 'interferes with the doctor's decisions and recommendations;'" "fee for service payment;" "direct doctor-patient negotiation of fees;" and "solo (or small single-specialty group) practice." The model was widely accepted because of the pre-Wennberg view of most people that "the medical care they receive [is] a necessity provided by doctors who adhere to scientific norms based on previously tested and proven treatments." In combination with well-insured patients, there was no way that employers or insurers could control health spending in this model. Organized medicine is still fighting to hold on to parts of it. Some people say that managed care is "anything other than Guild Free Choice."