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.

The purpose of the Handbook is to provide systematic overview of medical and health informatics for health care professionals and for students in medicine and health care, who will be the clinical professionals of the next millennium. Health care professionals will use computers to support patient care, assess the quality of care, and enhance decision making, management, planning, and medical research. Computer-based patient records and electronic communications will be the most visible developments in the years ahead. The Handbook has been written by a host of renowned international authorities in medical and health informatics. The editors took much care that the Handbook would not be merely a collection of separate chapters, but rather would offer a consistent and structured overview.

To what extent do employers subsidize the difference in prices among the insurance plans they offer their employees?

When employers offer multiple health plans at little or no cost to employees, what incentive do the employees have to select a less expensive plan? Economists have long contended that employers subsidize inefficiency when they contribute more for higher-cost health insurance plans than for lower-cost plans. These economists contend that such subsidies remove pressure on health plans and providers to maximize efficiency.Missing from these arguments have been data documenting the experience of employers that subsidize and do not subsidize the price of higher-cost plans.

Using data on the employer-sponsored health benefits of large firms, we examine the practice of paying more for more-expensive health plans in the United States. We also contrast premium growth among employers that engage in this practice. Although our data are not definitive on the question of whether employers subsidize inefficiency when they contribute more to higher-cost plans, they do provide a useful first step in analyzing health plan subsidization at the employer level.

This paper first describes our data and the incentive ratio, a tool developed to measure the extent to which an employer subsidizes the difference in prices among its health plans. Using the incentive ratio, we evaluate the scope of employer subsidies for higher-cost plans in the United States, and we analyze changes in a firm's overall health care costs based on whether an employer pays more for more-expensive health plans. Finally, we discuss policy implications based on our findings and provide an outline for further research.

An emerging solution to health care market failures involves a mix of federal/state regulation and private purchaser initiatives.

Market forces play an essential role in the regulation of managed care, the service that combines health insurance and health care delivery. Markets have successfully reduced overall health care costs and maintained quality, but because of the special characteristics of the market for managed care, market forces alone fail to produce an efficient and equitable allocation of health care resources. Collective action is needed.

This paper outlines the roles of market forces and collective action in a high-quality and tolerably (if not optimally) efficient and equitable health care system. A blend of market forces and collective action, including government action, is necessary for a good outcome, although where possible and practical, private-sector collective action is preferable. Of course, there is a great deal of government action in health care, and this paper is not a call for more. Rather, it attempts to clarify the kinds of collective action that are needed to correct market failures.

We investigate the effect of managed care on the health care system, focusing on the effects managed care could have on the number and types of health care providers and their efficiency. By influencing providers, managed care may change the structure and performance of the entire health care system in ways that influence care provided to all patients. We begin by discussing the mechanisms by which managed care influences health care providers, concentrating on shifts in market demand and increases in the amount of attention paid to price in provider choices. We develop a theoretical framework that illustrates these effects. We then empirically examine the relationship between managed care activity and mammography providers. We find evidence that increases in HMO activity are associated with changes in the number of providers, the volume of services produced by each provider, and the prices they charge. This evidence is consistent with the view that HMOs can have broad effects on health care providers.

This volume presents innovative research on issues of importance to the well-being of older persons: labor market behavior, health care, housing and living arrangements, and saving and wealth.

Specific topics include the effect of labor market rigidities on the employment of older workers; the effect on retirement of the availability of continuation coverage benefits; and the influence of the prospective payment system (PPS) on rising Medicare costs. Also considered are the effects of health and wealth on living arrangement decisions; the incentive effects of employer-provided pension plans; the degree of substitution between 401(k) plans and other employer-provided retirement saving arrangements; and the extent to which housing wealth determines how much the elderly save and consume.

Two final studies use simulations that describe the implications of stylized economic models of behavior among the elderly. This timely volume will be of interest to anyone concerned with the economics of aging.

Urinary incontinence affects 10 million elderly and is estimated to cost more than $10 billion annually. Treatments for this conditions vary widely in efficacy and cost. Using the Agency for Health Care Policy and Research urinary incontinence guideline, we calculated expected costs for three recommended treatments for stress urinary incontinence in elderly women: (1) behavioral therapy, (2) pharmacologic therapy, and (3) surgical therapy. We constructed decision trees for each treatment option and incorporated treatment efficacy rates stated in the guideline. Costs were determined from the literature.

Using a Markov cohort simulation, 10-year expected costs per patient, in 1994 dollars, were lowest for surgical therapies and were highest for behavioral therapy (needle suspension surgery, $25,388; phenlypropanolamine and estrogen, $62,021; and behavioral therapy, $68,924). All treatment strategies were less costly than that of untreated incontinence ($86,726). Sensitivity analysis revealed that the results were highly affected by the likelihood of the patient's entering a nursing home, the cost of nursing home care, and the long-term relapse rate after surgery.

In conclusion, on the basis of data from the urinary incontinence guideline, early surgical intervention is the least costly treatment for chronic stress incontinence in elderly women. Because the long-term effectiveness of most incontinence surgeries is uncertain, additional studies are necessary to substantiate these findings.