Patterns of care and expenditures by California Medicaid for peptic ulcer and other acid-related diseases.

We examined California Medicaid (Medi-Cal) service use and expenditures for peptic ulcer and other acid-related diseases during the 10-year period fiscal year (FY) 1976-1985. Between FY 1976 and FY 1980, hospitalizations rose irregularly, operations declined by 37%, endoscopies tripled, physician visits fluctuated from year to year, antacid prescriptions increased by 36%, and anticholinergic medication use was stable. From FY 1981 to FY 1985, hospitalizations declined by 52%, operations by 91%, endoscopies by 45%, physician visits by 30%, antacid use by 12%, and anticholinergic medication use by 48%. H2 antagonists were allowed onto Medi-Cal formulary near the end of FY 1980, and use rose sharply through 1985. Similar results were found across specific gastrointestinal (GI) diagnoses. Total payments for acid-related conditions were essentially stable during FY 1976-1980 period, although, for individual services, utilization and expenditures did not always move in the same direction. For example, declining operations rates and stable expenditures were found. However, during FY 1981-85, changes in rates of service use were generally matched by similar changes in total expenses for that service. For example, the 40% reduction in rate of endoscopies was accompanied by a near 50% decline in payments. Overall expenditures for all acid-related diagnoses fell by nearly 28% between 1981 and 1985. We concluded that the introduction of H2 antagonists had important positive clinical effects on all studied acid-related GI diagnoses.