Wednesday, March 10, 2010
Bill of Health
Meng Li, Jeffrey Vietri, Alison Galvani & Gretchen Chapman
Psychological Science, forthcoming
Abstract:
Who should be saved when health resources are limited? Although bioethicists and policymakers continue to debate which metric should be used to evaluate health interventions, public policy is also subject to public opinion. We investigated how the public values life when evaluating vaccine‐allocation policies during a flu epidemic. We found that people's ratings of the acceptability of policies were dramatically influenced by question framing. When policies were described in terms of lives saved, people judged them on the basis of the number of life years gained. In contrast, when the policies were described in terms of lives lost, people considered the age of the policy's beneficiaries, taking into account the number of years lived to prioritize young targets for the health intervention. In addition, young targets were judged as more valuable in general, but young participants valued young targets even more than older participants did.
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Health Spending Projections Through 2019: The Recession's Impact Continues
Christopher Truffer, Sean Keehan, Sheila Smith, Jonathan Cylus, Andrea Sisko, John Poisal, Joseph Lizonitz & Kent Clemens
Health Affairs, March 2010, Pages 522-529
Abstract:
The economic recession and rising unemployment-plus changing demographics and baby boomers aging into Medicare-are among the factors expected to influence health spending during 2009-2019. In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent-the largest single-year increase since 1960. Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.
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Douglas Almond, Janet Currie & Emilia Simeonova
NBER Working Paper, March 2010
Abstract:
This paper explores the consequences of the expiration of charity care requirements imposed on private hospitals by the Hill-Burton Act. We examine delivery care and the health of newborns using the universe of Florida births from 1989-2003 combined with hospital data from the American Hospital Association. We find that charity care requirements were binding on hospitals, but that private hospitals under obligation "cream skimmed" the least risky maternity patients. Conditional on patient characteristics, they provided less intensive maternity services but without compromising patient health. When obligations expired, private hospitals quickly reduced their charity caseloads, shifting maternity patients to public hospitals. There they received more intensive services, but did not experience improvements in health. These results suggest that public hospitals provided services less efficiently than private hospitals constrained to provide charity care.
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Attribute framing affects the perceived fairness of health care allocation principles
Eyal Gamliel & Eyal Peer
Judgment and Decision Making, February 2010, Pages 11-20
Abstract:
Health care resource allocation is a central moral issue in health policy, and opinions about it have been studied extensively. Allocation situations have typically been described and presented in a positive manner (i.e., who should receive medical aid). On the other hand, the negative valence allocation situation (i.e., who should not receive medical aid) has been relatively neglected. This paper demonstrates how positive versus negative framing of the exact same health care resource allocation situation can affect the perceived fairness of allocation principles. Participants usually perceived non-egalitarian principles (i.e., need, equity and tenure) to be fairer in positively framed situations (i.e., to deliver health care resources to certain patients) than negatively framed situation (i.e., not to deliver health care resources to other patients). However, framing did not affect the perceived fairness of the equality principle (i.e., a random draw). The paper offers a theoretical explanation for the effect of framing on the perceived fairness of heath care resource allocation and discusses implications for both researchers and policy makers.
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Prices Don't Drive Regional Medicare Spending Variations
Daniel Gottlieb, Weiping Zhou, Yunjie Song, Kathryn Gilman Andrews, Jonathan Skinner & Jason Sutherland
Health Affairs, March 2010, Pages 537-543
Abstract:
Per capita Medicare spending is more than twice as high in New York City and Miami than in places like Salem, Oregon. How much of these differences can be explained by Medicare's paying more to compensate for the higher cost of goods and services in such areas? To answer this question, we analyzed Medicare spending after adjusting for local price differences in 306 Hospital Referral Regions. The price-adjustment analysis resulted in less variation in what Medicare pays regionally, but not much. The findings suggest that utilization-not local price differences-drives Medicare regional payment variations, along with special payments for medical education and care for the poor.
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Leemore Dafny, Katherine Ho & Mauricio Varela
NBER Working Paper, January 2010
Abstract:
Most non-elderly Americans purchase insurance through their employers, which sponsor a limited number of plans. We estimate how much employees would be willing to pay for the right to apply their employer subsidy to the plan of their choosing. We make use of a proprietary dataset containing information on plan offerings and enrollment for 800+ large employers between 1998 and 2006; the dataset represents over 10 million Americans annually. We estimate a model of employee preferences using the set of plans they are offered. Using the estimated parameters from this model, we predict employees' choices in a hypothetical world in which additional plans in a market are available to them on the same terms, i.e. tax-free and subsidized by their employers. Holding employer outlays constant, we estimate that the median welfare gain from expanding choice amounts to roughly 20 percent of premiums. For the vast majority of employee groups and alternative model specifications, the gains from choice are likely to outweigh potential premium increases associated with a transition from large group to individual pricing.
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Melissa Boyle & Joanna Lahey
Journal of Public Economics, forthcoming
Abstract:
This paper exploits a major mid-1990s expansion in the U.S. Department of Veterans Affairs health care system to provide evidence on the labor market effects of expanding health insurance availability. Using data from the Current Population Survey, we employ a difference-in-differences strategy to compare the labor market behavior of older veterans and non-veterans before and after the VA health benefits expansion to test the impact of public health insurance on labor supply. We find that older workers are significantly more likely to decrease work both on the extensive and intensive margins after receiving access to non-employer based insurance. Workers with some college education or a college degree are more likely to transition into self-employment, a result consistent with "job-lock" effects. However, less-educated workers are more likely to leave self-employment, a result suggesting that the positive income effect from receiving public insurance dominates the "job-lock" effect for these workers. Some relatively disadvantaged sub-populations may also increase their labor supply after gaining greater access to public insurance, consistent with complementary positive health effects of health care access or decreased work disincentives for these groups. We conclude that this reform has affected employment and retirement decisions, and suggest that future moves toward universal coverage or expansions of Medicare are likely to have significant labor market effects.
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Institutional Feedback and Support for the Welfare State: The Case of National Health Care
Jason Jordan
Comparative Political Studies, forthcoming
Abstract:
Researchers interested in the political consequences of the welfare state argue that cross-country variations in the design of social policy institutions produce distinct patterns of public support for the welfare state. This research proposes an institutional feedback effect in which welfare institutions, once created, transform political debate, generate new constituencies, and alter how individuals and interest groups interpret their preferences. Existing research has found mixed results for these proposed institutional feedback effects on public opinion. This project contributes to research on institutional feedback through an analysis of cross-national variation in public support for national health care. National health care provides a unique opportunity for studying institutional feedback by avoiding problems with the measurement of key variables common to previous work in this area. This research offers evidence in support of institutional feedback effects by demonstrating links between the structure of health care institutions and public attitudes.
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Medicare Part D and the Financial Protection of the Elderly
Gary Engelhardt & Jonathan Gruber
Syracuse University Working Paper, October 2009
Abstract:
We examine the impact of the expansion of public prescription prescription-drug insurance coverage from Medicare Part D has had on the elderly and find evidence of substantial crowd-out. Using detailed data from the 2002-6 waves of the Medical Expenditure Panel Survey (MEPS), we estimate that the extension of Part D benefits resulted in 75% crowd-out of prescription drug insurance coverage and 33%-50% crowd-out of prescription drug expenditures of those 65 and older. Part D is associated with relatively small reductions in out-of-pocket spending. This suggests that the welfare gain from protecting the elderly from out-of-pocket spending risk through Part D has been small.
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Has the influence of managed care waned? Evidence from the market for physician services
Hai Fang & John Rizzo
International Journal of Health Care Finance and Economics, March 2010, Pages 85-103
Abstract:
Managed care has been the dominant organization of health care coverage in the United States, and seeks to achieve cost control by constraining services. The restrictive practices of managed care organizations have been widely criticized and the role of managed care in constraining health care services may be declining. Physician behavior is also believed to be influenced by the practices of managed care organization. This study examines the evolving nature of managed care and its restrictive effects on the provision of physician services. Physicians can choose whether and to what extent they are involved in managed care, so it is an endogenous decision. We employ instrumental variables method to correct for this endogeneity. Using data from the Community Tracking Study physician surveys from 2000-2001 and 2004-2005, we find that managed care organizations have became relatively less restrictive over time in terms of limiting the provision of physician services, compared to non-managed care organizations. These results suggest that managed care and non-managed care are converging in their effects on the provision of physician services.
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Evidence That Value-Based Insurance Can Be Effective
Michael Chernew, Iver Juster, Mayur Shah, Arnold Wegh, Stephen Rosenberg, Allison Rosen, Michael Sokol, Kristina Yu-Isenberg & Mark Fendrick
Health Affairs, March 2010, Pages 530-536
Abstract:
Value-based insurance design reduces patient copayments to encourage the use of health care services of high clinical value. As employers face constant pressure to control health care costs, this type of coverage has received much attention as a cost-savings device. This paper's examination of one value-based insurance design program found that the program led to reduced use of nondrug health care services, offsetting the costs associated with additional use of drugs encouraged by the program. The findings suggest that value-based insurance design programs do not increase total systemwide medical spending.
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Methuselah's medicine: Pharmaceutical innovation and mortality in the United States, 1960-2000
Jason Schnittker & George Karandinos
Social Science & Medicine, April 2010, Pages 961-968
Abstract:
Although there is a good deal of speculation surrounding the role of pharmaceutical innovation in late 20th century mortality improvements in the United States, there is little empirical evidence on the topic and there remains a good deal of doubt regarding whether pharmaceuticals matter at all for mortality. Using a reliable indicator of pharmaceutical innovation-yearly approvals of new molecular entities (NMEs) by the Food and Drug Administration, along with information on priority status and disease-category indication-this study examines the relationship between pharmaceutical innovation and life expectancy between 1960 and 2000. The study demonstrates a significant relationship between pharmaceutical innovation and life expectancy at birth, which is robust to controls for gross domestic product, as well as controls for various forms of medical spending. The relationship with life expectancy is robust, in part, because pharmaceutical innovation has a stronger relationship with early-life mortality (between 20 and 50) than with later-life mortality (65 and over), even though older persons consume more pharmaceuticals and many recently approved drugs target conditions more common in later life. There is, to be sure, another side to the results. There is some evidence, for example, that the relationship between pharmaceutical innovation and mortality has declined over time, suggesting a change in the kind of innovations now entering the market. Nevertheless, there is more to contemporary pharmaceutical innovation than the development of mere "halfway" technologies. The overall relationship between innovation and mortality is sufficiently strong to warrant further consideration as a key determinant of trends in mortality.
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Stephen Daniels & Joanne Martin
American Bar Foundation Working Paper, March 2009
Abstract:
This paper empirically investigates two overlapping propositions: that plaintiffs' lawyers will stop handling certain clients in medical malpractice cases in the face of caps on non-economic damages; and/or that plaintiffs' lawyers, particularly those who specialize in medical malpractice, will handle fewer malpractice cases generally. Relying primarily on material from in-depth interviews conducted with Texas plaintiffs' lawyers after Texas enacted a $250,000 cap on non-economic damages in 2003 and from a mail survey of Texas plaintiffs' lawyers conducted in 2006, the article shows there is strong evidence for both propositions. In doing so, the findings provide an excellent illustration of the theoretical idea of plaintiffs' lawyers as relatively rational actors who are constantly trying to adjust their practices - their businesses - to changes in their working environment and that those adjustments can have wide-ranging consequences. Understanding this is crucial for assessing the effects of tort reform. The findings show how tort reform - here a specific change in the formal law - affects the practices of plaintiffs' lawyers by limiting damages to a degree that significantly alters the incentive structure that lies at the heart of the contingency fee system. If the damage recovery potential is limited too severely in light of the costs and risks for a particular type of case, plaintiffs' lawyers may well avoid those cases, thereby diminishing meaningful access to the rights the law provides.
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Medical Insurance Coverage and Health Production Efficiency
Laurie Bates, Kankana Mukherjee & Rexford Santerre
Journal of Risk and Insurance, March 2010, Pages 211-229
Abstract:
Conventional economic theory predicts that medical insurance coverage causes an inefficient production of health because of ex-ante and ex-post moral hazard effects. However, no research has empirically examined the magnitude of the inefficiency. This study empirically examines the impact of medical insurance on the technical efficiency of health production at the metropolitan level. The underlying health production function allows for preventive care, curative care, and behavioral factors. Data envelopment analysis determines relative technical efficiency. The multiple regression results indicate that insurance coverage generates inefficiency but the efficiency loss appears to be relatively small on the extensive margin.
