Blue shield
How Does Retiree Health Insurance Influence Public Sector Employee Saving?
Robert Clark & Olivia Mitchell
Journal of Health Economics, forthcoming
Abstract:
Economic theory predicts that employer-provided retiree health insurance (RHI) benefits have a crowd-out effect on household wealth accumulation, not dissimilar to the effects reported elsewhere for employer pensions, Social Security, and Medicare. Nevertheless, we are unaware of any similar research on the impacts of retiree health insurance per se. Accordingly, the present paper utilizes a unique data file on respondents to the Health and Retirement Study, to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. Key findings include the following: - Most full-time public sector employees anticipate having employer-provided health insurance coverage in retirement, unlike most private sector workers; - Public sector employees covered by RHI had substantially less wealth than similar private sector employees without RHI. In our data, Federal workers had about $82,000 (18%) less net wealth than private sector employees lacking RHI; state/local workers with RHI accumulated about $69,000 (or 15%) less net wealth than their uninsured private sector counterparts. - After controlling on socioeconomic status and differences in pension coverage, net household wealth for Federal employees was $116,000 less than workers without RHI and the result is statistically significant; the state/local difference was not.
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Changes in Mortality After Massachusetts Health Care Reform: A Quasi-experimental Study
Benjamin Sommers, Sharon Long & Katherine Baicker
Annals of Internal Medicine, 6 May 2014, Pages 585-593
Objective: To determine whether the Massachusetts reform was associated with changes in all-cause mortality and mortality from causes amenable to health care.
Setting: Changes in mortality rates for adults in Massachusetts counties from 2001 to 2005 (prereform) and 2007 to 2010 (postreform) were compared with changes in a propensity score–defined control group of counties in other states.
Measurements: Annual county-level all-cause mortality in age-, sex-, and race-specific cells (n = 146 825) from the Centers for Disease Control and Prevention's Compressed Mortality File. Secondary outcomes were deaths from causes amenable to health care, insurance coverage, access to care, and self-reported health.
Results: Reform in Massachusetts was associated with a significant decrease in all-cause mortality compared with the control group (−2.9%; P = 0.003, or an absolute decrease of 8.2 deaths per 100 000 adults). Deaths from causes amenable to health care also significantly decreased (−4.5%; P < 0.001). Changes were larger in counties with lower household incomes and higher prereform uninsured rates. Secondary analyses showed significant gains in coverage, access to care, and self-reported health. The number needed to treat was approximately 830 adults gaining health insurance to prevent 1 death per year.
Conclusion: Health reform in Massachusetts was associated with significant reductions in all-cause mortality and deaths from causes amenable to health care.
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Dangerous Liquidity and the Demand for Health Care: Evidence from the 2008 Stimulus Payments
Tal Gross & Jeremy Tobacman
Journal of Human Resources, Spring 2014, Pages 424-445
Abstract:
Household finances can affect health and health care through several channels. To explore these channels, we exploit the randomized timing of the arrival of the 2008 Economic Stimulus Payments. We find that the payments raised the probability of an adult emergency department visit over the following 23 weeks by an average of 1.1 percent. This effect is difficult to reconcile with the Permanent Income Hypothesis. We observe little impact on avoidable hospitalizations or emergency visits for nonurgent conditions and no difference in effects as a function of health insurance coverage. By contrast, we show that the increase is driven by visits for urgent medical conditions, like drug- and alcohol-related visits. Complementary evidence suggests that consumers are not simply substituting from outpatient doctor visits to hospital care. The results thus suggest that liquidity constraints may not constitute a direct barrier to care, but rather that liquidity can increase health care utilization indirectly by increasing the need for care.
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Marcus Dillender
Journal of Health Economics, July 2014, Pages 84–97
Abstract:
Little is known about how health insurance affects labor market decisions for young adults. This is despite the fact that expanding coverage for people in their early twenties is an important component of the Affordable Care Act. This paper studies how having an outside source of health insurance affects wages by using variation in health insurance access that comes from states extending dependent coverage to young adults. Using American Community Survey and Census data, I find evidence that extending health insurance to young adults raises their wages. The increases in wages can be explained by increases in human capital and the increased flexibility in the labor market that comes from people no longer having to rely on their own employers for health insurance. The estimates from this paper suggest the Affordable Care Act will lead to wage increases for young adults.
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Sherry Glied
NBER Working Paper, April 2014
Abstract:
Doctors and hospitals in the United States serve patients covered by many types of insurance. This overlap in the supply of health care services means that changes in the prices paid or the volume of services demanded by one group of patients may affect other patient groups. This paper examines how marginal shifts in the demand for services among the adult population under 65 (specifically, factors that affect the uninsurance rate) affect use in the Medicare population. I provide a simple theoretical framework for understanding how changes in the demand for care among adults under 65 may affect Medicare spending. I then examine how two demand factors – recent coverage eligibility changes for parents and the firm size composition of employment – affect insurance coverage among adults under 65 and how these factors affect per beneficiary Medicare spending. Factors that contribute to reductions in uninsurance rates are associated with contemporaneous decreases in per beneficiary Medicare spending, particularly in high variation Medicare services. Reductions in the demand for medical services among adults below age 65 are not associated with reductions in the total quantity of physician services supplied. The increased Medicare utilization that accompanies lower demand among those under 65 has few, if any, benefits for Medicare patients.
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Benjamin Sommers
Health Affairs, May 2014, Pages 887-894
Abstract:
Recent cancellations of nongroup health insurance plans generated much policy debate and raised concerns that the Affordable Care Act (ACA) may increase the number of uninsured Americans in the short term. This article provides evidence on the stability of nongroup coverage using US census data for the period 2008–11, before ACA provisions took effect. The principal findings are threefold. First, this market was characterized by high turnover: Only 42 percent of people with nongroup coverage at the outset of the study period retained that coverage after twelve months. Second, 80 percent of people experiencing coverage changes acquired other insurance within a year, most commonly from an employer. Third, turnover varied across groups, with stable coverage more common for whites and self-employed people than for other groups. Turnover was particularly high among adults ages 19–35, with only 21 percent of young adults retaining continuous nongroup coverage for two years. Given estimates from 2012 that 10.8 million people were covered in this market, these results suggest that 6.2 million people leave nongroup coverage annually. This suggests that the nongroup market was characterized by frequent disruptions in coverage before the ACA and that the effects of the recent cancellations are not necessarily out of the norm. These results can serve as a useful pre-ACA baseline with which to evaluate the law’s long-term impact on the stability of nongroup coverage.
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Moral Hazard and Adverse Selection in Private Health Insurance
David Powell & Dana Goldman
RAND Working Paper, December 2013
Abstract:
Moral hazard and adverse selection create inefficiencies in private health insurance markets. The authors use claims data from a large firm to study the independent roles of both moral hazard and adverse selection. Previous studies have attempted to estimate moral hazard in private health insurance by assuming that individuals respond only to the spot price, end-of-year price, average price, or a related metric. There is little economic justification for such assumptions and, in fact, economic intuition suggests that the nonlinear budget constraints generated by health insurance plans make these assumptions especially poor. They study the differential impact of the health insurance plans offered by the firm on the entire distribution of medical expenditures without parameterizing the plans by a specific metric. They use a new instrumental variable quantile estimation technique introduced in Powell (2013b) that provides the quantile treatment effects for each plan, while conditioning on a set of covariates for identification purposes. This technique allows us to map the resulting estimated medical expenditure distributions to the nonlinear budget sets generated by each plan. Their method also allows them to separate moral hazard from adverse selection and estimate their relative importance. They estimate that 77% of the additional medical spending observed in the most generous plan in their data relative to the least generous is due to adverse selection. The remainder can be attributed to moral hazard. A policy which resulted in each person enrolling in the least generous plan would cause the annual premium of that plan to rise by over $1,500.
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The US healthcare workforce and the labor market effect on healthcare spending and health outcomes
Lawrence Pellegrini, Rosa Rodriguez-Monguio & Jing Qian
International Journal of Health Care Finance and Economics, June 2014, Pages 127-141
Abstract:
The healthcare sector was one of the few sectors of the US economy that created new positions in spite of the recent economic downturn. Economic contractions are associated with worsening morbidity and mortality, declining private health insurance coverage, and budgetary pressure on public health programs. This study examines the causes of healthcare employment growth and workforce composition in the US and evaluates the labor market’s impact on healthcare spending and health outcomes. Data are collected for 50 states and the District of Columbia from 1999–2009. Labor market and healthcare workforce data are obtained from the Bureau of Labor Statistics. Mortality and health status data are collected from the Centers for Disease Control and Prevention’s Vital Statistics program and Behavioral Risk Factor Surveillance System. Healthcare spending data are derived from the Centers for Medicare and Medicaid Services. Dynamic panel data regression models, with instrumental variables, are used to examine the effect of the labor market on healthcare spending, morbidity, and mortality. Regression analysis is also performed to model the effects of healthcare spending on the healthcare workforce composition. All statistical tests are based on a two-sided α significance of p< .05. Analyses are performed with STATA and SAS. The labor force participation rate shows a more robust effect on healthcare spending, morbidity, and mortality than the unemployment rate. Study results also show that declining labor force participation negatively impacts overall health status ( p< .01), and mortality for males ( p< .05) and females ( p< .001), aged 16–64. Further, the Medicaid and Medicare spending share increases as labor force participation declines ( p< .001); whereas, the private healthcare spending share decreases ( p< .001). Public and private healthcare spending also has a differing effect on healthcare occupational employment per 100,000 people. Private healthcare spending positively impacts primary care physician employment ( p< .001); whereas, Medicare spending drives up employment of physician assistants, registered nurses, and personal care attendants ( p< .001). Medicaid and Medicare spending has a negative effect on surgeon employment ( p< .05); the effect of private healthcare spending is positive but not statistically significant. Labor force participation, as opposed to unemployment, is a better proxy for measuring the effect of the economic environment on healthcare spending and health outcomes. Further, during economic contractions, Medicaid and Medicare’s share of overall healthcare spending increases with meaningful effects on the configuration of state healthcare workforces and subsequently, provision of care for populations at-risk for worsening morbidity and mortality.
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Ralph Koijen, Tomas Philipson & Harald Uhlig
NBER Working Paper, April 2014
Abstract:
We provide a theoretical and empirical analysis of the link between financial and real health care markets. We document a “medical innovation premium” of 4-6% annually for equity of medical firms and analyze the implications it has for the growth of the health care sector. We interpret the premium as compensating investors for government-induced profit risk. We provide supportive evidence for this hypothesis through company filings and abnormal return patterns surrounding threats of government intervention. We quantify the implications of the premium for growth in real health care spending by calibrating our model to match historical trends. Policies that had removed government risk would have lead to more than a doubling of medical R&D and would have increased the current share of health care spending by 4% of GDP, with a predicted long run share of 38%.
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Medical Care Spending and Labor Market Outcomes: Evidence from Workers' Compensation Reforms
David Powell & Seth Seabury
RAND Working Paper, December 2013
Abstract:
There is considerable controversy over whether much of the spending on health care in the United States delivers enough value to justify the cost. This paper contributes to this literature by studying the causal relationship between medical care spending and labor outcomes, exploiting a policy which directly impacted medical spending for reasons unrelated to health and using a unique data set which includes medical spending and labor earnings. The focus on labor outcomes is motivated by its potential usefulness as a measure of health, the importance of understanding the relationship between health and labor productivity, and the policy interest in improving labor outcomes for the population that it studies - injured workers. It exploits the 2003-2004 California workers’ compensation reforms which reduced medical care spending for injured workers with a disproportionate effect on workers suffering lower back injuries. It links administrative data on workers’ compensation claims to earnings and test the effect of the reforms on labor force outcomes for workers who experienced the biggest drop in medical care costs. Adjusting for the severity of injury and selection into workers’ compensation, it finds that workers with low back injuries experienced a 7.3% greater decline in medical care after the reforms, and that this led to an 8.3% drop in post-injury earnings relative to other injured workers. These results suggest jointly that medical care spending can impact health and that health affects labor outcomes.
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Martha Starr, Laura Dominiak & Ana Aizcorbe
Health Affairs, May 2014, Pages 823-831
Abstract:
Researchers have disagreed about factors driving up health care spending since the 1980s. One camp, led by Kenneth Thorpe, identifies rising numbers of people being treated for chronic diseases as a major factor. Charles Roehrig and David Rousseau reach the opposite conclusion: that three-quarters of growth in average spending reflects the rising costs of treating given diseases. We reexamined sources of spending growth using data from four nationally representative surveys. We found that rising costs of treatment accounted for 70 percent of growth in real average health care spending from 1980 to 2006. The contribution of shares of the population treated for given diseases increased in 1997–2006, but even then it accounted for only one-third of spending growth. We highlight the fact that Thorpe’s inclusion of population growth as part of disease prevalence explains the appreciable difference in results. An important policy implication is that programs to better manage chronic diseases may only modestly reduce average spending growth.
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Did Budget Cuts in Medicaid Disproportionate Share Hospital Payment Affect Hospital Quality of Care?
Hui-Min Hsieh et al.
Medical Care, May 2014, Pages 415-421
Background: Medicaid Disproportionate Share Hospital (DSH) payments are one of the major sources of financial support for hospitals providing care to low-income patients. However, Medicaid DSH payments will be redirected from hospitals to subsidize individual health insurance purchase through US national health reform.
Objectives: The purpose of this study is to examine the association between Medicaid DSH payment reductions and nursing-sensitive and birth-related quality of care among Medicaid/uninsured and privately insured patients.
Methods: Economic theory of hospital behavior was used as a conceptual framework, and longitudinal data for California hospitals from 1996 to 2003 were examined. Hospital-fixed effects regression models were estimated. The unit of analysis is at the hospital level, examining 2 aggregated measures based on the payer category of discharged patients (ie, Medicaid/uninsured and privately insured).
Principal Findings: The overall study findings provide at best weak evidence of an association between net Medicaid DSH payments and hospital quality of care for either Medicaid/uninsured or the privately insured patients. The magnitudes of the effects are small and only a few have significant DSH effects.
Conclusions: Although this study does not find evidence suggesting that reducing Medicaid DSH payments had a strong negative impact on hospital quality of care for Medicaid/uninsured or privately insured patients, the results are not necessarily predictive of the impact national health care reform will have. Research is necessary to monitor hospital quality of care as this reform is implemented.
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Thomas Buchmueller, Sarah Miller & Marko Vujicic
NBER Working Paper, April 2014
Abstract:
A large and growing number of adults are covered by public insurance, and the Affordable Care Act is predicted to dramatically increase public coverage over the next several years. This study evaluates how such large increases in public coverage affect provider behavior and patient wait times by analyzing a common type of primary care: dental services. We find that when states add dental benefit to adult Medicaid coverage, dentists' participation in Medicaid increases and dentists see more publicly insured patients without decreasing the number of visits provided to privately insured patients. Dentists increase the total number of visits they supply each week while only modestly increasing the amount of time they spend working. They achieve this primarily by making greater use of dental hygienists. As a result, dentists' income increases. Wait times increase modestly, with the largest increases in wait times observed in states with restrictive scope of practice laws governing dental hygienists. These changes are most pronounced among dentists who practice in poor areas where Medicaid coverage is greatest.
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Emergency Department Profits Are Likely To Continue As The Affordable Care Act Expands Coverage
Michael Wilson & David Cutler
Health Affairs, May 2014, Pages 792-799
Abstract:
To better understand the financial viability of hospital emergency departments (EDs), we created national estimates of the cost to hospitals of providing ED care and the associated hospital revenue using hospital financial reports and patient claims data from 2009. We then estimated the effect the Affordable Care Act (ACA) will have on the future profitability of providing ED care. We estimated that hospital revenue from ED care exceeded costs for that care by $6.1 billion in 2009, representing a profit margin of 7.8 percent (net revenue expressed as a percentage of total revenue). However, this is primarily because hospitals make enough profit on the privately insured ($17 billion) to cover underpayment from all other payer groups, such as Medicare, Medicaid, and unreimbursed care. Assuming current payer reimbursement rates, ACA reforms could result in an additional 4.4-percentage-point increase in profit margins for hospital-based EDs compared to what could be the case without the reforms.
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Matthew Hill, Nicole Maestas & Kathleen Mullen
RAND Working Paper, December 2013
Abstract:
The onset of a work-limiting disability sets in motion a sequence of events that for a growing number of workers ends in early retirement from the labor force, SSDI application and, ultimately, long-term program participation. Exactly how this sequence of events plays out is not well understood. While there exist large bodies of literature that address the effects of health insurance coverage on a wide range of outcomes, few papers have sought to examine how source of health insurance coverage generally and employer sponsored health insurance (ESHI) specifically affect the employment trajectory following onset of disability. The authors use the nationally representative, longitudinal data from the Health and Retirement Study (HRS) to observe individuals before and after they experience a self-reported work limiting disability. To estimate the effect of ESHI on labor supply and disability claiming, they compare individuals covered by ESHI with no other employer-sponsored option (i.e., spousal coverage) with individuals covered by ESHI but whose spouses are offered coverage from their own employer. They find evidence of an “employment lock” effect of ESHI only among the 20 percent of individuals whose disabilities do not impact their immediate physical capacity but are associated with high medical costs. They do not find any evidence of differential disability insurance application rates between those with ESHI and the comparison group. With the passage of the Affordable Care Act, there is concern that disability insurance applications may swell because the incentive to remain employed will diminish for disabled workers reliant on ESHI. Their results suggest that the availability of non-employment-based health insurance may cause disabled workers with high cost/low severity conditions to leave the workforce but it will not necessarily lead to increased disability insurance application among individuals with ESHI.
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Adding Employer Contributions to Health Insurance to Social Security's Earnings and Tax Base
Karen Smith & Eric Toder
Urban Institute Working Paper, April 2014
Abstract:
The inclusion of employer-sponsored health insurance (ESI) in taxable income would increase income and payroll tax receipts, but would also increase Old Age, Survivors, and Disability Insurance (OASDI) benefits by adding ESI to the OASDI earnings base. This study uses the Urban Institute’s DYNASIM model to estimate the effects of including ESI premiums in taxable earnings on the level and distribution by age and income groups of income tax burdens, payroll tax burdens, and OASDI benefits. We find that the increased present value of OASDI benefits from including ESI in the wage base in 2014 offsets about 22 percent of increased income and payroll taxes, 57 percent of increased payroll taxes, and 72 percent of increased OASDI taxes. The overall distributions of taxes and benefits by income group follow the same pattern, with both taxes and benefits increasing as a share of income between the bottom and middle quintiles and then declining as a share of income for higher income taxpayers. But households in the bottom income quintiles receive a net benefit from including ESI in the tax base because their increase in OASDI benefits exceeds their increase in income and payroll taxes. Over a lifetime perspective, all earnings groups experience net tax increases, but workers in the middle of the earnings distribution experience the largest net tax increases as a share of lifetime earnings. Higher benefits offset a larger share of tax increases for lower than for higher income groups.
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Socioeconomic Status And Readmissions: Evidence From An Urban Teaching Hospital
Jianhui Hu, Meredith Gonsahn & David Nerenz
Health Affairs, May 2014, Pages 778-785
Abstract:
The Centers for Medicare and Medicaid Services (CMS) Hospital Readmissions Reduction Program has focused attention on ways to reduce thirty-day readmissions and on factors affecting readmission risk. Using inpatient data from an urban teaching hospital, we examined how elements of individual characteristics and neighborhood socioeconomic status influenced the likelihood of readmission under a single fixed organizational and staffing structure. Patients living in high-poverty neighborhoods were 24 percent more likely than others to be readmitted, after demographic characteristics and clinical conditions were adjusted for. Married patients were at significantly reduced risk of readmission, which suggests that they had more social support than unmarried patients. These and previous findings that document socioeconomic disparities in readmission raise the question of whether CMS’s readmission measures and associated financial penalties should be adjusted for the effects of factors beyond hospital influence at the individual or neighborhood level, such as poverty and lack of social support.
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Community Factors and Hospital Readmission Rates
Jeph Herrin et al.
Health Services Research, forthcoming
Objective: To examine the relationship between community factors and hospital readmission rates.
Data Sources/Study Setting: We examined all hospitals with publicly reported 30-day readmission rates for patients discharged during July 1, 2007, to June 30, 2010, with acute myocardial infarction (AMI), heart failure (HF), or pneumonia (PN). We linked these to publicly available county data from the Area Resource File, the Census, Nursing Home Compare, and the Neilsen PopFacts datasets.
Study Design: We used hierarchical linear models to assess the effect of county demographic, access to care, and nursing home quality characteristics on the pooled 30-day risk-standardized readmission rate.
Principal Findings: The study sample included 4,073 hospitals. Fifty-eight percent of national variation in hospital readmission rates was explained by the county in which the hospital was located. In multivariable analysis, a number of county characteristics were found to be independently associated with higher readmission rates, the strongest associations being for measures of access to care. These county characteristics explained almost half of the total variation across counties.
Conclusions: Community factors, as measured by county characteristics, explain a substantial amount of variation in hospital readmission rates.
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Malpractice Laws and Incentives to Shield Assets: Evidence from Nursing Homes
James Brickley, Susan Lu & Gerard Wedig
University of Rochester Working Paper, March 2014
Abstract:
Previous empirical studies of the incentive effects of medical malpractice liability have largely ignored the incentives of providers to restructure to protect assets. This study uses a large panel database to provide evidence on asset-shielding responses to the enactment of pro-plaintiff tort laws in the nursing home industry. The evidence suggests two important asset-shielding responses. First, large chains sold many homes in the affected states to smaller, more judgment-proof owners (with fewer assets, little or no insurance coverage and protective legal structures). Second, chains became relatively less likely to brand their homes with names that linked them directly to the central corporation or sister units (we provide legal and informational explanations for why branding units is likely to increase expected tort liability). In addition to extending the empirical literature on malpractice, the paper provides evidence on the horizontal ownership of service establishments, branding and the choice of business names.
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The Spillover Effects of Health IT Investments on Regional Heath Care Costs
Hilal Atasoy, Pei-Yu Chen & Kartik Ganju
Temple University Working Paper, April 2014
Abstract:
Health IT investments are often presumed to ameliorate the societal challenge of significant and accelerating health care costs. However, mixed results based on hospital level analyses have been found. We argue that the effects of health IT investments go beyond hospital level due to patient mobility and information sharing. We provide empirical evidence that, although EMR adoption is found to increase the operational costs for the adopting hospitals, it has significant spillover effects by reducing the health care costs of the other hospitals in the same region. These regional externalities are stronger especially in the long term. We further analyze whether the spillover effects differ by EMR technology type (basic vs. advanced EMR) and by distributional characteristics of EMR in the region. Results reveal that not all hospitals need to have the same advanced level of EMR to achieve an optimal reduction in regional health care costs. Additionally, higher software integration among adopting hospitals further decreases regional health care costs. Overall, our results provide support to the role of EMR investments in reducing societal health care costs. Previous research based on hospital level analyses may have underestimated the societal impact of EMR adoption as externalities can lead to benefits to be realized at other hospitals in the region. Estimates, based on our results, suggest that EMR investments can lead to net reduction in national health care cost by about $47 billion dollars over 4 years. Policy makers should take into account the spillover effects, software integration and distribution of EMRs while formulating policies on subsidizing EMR investments.
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Eliminating Medication Copayments Reduces Disparities In Cardiovascular Care
Niteesh Choudhry et al.
Health Affairs, May 2014, Pages 863-870
Abstract:
Substantial racial and ethnic disparities in cardiovascular care persist in the United States. For example, African Americans and Hispanics with cardiovascular disease are 10–40 percent less likely than whites to receive secondary prevention therapies, such as aspirin and beta-blockers. Lowering copayments for these therapies improves outcomes among all patients who have had a myocardial infarction, but the impact of lower copayments on health disparities is unknown. Using self-reported race and ethnicity for participants in the Post-Myocardial Infarction Free Rx Event and Economic Evaluation (MI FREEE) trial, we found that rates of medication adherence were significantly lower and rates of adverse clinical outcomes were significantly higher for nonwhite patients than for white patients. Providing full drug coverage increased medication adherence in both groups. Among nonwhite patients, it also reduced the rates of major vascular events or revascularization by 35 percent and reduced total health care spending by 70 percent. Providing full coverage had no effect on clinical outcomes and costs for white patients. We conclude that lowering copayments for medications after myocardial infarctions may reduce racial and ethnic disparities for cardiovascular disease.
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Information technology and agency in physicians' prescribing decisions
Andrew Epstein & Jonathan Ketcham
RAND Journal of Economics, Summer 2014, Pages 422–448
Abstract:
Patients rely on physicians to act as their agents when prescribing medications, yet the efforts of pharmaceutical manufacturers and prescription drug insurers may alter this agency relationship. We evaluate how formularies, and the use of information technology (IT) that provides physicians with formulary information, influence prescribing. We combine data from a randomized experiment of physicians with secondary data to eliminate bias due to patient, physician, drug, and insurance characteristics. We find that when given formulary IT, physicians' prescribing decisions are influenced by formularies far more than by pharmaceutical firms' detailing and sampling. Without IT, however, formularies' effects are much smaller.
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Sarang Kim et al.
Academic Medicine, forthcoming
Purpose: To compare the speed and accuracy of answering clinical questions using Google versus summary resources.
Method: In 2011 and 2012, 48 internal medicine interns from two classes at Rutgers University Robert Wood Johnson Medical School, who had been trained to use three evidence-based summary resources, performed four-minute computer searches to answer 10 clinical questions. Half were randomized to initiate searches for answers to questions 1 to 5 using Google; the other half initiated searches using a summary resource. They then crossed over and used the other resource for questions 6 to 10. They documented the time spent searching and the resource where the answer was found. Time to correct response and percentage of correct responses were compared between groups using t test and general estimating equations.
Results: Of 480 questions administered, interns found answers for 393 (82%). Interns initiating searches in Google used a wider variety of resources than those starting with summary resources. No significant difference was found in mean time to correct response (138.5 seconds for Google versus 136.1 seconds for summary resource; P = .72). Mean correct response rate was 58.4% for Google versus 61.5% for summary resource (mean difference -3.1%; 95% CI -10.3% to 4.2%; P = .40).
Conclusions: The authors found no significant differences in speed or accuracy between searches initiated using Google versus summary resources. Although summary resources are considered to provide the highest quality of evidence, improvements to allow for better speed and accuracy are needed.
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Structuring Incentives within Accountable Care Organizations
Brigham Frandsen & James Rebitzer
Journal of Law, Economics, and Organization, forthcoming
Abstract:
Accountable Care Organizations (ACOs) are new organizations created by the Affordable Care Act to encourage more efficient, integrated care delivery. To promote efficiency, ACOs sign contracts under which they keep a fraction of the savings from keeping costs below target provided they also maintain quality levels. To promote integration and facilitate measurement, ACOs are required to have at least 5000 enrollees and so must coordinate across many providers. We calibrate a model of optimal ACO incentives using proprietary performance measures from a large insurer. Our key finding is that free-riding is a severe problem and causes optimal incentive payments to exceed cost savings unless ACOs simultaneously achieve extremely large efficiency gains. This implies that successful ACOs will likely rely on motivational strategies that amplify the effects of under-powered incentives. These motivational strategies raise important questions about the limits of ACOs as a policy for promoting more efficient, integrated care.
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Laurence Baker, Kate Bundorf & Daniel Kessler
Health Affairs, May 2014, Pages 756-763
Abstract:
We examined the consequences of contractual or ownership relationships between hospitals and physician practices, often described as vertical integration. Such integration can reduce health spending and increase the quality of care by improving communication across care settings, but it can also increase providers’ market power and facilitate the payment of what are effectively kickbacks for inappropriate referrals. We investigated the impact of vertical integration on hospital prices, volumes (admissions), and spending for privately insured patients. Using hospital claims from Truven Analytics MarketScan for the nonelderly privately insured in the period 2001–07, we constructed county-level indices of prices, volumes, and spending and adjusted them for enrollees’ age and sex. We measured hospital-physician integration using information from the American Hospital Association on the types of relationships hospitals have with physicians. We found that an increase in the market share of hospitals with the tightest vertically integrated relationship with physicians — ownership of physician practices — was associated with higher hospital prices and spending. We found that an increase in contractual integration reduced the frequency of hospital admissions, but this effect was relatively small. Taken together, our results provide a mixed, although somewhat negative, picture of vertical integration from the perspective of the privately insured.
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Jason Ryan et al.
American Journal of Medical Quality, May/June 2014, Pages 220-226
Abstract:
The objective of this study was to estimate the frequency of heart failure (HF) readmissions that can be prevented through a quality improvement (QI) program. All HF patients at the University of Connecticut Health Center who had a readmission within 30 days of discharge in the year before (2008) and the year after (2011) a QI program were studied. Through chart review, the percentage of patients who had preventable readmissions in each year was estimated. Prior to the QI initiative, chart reviewers identified that 20% to 30% of readmissions were preventable. The decrease in readmissions after the QI program was similar at 28%. Fewer readmissions after the QI initiative were deemed preventable compared with before. In conclusion, this study found a percentage of preventable readmissions similar to the actual 28% reduction in readmissions after a QI program was launched. Preventable readmissions were less common after the QI program was in place.
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Alan Zillich et al.
Health Services Research, forthcoming
Objective: To evaluate the effectiveness of a telephonic medication therapy management (MTM) service on reducing hospitalizations among home health patients.
Setting: Forty randomly selected, geographically diverse home health care centers in the United States.
Design: Two-stage, randomized, controlled trial with 60-day follow-up. All Medicare-insured home health care patients were eligible to participate. Twenty-eight consecutive patients within each care center were recruited and randomized to usual care or MTM intervention. The MTM intervention consisted of the following: (1) initial phone call by a pharmacy technician to verify active medications; (2) pharmacist-provided medication regimen review by telephone; and (3) follow-up pharmacist phone calls at day seven and as needed for 30 days. The primary outcome was 60-day all-cause hospitalization.
Data Collection: Data were collected from in-home nursing assessments using the OASIS-C. Multivariate logistic regression modeled the effect of the MTM intervention on the probability of hospitalization while adjusting for patients’ baseline risk of hospitalization, number of medications taken daily, and other OASIS-C data elements.
Principal Findings: A total of 895 patients (intervention n = 415, control n = 480) were block-randomized to the intervention or usual care. There was no significant difference in the 60-day probability of hospitalization between the MTM intervention and control groups (Adjusted OR: 1.26, 95 percent CI: 0.89–1.77, p = .19). For patients within the lowest baseline risk quartile (n = 232), the intervention group was three times more likely to remain out of the hospital at 60 days (Adjusted OR: 3.79, 95 percent CI: 1.35–10.57, p = .01) compared to the usual care group.
Conclusions: This MTM intervention may not be effective for all home health patients; however, for those patients with the lowest-risk profile, the MTM intervention prevented patients from being hospitalized at 60 days.