Explanation of benefits
New Analysis Reexamines The Value Of Cancer Care In The United States Compared To Western Europe
Samir Soneji & JaeWon Yang
Health Affairs, March 2015, Pages 390-397
Abstract:
Despite sharp increases in spending on cancer treatment since 1970 in the United States compared to Western Europe, US cancer mortality rates have decreased only modestly. This has raised questions about the additional value of US cancer care derived from this additional spending. We calculated the number of US cancer deaths averted, compared to the situation in Western Europe, between 1982 and 2010 for twelve cancer types. We also assessed the value of US cancer care, compared to that in Western Europe, by estimating the ratio of additional spending on cancer to the number of quality-adjusted life-years saved. Compared to Western Europe, for three of the four costliest US cancers — breast, colorectal, and prostate — there were approximately 67,000, 265,000, and 60,000 averted US deaths, respectively, and for lung cancer there were roughly 1,120,000 excess deaths in the study period. The ratio of incremental cost to quality-adjusted life-years saved equaled $402,000 for breast cancer, $110,000 for colorectal cancer, and $1,979,000 for prostate cancer — amounts that exceed most accepted thresholds for cost-effective medical care. The United States lost quality-adjusted life-years despite additional spending for lung cancer: −$19,000 per quality-adjusted life-year saved. Our results suggest that cancer care in the United States may provide less value than corresponding cancer care in Western Europe for many leading cancers.
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The Insurance Value of Medical Innovation
Darius Lakdawalla, Anup Malani & Julian Reif
NBER Working Paper, March 2015
Abstract:
Economists think of medical innovation as a valuable but risky good, producing health benefits but increasing financial risk. This perspective overlooks how innovation can lower physical risks borne by healthy patients facing the prospect of future disease. We present an alternative framework that accounts for all these aspects of value and links them to the value of health insurance. We show that any innovation worth buying reduces overall risk, thereby generating positive insurance value on its own. We conduct two empirical exercises to assess the significance of our insights. First, we calculate that conventional methods underestimate the value of historical health gains by 30-80%. Second, we examine a large set of medical technologies and calculate that insurance value on average adds 100% to the conventional valuation of those treatments. Moreover, we find that the physical risk-reduction value of these technologies is ten times greater than the financial risk they pose and the corresponding value of health insurance that insures this financial risk. Our analysis also suggests standard methods disproportionately undervalue treatments for the most severe illnesses, where physical risk to consumers is most costly.
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The effect of Medicaid expansions on demand for care from the Veterans Health Administration
Austin Frakt, Amresh Hanchate & Steven Pizer
Healthcare, forthcoming
Background: Adequate access to care at Veterans Health Administration (VA) medical centers has become a high-profile policy issue. The Affordable Care Act (ACA) could improve access to care for veterans, particularly if its Medicaid expansion is implemented in all states. The relationship between Medicaid expansion on the one hand and VA enrollment and utilization on the other has not previously been explored for all states.
Methods: Using VA and other public data from 2002 to 2008, we calculated a measure of Medicaid eligibility sensitive to state-year varying policy change but not changes in demographics or economic conditions. Next, controlling for potential confounding factors, we estimated fixed effects Poisson models of VA enrollment and inpatient and outpatient utilization. We then used these estimates to simulate the effect of the ACA׳s Medicaid expansion on demand for VA care.
Results: If the ACA׳s Medicaid expansion had been implemented in all states, enrollment for VA health coverage, acute inpatient care (days), and outpatient visits would have been 9%, 6%, and 12% lower, respectively. In states that did not expand Medicaid in 2014, VA enrollment, inpatient days, and outpatient visits were, respectively, 10, 6, and 13 percentage points higher than they would have been otherwise.
Conclusion: VA medical centers in states that did not expand Medicaid in 2014 are likely to have experienced a higher demand, and commensurately longer wait times. As policymakers continue to address VA capacity issues, they should be mindful of the potential role of Medicaid, and that it will change over time as more states adopt the expansion.
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Does Tort Reform Affect Physician Supply? Evidence From Texas
David Hyman et al.
International Review of Law and Economics, forthcoming
Abstract:
Does state tort reform affect physician supply? Tort reformers certainly believe so. Before Texas adopted tort reform in 2003, proponents claimed that physicians were deserting Texas in droves. After tort reform was enacted, proponents claimed there had been a dramatic increase in physicians moving to Texas due to the improved liability climate. We find no evidence to support either claim. Physician supply was not measurably stunted prior to reform, and it did not measurably improve after reform. This is true for all patient care physicians in Texas, high-malpractice-risk specialties, primary care physicians, and rural physicians.
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Vinish Shrestha & Otto Lenhart
Emory University Working Paper, March 2015
Abstract:
The federal dependent coverage mandate, a part of the Affordable Care Act, went into effect in September 2010. Using data from the American Time Use Survey from 2008 to 2013 and implementing difference in difference models, this paper evaluates the effect of the federal mandate on labor market outcomes and time allocation among young adults. We find that young adults reduce their labor supply both on the intensive and extensive margin in response to the dependent coverage. Specifically, we show that the dependent coverage mandate reduces weekly market work time by 259 minutes, which corresponds to an 18% change compared to before the policy change. Subsequently, affected individuals reallocate the majority of forgone market work hours toward leisure activities. Furthermore, we provide evidence that the provision of health insurance coverage through the mandate reduces time spent on health. We argue that this finding demonstrates evidence for the existence of ex-ante moral hazard. We find that the effect of the policy is stronger in states with no state level dependent coverage mandates prior to 2010.
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Does Medicaid Coverage for Pregnant Women Affect Prenatal Health Behaviors?
Dhaval Dave, Robert Kaestner & George Wehby
NBER Working Paper, March 2015
Abstract:
Despite plausible mechanisms, little research has evaluated potential changes in health behaviors as a result of the Medicaid expansions of the 1980s and 1990s for pregnant women. Accordingly, we provide the first national study of the effects of Medicaid on health behaviors for pregnant women. We exploit exogenous variation from the Medicaid income eligibility expansions for pregnant women and children during late-1980s through mid-1990s to examine effects on several prenatal health behaviors and health outcomes using U.S. vital statistics data. We find that increases in Medicaid eligibility were associated with increases in smoking and decreases in weight gain during pregnancy. Raising Medicaid eligibility by 12 percentage-points increased rates of any prenatal smoking and smoking more than five cigarettes daily by 0.7-0.8 percentage point. Medicaid expansions were associated with a reduction in pregnancy weight-gain by about 0.6%. These effects diminish at higher levels of eligibility, which is consistent with crowd-out from private to public insurance. Importantly, our evidence is consistent with ex-ante moral hazard although income effects are also at play. The worsening of health behaviors may partly explain why Medicaid expansions have not been associated with substantial improvement in infant health.
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Louise Sheiner
Brookings Papers on Economic Activity, Fall 2014, Pages 1-72
Abstract:
Examining the geographic variation in Medicare and non-Medicare health spending, I find little support for the view that most of the variation can be attributed to differences in practice styles. Instead, I find that socioeconomic factors that affect the need for medical care, as well as interactions between the Medicare system and other parts of the health system, can account for most of the variation in spending. I also find that controlling for health attributes at the state level explains more of the state-level variation associated with omitted health attributes than controlling for them at the individual level, an econometric difference that likely explains much of the difference between my results and those of the Dartmouth group. More broadly, I find that geographic variations in health spending do not provide a useful way to examine the inefficiencies of our health system. States where Medicare spending is high differ in multiple ways from states where it is low, and it is difficult to isolate the effects of health spending intensity from the effects of the underlying state characteristics. I show, for example, that previous findings about the relationships between health spending, the share of physicians who are general practitioners, and health care quality, are likely the result of omitted factors rather than the result of causal relationships.
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Health Insurance, Familial Responsibilities and Job Satisfaction
Scott Adams & Benjamin Artz
Journal of Family and Economic Issues, March 2015, Pages 143-153
Abstract:
We observed that workers with health insurance provided by their employers reported lower job satisfaction in survey data. Middle-aged and middle-income workers, particularly those with young children at home, showed the strongest negative relationship between health insurance and job satisfaction. The most plausible explanation is that these workers were in suboptimal labor market situations because of their familial responsibilities to provide health insurance for their family relative to workers who were free to choose a better job match or not work at all. This is confirmed by workers with options to obtain health insurance from a source other than their own jobs, namely those likely eligible for parental insurance, Medicaid, or Medicare, who showed no such negative relationship between health insurance and job satisfaction.
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Uncovering Waste in U.S. Healthcare
Joseph Doyle, John Graves & Jonathan Gruber
NBER Working Paper, March 2015
Abstract:
There is widespread agreement that the US healthcare system wastes as much as 5% of GDP, yet little consensus on what care is actually unproductive. This partly arises because of the endogeneity of patient choice of treatment location. This paper uses the effective random assignment of patients to ambulance companies to generate comparisons across similar patients treated at different hospitals. We find that assignment to hospitals whose patients receive large amounts of care over the three months following a health emergency do not have meaningfully better survival outcomes compared to hospitals whose patients receive less. Outcomes are related to different types of treatment intensity, however: patients assigned to hospitals with high levels of inpatient spending are more likely to survive to one year, while those assigned to hospitals with high levels of outpatient spending are less likely to do so. This adverse effect of outpatient spending is predominately driven by spending at skilled nursing facilities (SNF) following hospitalization. These results offer a new type of quality measure for hospitals based on utilization of SNFs. We find that patients quasi-randomized to hospitals with high rates of SNF discharge have poorer outcomes, as well as higher downstream spending once conditioning on initial hospital spending.
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Samuel Pimentel et al.
Journal of the American Statistical Association, forthcoming
"Using data from 498 hospitals, we compare 1252 pairs comprised of a new surgeon and an experienced surgeon working at the same hospital. We introduce a new form of matching that matches patients of each new surgeon to patients of an otherwise similar experienced surgeon at the same hospital, perfectly balancing 176 surgical procedures and closely balancing a total of 2.9 million categories of patients; additionally, the individual patient pairs are as close as possible. A new goal for matching is introduced, called 'refined covariate balance,' in which a sequence of nested, ever more refined, nominal covariates is balanced as closely as possible, emphasizing the first or coarsest covariate in that sequence...There is no evidence that mortality rates for new and experienced surgeons differ."
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Rebecca Anhang Price et al.
Health Services Research, forthcoming
Objective: To examine whether care experiences and immunization for racial/ethnic/language minority Medicare beneficiaries vary with the proportion of same-group beneficiaries in Medicare Advantage (MA) contracts.
Data Sources/Study Setting: Exactly 492,495 Medicare beneficiaries responding to the 2008–2009 MA Consumer Assessment of Healthcare Providers and Systems (CAHPS) Survey.
Data Collection/Extraction Methods: Mixed-effect regression models predicted eight CAHPS patient experience measures from self-reported race/ethnicity/language preference at individual and contract levels, beneficiary-level case-mix adjustors, along with contract and geographic random effects.
Principal Findings: As a contract's proportion of a given minority group increased, overall and non-Hispanic, white patient experiences were poorer on average; for the minority group in question, however, high-minority plans may score as well as low-minority plans. Spanish-preferring Hispanic beneficiaries also experience smaller disparities relative to non-Hispanic whites in plans with higher Spanish-preferring proportions.
Conclusions: The tendency for high-minority contracts to provide less positive patient experiences for others in the contract, but similar or even more positive patient experiences for concentrated minority group beneficiaries, may reflect cultural competency, particularly language services, that partially or fully counterbalance the poorer overall quality of these contracts. For some beneficiaries, experiences may be just as positive in some high-minority plans with low overall scores as in plans with higher overall scores.
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The Impact of Consumer Inattention on Insurer Pricing in the Medicare Part D Program
Kate Ho, Joseph Hogan & Fiona Scott Morton
NBER Working Paper, March 2015
Abstract:
Medicare Part D presents a novel privatized structure for a government pharmaceutical benefit. Incentives for firms to provide low prices and high quality are generated by consumers who choose among multiple insurance plans in each market. To date the literature has primarily focused on consumers, and has calculated how much could be saved if they chose better plans. In this paper we take the next analytical step and consider how plans will adjust prices as consumer search behavior improves. We use detailed data on enrollees in New Jersey to demonstrate that consumers switch plans infrequently and imperfectly. We estimate a model of consumer plan choice with inattentive consumers. We then turn to the supply side and examine insurer responses to this behavior. We show that high premiums are consistent with insurers profiting from consumer inertia. We use the demand model and a model of firm pricing to calculate how much lower Part D program costs would be if consumer inattention were removed and plans re-priced in response. Our estimates indicate that consumers would save $536 each, and the government would save $550 million total over three years, when firms' choice of markup is taken into account. Cost growth would also fall: by the last year of our sample government savings would amount to 8.2% of the cost of subsidizing the relevant enrollees.
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Matthew Austin et al.
Health Affairs, March 2015, Pages 423-430
Abstract:
Attempts to assess the quality and safety of hospitals have proliferated, including a growing number of consumer-directed hospital rating systems. However, relatively little is known about what these rating systems reveal. To better understand differences in hospital ratings, we compared four national rating systems. We designated “high” and “low” performers for each rating system and examined the overlap among rating systems and how hospital characteristics corresponded with performance on each. No hospital was rated as a high performer by all four national rating systems. Only 10 percent of the 844 hospitals rated as a high performer by one rating system were rated as a high performer by any of the other rating systems. The lack of agreement among the national hospital rating systems is likely explained by the fact that each system uses its own rating methods, has a different focus to its ratings, and stresses different measures of performance.
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Do "Consumer-Directed" Health Plans Bend the Cost Curve Over Time?
Amelia Haviland et al.
NBER Working Paper, March 2015
Abstract:
“Consumer-Directed” Health Plans (CDHPs) combine high deductibles with personal medical accounts and are intended to reduce health care spending through greater patient cost sharing. Prior research shows that CDHPs reduce spending in the first year. However, there is little research on the impact of CDHPs over the longer term. We add to this literature by using data from 13 million individuals in 54 large US firms to estimate the effects of a firm offering CDHPs on health care spending up to three years post offer. We use a difference-in-differences analysis and to further strengthen identification, we balance observables within firm, over time by developing weights through a machine learning algorithm. We find that spending is reduced for those in firms offering CDHPs in all three years post. The reductions are driven by spending decreases in outpatient care and pharmaceuticals, with no evidence of increases in emergency department or inpatient care.
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Home Safety, Accessibility, and Elderly Health: Evidence from Falls
Michael Eriksen, Nadia Greenhalgh-Stanley & Gary Engelhardt
Journal of Urban Economics, May 2015, Pages 14–24
Abstract:
This article presents estimates of the impact of home safety and accessibility features on the prevention of serious, non-fatal falls for elderly widowed individuals. As these features are not randomly assigned across homes, we develop an instrumental variable (IV) strategy that relies on the differential decline in the health and functional status of spouses to identify impacts. Specifically, we use the deceased spouse’s functional status when alive, as measured by limits to Activities of Daily Living (ADLs), as an IV for the presence of home safety and accessibility features for the surviving spouse in the years after widowhood, and then estimate the effect of these features on the likelihood of a serious fall for the widow using rich longitudinal data from the Health and Retirement Study. The presence of such features reduces the likelihood of a fall requiring medical treatment by 20 percentage points, a substantial effect. However, falls are not the type of health shock that is a main driver of housing tenure transitions among the elderly. Although somewhat speculative, cost-benefit estimates suggest that investments in home safety for the elderly may generate in the short run as much as a dollar-for-dollar reduction in medical expenditures.
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Modern Management Practices and Hospital Admissions
John McConnell et al.
Health Economics, forthcoming
Abstract:
We investigate whether the modern management practices and publicly reported performance measures are associated with choice of hospital for patients with acute myocardial infarction (AMI). We define and measure management practices at approximately half of US cardiac care units using a novel survey approach. A patient's choice of a hospital is modeled as a function of the hospital's performance on publicly reported quality measures and the quality of its management. The estimates, based on a grouped conditional logit specification, reveal that higher management scores and better performance on publicly reported quality measures are positively associated with hospital choice. Management practices appear to have a direct correlation with admissions for AMI — potentially through reputational effects — and indirect association, through better performance on publicly reported measures. Overall, a one standard deviation change in management practice scores is associated with an 8% increase in AMI admissions.
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Ask Your Doctor? Direct-to-Consumer Advertising of Pharmaceuticals
Michael Sinkinson & Amanda Starc
NBER Working Paper, March 2015
Abstract:
We measure the impact of direct-to-consumer television advertising (DTCA) by drug manufacturers. Our identification strategy exploits shocks to local advertising markets generated by idiosyncrasies of the political advertising cycle as well as a regulatory intervention affecting a single product. We find that a 10% increase in the number of a firm's ads leads to a 0.76% increase in revenue, while the same increase in rival advertising leads to a 0.55% decrease in firm revenue. Results also indicate that a 10% increase in category advertising produces a 0.2% revenue increase for non-advertised drugs. Both the business-stealing and spillover effects would not be detected through OLS. Decomposition using micro data confirms that the effect is due mostly to new customers as opposed to switching among current customers. Simulations show that an outright ban on DTCA would have modest effects on the sales of advertised drugs as well as on non-advertised drugs.
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The Practice of Cranial Neurosurgery and the Malpractice Liability Environment in the United States
Kimon Bekelis et al.
PLoS ONE, March 2015
Object: The potential imbalance between malpractice liability cost and quality of care has been an issue of debate. We investigated the association of malpractice liability with unfavorable outcomes and increased hospitalization charges in cranial neurosurgery.
Methods: We performed a retrospective cohort study involving patients who underwent cranial neurosurgical procedures from 2005-2010, and were registered in the National Inpatient Sample (NIS) database. We used data from the National Practitioner Data Bank (NPDB) from 2005 to 2010 to create measures of volume and size of malpractice claim payments. The association of the latter with the state-level mortality, length of stay (LOS), unfavorable discharge, and hospitalization charges for cranial neurosurgery was investigated.
Results: During the study period, there were 189,103 patients (mean age 46.4 years, with 48.3% females) who underwent cranial neurosurgical procedures, and were registered in NIS. In a multivariable regression, higher number of claims per physician in a state was associated with increased ln-transformed hospitalization charges (beta 0.18; 95% CI, 0.17 to 0.19). On the contrary, there was no association with mortality (OR 1.00; 95% CI, 0.94 to 1.06). We observed a small association with unfavorable discharge (OR 1.09; 95% CI, 1.06 to 1.13), and LOS (beta 0.01; 95% CI, 0.002 to 0.03). The size of the awarded claims demonstrated similar relationships. The average claims payment size (ln-transformed) (Pearson’s rho=0.435, P=0.01) demonstrated a positive correlation with the risk-adjusted hospitalization charges but did not demonstrate a correlation with mortality, unfavorable discharge, or LOS.
Conclusions: In the present national study, aggressive malpractice environment was not correlated with mortality but was associated with higher hospitalization charges after cranial neurosurgery. In view of the association of malpractice with the economics of healthcare, further research on its impact is necessary.
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Physician Incentives and the Rise in C-sections: Evidence from Canada
Sara Allin et al.
NBER Working Paper, March 2015
Abstract:
More than one in four births are delivered by Cesarean section across the OECD where fee-for-service remuneration schemes generally compensate C-sections more generously than vaginal deliveries. In this paper, we exploit unique features of the Canadian health care system to investigate if physicians respond to financial incentives in obstetric care. Previous studies have investigated physicians' behavioral response to incentives using data from institutional contexts in which they can sort across remuneration schemes and patient types. The single payer and universal coverage nature of Medicare in Canada mitigates the threat that our estimates are contaminated by such a selection bias. Using administrative data from nearly five million hospital records, we find that doubling the compensation received for a C-section relative to a vaginal delivery increases by 5.6 percentage points the likelihood that a birth is delivered by C-section, all else equal. This result is mostly driven by obstetricians, rather than by general practitioners. We also find that physicians' response to financial incentives is greater among patients over 34, which may reflect physicians' greater informational advantage on the risks of different delivery methods for this category of mothers.
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US Hospitals Experienced Substantial Productivity Growth During 2002–11
John Romley, Dana Goldman & Neeraj Sood
Health Affairs, March 2015, Pages 511-518
Abstract:
The need for better value in US health care is widely recognized. Existing evidence suggests that improvement in the productivity of American hospitals—that is, the output that hospitals produce from inputs such as labor and capital—has lagged behind that of other industries. However, previous studies have not adequately addressed quality of care or severity of patient illness. Our study, by contrast, adjusts for trends in the severity of patients’ conditions and health outcomes. We studied productivity growth among US hospitals in treating Medicare patients with heart attack, heart failure, and pneumonia during 2002–11. We found that the rates of annual productivity growth were 0.78 percent for heart attack, 0.62 percent for heart failure, and 1.90 percent for pneumonia. However, unadjusted productivity growth appears to have been negative. These findings suggest that productivity growth in US health care could be better than is sometimes believed, and may help alleviate concerns about Medicare payment policy under the Affordable Care Act.
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The Efficiency of Slacking Off: Evidence from the Emergency Department
David Chan
NBER Working Paper, March 2015
Abstract:
Work schedules play an important role in time-sensitive production utilizing workers interchangeably. Studying emergency department physicians in shift work, I find two types of strategic behavior induced by schedules. First, on an extensive margin, physicians "slack off" by accepting fewer patients near end of shift (EOS). Second, on an intensive margin, physicians distort patient care, incurring higher costs as they spend less time on patients accepted near EOS. I demonstrate a tradeoff between these two strategic behaviors, by examining how they change with shift overlap. Accounting for both costs of physician time and patient care, I find that physicians slack off at approximately second-best optimal levels.
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A Note on the Comparative Statics of Pay-for-Performance in Health Care
Tisamarie Sherry
Health Economics, forthcoming
Abstract:
Pay-for-performance (P4P) is a widely implemented quality improvement strategy in health care that has generated much enthusiasm, but only limited empirical evidence to support its effectiveness. Researchers have speculated that flawed program designs or weak financial incentives may be to blame, but the reason for P4P's limited success may be more fundamental. When P4P rewards multiple services, it creates a special case of the well-known multitasking problem, where incentives to increase some rewarded activities are blunted by countervailing incentives to focus on other rewarded activities: these incentives may cancel each other out with little net effect on quality. This paper analyzes the comparative statics of a P4P model to show that when P4P rewards multiple services in a setting of multitasking and joint production, the change in both rewarded and unrewarded services is generally ambiguous. This result contrasts with the commonly held intuition that P4P should increase rewarded activities.
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Schuyler Jones et al.
Journal of the American College of Cardiology, 10 March 2015, Pages 920–927
Background: Peripheral vascular intervention (PVI) is an effective treatment option for patients with peripheral artery disease (PAD). In 2008, Medicare modified reimbursement rates to encourage more efficient outpatient use of PVI in the United States.
Methods: Using a 5% national sample of Medicare fee-for-service beneficiaries from 2006 to 2011, we examined age- and sex-adjusted rates of PVI by year, type of procedure, clinical setting, and physician specialty.
Results: A total of 39,339 Medicare beneficiaries underwent revascularization for PAD between 2006 and 2011. The annual rate of PVI increased slightly from 401.4 to 419.6 per 100,000 Medicare beneficiaries (p = 0.17), but the clinical setting shifted. The rate of PVI declined in inpatient settings from 209.7 to 151.6 (p < 0.001), whereas the rate expanded in outpatient hospitals (184.7 to 228.5; p = 0.01) and office-based clinics (6.0 to 37.8; p = 0.008). The use of atherectomy increased 2-fold in outpatient hospital settings and 50-fold in office-based clinics during the study period. Mean costs of inpatient procedures were similar across all types of PVI, whereas mean costs of atherectomy procedures in outpatient and office-based clinics exceeded those of stenting and angioplasty procedures.
Conclusions: From 2006 to 2011, overall rates of PVI increased minimally. However, after changes in reimbursement, PVI and atherectomy in outpatient facilities and office-based clinics increased dramatically, neutralizing cost savings to Medicare and highlighting the possible unintended consequences of coverage decisions.
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Long-Term Care Utility and Late in Life Saving
John Ameriks et al.
NBER Working Paper, February 2015
Abstract:
Older wealthholders spend down assets slowly. To study this pattern, the paper introduces health dependent utility into a model in which different preferences for bequests, expenditures when in need of long-term care (LTC), and ordinary consumption combine with health and longevity uncertainty to determine saving behavior. To help separately identify motives, it develops Strategic Survey Questions (SSQs) that elicit stated preferences. The model is estimated using new SSQ and wealth data from the Vanguard Research Initiative. Estimates of the health-state utility function imply that motives associated with LTC are significantly more important than bequest motives in determining late in life saving.
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Copayments and Emergency Department Use Among Adult Medicaid Enrollees
Lindsay Sabik & Sabina Ohri Gandhi
Health Economics, forthcoming
Abstract:
A number of state Medicaid programs have recently proposed or implemented new or increased copayments for nonemergent emergency department (ED) visits. Evidence suggests that copayments generally reduce the level of healthcare utilization, although there is little specific evidence regarding the effectiveness of copayments in reducing nonurgent ED use among Medicaid enrollees or other low-income populations. Encouraging efficient and appropriate use of healthcare services will be of particular importance for Medicaid programs as they expand under the Patient Protection and Affordable Care Act. This analysis uses national data from 2001 to 2009 to examine the effect of copayments on nonurgent ED utilization among nonelderly adult enrollees. We find that visits among Medicaid enrollees in state-years where a copayment is in place are significantly less likely to be for nonurgent reasons. Our findings suggest that copayments may be an effective tool for reducing use of the ED for nonurgent care.
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Staffing Subsidies and the Quality of Care in Nursing Homes
Andrew Foster & Yong Suk Lee
Journal of Health Economics, May 2015, Pages 133–147
Abstract:
Concerns about the quality of state-financed nursing home care has led to the wide-scale adoption by states of pass-through subsidies, in which Medicaid reimbursement rates are directly tied to staffing expenditure. We examine the effects of Medicaid pass-through on nursing home staffing and quality of care by adapting a two-step FGLS method that addresses clustering and state-level temporal autocorrelation. We find that pass-through subsidies increases staffing by about 1% on average and 2.7% in nursing homes with a low share of Medicaid patients. Furthermore, pass-through subsidies reduce the incidences of pressure ulcer worsening by about 0.9%.
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Hyunjee Kim & Edward Norton
Health Services Research, forthcoming
Objective: To estimate the effect of the 10 percent cap introduced to Medicare home health care on treatment intensity and patient discharge status.
Data Sources: Medicare Denominator, Medicare Home Health Claims, and Medicare Provider of Services Files from 2008 through 2010.
Study Design: We used agency-level variation in the proportion of outlier payments prior to the implementation of the 10 percent cap to identify how home health agencies adjusted the number of home health visits and patient discharge status under the new law.
Principal Findings: Under the 10 percent cap, agencies dramatically decreased the number of service visits. Agencies also dropped relatively healthy patients and sent sicker patients to nursing homes.
Conclusions: The drastic reduction in the number of service visits and discontinuation of relatively healthy patients from home health care suggest that the 10 percent cap improved the efficiency of home health services as intended. However, the 10 percent cap increased other types of health care expenditures by pushing sicker patients to use more expensive health services.
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Public reporting and the evolution of diabetes quality
Jeffrey McCullough et al.
International Journal of Health Economics and Management, March 2015, Pages 127-138
Abstract:
We address three questions related to public reports of diabetes quality. First, does clinic quality evolve over time? Second, does the quality of reporting clinics converge to a common standard? Third, how persistent are provider quality rankings across time? Since current methods of public reporting rely on historic data, measures of clinic quality are most informative if relative clinic performance is persistent across time. We use data from the Minnesota Community Measurement spanning 2007–2012. We employ seemingly-unrelated regression to measure quality improvement conditional upon cohort effects and changes in quality metrics. Basic autoregressive models are used to measure quality persistence. There were striking differences in initial quality across cohorts of clinics and early-reporting cohorts maintained higher quality in all years. This suggests that consumers can infer, on average, that non-reporting clinics have poorer quality than reporting clinics. Average quality, however, improves slowly in all cohorts and quality dispersion declines over time both within and across cohorts. Relative clinic quality is highly persistent year-to-year, suggesting that publicly-reported measures can inform consumers in choice of clinics, even though they represent measured quality for a previous time period. Finally, definition changes in measures can make it difficult to draw appropriate inferences from longitudinal public reports data.