Death Panels
Nora Szech
Journal of Economic Behavior & Organization, forthcoming
Abstract:
We analyze a market with rational doctors and with patients who think anecdotally. In the pricing equilibrium, all doctors, no matter how bad, earn positive profits. Then we let doctors choose their qualities in a first stage. In SPNE, doctors offer treatments far worse than the costless optimal ones. Welfare may strictly decrease in the number of doctors.
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David Classen et al.
Health Affairs, April 2011, Pages 581-589
Abstract:
Identification and measurement of adverse medical events is central to patient safety, forming a foundation for accountability, prioritizing problems to work on, generating ideas for safer care, and testing which interventions work. We compared three methods to detect adverse events in hospitalized patients, using the same patient sample set from three leading hospitals. We found that the adverse event detection methods commonly used to track patient safety in the United States today - voluntary reporting and the Agency for Healthcare Research and Quality's Patient Safety Indicators - fared very poorly compared to other methods and missed 90 percent of the adverse events. The Institute for Healthcare Improvement's Global Trigger Tool found at least ten times more confirmed, serious events than these other methods. Overall, adverse events occurred in one-third of hospital admissions. Reliance on voluntary reporting and the Patient Safety Indicators could produce misleading conclusions about the current safety of care in the US health care system and misdirect efforts to improve patient safety.
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Testing for the Role of Prejudice in Emergency Departments Using Bounceback Rates
Shamena Anwar & Hanming Fang
NBER Working Paper, March 2011
Abstract:
We propose and empirically implement a test for the presence of racial prejudice among emergency department (ED) physicians based on the bounceback rates of the patients who were discharged after receiving diagnostic tests during their initial ED visits. A bounceback is defined as a return to the ED within 72 hours of being initially discharged. Based on a plausible model of physician behavior, we show that differential bounceback rates across patients of different racial groups who are discharged after receiving diagnostic tests from their ED visits are informative of the racial prejudice of the physicians. Applying the test to administrative data of ED visits from California and New Jersey, we do not find evidence of prejudice against black and Hispanic patients. Our finding suggests that, at least in the emergency department setting, taste based discrimination does not play an important role in the racial disparities in health care.
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Patient Dumping in New York City, 1877-1917
Emily Abel
American Journal of Public Health, May 2011, Pages 789-795
Abstract:
Although the term "patient dumping" was rarely used before the 1960s, the practice started much earlier. In the late 1870s, the New York Times began to report that private hospitals were using ambulances to shift poor, moribund patients to Bellevue, the city's preeminent public facility. Many trips had serious medical consequences. Private hospitals also instructed ambulances to take critically ill patients directly to Bellevue regardless of the distance. Efforts to combat such practices took various forms. When transfers resulted in death, Manhattan coroners held inquests. In 1902, the Commissioner of Charities issued an order requiring that he be sent a full report from the superintendent of any hospital in which a patient transferred from another facility died within three days after admission. Four years later, the city passed an ordinance imposing a severe penalty on any hospital official who transferred an ill patient. Those reforms were only partially effective at deterring such transfers.
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Variations In Efficiency And The Relationship To Quality Of Care In The Veterans Health System
Jian Gao et al.
Health Affairs, April 2011, Pages 655-663
Abstract:
There is widespread belief that the US health care system could realize significant improvements in efficiency, savings, and patient outcomes if care were provided in a more integrated and accountable way. We examined efficiency and its relationship to quality of care for medical centers run by the Veterans Health Administration of the Department of Veterans Affairs (VA), a national, vertically integrated health care system that is accountable for a large patient population. After devising a statistical model to indicate efficiency, we found that VA medical centers were highly efficient. We also found only modest variation in the level of efficiency and cost across VA medical centers, and a positive correlation overall between greater efficiency and higher inpatient quality. These findings for VA medical centers suggest that efforts to drive integration and accountability in other parts of the US health care system might have important payoffs in reducing variations in cost without sacrificing quality. Policy makers should focus on what aspects of certain VA medical centers allow them to provide better care at lower costs and consider policies that incentivize other providers, both within and outside the VA, to adopt these practices.
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Anirban Basu
NBER Working Paper, March 2011
Abstract:
The United States aspires to use information from comparative effectiveness research (CER) to reduce waste and contain costs without instituting a formal rationing mechanism or compromising patient or physician autonomy with regard to treatment choices. With such ambitious goals, traditional combinations of research designs and analytical methods used in CER may lead to disappointing results. In this paper, I study how alternate regimes of comparative effectiveness information help shape the marginal benefits (demand) curve in the population and how such perceived demand curves impact decision-making at the individual patient level and welfare at the societal level. I highlight the need to individualize comparative effectiveness research in order to generate the true (normative) demand curve for treatments. I discuss methodological principles that guide research designs for such studies. Using an example of the comparative effect of substance abuse treatments on crime, I use novel econometric methods to salvage individualized information from an existing dataset.
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Jennifer DeVoe
American Journal of Public Health, May 2011, Pages 891-898
Objectives: We identified characteristics of Oregon children who were eligible for the Oregon Health Plan (OHP), the state's combined Medicaid-Children's Health Insurance Program (CHIP), but were not enrolled in January 2005. We also assessed whether parents' confusion regarding their children's status affected nonenrollment.
Methods: We conducted cross-sectional analyses of linked statewide Food Stamp Program and OHP administrative databases (n=10175) and primary data from a statewide survey (n=2681).
Results: More than 20% of parents with children not administratively enrolled in OHP reported that their children were enrolled. Parents of 11.3% of children who were administratively enrolled reported that they were not.
Eligible but unenrolled children had higher odds of being older, having higher family incomes, and having employed and uninsured parents.
Conclusions: These findings reveal an important discrepancy between administrative data and parent-reported access to public health insurance.
This discrepancy may stem from transient coverage or confusion among parents and may result in underutilization of health insurance for eligible children.
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The Trade-Off Among Quality, Quantity, And Cost: How To Make It - If We Must
Mark Pauly
Health Affairs, April 2011, Pages 574-580
Abstract:
The Affordable Care Act, with its subsidies, demonstrations, commissions, and study groups, embodies a considerable amount of regulatory and policy pressure on markets to improve the quality of health care. However, it is possible that this government-led movement will lead to a lot of talk about quality but not necessarily much improvement. A better strategy may be found through "disruptive innovation," a market-driven approach that has balanced cost and quality in other industries. An example would be to provide lower-cost substitutes for some aspects of primary physician care, in the form of care at a retail clinic. Consumers might not perceive a clinic as a perfect substitute for physician care, but they might prefer the greater convenience and lower cost. Perhaps a little less quality for a lot less money might be acceptable to consumers and taxpayers, as we work to keep medical spending from siphoning off funds required for other needs.
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Physician Response to Pay-for-Performance: Evidence from a Natural Experiment
Jinhu Li, Jeremiah Hurley, Philip DeCicca & Gioia Buckley
NBER Working Paper, March 2011
Abstract:
Explicit financial incentives, especially pay-for-performance (P4P) incentives, have been extensively employed in recent years by health plans and governments in an attempt to improve the quality of health care services. This study exploits a natural experiment in the province of Ontario, Canada to identify empirically the impact of pay-for-performance (P4P) incentives on the provision of targeted primary care services, and whether physicians' responses differ by age, practice size and baseline compliance level. We use an administrative data source which covers the full population of the province of Ontario and nearly all the services provided by practicing primary care physicians in Ontario. With an individual-level data set of physicians, we employ a difference-in-differences approach that controls for both "selection on observables" and "selection on unobservables" that may cause estimation bias in the identification. We also implemented a set of robustness checks to control for confounding from the other contemporary interventions of the primary care reform in Ontario. The results indicate that, while all responses are of modest size, physicians responded to some of the financial incentives but not the others. The differential responses appear related to the cost of responding and the strength of the evidence linking a service with quality. Overall, the results provide a cautionary message regarding the effectiveness of pay-for-performance schemes for increasing quality of care.
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Willingness to Pay, Death, Wealth, and Damages
Ariel Porat & Avraham Tabbach
American Law and Economics Review, forthcoming
Abstract:
When people face risk of death, they overinvest in risk reduction: first, they discount their risk-reduction costs by the probability of death; second, they consider the consumption of their wealth as a benefit from risk reduction. From a social perspective, people's wealth remains after their death. Therefore, discounting costs by the probability of death and taking into account the benefit of wealth consumption are socially inefficient. Moreover, even for the individual under risk of death, the investment in risk reduction is excessive. We discuss market mechanisms that could correct the inefficiencies; we argue that "willingness to pay" as a criterion for valuing life should radically change; and we show how the results of the economic analysis of tort law should be modified.
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What The United States Could Learn From Israel About Improving The Quality Of Health Care
Bruce Rosen et al.
Health Affairs, April 2011, Pages 764-772
Abstract:
In 1999 Israel began to implement a system for monitoring quality of care in its health plans. That system was based largely on a similar system in the United States that, until recently, was associated with steady improvements in performance. However, in recent years health plan quality in the United States appears to have reached a plateau. In contrast, health plans in Israel have continued to show improvements on many of the same measures. Between 2005 and 2007 they achieved a gain of 6.7 percent in nine measures of primary care quality, while US performance on these measures declined. These gains were achieved, in part, through intense cooperation among health plans and physicians. Israel is a much smaller country and differs greatly from the United States in how it finances health care. Nonetheless, we suggest that the Israeli experience could help the United States accelerate the move toward quality improvement - for example, through increased coordination among US employers, health plans, physicians, and physician groups.
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Cost-Related Nonadherence in the Medicare Program: The Impact of Part D
James Kennedy et al.
Medical Care, May 2011, Pages 522-526
Background: Cost-related nonadherence (CRN) among Medicare beneficiaries declined after the implementation of the Part D program, but it is unknown whether CRN changes varied on the basis of beneficiaries' change in drug coverage.
Objective: To determine how CRN changed with the introduction of Part D, and whether CRN changes from 2005 to 2006 varied between newly insured beneficiaries, continuously insured beneficiaries, and continuously uninsured beneficiaries.
Methods: CRN, drug coverage, and beneficiary characteristics in 2005 and
2006 were constructed from merged Medicare Current Beneficiary Survey Access to Care files (sample, n=8935). Change in CRN was modeled using multinomial logistic regression to identify predictors of resolved CRN (reported in 2005 but not in 2006), unresolved CRN (reported in 2005 and 2006), and new CRN (reported in 2006 but not in 2005), relative to no CRN (not reported in 2005 or 2006).
Results: Rates of CRN declined from 2005 to 2006 for all beneficiaries, with the greatest reductions (from 22.1% in 2005 to 14.3% in 2006) for newly insured beneficiaries who gained drug coverage through Part D. In adjusted analyses, newly insured beneficiaries were more likely to have resolved CRN (adjusted odds ratio [AOR] =1.7; 95% confidence interval, 1.3-2.2). Younger beneficiaries (under the age of 65 years) and beneficiaries with multiple chronic conditions, poor health, and depression were significantly more likely to report CRN.
Conclusions: Part D coverage reduced but did not eliminate CRN for newly insured beneficiaries. Unresolved CRN persisted for newly insured and continuously uninsured beneficiaries, particularly among disabled beneficiaries.
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Paul Stiles et al.
Administration & Society, March 2011, Pages 171-192
Abstract:
Ethical standards and issues associated with the access and use of state Medicaid administrative data for research purposes from the data owners' perspective (i.e., state Medicaid authorities) were examined. Key informants at Medicaid authorities were surveyed regarding their states' policies and procedures related to the access and use of Medicaid data for research purposes. Results indicate that although a majority of states permit the use of Medicaid data by independent investigators for research purposes (74%), there is substantial variability across states in both the frequency with which access is granted as well as with the policies and procedures governing the access to these data. Literature on existing "best practices" by data owners regarding the use of administrative data in research is combined with survey findings to add the discussion in this highly important area and proposed guiding principles for administrative data owners and custodians are offered.
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Mark Metersky et al.
Medical Care, May 2011, Pages 504-510
Background: Although there is extensive evidence of racial disparities in processes and outcomes of medical care, there has been limited investigation of disparities in patient safety.
Objective: To determine whether there are racial disparities in the frequency of adverse events studied in the Medicare Patient Safety Monitoring System.
Design and Subjects: Abstraction of 102,623 randomly selected charts from hospital discharges of non-Hispanic white and black Medicare patients between January 1, 2004 and December 31, 2007 to assess frequency of patient safety events in 4 domains: general (pressure ulcers and falls), selected nosocomial infections, selected procedure-related adverse events, and adverse drug events due to anticoagulants and hypoglycemic agents.
Measures: Racial disparities in risk of patient safety events, and differences in adverse event rates among hospital groups stratified by percentage of black patients.
Results: Blacks had higher adjusted risk than whites of suffering one of the measured nosocomial infections (1.34; 95% confidence interval, 1.17-1.55; P < 0.001) and one of the measured adverse drug events (1.29; 95% confidence interval, 1.19-1.40; P < 0.001). After adjustment for patient and hospital factors, patients in hospitals with the highest percentages of black patients were at increased risk of experiencing one of the measured nosocomial infections (1.9% vs. 1.5%; P < 0.001) and adverse drug events (8.7% vs. 7.8%; P < 0.01).
Conclusions: Hospitalized blacks are at higher risk than whites of experiencing certain patient safety events. In addition, hospitals serving high percentages of black patients have higher risk-adjusted rates of selected patient safety events.
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Predictably Non-Bayesian: Quantifying Salience Effects in Physician Learning About Drug Quality
Nuno Camacho, Bas Donkers & Stefan Stremersch
Marketing Science, March-April 2011, Pages 305-320
Abstract:
Experimental and survey-based research suggests that consumers often rely on their intuition and cognitive shortcuts to make decisions. Intuition and cognitive shortcuts can lead to suboptimal decisions and, especially in high-stakes decisions, to legitimate welfare concerns. In this paper, we propose an extension of a Bayesian learning model that allows us to quantify the impact of salience - the fact that some pieces of information are easier to retrieve from memory than others - on physician learning. We show, using data on actual prescriptions for real patients, that physicians' belief formation is strongly influenced by salience effects. Feedback from switching patients - the ones the physician decided to switch to a clinically equivalent treatment - receives considerably more weight than feedback from other patients. In the category we study, salience effects slowed down physicians' speed of learning and the adoption of a new treatment, which raises welfare concerns. For managers, our findings suggest that firms that are able to eliminate, or at least reduce, salience effects to a greater extent than their competitors can speed up the adoption of new treatments. We explore the implications of these results and suggest alternative applications of our model that are relevant for policy makers and managers.
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The Effect Of Pay-For-Performance In Hospitals: Lessons For Quality Improvement
Rachel Werner et al.
Health Affairs, April 2011, Pages 690-698
Abstract:
The payment approach known as "pay-for-performance" has been widely adopted with the aim of improving the quality of health care. Nonetheless, little is known about how to use the approach most effectively to improve care. We examined the effects in 260 hospitals of a pay-for-performance demonstration project carried out by the Centers for Medicare and Medicaid Services in partnership with Premier Inc., a nationwide hospital system. We compared these results to those of a control group of 780 hospitals not in the demonstration project. The performance of the hospitals in the project initially improved more than the performance of the control group: More than half of the pay-for-performance hospitals achieved high performance scores, compared to fewer than a third of the control hospitals. However, after five years, the two groups' scores were virtually identical. Improvements were largest among hospitals that were eligible for larger bonuses, were well financed, or operated in less competitive markets. These findings suggest that tailoring pay-for-performance programs to hospitals' specific situations could have the greatest effect on health care quality.
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Carrie Queenan, Corey Angst & Sarv Devaraj
Journal of Operations Management, forthcoming
Abstract:
Doctors' orders entered with Computerized Physician Order Entry (CPOE) systems are designed to enhance patient care by standardizing routines that are intended to improve quality of healthcare. As with other health information technology (IT) performance studies, literature shows conflicting results regarding the CPOE-performance relationship. By adopting a more nuanced perspective and employing not just adoption but extent of use of CPOE, we first examine whether or not CPOE use improves patient satisfaction. Next, given that CPOEs are implemented in the backdrop of other hospital IT infrastructure, we examine how IT infrastructure impacts the relationship between CPOE use and satisfaction, testing both a complementary and substitution perspective. Finally, we examine the differential impact of CPOE use between academic and non-academic hospitals. Using data from 806 hospitals nationwide, we find a positive relationship between extent of CPOE use and patient satisfaction. Contrary to extant research, our results suggest this relationship is stronger in non-academic hospitals. We also find evidence that a hospital's IT infrastructure substitutes for CPOE use in its effect on patient satisfaction.