Getting Treatment

Kevin Lewis

May 13, 2024

Unwinding and the Medicaid Undercount: Millions Enrolled in Medicaid During the Pandemic Thought They Were Uninsured
Dong Ding, Benjamin Sommers & Sherry Glied
Health Affairs, May 2024, Pages 725-731

Policy responses to the March 31, 2023, expiration of the Medicaid continuous coverage provision need to consider the difference between self-reported Medicaid participation on government surveys and administrative records of Medicaid enrollment. The difference between the two is known as the "Medicaid undercount." The size of the undercount increased substantially after the continuous coverage provision took effect in March 2020. Using longitudinal data from the Current Population Survey, we examined this change. We found that assuming that all beneficiaries who ever reported enrolling in Medicaid during the COVID-19 pandemic public health emergency remained enrolled through 2022 (as required by the continuous coverage provision) eliminated the worsening of the undercount. We estimated that nearly half of the 5.9 million people who we projected were likely to become uninsured after the provision expired, or "unwound," already reported that they were uninsured in the 2022 Current Population Survey. This finding suggests that the impact of ending the continuous coverage provision on the estimated uninsurance rate, based on self-reported survey data, may have been smaller than anticipated. It also means that efforts to address Medicaid unwinding should include people who likely remain eligible for Medicaid but believe that they are already uninsured.

The Medicare Drug Negotiation: Unveiling Negotiation Imbalances
Jorge Klinnert, Jingyi Xing & Alessio Lombini
University of Maryland Working Paper, April 2024

This study examines the Medicare Drug Price Negotiation Program (DPNP) established under the Inflation Reduction Act of 2022. Using a game theoretical framework, we analyze the bargaining power between the Centers for Medicare & Medicaid Services (CMS) and Pharmaceutical Manufacturers (PM) in the negotiation process. Our findings reveal a significant imbalance favoring CMS, suggesting a departure from impartiality, and raising concerns about the fairness of the negotiation process. We propose a modified negotiation framework that incorporates a neutral third-party to address the imbalance and ensure a more equitable outcome. By conducting a simulation, we demonstrate how our alternative approach remedies this imbalance in bargaining power. Additionally, we discuss potential long-term repercussions of the current DPNP on pharmaceutical innovation and patient access. By highlighting these issues, our study contributes to the ongoing debate about drug pricing policies and highlights the importance of impartiality in negotiations aimed at improving healthcare affordability, accessibility and innovation.

Gender gap in STEM entrepreneurship: Effects of the Affordable Care Act reform
Jiayi Bao
Strategic Management Journal, forthcoming

This article examines whether the Affordable Care Act (ACA) health insurance reform reduced the gender gap in science, technology, engineering, and mathematics (STEM) entrepreneurship. I argue that the ACA mitigated mobility constraints imposed by employer-provided health insurance and encouraged entrepreneurship with important contingencies: effects were limited to women because of gender differences in supply-side cost reduction and demand-side health insurance needs and were specific to women in STEM (vs. non-STEM) entrepreneurship because of the human and financial capital needed to navigate insurance markets. Leveraging the ACA quasi-experiment, I find consistent evidence of a reduced gender gap in STEM entrepreneurship. Surprisingly, the effects were driven by increased STEM entrepreneurship for married women founding unincorporated businesses. Qualitative interview insights and empirical findings provide explanations for these patterns.

Labor force effects of Medicaid and Marketplace expansions: Variation by gender, parental status, and household structure
Makayla Lavender & Emily Johnston
Southern Economic Journal, April 2024, Pages 949-1001

We revisit the Affordable Care Act (ACA)'s Medicaid expansion's labor market effects and build upon it by estimating effects of subsidized Marketplace insurance. Using American Community Survey data, we jointly model the effects of Medicaid and Marketplace expansion on labor force outcomes using simulated eligibility measures. Throughout our analysis, we focus on heterogeneity by gender, parental status, and single versus two-headed households. Consequently, this is the first paper presenting labor outcomes of the ACA among women with children, an important group, which may be particularly responsive to increased flexibility in meeting income, childcare, and insurance needs. Even among women, we find little evidence that Medicaid eligibility reduced labor force participation. Any significant reductions among women are small in magnitude and not well corroborated by placebo tests. Alternatively, women with children gaining Marketplace eligibility had statistically significant reductions in labor force participation, reductions in hours, and increases in part-time work.

Nothing for Something: Marketing Cancer Drugs to Physicians Increases Prescribing Without Improving Mortality
Colleen Carey, Michael Daly & Jing Li
NBER Working Paper, April 2024

Physicians commonly receive marketing-related transfers from drug firms. We examine the impact of these relationships on the prescribing of physician-administered cancer drugs in Medicare. We find that prescribing of the associated drug increases 4% in the twelve months after a payment is received, with the increase beginning sharply in the month of payment and fading out within a year. A marketing payment also leads physicians to begin treating cancer patients with lower expected mortality. While payments result in greater expenditure on cancer drugs, there are no associated improvements in patient mortality.

Demand Inertia and the Hidden Impact of Pharmacy Benefit Managers
Josh Feng & Luca Maini
Management Science, forthcoming

Do pharmacy benefit managers (PBMs) reduce spending on prescription drugs? Reduced-form evidence suggests that PBMs enforce a tradeoff between net-of-rebate prices and access to drugs within each market. However, net-of-rebate prices grow consistently over time and appear unresponsive to competitor entry. We argue that inertia in drug demand can reconcile these facts. To formally analyze the roles played by PBMs and demand inertia, we build a dynamic structural model of drug pricing and estimate it using net-of-rebate prices of three major statins from 1996 to 2013. Counterfactuals suggest that, relative to a market with price-setting by drug manufacturers and patients who face coinsurance, PBMs reduce overall spending by 28%, without greatly limiting patient access. Without demand inertia, the presence of PBMs would cause prices to fall significantly as competitors enter.

The effect of substance use Certificate-of-Need laws on access to substance use disorder treatment facilities
Shishir Shakya & Christine Bretschneider-Fries
Southern Economic Journal, forthcoming

We investigate how substance use Certificate-of-Need (CON) laws influence access to substance use disorder treatment facilities in the United States. We use the National Directory of Drug and Alcohol Abuse Treatment Facilities data set, which lists all federal, state, and local government facilities and private facilities that provide substance use treatment services in 2020. Based on the locations of these facilities, we develop a novel access index to substance use disorder treatment facilities that accounts for driving distance and duration to measure the ease of reaching these facilities for individuals living at the population-weighted county centroids. We find that counties in states with CON laws that border counties without such laws have nearly 10% less spatial accessibility to substance use disorder treatment facilities at a 5% level of significance.

Supply of mental health practices after prescriptive authority expansion for psychologists
Angela Shoulders & Alicia Plemmons
Contemporary Economic Policy, forthcoming

The prescription-privileges movement has advocated for state laws enabling trained psychologists to prescribe psychotropic medication. We examine the impact of these laws on healthcare access and outcomes. Using staggered difference-in-differences analysis and Data Axle data, we estimate the number of new mental health establishments per 100,000 people after policy implementation. Using CDC data, we analyze the policy's impact on suicide rates. We find the policy increased the number of psychology and counseling practices without decreasing the number of psychiatric practices, implying that these practices are complements rather than substitutes. Quality held steady, with no notable change in the suicide rate.

The demand for skills training among Medicaid home-based caregivers
Christopher Cronin & Ethan Lieber
Journal of Health Economics, May 2024

Medicaid spends nearly 100 billion dollars annually on home and community-based care for the disabled. Much of this care is provided by personal care aides, few of whom have received training related to the services they provide. We conducted a randomized controlled trial to estimate their demand for training. We find that 13 percent of these caregivers complete training without an incentive. Paying the caregivers four times their hourly wage increases training completion by roughly nine percentage points. Additional experimental variation suggests that among individuals confirmed to be aware of the training, the financial incentive increases completion from 35 to 58 percent. Demand curves based on these results suggest that while many caregivers value the opportunity to train, policies aimed at universal take up require large financial incentives.

Fatigue and vigilance in medical experts detecting breast cancer
Sian Taylor-Phillips et al.
Proceedings of the National Academy of Sciences, 12 March 2024

An abundance of laboratory-based experiments has described a vigilance decrement of reducing accuracy to detect targets with time on task, but there are few real-world studies, none of which have previously controlled the environment to control for bias. We describe accuracy in clinical practice for 360 experts who examined >1 million women's mammograms for signs of cancer, whilst controlling for potential biases. The vigilance decrement pattern was not observed. Instead, test accuracy improved over time, through a reduction in false alarms and an increase in speed, with no significant change in sensitivity. The multiple-decision model explains why experts miss targets in low prevalence settings through a change in decision threshold and search quit threshold and propose it should be adapted to explain these observed patterns of accuracy with time on task. What is typically thought of as standard and robust research findings in controlled laboratory settings may not directly apply to real-world environments and instead large, controlled studies in relevant environments are needed.


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