On life support

Kevin Lewis

September 10, 2018

The Effect of Disenrollment from Medicaid on Employment, Insurance Coverage, Health and Health Care Utilization
Thomas DeLeire
NBER Working Paper, August 2018


This study examines the effect of a Medicaid disenrollment on employment, sources of health insurance coverage, health, and health care utilization of childless adults using longitudinal data from the 2004 Panel of the Survey of Income and Program Participation. From July through September 2005, TennCare, the Tennessee Medicaid program, disenrolled approximately 170,000 adults following a change in eligibility rules. Following this eligibility change, the fraction of adults in Tennessee covered by Medicaid fell by over 5 percentage points while uninsured rates increased by almost 5 percentage points relative to adults in other Southern states. There is no evidence of an increase in employment rates in Tennessee following the disenrollment. Self-reported health and access to medical care worsened as hospitalization rates, doctor visits, and dentist visits all declined while the use of free or public clinics increased. The Tennessee experience suggests that undoing the expansion of Medicaid eligibility to adults that occurred under the Affordable Care Act likely would reduce health insurance coverage, reduce health care access, and worsen health but would not lead to increases in employment.

Who pays for the medical costs of obesity? New evidence from the employer mandate
Conor Lennon
Health Economics, forthcoming


Theory suggests that the medical costs of obesity should be passed on to obese workers, in the form of lower wages, whenever health coverage is a part of employee compensation. In contrast to existing work on this topic, this paper illustrates that the medical expenditures caused by obesity among working adults are relatively small and that wage offsets should therefore be difficult to detect. The paper supports this claim by exploiting the variation provided by the Affordable Care Act's employer mandate. Findings suggest that obese workers tend to bear the approximate cost of their medical expenditures via lower wages. However, the observed effects are often insignificantly different from zero.

Subverting Administrative Oversight: Campaign Contributions and Nursing Home Inspections
Frederick Boehmke et al.
State Politics & Policy Quarterly, forthcoming


I study the consequences of interest group campaign contributions for administrative oversight. Unlike the few previous studies in this area, however, I study the influence in state bureaucracies and at the level of individual groups. Specifically, I test whether campaign contributions to state elected officials influence the outcomes of annual inspections of skilled nursing facilities in 16 states, leveraging the context of state politics in two important ways. First, I consider the differing effects of contributions to the legislative and executive branches. Second, I argue that legislative capacity for oversight influences the efficacy of contributions Regression analysis of inspection results with controls for facility characteristics provides evidence that contributing facilities have better overall inspection results, with a large reduction in citations for severe problems. Furthermore, contributions to legislators reduce overall problems, particularly in less professionalized legislatures, while those to the governor reduce severe ones.

Patient–physician gender concordance and increased mortality among female heart attack patients
Brad Greenwood, Seth Carnahan & Laura Huang
Proceedings of the National Academy of Sciences, 21 August 2018, Pages 8569-8574


We examine patient gender disparities in survival rates following acute myocardial infarctions (i.e., heart attacks) based on the gender of the treating physician. Using a census of heart attack patients admitted to Florida hospitals between 1991 and 2010, we find higher mortality among female patients who are treated by male physicians. Male patients and female patients experience similar outcomes when treated by female physicians, suggesting that unique challenges arise when male physicians treat female patients. We further find that male physicians with more exposure to female patients and female physicians have more success treating female patients.

Powerful pharma and its marginalized alternatives? Effects of individual differences in conspiracy mentality on attitudes toward medical approaches
Pia Lamberty & Roland Imhoff
Social Psychology, forthcoming 


Only little is known about the underpinning psychological processes that determine medical choices. Across four studies, we establish that conspiracy mentality predicts a preference for alternative over biomedical therapies. Study 1a (N = 392) and 1b (N = 204) provide correlational support, Study 2 (N = 185) experimentally tested the role of power: People who endorsed a conspiracy mentality perceived a drug more positively if its approval was supported by a powerless (vs. powerful) agent. Study 3 (N = 239) again showed a moderating effect of power and conspiracy mentality on drug evaluation by comparing analytic versus holistic approaches. These findings point to the consequences of conspiracy mentality for health behavior and prevention programs.

Long-Term Care Hospitals: A Case Study in Waste
Liran Einav, Amy Finkelstein & Neale Mahoney
NBER Working Paper, August 2018


There is substantial waste in U.S. healthcare, but little consensus on how to identify or combat it. We identify one specific source of waste: long-term care hospitals (LTCHs). These post-acute care facilities began as a regulatory carve-out for a few dozen specialty hospitals, but have expanded into an industry with over 400 hospitals and $5.4 billion in annual Medicare spending in 2014. We use the entry of LTCHs into local hospital markets and an event study design to estimate LTCHs’ impact. We find that most LTCH patients would have counterfactually received care at Skilled Nursing Facilities (SNFs) – post-acute care facilities that provide medically similar care to LTCHs but are paid significantly less – and that substitution to LTCHs leaves patients unaffected or worse off on all measurable dimensions. Our results imply that Medicare could save about $4.6 billion per year – with no harm to patients – by not allowing for discharge to LTCHs.

ACA Marketplace Premiums Grew More Rapidly In Areas With Monopoly Insurers Than In Areas With More Competition
Jessica Van Parys
Health Affairs, August 2018, Pages 1243-1251


Premiums have increased rapidly in the two most recent years of the health insurance Marketplaces, with notable variation across state rating areas. Some experts have speculated that these increases are due to greater enrollment among sicker patients, the expiration of market stabilization policies, or the federal government’s discontinuation of funding for cost-sharing subsidies. However, these factors do not explain why some rating areas have experienced rapid premium growth, while others have experienced more modest increases. I used a comprehensive database of information about premiums and market characteristics for rating areas in states with federally facilitated Marketplaces to demonstrate that higher premiums are associated with local health insurance monopolies. In 2018, Marketplace premiums were 50 percent ($180) higher, on average, in rating areas with monopolist insurers, compared to those with more than two insurers. This was driven by large premium increases for the monopolist insurers’ lowest-cost plans. Understanding how insurer competition has affected enrollment, costs, and quality will help guide future individual-market reforms.

Understanding Physician Decision Making: The Case of Depression
Janet Currie & Bentley MacLeod
NBER Working Paper, August 2018


Faulty physician decision making has been blamed for everything from medical errors to excessive procedure use and wasteful spending. Yet medical treatment is often complex, requiring a sequence of decisions that may involve trade offs between selecting the choice with the highest expected value or selecting a choice with higher possible payoffs. We show that the best choice depends on a physician’s diagnostic skill so that the optimal treatment can vary even for identical patients. Bringing the model to patient claims data for depression, we show that doctors who experiment more with drug choice achieve better patient outcomes, except when physician decisions violate professional guidelines for drug choice.

Consumer Responses to Price Transparency Alone Versus Price Transparency Combined with Reference Pricing
Christopher Whaley, Timothy Brown & James Robinson
American Journal of Health Economics, forthcoming


Efforts to spur patient price shopping by providing access to price transparency tools have been met with limited success. One potential reason is the absence of financial incentives. This paper uses data from a large employer that implemented a price transparency platform and subsequently implemented a reference pricing program for laboratory and diagnostic imaging tests. We find no price shopping effects when the price transparency tool is offered alone. However, combining price transparency with reference pricing leads to significant shifts in consumer choice of facility, resulting in a 27 percent reduction in the average price paid per laboratory test and a 13 percent reduction in price paid per imaging test. A variety of public and purchaser initiatives have sought to further the development and adoption of price transparency tools. Our results imply that these tools will capture the attention of consumers, and influence their behavior, only if patients have strong financial incentives to care about prices.

Medicaid Crowd-Out of Long-Term Care Insurance with Endogenous Medicaid Enrollment
Geena Kim
Journal of Human Capital, Fall 2018, Pages 431-474


I examine the impact of policies lowering long-term care insurance (LTCI) premiums and Medicaid availability on the LTCI demand of unmarried elderly women living in four states — California, Florida, Texas, and Michigan — by developing and estimating a stochastic dynamic model of decisions on LTCI purchase, Medicaid enrollment, nursing home use, and asset holdings. The model parameters are estimated using the Health and Retirement Study from 1998 to 2004 by simulated maximum likelihood estimation. Counterfactual policy experiments based on the estimated parameters show that both price elasticity and Medicaid crowd-out of LTCI demand are small for the population studied.

Does Spending More Get More? Health Care Delivery and Fiscal Implications From a Medicare Fee Bump
Alice Chen et al.
Journal of Policy Analysis and Management, forthcoming


While salient features of the Affordable Care Act include insurance expansions and private coverage reforms, various other provisions are embedded within the law. We focus on a temporary 10 percent fee increase for primary care visits supplied to publicly insured (Medicare) beneficiaries. Using administrative and survey data, we assess the price shock's impact on service volume, physician labor supply, and quality of care. Primary care physicians (PCPs) in independent practices demonstrate, at most, a marginal 2 percent increase in new patient visits while horizontally and vertically integrated PCPs show no change. Both PCP organizational types witness declines in established patient visits, on average, but there is marked heterogeneity: established patient visits increase by 1 to 2 percent among PCPs with fewer Medicare claims in the pre‐period. The Medicare fee bump did not observably impact other labor supply outcomes and quality of care margins. We estimate that the policy introduced a $1.5 billion transfer from taxpayers to providers during the initiative's first three years.

Does Limiting Allowable Rating Variation in the Small Group Health Insurance Market Affect Employer Self‐Insurance?
Erin Trish & Bradley Herring
Journal of Risk and Insurance, September 2018, Pages 607-633 


The Affordable Care Act (ACA) imposes adjusted community rating in the small group market, which employers can avoid by self‐insuring, raising concerns about adverse selection. We evaluate the impact of limiting allowable rating variation on employer self‐insurance across industries with varied health risk, using cross‐state variation in pre‐ACA rating regulations, the nationally representative 2008–2013 KFF/HRET Employer Health Benefits Survey, and a triple‐difference regression approach. We find that lower risk employers subject to laws limiting allowable premium rating variation have a predicted probability of self‐insurance that is about 18 percentage points higher than otherwise‐similar higher risk employers, suggesting that these selection concerns are warranted.

Young Adults’ Access to Insurance Through Parents: Relationship to Receipt of Reproductive Health Services and Chlamydia Testing, 2007–2014
Penny Loosier et al.
Journal of Adolescent Health, forthcoming

Methods: Cross-sectional analysis of commercially insured young women (18–25) enrolled ≥330 days in health plans included in the Truven Health MarketScan commercial claims and encounters database (2007–2014).

Results: Between 2010 and 2014, the proportion of parentally-insured young women increased significantly across all age groups (AOR = 4.32, CI = 4.29, 4.33). Compared to self-insured young women, parentally-insured young women were less likely to receive a reproductive health service (AOR = .66, CI = .66, .67) and sexually active parentally-insured young women were less likely to receive chlamydia testing (AOR = .75, CI = .75, .76) using their parent's insurance.

Conclusions: Young women who are insured through a parent are less likely to receive reproductive health services or chlamydia testing using their parent's insurance, which could suggest that concerns about confidential receipt of health services may result in missed care. Various policies, including those related to explanation of benefits sent to a plan policy holder outlining services received, may affect the receipt of confidential healthcare by young adults.

Saving Patient Ryan — Can Advanced Electronic Medical Records Make Patient Care Safer?
Muhammad Zia Hydari, Rahul Telang & William Marella
Management Science, forthcoming


The risk of patient harm resulting from medical care affects hundreds of thousands of patients and costs tens of billions of dollars every year. Advanced electronic medical records (EMRs) are expected to improve patient safety, but the evidence of their impact on patient safety is inconclusive. A key challenge to evaluating advanced EMRs’ impact has been the lack of reliable patient safety data. We address this issue by analyzing a new patient safety data set from the Pennsylvania Patient Safety Authority (PSA), a state agency that aggregates patient safety data from Pennsylvania hospitals. Using a 2005–2014 panel from PSA, we identify advanced EMRs’ effect using the difference-in-differences method. We find that advanced EMRs lead to a 17.5% decline in patient safety events, driven by reductions in medication errors, falls, and complication errors. Further, our analysis shows a decline in medium- and high-severity events.

Machine learning models in electronic health records can outperform conventional survival models for predicting patient mortality in coronary artery disease
Andrew Steele et al.
PLoS ONE, August 2018


Prognostic modelling is important in clinical practice and epidemiology for patient management and research. Electronic health records (EHR) provide large quantities of data for such models, but conventional epidemiological approaches require significant researcher time to implement. Expert selection of variables, fine-tuning of variable transformations and interactions, and imputing missing values are time-consuming and could bias subsequent analysis, particularly given that missingness in EHR is both high, and may carry meaning. Using a cohort of 80,000 patients from the CALIBER programme, we compared traditional modelling and machine-learning approaches in EHR. First, we used Cox models and random survival forests with and without imputation on 27 expert-selected, preprocessed variables to predict all-cause mortality. We then used Cox models, random forests and elastic net regression on an extended dataset with 586 variables to build prognostic models and identify novel prognostic factors without prior expert input. We observed that data-driven models used on an extended dataset can outperform conventional models for prognosis, without data preprocessing or imputing missing values. An elastic net Cox regression based with 586 unimputed variables with continuous values discretised achieved a C-index of 0.801 (bootstrapped 95% CI 0.799 to 0.802), compared to 0.793 (0.791 to 0.794) for a traditional Cox model comprising 27 expert-selected variables with imputation for missing values. We also found that data-driven models allow identification of novel prognostic variables; that the absence of values for particular variables carries meaning, and can have significant implications for prognosis; and that variables often have a nonlinear association with mortality, which discretised Cox models and random forests can elucidate. This demonstrates that machine-learning approaches applied to raw EHR data can be used to build models for use in research and clinical practice, and identify novel predictive variables and their effects to inform future research.

The effect of primary care visits on other health care utilization: A randomized controlled trial of cash incentives offered to low income, uninsured adults in Virginia
Cathy Bradley, David Neumark & Lauryn Saxe Walker
Journal of Health Economics, forthcoming


We conducted a randomized controlled trial, enrolling low-income uninsured adults in Virginia (United States), to determine whether cash incentives are effective at encouraging a primary care provider (PCP) visit, and at lowering utilization and costs. Subjects were randomized to four groups: untreated controls, and one of three incentive arms with incentives of $0, $25, or $50 for visiting a PCP within six months of group assignment. We used the exogenous variation generated by the experiment to obtain causal evidence on the effects of a PCP visit. We observed modest reductions in non-urgent emergency department use and increased outpatient use, but no reductions in overall costs. These findings in utilization are consistent with the expectation that PCPs offer an alternative to the emergency department for non-emergent conditions. Total costs did not decline because any savings from avoiding the emergency department were offset by increased outpatient utilization.

Simplifying The Medicare Plan Finder Tool Could Help Older Adults Choose Lower-Cost Part D Plans
Brian McGarry, Nicole Maestas & David Grabowski
Health Affairs, August 2018, Pages 1290-1297


Helping older adults make good plan choices is a persistent challenge of the Medicare prescription drug (Part D) program. The Centers for Medicare and Medicaid Services (CMS) provides an internet-based decision support tool (Plan Finder), but this appears to have had limited effect in part because the tool is complex and difficult to interpret. This study used a randomized experiment with hypothetical Part D plan choices to test the effect of simplifying the default amount of financial information provided on Plan Finder on people’s ability to select low-cost plans. Reducing the amount of financial information displayed results in the selection of lower-cost plans, with no accompanying decrease in average plan quality or pharmacy network size but an increase in the take-up of convenience options such as a mail-order pharmacy. These modifications to the current Plan Finder design have the potential to improve the tool’s usability and beneficiaries’ plan choices in the Part D market.

Homeowner Behavior, Health Status, and Medicaid Payment Eligibility: Evidence from the Deficit Reduction Act of 2005
Judith Ricks
Journal of Policy Analysis and Management, forthcoming


This paper analyzes the effect of a change in the status of housing equity as a protected asset for Medicaid long‐term care payment eligibility. A difference‐in‐difference‐in‐differences strategy is employed to estimate the effect of the policy on the housing equity holdings of potentially treated individuals. Using a panel of unmarried homeowners, the policy induced treated individuals who were likely to require long‐term care to hold less housing equity by values of $82,000 to $193,000 relative to control individuals. This equates to relative reductions of 12 to 29 percent for treated individuals after the policy change. Similar effects are not observed when considering health measures less predictive of long‐term care services and for a sample of married households who were unlikely affected by the policy. These estimates confirm the importance of the housing asset as a shelter for Medicaid eligibility.


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