Special treatment
Imperfect Synthetic Controls: Did the Massachusetts Health Care Reform Save Lives?
David Powell
RAND Working Paper, May 2018
Abstract:
In 2006, Massachusetts enacted comprehensive health care reform which served as a model for the Affordable Care Act. I study the mortality effects of the reform using synthetic control estimation, relaxing two critical assumptions required to implement this method. The traditional approach assumes the existence of a perfect synthetic control, which cannot exist if the outcomes of the treated unit are outside of the "convex hull" or functions of transitory shocks. I propose simple modifications to relax these restrictions. The new estimator outperforms the traditional method in simulations. I estimate that the Massachusetts Health Care Reform reduced mortality by 3%.
Defensive Medicine: Evidence from Military Immunity
Michael Frakes & Jonathan Gruber
NBER Working Paper, July 2018
Abstract:
We estimate the extent of defensive medicine by physicians, embracing the no-liability counterfactual made possible by the structure of liability rules in the Military Heath System. Active-duty patients seeking treatment from military facilities cannot sue for harms resulting from negligent care, while protections are provided to dependents treated at military facilities and to all patients — active-duty or not — that receive care from civilian facilities. Drawing on this variation and exploiting exogenous shocks to care location choices stemming from base-hospital closures, we find suggestive evidence that liability immunity reduces inpatient spending by 5% with no measurable negative effect on patient outcomes.
A Doctor Like Me: Physician-Patient Race-Match and Patient Outcomes
Andrew Hill, Daniel Jones & Lindsey Woodworth
Montana State University Working Paper, July 2018
Abstract:
This paper assesses the impacts of physician-patient race-match on patient mortality. We draw on administrative data from Florida, linking hospital encounters from mid-2011 through 2014 to information from the Florida Physician Workforce Survey. We focus on a subset of hospital patients who are conditionally randomly assigned to physicians. We find that physician-patient race-match reduces the likelihood of within-hospital mortality by 0.14 percentage points, a substantial 13% reduction relative to the overall mortality rate. Results are primarily driven by gains experienced by black patients when matched to black physicians.
Paying More for Less? Insurer Competition and Health Plan Generosity in the Medicare Advantage Program
Daria Pelech
Journal of Health Economics, forthcoming
Abstract:
This paper explores the relationship between insurer competition and health plan benefit generosity by examining the impact of a regulatory change that caused the cancellation of 40% of the private plans in Medicare. I isolate cancellation's causal effect by using variation induced by insurers canceling all plans nationally. Results show that insurers in markets affected by cancellation reduced the benefit generosity of the plans remaining in the market. In the average market, out-of-pocket costs for a representative beneficiary enrolled in plans not directly affected by the policy increased by $91 annually. In the least competitive markets, out-of-pocket costs increased by roughly $64-$127 a year for enrollees in those plans. Meanwhile in the most competitive markets, benefit generosity barely changed. These findings have crucial implications for markets such as health insurance exchanges, as they suggest that plan generosity is degraded when competition declines.
Are Health Care Services Shoppable? Evidence from the Consumption of Lower-Limb MRI Scans
Michael Chernew et al.
NBER Working Paper, July 2018
Abstract:
We study how individuals with private health insurance choose providers for lower-limb MRI scans. Lower-limb MRI scans are a fairly undifferentiated service and providers' prices routinely vary by a factor of five or more across providers within hospital referral regions. We observe that despite significant out-of-pocket cost exposure, patients often received care in high-priced locations when lower priced options were available. Fewer than 1 percent of individuals used a price transparency tool to search for the price of their services in advance of care. The choice of provider is such that, on average, individuals bypassed 6 lower-priced providers between their home and the location where they received their scan. Referring physicians heavily influence where their patients receive care. The influence of referring physicians is dramatically greater than the effect of patient cost-sharing. As a result, in order to lower out-of-pocket costs and reduce total MRI spending, patients must diverge from the established referral pathways of their referring physicians. We also observe that patients with vertically integrated (i.e. hospital-owned) referring physicians are more likely to have hospital-based (and more costly) MRI scans.
Medicaid Expansion as an Employment Incentive Program for People With Disabilities
Jean Hall et al.
American Journal of Public Health, forthcoming
Abstract:
Before the Patient Protection and Affordable Care Act (ACA), many Americans with disabilities were locked into poverty to maintain eligibility for Medicaid coverage. US Medicaid expansion under the ACA allows individuals to qualify for coverage without first going through a disability determination process and declaring an inability to work to obtain Supplemental Security Income. Medicaid expansion coverage also allows for greater income and imposes no asset tests. In this article, we share updates to our previous work documenting greater employment among people with disabilities living in Medicaid expansion states. Over time (2013–2017), the trends in employment among individuals with disabilities living in Medicaid expansion states have become significant, indicating a slow but steady progression toward employment for this group post-ACA. In effect, Medicaid expansion coverage is acting as an employment incentive program for people with disabilities. These findings have broad policy implications in light of recent changes regarding imposition of work requirements for Medicaid programs.
Interruptions In Private Health Insurance And Outcomes In Adults With Type 1 Diabetes: A Longitudinal Study
Mary Rogers et al.
Health Affairs, July 2018, Pages 1024-1032
Abstract:
Type 1 diabetes mellitus, which often originates during childhood, is a lifelong disease that requires intensive daily medical management. Because health care services are critical to patients with this disease, we investigated the frequency of interruptions in private health insurance, and the outcomes associated with them, for working-age adults with type 1 diabetes in the United States in the period 2001–15. We designed a longitudinal study with a nested self-controlled case series, using the Clinformatics Data Mart Database. The study sample consisted of 168,612 adults ages 19–64 with type 1 diabetes who had 2.6 mean years of insurance coverage overall. Of these adults, 24.3 percent experienced an interruption in coverage. For each interruption, there was a 3.6 percent relative increase in glycated hemoglobin. The use of acute care services was fivefold greater after an interruption in health insurance compared to before the interruption and remained elevated when stratified by age, sex, or diabetic complications. An interruption was associated with lower perceived health status and lower satisfaction with life. We conclude that interruptions in private health insurance are common among adults with type 1 diabetes and have serious consequences for their well-being.
Reimbursement Rates for Primary Care Services: Evidence of Spillover Effects to Behavioral Health
Johanna Catherine Maclean et al.
NBER Working Paper, July 2018
Abstract:
We study spillover effects of the largest ever increase in Medicaid primary care reimbursement rates on behavioral health and healthcare outcomes; mental illness, substance use disorders, and tobacco product use. Much of the variation in Medicaid reimbursement rates we leverage is attributable to a large federally mandated increase between 2013 and 2014 through the Affordable Care Act. We apply differences-in-differences models to survey data specifically designed to measure behavioral health outcomes over the period 2010 to 2016. We find that higher primary care Medicaid reimbursement rates improve behavioral health outcomes among enrollees. We find no evidence that behavioral healthcare service use is altered. Previous economic research shows that the mandated boost increased office visits. Thus our results suggest that primary care providers are efficient in improving behavioral health outcomes among Medicaid enrollees. Given established shortages of behavioral health providers, these findings are important from a healthcare workforce and policy perspective.
The effects of state‐level pharmacist regulations on generic substitution of prescription drugs
Yan Song & Douglas Barthold
Health Economics, forthcoming
Abstract:
Substituting generic for brand name drugs whenever possible has been proposed to control prescription drug expenditure growth in the United States. This work investigates two types of state laws that regulate the procedures under which pharmacists substitute bioequivalent generic versions of brand name drugs. Mandatory substitution laws require pharmacists to use the generic as a default, and presumed consent laws allow them to assume that the patient agrees to the substitution. Both situations can be overruled by the patient. Using plausibly exogenous changes in states' laws, we use difference‐in‐differences and a discrete choice model to show that although the mandatory switching laws have little effect, the presumed consent laws reduce consumers' probability of purchasing brand name drugs by 3.2% points. The differential effectiveness of the laws is likely caused by pharmacists' profit motives. These results offer important implications for policies that seek to reduce drug expenditures by incentivizing the use of generic drugs.
Effects of health insurance coverage on household financial portfolio: Evidence from the Affordable Care Act
Daeyong Lee
Economics Letters, forthcoming
Abstract:
This article examines the effects of the health insurance coverage mandate for dependents on household financial portfolio decisions by focusing on the Affordable Care Act of 2010. Using the Survey of Income and Program Participation data, the author finds that the dependent coverage mandate significantly increased (decreased) the share of stocks (bonds and other interest-accruing assets) by 2.5 (1.3 and 1.1) percentage points for households having both parental employer-sponsored health insurance and dependent children aged 19 to 25 years.
Growing Number Of Unsubsidized Part D Beneficiaries With Catastrophic Spending Suggests Need For An Out-Of-Pocket Cap
Erin Trish, Jianhui Xu & Geoffrey Joyce
Health Affairs, July 2018, Pages 1048-1056
Abstract:
Medicare Part D has no cap on beneficiaries’ out-of-pocket spending for outpatient prescription drugs, and, unlike Medicare Parts A and B, beneficiaries are prohibited from purchasing supplemental insurance that could provide such a cap. Historically, most beneficiaries whose annual Part D spending reached the catastrophic level were protected from unlimited personal liability by the Low-Income Subsidy (LIS). However, we found that the proportion of beneficiaries whose spending reached that level but did not qualify for the subsidy — and therefore remained liable for coinsurance — increased rapidly, from 18 percent in 2007 to 28 percent in 2015. Moreover, average total per person per year spending grew much more rapidly for those who did not qualify for the LIS than for those who did, primarily because of differences in price and utilization trends for the drugs that represented disproportionately large shares of their spending. We estimated that a cap for all Part D enrollees in 2015 would have raised monthly premiums by only $0.40–$1.31 per member.
Cesarean Delivery Rates and Costs of Childbirth in a State Medicaid Program After Implementation of a Blended Payment Policy
Katy Kozhimannil et al.
Medical Care, August 2018, Pages 658–664
Background: Nearly half of US births are financed by Medicaid, and one-third of births occur by cesarean delivery, at double the cost of vaginal delivery. With the goal of reducing unnecessary cesarean use and improving value, in 2009 Minnesota’s Medicaid program introduced a blended payment rate for uncomplicated births (ie, a single facility or professional services payment regardless of delivery mode).
Methods: We identified births in Medicaid Analytic Extract files from 3 years before and after the 2009 payment change in Minnesota and in 6 control states. We used a quarterly interrupted time series approach to assess policy-related changes in study outcomes, comparing Minnesota to control states. Outcomes included cesarean delivery, childbirth hospitalization costs, and maternal morbidity.
Results: Minnesota’s prepolicy cesarean rate (22.8%) decreased 0.27 percentage points per quarter after the policy for a total decrease of 3.24 percentage points, compared with control states (P=0.01). The cost of childbirth hospitalizations in Minnesota dropped by $425.80 at the time of the policy. Postpolicy, childbirth hospitalization costs continued to decrease in Minnesota relative to prepolicy by $95.04 per quarter, and declined more than control states (P<0.001). There were no significant policy effects on maternal morbidity.
Estimating the monetary benefits of Medicare eligibility for reducing the symptoms of dementia
Robert Brent
Applied Economics, forthcoming
Abstract:
We adopt a three-component method based on the idea of cost-saving for estimating the monetary benefits of Medicare eligibility for reducing dementia symptoms. The method involves Medicare eligibility lowering dementia symptoms, which reduces the need for dependent living, which in turn lowers caregiving costs. We use the Regression Discontinuity approach to establish a causal link between Medicare eligibility and dementia. The novel aspect of the study comes from using a quality-of-life proxy measure for the utility function to derive the marginal rate of substitution between dementia symptoms reduction and dependent living arrangements.
Is Inpatient Volume Or Emergency Department Crowding A Greater Driver Of Ambulance Diversion?
Renee Hsia, Nandita Sarkar & Yu-Chu Shen
Health Affairs, July 2018, Pages 1115-1122
Abstract:
Inpatient volume has long been believed to be a contributing factor to ambulance diversion, which can lead to delayed treatment and poorer outcomes. We examined the extent to which both daily inpatient and emergency department (ED) volumes at specified hospitals, and diversion levels (that is, the number of hours ambulances were diverted on a given day) at their nearest neighboring hospitals, were associated with diversion levels in the period 2005–12. We found that a 10 percent increase in patient volume was associated with a sevenfold greater increase in diversion hours when the volume increase occurred among inpatients (5 percent) versus ED visitors (0.7 percent). When the next-closest ED experienced mild, moderate, or severe diversion, the study hospital’s diversion hours increased by 8 percent, 23 percent, and 44 percent, respectively. These findings suggest that efforts focused on managing inpatient volume and flow might reduce diversion more effectively than interventions focused only on ED dynamics.
The U.S. Medicare Disproportionate Share Hospital program and capacity planning
Beau Grant Barnes & Nancy Harp
Journal of Accounting and Public Policy, forthcoming
Abstract:
U.S. Medicare's Disproportionate Share Hospital (DSH) program provides financial assistance to hospitals that serve low-income populations. Statutory formulas determine the DSH payments made to hospitals; however, the formulas applied to “large” urban hospitals (at least 100 beds) are more generous than those used for “small” urban hospitals (less than 100 beds). The purpose of this study is to determine if the DSH program's 100-bed threshold influences bed capacity planning. We find that the threshold drives a significant discontinuity in the distribution of urban hospital bed capacities, with hospitals tending to maintain just enough beds to qualify for higher DSH payments. The magnitude of the discontinuity is greatest in hospitals with strong incentives to manage bed capacity; and, compared to government and not-for-profit hospitals, for-profit hospitals are more likely to manage capacity to meet the 100-bed threshold. Our findings highlight the potential for regulatory institutions to have unintended influence on capacity planning decisions.
The Effect of Lowering Public Insurance Income Limits on Hospitalizations for Low-Income Children
Jessica Bettenhausen et al.
Pediatrics, August 2018
Methods: In this retrospective cohort study using the 2014 State Inpatient Databases, we included all pediatric (age <18) hospitalizations in 14 states from January 1, 2014, to December 31, 2014, with public insurance as the primary payer. We linked each patient’s zip code to the American Community Survey to determine the likelihood of the patient being below 3 different public insurance income eligibility thresholds (300%, 200%, and 100% of the FPL). Multiple simulations were used to describe newly ineligible hospitalizations under each threshold.
Results: In 775 460 publicly reimbursed hospitalizations in 14 states, reductions in eligibility limits to 300%, 200%, or 100% of the FPL would have resulted in large numbers of newly ineligible hospitalizations (∼155 000 [20% of hospitalizations] for 300%, 440 000 [57%] for 200%, and 650 000 [84%] for 100% of the FPL), equaling $1.2, $3.1, and $4.4 billion of estimated child hospitalization costs, respectively. Patient demographics differed only slightly under each eligibility threshold.
Electronic Health Records Associated With Lower Hospital Mortality After Systems Have Time To Mature
Sunny Lin, Ashish Jha & Julia Adler-Milstein
Health Affairs, July 2018, Pages 1128-1135
Abstract:
Evidence linking electronic health record (EHR) adoption to better care is mixed. More nuanced measures of adoption, particularly those that capture the common incremental approach of adding functions over time in US hospitals, could help elucidate the relationship between adoption and outcomes. We used data for the period 2008–13 to assess the relationship between EHR adoption and thirty-day mortality rates. We found that baseline adoption was associated with a 0.11-percentage-point higher rate per function. Over time, maturation of the baseline functions was associated with a 0.09-percentage-point reduction in mortality rate per year per function. Each new function adopted in the study period was associated with a 0.21-percentage-point reduction in mortality rate per year per function. We observed effect modification based on size and teaching status, with small and nonteaching hospitals realizing greater gains. These findings suggest that national investment in hospital EHRs should yield improvements in mortality rates, but achieving them will take time.