Takeover of healthcare

Kevin Lewis

March 05, 2018

Does Medicare Part D Save Lives?
Abe Dunn & Adam Hale Shapiro
American Journal of Health Economics, forthcoming


We examine the impact of Medicare Part D on mortality for the population over the age of 65. We identify the effects of the reform using variation in drug coverage across counties before the reform was implemented. Studying mortality rates immediately before and after the reform, we find that cardiovascular-related mortality drops significantly in those counties most affected by Part D. Estimates suggest that up to 26,000 more individuals were alive in mid-2007 because of the Part D implementation in 2006. We estimate the welfare benefit from lives saved to range from $1.5 to $4.8 billion.

Effects of health insurance coverage on risky behaviors
Jungtaek Lee
Health Economics, forthcoming


Prior to implementation of the Patient Protection and Affordable Care Act, dependent health insurance coverage was typically available only for young adults under the age of 19. As of September 2010, the Affordable Care Act extended dependent health insurance coverage to include young adults up to the age of 26. I use the National Health Interview Survey for the sample period from 2011 to 2013 to analyze the causal relationship between the expansion of dependent coverage and risky behaviors including smoking and drinking as well as preventive care. I employ a regression discontinuity design to estimate the causal effect of health insurance coverage and overcome the endogeneity problem between insurance status and risky behaviors. When young adults become 26 years old, they are 7 to 10 percentage points more likely to lose health insurance than young adults under the age of 26. Although young adults over the age of 26 are generally aged out of insurance coverage, presence or absence of health insurance does not affect their smoking and drinking behaviors and their access to preventive care.

The Effect of Health Insurance on Crime: Evidence from the Affordable Care Act Medicaid Expansion
Qiwei He
Clemson University Working Paper, January 2018


Little evidence exists on the Affordable Care Act (ACA) on criminal behavior, a gap in the literature that this paper seeks to address. Using a one period static model of criminal behavior, I argue we should anticipate a decrease in time devoted to criminal activities in response to the expansion, since the availability of public health insurance not only has a pure negative income effect on crime but also raises the opportunity cost of crime. This prediction is particularly relevant for the ACA expansion, because it primarily affects childless adults, the population that is most likely to engage in criminal behavior. I validate this forecast using a difference-in-differences approach, estimating the expansion’s effects on a panel dataset of state- and county-level crime rates. My point estimates show that the ACA Medicaid expansion is negatively related to burglary, motor vehicle theft, criminal homicide, robbery, and aggravated assault. The value of this Medicaid expansion induced reduction in crime to expansion states is almost $10 billion per year.

In Sickness and in Health: The Influence of State and Federal Health Insurance Coverage Mandates on Marriage of Young Adults in the USA
Scott Barkowski & Joanne Song McLaughlin
Clemson University Working Paper, January 2018


We study the effects of state and federal dependent health insurance mandates on marriage rates of young adults, ages 19 to 25. Motivated by low rates of coverage among this age group, state governments began mandating health insurers in the 1970s to allow adult children to stay on their parents’ insurance plans. These state level efforts successfully increased insurance coverage rates, but also came with unintended implications for the marriage decisions of young adults. Almost all state mandates explicitly prohibited marriage as a condition of eligibility, thereby directly discouraging marriage. Additionally, by making access to health insurance through parents easier, the mandates made access through spouses’ employers relatively less attractive. To the extent that young adults were altering their marriage plans to gain access through potential spouses, they no longer needed to do so under the mandates, thereby implicitly discouraging marriage. When the dependent coverage mandate of the Affordable Care Act (ACA) was enacted, it effectively ended the state-based marriage restrictions, thereby encouraging marriage among young adults previously eligible for state mandates. On the other hand, for those who were not eligible for state mandates, the ACA represented an attractive new path to obtain coverage, thereby discouraging marriage for these young adults, just as the state mandates had implicitly done previously for others. Thus, the separate efforts at the state and federal level to address low coverage rates for young adults ended up interacting and influencing incentives for marriage in opposite directions. We study these interaction effects on marriage empirically using a new dataset we compiled on state-level dependent coverage mandates. Consistent with theoretical arguments, we find that, before the implementation of the ACA, state mandates lowered marriage rates by about 2 percentage points, but this pattern reversed upon the passage of the ACA. We also find that state mandates increased the probability of out-of-wedlock births among state-mandate-eligible women as compared to ineligible ones, but the ACA reversed this trend as well. Our study provides an important example where fundamental understanding of the effects of the ACA dependent coverage mandate can only be had with full consideration of the pre-existing state laws.

Health Insurance and the Earnings Stability of Low-Income Households
Emily Gallagher et al.
Washington University in St. Louis Working Paper, November 2017


We evaluate the effect of health insurance on negative earnings shocks using the administrative tax data and survey responses of 4,975 low-income households. We exploit exogenous variation in the cost of private insurance under the Affordable Care Act using a regression discontinuity (RD) design. Eligibility to purchase subsidized private insurance is associated with a 29 and 22 percent decline in the rates of unexpected job loss and income loss, respectively. Effects are concentrated among households with past health costs and exist only for “unexpected” forms of earnings variation, suggesting a health-productivity link. Rudimentary calculations based on our RD estimate imply a $256–$476 per year welfare benefit of health insurance in terms of reduced exposure to job loss.

Does Government Health Insurance Reduce Job Lock and Job Push?
Scott Barkowski
Clemson University Working Paper, June 2017


I study job lock and job push, the twin phenomena believed to be caused by employment-contingent health insurance (ECHI). Using variation in Medicaid eligibility among household members of male workers as a proxy for shifts in workers’ dependence on employment for health insurance, I estimate large job lock and job push effects. For married workers, Medicaid eligibility for one household member results in an increase in the likelihood of a voluntary job exit over a four-month period by approximately 34%. For job push, the transition rate into jobs with ECHI among all workers falls on average by 26%.

Excess Prices for Drugs in Medicare: Diagnosis and Prescription
Richard Frank & Richard Zeckhauser
Harvard Working Paper, January 2018


Excess prices for drugs in the U.S. is a persistently vexing policy problem. While there is agreement among most policy analysts that supra competitive prices are necessary to promote innovation; significant disagreements arise over how much pricing discretion prescription drug manufacturers should be permitted, and what portion of the sum of producer plus consumer surplus in the prescription drug market should be claimed by manufacturers relative to consumers and other payers. This analysis first diagnoses the causes of the high costs in Medicare Part D. It then makes use of that diagnosis to provide a prescription for policy measures that have the potential to simultaneously reduce these costs without significantly sacrificing incentives to bring valuable new drugs to market. This paper focuses on an extremely costly component of the Medicare Part D program, the region of coverage that kicks in once a consumer has spent $4,950 on drugs in a calendar year (roughly $8,100 in total drug spending). At that point there are high levels of insurance for the consumer and reinsurance for the prescription drug plan. Consumers pay 5% of costs; plans pay 15% and the government 80%. That design generates serious inefficiencies. The significant subsidies to plans in the reinsurance region combined with the launch of unique high cost prescription drugs could be expected to lead to and has led to substantial departures from cost-effective outcomes in treatments delivered. As would be expected, spending has been growing rapidly in this so called “reinsurance region”. What is less well known is that a small number of very high-cost drugs account for almost all of this growth. Following this diagnosis, we present two, possibly complementary, prescriptions for reducing these inefficiencies. The first follows on the MedPac recommendation that the government reduce its share of risk bearing for the Part D reinsurance benefit. The second focuses on curbing price inefficiencies for those very high-cost drugs. That prescription has two components: eliminating monopolistic overpricing, and promoting the quality of drugs brought to market. It is grounded in the economics of two part tariffs, research on innovation prizes, performance-based contracts, and draws on the mechanism design literature. Such pricing could save substantially on costs without curtailing the most important R&D efforts for pharmaceuticals. Market conditions and political forces appear ripe for significant new approaches to pricing high cost drugs in Medicare Part D. We believe that the prescription discussion here, which draws on this paper’s diagnosis, identifies some promising approaches to a vexing problem.

Contribution of NIH funding to new drug approvals 2010–2016
Ekaterina Galkina Cleary et al.
Proceedings of the National Academy of Sciences, forthcoming


This work examines the contribution of NIH funding to published research associated with 210 new molecular entities (NMEs) approved by the Food and Drug Administration from 2010–2016. We identified >2 million publications in PubMed related to the 210 NMEs (n = 131,092) or their 151 known biological targets (n = 1,966,281). Of these, >600,000 (29%) were associated with NIH-funded projects in RePORTER. This funding included >200,000 fiscal years of NIH project support (1985–2016) and project costs >$100 billion (2000–2016), representing ∼20% of the NIH budget over this period. NIH funding contributed to every one of the NMEs approved from 2010–2016 and was focused primarily on the drug targets rather than on the NMEs themselves. There were 84 first-in-class products approved in this interval, associated with >$64 billion of NIH-funded projects. The percentage of fiscal years of project funding identified through target searches, but not drug searches, was greater for NMEs discovered through targeted screening than through phenotypic methods (95% versus 82%). For targeted NMEs, funding related to targets preceded funding related to the NMEs, consistent with the expectation that basic research provides validated targets for targeted screening. This analysis, which captures basic research on biological targets as well as applied research on NMEs, suggests that the NIH contribution to research associated with new drug approvals is greater than previously appreciated and highlights the risk of reducing federal funding for basic biomedical research.

Screening Plaintiffs and Selecting Defendants in Medical Malpractice Litigation: Evidence from Illinois and Indiana
Mohammad Rahmati et al.
Journal of Empirical Legal Studies, March 2018, Pages 41–79


Many physicians and tort reform advocates believe that most medical malpractice (med mal) claims are “frivolous.” As evidence, they often rely on reports that only about 20 percent of claims result in a payout. Many physicians and reform advocates also believe that plaintiffs lawyers often sue every health provider with even a remote a connection to the patient. Plaintiffs’ lawyers, however, insist that they screen med mal cases carefully, and when they bring a claim, are selective in whom they sue. Can these perspectives be harmonized? We study this question using databases of every insured med mal claim closed in Illinois during 2000–2010 and in Indiana during 1980–2015, and with semi-structured interviews with six plaintiffs’ lawyers. We innovate by using defense costs to assess whether plaintiffs’ lawyers take a case seriously. We treat cases with under $5k in defense spending as “nonserious” unless they have a payout over $25k. We find evidence that many “cases” are nonserious — suggesting that screening is an ongoing process that does not end when a case is accepted. Observed success rates are sensitive to whether one counts “claims” (each defendant is a separate claim) or “cases” (one plaintiff vs. one or more defendants), includes pro se and/or only represented cases, and includes all versus only serious cases. If we analyze cases instead of claims and limit to serious, represented cases, we find much higher success rates (43 percent in Illinois; 44 percent in Indiana). Success rates are higher still in cases brought solely against institutional defendants (58 percent in Illinois; 68 percent in Indiana). Plaintiffs’ lawyers are also selective in the number of defendants they sue. In med mal cases involving only physicians and/or institutions, the mean number of defendants is 1.5 in Illinois and 1.8 in Indiana.

Is health care infected by Baumol's cost disease? Test of a new model
Akinwande Atanda, Andrea Kutinova Menclova & Robert Reed
Health Economics, forthcoming


Rising health care costs are a policy concern across the Organisation for Economic Co-operation and Development, and relatively little consensus exists concerning their causes. One explanation that has received revived attention is Baumol's cost disease (BCD). However, developing a theoretically appropriate test of BCD has been a challenge. In this paper, we construct a 2-sector model firmly based on Baumol's axioms. We then derive several testable propositions. In particular, the model predicts that (a) the share of total labor employed in the health care sector and (b) the relative price index of the health and non-health care sectors should both be positively related to economy-wide productivity. The model also predicts that (c) the share of labor in the health sector will be negatively related and (d) the ratio of prices in the health and non-health sectors unrelated, to the demand for non-health services. Using annual data from 28 Organisation for Economic Co-operation and Development countries over the years 1995–2016 and from 14 U.S. industry groups over the years 1947–2015, we find little evidence to support the predictions of BCD once we address spurious correlation due to coincident trending and other econometric issues.

Association of the Affordable Care Act Dependent Coverage Provision With Prenatal Care Use and Birth Outcomes
Jamie Daw & Benjamin Sommers
Journal of the American Medical Association, 13 February 2018, Pages 579-587

Design, Setting, and Participants: Retrospective cohort study, using a differences-in-differences analysis of individual-level birth certificate data comparing live births among US women aged 24 to 25 years (exposure group) and women aged 27 to 28 years (control group) before (2009) and after (2011-2013) enactment of the dependent coverage provision. Results were stratified by marital status.

Results: The study population included 1 379 005 births among women aged 24-25 years (exposure group; 299 024 in 2009; 1 079 981 in 2011-2013), and 1 551 192 births among women aged 27-28 years (control group; 325 564 in 2009; 1 225 628 in 2011-2013). From 2011-2013, compared with 2009, private insurance payment for births increased in the exposure group (36.9% to 35.9% [difference, −1.0%]) compared with the control group (52.4% to 51.1% [difference, −1.3%]), adjusted difference-in-differences, 1.9 percentage points (95% CI, 1.6 to 2.1). Medicaid payment decreased in the exposure group (51.6% to 53.6% [difference, 2.0%]) compared with the control group (37.4% to 39.4% [difference, 1.9%]), adjusted difference-in-differences, −1.4 percentage points (95% CI, −1.7 to −1.2). Self-payment for births decreased in the exposure group (5.2% to 4.3% [difference, −0.9%]) compared with the control group (4.9% to 4.3% [difference, −0.5%]), adjusted difference-in-differences, −0.3 percentage points (95% CI, −0.4 to −0.1). Early prenatal care increased from 70% to 71.6% (difference, 1.6%) in the exposure group and from 75.7% to 76.8% (difference, 0.6%) in the control group (adjusted difference-in-differences, 0.6 percentage points [95% CI, 0.3 to 0.8]). Adequate prenatal care increased from 73.5% to 74.8% (difference, 1.3%) in the exposure group and from 77.5% to 78.8% (difference, 1.3%) in the control group (adjusted difference-in-differences, 0.4 percentage points [95% CI, 0.2 to 0.6]). Preterm birth decreased from 9.4% to 9.1% in the exposure group (difference, −0.3%) and from 9.1% to 8.9% in the control group (difference, −0.2%) (adjusted difference-in-differences, −0.2 percentage points (95% CI, −0.3 to −0.03). Overall, there were no significant changes in low birth weight, NICU admission, or cesarean delivery. In stratified analyses, changes in payment for birth, prenatal care, and preterm birth were concentrated among unmarried women.

Conclusions and Relevance: In this study of nearly 3 million births among women aged 24 to 25 years vs those aged 27 to 28 years, the Affordable Care Act dependent coverage provision was associated with increased private insurance payment for birth, increased use of prenatal care, and modest reduction in preterm births, but was not associated with changes in cesarean delivery rates, low birth weight, or NICU admission.

The effect of health insurance on sexual health: Evidence from the Affordable Care Act's dependent coverage mandate
Melissa Oney
Social Science & Medicine, April 2018, Pages 20–27


This study estimates changes in sexually transmitted disease rates for young adults in the United States following the Affordable Care Act's dependent coverage mandate; a provision that allows dependents to remain covered under their parents' health insurance plans until the age of 26. This study is the first to analyze changes in reported chlamydia and gonorrhea rates resulting from the dependent coverage mandate. Utilizing a difference-in-differences framework coupled with administrative data from the Centers for Disease Control and Prevention, I find that reported chlamydia rates increased for males and females ages 20–24 relative to comparison groups of males and females ages 15–19 and 25–29 following the mandate. I also find evidence of an increase in gonorrhea rates for females in this age group. I find no evidence that the mandate induced ex ante moral hazard.

Medicaid Benefit Generosity and Labor Market Outcomes: Evidence from Medicaid Adult Vision Benefits
Michel Boudreaux & Brandy Lipton
San Diego State University Working Paper, January 2018


Previous work suggests that Medicaid eligibility expansions may lead to declines in labor market activity. This paper explores the related, but novel question of whether variation in Medicaid benefit generosity alters employment outcomes. We consider adult vision benefits as a case study. Our findings suggest that vision benefits have a net positive effect on intensive margin measures including hours worked and occupational skill requirements, but no significant effect on the likelihood of being employed. These results indicate that Medicaid’s effect on labor market activity is sensitive to the set of covered services.

The Great Recession and Workers’ Health Benefits
Kanghyock Koh
Journal of Health Economics, March 2018, Pages 18–28


During a recession, cost-sharing of employer-sponsored health benefits could increase to reduce labor costs in the U.S. Using a variation in the severity of recession shocks across industries, I find evidence that the enrollment rate of high deductible health plans (HDHPs) among workers covered by employer-sponsored health benefits increased more among firms in industries that experienced severe recession shocks. As potential mechanisms, I study employer-side and worker-side mechanisms. I find that employers changed health benefit offerings to force or incentivize workers to enroll in HDHPs. But I find little evidence of an increase in workers’ demand for HDHPs due to a reduction in income. These results suggest that the HDHP enrollment rate increased during the Great Recession, as employers tried to save costs of offering health benefits.

Industry Input in Policymaking: Evidence from Medicare
David Chan & Michael Dickstein
NBER Working Paper, February 2018


In setting prices for physician services, Medicare solicits input from a committee that evaluates proposals from industry. We investigate whether this arrangement leads to prices biased toward the interests of committee members. We find that increasing a measure of affiliation between the committee and proposers by one standard deviation increases prices by 10%, demonstrating a pathway for regulatory capture. We then evaluate the effect of affiliation on the quality of information used in price-setting. More affiliated proposals produce less hard information, measured as lower quality survey data. However, affiliation results in prices that are more closely followed by private insurers, suggesting that affiliation may increase the total information used in price-setting.

Physician Competition and the Provision of Care: Evidence from Heart Attacks
Abe Dunn & Adam Hale Shapiro
American Journal of Health Economics, forthcoming


We study the impact of competition among physicians on service provision and patients' health outcomes for the U.S. commercial market. We focus on cardiologists treating patients with a first-time heart attack treated in the emergency room. Physician concentration has a small, but statistically significant effect on service utilization. Cardiologists in more concentrated markets perform more intensive procedures, particularly diagnostic procedures – services in which the procedure choice is more discretionary. Higher concentration leads to fewer readmissions but no effect on mortality. These findings suggest that changes in organizational structure, such as a merger of physician groups, not only influence the negotiated prices of services, but also service provision.

Physician Market Structure, Patient Outcomes, and Spending: An Examination of Medicare Beneficiaries
Thomas Koch, Brett Wendling & Nathan Wilson
Health Services Research, forthcoming

Data Sources: 2005–2012 Medicare fee-for-service claims and enrollment data.

Principal Findings: The study finds that an increase in consolidation leads to statistically and economically significant increases in negative health outcomes. For example, we find that moving from a zip code at the 25th percentile of cardiology market concentration to one at the 75th percentile would be associated with 5 to 7 percent increases in risk-adjusted mortality for three of the sample populations. We also found higher expenditures in more concentrated markets. For example, moving from a zip code at the 25th percentile of cardiology market concentration to one at the 75th would be associated with 7 to 11 percent increases in expenditures, depending on sample population.

Market Competition and Health Outcomes in Hemodialysis
Kevin Erickson et al.
Health Services Research, forthcoming

Data Sources: Secondary analysis of data from a national dialysis registry between 2001 and 2011.

Study Design: We conducted one- and two-part linear regression models, using each hospital service area (HSA) as its own control, to examine the independent associations among market concentration and health outcomes.

Data Collection: We selected cohorts of patients receiving in-center hemodialysis in the United States at the start of each calendar year. We used information about dialysis facility ownership and the location where patients received dialysis to measure an index of market concentration — the Hirschman-Herfindahl Index (HHI) — for HSA and year, which ranges from near zero (perfect competition) to one (monopoly).

Principal Findings: An average reduction in HHI by 0.2 (one standard deviation in 2011) was associated with 2.9 fewer hospitalizations per 100 patient-years (95 percent CI, 0.4 to 5.4). If these findings were generalized to the entire in-center hemodialysis population, this would translate to 8,100 (95 percent CI 1,200 to 15,000) fewer hospitalizations in 2011. There was no association between change in market competition and mortality.

Nurse Practitioner Independence, Health Care Utilization, and Health Outcomes
Jeffrey Traczynski & Victoria Udalova
Journal of Health Economics, March 2018, Pages 90-109


Many states allow nurse practitioners (NPs) to practice and prescribe drugs without physician oversight, increasing the number of autonomous primary care providers. We estimate the causal impact of NP independence on population health care utilization rates and health outcomes, exploiting variation in the timing of state law passage. We find that NP independence increases the frequency of routine checkups, improves care quality, and decreases emergency room use by patients with ambulatory care sensitive conditions. These effects come from decreases in administrative costs for physicians and NPs and patients’ indirect costs of accessing medical care.

Team Formation and Performance: Evidence from Healthcare Referral Networks
Leila Agha et al.
NBER Working Paper, February 2018


How does team structure affect productivity? We address this question with an application to healthcare by examining the teams that primary care physicians (PCPs) assemble when they refer patients to specialists. Our theoretical model analyzes how PCPs trade off costly coordination against beneficial specialization, predicting that coordination improves when PCPs concentrate their referrals within a smaller set of specialists. Empirically we find that patients of PCPs with concentrated referrals have lower healthcare costs. This effect exists for commercially insured and Medicare populations; is statistically and economically significant; and holds under identification strategies that account for unobserved patient and physician characteristics.

New Risk-Adjustment Policies Reduce But Do Not Eliminate Special Enrollment Period Underpayment
Stan Dorn, Bowen Garrett & Marni Epstein
Health Affairs, February 2018, Pages 308-315


Millions of uninsured Americans do not sign up for available coverage despite job loss or other factors that would make them eligible for special enrollment periods (SEPs). Such periods let people enroll in nongroup insurance outside the usual open enrollment period for Marketplace coverage. Concerned that risk adjustment results in underpayment for the health risks associated with SEP enrollees, carriers rarely market their products to consumers eligible for SEPs, and many do not pay agents and brokers to enroll such consumers. To address the apparent underpayments, federal officials added enrollment duration factors that, starting in 2017, increased risk scores for SEP enrollees and other part-year members. Using individual-market claims data for 2015 from two large carriers, we found that risk adjustment did, in fact, undercompensate plans for part-year members. However, underpayment was much larger for SEP enrollees than for part-year members who joined during open enrollment periods. Short-term, urgent health problems appeared to drive enrollment more for SEP enrollees than for part-year members who signed up during open enrollment. We also found that the federal government’s enrollment duration factors will remedy underpayment for part-year members whose coverage begins during open enrollment but leave carriers significantly underpaid for SEP enrollees. For carriers to recruit rather than avoid SEP enrollees, further increases to risk adjustment for such enrollees are likely needed.

Hospital Pricing and Public Payments
Michael Darden, Ian McCarthy & Eric Barrette
NBER Working Paper, February 2018


A longstanding debate in health economics and health policy concerns how hospitals adjust prices with private insurers following reductions in public funding. A common argument is that hospitals engage in some degree of "cost-shifting," wherein hospitals increase prices with private insurers in response to a reduction in public payments; however, evidence of significant cost-shifting is mixed, and the rationale for such behavior is unclear. We enter this debate by examining plausibly exogenous variation in Medicare payment rates generated by two policies under the Affordable Care Act: the Hospital Readmission Reduction Program (HRRP) and the Hospital Value Based Purchasing (HVBP) program. We merge rich hospital-level information to actual private-payer payment data from a large, multi-payer database. Our data include roughly 50% of inpatient prospective payment hospitals in the United States from 2010 to 2015. We find that hospitals that faced net payment reductions from HRRP and HVBP were able to negotiate 1.5% higher average private payments - approximately $155 extra for the average acute care claim, or $82,000 per hospital, based on an average hospital penalty of nearly $146,000. We find the largest increases in payments for circulatory system (2.7%) and nervous system (3.2%) claims. We also find significant heterogeneity by payer mix, where cost-shifting is largest for hospitals with higher shares of private insurance patients.

Medicare Payment Penalties and Safety Net Hospital Profitability: Minimal Impact on These Vulnerable Hospitals
Gloria Bazzoli, Michael Thompson & Teresa Waters
Health Services Research, forthcoming

Objective: To examine relationships between penalties assessed by Medicare's Hospital Readmission Reduction Program and Value-Based Purchasing Program and hospital financial condition.

Data Sources/Study Setting: Centers for Medicare and Medicaid Services, American Hospital Association, and Area Health Resource File data for 4,824 hospital-year observations.

Study Design: Bivariate and multivariate analysis of pooled cross-sectional data.

Principal Findings: Safety net hospitals have significantly higher HRRP/VBP penalties, but, unlike nonsafety net hospitals, increases in their penalty rate did not significantly affect their total margins.

The Impact of E-Visits on Visit Frequencies and Patient Health: Evidence from Primary Care
Hessam Bavafa, Lorin Hitt & Christian Terwiesch
Management Science, forthcoming


Secure messaging, or “e-visits,” between patients and providers has sharply increased in recent years, and many hope they will help improve healthcare quality, while increasing provider capacity. Using a panel data set from a large healthcare system in the United States, we find that e-visits trigger about 6% more office visits, with mixed results on phone visits and patient health. These additional visits come at the sacrifice of new patients: physicians accept 15% fewer new patients each month following e-visit adoption. Our data set on nearly 100,000 patients spans from 2008 to 2013, which includes the rollout and diffusion of e-visits in the health system we study. Identification comes from difference-in-differences estimates leveraging variation in the timing of e-visit adoption by both patients and providers. We conduct several robustness checks, including matching analyses and an instrumental variable analysis to account for possible time-varying characteristics among patient e-visit adopters.

The Impact of Nurse Turnover on Quality of Care and Mortality in Nursing Homes: Evidence from the Great Recession
Yaa Akosa Antwi & John Bowblis
American Journal of Health Economics, forthcoming


We estimate the causal effect of nurse turnover on mortality and the quality of nursing home care with a fixed effect instrumental variable estimation that uses the unemployment rate as an instrument for nursing turnover. We find that ignoring endogeneity leads to a systematic underestimation of the effect of nursing turnover on mortality and quality of care in a sample of California nursing homes. Specifically, 10 percentage point increase in nurse turnover results in a facility receiving 1.8 additional deficiencies per annual regulatory survey, reflecting a 16.5 percent increase. Not accounting for endogeneity of turnover leads to results that suggest only a 1 percent increase in deficiencies. We also find suggestive evidence that turnover results in lower quality in other dimensions and may increase mortality.

Early Impact of the Affordable Care Act Coverage Expansion on Safety-Net Hospital Inpatient Payer Mix and Market Shares
Vivian Wu et al.
Health Services Research, forthcoming

Objective: To examine the impact of the Affordable Care Act's coverage expansion on safety-net hospitals (SNHs).

Study Setting: Nine Medicaid expansion states.

Study Design: Differences-in-differences (DID) models compare payer-specific pre-post changes in inpatient stays of adults aged 19–64 years at SNHs and non-SNHs.

Data Collection Methods: 2013–2014 Healthcare Cost and Utilization Project State Inpatient Databases.

Principal Findings: On average per quarter postexpansion, SNHs and non-SNHs experienced similar relative decreases in uninsured stays (DID = –2.2 percent, p = .916). Non-SNHs experienced a greater percentage increase in Medicaid stays than did SNHs (DID = 13.8 percent, p = .041). For SNHs, the average decrease in uninsured stays (–146) was similar to the increase in Medicaid stays (153); privately insured stays were stable. For non-SNHs, the decrease in uninsured (–63) plus privately insured (–33) stays was similar to the increase in Medicaid stays (105). SNHs and non-SNHs experienced a similar absolute increase in Medicaid, uninsured, and privately insured stays combined (DID = –16, p = .162).

Conclusions: Postexpansion, non-SNHs experienced a greater percentage increase in Medicaid stays than did SNHs, which may reflect patients choosing non-SNHs over SNHs or a crowd-out of private insurance. More research is needed to understand these trends.

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