They care

Kevin Lewis

July 06, 2016

Achieving Kaiser Permanente quality

Matthew McHugh et al.

Health Care Management Review, July/September 2016, Pages 178–188

Background: The Kaiser Permanente model of integrated health delivery is highly regarded for high-quality and efficient health care. Efforts to reproduce Kaiser’s success have mostly failed. One factor that has received little attention and that could explain Kaiser’s advantage is its commitment to and investment in nursing as a key component of organizational culture and patient-centered care.

Methodology: This was a cross-sectional analysis of linked secondary data from multiple sources, including a detailed survey of nurses, for 564 adult, general acute care hospitals from California, Florida, Pennsylvania, and New Jersey in 2006–2007. We used logistic regression models to examine whether patient (mortality and failure-to-rescue) and nurse (burnout, job satisfaction, and intent-to-leave) outcomes in Kaiser hospitals were better than in non-Kaiser hospitals. We then assessed whether differences in nursing explained outcomes differences between Kaiser and other hospitals. Finally, we examined whether Kaiser hospitals compared favorably with hospitals known for having excellent nurse work environments — Magnet hospitals.

Findings: Patient and nurse outcomes in Kaiser hospitals were significantly better compared with non-Magnet hospitals. Kaiser hospitals had significantly better nurse work environments, staffing levels, and more nurses with bachelor’s degrees. Differences in nursing explained a significant proportion of the Kaiser outcomes advantage. Kaiser hospital outcomes were comparable with Magnet hospitals, where better outcomes have been largely explained by differences in nursing.

Implications: An important element in Kaiser’s success is its investment in professional nursing, which may not be evident to systems seeking to achieve Kaiser’s advantage. Our results suggest that a possible strategy for achieving outcomes like Kaiser may be for hospitals to consider Magnet designation, a proven and cost-effective strategy to improve process of care through investments in nursing.


Effect of physician disclosure of specialty bias on patient trust and treatment choice

Sunita Sah, Angela Fagerlin & Peter Ubel

Proceedings of the National Academy of Sciences, 5 July 2016, Pages 7465–7469

This paper explores the impact of disclosures of bias on advisees. Disclosure — informing advisees of a potential bias — is a popular solution for managing conflicts of interest. Prior research has focused almost exclusively on disclosures of financial conflicts of interest but little is known about how disclosures of other types of biases could impact advisees. In medicine, for example, physicians often recommend the treatment they specialize in; e.g., surgeons are more likely to recommend surgery than nonsurgeons. In recognition of this bias, some physicians inform patients about their specialty bias when other similarly effective treatment options exist. Using field data (recorded transcripts of surgeon–patient consultations) from Veteran Affairs hospitals and a randomized controlled laboratory experiment, we examine and find that disclosures of specialty bias increase patients’ trust and their likelihood of choosing a treatment in accordance with the physicians’ specialty. Physicians in the field also increased the strength of their recommendation to have the specialty treatment when they disclosed their bias or discussed the opportunity for the patient to seek a consultation with a physician from another specialty. These findings have important implications for handling advisor bias, shared advisor–advisee decision-making, and disclosure policies.


The Determinants of Productivity in Medical Testing: Intensity and Allocation of Care

Jason Abaluck et al.

American Economics Review, forthcoming

A large body of research has investigated whether physicians overuse care. There is less evidence on whether, for a fixed level of spending, doctors allocate resources to patients with the highest expected returns. We assess both sources of inefficiency exploiting variation in rates of negative imaging tests for pulmonary embolism. We document enormous across-doctor heterogeneity in testing conditional on patient population, which explains the negative relationship between physicians’ testing rates and test yields. Furthermore, doctors do not target testing to the highest risk patients, reducing test yields by one third. Our calibration suggests misallocation is more costly than overuse.


Pharmaceutical Industry–Sponsored Meals and Physician Prescribing Patterns for Medicare Beneficiaries

Colette DeJong et al.

JAMA Internal Medicine, forthcoming

Design, Setting, and Participants: Cross-sectional analysis of industry payment data from the federal Open Payments Program for August 1 through December 31, 2013, and prescribing data for individual physicians from Medicare Part D, for all of 2013. Participants were physicians who wrote Medicare prescriptions in any of 4 drug classes: statins, cardioselective β-blockers, angiotensin-converting enzyme inhibitors and angiotensin-receptor blockers (ACE inhibitors and ARBs), and selective serotonin and serotonin-norepinephrine reuptake inhibitors (SSRIs and SNRIs). We identified physicians who received industry-sponsored meals promoting the most-prescribed brand-name drug in each class (rosuvastatin, nebivolol, olmesartan, and desvenlafaxine, respectively). Data analysis was performed from August 20, 2015, to December 15, 2015.

Main Outcomes and Measures: Prescribing rates of promoted drugs compared with alternatives in the same class, after adjustment for physician prescribing volume, demographic characteristics, specialty, and practice setting.

Results: A total of 279 669 physicians received 63 524 payments associated with the 4 target drugs. Ninety-five percent of payments were meals, with a mean value of less than $20. Rosuvastatin represented 8.8% (SD, 9.9%) of statin prescriptions; nebivolol represented 3.3% (7.4%) of cardioselective β-blocker prescriptions; olmesartan represented 1.6% (3.9%) of ACE inhibitor and ARB prescriptions; and desvenlafaxine represented 0.6% (2.6%) of SSRI and SNRI prescriptions. Physicians who received a single meal promoting the drug of interest had higher rates of prescribing rosuvastatin over other statins (odds ratio [OR], 1.18; 95% CI, 1.17-1.18), nebivolol over other β-blockers (OR, 1.70; 95% CI, 1.69-1.72), olmesartan over other ACE inhibitors and ARBs (OR, 1.52; 95% CI, 1.51-1.53), and desvenlafaxine over other SSRIs and SNRIs (OR, 2.18; 95% CI, 2.13-2.23). Receipt of additional meals and receipt of meals costing more than $20 were associated with higher relative prescribing rates.

Conclusions and Relevance: Receipt of industry-sponsored meals was associated with an increased rate of prescribing the brand-name medication that was being promoted. The findings represent an association, not a cause-and-effect relationship.


Primary Care Appointment Availability and Nonphysician Providers One Year After Medicaid Expansion

Renuka Tipirneni et al.

American Journal of Managed Care, June 2016, Pages 427-431

Objectives: With insurance enrollment greater than expected under the Affordable Care Act, uncertainty about the availability and timeliness of healthcare services for newly insured individuals has increased. We examined primary care appointment availability and wait times for new Medicaid and privately insured patients before and after Medicaid expansion in Michigan.

Methods: Extended follow-up of a previously reported simulated patient (“secret shopper”) study assessing accessibility of routine new patient appointments in a stratified proportionate random sample of Michigan primary care practices before versus 4, 8, and 12 months after Medicaid expansion.

Results: During the study period, approximately 600,000 adults enrolled in Michigan’s Medicaid expansion program, representing 57% of the previously uninsured nonelderly adult population. One year after expansion, we found that appointment availability remained increased by 6 percentage points for new Medicaid patients (95% CI, 1.6-11.1) and decreased by 2 percentage points for new privately insured patients (95% CI, –0.5 to –3.8). Over the same period, the proportion of appointments scheduled with nonphysician providers (nurse practitioners or physician assistants) increased from 8% to 21% of Medicaid appointments (95% CI, 5.6-20.2) and from 11% to 19% of private-insurance appointments (95% CI, 1.3-14.1). Median wait times remained stable for new Medicaid patients and increased slightly for new privately insured patients, both remaining within 2 weeks.

Conclusions: During the first year following Medicaid expansion in Michigan, appointment availability for new Medicaid patients increased, a greater proportion of appointments could be obtained with nonphysician providers, and wait times remained within 2 weeks.


Insurance and the High Prices of Pharmaceuticals

David Besanko, David Dranove & Craig Garthwaite

NBER Working Paper, June 2016

We present a model in which prospective patients are liquidity constrained, and thus health insurance allows patients access to treatments and services that they otherwise would have been unable to afford. Consistent with large expansions of insurance in the U.S. (e.g., the Affordable Care Act), we assume that policies expand the set of services that must be covered by insurance. We show that the profit-maximizing price for an innovative treatment is greater in the presence of health insurance than it would be for an uninsured population. We also show that consumer surplus is less than it would be if the innovation was not covered. These results show that even in the absence of moral hazard, there are channels through which insurance can negatively affect consumer welfare. Our model also provides an economic rationale for the claim that pharmaceutical firms set prices that exceed the value their products create. We empirically examine our model's predictions by studying the pricing of oncology drugs following the 2003 passage of Medicare Part D. Prior to 2003, drugs covered under Medicare Part B had higher prices than those that would eventually be covered under Part D. In general, the trends in pricing across these categories were similar. However, after 2003 there was a far greater increase in prices for products covered under Part D, and as result, products covered by both programs were sold at similar prices. In addition, these prices were quite high compared to the value created by the products --- suggesting that the forced bundle of Part D might have allowed firms to capture more value than their products created.


The Growing Integration of Physician Practices: With a Medicaid Side Effect

Michael Richards, Sayeh Nikpay & John Graves

Medical Care, July 2016, Pages 714–718

Objectives: We track the organizational landscape among all office-based US physician practices from 2009 to 2015 and document the degree of vertical integration over time. Then, we examine the implications of vertical integration on practices’ acceptance of publicly insured patients.

Research Design: We use descriptive trends and linear regression models with practice level fixed effects to capture the relationships between within-office changes in integration behavior and changes in public payer acceptance.

Results: Independent (nonintegrated) physician practices are still the most common organizational type, but their share is declining as the share of practices integrated with a health system increases 3-fold between 2009 and 2015. Although >80% of practices that are part of a health system accept Medicaid, <60% of independent practices will see these patients. Vertically integrating with a health system makes it more likely a practice will start seeing Medicaid patients.

Conclusions: Integration — and possibly consolidation — appears to be occurring and may be increasing over time in the United States. However, it also seems to increase the number of physician practices participating in the Medicaid program. This beneficial side effect has not been previously documented and should be kept in mind as policymakers weigh the pros and cons of a more integrated health care system.


Risk-Adjustment Simulation: Plans May Have Incentives To Distort Mental Health And Substance Use Coverage

Ellen Montz et al.

Health Affairs, June 2016, Pages 1022-1028

Under the Affordable Care Act, the risk-adjustment program is designed to compensate health plans for enrolling people with poorer health status so that plans compete on cost and quality rather than the avoidance of high-cost individuals. This study examined health plan incentives to limit covered services for mental health and substance use disorders under the risk-adjustment system used in the health insurance Marketplaces. Through a simulation of the program on a population constructed to reflect Marketplace enrollees, we analyzed the cost consequences for plans enrolling people with mental health and substance use disorders. Our assessment points to systematic underpayment to plans for people with these diagnoses. We document how Marketplace risk adjustment does not remove incentives for plans to limit coverage for services associated with mental health and substance use disorders. Adding mental health and substance use diagnoses used in Medicare Part D risk adjustment is one potential policy step toward addressing this problem in the Marketplaces.


Health insurance reform and part-time work: Evidence from Massachusetts

Marcus Dillender, Carolyn Heinrich & Susan Houseman

Labour Economics, forthcoming

A concern with requiring employers to provide health insurance to full-time employees is that employers may increase their use of part-time workers to circumvent the mandate. In this paper, we study the effect of the employer mandate in the Massachusetts health insurance reform on part-time work using a difference-in-differences strategy that compares changes in part-time work in Massachusetts after the reform to changes in various control groups. We find strong evidence that the Massachusetts employer mandate increased part-time employment among low-educated workers and some evidence that it increased part-time employment among younger workers. Our estimate of a 1.7 percentage point increase in part-time employment among workers without a college degree suggests that lower-skilled workers may be vulnerable to having their hours cut so that employers do not have to offer them health insurance.


Strategic Formulary Design in Medicare Part D Plans

Kurt Lavetti & Kosali Simon

NBER Working Paper, June 2016

The design of Medicare Part D causes most Medicare beneficiaries to receive fragmented health insurance, whereby prescription drugs and other medical care are covered by separate insurance plans. Fragmentation of insurance plans is potentially inefficient since separate insurers maximize profits over only one component of healthcare spending, despite many complementarities and substitutabilities between types of healthcare. Fragmentation of some plans but not others can also lead to market distortions due to differential adverse selection, as integrated plans may use drug formulary designs to induce enrollment by patients who are profitable under Parts A & B, while stand-alone drug plans have no such incentive. We study whether the design of insurance plans in Medicare Part D reflects these two differences in incentives using data on the universe of Part D plan formularies, drug prices, and Medicare claims data. We find evidence consistent with both hypotheses. Relative to fragmented plans, integrated plans systematically design their drug formularies to encourage enrollment by beneficiaries with medical conditions that are profitable under Parts A & B. However, integrated plans also more generously cover drugs that have the potential to causally reduce medical costs. These large differences in incentives and plan design between integrated and fragmented plans are likely the precursors of substantial differential selection of enrollees, and the basic design of Medicare Part D abets this covert selection.


Association between Temporal Changes in Primary Care Workforce and Patient Outcomes

Chiang-Hua Chang, James O'Malley & David Goodman

Health Services Research, forthcoming

Objective: To examine the association between 10-year temporal changes in the primary care workforce and Medicare beneficiaries' outcomes.

Data Sources: 2001 and 2011 American Medical Association Masterfiles and fee-for-service Medicare claims.

Study Design/Methods: We calculated two primary care workforce measures within Primary Care Service Areas: the number of primary care physicians per 10,000 population (per capita) and the number of Medicare primary care full-time equivalents (FTEs) per 10,000 Medicare beneficiaries. The three outcomes were mortality, ambulatory care–sensitive condition (ACSC) hospitalizations, and emergency department (ED) visits. We measured the marginal association between changes in primary care workforce and patient outcomes using Poisson regression models.

Principal Findings: An increase of one primary care physician per 10,000 population was associated with 15.1 fewer deaths per 100,000 and 39.7 fewer ACSC hospitalizations per 100,000 (both p < .05). An increase of one Medicare primary care FTE per 10,000 beneficiaries was associated with 82.8 fewer deaths per 100,000, 160.8 fewer ACSC hospitalizations per 100,000, and 712.3 fewer ED visits per 100,000 (all p < .05).

Conclusions: Medicare beneficiaries' outcomes improved as the number of primary care physicians and their clinical effort increased.


Labor Supply Effects of Occupational Regulation: Evidence from the Nurse Licensure Compact

Christina DePasquale & Kevin Stange

NBER Working Paper, June 2016

There is concern that licensure requirements impede mobility of licensed professionals to areas of high demand. Nursing has not been immune to this criticism, especially in the context of perceived nurse shortages and large expected future demand. The Nurse Licensure Compact (NLC) was introduced to solve this problem by permitting registered nurses to practice across state lines without obtaining additional licensure. We exploit the staggered adoption of the NLC to examine whether a reduction in licensure-induced barriers alters the nurse labor market. Using data on over 1.8 million nurses and other health care workers we find no evidence that the labor supply or mobility of nurses increases following the adoption of the NLC, even among the residents of counties bordering other NLC states who are potentially most affected by the NLC. This suggests that nationalizing occupational licensing will not substantially reduce labor market frictions.


Changes in Retail Prices of Prescription Dermatologic Drugs From 2009 to 2015

Miranda Rosenberg & Steven Rosenberg

JAMA Dermatology, February 2016, Pages 158-163

Design, Setting, and Participants: Four national chain pharmacies received surveys requesting price data on commonly prescribed dermatologic drugs in 2009, 2011, 2014, and 2015. The initial survey requested information on 72 brand-name drugs. Subsequent surveys increased to eventually include 120 additional brand-name drugs and their generic alternatives when available. Owing to the frequency of prescription, diseases treated, or unusual price increases, 19 brand-name drugs surveyed in all 4 years were selected for final price trend analysis, which was conducted from August 1 to 15, 2015.

Results: Prices of surveyed brand-name drugs increased rapidly between 2009 and 2015. Of the 19 brand-name drugs analyzed, the retail prices of 7 drugs more than quadrupled during the study period. Among these 19 drugs, the mean price increase was 401% during the 6-year survey period, with the majority of the price increases occurring after 2011. Prices of topical antineoplastic drugs had the greatest mean absolute and percentage increase ($10 926.58 [1240%]). Prices of drugs in the antiinfective class had the smallest mean absolute increase ($333.99); prices of psoriasis medications had the smallest mean percentage increase (180%). Prices of acne and rosacea medications increased a mean of 195%, and prices of topical corticosteroids increased a mean of 290% during the study period. Selected generic drugs surveyed in 2011 and 2014 also increased a mean of 279% during the 3-year period.

Conclusions and Relevance: The price of prescription dermatologic drugs rose considerably from 2009 to 2015, with the vast majority of price increases occurring after 2011. Percent increases for multiple, frequently prescribed medications greatly outpaced inflation, national health expenditure growth, and increases in reimbursements for physician services.


Bundled Payment vs. Fee-for-Service: Impact of Payment Scheme on Performance

Elodie Adida, Hamed Mamani & Shima Nassiri

Management Science, forthcoming

Healthcare reimbursements in the United States have been traditionally based on a fee-for-service (FFS) scheme, providing incentives for high volume of care, rather than efficient care. The new healthcare legislation tests new payment models that remove such incentives, such as the bundled payment (BP) system. We consider a population of patients (beneficiaries). The provider may reject patients based on the patient’s cost profile and selects the treatment intensity based on a risk-averse utility function. Treatment may result in success or failure, where failure means that unforeseen complications require further care. Our interest is in analyzing the effect of different payment schemes on outcomes such as the presence and extent of patient selection, the treatment intensity, the provider’s utility and financial risk, and the total system payoff. Our results confirm that FFS provides incentives for excessive treatment intensity and results in suboptimal system payoff. We show that BP could lead to suboptimal patient selection and treatment levels that may be lower or higher than desirable for the system, with a high level of financial risk for the provider. We also find that the performance of BP is extremely sensitive to the bundled payment value and to the provider’s risk aversion. The performance of both BP and FFS degrades when the provider becomes more risk averse. We design two payment systems, hybrid payment and stop-loss mechanisms, that alleviate the shortcomings of FFS and BP and may induce system optimum decisions in a complementary manner.


Moneyball in Medicare

Edward Norton et al.

NBER Working Paper, June 2016

US policymakers place a high priority on tying Medicare payments to the value of care delivered. A critical part of this effort is the Hospital Value-based Purchasing Program (HVBP), which rewards or penalizes hospitals based on their quality and episode-based costs of care. Within HVBP, each patient affects hospital performance on a variety of quality and spending measures, and performance translates directly to changes in program points and ultimately dollars. In short, hospital revenue from a patient consists not only of the DRG payment, but also consists of that patient’s marginal future reimbursement. We estimate the magnitude of the marginal future reimbursement for individual patients across each type of quality and performance measure. We describe how those incentives differ across hospitals, including integrated and safety-net hospitals. We find some evidence that hospitals improved their performance over time in the areas where they have the highest marginal incentives to improve care.


Association Between Medicare Accountable Care Organization Implementation and Spending Among Clinically Vulnerable Beneficiaries

Carrie Colla et al.

JAMA Internal Medicine, forthcoming

Importance: Accountable care contracts hold physician groups financially responsible for the quality and cost of health care delivered to patients. Focusing on clinically vulnerable patients, those with serious conditions who are responsible for the greatest proportion of spending, may result in the largest effects on both patient outcomes and financial rewards for participating physician groups.

Design, Setting, and Participants: For this cohort study, 2 study populations were defined: the overall Medicare population and the clinically vulnerable subgroup of Medicare beneficiaries. The overall Medicare population was based on a random 40% sample drawn from continuously enrolled fee-for-service beneficiaries with at least 1 evaluation and management visit in a calendar year. The clinically vulnerable study population included all Medicare beneficiaries 66 years or older who had at least 3 Hierarchical Condition Categories (HCCs). Beneficiaries entered the cohort during the quarter between January 2009 to December 2011 when they first had at least 3 HCCs and remained in the cohort until death. Cohort entry was restricted to the preperiod to account for potential changes in coding practices after ACO implementation. Difference-in-difference estimations were used to compare changes in health care outcomes for Medicare beneficiaries attributed to physicians in ACOs with those attributed to non-ACO physicians from January 2009 to December 2013.

Results: Total spending decreased by $34 (95% CI, −$52 to −$15) per beneficiary-quarter after ACO contract implementation across the overall Medicare population (n = 15 592 600) and decreased $114 in clinically vulnerable patients (n = 8 673 823) (95% CI, −$178 to −$50). In the overall Medicare cohort, hospitalizations and emergency department visits decreased by 1.3 and 3.0 events per 1000 beneficiaries per quarter, respectively (95% CIs: −2.1 to −0.4 and −4.8 to −1.3), and hospitalizations and emergency department visits decreased in the clinically vulnerable cohort by 2.9 and 4.1 events per 1000 beneficiaries per quarter, respectively (95% CIs: −5.2 to −0.7 and −7.1 to −1.2). Changes in total spending associated with ACOs did not vary by clinical condition of beneficiaries.

Conclusions and Relevance: Medicare ACO programs are associated with modest reductions in spending and use of hospitals and emergency departments. Savings were realized through reductions in use of institutional settings in clinically vulnerable patients.


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