Against Medical Advice
The politics of pain: Medicaid expansion, the ACA and the opioid epidemic
Michael Shepherd
Journal of Public Policy, forthcoming
Abstract:
Federalism allows state politicians opportunities to undermine or support for federal policies. As a result, voters often have varied impressions of the same federal programmes. To test how this dynamic affects voting behaviour, I gather data on the severity of the opioid epidemic from 2006–2016. I exploit discontinuities between states that expanded Medicaid and those that did not to gain causal leverage over whether expansion affected the severity of the epidemic and whether these policy effects affected policy feedback. I show that the decision to expand Medicaid reduced the severity of the opioid epidemic. I also show that expanding Medicaid and subsequent reductions in the severity of the opioid epidemic increased support for the Democratic Party. The results imply that the Republican Party performed better in places where voters did not have access to Medicaid expansion and where the epidemic worsened, demonstrating an unintended consequence of federalism on policy feedback.
Unwanted Advice? Frequency, Characteristics, And Outcomes Of Negative Advisory Committee Votes For FDA-Approved Drugs
Joseph Ross Daval, Ameet Sarpatwari & Aaron Kesselheim
Health Affairs, May 2022, Pages 713-721
Abstract:
Substantial controversy arose in 2021 when the Food and Drug Administration (FDA) approved the Alzheimer’s disease drug aducanumab (Aduhelm) under its accelerated approval program despite a nearly unanimous negative advisory committee vote. Advisory committees are convened before some FDA decisions to provide insight for the agency’s decision-making process. To understand the frequency, characteristics, and outcomes of cases in which the FDA authorizes a drug against the recommendations of an advisory committee, we reviewed all FDA advisory committee referrals for new drugs approved during the period 2010–21. The fraction of approved drugs that had been referred to an advisory committee decreased from 55 percent to 6 percent annually, with FDA approvals of negatively reviewed drugs occurring about once a year. Qualitative analysis of committee meetings revealed variability in the substance and wording of key voting questions. Reforms such as transparent criteria for when a drug should be subject to external scrutiny, consistent wording of voting questions, and clear regulatory responses to negative recommendations can better ensure public confidence in the FDA approval process.
A Welfare Analysis of Medicaid and Crime
Erkmen Giray Aslim, Murat Mungan & Han Yu
George Mason University Working Paper, April 2022
Abstract:
We calculate conservative estimates for the marginal value of public funds (MVPF) associated with providing Medicaid to inmates exiting prison. Our MVPF estimates, which measure the ratio between the benefits associated with the policy (measured in terms of willingness to pay) and its costs net of fiscal externalities, range between 3.44 and 10.61. A large proportion of the benefits that we account for are related to the reduced future criminal involvement of exiting inmates who receive Medicaid. Using a difference-in-differences approach, we find that Medicaid expansions reduce the average number of times a released inmate is reimprisoned within a year by about 11.5%. We use this estimate along with key values reported elsewhere (e.g., victimization costs, data on victimization and incarceration) to calculate specific benefits from the policy. These include reduced criminal harm due to reductions in reoffenses; direct benefits to former inmates from receiving Medicaid; increased employment; and reduced loss of liberty due to fewer future reimprisonments. Net-costs consist of the cost of providing Medicaid net of changes in the governmental cost of imprisonment; changes in the tax revenue due to increased employment; and changes in spending on other public assistance programs. We interpret our estimates as being conservative, because we err on the side of under-estimating benefits and over-estimating costs when data on specific items are imprecise or incomplete. Our findings are largely consistent with others in the sparse literature investigating the crime-related welfare impacts of Medicaid access, and suggest that public health insurance programs can deliver sizeable indirect benefits from reduced crime in addition to their direct health-related benefits.
When Does Product Liability Risk Chill Innovation? Evidence from Medical Implants
Alberto Galasso & Hong Luo
American Economic Journal: Economic Policy, May 2022, Pages 366-401
Abstract:
Liability laws designed to compensate for harms caused by defective products may also affect innovation. We examine this issue by exploiting a major quasi-exogenous increase in liability risk faced by US suppliers of polymers used to manufacture medical implants. Difference-in-difference analyses show that this surge in suppliers' liability risk had a large and negative impact on downstream innovation in medical implants, but it had no significant effect on upstream polymer patenting. Our findings suggest that liability risk can percolate throughout a vertical chain and may have a significant chilling effect on downstream innovation.
Does the Delivery of Primary Health Care Improve Birth Outcomes? Evidence from the Rollout of Community Health Centers
Esra Kose, Siobhan O'Keefe & Maria Rosales-Rueda
NBER Working Paper, May 2022
Abstract:
Introduced as part of the War on Poverty, Community Health Centers (CHCs) deliver primary care to underserved populations by locating sliding-scale clinics in economically disadvantaged areas. We investigate how this policy affected infant health using the rollout of CHCs and a flexible event study framework with Vital Statistics natality data. Our results show that average birth weight increased, and low birth weight incidence decreased after a CHC opened in the mother’s county of residence. These improvements in infant health can be explained by increased access to early prenatal care and reductions in maternal smoking.
Hospital-physician integration and risk-coding intensity
Brady Post et al.
Health Economics, forthcoming
Abstract:
Hospital-physician integration has surged in recent years. Integration may allow hospitals to share resources and management practices with their integrated physicians that increase the reported diagnostic severity of their patients. Greater diagnostic severity will increase practices' payment under risk-based arrangements. We offer the first analysis of whether hospital-physician integration affects providers' coding of patient severity. Using a two-way fixed effects model, an event study, and a stacked difference-in-differences analysis of 5 million patient-year observations from 2010 to 2015, we find that the integration of a patient's primary care doctor is associated with a robust 2%–4% increase in coded severity, the risk-score equivalent of aging a physician's patients by 4–8 months. This effect was not driven by physicians treating different patients nor by physicians seeing patients more often. Our evidence is consistent with the hypothesis that hospitals share organizational resources with acquired physician practices to increase the measured clinical severity of patients. Increases in the intensity of coding will improve vertically-integrated practices' performance in alternative payment models and pay-for-performance programs while raising overall health care spending.
Employee income, premium pricing, and high deductible health plan enrollment
Brigham Walker & Kevin Callison
Applied Economics Letters, forthcoming
Abstract:
Employer health plan premiums are often subsidized at different levels according to enrollee income. When enrollees cross an income threshold, they lose some of the income-based subsidy resulting in higher premium prices for their plan choices. We use these discontinuous subsidy reductions, which induce relative price changes across plans, to assess the relationship between premium price and plan choice for workers in a large, national firm. We segmented individuals by income into $100 bins surrounding a $40,000 subsidy threshold and $200 bins surrounding a $110,000 subsidy threshold. We plotted these bins to visualize potential discontinuities and then estimated regression models that fit linear trends to the binned data at each subsidy threshold. Higher income workers were more likely to enroll in high deductible health plans (HDHPs) when those plans became relatively cheaper compared to traditional plans (estimate = −0.057, standard error = 0.027; p-value = 0.02). In contrast, lower income workers were less likely to enroll in a HDHP when the relative price fell (estimate = 0.065, standard error = 0.029, p-value = 0.03). Our findings indicate that responses to relative price distortions between insurance plan options differ by income and that benefit design should account for such heterogeneity.
In Medicaid Managed Care Networks, Care Is Highly Concentrated Among A Small Percentage Of Physicians
Avital Ludomirsky et al.
Health Affairs, May 2022, Pages 760-768
Abstract:
States have increasingly outsourced the provision of Medicaid services to private managed care plans. To ensure that plans maintain access to care, many states set network adequacy standards that require plans to contract with a minimum number of physicians. In this study we used data from the period 2015–17 for four states to assess the level of Medicaid participation among physicians listed in the provider network directories of each managed care plan. We found that about one-third of outpatient primary care and specialist physicians contracted with Medicaid managed care plans in our sample saw fewer than ten Medicaid beneficiaries in a year. Care was highly concentrated: 25 percent of primary care physicians provided 86 percent of the care, and 25 percent of specialists, on average, provided 75 percent of the care. Our findings suggest that current network adequacy standards might not reflect actual access; new methods are needed that account for beneficiaries’ preferences and physicians’ willingness to serve Medicaid patients.
The effect on dental care utilization from transitioning pediatric Medicaid beneficiaries to managed care
Kamyar Nasseh & John Bowblis
Health Economics, June 2022, Pages 1103-1128
Abstract:
Compared to the fee-for-service (FFS) model, the managed care delivery system has the potential to improve health care management, increase provider accountability, and support better monitoring of health care quality. However, managed care organizations may attempt to control costs by curbing utilization among Medicaid beneficiaries or reducing reimbursement for Medicaid services. It is an empirical question whether managed care increases or decreases utilization of services. Using detailed pediatric public insurance dental claims data from 2016 through 2018, we examined whether the transition from FFS to managed care affects rates of dental care utilization. Between 2016 and 2018, Indiana, Missouri and Nebraska transitioned pediatric Medicaid beneficiaries from public dental fee-for-service programs to private managed care entities. Using an extended two-way fixed-effects estimation framework, we found that dental managed care leads to a decline in dental care utilization, especially when compared to states that maintain FFS provision of Medicaid dental services.