Any willing provider
Pinka Chatterji, Peter Brandon & Sara Markowitz
Journal of Health Economics, July 2016, Pages 26–43
Abstract:
We examine the effects of the 2010 Patient Protection and Affordable Care Act's (ACA) prohibition of preexisting conditions exclusions for children on job mobility among parents. We use a difference-in-difference approach, comparing pre-post policy changes in job mobility among privately-insured parents of children with chronic health conditions vs. privately-insured parents of healthy children. Data come from the 2004 and 2008 Survey of Income and Program Participation (SIPP). Among married fathers, the policy change is associated with about a 0.7 percentage point, or 35 percent increase, in the likelihood of leaving an employer voluntarily. We find no evidence that the policy change affected job mobility among married and unmarried mothers.
---------------------
Selective Hearing: Physician-Ownership and Physicians' Response to New Evidence
David Howard, Guy David & Jason Hockenberry
NBER Working Paper, April 2016
Abstract:
Physicians, acting in their role as experts, are often faced with situations where they must trade off personal and patient welfare. Physicians’ incentives vary based on the organizational environment in which they practice. We use the publication of a major clinical trial, which found that a common knee operation does not improve outcomes for patients with osteoarthritis, as an “informational shock” to gauge the impact of physicians’ agency relationships on treatment decisions. Using a 100% sample of procedures in Florida from 1998 to 2010, we find that publication of the trial reduced procedure volume, but the magnitude of the decline was smaller in physician-owned surgery centers. Incentives affected physicians’ reactions to evidence.
---------------------
Matthew Niedzwiecki et al.
Medical Care, May 2016, Pages 498–503
Background: There is substantial interest in identifying low-acuity visits to emergency departments (EDs) that could be treated more appropriately in other settings. Systematic differences in illness severity between ED patients and comparable patients elsewhere could make such strategies unsafe, but little evidence exists to guide policy makers.
Objective: To compare illness severity between patients visiting EDs and outpatient clinics, by comparing short-term mortality and hospitalization, controlling for patient demographics, comorbidity, and visit acuity.
Subjects: Nationally representative 20% sample of Medicare fee-for-service beneficiaries discharged home from ED or clinic visit in 2011, and enrolled continuously for 1 year before the visit.
Measures: All-cause mortality and hospitalization in the 8, 15, and 30 days after discharge home from ED or clinic visits.
Results: After risk-adjusting for patient demographic, comorbidity, disability, and dual-eligibility status, as well as visit acuity as measured by a commonly used algorithm, we found that ED patients were more likely to die (risk-adjusted odds ratio=2.75; 95% confidence interval, 2.56–2.96) or be hospitalized (odds ratio=1.97; 95% confidence interval, 1.95–2.00) after discharge than clinic patients. Differences in short-term outcomes were observed even when comparing patients with the same discharge diagnoses after risk adjustment.
Conclusions: Patients presenting to EDs have worse risk-adjusted short-term outcomes than those presenting to outpatient clinics, even after controlling for acuity level of visit or discharge diagnosis. Existing measures of acuity using administrative data may not adequately capture severity of illness, making judgments of the appropriate setting for care difficult.
---------------------
Health insurance as a productive factor
Allan Dizioli & Roberto Pinheiro
Labour Economics, June 2016, Pages 1–24
Abstract:
In this paper, we present a less-explored channel through which health insurance impacts productivity: by offering health insurance, employers reduce the expected time workers spend out of work in sick days. Using data from the Medical Expenditure Panel Survey (MEPS), we show that a worker with health coverage misses on average 76.54% fewer workdays than uninsured workers, after controlling for endogeneity. We develop a model that embodies this impact of health coverage in productivity. In our model, health insurance reduces the probability that a healthy worker gets sick, missing workdays, and it increases the probability that a sick worker recovers and returns to work. In our model, firms that offer health insurance are larger and pay higher wages in equilibrium, a pattern observed in the data. We calibrated the model using US data for 2004 and show the impact of increases in health costs, as well as of changes in tax benefits of health insurance expenses, on labor force health coverage and productivity.
---------------------
The Effect of Expanding Medicaid Eligibility on Supplemental Security Income Program Participation
Marguerite Burns & Laura Dague
University of Wisconsin Working Paper, March 2016
Abstract:
Low-income adults without dependent children have historically had few paths to obtain public health insurance unless they qualified for Supplemental Security Income (SSI) cash benefits because of a disability. However, in states that expand their Medicaid programs, childless adults may obtain Medicaid without undergoing an intensive SSI disability review process and with substantially higher income and assets than the SSI program allows. This expanded availability of Medicaid coverage, independent of SSI participation, creates an opportunity to increase earnings and savings without jeopardizing health insurance coverage. In this paper, we use the natural experiments created by state decisions to expand Medicaid to nondisabled, nonelderly adults without dependent children to study the effect of decoupling Medicaid eligibility and cash assistance using a difference-in-differences study design. We collected data on the income eligibility limits, enrollment caps, and coverage characteristics of state Medicaid expansions to childless adults from 2001-2013. We combine these data with the nationally representative American Community Survey to estimate the effects of state expansion on SSI participation. We find relative declines in SSI participation caused by Medicaid expansions of 0.17 percentage points, a 7% relative decrease; this finding suggests the potential for small but important efficiency gains from separating SSI and Medicaid eligibility.
---------------------
Luojia Hu et al.
NBER Working Paper, April 2016
Abstract:
We examine the effect of the Medicaid expansions under the 2010 Patient Protection and Affordable Care Act (ACA) on financial outcomes using credit report data for a large sample of individuals. We employ the synthetic control method (Abadie et al., 2010) to compare individuals living in states that expanded Medicaid to those that did not. We find that the Medicaid expansions significantly reduced the number of unpaid bills and the amount of debt sent to third-party collection agencies among those residing in zip codes with the highest share of low income, uninsured individuals. Our estimates imply a reduction in collection balances of around $600 to $1,000 among those who gain Medicaid coverage due to the ACA. Our findings suggest that the ACA Medicaid expansions had important financial impacts beyond health care use.
---------------------
Does Churning in Medicaid Affect Health Care Use?
Eric Roberts, Craig Evan Pollack
Medical Care, May 2016, Pages 483–489
Data: Longitudinal data from 6 panels of the Medical Expenditure Panel Survey.
Methods: We used differences-in-differences regression to compare health care use when adults reenrolled in Medicaid following a loss of coverage, to utilization in a control group of continuously enrolled adults.
Results: During the study period, 264 adults churned into and out of Medicaid and 627 had continuous coverage. Churning adults had an average of approximately 0.05 Medicaid-covered office-based visits per month 4 months before reenrolling in Medicaid, significantly below the rate of approximately 0.20 visits in the control group. Visits to office-based providers did not reach the control group rate until several months after churning adults had resumed Medicaid coverage. Our comparisons found no evidence of significantly elevated ED and inpatient admission rates in the churning group following reenrollment.
Conclusions: Adults who lose Medicaid tend to defer their use of office-based care to periods when they are insured. Although this suggests that enrollment disruptions lead to suboptimal timing of care, we do not find evidence that adults reenroll in Medicaid with elevated acute care needs.
---------------------
The Price Effects of Cross-Market Hospital Mergers
Leemore Dafny, Kate Ho & Robin Lee
NBER Working Paper, March 2016
Abstract:
So-called "horizontal mergers" of hospitals in the same geographic market have garnered significant attention from researchers and regulators alike. However, much of the recent hospital industry consolidation spans multiple markets serving distinct patient populations. We show that such combinations can reduce competition among the merging providers for inclusion in insurers' networks of providers, leading to higher prices. The result derives from the presence of "common customers” (i.e. purchasers of insurance plans) who value both providers, as well as (one or more) "common insurers" with which price and network status is negotiated. We test our theoretical predictions using two samples of cross-market hospital mergers, focusing exclusively on hospitals that are bystanders rather than the likely drivers of the transactions in order to address concerns about the endogeneity of merger activity. We find that hospitals gaining system members in-state (but not in the same geographic market) experience price increases of 6-10 percent relative to control hospitals, while hospitals gaining system members out-of-state exhibit no statistically significant changes in price. The former group are likelier to share common customers and insurers. This effect remains sizeable even when the merging parties are located further than 90 minutes apart. The results suggest that cross-market, within-state hospital mergers appear to increase hospital systems' leverage when bargaining with insurers.
---------------------
Abe Dunn
Journal of Health Economics, July 2016, Pages 74–88
Abstract:
This paper takes a different approach to estimating demand for medical care that uses the negotiated prices between insurers and providers as an instrument. The instrument is viewed as a textbook “cost shifting” instrument that impacts plan offerings, but is unobserved by consumers. The paper finds a price elasticity of demand of around −0.20, matching the elasticity found in the RAND Health Insurance Experiment. The paper also studies within-market variation in demand for prescription drugs and other medical care services and obtains comparable price elasticity estimates.
---------------------
Cost Analysis of the STONE Randomized Trial: Can Health Care Costs be Reduced One Test at a Time?
Joy Melnikow
Medical Care, April 2016, Pages 337–342
Objective: To compare costs of care for patients presenting to the emergency department (ED) with suspected kidney stones randomized to 1 of 3 initial imaging tests.
Research Design: Patients were randomized to point-of-care ultrasound (POC US, least costly), radiology ultrasound (RAD US), or computed tomography (CT, most costly). Subsequent testing and treatment were the choice of the treating physician.
Subjects: A total of 2759 patients at 15 EDs were randomized to POC US (n=908), RAD US, (n=893), or CT (n=958). Mean age was 40.4 years; 51.8% were male.
Measures: All medical care documented in the trial database in the 7 days following enrollment was abstracted and coded to estimate costs using national average 2012 Medicare reimbursements. Costs for initial ED care and total 7-day costs were compared using nonparametric bootstrap to account for clustering of patients within medical centers.
Results: Initial ED visit costs were modestly lower for patients assigned to RAD US: $423 ($411, $434) compared with patients assigned to CT: $448 ($438, $459) (P<0.0001). Total costs were not significantly different between groups: $1014 ($912, $1129) for POC US, $970 ($878, $1078) for RAD US, and $959 ($870, $1044) for CT. Hospital admissions contributed over 50% of total costs, though only 11% of patients were admitted. Mean total costs (and admission rates) varied substantially by site from $749 to $1239.
Conclusions: Assignment to a less costly test had no impact on overall health care costs for ED patients. System-level interventions addressing variation in admission rates from the ED might have greater impact on costs.
---------------------
Danil Makarov et al.
Medical Care Research and Review, forthcoming
Abstract:
The surgical robot, a costly technology for treatment of prostate cancer with equivocal marginal benefit, rapidly diffused into clinical practice. We sought to evaluate the role of teaching in the early adoption phase of the surgical robot. Teaching hospitals were the primary early adopters: data from the Healthcare Cost and Utilization Project showed that surgical robots were acquired by 45.5% of major teaching, 18.0% of minor teaching and 8.0% of non-teaching hospitals during the early adoption phase. However, teaching hospital faculty produced little comparative effectiveness research: By 2008, only 24 published studies compared robotic prostatectomy outcomes to those of conventional techniques. Just ten of these studies (41.7%) were more than minimally powered, and only six (25%) involved cross-institutional collaborations. In adopting the surgical robot, teaching hospitals fulfilled their mission to innovate, but failed to generate corresponding scientific evidence.
---------------------
Early Performance of Accountable Care Organizations in Medicare
Michael McWilliams et al.
New England Journal of Medicine, forthcoming
Background: In the Medicare Shared Savings Program (MSSP), accountable care organizations (ACOs) have financial incentives to lower spending and improve quality. We used quasi-experimental methods to assess the early performance of MSSP ACOs.
Methods: Using Medicare claims from 2009 through 2013 and a difference-in-differences design, we compared changes in spending and in performance on quality measures from before the start of ACO contracts to after the start of the contracts between beneficiaries served by the 220 ACOs entering the MSSP in mid-2012 (2012 ACO cohort) or January 2013 (2013 ACO cohort) and those served by non-ACO providers (control group), with adjustment for geographic area and beneficiary characteristics. We analyzed the 2012 and 2013 ACO cohorts separately because entry time could reflect the capacity of an ACO to achieve savings. We compared ACO savings according to organizational structure, baseline spending, and concurrent ACO contracting with commercial insurers.
Results: Adjusted Medicare spending and spending trends were similar in the ACO cohorts and the control group during the precontract period. In 2013, the differential change (i.e., the between-group difference in the change from the precontract period) in total adjusted annual spending was −$144 per beneficiary in the 2012 ACO cohort as compared with the control group (P=0.02), consistent with a 1.4% savings, but only −$3 per beneficiary in the 2013 ACO cohort as compared with the control group (P=0.96). Estimated savings were consistently greater in independent primary care groups than in hospital-integrated groups among 2012 and 2013 MSSP entrants (P=0.005 for interaction). MSSP contracts were associated with improved performance on some quality measures and unchanged performance on others.
Conclusions: The first full year of MSSP contracts was associated with early reductions in Medicare spending among 2012 entrants but not among 2013 entrants. Savings were greater in independent primary care groups than in hospital-integrated groups.
---------------------
Jillian Berry Jaeker & Anita Tucker
Management Science, forthcoming
Abstract:
Service organizations face a trade-off between high utilization and responsiveness. High utilization can improve financial performance, but causes congestion, which increases throughput time. Employees may manage this trade-off by reducing processing times during periods of high workload, resulting in an inverted U-shaped relationship between utilization and throughput time. Using two years of inpatient data from 203 California hospitals, we find evidence that patient length of stay (LOS) increases as occupancy increases, until a tipping point, after which patients are discharged early to alleviate congestion. More interestingly, we find a second tipping point — at 93% occupancy — beyond which additional occupancy leads to a longer LOS. These results are indicative of a workload-related “saturation effect” where employees can no longer overcome high workload by speeding up. Our data suggest that the saturation effect is due to an increase in the workload requirements of the remaining patients. Collectively, we find that the underlying relationship between occupancy and LOS is N-shaped. Consequently, managers who seek cost efficiencies via a strategy of high utilization in tandem with speeding up may find that their strategy backfires because there is a point at which employees are no longer able to compensate for a high workload by working harder, and throughput time counterproductively increases. We perform a counterfactual analysis and find that an alternate strategy of employing flexible labor when faced with high occupancy levels might be a more productive approach, and could save the hospitals in our sample up to $138 million over 23 months.