Care to Sell
Are Bans on Kidney Sales Unjustifiably Paternalistic?
Erik Malmqvist
Bioethics, forthcoming
Abstract:
This paper challenges the view that bans on kidney sales are unjustifiably paternalistic, that is, that they unduly deny people the freedom to make decisions about their own bodies in order to protect them from harm. I argue that not even principled anti-paternalists need to reject such bans. This is because their rationale is not hard paternalism, which anti-paternalists repudiate, but soft paternalism, which they in principle accept. More precisely, I suggest that their rationale is what Franklin Miller and Alan Wertheimer call ‘group soft paternalism'. Group soft paternalistic policies restrict the freedom of autonomous individuals, not for their own good (hard paternalism), but as an unavoidable consequence of seeking to protect other, non-autonomous individuals from harms that they have not voluntarily chosen (soft paternalism). Group soft paternalism supports prohibiting kidney sales on three conditions: (1) that such sales are potentially harmful to vendors, (2) that many vendors would suffer impaired autonomy, and (3) that distinguishing between autonomous and non-autonomous vendors and interfering only with the latter is unfeasible. I provide reasons for thinking that these conditions will often hold.
----------------------
John Graves
Health Affairs, July 2012, Pages 1613-1622
Abstract:
Under the Affordable Care Act, people who meet certain income eligibility criteria will be eligible for subsidies to offset costs of premiums and cost sharing for health insurance plans purchased through new health insurance exchanges. But determining the correct level of these subsidies will not be easy, because of several factors. These include the way in which eligibility will be calculated for participation in Medicaid or for subsidies through the exchanges; possibly inaccurate income projections; the use of different income time periods to determine eligibility; and fluctuations in income. I performed a simulation that shows that under the most likely methods to be used to determine eligibility for Medicaid or for receiving subsidies through exchanges, one-third of people with incomes initially judged to be below the Medicaid threshold would actually "churn" into an exchange at the end of the year. Other people would be wrongly deemed ineligible for advance subsidy payments because their projected income was too high, while still others judged eligible for subsidies would receive advance payments on those subsidies that were too high by $208 per year, on average. To reduce these errors, I recommend the adoption of a single eligibility standard based on income data derived from prior tax returns, along with generous accommodations during a given enrollment year for people who claim a change in circumstances, such as a change in income.
----------------------
Sarah Miller
University of Illinois Working Paper, June 2012
Abstract:
This paper analyzes the impact of a major health reform in Massachusetts on emergency room (ER) visits. I exploit the variation in pre-reform uninsurance rates across counties to identify the causal e ect of the reform on ER visits. My estimates imply that the reform reduced ER usage by between 5 and 13 percent, nearly all of which is accounted for by a reduction in non-urgent visits that could be treated in alternative settings. The reduction in non-urgent and primary-care treatable visits is most pronounced during regular office hours when physician's offices are likely to be open. In contrast, I find no effect for non-preventable emergencies such as heart attacks. These estimates are consistent with a large causal effect of insurance on ER usage and imply that expanding insurance coverage could have a substantial impact on the efficiency of health services.
----------------------
Plan Selection in Medicare Part D: Evidence from Administrative Data
Florian Heiss et al.
NBER Working Paper, June 2012
Abstract:
We study the Medicare Part D prescription drug insurance program as a bellwether for designs of private, non-mandatory health insurance markets, focusing on the ability of consumers to evaluate and optimize their choices of plans. Our analysis of administrative data on medical claims in Medicare Part D suggests that less than 10 percent of individuals enroll in plans that are ex post optimal with respect to total cost (premiums and co-payments). Relative to the benchmark of a static decision rule, similar to the Plan Finder provided by the Medicare administration, that conditions next year's plan choice only on the drugs consumed in the current year, enrollees lost on average about $300 per year. These numbers are hard to reconcile with decision costs alone; it appears that unless a sizeable fraction of consumers value plan features other than cost, they are not optimizing effectively.
----------------------
Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?
Jeffrey Clemens & Joshua Gottlieb
Harvard Working Paper, January 2012
Abstract:
We investigate whether physicians' financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts payments for physician services, generating area-specific price shocks that are plausibly exogenous with respect to health care demand. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 5 percent increase in care provision per patient. Elective procedures such as cataract surgery respond twice as strongly as less discretionary services like dialysis. Higher reimbursements also increase the pace of technology diffusion, as non-radiologists acquire magnetic resonance imaging scanners more readily when prices increase. The magnitudes of our empirical findings imply that changing provider incentives explain up to one third of recent growth in spending on physician services. The incremental care has no significant impacts on mortality, hospitalizations, or heart attacks.
----------------------
Affording to Wait: Medicare Initiation and the Use of Health Care
Guy David et al.
Health Economics, August 2012, Pages 1030-1036
Abstract:
Delays in receipt of necessary diagnostic and therapeutic medical procedures related to the timing of Medicare initiation at age 65 years have potentially broad welfare implications. We use 2005-2007 data from Florida and North Carolina to estimate the effect of initiation of Medicare benefits on healthcare utilization across procedures that differ in urgency and coverage. In particular, we study trends in the use of elective procedures covered by Medicare to treat conditions that vary in symptoms; these are compared with elective surgical procedures not eligible for Medicare reimbursement, and to a set of urgent and emergent procedures. We find large discontinuities in health services utilization at age 65 years concentrated among low-urgency, Medicare-reimbursable procedures, most pronounced among screening interventions and treatments for minimally symptomatic disease.
----------------------
The impact of state regulations on nursing home care practices
John Bowblis & Judith Lucas
Journal of Regulatory Economics, August 2012, Pages 52-72
Abstract:
This article assesses the effect of the minimum quality standards of deficiencies and nurse staffing requirements on the nursing home care practices of physical restraint, indwelling urinary catheter, and feeding tube use. National longitudinal data on nursing homes reveal that the effect of specific deficiency citations on care practice use depends on the clinical complementarity or substitutability of the deficiency and the specific care practice, while a high number of deficiencies can lead to a greater use of each care practice. Higher direct care staffing requirements increased the use of physical restraints and decreased the use of feeding tubes. Increases in licensed nursing staff requirements had no effect on the care practices studied. Regulators should be aware that using minimum quality standards when quality is multidimensional creates incentives for offsetting quality improvement practices.
----------------------
Malpractice liability, technology choice and negative defensive medicine
Eberhard Feess
European Journal of Health Economics, April 2012, Pages 157-167
Abstract
We extend the theoretical literature on the impact of malpractice liability by allowing for two treatment technologies, a safe and a risky one. The safe technology bears no failure risk, but leads to patient-specific disutility since it cannot completely solve the health problems. By contrast, the risky technology (for instance a surgery) may entirely cure patients, but fail with some probability depending on the hospital's care level. Tight malpractice liability increases care levels if the risky technology is chosen at all, but also leads to excessively high incentives for avoiding the liability exposure by adopting the safe technology. We refer to this distortion toward the safe technology as negative defensive medicine. Taking the problem of negative defensive medicine seriously, the second best optimal liability needs to balance between the over-incentive for the safe technology in case of tough liability and the incentive to adopt little care for the risky technology in case of weak liability. In a model with errors in court, we find that gross negligence where hospitals are held liable only for very low care levels outperforms standard negligence, even though standard negligence would implement the first best efficient care level.
----------------------
Hospital Volume Responses to Medicare's Outpatient Prospective Payment System: Evidence from Florida
Daifeng He & Jennifer Mellor
Journal of Health Economics, forthcoming
Abstract:
Effective in 2000, Medicare's Outpatient Prospective Payment System (OPPS) sets pre-determined reimbursement rates for hospital outpatient services, replacing the prior cost-based methods of reimbursement. Using Florida outpatient discharge data, we study the effect of OPPS on hospital outpatient volume. We find that on average Medicare rate cuts either decreased or had no significant effect on Medicare volume, but increased private fee-for-service (FFS) volume. We also find that responses vary with the hospital's "exposure" to Medicare payment changes, where exposure is measured as the baseline Medicare patient share. Compared to less exposed hospitals, highly exposed hospitals responded with larger increases in private FFS volume and with smaller decreases (in some cases, even increases) in Medicare volume when payment rates fell. Our results are consistent with provider demand inducement.
----------------------
The Dynamics of Medical Care Use in the British Household Panel Survey
Jennifer Kohn & Jing Shi Liu
Health Economics, forthcoming
Abstract:
We explore whether medical care use is persistent over a long panel using 18 waves of the British Household Panel Survey. Of particular interest is high medical care use because a few high users account for a disproportionate amount of use while many individuals use no medical care in a given year. If health is a primary driver of medical care demand, and we control for health, then past medical care use should be uninformative for future use. However, we find that conditional on health, other covariates and unobservable heterogeneity, medical care use remains significantly persistent. "No use" and "high use" are more strongly persistent, and persistence is generally stronger for women, those in poor health, and at older ages. We find that unobservable heterogeneity explains between 10% and 25% of the variation in medical care use. This heterogeneity is significantly correlated with both medical care use and health over our long panel. These findings have implications for the econometric modeling of medical care demand and suggest that policies aimed to reduce aggregate medical care spending by improving health, particularly the health of seniors, may be less effective than projected using static models.
----------------------
Cancelled Procedures: Inequality, Inequity and the National Health Service Reforms
Graham Cookson, Simon Jones & Bryan McIntosh
Health Economics, forthcoming
Abstract:
Using data for every elective procedure in 2007 in the English National Health Service, we found evidence of socioeconomic inequality in the probability of having a procedure cancelled after admission while controlling for a range of patient and provider characteristics. Whether this disparity is inequitable is inconclusive.
----------------------
Does Targeted, Disease-Specific Public Research Funding Influence Pharmaceutical Innovation?
Margaret Blume-Kohout
Journal of Policy Analysis and Management, Summer 2012, Pages 641-660
Abstract:
Public funding for biomedical research is often justified as a means to encourage development of more (and better) treatments for disease. However, few studies have investigated the relationship between these expenditures and downstream pharmaceutical innovation. In particular, although recent analyses have shown a clear contribution of federally funded research to drug development, there exists little evidence to suggest that increasing targeted public research funding for any specific disease will result in increased development of drugs to treat that disease. This paper evaluates the impact of changes in the allocation of U.S. National Institutes of Health (NIH) extramural research grant funding across diseases on the number of drugs entering clinical testing to treat those diseases, using new longitudinal data on NIH extramural research grants awarded by disease for years 1975 through 2006. Results from a variety of distributed lag models indicate that a sustained 10 percent increase in targeted, disease-specific NIH funding yields approximately a 4.5 percent increase in the number of related drugs entering clinical testing (phase I trials) after a lag of up to 12 years, reflecting the continuing influence of NIH funding on discovery and testing of new molecular entities. In contrast, we do not see evidence that increases in NIH extramural grant funding for research focused on specific diseases will increase the number of related treatments investigated in the more expensive, late-stage (phase III) trials.
----------------------
Variation and Imprecision of Clerkship Grading in U.S. Medical Schools
Erik Alexander et al.
Academic Medicine, forthcoming
Purpose: Despite standardized curricula and mandated accreditation, concern exists regarding the variability and imprecision of medical student evaluation. The authors set out to perform a complete review of clerkship evaluation in U.S. medical schools.
Method: Clerkship evaluation data were obtained from all Association of American Medical Colleges-affiliated medical schools reporting enrollment during 2009-2010. Deidentified reports were analyzed to define the grading system and the percentage of each class within each grading tier. Inter- and intraschool grading variation was assessed in part by comparing the proportion of students receiving the top grade.
Results: Data were analyzed from 119 of 123 accredited medical schools. Dramatic variation was detected. Specifically, the authors documented eight different grading systems using 27 unique sets of descriptive terminology. Imprecision of grading was apparent. Institutions frequently used the same wording (e.g., "honors") to imply different meanings. The percentage of students awarded the top grade in any clerkship exhibited extreme variability (range 2%-93%) from school to school, as well as from clerkship to clerkship within the same school (range 18%-81%). Ninety-seven percent of all U.S. clerkship students were awarded one of the top three grades regardless of the number of grading tiers. Nationally, less than 1% of students failed any required clerkship.
Conclusions: There exists great heterogeneity of grading systems and imprecision of grade meaning throughout the U.S. medical education system. Systematic changes seeking to increase consistency, transparency, and reliability of grade meaning are needed to improve the student evaluation process at the national level.
----------------------
Massachusetts Reform and Disparities in Inpatient Care Utilization
Amresh Hanchate et al.
Medical Care, July 2012, Pages 569-577
Background: The 2006 Massachusetts health reform substantially decreased uninsurance rates. Yet, little is known about the reform's impact on actual health care utilization among poor and minority populations, particularly for receipt of inpatient surgical procedures that are commonly initiated by outpatient physician referral.
Methods: Using discharge data on Massachusetts hospitalizations for 21 months before and after health reform implementation (7/1/2006-12/31/2007), we identified all nonobstetrical major therapeutic procedures for patients aged 40 or older and for which ≥70% of hospitalizations were initiated by outpatient physician referral. Stratifying by race/ethnicity and patient residential zip code median (area) income, we estimated prereform and postreform procedure rates, and their changes, for those aged 40-64 (nonelderly), adjusting for secular changes unrelated to reform by comparing to corresponding procedure rate changes for those aged 70 years and above (elderly), whose coverage (Medicare) was not affected by reform.
Results: Overall increases in procedure rates (among 17 procedures identified) between prereform and postreform periods were higher for nonelderly low area income (8%, P=0.04) and medium area income (8%, P<0.001) cohorts than for the high area income cohort (4%); and for Hispanics and blacks (23% and 21%, respectively; P<0.001) than for whites (7%). Adjusting for secular changes unrelated to reform, postreform increases in procedure utilization among nonelderly were: by area income, low=13% (95% confidence interval (CI)=[9%, 17%]), medium=15% (95% CI [6%, 24%]), and high=2% (95% CI [-3%, 8%]); and by race/ethnicity, Hispanics=22% (95% CI [5%, 38%]), blacks=5% (95% CI [-20%, 30%]), and whites=7% (95% CI [5%, 10%]).
Conclusions: Postreform use of major inpatient procedures increased more among nonelderly lower and medium area income populations, Hispanics, and whites, suggesting potential improvements in access to outpatient care for these vulnerable subpopulations.
----------------------
The Cost of an Additional Disability-Free Life Year for Older Americans: 1992-2005
Liming Cai
Health Services Research, forthcoming
Objective: To estimate the cost of an additional disability-free life year for older Americans in 1992-2005.
Data Source: This study used 1992-2005 Medicare Current Beneficiary Survey, a longitudinal survey of Medicare beneficiaries with a rotating panel design.
Study Design: This analysis used multistate life table model to estimate probabilities of transition among a discrete set of health states (nondisabled, disabled, and dead) for two panels of older Americans in 1992 and 2002. Health spending incurred between annual health interviews was estimated by a generalized linear mixed model. Health status, including death, was simulated for each member of the panel using these transition probabilities; the associated health spending was cross-walked to the simulated health changes.
Principal Findings: Disability-free life expectancy (DFLE) increased significantly more than life expectancy during the study period. Assuming that 50 percent of the gains in DFLE between 1992 and 2005 were attributable to increases in spending, the average discounted cost per additional disability-free life year was $71,000. There were small differences between gender and racial/ethnic groups.
Conclusions: The cost of an additional disability-free life year was substantially below previous estimates based on mortality trends alone.
----------------------
Cost-Effectiveness of Expanded Newborn Screening in Texas
Simrandeep Tiwana, Karen Rascati & Haesuk Park
Value in Health, forthcoming
Objective: Texas House Bill 790 resulted in the expansion of the newborn screening panel from 7 disorders to 27 disorders. Implementation of this change began in 2007. The objective of this study was to estimate the incremental cost-effectiveness of the expanded newborn screening program compared with the previous standard screening in Texas.
Methods: A Markov model (for a hypothetical cohort of Texas births in 2007) was constructed to compare lifetime costs and quality-adjusted life-years (QALYs) between the expanded newborn screening and preexpansion newborn screening. Estimates of costs, probabilities of sequelae, and utilities for disorder categories were obtained from a combination of Texas statistics, the literature, and expert opinion. A baseline discount rate of 3% was used for both costs and QALYs, with a range of 0% to 5%. Analyses were conducted from a payer's perspective, and so only direct medical cost estimates were included.
Results: The lifetime incremental cost-effectiveness ratio for expanded versus preexpansion screening was about $11,560 per QALY. The results remained robust to both deterministic and probabilistic sensitivity analyses.
Conclusions: Expanded newborn screening does result in additional expenses to the payer, but it also improves patient outcomes by preventing avoidable morbidity and mortality. The screened population benefits from greater QALYs as compared with the unscreened population. Overall, expanded newborn screening in Texas was estimated to be a cost-effective option as compared with unexpanded newborn screening.
----------------------
Cost-effectiveness of statins revisited: Lessons learned about the value of innovation
Peter Lindgren & Bengt Jönsson
European Journal of Health Economics, August 2012, Pages 445-450
Background: The economic evaluation of statins has undergone a development from risk-factor-based models to modeling of hard end points in clinical trials with a shift back to risk-factor models after increased confidence in their predictive power has now been established. At this point, we can look back on the historical economic data on simvastatin to see what lesson regarding reimbursement we can learn.
Methods: Historical data on the usage and sales of simvastatin in Sweden were combined with published epidemiological and clinical data to calculate the social value of simvastatin to the present day and to make projection until projected until 2018. The distribution of the social surplus was calculated by taking the costs born by society and the producer of the drug into consideration.
Results: The cost of simvastatin fell drastically following patent expiration, although the number of treated patients has continued to grow. Presently, the use of simvastatin is close to cost neutrality taking direct and indirect cost savings from reduced morbidity into account. However, the major part of the social surplus generated comes from the value of improved quality-adjusted survival. Of the social surplus generated, the producer appropriated 20-43% of the value during the on-patent period, a figure dropping to 1% following loss of exclusivity. The total producer surplus between 1987 and 2018 is 2-5% of the total social surplus.
Conclusion: Only a small part of the surplus value generated was appropriated by the producer. A regulatory and reimbursement approach that favors early market access and coverage with evidence development as opposed to long-term trials as a pre-requisite for launch is more attractive from both a company and social perspective.
----------------------
Growing Stem Cells: The Impact of Federal Funding Policy on the U.S. Scientific Frontier
Jeffrey Furman, Fiona Murray & Scott Stern
Journal of Policy Analysis and Management, Summer 2012, Pages 661-705
Abstract:
This paper articulates a citation-based approach to science policy evaluation and employs that approach to investigate the impact of the United States' 2001 policy regarding the federal funding of human embryonic stem cell (hESC) research. We evaluate the impact of the policy on the level of U.S. hESC research, the U.S. position at the knowledge frontier, and the strategic response of U.S. scientists. Consistent with recent research on the science of science and innovation policy, we employ a difference-in-differences approach using bibliometric data with the aim of analyzing the causal impact of the policy on cumulative research. Our estimates suggest that in the aftermath of the 2001 policy, U.S. production of hESC research lagged 35 to 40 percent behind anticipated levels. However, this relative decline was largely concentrated in the years 2001 to 2003 and ameliorated over time. The rebound in U.S. hESC research after 2003 was driven by contributions by researchers at elite U.S. institutions and U.S. researchers who collaborated with international partners. The results suggest that scientists respond strategically to research funding restrictions and that modest science policy shifts can have a significant influence on the within-country composition of research and the pattern of global research collaboration.
----------------------
A Longitudinal Analysis of the Lifetime Cost of Dementia
Zhou Yang et al.
Health Services Research, August 2012, Pages 1660-1678
Objective: Estimate the lifetime cost of dementia to Medicare and Medicaid.
Data Source: 1997-2005 Medicare Current Beneficiary Survey.
Study Design: A multistage analysis was conducted to first predict the probability of developing dementia by age and then predict the annual Medicare/Medicaid expenditures conditional on dementia status. A cohort-based simulation was conducted to estimate the lifetime cost of dementia.
Principal Findings: The average lifetime cost of dementia per patient for Medicare is approximately $12,000 (2005 dollars) and for Medicaid about $11,000. Dementia onset at older age leads to shorter duration and lower lifetime cost. Increased educational level leads to longer longevity, more dementia cases per cohort, but shorter duration, and lower lifetime cost per patient, which could offset the cost increase induced by more dementia cases. Increased body mass index leads to more dementia cases per cohort and higher lifetime cost per patient.
Conclusion: Net cost of dementia is lower than the estimates from cross-sectional studies. Promoting healthy lifestyle to reverse the obesity epidemic is a short-term priority to confront the epidemic of dementia in the near future. Promoting higher education among the younger generation is a long-term priority to mitigate the effect of population aging on the dementia epidemic in the distant future.
----------------------
Hiring and Screening Practices of Agencies Supplying Paid Caregivers to Older Adults
Lee Lindquist et al.
Journal of the American Geriatrics Society, forthcoming
Objectives: To assess what screening practices agencies use in hiring caregivers and how caregiver competency is measured before assigning responsibilities in caring for older adults.
Design: One-to-one phone interviews in which interviewers posed as prospective clients seeking a caregiver for an older adult relative.
Setting: Cross-sectional cohort of agencies supplying paid caregivers to older adults in Illinois, California, Florida, Colorado, Arizona, Wisconsin, and Indiana.
Participants: Four hundred sixty-two home care agencies were contacted, of which 84 were no longer in service, 165 offered only nursing care, and 33 were excluded; 180 agencies completed interviews.
Measurements: Agencies were surveyed about their hiring methods, screening measures, training practices, skill competencies assessments, and supervision. Two coders qualitatively analyzed open-ended responses.
Results: To recruit caregivers, agencies primarily used print and Internet (e.g., Craigslist.com) advertising (n = 69, 39.2%) and word-of-mouth referrals (n = 49, 27.8%). In hiring, agencies required prior "life experiences" (n = 121, 68.8%) few of which (n = 33, 27.2%) were specific to caregiving. Screening measures included federal criminal background checks (n = 96, 55.8%) and drug testing (n = 56, 31.8%). Agencies stated that the paid caregiver could perform skills, such as medication reminding (n = 169, 96.0%). Skill competency was assessed according to caregiver self-report (n = 103, 58.5%), testing (n = 62, 35.2%), and client feedback (n = 62, 35.2%). General caregiver training length ranged from 0 to 7 days. Supervision ranged from none to weekly and included home visits, telephone calls, and caregivers visiting the central office.
Conclusion: Using an agency to hire paid caregivers may give older adults and their families a false sense of security regarding the background and skill set of the caregiver.
----------------------
The Return of the Family? Welfare State Retrenchment and Client Autonomy in Long-Term Care
Ellen Grootegoed & Diana Van Dijk
Journal of Social Policy, forthcoming
Abstract:
European welfare states are cutting back their responsibilities for long-term care, emphasising ‘self-reliance' and replacing care as an entitlement of citizenship with targeted services. But we do not know how former long-term care recipients cope with retrenchment and if they are able to negotiate support from their family and friends. Through an analysis of 500 telephone interviews and thirty face-to-face interviews with long-term care recipients facing reduced care rights in the Netherlands, we found that disabled and elderly persons resist increased dependence on their personal networks. Most clients who face reduced access to public long-term care do not seek alternative help despite their perceived need for it, and feel trapped between the policy definition of self-reliance and their own ideals of autonomy.