Kevin Lewis

August 12, 2019

Medicaid and Mortality: New Evidence from Linked Survey and Administrative Data
Sarah Miller et al.
NBER Working Paper, July 2019

We use large-scale federal survey data linked to administrative death records to investigate the relationship between Medicaid enrollment and mortality. Our analysis compares changes in mortality for near-elderly adults in states with and without Affordable Care Act Medicaid expansions. We identify adults most likely to benefit using survey information on socioeconomic and citizenship status, and public program participation. We find a 0.13 percentage point decline in annual mortality, a 9.3 percent reduction over the sample mean, associated with Medicaid expansion for this population. The effect is driven by a reduction in disease-related deaths and grows over time. We find no evidence of differential pre-treatment trends in outcomes and no effects among placebo groups.

Just what the nurse practitioner ordered: Independent prescriptive authority and population mental health
Diane Alexander & Molly Schnell
Journal of Health Economics, July 2019, Pages 145-162

We examine whether relaxing occupational licensing to allow nurse practitioners (NPs) - registered nurses with advanced degrees - to prescribe medication without physician oversight improves population mental health. Exploiting time-series variation in independent prescriptive authority for NPs from 1990 to 2014, we find that broadening prescriptive authority leads to improvements in self-reported mental health and decreases in mental health-related mortality. These improvements are concentrated in areas that are underserved by physicians and among populations that have difficulty accessing physician-provided care. Our results demonstrate that extending independent prescriptive authority to NPs can help mitigate physician shortages and extend care to disadvantaged populations.

Under Pressure: Reputation, Ratings, and Inaccurate Self‐Reporting in the Nursing Home Industry
Amandine Ody‐Brasier & Amanda Sharkey
Strategic Management Journal, forthcoming

This paper examines firms' strategic responses to reputational pressures in a critical healthcare domain ‐‐ the U.S. nursing home industry. We investigate whether organizations improved in terms of care quality following an exogenous change in the required number of nursing hours associated with star‐based ratings to which nursing homes are subject. We show that although firms at risk of losing a star tended to self‐report higher staffing levels after the policy change, these reported increases were not associated with improvements in an important patient outcome ‐‐ bedsores. These findings are consistent with false reporting of staffing data, or insufficient or ineffective hiring practices. Although we cannot definitively establish the existence of false reporting, supplementary analyses offer little support for the latter two possibilities.

Government Regulation and Lifecycle Wages: Evidence from Continuing Coverage Mandates
Catherine Maclean & Douglas Webber
Temple University Working Paper, July 2019

We examine the lifecycle wage effects of health insurance market regulation that compels private insurers to offer continuing coverage to beneficiaries. Using a panel of male workers drawn from the National Longitudinal Survey of Youth 1979, we model wages across the lifecycle as a function of the mandated number of months of continuing coverage at labor market entrance. Access to continuing coverage is plausibly valuable to young workers as this benefit facilities job mobility, which is important for early career wage growth and lifecycle wages, but is costly to firms. We show that more generous mandated continuing coverage at labor market entrance causes an initial wage decline of roughly 1% that reverses after five years in the labor market leading to higher wages later in the career. Wage increases are observable up to 30 years after labor market entrance. We provide suggestive evidence that increased job mobility early in the career is a mechanism for the observed wage effects.

Impacts of shifting responsibility for high-cost individuals on Health Insurance Exchange plan premiums and cost-sharing provisions
Sankar Mukhopadhyay, Jeanne Wendel & Miaomiao Zou
Journal of Health Economics, July 2019, Pages 180-194

Insurance companies can respond to increases in expected per-capita healthcare expenditures by adjusting premiums, cost-sharing requirements, and/or plan generosity. We use a Difference-in-Difference model with Plan-level Fixed Effects to estimate the impacts of increases in expected expenditures generated by closure of state-operated High Risk Pools (HRPs). For Silver plans, we find that issuers responded to HRP closures by increasing both premiums and deductibles, and by increasing the ratios of premiums to deductibles. This adjustment to the structure of plan prices is consistent with the hypothesis that issuers will be reluctant to adjust deductibles, because consumers tend to overweight changes in deductibles over changes in premiums. The increase in the ratio of premiums to deductibles indicates that the increase in expected expenditures triggered an increase in the share of total risk-pool healthcare expenditures paid by low healthcare utilizers, and a decrease in the share paid by high utilizers.

The Price to Consumers of Generic Pharmaceuticals: Beyond the Headlines
Richard Frank, Andrew Hicks & Ernst Berndt
NBER Working Paper, July 2019

Generic drug prices have been the focus of much attention in recent years, with Congressional committees, executive agencies and private organizations all conducting investigations into the pricing patterns for generic drugs. Price spikes for selected old, off-patent drugs have also been widely reported in the media. To place these generic price increases into context, we construct two chained Laspeyres consumer price indexes (CPIs), using the 2007-2016 IBM MarketScan Commercial Claims and Encounters Research Database. The first ("direct out-of-pocket CPI") measures consumers' direct out-of-pocket payments to the dispensing pharmacy, while the second ("total CPI") represents the total revenues received by the dispensing pharmacy - the consumers' direct out-of-pocket payments plus the amount paid to the pharmacy by the insurer on behalf of the consumer. We find the chained direct-out-of-pocket CPI for generic prescription drugs declines by about 50% between 2007 and 2016, while the total CPI falls by nearly 80% over the same time period. The smaller decline in the direct out-of-pocket CPI than in the total CPI is due in part to consumers' increasingly moving away from fixed copayment benefit plans to pure coinsurance or a mixed package of coinsurance and copayments. While consumers are experiencing more cost sharing that in fact shifts more of the drug cost burden on to them, on balance in the US consumers have experienced substantial price declines for generic drugs.

The effect of decision fatigue on surgeons' clinical decision making
Emil Persson et al.
Health Economics, forthcoming

The depleting effect of repeated decision making is often referred to as decision fatigue. Understanding how decision fatigue affects medical decision making is important for achieving both efficiency and fairness in health care. In this study, we investigate the potential role of decision fatigue in orthopedic surgeons' decisions to operate, exploiting a natural experiment whereby patient allocation to time slots is plausibly randomized at the level of the patient. Our results show that patients who met a surgeon toward the end of his or her work shift were 33 percentage points less likely to be scheduled for an operation compared with those who were seen first. In a logistic regression with doctor‐fixed effects and standard errors clustered at the level of the doctor, the odds of operation were estimated to decrease by 10.5% (odds ratio = 0.895, p < .001; 95% CI [0.842, 0.951]) for each additional patient appointment in the doctors' work shift. This pattern in surgeons' decision making is consistent with decision fatigue. Because long shifts are common in medicine, the effect of decision fatigue could be substantial and may have important implications for patient outcomes.

Health Care Spending, Utilization, and Quality 8 Years into Global Payment
Zirui Song et al.
New England Journal of Medicine, 18 July 2019, Pages 252-263

Background: Population-based global payment gives health care providers a spending target for the care of a defined group of patients. We examined changes in spending, utilization, and quality through 8 years of the Alternative Quality Contract (AQC) of Blue Cross Blue Shield (BCBS) of Massachusetts, a population-based payment model that includes financial rewards and penalties (two-sided risk).

Methods: Using a difference-in-differences method to analyze data from 2006 through 2016, we compared spending among enrollees whose physician organizations entered the AQC starting in 2009 with spending among privately insured enrollees in control states. We examined quantities of sentinel services using an analogous approach. We then compared process and outcome quality measures with averages in New England and the United States.

Results: During the 8-year post-intervention period from 2009 to 2016, the increase in the average annual medical spending on claims for the enrollees in organizations that entered the AQC in 2009 was $461 lower per enrollee than spending in the control states (P<0.001), an 11.7% relative savings on claims. Savings on claims were driven in the early years by lower prices and in the later years by lower utilization of services, including use of laboratory testing, certain imaging tests, and emergency department visits. Most quality measures of processes and outcomes improved more in the AQC cohorts than they did in New England and the nation in unadjusted analyses. Savings were generally larger among subpopulations that were enrolled longer. Enrollees of organizations that entered the AQC in 2010, 2011, and 2012 had medical claims savings of 11.9%, 6.9%, and 2.3%, respectively, by 2016. The savings for the 2012 cohort were statistically less precise than those for the other cohorts. In the later years of the initial AQC cohorts and across the years of the later-entry cohorts, the savings on claims exceeded incentive payments, which included quality bonuses and providers’ share of the savings below spending targets.

Conclusions: During the first 8 years after its introduction, the BCBS population-based payment model was associated with slower growth in medical spending on claims, resulting in savings that over time began to exceed incentive payments. Unadjusted measures of quality under this model were higher than or similar to average regional and national quality measures.

Do Health Insurance Mandates Spillover to Education? Evidence from Michigan's Autism Insurance Mandate
Riley Acton, Scott Imberman & Michael Lovenheim
NBER Working Paper, July 2019

Social programs and mandates are usually studied in isolation, but interaction effects could create spillovers to other public goods. We examine how health insurance coverage affects the education of students with Autism Spectrum Disorder (ASD) in the context of state-mandated private therapy coverage. Since Medicaid benefits under the mandate were far weaker than under private insurance, we proxy for Medicaid ineligibility and estimate effects via triple-differences. While we find little change in ASD identification, the mandate crowds-out special education supports for students with ASD by shifting students to less restrictive environments and reducing the use of ASD specialized teacher consultants. A lack of short-run impact on achievement supports our interpretation of the service reductions as crowd-out and indicates that the shift does not academically harm students with ASD.

Health Care Spending Projections and Policy Changes: Recognizing the Limits of Existing Forecasts
Daniel Shoag
Harvard Working Paper, June 2019

Many projections for health care spending growth do not incorporate the impact of changing labor market regulations. In this paper, I show that changing one such regulation - raising the federal minimum wage - would significantly increase the cost of several important types of care. I do this using data on the cost of long-term care from thousands of providers from 2012-2018. Using these data, I show that costs, which include home health aides and nursing home care, are highly correlated with changes in state level minimum wages. This relationship is statistically robust. Forecasts that ignore the risk of a federal minimum wage increase will understate this element of expected medical spending growth.

Better outcomes at lower costs? The effect of public health expenditures on hospital efficiency
David Hunt & Charles Link
Applied Economics, forthcoming

Local health departments play a critical role in the community they serve as they are the foundation of the U.S. public health system providing services such as immunizations to the less affluent and advocating for state smoking bans. Research indicates public health expenditures improve overall health of the population. Importantly, a healthier population may lead to efficiency gains for surrounding health care providers. We use a two-stage semi-parametric Data Envelopment Analysis to estimate the effects of public health spending on the technical efficiency of the surrounding hospitals. Our results indicate hospitals operating in an area with a high level of per capita public health expenditures experience gains in efficiency of approximately 1.67 percentage points relative to hospitals in low spending areas suggesting a $20 billion in annual savings due to increased hospital efficiency. We also found that the more traditional approaches using the biased estimate for technical efficiency yielded the same conclusions with less computational burdens.

The Impacts of Physician Payments on Patient Access, Use, and Health
Diane Alexander & Molly Schnell
NBER Working Paper, July 2019

We examine how the amount a physician is paid influences who they are willing to see. Exploiting large, exogenous changes in Medicaid reimbursement rates, we find that increasing payments for new patient office visits reduces reports of providers turning away beneficiaries: closing the gap in payments between Medicaid and private insurers would reduce more than two-thirds of disparities in access among adults and would eliminate disparities among children. These improvements in access lead to more office visits, better self-reported health, and reduced school absenteeism. Our results demonstrate that financial incentives for physicians drive access to care and have important implications for patient health.

Association Between Insurance and the Transfer of Children With Mental Health Emergencies
Jamie Kissee et al.
Pediatric Emergency Care, forthcoming

Methods: This is a cross-sectional study of pediatric mental health ED admission and transfer events using the Healthcare Cost and Utilization Project 2014 Nationwide Emergency Department Sample. Children presenting to an ED with a primary mental health disorder who were either admitted locally or transferred to another hospital were included. Multivariable logistic regression models were used to adjust for confounders.

Results: Nine thousand eighty-one acute mental health ED events among children were included in the analyses. The odds of transfer relative to admission were higher for children without insurance (odds ratio, 3.30; 95% confidence interval, 1.73-6.31) compared with patients with private insurance. The odds of transfer were similar for children with Medicaid compared with children with private insurance (odds ratio, 1.23; 95% confidence interval, 0.80-1.88). Transfer rates also varied across mental health diagnostic categories. Patients without insurance had higher odds of transfer compared with those with private insurance when they presented with depressive disorder, bipolar disorder, attention-deficit/conduct disorders, and schizophrenia.

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