Intensive Care
Swamped: Emergency Department Crowding and Patient Mortality
Lindsey Woodworth
Journal of Health Economics, forthcoming
Abstract:
U.S. emergency departments are experiencing extreme levels of crowding. This study estimates the impact of emergency department crowding on patient mortality. Identification relies on the abrupt crowding shocks felt by “old” emergency departments at the time a new emergency department opens nearby. Using death records linked to hospital administrative records, I find that a 10% alleviation of emergency department patient volume significantly lowers the average patient’s chance of mortality. Improvements appear to be realized both inside the hospital and after the patient has left.
An empirical investigation of time‐varying cost‐effectiveness across the product life cycle
Warren Stevens et al.
Health Economics, May 2020, Pages 580-590
Abstract:
Cost‐effectiveness is traditionally treated as a static estimate driven by clinical trial efficacy and drug price at launch. Prior studies suggest that cost‐effectiveness varies over the drug's lifetime. We examined the impact of “learning by doing,” one of the least studied drivers of changes in cost‐effectiveness across the product life cycle. We combined time‐series trends in effectiveness over time by cancer regimen using the Surveillance, Epidemiology, and End Results‐Medicare database. We estimated the time‐varying effects of treatments in colorectal and pancreatic cancer over their life cycle, including FOLFOX (leucovorin, 5‐fluorouracil, and oxaliplatin) and gemcitabine, on survival of patients. Mean prices over time by strength and dosage form were calculated using historical wholesale acquisition costs. We found consistent downward trends in the mortality hazard ratios, which suggest that effectiveness improves over time. In the case of first‐line FOLFOX for colorectal cancer, the implied incremental cost‐effectiveness ratio based on the observational data fell from $610,000 per life year gained in 2004 to $27,000 per life year gained in 2011. Cost‐effectiveness estimated at launch is unlikely to be representative of cost‐effectiveness over the drug's lifetime. In the drugs studied, the impact of time‐varying clinical effectiveness dominated the impact of changing prices overtime.
Does Private Equity Investment in Healthcare Benefit Patients? Evidence from Nursing Homes
Atul Gupta et al.
University of Pennsylvania Working Paper, February 2020
Abstract:
Private Equity (PE) investment in healthcare has increased dramatically in recent years. This paper studies how PE buyouts affect the quality of care in nursing homes. Using comprehensive facility-level data from 2000 to 2017, we find robust evidence of declines in patient health and compliance with care standards. These declines appear to reflect cuts to front-line nursing staff, one component of efficiency improvements that also include higher bed utilization. Neither selection nor patient composition changes can fully explain the results. The particular incentives of PE managers appear responsible, as quality does not decline after acquisitions by non-PE corporates and chains.
Framing utility: Regulatory reform and genetic tests in the USA, 1989-2000
Steve Sturdy
Social Science & Medicine, forthcoming
Abstract:
Before about 1990, insofar as diagnostic and other medical tests were subject to regulatory oversight, it was chiefly to ensure that they met appropriate standards of analytic and clinical validity. Over the course of the 1990s, however, regulatory reformers in the United States began to argue that genetic tests, specifically, should also be assessed to determine whether or not they actually benefit those undergoing testing - whether they possess “clinical utility”, as they put it. The present paper asks why this shift in regulatory focus occurred specifically in relation to genetic tests, and why clinical utility became a key object of assessment. It answers these questions by situating concerns about genetic tests in the longer history of medical genetics. Looking back to the 1970s and medical geneticists' efforts to distance themselves from their earlier association with eugenics, it shows that they adopted a particular framing of the dangers of genetic testing which would inform their response to the proliferation of new genetic tests and the growth of commercial testing in the 1990s. In a series of policy committees convened over the course of that decade, medical geneticists called for regulatory measures to be implemented to ensure that genetic tests were only introduced into medical practice if they had been shown to be beneficial to those tested. The paper follows the deliberations of those committees to show in detail how geneticists worked within this framing to accommodate new technical capacities and regulatory opportunities. In the course of these deliberations, they adopted the idea of clinical utility to signify the need for evidence of benefit specifically to those tested. The paper concludes with some observations regarding how this framing of genetic tests relates to current understandings of “genetic exceptionalism” and to more recent articulations of clinical utility.
Understanding Cross-country Differences in Health Status and Expenditures
Raquel Fonseca et al.
NBER Working Paper, March 2020
Abstract:
Using a general equilibrium heterogeneous agent model featuring health production, we quantify the relative contribution of price distortions in the health market, TFP and other health risks in explaining cross-country differences in health expenditure (as a share of GDP) and health status. Estimated parameters reveal a substantial price wedge that explains at most 20% of the difference in health spending (as a share of GDP) and 30% of the difference in health status between Europe and the U.S. We estimate a one percentage point negative impact on the life-time cost-of-living of Americans from higher prices due to inefficiencies.
How do hospitals respond to managed care? Evidence from at-risk newborns
Ajin Lee
Journal of Public Economics, forthcoming
Abstract:
Medicaid has increasingly transitioned from a government-run fee-for-service system (FFS) to a managed care system (MMC) administered by private insurers. To examine the effect of MMC, I exploit an arbitrary determinant of MMC enrollment in New York State: infants weighing less than 1200 g were excluded from MMC and were instead served through FFS. I find evidence that MMC reduces hospital costs at birth, which is driven by infants born in New York City. The hospital cost reductions arise from shortening the lengths of stay and encouraging inter-hospital transfers. These results are consistent with health plans influencing hospitals to reduce the intensity of treatment and steering patients away from high-cost hospitals.
The impact of the managed care backlash on health care spending
Maxim Pinkovskiy
RAND Journal of Economics, Spring 2020, Pages 59-108
Abstract:
The health spending slowdown associated with the managed care revolution in the 1990s suggests that managed care may have been successful in controlling health care spending. I exploit the passage of state regulation during the “managed care backlash” as well as geographic variation in managed care intensity to measure the impact of managed care on spending. I find that restricting managed care causes a large and significant increase in hospital spending, which cannot be explained by changes in hospital market concentration, other regulatory activity, and multiple other possible explanations. I also do not find effects of the backlash on mortality.
Fiscal Federalism and the Budget Impacts of the Affordable Care Act's Medicaid Expansion
Jonathan Gruber & Benjamin Sommers
NBER Working Paper, March 2020
Abstract:
Medicaid’s federal-state matching system of financing is the nation’s largest example of fiscal federalism. Using generous federal subsidies, the Affordable Care Act incentivized states to expand Medicaid, which became a state option in the aftermath of a 2012 Supreme Court ruling. As of early 2020, 14 states had not yet expanded, with concerns over state budgetary effects described as a key barrier. We use an event-study approach to analyze state budget data from 2010-2018 and assess the effects of state Medicaid expansion decisions. We find that Medicaid expansion increased total spending in expansion states by 6% to 9%, compared to non-expansion states. By source of funds, federal spending via the states increased by 10% in the first year of Medicaid expansion, rising to 27% in 2018. Changes in spending from state funding were modest and non-significant, with less than a 1% change from baseline annually in the most recent years, 2017 and 2018. Meanwhile, we find no evidence that increased Medicaid spending from expansion produced any reductions in spending on education, corrections, transportation, or public assistance. Changes in Medicaid spending tracked closely with the baseline pre-ACA (2013) uninsured rate in each states, with expansion leading to roughly $2680 in added annual spending per uninsured adult. As a result, we estimate states that didn’t expand Medicaid passed up $43 billion in federally-subsidized program funds in 2018. Finally, state projections in the aggregate were reasonably accurate, with expansion states projecting average Medicaid spending from 2014-2018 within 2 percent of the actual amounts, and in fact overestimating Medicaid spending in most years.
Antitrust Treatment of Nonprofits: Should Hospitals Receive Special Care?
Cory Capps, Dennis Carlton & Guy David
Economic Inquiry, forthcoming
Abstract:
Nonprofit hospitals receive favorable tax treatment in exchange for providing socially beneficial activities. Extending this rationale suggests that nonprofit hospital mergers should be evaluated differently than mergers of for‐profit hospitals because suppression of competition may also allow nonprofits to cross‐subsidize care for the poor. Using detailed California data, we find no evidence that nonprofit hospitals are more likely than for‐profit hospitals to provide more charity care or offer unprofitable services in response to an increase in market power. Therefore, we find no empirical justification for applying, as some courts have suggested, different antitrust standards for nonprofit hospitals.
The Rise of For-Profit Experimental Medicine
Pierre Azoulay & Ariel Fishman
NBER Working Paper, March 2020
Abstract:
Beginning around 1990, academic medical centers have ceased to be the primary locus of industry-sponsored clinical trial activity. Instead, clinical trials have increasingly been conducted in private practices and for-profit, dedicated study sites. We examine the underlying causes of this startling evolution. On the demand side, the greater availability of non-academic investigators has enabled pharmaceutical firms to better match physicians' skills with specific projects. On the supply side, we argue that the growth of managed care health insurance has contributed to a rise in the number of non-academic physicians performing clinical research. We find evidence consistent with these claims using a unique data set containing information about 85,919 site contracts for 7,735 clinical trials between 1991 and 2003. Furthermore, we examine the gap in prevailing prices for comparable procedures conducted for clinical trials versus conventional medical care, and conclude that the effect of managed care on entry is consistent with non-academic physicians “inducing demand” so as to resist downward pressures on their income.
The ACA Medicaid Rebate Rule Change: Impact on Pricing and Innovation
Josh Feng, Thomas Hwang & Luca Maini
University of North Carolina Working Paper, February 2020
Abstract:
We study how Medicaid drug procurement rules affect private markets, leveraging new data and changes implemented as part of the Affordable Care Act (ACA). Using a stylized model, we illustrate how the rules of the Medicaid Drug Rebate Program (MDRP) qualitatively distorts pricing and innovation outcomes. Consistent with previous literature, the model predicts that larger mandatory rebates cause firms to set higher initial list prices. However, after factoring in the MDRP's inflation penalty and “best price” provisions, the model predicts that higher Medicaid rebates reduce list price growth, increase private market rebates, and can even encourage higher quality line extensions. We test these predictions using a difference-in-difference analysis that exploits an increase in the minimum Medicaid rebate implemented as part of the ACA. Our empirical results are consistent with the predictions of the model and provide a more nuanced view of the impact of government procurement rules on private drug market outcomes.
Regulating Conflicts of Interest through Public Disclosure: Evidence from a Physician Payments Sunshine Law
Matthew Chao & Ian Larkin
University of California Working Paper, February 2020
Abstract:
Hospital and health care administrators have often named prescription drug costs as one of their largest cost problems. Relatedly, a significant body of research demonstrates that meals and honoraria from pharmaceutical firms to physicians leads to higher prescribing of expensive, brand name drugs. Some administrators and scholars have advocated for mandatory disclosure of these payments in order to reduce this conflict of interest, but many practitioners believe disclosure has little effect on prescribing. This paper uses a quasi-experiment of a 2009 payment disclosure policy in Massachusetts to estimate the causal impact of public disclosure on prescribing. The comprehensive dataset includes all retail prescriptions for 262 drugs in 9 drug classes written by 5730 physicians in five states over 48 months. We show a significant post-disclosure reduction in brand name drug prescriptions by Massachusetts physicians, relative to control doctors in other states. These effects are driven by heavy prescribers of brand name drugs in the pre-policy period, particularly for drugs with large pre-policy sales forces. Effects are also detected before the first data were released, implying that the effects are not because patients or administrators responded to the disclosed payments. Instead, some physicians may have reduced payments after disclosure is mandated, leading to changes in their prescriptions. Taken in tandem with the many studies showing that industry payments influence prescribing, this study suggests a strong role for mandatory public disclosure in reducing conflicts of interest in medicine and costly prescribing of brand name drugs.
Medicaid Expansion and Emergency Department Utilization
Lindsey Woodworth
Contemporary Economic Policy, forthcoming
Abstract:
This study measures the effect of Medicaid expansion on emergency department (ED) utilization. It also explores the mechanism through which treatment effects operate. Identification relies on a county‐level Medicaid expansion rollout within California from 2011 to 2013. The results suggest that Medicaid expansion increased ED utilization in California. Every time one individual transferred into the Medicaid program, there emerged one additional ED visit per year. Furthermore, the effect appears to be driven by difficulty accessing primary care. These findings suggest Medicaid expansion may have different effects in different environments, depending on how easily enrollees can schedule appointments.
Analyses of Employer Medical Claims Data to Assess Receipt of High-Priority Preventive Health Services
Andrew Rundle et al.
American Journal of Preventive Medicine, forthcoming
Methods: High-priority preventive healthcare services are defined as, a physical examination; type 2 diabetes screening; blood lipid screening; cervical, breast, and colon cancer screening; and osteoporosis screening. Current Procedural Terminology codes reflecting billing for these screening services were identified. Receipt of these age- and sex-appropriate services in rolling 3-year windows from 2010 to 2016 was assessed in 86,895,424 person-years of medical claims data from the IBM Watson Health MarketScan Commercial Claims and Encounters Database and the Medicare Supplemental and Coordination of Benefit Database. Data were analyzed in 2018 and 2019.
Results: In the 2014-2016 period, 29% of men and 36% of women received the complete set of age- and sex-appropriate preventive health services, whereas 33% of men and 13% of women received none of these services.
The Effects of State Scope of Practice Laws on the Labor Supply of Advanced Practice Registered Nurses
Sara Markowitz & Kathleen Adams
NBER Working Paper, March 2020
Abstract:
This paper studies the effects of changes in states’ scope of practice laws (SOP) for advanced practice registered nurses (APRNs) on individual labor supply decisions. Restrictive SOP impose costs and other barriers to practice that may affect these decisions. Using survey data on APRNs, we analyze employment in nursing, work hours, part-time work status, multiple job holding, self-employment, wages, and migration. Results show that the level of SOP restrictions are not strong determinants of many labor market decisions, with a few exceptions. We find that hours worked and self-employment both increase when nurses practice in regulatory environments that are free from physician oversight requirements.
Deep learning robotic guidance for autonomous vascular access
Alvin Chen et al.
Nature Machine Intelligence, February 2020, Pages 104-115
Abstract:
Medical robots have demonstrated the ability to manipulate percutaneous instruments into soft tissue anatomy while working beyond the limits of human perception and dexterity. Robotic technologies further offer the promise of autonomy in carrying out critical tasks with minimal supervision when resources are limited. Here, we present a portable robotic device capable of introducing needles and catheters into deformable tissues such as blood vessels to draw blood or deliver fluids autonomously. Robotic cannulation is driven by predictions from a series of deep convolutional neural networks that encode spatiotemporal information from multimodal image sequences to guide real-time servoing. We demonstrate, through imaging and robotic tracking studies in volunteers, the ability of the device to segment, classify, localize and track peripheral vessels in the presence of anatomical variability and motion. We then evaluate robotic performance in phantom and animal models of difficult vascular access and show that the device can improve success rates and procedure times compared to manual cannulations by trained operators, particularly in challenging physiological conditions. These results suggest the potential for autonomous systems to outperform humans on complex visuomotor tasks, and demonstrate a step in the translation of such capabilities into clinical use.
Nonprofit Versus For-Profit Health Care Competition: How Service Mix Makes Nonprofit Hospitals More Profitable
Jihwan Moon & Steven Shugan
Journal of Marketing Research, April 2020, Pages 193-210
Abstract:
This article studies the intersection between the largest U.S. industry - health care - and the $1 trillion nonprofit sector. Using analytical and empirical analyses, the authors reveal the marketing strategies helping private nonprofit hospitals achieve higher output, prices, and profits than for-profit hospitals. Nonprofit hospitals, focusing on both profits and output, obtain these outcomes by expanding their service mix with high-priced premium specialty medical services (PSMS), whereas for-profit hospitals can be more profitable with higher prices for basic services. Competition increases the differences between nonprofit and for-profit hospitals in PSMS breadth, output, and prices. Nonprofit hospitals lose their competitive advantage when competing with other nonprofits; that is, presence of a for-profit competitor broadens available nonprofit PSMS. With broader service mixes, nonprofits focus more on national advertising than for-profits because PSMS (e.g., pediatric trauma, neurosurgery, heart transplants, oncology) require larger geographic markets than local basic services (e.g., laboratory, diagnostics, nursing, pharmaceutics). Exogenous, heterogeneous state regulations restricting for-profit hospital entry help econometric identification (i.e., markets prohibiting for-profits act as controls). Service mix may be a key difference between nonprofit and for-profit hospitals.
The Impact of Diversification on Task Performance: Evidence from Kidney Transplant Centers
Sara Parker‐Lue & Marvin Lieberman
Strategic Management Journal, forthcoming
Abstract:
Even when diversification is beneficial, entry into a new business can negatively affect the performance of the firm's existing business (es). We examine transplant centers that diversified from kidney transplants into liver transplants, focusing on how patient age can affect the costs associated with diversification. We find that diversification into liver transplants resulted in worsened quality performance in kidney transplants for younger patients, whose cases were less likely to be unexpectedly complex. For older patients, whose cases were more likely to have complications, the negative effect of diversification was offset. Our findings suggest that in health care the costs of diversification can be sensitive to patient characteristics, making focused organizations desirable when task complexity is low, while favoring diversified organizations for more complex tasks.