Pooling
John Sheils & Randall Haught
Health Affairs, November 2011, Pages 2177-2185
Abstract:
Many policy analysts fear that eliminating the individual health insurance mandate and penalty from the Affordable Care Act of 2010 would lead to a "premium spiral," in which healthy people would drop coverage, premiums would soar, and the number of people with coverage would plummet. However, there are other provisions of the law that would greatly mitigate this effect. For example, the subsidies provided in the law to help people purchase coverage through health insurance exchanges would restrain a premium spiral by absorbing much of the impact of premium increases. We estimate that if the mandate were lifted, premiums in the individual market would increase by 12.6 percent - somewhat less than other estimates - with 7.8 million people losing coverage, versus other estimates for coverage loss of 16-24 million people. In sum, the Affordable Care Act would still cover 23 million people who would have been uninsured without the law. Our study suggests that although the mandate would have important effects on premiums and coverage, it might not be essential to the act's successful implementation.
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Thomas Buchmueller, John DiNardo & Robert Valletta
American Economic Journal: Economic Policy, November 2011, Pages 25-51
Abstract:
We examine the effects of the most durable employer health insurance mandate in the United States, Hawaii's Prepaid Health Care Act, using Current Population Survey data covering the years 1979 to 2005. Relying on a variation of the classical Fisher permutation test applied across states, we find that Hawaii's law increased insurance coverage over time for worker groups with low rates of coverage in the voluntary market. We find no statistically significant support for the hypothesis that the mandate reduced wages and employment probabilities. Instead, its primary detectable effect was an increased reliance on exempt part-time workers.
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Demanding Customers: Consumerist Patients and Quality of Care
Hai Fang et al.
B.E. Journal of Economic Analysis & Policy, September 2011
Abstract:
Consumerism arises when patients acquire and use medical information from sources other than their physicians. This practice has been hailed as a means of improving quality. This need not be the result. Our theoretical model identifies a channel through which consumerism may reduce quality: consumerist patients place additional demands on their doctors' time, thus imposing a negative externality on other patients. Relative to a world in which consumerism does not exist, consumerism may harm other consumerists, non-consumerists, or both. Data from a large national survey of physicians confirm the negative effects of consumerism: high levels of consumerist patients are associated with lower perceived quality among physicians.
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Are Estimates of the Value of a Statistical Life Exaggerated?
Chris Doucouliagos, T.D. Stanley & Margaret Giles
Journal of Health Economics, forthcoming
Abstract:
The magnitude of the value of a statistical life (VSL) is critical to the evaluation of many health and safety initiatives. To date, the large and rigorous VSL research literature has not explicitly accommodated publication selectivity bias (i.e., the reduced probability that insignificant or negative VSL values are reported). This study demonstrates that doing so is essential. For studies that employ hedonic wage equations to estimate VSL, correction for selection bias reduces the average value of a statistical life by seventy to eighty percent. Our meta-regression analysis also identifies several sources for the wide heterogeneity found among reported VSL estimates.
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Do bad risks know it? Experimental evidence on optimism and adverse selection
Marta Coelho & David de Meza
Economics Letters, February 2012, Pages 168-171
Abstract:
Subjects who overestimate their performance in experimental tasks unrelated to travel are less willing to insure against failing in the task and also less inclined to buy travel insurance. This suggests intrinsic optimism influences insurance demand and diminishes adverse selection.
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Nilay Shah et al.
Health Affairs, November 2011, Pages 2134-2141
Abstract:
Some health plans have experimented with increasing consumer cost sharing, on the theory that consumers will use less unnecessary health care if they are expected to bear some of the financial responsibility for it. However, it is unclear whether the resulting decrease in use is sustained beyond one or two years. In 2004 Mayo Clinic's self-funded health plan increased cost sharing for its employees and their dependents for specialty care visits (adding a $25 copayment to the high-premium option) and other services such as imaging, testing, and outpatient procedures (adding 10 or 20 percent coinsurance, depending on the option). The plan also removed all cost sharing for visits to primary care providers and for preventive services such as colorectal screening and mammography. The result was large decreases in the use of diagnostic testing and outpatient procedures that were sustained for four years, and an immediate decrease in the use of imaging that later rebounded (possibly to levels below the expected trend). Beneficiaries decreased visits to specialists but did not make greater use of primary care services. These results suggest that implementing relatively low levels of cost sharing can lead to a long-term decrease in utilization.
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Daniel Carpenter et al.
American Journal of Political Science, forthcoming
Abstract:
Public agencies have discretion on the time domain, and politicians deploy numerous policy instruments to constrain it. Yet little is known about how administrative procedures that affect timing also affect the quality of agency decisions. We examine whether administrative deadlines shape decision timing and the observed quality of decisions. Using a unique and rich dataset of FDA drug approvals that allows us to examine decision timing and quality, we find that this administrative tool induces a piling of decisions before deadlines, and that these "just-before-deadline" approvals are linked with higher rates of postmarket safety problems (market withdrawals, severe safety warnings, safety alerts). Examination of data from FDA advisory committees suggests that the deadlines may impede quality by impairing late-stage deliberation and agency risk communication. Our results both support and challenge reigning theories about administrative procedures, suggesting they embody expected control-expertise trade-offs, but may also create unanticipated constituency losses.
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Sex, self-interest and health care priorities
Tracey Sach & David Whynes
Journal of Socio-Economics, forthcoming
Abstract:
In this questionnaire study, individuals were asked to prioritise publicly-provided preventive health care services, one of which would be unavailable to them by virtue of their sex. The aim was to establish whether men and women would exhibit different degrees of self-interest when making a constrained choice. Around 1,800 subjects from east-central England prioritised three different types of cancer screening. Most also provided written explanations for their rankings and these were classified into explanatory themes. Logistic regressions using socio-demographic and attitude data predicted the type of screening chosen as first priority. The analysis revealed that many men and women did indeed assign similar priorities to the different types of screening and, even when the priorities differed, these were often justified by similar arguments relating to technical aspects of the interventions and to self-interest. However, women were far more likely than men to prioritise a type of screening from which they themselves would benefit directly and the variations in preferences and explanations between the sexes occurred primarily because of differences in other-regarding attitudes. The bias towards screening of females was driven by women's greater worries about the disease in question and by men's "benevolent sexism" with respect to women's wellbeing.
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Protecting Against Low-Probability Disasters: The Role of Worry
Christian Schade, Howard Kunreuther & Philipp Koellinger
Journal of Behavioral Decision Making, forthcoming
Abstract:
We carry out a large monetary stakes insurance experiment with very small probabilities of losses and ambiguous as well as exact probabilities. Many individuals do not want to pay anything for insurance whether the probabilities are given exactly or are ambiguous. Many others, however, are willing to pay surprisingly large amounts. With ambiguity, the percentage of those paying nothing is smaller and the willingness to pay (WTP) of the other individuals larger than with exact probabilities. Comparing elasticities with ambiguity, we find that worry is much more important than subjective probability in determining WTP for insurance. Furthermore, when the ambiguous loss probability is increased by a factor of 1000, it has almost no effect on WTP.
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What is the Role of Free Clinics in the Safety Net?
Julie Darnell
Medical Care, November 2011, Pages 978-984
Background: Free clinics play an important role in the safety net but little is known about what factors drive their existence within a given community. The anecdotal literature suggests that they exist due to growing numbers of uninsured and a lack of affordable care.
Objective: To determine whether unmet needs explain the existence of free clinics.
Materials and Methods: The relationship between demographics, Medicaid policy, and ambulatory safety-net care on the geographical distribution of all known free clinics (n=1007) across all metropolitan statistical areas
(n=361) in the United States is investigated cross sectionally. Drawing from numerous secondary data sources and an original dataset of all known free clinics, a negative binomial model is used to examine whether free clinic prevalence is higher in communities with larger proportions of uninsured patients, poor adults, and African Americans and is lower in communities with greater availability of federally qualified health centers (FQHCs), FQHC look-alikes, and health departments, and more generous Medicaid eligibility for working parents and Medicaid beneficiary/provider payment levels.
Results and Discussion: None of the demographic variables has a positive, statistically significant relationship to the number of free clinics in a metropolitan statistical area. However, the number of FQHC grantees per 10,000 uninsured individuals [incidence rate ratios (IRR)=0.69, P<0.05], the number of FQHC look-alike sites per 10,000 uninsured individuals (IRR=0.46, P<0.05), Medicaid beneficiary payments (IRR=0.9998, P<0.05), and Medicaid eligibility levels (IRR=0.998, P<0.10) are negatively associated with the number of free clinics. Thus, free clinics seem to respond to particular gaps left by safety-net providers and Medicaid but do not seem to respond to direct need.
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The Impact of Regime Type on Health: Does Redistribution Explain Everything?
Simon Wigley & Arzu Akkoyunlu-Wigley
World Politics, October 2011, Pages 647-677
Abstract:
Many scholars claim that democracy improves population health. The prevailing explanation for this is that democratic regimes distribute health-promoting resources more widely than autocratic regimes. The central contention of this article is that democracies also have a significant pro-health effect regardless of public redistributive policies. After establishing the theoretical plausibility of the nondistributive effect, a panel of 153 countries for the years 1972 to 2000 is used to examine the relationship between extent of democratic experience and life expectancy. The authors find that democratic governance continues to have a salutary effect on population health even when controls are introduced for the distribution of health-enhancing resources. Data for fifty autocratic countries for the years 1994 to 2007 are then used to examine whether media freedom - independent of government responsiveness - has a positive impact on life expectancy.
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Medicare Part D and the Financial Protection of the Elderly
Gary Engelhardt & Jonathan Gruber
American Economic Journal: Economic Policy, November 2011, Pages 77-102
Abstract:
We examine the impact of the expansion of public prescription-drug insurance coverage from Medicare Part D and find evidence of substantial crowd-out. Using the 2002-2007 waves of the Medical Expenditure Panel Survey, we estimate the extension of Part D benefits resulted in 75 percent crowd-out of both prescription-drug insurance coverage and expenditures of those 65 and older. Part D is associated with sizeable reductions in out-of-pocket spending, much of which has accrued to a small proportion of the elderly. On average, we estimate a welfare gain from Part D comparable to the deadweight cost of program financing.
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Peter Hussey, Susan Ridgely & Meredith Rosenthal
Health Affairs, November 2011, Pages 2116-2124
Abstract:
Fee-for-service payment is blamed for many of the problems observed in the US health care system. One of the leading alternative payment models proposed in the Affordable Care Act of 2010 is bundled payment, which provides payment for all of the care a patient needs over the course of a defined clinical episode, instead of paying for each discrete service. We evaluated the initial "road test" of PROMETHEUS Payment, one of several bundled payment pilot projects. The project has faced substantial implementation challenges, and none of the three pilot sites had executed contracts or made bundled payments as of May 2011. The pilots have taken longer to set up than expected, primarily because of the complexity of the payment model and the fact that it builds on the existing fee-for-service payment system and other complexities of health care. Participants continue to see promise and value in the bundled payment model, but the pilot results suggest that the desired benefits of this and other payment reforms may take time and considerable effort to materialize.
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Health, Luck and Moral Fallacies of the Second Best
Eric Cavallero
Journal of Ethics, December 2011, Pages 387-403
Abstract:
Individuals who become ill as a result of personal lifestyle choices often shift the monetary costs of their healthcare needs to the taxpaying public or to fellow members of a private insurance pool. Some argue that policies permitting such cost shifting are unfair. Arguments for this view may seem to draw support from luck egalitarian accounts of distributive justice. This essay argues that the luck egalitarian framework provides no such support. To allocate healthcare costs on the basis of personal responsibility would arbitrarily and publicly burden socially detectable risk-takers while undetectable risk-takers continue to get a free ride. That problem is unavoidable even on the assumption that distributive institutions outside the healthcare sector are fully just. In actual, farfrom-just societies, imposing personal liability for the costs of voluntary risk taking would be wrong for an additional reason. Doing so would tend to magnify existing distributive injustices. These conclusions draw attention to two common 'moral fallacies of the second best' that can arise when applying ideal normative theory to matters of institutional design and in real-world policy contexts.
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Stephen Schoenbaum et al.
Journal of Public Health Policy, November 2011, Pages 407-429
Abstract:
This article examines associations of socio-demographic and health-care indicators, and the statistic 'mortality amenable to health care' (amenable mortality) across the US states. There is over two-fold variation in amenable mortality, strongly associated with the percentages of state populations that are poor or black. Controlling for poverty and race with bi- and multi-variate analyses, several indicators of health system performance, such as hospital readmission rates and preventive care for diabetics, are significantly associated with amenable mortality. A significant crude association of 'uninsurance' and amenable mortality rates is no longer statistically significant when poverty and race are controlled. Overall, there appear to be opportunities for states to focus on specific modifiable health system performance indicators. Comparative rates of amenable mortality should be useful for estimating potential gains in population health from delivering more timely and effective care and for tracking the health outcomes of efforts to improve health system performance.