Kevin Lewis

February 22, 2021

The Effect Of The Affordable Care Act On Cancer Detection Among The Near-Elderly
Fabian Duarte et al.
Health Affairs, February 2021, Pages 258-265


During the period 2014-16 the Affordable Care Act (ACA) dramatically reduced rates of uninsurance and underinsurance in the United States. In this study we estimated the effects of these coverage increases on cancer detection among the near-elderly population (ages 60-64). Using 2010-16 Surveillance, Epidemiology, and End Results (SEER) Program data, we estimated that the ACA increased cancer detection among this population. We found that 45 percent of the jump in cancer detection that occurs when people reach Medicare eligibility age was eliminated by the ACA coverage expansions. The ACA coverage expansions had large effects on cancers with and without routine screening tests, and 68 percent of newly detected cancers were early- and middle-stage cancers. In addition, the empirical strategy used to identify the effects of the ACA on cancer detection confirmed the role of health insurance as the key mechanism to explain Medicare’s effects on health care use and health outcomes as described in the prior literature. Our results highlight the importance of the ACA, Medicare, and health insurance coverage generally for disease detection.

Mediators of discrimination in primary care appointment access
Janna Wisniewski et al.
Economics Letters, forthcoming


We examine how differences in questions asked and information provided by physicians’ offices contribute to differences in new-patient appointment offers. Data is from a 2013-16 field experiment involving calls to a random sample of US primary care physicians on behalf of simulated new patients differentiated by race/ethnicity (Black, Hispanic, White), sex, and insurance. We find that the rates and stated reasons for denial of appointment offers differ substantially across patient groups.

The Health Costs of Cost-Sharing
Amitabh Chandra, Evan Flack & Ziad Obermeyer
NBER Working Paper, February 2021


We use the design of Medicare’s prescription drug benefit program to demonstrate three facts about the health consequences of cost-sharing. First, we show that an as-if-random increase of 33.6% in out-of-pocket price (11.0 percentage points (p.p.) change in coinsurance, or $10.40 per drug) causes a 22.6% drop in total drug consumption ($61.20), and a 32.7% increase in monthly mortality (0.048 p.p.). Second, we trace this mortality effect to cutbacks in life-saving medicines like statins and antihypertensives, for which clinical trials show large mortality benefits. We find no indication that these reductions in demand affect only ‘low-value’ drugs; on the contrary, those at the highest risk of heart attack and stroke, who would benefit the most from statins and antihypertensives, cut back more on these drugs than lower risk patients. Similar patterns exist for other drug-disease pairs, and irrespective of socioeconomic circumstance. Finally, we document that when faced with complex, high-dimensional choice problems, patients respond in simple, perverse ways. Specifically, price increases cause 18.0% more patients (2.8 p.p.) to fill no drugs, regardless of how many drugs they had been on previously, or their health risks. This decision mechanically results in larger absolute reductions in utilization for those on many drugs. We conclude that cost-sharing schemes should be evaluated based on their overall impact on welfare, which can be very different from the price elasticity of demand.


Better Nurse Staffing Is Associated With Survival for Black Patients and Diminishes Racial Disparities in Survival After In-Hospital Cardiac Arrests
Margo Brooks Carthon et al.
Medical Care, February 2021, Pages 169-176

Research Design: Cross-sectional data from (1) the American Heart Association’s Get With the Guidelines-Resuscitation database; (2) the University of Pennsylvania Multi-State Nursing Care and Patient Safety Survey; and (3) The American Hospital Association annual survey. Risk-adjusted logistic regression models, which took account of the hospital and patient characteristics, were used to determine the association of nurse staffing and survival to discharge for black and white patients.

Subjects: A total of 14,132 adult patients aged 18 and older between 2004 and 2010 in 75 hospitals in 4 states.

Results: In models that accounted for hospital and patient characteristics, the odds of survival to discharge was lower for black patients than white patients [odds ratio (OR)=0.70; 95% confidence interval (CI), 0.61-0.82]. A significant interaction was found between race and medical-surgical nurse staffing for survival to discharge, such that each additional patient per nurse lowered the odds of survival for black patients (OR=0.92; 95% CI, 0.87-0.97) more than white patients (OR=0.97; 95% CI, 0.93-1.00).


Impacts of Medicaid Expansion Prior to Conception on Pre-pregnancy Health, Pregnancy Health, and Outcomes
Claire Margerison et al.
American Journal of Epidemiology, forthcoming


Preconception healthcare is heralded as an essential method of improving pregnancy health and outcomes. However, access to healthcare for low-income women of reproductive age has been limited because of a lack of health insurance. Expansions of Medicaid eligibility under the Affordable Care Act (as well as prior expansions in some states) have changed this circumstance and expanded health insurance coverage for low income women. These Medicaid expansions provide an opportunity to assess whether obtaining health insurance coverage improves pre-pregnancy and pregnancy health and reduces prevalence of adverse pregnancy outcomes. We tested this hypothesis using vital statistics data from 2011-2017 on singleton births to United States resident women ages 15 to 44. We examined associations between preconception exposure to Medicaid expansion and measures of pre-pregnancy health, pregnancy health, and pregnancy outcomes using a difference-in-differences empirical approach. Increased Medicaid eligibility was not associated with improvements in pre-pregnancy or pregnancy health measures and did not reduce prevalence of adverse birth outcomes (e.g., preterm birth increased by 0.1 percentage points [95% CI: -0.2, 0.3]). Increasing Medicaid eligibility alone may be insufficient to improve pre-pregnancy or pregnancy health and birth outcomes. Preconception programming in combination with attention to other structural determinants of pregnancy health is needed.

The impact of mental health parity laws on birth outcomes
Monica Harber Carney
Health Economics, forthcoming


Prior studies have found that poor mental health during pregnancy is associated with poor birth outcomes, but little is known about the ability of mental health care access and treatment to counteract these effects. I use a difference‐in‐differences strategy exploiting the staggered enactment of state mental health parity laws in 25 states from 1995 to 2002 to identify the impact of mental health care access on the probability of an adverse birth outcome. These state mental health parity laws are insurance mandates requiring coverage of mental health care be equivalent to physical health care. Using birth records, I find that, among the group of mothers most likely to have private insurance, introduction of a mental health parity law in a state decreased the probability of an adverse birth outcome. Furthermore, I find that the parity laws decreased the likelihood that a pregnant woman hospitalized for delivery would receive a mental illness diagnosis.


Reducing Readmissions by Addressing the Social Determinants of Health
William Evans et al.
American Journal of Health Economics, Winter 2021, Pages 1-40


Hospital readmissions generate enormous costs and are the subject of increased scrutiny among US lawmakers. The Affordable Care Act created the Community-Based Care Transitions Program (CCTP) to test models for improving care transitions after hospital discharge with the goal of reducing 30-day Medicare hospital readmission rates by 20 percent. Few of these demonstrations showed sustained reductions in readmission rates. In contrast to more traditional medically focused programs, the Chicago Southland Coalition for Transition Care (CSCTC) utilized social workers solely to manage care transitions in an effort to address nonmedical obstacles to recovery. Using a difference-in-differences model and the census of Medicare discharges over the 2010-15 period, we evaluate the impact of this program. We select as a comparison group hospitals in the Chicago area with similar pretreatment trends in readmission rates and total discharges. Treatment-on-treated estimates indicate that the CSCTC program reduced 30-, 60-, and 90-day readmission rates by a statistically significant 14 percent or more of the sample mean, and reduced readmission costs an amount equal to CSCTC program cost. Effects are driven by black and Hispanic patients as well as those with dual eligibility for both Medicare and Medicaid.


Physician Agency, Consumerism, and the Consumption of Lower-Limb MRI Scans
Michael Chernew et al.
Journal of Health Economics, forthcoming


We study where privately insured individuals received planned MRI scans. Despite significant out-of-pocket costs for this undifferentiated service, privately insured patients often received care in high-priced locations when lower priced options were available. The median patient in our data has 16 MRI providers within a 30-minute drive of her home. On average, patients bypassed 6 lower-priced providers between their homes and their actual treatment locations. Referring physicians heavily influence where patients receive care. The share of the variance in the prices of patients’ MRI scans explained by referrer fixed effects (52 percent) is dramatically greater than the share explained by patient cost-sharing (< 1 percent), patient characteristics (< 1 percent), or patients’ home HRR fixed effects (2 percent). In order to access lower cost providers, patients must generally diverge from physicians’ established referral patterns.


The Secret Menu in Health Care: A Cash Market for Imaging in California
Jordan Epstein et al.
INQUIRY: The Journal of Health Care Organization, Provision, and Financing, December 2020


In addition to the prices they negotiate with private health insurers, most providers also have a cash price schedule for patients who have the wherewithal to ask and are willing to pay in full when they receive a service. This is the first study that estimates the potential cost saving of allowing privately-insured consumers to observe both in-network negotiated prices and cash prices, which is of particular interest given the growing importance of high-deductible health plans and a recent executive order mandating greater price transparency. Using data from five private health insurers and 142 imaging facilities in the San Francisco Bay Area, we estimate that patients could save between 10% and 22% of their insurer’s in-network price by paying cash. Potential savings are much larger (between 45% and 64% of their insurer’s in-network price) if consumers observe both cash and in-network prices and select the facility in the region offering the lowest price for a particular service.


Time Aggregation in Health Insurance Deductibles
Long Hong & Corina Mommaerts
NBER Working Paper, February 2021


Health insurance plans increasingly pay for expenses only beyond a large annual deductible. This paper explores the implications of deductibles that reset over shorter timespans. We develop a model of insurance demand between two actuarially equivalent deductible policies, in which one deductible is larger and resets annually and the other deductible is smaller and resets biannually. Our model incorporates borrowing constraints, moral hazard, mid-year contract switching, and delayable care. Calibrations using claims data show that the liquidity benefits of resetting deductibles can generate welfare gains of 6-10% of premium costs, particularly for individuals with borrowing constraints.


Medicare Advantage Chart Reviews Are Associated With Billions in Additional Payments for Some Plans
David Meyers & Amal Trivedi
Medical Care, February 2021, Pages 96-100

Background: In the Medicare Advantage (MA) program, private plans receive capitated payments that are adjusted based on their enrollees’ number and type of clinical conditions. Plans have the ability to review charts to identify additional conditions that are not present in claims data, thereby increasing risk-adjusted payments. Recently the Government Accountability Office released a report raising concerns about the use of these chart reviews as a potential tool for upcoding.

Research Design: In this cross-sectional study we use 2015 MA Encounter data to calculate how many additional diagnoses codes were added for each enrollee using chart reviews. We then calculate how these additional diagnosis codes translate to additional reimbursements across plans.

Results: Chart reviews were associated with a $2.3 billion increase in payments to plans, a 3.7% increase in Medicare spending to MA plans. Just 10% of plans accounted for 42% of the $2.3 billion in additional spending attributed to chart review. Among these plans, the relative increase in risk score from chart review was 17.2%. For-profit plans engaged in chart reviews substantially more frequently than nonprofit plans.


How Does Occupational Licensing Affect Entry into the Medical Field? An Examination of EMTs
Aaron Yelowitz & Samuel Ingram
University of Kentucky Working Paper, January 2021


The COVID‐19 pandemic has led to temporary suspensions of many occupational licensing laws, especially for health care professionals, in an effort to manage surges in health care demand. The crisis highlights more general concerns about occupational licensing laws, yet convincing empirical evidence on the degree to which such laws have inhibited entry into health care professions is scarce because most studies must rely on cross‐sectional variation to identify such effects. In this study, we indirectly examine how occupational licensing affects the choice to become an Emergency Medical Technician (EMT) by exploiting the demand‐side shock from the Affordable Care Act (ACA). Although demand‐side shocks should increase the likelihood of becoming an EMT relative to other similar non‐medical professions, this effect should be moderated in states with higher barriers to entry. Using a large number of individuals from the American Community Survey (ACS) who work as either EMTs or in a similar non‐medical field (protective services), we find suggestive evidence that while the demand‐side shock from the ACA increased the likelihood of being an EMT, this effect was substantially moderated by more stringent occupational licensing laws. Although the effect for the full sample is marginally significant, the estimated effects are substantially larger for individuals under age 40, who are presumably more flexible in choosing a career path. Evaluated at the average number of days to complete EMT training and the pre‐treatment uninsured rate, the implied effects for young individuals in the most careful specification suggests virtually complete offset; the ACA demand‐side shock would increase entry by 18 percentage points, while occupational licensing restrictions reduce entry by a similar magnitude.


Data-Driven Incentive Alignment in Capitation Schemes
Mark Braverman & Sylvain Chassang
NBER Working Paper, February 2021


This paper explores whether Big Data, taking the form of extensive high dimensional records, can reduce the cost of adverse selection by private service providers in government-run capitation schemes, such as Medicare Advantage. We argue that using data to improve the ex ante precision of capitation regressions is unlikely to be helpful. Even if types become essentially observable, the high dimensionality of covariates makes it infeasible to precisely estimate the cost of serving a given type: Big Data makes types observable, but not necessarily interpretable. This gives an informed private operator scope to select types that are relatively cheap to serve. Instead, we argue that data can be used to align incentives by forming unbiased and non-manipulable ex post estimates of a private operator’s gains from selection.


Higher Medicare Advantage Star Ratings Are Associated With Improvements In Patient Outcomes
David Meyers et al.
Health Affairs, February 2021, Pages 243-250


Little is known about how well the Centers for Medicare and Medicaid Services’ five-star rating system for the overall quality of Medicare Advantage (MA) contracts captures quality of care. Leveraging contract consolidation as a natural experiment to study the association between outcomes and insurer-initiated enrollee shifts to plans with higher-rated contracts, we found that enrollees experiencing a one-star MA rating increase were 20.8 percent less likely to voluntarily leave their plan to enroll in another plan or traditional Medicare. When hospitalized, they were 3.4 percent more likely to use a higher-quality hospital and 2.6 percent less likely to be readmitted within ninety days. Our findings suggest that MA star ratings may capture key domains of an MA plan’s quality; however, the differences in outcomes that they capture might not all be clinically meaningful.


Employer Consolidation and Wages: Evidence from Hospitals
Elena Prager & Matt Schmitt
American Economic Review, February 2021, Pages 397-427


We test whether wage growth slows following employer consolidation by examining hospital mergers. We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers' skills are industry-specific. In all other cases, we fail to reject zero wage effects. We consider alternative explanations and find that the observed patterns are unlikely to be explained by merger-related changes besides labor market power. Wage growth slowdowns are attenuated in markets with strong labor unions, and wage growth does not decline after out-of-market mergers that leave local employer concentration unchanged.

The Effect of Mandatory Insurer Reporting on Settlement Delay
Paul Heaton
American Law and Economics Review, Fall 2020, Pages 397-433


To improve their fiscal position, Medicare and some state Medicaid programs have recently taken steps to mandate reporting of personal injury awards and thus facilitate subrogation against such awards. Participants in the tort system have argued these additional reporting requirements might delay settlement of claims, harming both plaintiffs and defendants. This article examines this problem empirically, using a rich, national data set of closed automobile bodily injury claims. Using a differences-in-differences research design that exploits the introduction of a new Medicare reporting requirement in 2011, it demonstrates that mandated reporting increased time to settlement by 19%, or an average of 58 days. Robustness checks using data from closed malpractice claims reveal a similar delay. Conservative calculations suggest such delays could generate hundreds of millions of dollars in waiting costs each year. Policymakers should be aware of and seek to avoid such costs as they assess whether and how to expand reporting of personal injury awards.


Getting the Price Right? The Impact of Competitive Bidding in the Medicare Program
Hui Ding, Mark Duggan & Amanda Starc
NBER Working Paper, February 2021


We study Medicare's competitive bidding program (CBP) for durable medical equipment (DME). We exploit Medicare claims data to examine both prices and utilization, focusing on continuous positive airway pressure (CPAP) devices to treat sleep apnea. We find that spending falls by 47.2% percent after a highly imperfect bidding mechanism is introduced. The effect is almost entirely driven by a 44.8% price reduction, though quantities also fall by 4.3%. To disentangle supply and demand, we leverage differential cost sharing across Medicare recipients. We measure a demand elasticity of -0.272 and find that quantity reductions are concentrated among less clinically appropriate groups.


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