Health Care Spending in the United States and Other High-Income Countries
Irene Papanicolas, Liana Woskie & Ashish Jha
Journal of the American Medical Association, 13 March 2018, Pages 1024-1039
Evidence: Analysis of data primarily from 2013-2016 from key international organizations including the Organisation for Economic Co-operation and Development (OECD), comparing underlying differences in structural features, types of health care and social spending, and performance between the United States and 10 high-income countries. When data were not available for a given country or more accurate country-level estimates were available from sources other than the OECD, country-specific data sources were used.
Findings: In 2016, the US spent 17.8% of its gross domestic product on health care, and spending in the other countries ranged from 9.6% (Australia) to 12.4% (Switzerland). The proportion of the population with health insurance was 90% in the US, lower than the other countries (range, 99%-100%), and the US had the highest proportion of private health insurance (55.3%). For some determinants of health such as smoking, the US ranked second lowest of the countries (11.4% of the US population ≥15 years smokes daily; mean of all 11 countries, 16.6%), but the US had the highest percentage of adults who were overweight or obese at 70.1% (range for other countries, 23.8%-63.4%; mean of all 11 countries, 55.6%). Life expectancy in the US was the lowest of the 11 countries at 78.8 years (range for other countries, 80.7-83.9 years; mean of all 11 countries, 81.7 years), and infant mortality was the highest (5.8 deaths per 1000 live births in the US; 3.6 per 1000 for all 11 countries). The US did not differ substantially from the other countries in physician workforce (2.6 physicians per 1000; 43% primary care physicians), or nursing workforce (11.1 nurses per 1000). The US had comparable numbers of hospital beds (2.8 per 1000) but higher utilization of magnetic resonance imaging (118 per 1000) and computed tomography (245 per 1000) vs other countries. The US had similar rates of utilization (US discharges per 100 000 were 192 for acute myocardial infarction, 365 for pneumonia, 230 for chronic obstructive pulmonary disease; procedures per 100 000 were 204 for hip replacement, 226 for knee replacement, and 79 for coronary artery bypass graft surgery). Administrative costs of care (activities relating to planning, regulating, and managing health systems and services) accounted for 8% in the US vs a range of 1% to 3% in the other countries. For pharmaceutical costs, spending per capita was $1443 in the US vs a range of $466 to $939 in other countries. Salaries of physicians and nurses were higher in the US; for example, generalist physicians salaries were $218 173 in the US compared with a range of $86 607 to $154 126 in the other countries.
Conclusions and Relevance: The United States spent approximately twice as much as other high-income countries on medical care, yet utilization rates in the United States were largely similar to those in other nations. Prices of labor and goods, including pharmaceuticals, and administrative costs appeared to be the major drivers of the difference in overall cost between the United States and other high-income countries. As patients, physicians, policy makers, and legislators actively debate the future of the US health system, data such as these are needed to inform policy decisions.
Effects Of The ACA’s Health Insurance Marketplaces On The Previously Uninsured: A Quasi-Experimental Analysis
Anna Goldman et al.
Health Affairs, April 2018, Pages 591-599
Descriptive studies have suggested that the Affordable Care Act’s (ACA’s) health insurance Marketplaces improved access to care. However, no evidence from quasi-experimental studies is available to support these findings. We used longitudinal survey data to compare previously uninsured adults with incomes that made them eligible for subsidized Marketplace coverage (138–400 percent of the federal poverty level) to those who had employer-sponsored insurance before the ACA with incomes in the same range. Among the previously uninsured group, the ACA led to a significant decline in the uninsurance rate, decreased barriers to medical care, increased the use of outpatient services and prescription drugs, and increased diagnoses of hypertension, compared to a control group with stable employer-sponsored insurance. Changes were largest among previously uninsured people with incomes of 138–250 percent of poverty, who were eligible for the ACA’s cost-sharing reductions. Our quasi-experimental approach provides rigorous new evidence that the ACA’s Marketplaces led to improvements in several important health care outcomes, particularly among low-income adults.
Medicaid and the Labor Supply of Single Mothers: Implications for Health Care Reform
International Economic Review, forthcoming
The Medicaid expansions and health insurance subsidies of the Affordable Care Act (ACA) change work incentives for single mothers. To evaluate the employment effects of these policies ex ante, I estimate a model of labor supply and health insurance choice exploiting variation in pre-ACA Medicaid policies. Simulations show that single mothers increase their labor supply at the extensive and intensive margin by 12 and 7 percent, respectively, uninsurance rates decline by up to 40 percent, and an average family's welfare improves by 1,600 dollars per year. Health insurance subsidies and not Medicaid expansions mostly drive these effects.
The New Prescription Drug Paradox: Pipeline Pressure and Rising Prices
Alice Ellyson & Anirban Basu
NBER Working Paper, March 2018
Economic literature has extensively studied how prices for incumbent pharmaceutical drugs respond to generic competition after entry. However, less attention has been paid to pricing behavior in anticipation of brand-to-brand competition. We contribute to this gap in the literature by both developing a model of pricing strategies for incumbent drug manufacturers under tiered-insurance anticipating branded competition. Our model predicts rising prices for incumbent drugs for a range of elasticities as the likelihood of entry increases from competitors with horizontally-differentiated products. Using the insulin market as a natural experiment, we exploit exogenous variation in a potential entrant's completion of clinical trials to identify the effect of drug pipeline pressure on the prices of incumbent drugs. Results suggest that pipeline pressure significantly increases the prices of incumbent drugs. We expect that similar pricing effects will be prevalent with potential biosimilar entry.
Acute Myocardial Infarction Mortality During Dates of National Interventional Cardiology Meetings
Anupam Jena et al.
Journal of the American Heart Association, 20 March 2018
Background: Previous research has found that patients with acute cardiovascular conditions treated in teaching hospitals have lower 30‐day mortality during dates of national cardiology meetings.
Methods and Results: We analyzed 30‐day mortality among Medicare beneficiaries hospitalized with acute myocardial infarction (overall, ST‐segment–elevation myocardial infarction, and non–ST‐segment–elevation myocardial infarction) from January 1, 2007, to November 31, 2012, in major teaching hospitals during dates of a major annual interventional cardiology meeting (Transcatheter Cardiovascular Therapeutics) compared with identical nonmeeting days in the ±5 weeks. Treatment differences were assessed. We used a database of US physicians to compare interventional cardiologists who practiced and did not practice during meeting dates (“stayers” and “attendees,” respectively) in terms of demographic characteristics and clinical and research productivity. Unadjusted and adjusted 30‐day mortality rates were lower among patients admitted during meeting versus nonmeeting dates (unadjusted, 15.3% [482/3153] versus 16.7% [5208/31 556] [P=0.04]; adjusted, 15.4% versus 16.7%; difference −1.3% [95% confidence interval, −2.7% to −0.1%] [P=0.05]). Rates of interventional cardiologist involvement were similar between dates (59.5% versus 59.8% of hospitalizations; P=0.88), as were percutaneous coronary intervention rates (30.2% versus 29.1%; P=0.20). Mortality reductions were largest among patients with non–ST‐segment–elevation myocardial infarction not receiving percutaneous coronary intervention (16.9% versus 19.5% adjusted 30‐day mortality; P=0.008). Compared with stayers, attendees were of similar age and sex, but had greater publications (18.9 versus 6.3; P<0.001), probability of National Institutes of Health funding (5.3% versus 0.4%; P<0.001), and clinical trial leadership (10.3% versus 3.9%; P<0.001), and they performed more percutaneous coronary interventions annually (85.6 versus 63.3; P<0.001).
Conclusions: Hospitalization with acute myocardial infarction during Transcatheter Cardiovascular Therapeutics meeting dates was associated with lower 30‐day mortality, predominantly among patients with non–ST‐segment–elevation myocardial infarction who were medically managed.
Medical Malpractice Reforms and the Location Decisions of New Physicians
Pinka Chatterji, Siyang Li & Gerald Marschke
NBER Working Paper, March 2018
Spatial inequalities in access to physicians is a long-standing problem in the US, and it may be an important underlying cause of SES-related and racial/ethnic disparities in health outcomes. One important factor underlying spatial inequalities may be the enactment of state-level malpractice reforms, which could affect physician supply to a state, and/or lead to sorting among physicians across states along characteristics such as physician quality. In this study, we test whether state-level malpractice laws affect new physicians’ location decisions and sorting of physicians by quality measures across states. We use data from the New York State (NYS) Residents’ Exit Survey, which includes all exiting medical residents from hospitals in NYS, and includes the practice locations these new physicians have chosen. We focus on two malpractice reforms – caps on noneconomic damages and caps on punitive damages. Our findings suggest that both types of reforms are associated with an increased probability of new physicians locating in the state that passed the reform, but only the caps on noneconomic damages are statistically significant at conventional levels. Effects of the laws are stronger for physicians in specialties which tend to face the highest risk of malpractice awards, while the opposite is true for physicians in specialties with the lowest risk of malpractice awards, as well as for osteopathic physicians. Physicians entering solo practice and partnerships respond more to damage cap laws than physicians entering group practices, hospital-based practices and other practice settings. While we do not find that median MCAT scores in the medical schools attended (among physicians from medical schools in New York State (NYS)) interact with the effects of the laws, we do find that US citizens attending foreign medical schools, as well as international medical graduates more generally, respond more to damage caps laws compared to physicians trained only in the US. If we consider the degree of selectivity of the medical school to be a measure of physician ability, this finding may suggest that damage cap laws influence location choices more among lower-ability physicians.
Employer-Sponsored Insurance Stable For Low-Income Workers In Medicaid Expansion States
Adele Shartzer, Fredric Blavin & John Holahan
Health Affairs, April 2018, Pages 607-612
We assessed rates of employer health insurance offer, take-up, and coverage in June 2013 and March 2017 among workers. Overall, offer rates remained stable, and take-up and coverage rates increased. In Medicaid expansion states, the share of workers with family incomes at or below 138 percent of the federal poverty level who had employer-based coverage held steady, while uninsurance rates declined.
Multimarket Contact in Health Insurance: Evidence from Medicare Advantage
Haizhen Lin & Ian McCarthy
NBER Working Paper, April 2018
Many industries, including health insurance, are characterized by a handful of large firms that compete in multiple geographic markets. Such overlap across markets, defined as multimarket contact (MMC), may facilitate tacit collusion and thus reduce the intensity of competition. We examine the effects of MMC on health insurance prices and quality using comprehensive data on the Medicare Advantage (MA) market from 2008 through 2015. Our estimation strategy exploits two plausibly exogenous changes to MMC: 1) a merger-induced change in MMC due to consolidations in other markets; and 2) reimbursement policy changes in which benchmark rates were increased in a subset of markets, encouraging additional entry into those markets and therefore affecting MMC even in markets otherwise unaffected by the policy itself. Across a range of estimates and alternative measures of MMC, our results consistently support the mutual forbearance hypothesis, where we find that prices are significantly higher and quality significantly lower as MMC increases. These results suggest MMC as one potential channel through which cross-market mergers and acquisitions could soften competitiveness in local markets.
Promoting Wellness or Waste? Evidence from Antidepressant Advertising
University of Chicago Working Paper, February 2018
Direct-to-Consumer Advertising (DTCA) of prescription drugs is controversial and has ambiguous potential welfare effects. In this paper, I estimate costs and benefits of DTCA in the market for antidepressant drugs. In particular, using individual health insurance claims and human resources data, I estimate the effects of DTCA on outcomes relevant to societal costs: new prescriptions, prices and adherence. Addtionally I estimate the effect of DTCA on labor supply, the economic outcome most associated with depression. First, category expansive effects of DTCA found in past literature are replicated, with DTCA particularly causing new prescriptions of antidepressants. Additionally, I find evidence of no advertising effect on either the prices or co-pays of the drugs prescribed. Next, lagged advertising is associated with higher first refill rates, indicating that the advertising marginal are not more likely to end treatment prematurely due to initial adverse effects. Despite first refill rates being higher for those that are more likely advertising-marginal, concurrent advertising drives slightly lower refill rates overall, particularly among individuals who stand to gain least from treatment. Finally, advertising significantly decreases missed days of work, with the effect concentrated on workers who tend to have more absences. Back-of-the-envelope calculations suggest that the wage benefits of the advertising marginal work days are more than an order of magnitude larger than the total cost of the advertising marginal prescriptions.
Low agreement among reviewers evaluating the same NIH grant applications
Elizabeth Pier et al.
Proceedings of the National Academy of Sciences, 20 March 2018, Pages 2952-2957
Obtaining grant funding from the National Institutes of Health (NIH) is increasingly competitive, as funding success rates have declined over the past decade. To allocate relatively scarce funds, scientific peer reviewers must differentiate the very best applications from comparatively weaker ones. Despite the importance of this determination, little research has explored how reviewers assign ratings to the applications they review and whether there is consistency in the reviewers’ evaluation of the same application. Replicating all aspects of the NIH peer-review process, we examined 43 individual reviewers’ ratings and written critiques of the same group of 25 NIH grant applications. Results showed no agreement among reviewers regarding the quality of the applications in either their qualitative or quantitative evaluations. Although all reviewers received the same instructions on how to rate applications and format their written critiques, we also found no agreement in how reviewers “translated” a given number of strengths and weaknesses into a numeric rating. It appeared that the outcome of the grant review depended more on the reviewer to whom the grant was assigned than the research proposed in the grant. This research replicates the NIH peer-review process to examine in detail the qualitative and quantitative judgments of different reviewers examining the same application, and our results have broad relevance for scientific grant peer review.
Ambulance Utilization in New York City after the Implementation of the Affordable Care Act
Charles Courtemanche, Andrew Friedson & Daniel Rees
NBER Working Paper, April 2018
Expanding insurance coverage could, by insulating patients from having to pay full cost, encourage the utilization of arguably unnecessary medical services. It could also eliminate (or at least diminish) the need for emergency services through increasing access to preventive care. Using publicly available data from New York City for the period 2013-2016, we explore the effect of the Affordable Care Act (ACA) on the volume and composition of ambulance dispatches. Consistent with the argument that expanding insurance coverage encourages the utilization of unnecessary medical services, we find that, as compared to dispatches for more severe injuries, dispatches for minor injuries rose sharply after the implementation of the ACA. By contrast, dispatches for pre-labor pregnancy complications decreased as compared to dispatches for women in labor.
Dominated Options in Health-Insurance Plans
Chenyuan Liu & Justin Sydnor
NBER Working Paper, March 2018
Recent studies have found that many people select into health plans with higher coverage (e.g., lower deductibles) even when those plans are financially dominated by other options. We explore whether having dominated options is common by analyzing data on plan designs from the Kaiser Family Foundation Employer Health Benefits Survey for firms that offered employees both a high-deductible (HD) health plan and a lower-deductible (LD) option. In 65% of firms the high-deductible option would result in lower maximum possible health spending for the employee for the year. We estimate that the HD plan financially dominates the LD plan at roughly half of firms across a wide range of possible health spending needs employees might anticipate. The expected savings from selecting the HD plan are typically over $500 per year, often with no increase in financial risk. We present evidence that these patterns may arise naturally from employers passing through large average-cost differences between HD and LD plans to their employees. We discuss the implications of those dynamics for the nature of transfers between employees and the efficiency of health spending.
The Economics of Patient-Centered Care
Guy David, Philip Saynisch & Aaron Smith-McLallen
Journal of Health Economics, forthcoming
The Patient-Centered Medical Home (PCMH) is a widely-implemented model for improving primary care, emphasizing care coordination, information technology, and process improvements. However, its treatment as an undifferentiated intervention obscures meaningful variation in implementation. This heterogeneity leads to contracting inefficiencies between insurers and practices and may account for mixed evidence on its success. Using a novel dataset we group practices into meaningful implementation clusters and then link these clusters with detailed patient claims data. We find implementation choice affects performance, suggesting that generally-unobserved features of primary care reorganization influence patient outcomes. Reporting these features may be valuable to insurers and their members.
Adoption and Learning Across Hospitals: The Case of a Revenue-Generating Practice
NBER Working Paper, April 2018
Performance-raising practices tend to diffuse slowly in the health care sector. To understand how incentives drive adoption, I study a practice that generates revenue for hospitals: submitting detailed documentation about patients. After a 2008 reform, hospitals could raise their Medicare revenue over 2% by always specifying a patient’s type of heart failure. Hospitals only captured around half of this revenue, indicating that large frictions impeded takeup. Exploiting the fact that many doctors practice at multiple hospitals, I find that four-fifths of the dispersion in adoption reflects differences in the ability of hospitals to extract documentation from physicians. Hospital adoption is robustly correlated with generating survival for heart attack patients and using inexpensive survival-raising standards of care. Hospital-physician integration and electronic medical records also influence adoption. These findings highlight the potential for institution-level frictions, including agency conflicts, to explain variations in health care performance across providers.
State entry regulation and home health agency quality ratings
Robert Ohsfeldt & Pengxiang Li
Journal of Regulatory Economics, February 2018, Pages 1–19
There is a substantial literature assessing the impact of entry restrictions created by state certificate-of-need (CON) programs on hospital and nursing home markets, but comparatively little research has focused on CON for home health agencies (HHAs). We assessed the impact of state CON programs for HHAs, and for potential substitute service providers, on quality ratings for HHAs. HHA quality ratings were obtained from the Home Health Compare database developed by the Centers for Medicare and Medicaid Services (CMS) for the last quarter of 2010 through the last quarter of 2013. The HHA-level data were augmented with county-level area characteristics for each HHA in the CMS database. An ordered logit model was used to estimate the association between state CON restrictions and Low, Medium, and High quality categories, adjusted for HHA and area characteristics. The results indicated that HHAs in states with CON for HHAs were less likely to have High quality ratings, and more likely to have Medium quality ratings, compared to agencies in states without CON for home health. Additional research is needed to assess whether the apparent adverse impact of CON on HHA quality is related to diminished competition among HHAs in states with CON.
Most Primary Care Physicians Provide Appointments, But Affordability Remains A Barrier For The Uninsured
Brendan Saloner et al.
Health Affairs, April 2018, Pages 627-634
The US uninsurance rate has nearly been cut in half under the Affordable Care Act, and access to care has improved for the newly insured, but less is known about how the remaining uninsured have fared. In 2012–13 and again in 2016 we conducted an experiment in which trained auditors called primary care offices, including federally qualified health centers, in ten states. The auditors portrayed uninsured patients seeking appointments and information on the cost of care and payment arrangements. In both time periods, about 80 percent of uninsured callers received appointments, provided they could pay the full cash amount. However, fewer than one in seven callers in both time periods received appointments for which they could make a payment arrangement to bring less than the full amount to the visit. Visit prices in both time periods averaged about $160. Trends were largely similar across states, despite their varying changes in the uninsurance rate. Federally qualified health centers provided the highest rates of primary care appointment availability and discounts for uninsured low-income patients.
Changes In Hospital Utilization Three Years Into Maryland’s Global Budget Program For Rural Hospitals
Eric Roberts et al.
Health Affairs, April 2018, Pages 644-653
In a substantial shift in payment policy, the State of Maryland implemented a global budget program for acute care hospitals in 2010. Goals of the program include controlling hospital use and spending. Eight rural hospitals entered the program in 2010, while urban and suburban hospitals joined in 2014. Prior analyses, which focused on urban and suburban hospitals, did not find consistent evidence that Maryland’s program had contributed to changes in hospital use after two years. However, these studies were limited by short follow-up periods, may have failed to isolate impacts of Maryland’s payment change from other state trends, and had limited generalizability to rural settings. To understand the effects of Maryland’s global budget program on rural hospitals, we compared changes in hospital use among Medicare beneficiaries served by affected rural hospitals versus an in-state control population from before to after 2010. By 2013 — three years after the rural program began — there were no differential changes in acute hospital use or price-standardized hospital spending among beneficiaries served by the affected hospitals, versus the within-state control group. Our results suggest that among Medicare beneficiaries, global budgets in rural Maryland hospitals did not reduce hospital use or price-standardized spending as policy makers had anticipated.
The Effect of Workforce Assignment on Performance: Evidence from Home Health Care
Guy David & Kunhee Lucy Kim
Journal of Health Economics, May 2018, Pages 26-45
Effective workforce assignment has the potential for improving performance. Using novel home health data combining provider work logs, personnel data, and detailed patient records, we estimate the effect of provider handoffs — a marker of care discontinuity — on hospital readmissions, an important performance measure for healthcare systems. We use workflow interruption caused by attrition and providers’ work inactivity as an instrument for nurse handoffs. We find handoffs to substantially increase hospital readmissions. Our estimates imply that a single handoff increases the likelihood of 30-day hospital readmission by 16 percent and one in four hospitalizations during home health care would be avoided if handoffs were eliminated. Moreover, handoffs are more detrimental for high-severity patients and expedite hospital readmission. The frequency and sequencing of handoffs also affect the likelihood of rehospitalization.
Meal Delivery Programs Reduce The Use Of Costly Health Care In Dually Eligible Medicare And Medicaid Beneficiaries
Seth Berkowitz et al.
Health Affairs, April 2018, Pages 535-542
Delivering food to nutritionally vulnerable patients is important for addressing these patients’ social determinants of health. However, it is not known whether food delivery programs can reduce the use of costly health services and decrease medical spending among these patients. We sought to determine whether home delivery of either medically tailored meals or nontailored food reduces the use of selected health care services and medical spending in a sample of adults dually eligible for Medicare and Medicaid. Compared with matched nonparticipants, participants had fewer emergency department visits in both the medically tailored meal program and the nontailored food program. Participants in the medically tailored meal program also had fewer inpatient admissions and lower medical spending. Participation in the nontailored food program was not associated with fewer inpatient admissions but was associated with lower medical spending. These findings suggest the potential for meal delivery programs to reduce the use of costly health care and decrease spending for vulnerable patients.
The More Med-Mals, the Shorter the Litigation: Evidence from Florida
Review of Law & Economics, March 2018
Medical malpractices (med-mals) are among the most long-lasting litigations in the United States with an average duration of more than 4 years. Using the Florida database of med-mals, this study examines each physician in multiple sequential cases and documents a significantly negative correlation between the length of litigation and defendants’ numbers of past med-mals: a case closes nearly 1 year sooner if its defendant has previously experienced another claim. To explain this stylized fact, a dynamic model with the feature of “firmness of beliefs” is developed. The model assumes that the more prior litigations, the more realistic perception of the tort system and therefore a faster closure of the final dispute. I call this mechanism “learning-by-doing.” Alternative hypotheses include the following: (1) plaintiffs’ endogenous choice of filing against physicians with worse histories and (2) physicians’ reputation (career) concerns. I find no evidence in support of the first one, but the reputation concern cannot be rejected. The learning-by-doing mechanism is consistent in many robustness tests, including controlling for the reputation concerns.
The Health Effects of Cesarean Delivery for Low-Risk First Births
David Card, Alessandra Fenizia & David Silver
NBER Working Paper, April 2018
Cesarean delivery for low-risk pregnancies is generally associated with worse health outcomes for infants and mothers. The interpretation of this correlation, however, is confounded by potential selectivity in the choice of birth mode. We use birth records from California, merged with hospital and emergency department (ED) visits for infants and mothers in the year after birth, to study the causal health effects of cesarean delivery for low-risk first births. Building on McClellan, McNeil, and Newhouse (1994), we use the relative distance from a mother’s home to hospitals with high and low c-section rates as an instrument for c-section. We show that relative distance is a strong predictor of c-section but is orthogonal to many observed risk factors, including birth weight and indicators of prenatal care. Our IV estimates imply that cesarean delivery causes a relatively large increase in ED visits of the infant, mainly due to acute respiratory conditions. We find no significant effects on mothers’ hospitalizations or ED use after birth, or on subsequent fertility, but we find a ripple effect on second birth outcomes arising from the high likelihood of repeat c-section. Offsetting these morbidity effects, we find that delivery at a high c-section hospital leads to a significant reduction in infant mortality, driven by lower death rates for newborns with high rates of pre-determined risk factors.
The Impact of Facility Layout on Worker Behavior: An Empirical Study of Nurses in the Emergency Department
Lesley Meng, Robert Batt & Christian Terwiesch
University of Pennsylvania Working Paper, March 2018
We study the impact of service facility layout on how service workers organize their tasks. We focus on the hospital emergency department (ED) as a service setting where nurses (servers) have discretion over how they interact with their patients (customers) in a facility that introduces significant heterogeneity in necessary walking distance. We utilize a unique dataset consisting of infrared nurse location tracking data, patient EMR data, bedside call data, and the architectural floor plan, to show that nurses reduce their total walking distance by decreasing the frequency of visits to patient rooms far away. We show that this behavior is consistent with batching their tasks rather than a reduction of tasks. While this behavior reduces necessary nurse walking, it comes at the expense of poorer care quality. We find that patients in rooms farthest away press the nurse call button more frequently, an action that is linked with poor patient satisfaction. These findings show that even in services, facility layout can lead to servers with discretion over task timing using that discretion in ways that help the server but that lead to reduced customer quality.