Socialized medicine

Kevin Lewis

February 11, 2019

Health Care Spending Slowed After Rhode Island Applied Affordability Standards To Commercial Insurers
Aaron Baum et al.
Health Affairs, February 2019, Pages 237-245


States are introducing regulations to slow health care spending growth, but which of these successfully reduce spending growth remains unclear. We studied Rhode Island’s 2010 affordability standards, which imposed price controls - particularly inflation caps and diagnosis-based payments - on contracts between commercial insurers and hospitals and clinics and required commercial insurers to increase their spending on primary care and care coordination services. Using a difference-in-differences design, we compared spending among 38,001 commercially insured adults in Rhode Island to that among 38,001 matched adults in other states in the period 2007-16. Relative to quarterly fee-for-service (FFS) spending among the control group, quarterly FFS spending among the Rhode Island group decreased by $76 per enrollee after implementation of the policy, or a decline of 8.1 percent from 2009 spending. Quarterly non-FFS primary care coordination spending increased by $21 per enrollee. Total spending growth decreased, driven by lower prices concordant with the adoption of price controls. Quality measures were unaffected or improved. The Rhode Island experience indicates that states may be able to slow total commercial health care spending growth through price controls while maintaining quality.

The effect of prescription drug insurance on health behavior: Evidence from Medicare Part D
Abraham Abebe Asfaw
Health Economics, forthcoming


This paper provides empirical evidence on the health behavior effect of prescription drug insurance. Using the difference in the regression discontinuity research design, I compare health behavior changes at age 65 before and after the introduction of Medicare Part D. I find that the implementation of Medicare Part D increased prescription drug insurance coverage and reduced out‐of‐pocket spending per prescription and the use of cardiovascular and metabolic therapeutic class drugs. I also find that Medicare Part D led to a 6.36 percentage point decrease in the probability of engaging in moderate physical exercise and a 27.4 percentage point decrease in the amount of time spent on moderate physical activity. It also increased the probability of being overweight by 5.75 percentage points. Its effects on vigorous and muscle‐strengthening exercise both at the extensive and intensive margins, obesity, BMI, and cigarette consumption are not statistically significant.

Affordable Care Act-Dependent Insurance Coverage and Access to Care Among Young Adult Women with a Recent Live Birth
Rui Li et al.
Medical Care, February 2019, Pages 109-114

Research Design, Subjects, and Outcome Measures: We conducted a difference-in-difference analysis to assess the effect of the Provision using data from the Pregnancy Risk Assessment Monitoring System among 22,599 women aged 19-25 (treatment group) and 22,361 women aged 27-31 years (control group). Outcomes include insurance coverage in the month before and during pregnancy, and at delivery, and receipt of timely prenatal care, a postpartum check-up, and postpartum contraceptive use.

Results: Compared with the control group, the Provision was associated with a 4.7-percentage point decrease in being uninsured and a 5.9-percentage point increase in private insurance coverage in the month before pregnancy, and a 5.4-percentage point increase in private insurance coverage and a 5.9-percentage point decrease in Medicaid coverage during pregnancy, with similar changes in insurance coverage at delivery. Findings demonstrated a 3.6-percentage point increase in receipt of timely prenatal care, and no change in receipt of a postpartum check-up or postpartum contraceptive use.

Trends in Receipt of Contraceptive Services: Young Women in the U.S., 2002-2015
Jennifer Frost & Laura Lindberg
American Journal of Preventive Medicine, forthcoming

Methods: The analysis uses nationally representative data from females aged 15-25 years in the 2002, 2006-2010, and 2011-2015 National Surveys of Family Growth. In 2018, summary measures for receipt of any contraceptive service, the type of provider visited and payment used were created and compared across survey years and age groups (15-17 and 18-25 years).

Results: From 2002 to 2011-2015, the proportion of adolescent girls aged 15-17 years relying on publicly funded clinics for contraceptive care fell from 47% to 24% (95% CI=38.4%, 55.0% and 95% CI=19.0%, 29.9%), whereas the proportion relying on private providers increased from 49% to 69% (95% CI=40.7%, 57.1% and 95% CI=61.6%, 76.2%). A significant, but smaller, shift away from clinics occurred among women aged 18-25 years. Over the same period, use of health insurance to pay for contraceptive services among all females aged 15-25 years increased from 68% to 81% (95% CI=64.7%, 71.3% and 95% CI=78.5%, 83.8%), whereas the proportion who had private insurance during the year, but did not use it to pay for contraceptive care, declined from 21% to 9% (95% CI=18.3%, 23.5% and 95% CI=6.8%, 10.7%).

Employment Effects of Healthcare Policy: Evidence from the 2007 FDA Black Box Warning on Antidepressants
Aline Butikofer, Christopher Cronin & Meghan Skira
University of Georgia Working Paper, January 2019


Public policies aimed at improving health may have indirect effects on outcomes such as education and employment. We study the labor market effects of a 2007 regulatory action by the US Food and Drug Administration, in which they expanded the black box warning on antidepressants. Using nationally representative data from the National Survey on Drug Use and Health and a difference-in-differences strategy, we find that employment among women aged 35-49 with a history of depression decreased by 6.1 percent (4.4 percentage points) in response to the warning. We explore potential mechanisms generating these employment effects and find that both antidepressant and psychotherapy use among women aged 35-49 decreased after the warning. Our estimates suggest these same women did not substitute towards non-medical alternatives such as marijuana or alcohol. We find no employment or mental health treatment response among men or among women younger than 35. Overall, our analysis suggests that the 2007 expanded black box warning reduced US labor force participation by 0.23 percentage points and led to roughly $13 billion in lost wages.

Industry payments to physician journal editors
Victoria Wong , Lauro Nathaniel Avalos, Michael Callaham
PLoS ONE, February 2019

Background: Open Payments is a United States federal program mandating reporting of medical industry payments to physicians, increasing transparency of physician conflicts of interest (COI). Study objectives were to assess industry payments to physician-editors, and to compare their financial COI rate to all physicians within the specialty.

Methods and findings: We performed a retrospective analysis of prospectively collected data, reviewing Open Payments from August 1, 2013 to December 31, 2016. We reviewed general payments (“… not made in connection with a research agreement”) and research funding to “top tier” physician-editors of highly-cited medical journals. We compared payments to physician-editors and physicians-by-specialty. In 35 journals, 333 (74.5%) of 447 “top tier” US-based editors met inclusion criteria. Of these, 212 (63.7%) received industry-associated payments in the study period. In an average year, 141 (42.3%) of physician-editors received any direct payments to themselves including general payments and research payments, 66 (19.8%) received direct payments >$5,000 (National Institutes of Health threshold for a Significant Financial Interest) and 51 (15.3%) received >$10,000. Mean annual general payments to physician-editors was $55,157 (median 3,512, standard deviation 561,885, range 10-10,981,153). Median general payments to physician-editors were mostly higher compared to all physicians within their specialty. Mean annual direct research payment to the physician-editor was $14,558 (median 4,000, range 15-174,440). Mean annual indirect research funding to the physician-editor’s institution (highly valued by academic leaders such as departmental chairs and deans) was $175,282 (median 49,107, range 0.18-5,000,000). The main study limitation was difficulty identifying physician-editors primarily responsible for making manuscript decisions.

Conclusions: A substantial minority of physician-editors receive payments from industry within any given year, sometimes quite large. Most editors received payment of some kind during the four-year study period. Given the extent of editors’ influences on the medical literature, more robust and accessible editor financial COI declarations are recommended.

Variation In Health Spending Growth For The Privately Insured From 2007 To 2014
Zack Cooper et al.
Health Affairs, February 2019, Pages 230-236


We examined the growth in health spending on people with employer-sponsored private insurance in the period 2007-14. Our analysis relied on information from the Health Care Cost Institute data set, which includes insurance claims from Aetna, Humana, and UnitedHealthcare. In the study period private health spending per enrollee grew 16.9 percent, while growth in Medicare spending per fee-for-service beneficiary decreased 1.2 percent. There was substantial variation in private spending growth rates across hospital referral regions (HRRs): Spending in HRRs in the tenth percentile of private spending growth grew at 0.22 percent per year, while HRRs in the ninetieth percentile experienced 3.45 percent growth per year. The correlation between the growth in HRR-level private health spending and growth in fee-for-service Medicare spending in the study period was only 0.211. The low correlation across HRRs suggests that different factors may be driving the growth in spending on the two populations.

Entry regulation and the effect of public reporting: Evidence from Home Health Compare
Bingxiao Wu et al.
Health Economics, forthcoming


Economic theory suggests that competition and information are complementary tools for promoting health care quality. The existing empirical literature has documented this effect only in the context of competition among existing firms. Extending this literature, we examine competition driven by the entry of new firms into the home health care industry. In particular, we use the certificate of need (CON) law as a proxy for the entry of firms to avoid potential endogeneity of entry. We find that home health agencies in non‐CON states improved quality under public reporting significantly more than agencies in CON states. Because home health care is a labor‐intensive and capital‐light industry, the state CON law is a major barrier for new firms to enter. Our findings suggest that policymakers may jointly consider information disclosure and entry regulation to achieve better quality in home health care.

The Impact of the Affordable Care Act: Evidence from California's Hospital Sector
Mark Duggan, Atul Gupta & Emilie Jackson
NBER Working Paper, January 2019


The Affordable Care Act (ACA) authorized the largest expansion of public health insurance in the U.S. since the mid-1960s. We exploit ACA-induced changes in the discontinuity in coverage at age 65 using a regression discontinuity based design to examine effects of the expansion on health insurance coverage, hospital use, and patient health. We then link these changes to effects on hospital finances. We show that a substantial share of the federally-funded Medicaid expansion substituted for existing locally-funded safety net programs. Despite this offset, the expansion produced a substantial increase in hospital revenue and profitability, with larger gains for government hospitals. On the benefits side, we do not detect significant improvements in patient health, although the expansion led to substantially greater hospital and emergency room use, and a reallocation of care from public to private and better-quality hospitals.

Primary Care Office Visits For Acute Care Dropped Sharply In 2002-15, While ED Visits Increased Modestly
Shih-Chuan Chou et al.
Health Affairs, February 2019, Pages 268-275


The traditional model of primary care practices as the main provider of care for acute illnesses is rapidly changing. Over the past two decades the growth in emergency department (ED) visits has spurred efforts to reduce “inappropriate” ED use. We examined a nationally representative sample of office and ED visits in the period 2002-15. We found a 12 percent increase in ED use (from 385 to 430 visits per 1,000 population), which was dwarfed by a decrease of nearly one-third in the rate of acute care visits to primary care practices (from 938 to 637 visits per 1,000 population). The decrease in primary care acute visits was also present among two vulnerable populations: Medicaid beneficiaries and adults ages sixty-five and older, either in Medicare or privately insured. As acute care delivery shifts away from primary care practices, there is a growing need for integration and coordination across an increasingly diverse spectrum of venues where patients seek care for acute illnesses.

Damage Caps and Defensive Medicine: Reexamination with Patient‐Level Data
Ali Moghtaderi, Steven Farmer & Bernard Black
Journal of Empirical Legal Studies, forthcoming


Physicians often claim that they practice “defensive medicine,” including ordering extra imaging and laboratory tests, due to fear of malpractice liability. Caps on noneconomic damages are the principal proposed remedy. Do these caps in fact reduce testing, overall health‐care spending, or both? We study the effects of “third‐wave” damage caps, adopted in the 2000s, on specific areas that are expected to be sensitive to med mal risk: imaging rates, cardiac interventions, and lab and radiology spending, using patient‐level data, with extensive fixed effects and patient‐level covariates. We find heterogeneous effects. Rates for the principal imaging tests rise, as does Medicare Part B spending on laboratory and radiology tests. In contrast, cardiac intervention rates (left‐heart catheterization, stenting, and bypass surgery) do not rise (and likely fall). We find some evidence that overall Medicare Part B rises, but variable results for Part A spending. We find no evidence that caps affect mortality.

Hospital Prices Grew Substantially Faster Than Physician Prices For Hospital-Based Care In 2007-14
Zack Cooper et al.
Health Affairs, February 2019, Pages 184-189


Evidence suggests that growth in providers’ prices drives growth in health care spending on the privately insured. However, existing work has not systematically differentiated between the growth rate of hospital prices and that of physician prices. We analyzed growth in both types of prices for inpatient and hospital-based outpatient services using actual negotiated prices paid by insurers. We found that in the period 2007-14 hospital prices grew substantially faster than physician prices. For inpatient care, hospital prices grew 42 percent, while physician prices grew 18 percent. Similarly, for hospital-based outpatient care, hospital prices grew 25 percent, while physician prices grew 6 percent. A majority of the growth in payments for inpatient and hospital-based outpatient care was driven by growth in hospital prices, not physician prices. Our work suggests that efforts to reduce health care spending should be primarily focused on addressing growth in hospital rather than physician prices. Policy makers should consider a range of options to address hospital price growth, including antitrust enforcement, administered pricing, the use of reference pricing, and incentivizing referring physicians to make more cost-efficient referrals.

Union Threat Effects and the Decline in Employer-Provided Health Insurance
Craig Olson
ILR Review, March 2019, Pages 417-445


Employer-provided health insurance decreased by an average of almost 0.6 percentage points per year for adults aged 18 to 64 who were working full-time in the private sector between 1983 and 2007. Most of this decline was among non-union workers. This study reports estimates that suggest the decrease was caused by a decline employers faced in the threat of being unionized, as measured by the drop in state-level private-sector union density over the 25 years and across the 50 states. The author hypothesizes the decline in union density caused some non-union employers to decide not to offer health insurance. The study shows the importance of accounting for measurement error in union density when estimating the declining threat effect of unionization on non-union employer-provided health insurance coverage.

The Impacts of Restricting Mobility of Skilled Service Workers: Evidence from Physicians
Kurt Lavetti, Carol Simon & William White
Journal of Human Resources, forthcoming


Why do skilled services firms use non-compete agreements (NCAs), which prohibit workers from leaving firms and competing against them? We conduct a survey of physicians linking NCA use to labor-market outcomes and firm performance, and show that by deterring poaching of patients NCAs increase the return to job-tenure, with larger effects in states with more enforceable NCA laws. These effects are consistent with NCAs enabling practices to allocate clients to new physicians through intra-firm referrals, reducing a form of investment holdup. We discuss an array of supporting suggestive evidence, but also find NCAs provide some benefits by reducing job turnover.

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