Findings

Standard of care

Kevin Lewis

October 15, 2012

Income Inequality in Health at All Ages: A Comparison of the United States and England

Melissa Martinson
American Journal of Public Health, November 2012, Pages 2049-2056

Objectives: I systematically examined income gradients in health in the United States and England across the life span (ages birth to 80 years), separately for females and males, for a number of health conditions.

Methods: Using data from the National Health and Nutrition Examination Survey for the United States (n = 36 360) and the Health Survey for England (n = 55 783), I calculated weighted prevalence rates and risk ratios by income level for the following health risk factors or conditions: obesity, hypertension, diabetes, low high-density lipoprotein cholesterol, high cholesterol ratio, heart attack or angina, stroke, and asthma.

Results: In the United States and England, the income gradients in health are very similar across age, gender, and numerous health conditions, and are robust to adjustments for race/ethnicity, health behaviors, body mass index, and health insurance.

Conclusions: Health disparities by income are pervasive in England as well as in the United States, despite better overall health, universal health insurance, and more generous social protection spending in England.

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Quantitative analysis of health insurance reform: Separating regulation from redistribution

Svetlana Pashchenko & Ponpoje Porapakkarm
Review of Economic Dynamics, forthcoming

Abstract:
Two key components of the recent U.S. health reform are a new regulation of the individual health insurance market and an increase in income redistribution in the economy. Which component contributes more to the welfare outcome of the reform? We address this question by constructing a general equilibrium life cycle model that incorporates both medical expenses and labor income risks. We replicate the key features of the current health insurance system in the U.S. and calibrate the model using the Medical Expenditures Panel Survey dataset. We find that the reform decreases the number of uninsured more than twice and generates substantial welfare gains. These welfare gains mostly come from the redistributive measures embedded in the reform, rather than from the regulatory changes.

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Delivering Bad News: Market Responses to Negligence

David Dranove, Subramaniam Ramanarayanan & Yasutora Watanabe
Journal of Law and Economics, February 2012, Pages 1-25

Abstract:
One of the goals of the legal liability system is to ensure that sellers provide appropriate care. Reputation effects may also deter negligence. The little available research evidence suggests that reputation effects are minimal, however. We develop a theory tailored to an environment, such as medicine, in which sellers are of heterogeneous quality and face two types of demand - private consumers who exhibit downward-sloping demand (for example, private health insurance) and government consumers who exhibit perfectly elastic demand at a fixed price (for example, Medicaid insurance). The theory predicts that high-quality sellers who suffer reputation losses will see their caseloads shift from private to government patients, while low-quality sellers will lose government patients and may gain private patients. Combining individual patient-level data from Florida for the years 1994-2003 with physician-level litigation data, we find evidence that physicians experience reputation effects that are consistent with the theory.

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Does the Availability of Parental Health Insurance Affect the College Enrollment Decision of Young Americans?

Juergen Jung, Diane Harnek Hall & Thomas Rhoads
Economics of Education Review, forthcoming

Abstract:
The present study examines whether the college enrollment decision of young individuals (student full-time, student part-time, non-student) depends on health insurance coverage via a parent's family health plan. Our findings indicate that the availability of parental health insurance can have significant effects on the probability that a young individual enrolls as a full-time student. A young individual who has access to health insurance via a parent can be up to 22 percent more likely to enroll as a full-time student than an individual without parental health insurance. After controlling for unobserved heterogeneity this probability drops to 5.5-6.5 percent but is still highly significant. We also find that the marginal effect of the availability of parental health insurance has a larger effect on older students between ages 21-23. We provide a brief discussion about possible implications of the Affordable Care Act of 2010 in this context.

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Why prevention can increase health-care spending

Norman Temple
European Journal of Public Health, October 2012, Pages 618-619

Abstract:
This article examines the impact of disease prevention on health-care spending. The relationship between these two variables is more complex than what, at first glance, appears to be the case. Health-care spending would be reduced if more effective means could be found to prevent health problems that are expensive to treat but are generally not fatal, such as dementia, infectious diseases and accidents. The major focus here is on interventions designed to persuade people to quit smoking. Savings on health-care spending in early years after people stop smoking are counter-balanced (often exceeded) by higher spending at a later time. In addition, when people stop smoking there is a significant negative impact on government finances from the double effect of lost tax revenues combined with increased spending on pension payments. Arguments in favour of policies designed to prevent fatal disease, such as by reducing the prevalence of smoking, should be based on improvements to population health rather than on misleading claims that this will reduce spending on health care.

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Median Approval Times For Class III Medical Devices Have Been Well Above Statutory Deadlines Set For FDA And CMS

Annette Zinn, John Allen & Carl Hacker
Health Affairs, October 2012, Pages 2304-2313

Abstract:
The Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) play key roles in making safe and effective medical devices available to the public. Since 1997 Congress has passed "modernization" laws that specify statutory deadlines for these agencies to review manufacturers' applications for premarket approval-the process by which the FDA evaluates the safety and effectiveness of class III medical devices, those that pose the highest risk-and applications for national coverage by Medicare. We questioned whether these reforms shortened approval time at the FDA and CMS. We searched publicly available databases for information for the period from January 1, 1995, through December 31, 2008, and calculated median time to approval. After initially declining, the FDA median approval time increased after 2002 and nearly reached the 1997 prereform levels by the end of the study period. In contrast, the CMS median approval time decreased steadily over the period. Neither agency consistently met the statutory deadline of 180 days for approval of premarket applications or national coverage. Congress should consider the underlying causes for these delays in the development of future modernization legislation.

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What Hospital Inpatient Services Contributed the Most to the 2001-2006 Growth in the Cost per Case?

Jared Lane Maeda, Susan Raetzman & Bernard Friedman
Health Services Research, October 2012, Pages 1814-1835

Objective: To demonstrate a refined cost-estimation method that converts detailed charges for inpatient stays into costs at the department level to enable analyses that can unravel the sources of rapid growth in inpatient costs.

Data Sources: Healthcare Cost and Utilization Project State Inpatient Databases and Medicare Cost Reports for all community, nonrehabilitation hospitals in nine states that reported detailed charges in 2001 and 2006 (n = 10,280,416 discharges).

Study Design: We examined the cost per discharge across all discharges and five subgroups (medical, surgical, congestive heart failure, septicemia, and osteoarthritis).

Data Collection/Extraction Methods: We created cost-to-charge ratios (CCRs) for 13 cost-center or department-level buckets using the Medicare Cost Reports. We mapped service-code-level charges to a CCR with an internally developed crosswalk to estimate costs at the service-code level.

Principal Findings: Supplies and devices were leading contributors (24.2 percent) to the increase in mean cost per discharge across all discharges. Intensive care unit and room and board (semiprivate) charges also substantially contributed (17.6 percent and 11.3 percent, respectively). Imaging and other advanced technological services were not major contributors (4.9 percent).

Conclusions: Payers and policy makers may want to explore hospital stay costs that are rapidly rising to better understand their increases and effectiveness.

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Cost-Sharing and Productivity

Teresa Gibson, Mark Fendrick & Michael Chernew
NBER Working Paper, October 2012

Abstract:
A growing body of literature examines the cross price elasticities between different health care services. For example, increasing the patient out of pocket price for some health care services increases the utilization of other health care services. Yet, the literature has generally ignored the connection between cost sharing for health care services and labor market outcomes. This paper examines the direction and magnitude of the reduced form relationship between patient cost-sharing and work loss following methods used to study the impact of cost-sharing and medical spending, finding a positive, quantitatively meaningful association between cost-sharing and hours absent. We find no such association between cost-sharing and the probability of incurring short-term disability days. This suggests that the cross-market ramifications of higher patient cost sharing extend beyond other health care services to include broad labor market outcomes.

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Visiting the Emergency Department for Dental Problems: Trends in Utilization, 2001 to 2008

Helen Lee et al.
American Journal of Public Health, November 2012, Pages e77-e83

Objectives: We tested the hypothesis that between 2001 and 2008, Americans increasingly relied upon emergency departments (EDs) for dental care.

Methods: Data from 2001 through 2008 were collected from the National Hospital Ambulatory Medical Care Survey (NHAMCS). Population-based visit rates for dental problems, and, for comparison, asthma, were calculated using annual US Census Bureau estimates. As part of the analysis, we described patient characteristics associated with large increases in ED dental utilization.

Results: Dental visit rates increased most dramatically for the following subpopulations: those aged 18 to 44 years (7.2-12.2 per 1000, P < .01); Blacks (6.0-10.4 per 1000, P < .01); and the uninsured (9.5-13.2 per 1000, P < .01). Asthma visit rates did not change although dental visit rates increased 59% from 2001 to 2008.

Conclusions: There is an increasing trend in ED visits for dental issues, which was most pronounced among those aged 18 to 44 years, the uninsured, and Blacks. Dental visit rates increased significantly although there was no overall change in asthma visit rates. This suggests that community access to dental care compared with medical care is worsening over time.

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In Medicare Part D Plans, Low Or Zero Copays And Other Features To Encourage The Use Of Generic Statins Work, Could Save Billions

John Hoadley et al.
Health Affairs, October 2012, Pages 2266-2275

Abstract:
The private health plans that administer the Medicare drug benefit use various tools to encourage the use of generic drugs in order to lower total drug spending. Higher generic drug use also appears to encourage consumers to continue taking their medications. This study examines how different drug plan benefit and formulary designs influence the selection of generic drugs to treat high cholesterol among Medicare beneficiaries. We found that a low copayment for generic statins is the strongest factor influencing the use of these drugs, and eliminating the copay altogether has an especially large effect. Other tools that have an effect are higher copays and prior authorization or "step therapy" requirements for popular brand-name statins. In this drug class, where generics can be readily substituted for brand-name drugs for most people, adoption of the policies most effective in encouraging generic use could lead to considerable savings for the plans, Medicare, and enrollees. We estimate that every 10 percent increase in the use of generic, rather than brand-name, statins would reduce Medicare costs by about $1 billion annually. Plans could apply the lessons from this analysis and consider a zero copay for use of generic drugs, and Medicare might consider further incentives for plans to use benefit designs that increase such drugs' use.

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California's Minimum Nurse Staffing Legislation: Results from a Natural Experiment

Barbara Mark et al.
Health Services Research, forthcoming

Objective: To determine whether, following implementation of California's minimum nurse staffing legislation, changes in acuity-adjusted nurse staffing and quality of care in California hospitals outpaced similar changes in hospitals in comparison states without such regulations.

Data Sources/Study Setting: Data from the American Hospital Association Annual Survey of Hospitals, the California Office of Statewide Health Planning and Development, the Hospital Cost Report Information System, and the Agency for Healthcare Research and Quality's Health Care Cost and Utilization Project's State Inpatient Databases from 2000 to 2006.

Study Design: We grouped hospitals into quartiles based on their preregulation staffing levels and used a difference-in-difference approach to compare changes in staffing and in quality of care in California hospitals to changes over the same time period in hospitals in 12 comparison states without minimum staffing legislation.

Data Collection/Extraction Methods: We merged data from the above data sources to obtain measures of nurse staffing and quality of care. We used Agency for Healthcare Research and Quality's Patient Safety Indicators to measure quality.

Principal Findings: With few exceptions, California hospitals increased nurse staffing levels over time significantly more than did comparison state hospitals. Failure to rescue decreased significantly more in some California hospitals, and infections due to medical care increased significantly more in some California hospitals than in comparison state hospitals. There were no statistically significant changes in either respiratory failure or postoperative sepsis.

Conclusions: Following implementation of California's minimum nurse staffing legislation, nurse staffing in California increased significantly more than it did in comparison states' hospitals, but the extent of the increases depended upon preregulation staffing levels; there were mixed effects on quality.

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Effect of Nonpayment for Preventable Infections in U.S. Hospitals

Grace Lee et al.
New England Journal of Medicine, 11 October 2012, Pages 1428-1437

Background: In October 2008, the Centers for Medicare and Medicaid Services (CMS) discontinued additional payments for certain hospital-acquired conditions that were deemed preventable. The effect of this policy on rates of health care-associated infections is unknown.

Methods: Using a quasi-experimental design with interrupted time series with comparison series, we examined changes in trends of two health care-associated infections that were targeted by the CMS policy (central catheter-associated bloodstream infections and catheter-associated urinary tract infections) as compared with an outcome that was not targeted by the policy (ventilator-associated pneumonia). Hospitals participating in the National Healthcare Safety Network and reporting data on at least one health care-associated infection before the onset of the policy were eligible to participate. Data from January 2006 through March 2011 were included. We used regression models to measure the effect of the policy on changes in infection rates, adjusting for baseline trends.

Results: A total of 398 hospitals or health systems contributed 14,817 to 28,339 hospital unit-months, depending on the type of infection. We observed decreasing secular trends for both targeted and nontargeted infections long before the policy was implemented. There were no significant changes in quarterly rates of central catheter-associated bloodstream infections (incidence-rate ratio in the postimplementation vs. preimplementation period, 1.00; P=0.97), catheter-associated urinary tract infections (incidence-rate ratio, 1.03; P=0.08), or ventilator-associated pneumonia (incidence-rate ratio, 0.99; P=0.52) after the policy implementation. Our findings did not differ for hospitals in states without mandatory reporting, nor did it differ according to the quartile of percentage of Medicare admissions or hospital size, type of ownership, or teaching status.

Conclusions: We found no evidence that the 2008 CMS policy to reduce payments for central catheter-associated bloodstream infections and catheter-associated urinary tract infections had any measurable effect on infection rates in U.S. hospitals.

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The Vast Majority Of Medicare Part D Beneficiaries Still Don't Choose The Cheapest Plans That Meet Their Medication Needs

Chao Zhou & Yuting Zhang
Health Affairs, October 2012, Pages 2259-2265

Abstract:
When the Medicare Part D prescription drug benefit began in 2006, a primary concern for some policy makers was whether seniors would be able to make smart choices from among the dozens of competing plans. Using 2009 Part D data, we found that only 5.2 percent of beneficiaries chose the cheapest plan. Nationwide, beneficiaries on average spent $368 more annually than they would have spent had they purchased the cheapest plan available in their region, given their medication needs. More than a fifth of beneficiaries spent at least $500 a year more than they needed to. Beneficiaries often overprotected themselves by paying higher premiums for plan features that they did not need, such as generic drug coverage in the coverage gap. Our findings suggest that beneficiaries need more targeted assistance from the government to help them choose plans, such as customized communications about the most cost-effective plans that would cover their medication needs.

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The Problem of the Uninsured

Isaac Ehrlich & Yong Yin
NBER Working Paper, October 2012

Abstract:
The problem of the uninsured - those eschewing the purchase of health insurance policies - cannot be fully understood without considering informal alternatives to market insurance called "self-insurance" and "self-protection", including the publicly and charitably-financed safety-net health care system. This paper tackles the problem of the uninsured by formulating a "full-insurance" paradigm that includes all 4 measures of insurance as interacting components, and analyzing their interdependencies. We apply both a baseline and extended versions of the model through calibrated simulations to estimate the degree to which these non-market alternatives can account for the fraction of the non-elderly adults who are uninsured, and estimate their behavioral and policy ramifications. Our results indicate that policy analyses that do not consider the role of self-efforts to avoid health losses can grossly distort the success of the ACA mandate to insure the uninsured and to improve the health and welfare outcomes of the previously uninsured.

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An Experimental Investigation of Mixed Systems of Public and Private Health Care Finance

Neil Buckley et al.
Journal of Economic Behavior & Organization, forthcoming

Abstract:
This paper presents the results of a revealed-choice experiment testing the theoretical predictions of a model of a mixed system of public and private finance. We investigate behavioural responses in individuals' willingnesses-to-pay for private health insurance to changes in the public sector allocation rule (needs-based vs. random), the supply of health care resources, and the size of the public health care budget. Of particular interest is how willingness-to-pay for private insurance feeds back into the determination of the equilibrium price of health care resources, the probability of public treatment and which individuals are left untreated. Our findings are generally consistent with the predictions of the theoretical model, although individuals consistently exhibit greater willingnesses-to-pay for private insurance than predicted resulting in a larger than predicted amount of private insurance being purchased. A commonly used risk-aversion measure only partially explains this observed deviation. We also find that, relative to a system of public financing only, a mixed system of health care finance results in higher health care prices and sicker, poorer people being left untreated.

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Losers and losers: Some demographics of medical malpractice tort reforms

Andrew Friedson & Thomas Kniesner
Journal of Risk and Uncertainty, October 2012, Pages 115-133

Abstract:
Our research examines how recent reforms have affected a key aspect of patients' implicit insurance present in medical malpractice torts. Specifically, we estimate how non-economic damages caps affected pre-trial settlement speed and settlement amounts. Maximum entropy (most likely) quantile regressions emphasize that the post-reform settlement effects most informative for policy evaluation differ greatly from OLS (mean) estimates and clarify the conclusion emerging. In particular, the effect of the tort reform here can best be thought of as a 25% tax on the asset value of settlements that exempts settlements involving infants. The social welfare effects of tort reform are less clear than the asset reduction effects due to likely health state dependent utility.

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Participation and Crowd Out: Assessing the Effects of Parental Medicaid Expansions

Sarah Hamersma & Matthew Kim
Journal of Health Economics, forthcoming

Abstract:
In this paper, we examine the effects of recent parental Medicaid eligibility expansions on Medicaid participation and private insurance coverage. We present a new approach for estimating these policy effects that explicitly models the particular policy instrument over which legislators have control - income eligibility thresholds. Our approach circumvents estimation problems stemming from misclassification or measurement error. Moreover, it allows us to assess how the policy effects may vary at different initial threshold levels. Using data from the Survey of Income and Program Participation, we find three main results. First, the eligibility expansions result in significant increases in Medicaid participation; a "typical" expansion increases Medicaid participation by about four percent of baseline coverage rates. Second, the participation effect is larger for lower initial thresholds and the effect decreases as Medicaid thresholds increase. Third, we find no statistically significant evidence of crowd out regardless of initial threshold level.

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The Impact of Hospital-Based Skilled Nursing Facility Closures on Rehospitalizations

Momotazur Rahman, Jacqueline Zinn & Vincent Mor
Health Services Research, forthcoming

Objective: To examine the effect of reductions in hospital-based (HB) skilled nursing facility (SNF) bed supply on the rate of rehospitalization of patients discharged to any SNF from zip codes that lost HB beds.

Data Source: We used Medicare enrollment records, Medicare hospital and SNF claims, and nursing home Minimum Dataset assessments and characteristics (OSCAR) to examine nearly 10 million Medicare fee-for-service hospital discharges to SNFs between 1999 and 2006.

Study Design: We calculated the number of HB and freestanding (FS) SNF beds within a 22 km radius from the centroid of all zip codes in which Medicare beneficiaries reside in all years. We examined the relationship between HB and FS bed supply and the rehospitalization rates of the patients residing in corresponding zip codes in different years using zip code fixed effects and instrumental variable methods including extensive sensitivity analyses.

Principal Findings: Our estimated coefficients suggest that closure of 882 HB homes during our study period resulted in 12,000-18,000 extra rehospitalizations within 30 days of discharge. The effect was largely concentrated among the most acutely ill, high-need patients.

Conclusions: SNF patient-based prospective payment resulted in closure of higher cost HB facilities that had served most postacute patients. As other, less experienced SNFs replaced HB facilities, they were less able to manage high acuity patients without rehospitalizing them.

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Geographic Variation in Outpatient Antibiotic Prescribing Among Older Adults

Yuting Zhang, Michael Steinman & Cameron Kaplan
Archives of Internal Medicine, forthcoming

Background: Consequences of antibiotic overuse are substantial, especially among older adults, who are more susceptible to adverse reactions. Findings about variation in antibiotic prescribing can target policy efforts to focused areas; however, little is known about these patterns among older adults.

Methods: Using Medicare Part D data from January 1, 2007, through December 31, 2009 (comprising 1.0-1.1 million patients per year), we examined geographic variation in antibiotic use among older adults in 306 Dartmouth Atlas of Health Care hospital referral regions, 50 states and the District of Columbia, and 4 national regions (South, West, Midwest, and Northeast). In addition, we examined the quarterly change in antibiotic use across the 4 regions. Differences in patient demographics, insurance status, and clinical characteristics were adjusted for across regions.

Results: Substantial geographic and quarterly variation in outpatient antibiotic prescribing existed across regions after adjusting for population characteristics. This variation could not be explained by differences in the prevalences of the underlying conditions. For example, the ratios of the 75th percentile to the 25th percentile of adjusted annual antibiotic spending were 1.31 across states and 1.32 across regions. The highest antibiotic use was in the South, where 21.4% of patients per quarter used an antibiotic, whereas the lowest antibiotic use was in the West, where 17.4% of patients per quarter used an antibiotic (P < .01). Regardless of region, the rate of antibiotic use was highest in the first quarter (20.9% in January through March) and was lowest in the third quarter (16.9% in July through September) (P < .01).

Conclusions: Areas with high rates of antibiotic use may benefit from targeted programs to reduce unnecessary prescription. Quality improvement programs can set attainable targets using the low-prescribing areas as a reference, particularly targeting older adults.

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Firm-Sponsored General Education and Mobility Frictions: Evidence from Hospital Sponsorship of Nursing Schools and Faculty

Alan Benson
Journal of Health Economics, forthcoming

Abstract:
This study asks why hospitals provide direct financial support to nursing schools and faculty. This support is striking because nursing education is clearly general, clearly paid by the firm, and information asymmetries appear minimal. Using AHA and survey data, I find hospitals employing a greater share of their MSA's registered nurses are more likely to provide direct financial support to nursing schools and faculty, net of size and other institutional controls. Given the institutional context, I interpret this result as unusually-specific evidence that technologically-general skill training may be made de facto-specific by imperfect and costly mobility.

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The Effect of a Large Regional Health Plan's Value-based Insurance Design Program on Statin Use

Matthew Frank et al.
Medical Care, November 2012, Pages 934-939

Background: Cost-sharing requirements employed by health insurers to discourage the unnecessary use of medications may lead to underutilization of recommended treatment regimens and suboptimal quality of care. Value-based insurance design (VBID) programs seek to address these problems by lowering copayments to promote adherence to "high-value" medications that have been proven to be clinically beneficial. VBID evaluations to date have focused on programs implemented by self-insured employers. This study is among the first to assess the VBID program of a health plan.

Methods: We examined a VBID program for statins implemented by a large regional health plan in 2008 and assessed its effect on medication adherence. Copayments on VBID brand statins were reduced by 42.9% for employer-sponsored plans (the treatment group) and increased by 16.7% for state-sponsored plans (the control group) between the preintervention and postintervention periods. Propensity score weights were used to balance the treatment and control groups on observed characteristics. We evaluated the impact of the VBID program on adherence using an econometric model with a difference-in-difference design.

Results: Medication adherence increased 2.7 percentage points (P=0.033) among VBID brand statin users in the treatment group relative to the control group. With a baseline adherence rate of 77.6%, nonadherence was reduced by 11.9%.

Conclusions: Copayment reductions on selected statin medications contributed to improvements in adherence. As one of the first studies to evaluate a health plan's VBID program, our findings demonstrate that insurer-based VBID programs may yield results similar to those achieved by employer-based programs.

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Effect of Nursing Home Ownership on the Quality of Post-Acute Care: An Instrumental Variables Approach

David Grabowski et al.
Journal of Health Economics, forthcoming

Abstract:
Given the preferential tax treatment afforded nonprofit firms, policymakers and researchers have been interested in whether the nonprofit sector provides higher nursing home quality relative to its for-profit counterpart. However, differential selection into for-profits and nonprofits can lead to biased estimates of the effect of ownership form. By using "differential distance" to the nearest nonprofit nursing home relative to the nearest for-profit nursing home, we mimic randomization of residents into more or less "exposure" to nonprofit homes when estimating the effects of ownership on quality of care. Using national Minimum Data Set assessments linked with Medicare claims, we use a national cohort of post-acute patients who were newly admitted to nursing homes within an 18-month period spanning January 1, 2004 and June 30, 2005. After instrumenting for ownership status, we found that post-acute patients in nonprofit facilities had fewer 30-day hospitalizations and greater improvement in mobility, pain, and functioning.

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The Effect of State Regulatory Stringency on Nursing Home Quality

Dana Mukamel et al.
Health Services Research, October 2012, Pages 1791-1813

Objective: To test the hypothesis that more stringent quality regulations contribute to better quality nursing home care and to assess their cost-effectiveness.

Data Sources/Setting: Primary and secondary data from all states and U.S. nursing homes between 2005 and 2006.

Study Design: We estimated seven models, regressing quality measures on the Harrington Regulation Stringency Index and control variables. To account for endogeneity between regulation and quality, we used instrumental variables techniques. Quality was measured by staffing hours by type per case-mix adjusted day, hotel expenditures, and risk-adjusted decline in activities of daily living, high-risk pressure sores, and urinary incontinence.

Data Collection: All states' licensing and certification offices were surveyed to obtain data about deficiencies. Secondary data included the Minimum Data Set, Medicare Cost Reports, and the Economic Freedom Index.

Principal Findings: Regulatory stringency was significantly associated with better quality for four of the seven measures studied. The cost-effectiveness for the activities-of-daily-living measure was estimated at about 72,000 in 2011/ Quality Adjusted Life Year.

Conclusions: Quality regulations lead to better quality in nursing homes along some dimensions, but not all. Our estimates of cost-effectiveness suggest that increased regulatory stringency is in the ballpark of other acceptable cost-effective practices.


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