Treatment Plan

Kevin Lewis

December 21, 2010

McAllen And El Paso Revisited: Medicare Variations Not Always Reflected In The Under-Sixty-Five Population

Luisa Franzini, Osama Mikhail & Jonathan Skinner
Health Affairs, December 2010, Pages 2302-2309

Medicare spending for the elderly is much higher in McAllen, Texas, than in El Paso, Texas, as reported in a 2009 New Yorker article by Atul Gawande. To investigate whether this disparity was present in the non-Medicare populations of those two cities, we obtained medical use and expense data for patients privately insured by Blue Cross and Blue Shield of Texas. In contrast to the Medicare population, the use of and spending per capita for medical services by privately insured populations in McAllen and El Paso was much less divergent, with some exceptions. For example, although spending per Medicare member per year was 86 percent higher in McAllen than in El Paso, total spending per member per year in McAllen was 7 percent lower than in El Paso for the population insured by Blue Cross and Blue Shield of Texas. We consider possible explanations but conclude that health care providers respond quite differently to incentives in Medicare compared to those in private insurance programs.


US Mortality in an International Context: Age Variations

Jessica Ho & Samuel Preston
Population and Development Review, December 2010, Pages 749-773

Compared to other developed countries, the United States ranks poorly in terms of life expectancy at age 50. We seek to shed light on the US's low life expectancy ranking by comparing the age-specific death rates of 18 developed countries at older ages. A striking pattern emerges: between ages 40 and 75, US all-cause mortality rates are among the poorest in the set of comparison countries. The US position improves dramatically after age 75 for both males and females. We consider four possible explanations of the age patterns revealed by this analysis: (1) access to health insurance; (2) international differences in patterns of smoking; (3) age patterns of health care system performance; and (4) selection processes. We find that health insurance and smoking are not plausible sources of this age pattern. While we cannot rule out selection, we present suggestive evidence that an unusually vigorous deployment of life-saving technologies by the US health care system at very old ages is contributing to the age-pattern of US mortality rankings. Differences in obesity distributions are likely to be making a moderate contribution to the pattern but uncertainty about the risks associated with obesity prevents a precise assessment.


Public vs. Private Provision of Charity Care? Evidence from the Expiration of Hill-Burton Requirements in Florida

Douglas Almond, Janet Currie & Emilia Simeonova
Journal of Health Economics, forthcoming

This paper explores the consequences of the expiration of charity care requirements imposed on private hospitals by the Hill-Burton Act. We examine delivery care and the health of newborns using the universe of Florida births from 1989-2003 combined with hospital data from the American Hospital Association. We find that charity care requirements were binding on hospitals, but that private hospitals under obligation "cream skimmed" the least risky maternity patients. Conditional on patient characteristics, they provided less intensive maternity services but without compromising patient health. When obligations expired, private hospitals quickly reduced their charity caseloads, shifting maternity patients to public hospitals. The results in this paper suggest, perhaps surprisingly, that requiring private providers to serve the underinsured can be effective.


Unhealthy and Uninsured: Exploring Racial Differences in Health and Health Insurance Coverage Using a Life Table Approach

James Kirby & Toshiko Kaneda
Demography, November 2010, Pages 1035-1051

Millions of people in the United States do not have health insurance, and wide racial and ethnic disparities exist in coverage. Current research provides a limited description of this problem, focusing on the number or proportion of individuals without insurance at a single time point or for a short period. Moreover, the literature provides no sense of the joint risk of being uninsured and in need of medical care. In this article, we use a life table approach to calculate health- and insurance-specific life expectancies for whites and blacks, thereby providing estimates of the duration of exposure to different insurance and health states over a typical lifetime. We find that, on average, Americans can expect to spend well over a decade without health insurance during a typical lifetime and that 40% of these years are spent in less-healthy categories. Findings also reveal a significant racial gap: despite their shorter overall life expectancy, blacks have a longer uninsured life expectancy than whites, and this racial gap consists entirely of less-healthy years. Racial disparities in insurance coverage are thus likely more severe than indicated by previous research.


Raising Premiums And Other Costs For Oregon Health Plan Enrollees Drove Many To Drop Out

Bill Wright, Matthew Carlson, Heidi Allen, Alyssa Holmgren & Leif Rustvold
Health Affairs, December 2010, Pages 2311-2316

The Oregon Health Plan was created to be a sustainable program that could weather budgetary storms without having to cut enrollees from Medicaid. A 2003 redesign of the program increased premiums, raised cost sharing, and imposed rigid premium payment deadlines for members in the "Standard" version of the program but not for members of the "Plus" version. This paper adds two years of longitudinal data to a previous study on the impacts of these changes. It shows that the redesign was a key factor driving a 77 percent disenrollment rate in the Standard program, from a high of 104,000 enrollees in February 2003 to just 24,000 by the end of the study period, November 2005. Those who were in the Standard plan when the reduced benefits and higher member costs went into effect were also nearly twice as likely to have unmet health care needs compared to those in the Plus plan. These changes underscore that in a period of economic downturn, policy makers must understand the impact of increased cost sharing on vulnerable populations.


Ongoing Coverage for Ongoing Care: Access, Utilization, and Out-of-Pocket Spending Among Uninsured Working-Aged Adults with Chronic Health Care Needs

Stephen Gulley, Elizabeth Rasch & Leighton Chan
American Journal of Public Health, forthcoming

Objectives: We sought to determine how part-year and full-year gaps in health insurance coverage affected working-aged persons with chronic health care needs.

Methods: We conducted multivariate analyses of the 2002-2004 Medical Expenditure Panel Survey to compare access, utilization, and out-of-pocket spending burden among key groups of persons with chronic conditions and disabilities. The results are generalizable to the US community-dwelling population aged 18 to 64 years.

Results: Among 92 million adults with chronic conditions, 21% experienced at least 1 month uninsured during the average year (2002-2004). Among the 25 million persons reporting both chronic conditions and disabilities, 23% were uninsured during the average year. These gaps in coverage were associated with significantly higher levels of access problems, lower rates of ambulatory visits and prescription drug use, and higher levels of out-of-pocket spending.

Conclusions: Implementation of health care reform must focus not only on the prevention of chronic conditions and the expansion of insurance coverage but also on the long-term stability of the coverage to be offered.


Health Awareness Campaigns and Diagnosis Rates: Evidence from National Breast Cancer Awareness Month

Grant Jacobsen & Kathryn Jacobsen
Journal of Health Economics, forthcoming

Awareness campaigns are often used to encourage medical screening that allows for early detection of health problems, but much remains unknown about the effectiveness of these programs. This paper evaluates whether National Breast Cancer Awareness Month (NBCAM) has led to increased diagnosis of breast cancer. The analysis examines the number of diagnoses made in November (one month after NBCAM) during years before and after NBCAM was initiated. We find that from 1993 to 1995, the period when breast cancer advocacy was expanding rapidly into a nationwide movement, NBCAM led to an increase in the number of November diagnoses. During earlier periods (from the mid-1980 s to the early-1990 s), when breast cancer advocacy was still a nascent grassroots movement, and in later periods, when breast cancer advocacy had become a well-established nationwide cause, there is little evidence that October NBCAM events had an effect on November diagnoses.


Acquisition Of MRI Equipment By Doctors Drives Up Imaging Use And Spending

Laurence Baker
Health Affairs, December 2010, Pages 2252-2259

Some orthopedists and neurologists acquired their own magnetic resonance imaging (MRI) equipment during the early 2000s. This paper examines changes in imaging use and in overall spending by patients of orthopedists and neurologists who began billing for MRI scans between 1999 and 2005. Results show that physicians ordered substantially more scans once they began billing for MRI. For example, after orthopedists began billing for MRI, the number of MRI procedures used within thirty days of a first visit increased by about 38 percent. Not only did MRI spending increase for their patients, but spending for other aspects of care rose as well. Attention should be paid to ensuring that advanced medical equipment acquired in physician practices is used appropriately.


Public and private health-care financing with alternate public rationing rules

Katherine Cuff et al.
Health Economics, forthcoming

We develop a model to analyze parallel public and private health-care financing under two alternative public sector rationing rules: needs-based rationing and random rationing. Individuals vary in income and severity of illness. There is a limited supply of health-care resources used to treat individuals, causing some individuals to go untreated. Insurers (both public and private) must bid to obtain the necessary health-care resources to treat their beneficiaries. Given individuals' willingnesses-to-pay for private insurance are increasing in income, the introduction of private insurance diverts treatment from relatively poor to relatively rich individuals. Further, the impact of introducing parallel private insurance depends on the rationing mechanism in the public sector. We show that the private health insurance market is smaller when the public sector rations according to need than when allocation is random.


Health Care Politics in the Age of Retrenchment

Jason Jordan
Journal of Social Policy, January 2011, Pages 113-134

This article examines the debate between the power resources and ‘new politics' scholars concerning the politics of welfare state retrenchment in advanced industrial democracies. Both approaches make competing claims concerning the relevance of partisan differences in the current age of welfare reform. This article tests the new politics hypothesis that partisanship has had a declining impact on welfare politics over time through an analysis of the growth in the public share of health care spending in 18 countries from 1960 to 2000. Consistent with the new politics approach, the results reveal that the partisan character of government no longer plays a significant role in determining changes in public responsibility for health care during the new politics period. This suggests that the current period is characterised by general agreement across party lines on the broad parameters of the health care system, reducing the intense partisan conflicts of the past to debates over reform at the margins of the health care system.


How Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven Countries

Cathy Schoen et al.
Health Affairs, December 2010, Pages 2323-2334

This 2010 survey examines the insurance-related experiences of adults in Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United States, and the United Kingdom. The countries all have different systems of coverage, ranging from public systems to hybrid systems of public and private insurance, and with varying levels of cost sharing. Overall, the study found significant differences in access, cost burdens, and problems with health insurance that are associated with insurance design. US adults were the most likely to incur high medical expenses, even when insured, and to spend time on insurance paperwork and disputes or to have payments denied. Germans reported spending time on paperwork at rates similar to US rates but were well protected against out-of-pocket spending. Swiss out-of-pocket spending was high, yet few Swiss had access concerns or problems paying bills. For US adults, comprehensive health reforms could lead to improvements in many of these areas, including reducing differences by income observed in the study.


Mortality and Morbidity Trends: Is There Compression of Morbidity?

Eileen Crimmins & Hiram Beltrán-Sánchez
Journals of Gerontology: Series B, January 2011, Pages 75-86

Objective: This paper reviews trends in mortality and morbidity to evaluate whether there has been a compression of morbidity.

Methods: Review of recent research and analysis of recent data for the United States relating mortality change to the length of life without 1 of 4 major diseases or loss of mobility functioning.

Results: Mortality declines have slowed down in the United States in recent years, especially for women. The prevalence of disease has increased. Age-specific prevalence of a number of risk factors representing physiological status has stayed relatively constant; where risks decline, increased usage of effective drugs is responsible. Mobility functioning has deteriorated. Length of life with disease and mobility functioning loss has increased between 1998 and 2008.

Discussion: Empirical findings do not support recent compression of morbidity when morbidity is defined as major disease and mobility functioning loss.


An Examination of Periodontal Treatment, Dental Care, and Pregnancy Outcomes in an Insured Population in the United States

David Albert et al.
American Journal of Public Health, January 2011, Pages 151-156

Objectives: We examined whether periodontal treatment or other dental care is associated with adverse birth outcomes within a medical and dental insurance database.

Methods: In a retrospective cohort study, we examined the records of 23 441 women enrolled in a national insurance plan who delivered live births from singleton pregnancies in the United States between January 1, 2003, and September 30, 2006, for adverse birth outcomes on the basis of dental treatment received. We compared rates of low birthweight and preterm birth among 5 groups, specifying the relative timing and type of dental treatment received. We used logistic regression analysis to compare outcome rates across treatment groups while adjusting for duration of continuous dental coverage, maternal age, pregnancy complications, neighborhood-level income, and race/ethnicity.

Results: Analyses showed that women who received preventive dental care had better birth outcomes than did those who received no treatment (P < .001). We observed no evidence of increased odds of adverse birth outcomes from dental or periodontal treatment.

Conclusions: For women with medical and dental insurance, preventive care is associated with a lower incidence of adverse birth outcomes.


Do Bad Report Cards Have Consequences? How Pubicly Reported Provider Quality Information Impacts the CABG Market in Pennsylvania

Justin Wang, Jason Hockenberry, Shin-Yi Chou & Muzhe Yang
Journal of Health Economics, forthcoming

Since 1992, the Pennsylvania Health Care Cost Containment Council (PHC4) has published cardiac care report cards for coronary artery bypass graft (CABG) surgery providers. We examine the impact of CABG report cards on a provider's aggregate volume and volume by patient severity and then employ a mixed logit model to investigate the matching between patients and providers. We find a reduction in volume of poor performing and unrated surgeons' volume but no effect on more highly rated surgeons or hospitals of any rating. We also find that the probability that patients, regardless of severity of illness, receive CABG surgery from low-performing surgeons is significantly lower.


Fixing Flaws In Medicare Drug Coverage That Prompt Insurers To Avoid Low-Income Patients

John Hsu et al.
Health Affairs, December 2010, Pages 2335-2343

Since 2006 numerous insurers have stopped serving the low-income segment of the Medicare Part D program, forcing millions of beneficiaries to change prescription drug plans. Using data from participating plans, we found that Medicare payments do not sufficiently reimburse insurers for the relatively high medication use among this population, creating perverse incentives for plans to avoid this part of the Part D market. Plans can accomplish this by increasing their premiums for all beneficiaries to an amount above regional benchmarks. We demonstrate that improving the accuracy of Medicare's risk and subsidy adjustments could mitigate these perverse incentives.


Potential National and State Medical Care Savings From Primary Disease Prevention

Barbara Ormond, Brenda Spillman, Timothy Waidmann, Kyle Caswell & Bogdan Tereshchenko
American Journal of Public Health, January 2011, Pages 157-164

Objectives: We estimated national and state-level potential medical care cost savings achievable through modest reductions in the prevalence of several diseases associated with the same lifestyle-related risk factors.

Methods: Using Medical Expenditure Panel Survey Household Component data (2003-2005), we estimated the effects on medical spending over time of reductions in the prevalence of diabetes, hypertension, and related conditions amenable to primary prevention by comparing simulated counterfactual morbidity and medical care expenditures to actual disease and expenditure patterns. We produced state-level estimates of spending by using multivariate reweighting techniques.

Results: Nationally, we estimated that reducing diabetes and hypertension prevalence by 5% would save approximately $9 billion annually in the near term. With resulting reductions in comorbidities and selected related conditions, savings could rise to approximately $24.7 billion annually in the medium term. Returns were greatest in absolute terms for private payers, but greatest in percentage terms for public payers. State savings varied with demographic makeup and prevailing morbidity.

Conclusions: Well-designed interventions that achieve improvements in lifestyle-related risk factors could result in sufficient savings in the short and medium term to substantially offset intervention costs.


Do physician incentives affect hospital choice? A progress report

Katherine Ho & Ariel Pakes
International Journal of Industrial Organization, forthcoming

The US health reforms of March 2010 introduce new provisions for physicians providing Medicare and Medicaid services to be given financial incentives to control costs. Physician payment mechanisms generating similar incentives are currently used by some health maintenance organizations in California. We describe an ongoing research project in which we investigate physician responses to these payment schemes. The question is whether patients whose physicians have incentives to control hospital costs are admitted to lower-priced hospitals than other patients, all else equal. We provide an initial analysis of California hospital discharge data from 2003, documenting evidence consistent with this hypothesis.


Retirement Effects on Health in Europe

Norma Coe & Gema Zamarro
Journal of Health Economics, forthcoming

What are the health impacts of retirement? As talk of raising retirement ages in pensions and social security schemes continues around the world, it is important to know both the costs and benefits for the individual as well as the governments' budgets. In this paper we use the Survey of Health, Ageing and Retirement in Europe (SHARE) dataset to address this question in a multi-country setting. We use country-specific early and full retirement ages as an instrument for retirement behavior. These statutory retirement ages clearly induce retirement, but are not related to an individual's health. Exploiting the discontinuities in retirement behavior across countries, we find significant evidence that retirement has a health-preserving effect on overall general health. Our estimates indicate that retirement leads to a 35 percent decrease in the probability of reporting to be in fair, bad or very bad health, and an almost one standard deviation improvement in the health index. While the self-reported health seems to be a temporary impact, the health index indicates there are long-lasting health differences.


Using simulation-optimization to construct screening strategies for cervical cancer

Laura McLay, Christodoulos Foufoulides & Jason Merrick
Health Care Management Science, December 2010, Pages 294-318

Cervical cancer is the second most common cancer in women worldwide. Cervical screening is critical for preventing this type of cancer. Traditionally, screening strategies are evaluated from an economic point of view through cost-effectiveness analysis. However, cost-effectiveness analysis is typically performed on a limited number of de facto or predetermined screening policies. We develop a simulation-optimization model to determine the ages at which screening should be performed, resulting in dynamic, age-based screening policies. We consider three performance measures: cervical cancer incidence, the number of cervical cancer deaths, and the number of life years lost due to cervical cancer death. Using each performance measure, we compare our optimal, dynamic screening strategies to standard policies considered in the health screening literature that are static and predetermined. We also evaluate the anticipated impact of vaccinations for preventing cervical cancer. The strategies that are developed are compared to those used in practice or considered in the literature. The Centers for Disease Control and Prevention recommends one screening every 3 years, resulting in 14 scheduled lifetime screenings. Our dynamic screening strategies provide approximately the same health benefits as this but with four to six fewer scheduled screenings, depending on the performance measure considered. Our dynamic strategies also provide approximately the same health benefits as screening every 2 years, but with six to nine fewer scheduled screenings. The results suggest that dynamic, age-based cervical cancer screening policies offer substantial economic savings in order to offer the same health benefits as equally spaced screening strategies.

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