Valuing Statistical Life
Mortality Effects and Choice Across Private Health Insurance Plans
Jason Abaluck et al.
NBER Working Paper, July 2020
Abstract:
Competition in health insurance markets may fail to improve health outcomes if consumers are not willing to pay for high quality plans. We document large differences in the mortality rates of Medicare Advantage (MA) plans within local markets. We then show that when high (low) mortality plans exit these markets, enrollees tend to switch to more typical plans and subsequently experience lower (higher) mortality. We develop a framework that uses this variation to estimate the relationship between observed mortality rates and causal mortality effects; we find a tight link. We then extend the framework to study other predictors of mortality effects and estimate consumer willingness to pay. Higher spending plans tend to reduce enrollee mortality, but existing quality ratings are uncorrelated with plan mortality effects. Consumers place little weight on mortality effects when choosing plans. Moving beneficiaries out of the bottom 5% of plans could save tens of thousands of elderly lives each year.
The Role of Decision Support Systems in Attenuating Racial Biases in Healthcare Delivery
Kartik Ganju et al.
Management Science, forthcoming
Abstract:
Although significant research has examined how technology can intensify racial and other outgroup biases, limited work has investigated the role information systems can play in abating them. Racial biases are particularly worrisome in healthcare, where underrepresented minorities suffer disparities in access to care, quality of care, and clinical outcomes. In this paper, we examine the role clinical decision support systems (CDSS) play in attenuating systematic biases among black patients, relative to white patients, in rates of amputation and revascularization stemming from diabetes mellitus. Using a panel of inpatient data and a difference-in-difference approach, results suggest that CDSS adoption significantly shrinks disparities in amputation rates across white and black patients — with no evidence that this change is simply delaying eventual amputations. Results suggest that this effect is driven by changes in treatment care protocols that match patients to appropriate specialists, rather than altering within physician decision making. These findings highlight the role information systems and digitized patient care can play in promoting unbiased decision making by structuring and standardizing care procedures.
Access to Healthcare and Criminal Behavior: Evidence from the ACA Medicaid Expansions
Jacob Vogler
Journal of Policy Analysis and Management, forthcoming
Abstract:
I investigate the causal relationship between access to healthcare and crime following state decisions to expand Medicaid coverage after the Affordable Care Act. I combine state‐level crime data from the Federal Bureau of Investigation Uniform Crime Reports for the years 2009 through 2018 with variation in insurance eligibility generated by the Medicaid expansion. Using a difference‐in‐differences design, my findings indicate that states that expanded Medicaid have experienced a 5.3 percent reduction in annual reported violent crime rates relative to nonexpansion states. This effect is explained by decreases in aggravated assaults and corresponds to 17 fewer incidents per 100,000 people. The estimated decrease in reported crime amounts to an annual cost savings of approximately $4 billion.
Ideological Sorting of Physicians in Both Geography and the Workplace
Adam Bonica et al.
Journal of Health Politics, Policy and Law, forthcoming
Methods: Physician relocation and employment patterns are analyzed using a panel constructed from the National Provider Information (NPI) directory. Data on political donations are used to measure the political preferences of physicians.
Findings: The “ideological fit” between a physician and his or her community is a key predictor of both relocation and employment decisions. A Democratic physician in a predominantly Republican area is twice as likely to relocate as a Republican counterpart living there; the reverse is also true for Republicans living in Democratic areas. Physicians who do not share the political orientation of their colleagues are more likely to change workplaces within the same geographic area.
Conclusions: Physicians are actively sorting along political lines. Younger physicians have trended sharply to the left and are increasingly drawn to urban areas with physician surpluses and away from rural areas suffering from physician shortages. The findings also help explain why physician shortages are more prevalent among left-leaning specialties, such as psychiatry.
Medicaid expansion and non‐alcoholic beverage choices by low‐income households
Xi He, Rigoberto Lopez & Rebecca Boehm
Health Economics, forthcoming
Abstract:
This article investigates the impact of the 2010 Patient Protection and Affordable Care Act (ACA) on the healthfulness of non‐alcoholic beverage (NAB) choices of low‐income households. A theoretical analysis proposes an income effect that increases unhealthy beverage purchases after Medicaid expansion and a nutrition education effect that decreases them. To empirically test these effects, we utilize household‐level data for NAB purchases in 52 U.S. metropolitan areas. Our identification strategy is based on eligible households following the 2012 Supreme Court ruling that allowed states to opt out of Medicaid expansion. We examine changes in purchases across NAB categories and in purchases at the product‐brand level. Empirical results indicate that Medicaid expansion resulted in eligible households buying more diet carbonated soft drinks (CSDs) and bottled water, with no effect on regular CSDs, fruit juice, fruit drinks, milk, or tea. Moreover, the expansion led to decreases in sugar purchases and increases in purchases of NAB products with lower sugar content, highlighting the benefits of supplementing the medical benefits of Medicaid with diet quality programs, such as nutrition education.
Consolidation Of Providers Into Health Systems Increased Substantially, 2016–18
Michael Furukawa et al.
Health Affairs, August 2020, Pages 1321-1325
Abstract:
Provider consolidation into vertically integrated health systems increased from 2016 to 2018. More than half of US physicians and 72 percent of hospitals were affiliated with one of 637 health systems in 2018. For-profit and church-operated systems had the largest increases in system size, driven in part by a large number of system mergers and acquisitions.
Primary care competition and quality of care: Empirical evidence from Medicare
Christopher Brunt, Joshua Hendrickson & John Bowblis
Health Economics, September 2020, Pages 1048-1061
Abstract:
In this paper, we explore the effects of primary care physician (PCP) practice competition on five distinct quality metrics directly tied to screening, follow‐up care, and prescribing behavior under Medicare Part B and D. Controlling for physician, practice, and area characteristics as well as zip code fixed effects, we find strong evidence that PCP practices in more concentrated areas provide lower quality of care. More specifically, PCPs in more concentrated areas are less likely to perform screening and follow‐up care for high blood pressure, unhealthy bodyweight, and tobacco use. They are also less likely to document current medications. Furthermore, PCPs in more concentrated areas have a higher amount of opioid prescriptions as a fraction of total prescriptions.
Child Support and the Affordable Care Act's Medicaid Expansions
Lindsey Rose Bullinger
Journal of Policy Analysis and Management, forthcoming
Abstract:
A quickly developing literature has shown that the Affordable Care Act's (ACA) Medicaid expansions have improved health insurance coverage, health, and financial well‐being among low‐income adults without dependent children. This population includes noncustodial parents. With substantial overlap in the population that is typically obligated to pay child support and the population that has strongly benefited from the expansions, there may be potential implications for child support enforcement. In this paper, I examine the effect of public health insurance eligibility to low‐income adults on child support outcomes. I find that the ACA Medicaid expansions increased child support distributed to custodial families as arrears by 8.5 percent. Evidence also suggests current support distributions increased by about 2 percent. There were no significant effects on paying toward a child support order. Among unmarried mothers, the likelihood of child support receipt increased by 8 percent. These results imply that access to public health insurance can increase the ability of noncustodial parents to pay child support.
Treatment flows after outsourcing public insurance provision: Evidence from Florida Medicaid
Elizabeth Munnich & Michael Richards
Health Economics, forthcoming
Abstract:
While politics can determine what public goods are available, elected officials must decide on the method of allocation. Commonly, governments provide public health insurance directly or pay private parties to administer it on their behalf. Such contracting can leverage private sector expertise but also raises agency concerns. In particular, little is known about how private provision of public health insurance impacts medical decision‐making and treatment flows for low‐income populations. An example comes from the Medicaid program, which has increasingly relied on outside insurers to deliver health services to enrollees. We exploit a large legislative intervention in Florida to show that Medicaid managed care (MMC) organizations generally do not skimp on short‐run treatment delivery in the inpatient setting. In fact, patients with severe and chronic illnesses receive more inpatient services under these contracts, especially in relation to managing care transitions. We also document increased competition in the MMC market following the state's policy intervention.
The cumulative impact of health insurance on health status
Abigail Barker & Linda Li
Health Services Research, forthcoming
Data Source: Secondary data from the Panel Study of Income Dynamics (PSID), 2009‐17, which is a longitudinal, multigenerational study covering a wide array of socioeconomic topics that began in 1968 but has only recently begun collecting useful information on individual health insurance.
Study Design: 2017 data on self‐reported health status, work limitations, and death were analyzed as outcomes based upon the degree of exposure to health insurance in 2011‐17. All variables were collected biannually for four years beginning in 2011. Having health insurance at each point in time was, in turn, modeled as a function of several sociodemographic factors.
Principal Findings: Among respondents who were not in fair or poor health in 2009, each additional 2 years of subsequent reported insurance coverage reduced the chance of reporting fair or poor health in 2017 by 10 percent; however, this effect was not present for black respondents.
Randomized trial shows healthcare payment reform has equal-sized spillover effects on patients not targeted by reform
Liran Einav et al.
Proceedings of the National Academy of Sciences, 11 August 2020, Pages 18939-18947
Abstract:
Changes in the way health insurers pay healthcare providers may not only directly affect the insurer’s patients but may also affect patients covered by other insurers. We provide evidence of such spillovers in the context of a nationwide Medicare bundled payment reform that was implemented in some areas of the country but not in others, via random assignment. We estimate that the payment reform — which targeted traditional Medicare patients — had effects of similar magnitude on the healthcare experience of nontargeted, privately insured Medicare Advantage patients. We discuss the implications of these findings for estimates of the impact of healthcare payment reforms and more generally for the design of healthcare policy.
The effect of increased cost‐sharing on low‐value service use
Jonathan Gruber et al.
Health Economics, forthcoming
Abstract:
We examine the effect of a value‐based insurance design (VBID) program implemented at a large public employer in the state of Oregon. The program substantially increased cost‐sharing for several healthcare services likely to be of low value for most patients: diagnostic services (e.g., imaging services) and surgeries (e.g., spinal surgeries for pain). Using a difference‐in‐differences design coupled with granular, administrative health insurance claims data over the period 2008–2012, we estimate the change in low‐value service use among beneficiaries before and after program implementation relative to a comparison group not exposed to the VBID. Our findings suggest that the VBID significantly reduced the use of targeted services, with an implied elasticity of demand of −0.22. We find no evidence that the VBID led to substitution to non‐targeted services or increased overall healthcare costs. However, we also observe no evidence that the program led to cost‐savings.
A non-parametric investigation of supply side factors and healthcare efficiency in the U.S.
Richard Gearhart & Nyakundi Michieka
Journal of Productivity Analysis, August 2020, Pages 59–74
Abstract:
In this study, the supply-side factors affecting healthcare efficiency in the U.S are studied using data between 2010 and 2017. The recently developed non-parametric order-m estimator is used for the analysis. Results suggest that the U.S. has output production that is 87.6-percent of the expected maximum amount, with life expectancy being 3 years too short given healthcare spending and education levels. However, conditioning efficiency estimates on supply-side secondary environmental variables explains 34 to 85-percent of inefficiency found in the average county. This suggests that hospital expenditures are an inefficient mechanism to improve healthcare efficiency, while focus should be placed on the number and composition of healthcare personnel. Our results suggest that lack of access to care due to provider availability is the biggest impediment to timely and successful care, and that increasing the number of primary care providers or nurse practitioners will improve poor health outcomes in many counties. This suggests that healthcare providers are the main avenues to improve healthcare inefficiency on the supply side.
Public insurance expansions and mental health care availability
Elson Oshman Blunt et al.
Health Services Research, August 2020, Pages 615-625
Data Source/Study Setting: The National Mental Health Services Survey (N‐MHSS) 2010‐2018.
Study Design: A quasi‐experimental differences‐in‐differences design using observational data.
Principal Findings: ACA‐Medicaid expansion increases the probability that a provider accepts Medicaid by 1.69 percentage points, 95 percent confidence interval: [0.0017,0.0321], which corresponds to an increase from 87.27 percent pre‐expansion to 90.27 percent postexpansion in expansion states or a 1.94 percent increase. We observe spillovers to Medicare, although this finding is sensitive to specification.
Investing in Ex Ante Regulation: Evidence from Pharmaceutical Patent Examination
Michael Frakes & Melissa Wasserman
NBER Working Paper, July 2020
Abstract:
The debate surrounding escalating prescription drug prices has increasingly focused on the legitimacy of the practice of brand-name manufacturers receiving patent protection on peripheral features of the drug such as the route of administration, as opposed to just the active-ingredient itself. The key question is whether these later-obtained, secondary patents protect novel features and represent true innovation or, instead, provide little to no innovative benefit and improperly delay generic entry. In this paper, we explore how the Patent Office may improve the quality of the secondary patents issued — thereby reducing the degree of unnecessary and harmful delays of generic entry — by giving examiners more time to review patent applications. Our findings suggest that current examiner time allocations are causing patent examiners to issue low quality secondary patents on the margin. We further set forth evidence suggesting that the costs to investing in greater ex ante scrutiny of secondary pharmaceutical patent applications by the Patent Office are greatly outweighed by the benefits, which include the avoidance of downstream litigation expenses and gains to consumer and total surplus from reduced drug prices.