• Ateev Mehrotra on a controversial Texas emergency medicine study

    In February, Annals of Emergency Medicine published a paper by Vivian Ho, Leanne Metcalfe, Cedric Dark, Lan Vu, Ellerie Weber, George Shelton Jr., and Howard Underwood. The main finding was that in a sample of Texas patients, it cost more for patients to be treated at emergency departments compared to comparable patients treated at urgent care centers. According to Health Data Buzz, the paper “caused an uproar among emergency department physicians.”

    Subsequent to publication, errors were found in an appendix, which the authors corrected and with no implications for the study’s main findings.

    Nevertheless, “the journal [conducted] another investigation, triggered by emergency physicians with reimbursement expertise in Texas, who raised additional concerns about the accuracy of the data.” During this investigation, the paper was temporarily removed from the journal’s website.

    After further review, Annals of Emergency Medicine republished the paper in September. It is available here, along with numerous commentaries, critiques, and rebuttals in the right-hand sidebar. One critique is by Paul Kivela, president-elect of the American College of Emergency Physicians, the publisher of Annals of Emergency Medicine. Asserting discrepancies between the paper’s findings and that of his own analysis, he requested the paper be retracted. The authors responded to Dr. Kivella’s critiques here.

    About this incident, I corresponded with Ateev Mehrotra, an associate professor of health care policy and medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center who has worked extensively with health plan claims data and is conducting research on free-standing emergency departments.

    Austin: What is a freestanding emergency department? What is an urgent care center? How are they different?

    Ateev: As implied by the name, FSEDs are emergency departments that are not within the confines of a hospital. Though they are free-standing FSEDs should still be able to address the full spectrum of illnesses treated at a hospital-based ED and when necessary transfer patients to a hospital when a hospital admission is required.

    In contrast an urgent care center does not offer care for the full spectrum of illness. Urgent care centers typically focus on low-acuity illnesses (e.g., sinusitis, strep throat) as well as sprains, strains, and simple fractures. Problems that are more complicated than this are referred to an emergency department.

    While both FSEDs and urgent care centers have extended and weekend hours, hospital-based EDs are typically open 24 hours a day and some free-standing EDs are also open around the clock. Urgent care centers are typically not open all the time.

    I’ve used the word “typically” a number of times in these descriptions. It is important to highlight that word as there is notable variation within FSEDs and urgent-care centers in their capacity. For example, some urgent care centers are simply after-hours clinics at a primary care practice with no laboratory or radiology services. At the other extreme, some urgent care centers have both x-ray and CT scans and can provide many IV medications.

    Austin: The study found that prices for patients with the same diagnosis were 10 times higher at freestanding EDs than at urgent care centers. For example, the study found that a routine urinalysis at a freestanding ED cost $51 versus only $3 at an urgent care center. How much of this could be due to differences in patient severity? What other factors that could explain it?

    Ateev: None of these results are surprising. It is widely recognized that hospital-based EDs are much more expensive than UCC. Because FSEDs are paid at similar rates as hospital-based EDs than we should also expect them to be more expensive.

    In the current payment system in the US, the relative price or reimbursement of a test such as a urinalysis or CT scan does not depend on patient severity. Rather, the level of reimbursement is primarily driven by where the care was provided.

    Austin: The study used data from one insurer (Blue Cross Blue Shield) in one state (Texas). How far would you generalize the findings beyond this one insurer and state?

    Ateev: As with any scientific study, we must be cautious when generalizing the results. However, I would not expect the results to be different in other states or with a different insurer, because the underlying reason for the price differences are similar in those contexts. FSEDs have been successful financially because they have been paid similar rates as hospital-based EDs.

    Austin: In his critique, Dr. Kivela used reported charges (not allowed amounts) from a freestanding facility in a Dallas suburb, finding significant differences with the paper’s results. How do reported charges differ from allowed amounts? To what extent could this explain the differences between Dr. Kivela’s analysis and the paper’s? How far would you generalize results based on one freestanding facility?

    Ateev: Charges are fiction. They have little relationship to what is the actual reimbursement. The best analogy is to the “rack rate” at a hotel. The rack rate is the rate for a night in the hotel you see posted in the room. But no one pays that rate for a night in the hotel.

    I have argued that we should simply eliminate the publication and dissemination of charge data. They are a relic of the past and all they do is cause confusion.

    Austin: This paper was controversial, particularly among some emergency physicians who didn’t want it to be published. Why?

    Ateev: The easy answer is money. Outside the controversy about FSEDs, the emergency medicine community is frustrated by the rhetoric around “overuse” of the emergency department for low-acuity conditions such as sinusitis or ear infections. Though they might have a straightforward diagnosis such as sinusitis, many in the emergency medicine community have argued that these patients had more severe symptoms and are not directly comparable to the care provided in a primary care office or urgent care. Concerns about emergency department spending among insurers has increased over the last decade as they have observed a dramatic increase in the reimbursement for the average emergency department visit. The severity of this conflict is illustrated in Anthem’s recent decision to deny emergency department claims for what it deems unnecessary visits.

    In that context come FSEDs. They are likely big profit generators for their investors and they also employ many emergency medicine physicians. Dr. Kivela is both an investor in FSEDs as well as a head of an organization of emergency medicine physicians. Feeling threatened by this research, ACEP is naturally going to attack the article.

    ACEP’s response was similar with when the New England Journal of Medicine published an article on balance billing in emergency departments. The findings of this balance billing article were also viewed as threatening by the emergency medicine community and again, ACEP attacked the methodology as flawed and accused the researchers of being biased.


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  • Today’s interview, basically: CSR edition

    Hypothetical discussion with a journalist:

    Q: If the federal government doesn’t pay the cost sharing reductions, consumers that rely on them are screwed, right?

    A: No, insurers have to pay them anyway.

    Q: <surprise> Oh! Well, then insurers are screwed, right?

    A: Not necessarily. They could raise premiums to cover the costs.

    Q: <insight> Ah ha! But, then consumers are screwed, yes?

    A: Some could be, yes, those that aren’t protected by premium tax credits. But those who get those credits are protected from premium increases.

    Q: <scratches head> Umm, so almost nobody is worse off?

    A: Well, like I said, those who aren’t protected by premium tax credits could pay higher premiums. But there is actually a scenario under which they aren’t worse off, and could be better off. It’s tricky, so I won’t go into it here. Go talk to Charles Gaba. But also keep in mind, since premiums go up, so do the tax credits, which the government pays.

    Q: But the government saves money in the end because of not paying cost sharing reductions, right?!

    A: No, the premium tax credit increases are larger than the cost sharing reductions savings. The government pays more, so taxpayers are worse off.

    Q: <OMG face> So this doesn’t even save money?! Ooookaaaayy, but it does cause some turmoil in the markets, right?

    A: Yes, it could. But there will be lawsuits. A very likely consequence is that the government ends up paying for the cost sharing reductions anyway. And, in the meantime, an immediate injunction could be granted to keep the cost sharing reduction payments flowing.

    Q: <faceplam face> So all of this could end up leading to … literally no change for anybody?

    A: Yeah, that sounds about right.

    Q: <gobsmacked silence>


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  • When a Drug Coupon Helps You but Hurts Others

    The following originally appeared on The Upshot (copyright 2017, The New York Times Company). It also appeared on page A16 of the September 26, 2017 print edition.

    It’s completely rational for you to use coupons to lower the cost of your brand-name drug purchase.

    But if the coupon is causing you to switch away from a generic drug with an overall lower cost, you may be playing a role in pushing up drug spending and premiums for others.

    Let’s say that I needed the brand drug Effexor XR, used to treat depression and anxiety disorders. It would cost me at least $65 per month on my health insurance plan. It retails for about twice that amount, and the difference would be picked up by my insurer. But the generic version, Venlafaxine, would cost my insurer far less, and my co-payment would be only $10 per month.

    My insurer and I would both save money if I purchased the generic. Wyeth, the maker of Effexor XR, would lose a sale.

    But Pfizer is fighting back. It offers an Effexor XR coupon card I could use at the pharmacy that would reduce my cost to as low as $4 per month. At that price, I would prefer the brand-name product. Why pay $10 for a generic when for $4 I can get the brand-name drug?

    But for the insurer, unless it is getting a discount or a rebate from the manufacturer, the cost is about $130 minus the co-payment.

    The company is by no means alone in this tactic. Many other drug manufacturers also offer coupon cards online for their brand-name products that compete with generics.

    Such coupons are not new. But from 2007 to 2010, brand-name drugs with coupons grew as a share of retail drug spending, to 54 percent from 26 percent. The figure may well be even higher today, according to Leemore Dafny, an economist at Harvard Business School.

    Though such coupons assist patients, they do nothing for insurers, for whom generics are still a better deal. And that’s the problem. By encouraging patients to switch from generic to brand drugs, coupons effectively impose higher costs on insurers. That ends up increasing premiums, and not for any particularly good reason. Generic drugs are generally regarded as equivalent to their corresponding brand products and are 80 percent cheaper, on average.

    This is precisely why plans impose much higher cost-sharing for brand-name drugs than their generic equivalent. Doing so can help keep premiums down without harming patients. Perhaps in response, Americans are using more generics. In 2006, 90 percent of prescriptions that were filled were for a generic equivalent to a brand-name drug, when such a generic was available. In 2012, that number had increased to 95 percent.

    The circumvention of insurance plan designs by these coupons has long been suspected to contribute to drug spending and premium growth. A recent study examining data from 2007 through 2010 and published in The American Economic Journal: Economic Policy, puts some numbers to the phenomenon. Co-pay coupons increase use of brand drugs for which generics are available by 60 percent and spending by as much as 4.6 percent.

    “Coupons raise spending in two ways,” said Ms. Dafny, an author of the study. “In addition to making more expensive brand drugs more attractive to consumers, it allows manufacturers to raise brand prices.”

    For example, the $4 cost with the coupon holds the consumers’ prices fixed at a low level. That allows the manufacturer to raise the overall price without losing sales. This raises spending, too, but for the insurer.

    In total, the coupons for drugs with generic competition are responsible for several billion dollars of additional drug spending per year, according to the study, which was also written by Christopher Ody with Northwestern’s Kellogg School of Management and Matthew Schmitt with the U.C.L.A. Anderson School of Management.

    The coupons do so, by and large, without expanding the number of people using medications, just by switching which product they purchase — brand or generic. Drug manufacturers also offer coupons for drugs without generic competition, but they were not the focus of the study.

    If drug coupons are problematic for insurers and drive up premiums, why don’t insurers reject them?

    “They say they can’t ban them because they can’t tell when a coupon is being redeemed at the pharmacy counter,” Ms. Dafny said. But “public payers ban them, after all, and their enrollees pick up prescriptions at the same pharmacies.”

    Medicare, for example, bans their use. But enforcement is incomplete, and by one estimate 6 percent of Medicare enrollees use coupons anyway. And Massachusetts has passed laws that ban co-pay coupons for brand drugs with generic equivalents.

    The likelier explanation, Ms. Dafny says, is that denying consumers access to coupons would cause a backlash. In the short term, out-of pocket-prices would rise for the few: the consumers relying upon them. But in the long term, encouraging consumers to use generic drugs when available — which is what insurers are trying to do — would reduce drug spending and premiums for everyone.


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  • Frakt’s rules of temporal tense in research articles

    Very early in my research career (actually, as a grad student) I noticed that researchers were not consistent in their use of temporal tense (past, present, future) in journal articles and manuscripts. It was (and still is) all over the map. You’ll see stuff like this, even within the same paper:

    • “We ran OLS regressions and find …” [“ran” is past tense; “find” is present]
    • “We estimate a model with fixed effects.” [“estimate” is present]
    • “The coefficient is … which meant that.” [“is” is present; “meant” is past]

    Yikes! Which of these is correct? This bothered me, and I wondered if there were rules about whether research was or is or results are or were. I think I asked around and got different opinions. Then I made up my own set of rules, which I’ve followed to this day, and attempt to get others to follow. They’re below. Do you agree with them? Comments open for one week.

    All the things I (or my colleagues and I) did methodologically, I (we) did in the past, so I use past tense for methods and data collection. However, all the results are true for all time (so we think), so I like to report results in the present tense, with one exception.

    Example: “We ran [past] an OLS and found [past] that people with bigger feet are [present] smarter than people with smaller feet, even controlling for age.”

    The only exception is if I’m explicitly referencing a prior year. Example: “However, we found that in the 1990s, people with bigger feet were [past, because we’re explicitly referencing a past year] stupider than people with smaller feet.” It would read oddly to say that people in the 1990s with bigger feet “are” stupider …

    That’s it. Not hard to follow. Even if you disagree, it has the advantage of consistency. At a minimum, authors should at least figure out what tense they want to use for methods and results and then do so consistently in a single paper. Read closely, and you’ll find that researchers don’t/didn’t/and may never pay attention to tense.


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  • Prescription Drug Monitoring Programs: A Helpful Tool to Combat the Opioid Crisis

    The following originally appeared on The Upshot (copyright 2017, The New York Times Company).

    The opioid crisis is so complex and so large — drug-related deaths now exceed those caused by cars, H.I.V. or guns — that there is no single solution. Among the partial ones: prescription drug monitoring programs, an approach highlighted in the draft report from President Trump’s Commission on Combating Drug Addiction and the Opioid Crisis.

    The epidemic has led every state but Missouri to establish one of these programs, which allow doctors and regulators to track how many opioid medications and other controlled substances have been dispensed to patients. A new analysis shows that prescription drug monitoring programs can reduce the overuse of narcotics — but that many states have adopted relatively weak versions.

    Opioid medications, like Vicodin, Percocet or OxyContin, can be useful in treating pain. But when patients receive many prescriptions — whether from multiple doctors at the same time or from the same one for a long period of time — it can signal a problem. Patients with more pills than they need could endanger themselves or divert them to the black market. Longer-term use increases the risk of addiction and other bad outcomes.

    Data from the Centers for Disease Control and Prevention show that opioid overdoses and prescriptions grew in parallel between 1999 and 2010. Though prescriptions have fallen more recently, they have been written for longer durations. Black-market opioids — heroin and, in particular, fentanyl — also contribute to overdose deaths. But many who use these drugs also use prescription opioids and may have become dependent on them first.

    That’s where prescription drug monitoring programs come in. They collect data from pharmacies to track what prescriptions for controlled substances patients have filled. The databases can be used to assess whether patients are getting more opioids than they can safely use. In addition, they can be used to tell if patients are getting other drugs, like a benzodiazepine, that are dangerous to use in combination with an opioid.

    According to research summarized by the Leonard Davis Institute of Health Economics at the University of Pennsylvania, prescription drug monitoring programs can help reduce the amount or strength of opioids prescribed and dispensed. When physicians or dentists check the database and see a worrisome pattern of dispensed opioids, they can deny or change a prescription, screen for an opioid or other substance use disorder, and even counsel the patient to seek other forms of pain management or addiction treatment, if warranted.

    Dr. Zachary Meisel, an author of the Leonard Davis review, uses a drug database when he practices in the Hospital of the University of Pennsylvania emergency department. In related work, he found that the databases often prompt conversations about opioids between provider and patient. In other cases, he said, prescription drug monitoring programs “help dispel a suspicion that a patient is seeking additional opioids.”

    Monitoring programs are mitigating the opioid epidemic. One study, published in Health Affairs, found they’re associated with a decline in the chance a patient with pain will receive a Schedule II opioid prescription, to 3.7 percent from 5.5 percent. The study was based on a sample of 26,275 doctor’s office visits in the 24 states that started drug monitoring operations during 2001-2010. The results of another study— of Medicare beneficiaries over 2007-12 in 10 states — suggest that such programs are associated with reductions in the strength of opioid medications dispensed and the duration of opioid prescriptions. Deaths related to oxycodone use fell 25 percent in 2012, after Florida created a monitoring program.

    But other work shows that having access to a prescription drug monitoring program is not enough. States can make the programs much more effective by mandating prescribers to engage with it. Twenty-five states require prescribers — physicians and dentists — to register with their state database. This forces prescribers to push through the first barrier to use — just signing up — and seems to make a difference.

    One study, published this year in Health Affairs, found that states that required prescriber registration saw a 10-percentage-point reduction in use of Schedule II opioids among Medicaid enrollees, relative to states that did not require registration.

    Most, but not all, states with mandatory registration also require prescribers to consult their state databases before prescribing an opioid. A study published in Health Services Research this year found that states requiring this experienced a reduction in the duration of opioid prescriptions in the Medicare population. Another study, also of the Medicare population, found that mandatory use was associated with fewer patients getting opioids from multiple doctors — so-called doctor shopping — and with patients holding a smaller supply of the drugs.

    Studies expanding beyond the Medicare population to include younger Americans find that use mandatesreduce admissions to treatment facilities for opioid use disorder. A New York study of prescriptions by dentists in an urgent care center found that when its mandatory program went into effect, opioid pills prescribed went down 78 percent.

    When states roll out monitoring programs, opioid-related overdose deaths fall, according to one study. And they decline more in states that mandate their use. Though some studies have not found that such programs reduce opioid use or opioid-related mortality, it could be because they do not distinguish between programs with such mandates and those without.

    Nevertheless, prescription drug monitoring programs have limitations. They can track only dispensed drugs, not black-market drugs (like heroin and fentanyl). And though they can be used to tell how many and what kinds of opioids are dispensed, they can’t tell who takes them or if they’re diverted to the black market. The programs could also be more effective if more prescribers used them. One study found that only about half of primary care physicians use the database. Among those who use them, many do not do so routinely.

    The data monitoring programs could be more useful if integrated with other health data and shared across states, as recommended by the opioid commission. Doing so could make it easier to combine prescription data with other data that could indicate problems — like a history of mental health or substance use disorders. These data, together, can help predict who is most likely to suffer adverse outcomes from prescribed opioids. This is an approach being adopted by the Department of Veterans Affairs, with an evaluation underway. [Disclosure: I am involved in that evaluation.]

    Prescription drug monitoring programs are not the only tool to combat the opioid crisis. Other state laws that tighten regulations of pain clinics and combat doctor shopping can help, too, reducing overdose deaths and admissions to treatment facilities. Wider distribution of naloxone, which can reverse an opioid overdose, and public education on its delivery can also help, as can greater access to safe means of disposing of unused pills.

    Prescription drug monitoring programs have shown promise, but so long as relatively inexpensive heroin and fentanyl are available on the street, they will never be a full solution on their own.


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  • Public Health Care Programs: Lower Cost but Not Lower Quality

    The following originally appeared on The Upshot (copyright 2017, The New York Times Company).

    In recent days, Democrats have stepped into the health policy vacuum created by the Republicans’ failure to repeal and replace the Affordable Care Act. Proposals making the rounds include allowing Americans to buy into Medicare at age 55 or to buy into Medicaid.

    Both Medicare and Medicaid pay lower prices to health care providers compared with private market plans offered by employers and in the Affordable Care Act marketplaces. On that basis, you might think these public programs are more cost-efficient. Are they?

    Imagine that I take my car to the cheapest mechanic in town, while you take yours to the most expensive. My repairs, though costing less, don’t always fix the problem or last as long. You get what you pay for.

    Let’s take a look at whether something similar is happening with public health programs. One study examined claims data for 26 low-value services and found that as much as 2.7 percent of Medicare’s spending is on these services alone, which include ineffective cancer screening, diagnostic testing, imaging and surgery. That sounds pretty bad.

    But a paper that appeared in Health Services Research this year suggests that private plans do not perform better. Looking at the years 2009 to 2011, the authors compared the rates at which Medicare and private health plans provided seven low-value services. The services compared were among those identified as unnecessary by national organizations of medical specialists as part of the Choosing Wisely campaign.

    The researchers found that four of the seven services they examined were provided at similar rates by Medicare and commercial market plans: cervical cancer screening over age 65; prescription opioid use for migraines; cardiac testing in asymptomatic patients; and frequent bone density scans. Medicare was less likely to pay for unnecessary imaging for back pain, but more likely to pay for vitamin D screening.

    This finding might seem counterintuitive. Commercial market plans pay higher rates and confer higher profit margins, meaning there is more financial incentive for physicians to provide privately insured patients more of all types of care, whether low or high value.

    But other results from the study suggest a more likely explanation: Doctors tend to treat all their patients similarly, regardless of who is paying the bill.

    “What kind of insurance you have does affect your access to health care,” said Carrie Colla, associate professor of the Dartmouth Institute for Health Policy & Clinical Practice and the lead author of the study. “But once you’re in front of the doctor, by and large you’re treated the same way as any other patient.”

    One apparent exception found in the study involved the seventh service it examined: cardiac testing before low-risk, noncardiac surgery. This service was provided to 46 percent of Medicare beneficiaries and 26 percent of privately insured patients. The large difference could reflect the fact that cardiac problems are more prevalent among older people. So a doctor with equal concern for all her patients might test Medicare patients at a higher rate for that reason. Nonetheless, such testing is considered low value even for the Medicare population.

    Another recent study, published in JAMA Internal Medicine, also found little relationship between insurance status and low-value care. The study found no difference in the rates at which seven of nine low-value services were provided to patients on Medicaid versus those with private coverage. Six were also provided at the same rates for uninsured and privately insured patients.

    Moreover, the study found that physicians who see a higher proportion of patients on Medicaid provide the same rate of low- and high-value services for all their patients as other physicians do. This is an important finding because Medicaid pays doctors less than private plans do, raising concerns that higher-quality doctors would tend not to participate in the program.

    “Despite concerns to the contrary, Medicaid patients don’t appear to be seeing lower-quality doctors,” said Dr. Michael Barnett, lead author of the study, a physician with the Brigham and Women’s Hospital and an assistant professor at the Harvard T.H. Chan School of Public Health. “Though raising the prices Medicaid pays doctors may increase physician participation, enhancing enrollees’ access to care, it isn’t likely to change the quality of care patients receive once they are in the doctor’s office.”

    If insurance status doesn’t influence how much low-value care patients are being offered, what does? In part, it seems related to the history and organization of local health care markets. A big culprit, according to Ms. Colla’s study, is a market’s ratio of specialists, like cardiologists and orthopedists, to primary care physicians. In areas where there are relatively more specialists, there is also more low-value care. That’s not to say that specialists don’t provide valuable services — but it suggests that they tend to provide more low-value care as well.

    In a way, this is good news — the medical system doesn’t seem to discriminate by insurance status. It also means that public programs appear to be relatively cost-efficient, spending less than private payers for care of similar quality. That bodes well for Democrats’ proposals to expand Medicare or Medicaid.

    But the bad news is that the study results imply that the value of care is hard to influence by adjusting prices. In a normal market, paying less for something would send a message of its low value, prompting people to provide less of it. The fact that price apparently does not influence doctors’ decisions is just another way in which health care does not seem to function like other markets.


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  • Opioid detoxification is not enough

    But detoxification is actually extremely dangerous. Nearly every addict who successfully completes a week-long detox program without further treatment relapses, and in a world with increasingly powerful synthetic drugs on the market, the risk of overdosing and dying during a relapse has become ever more threatening.

    That’s from a nicely written and brief piece in WaPo by Michael Stein, an internist and the chairman of the department of health law, policy and management at Boston University. Read the whole thing.


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  • Coverage expansion and primary care access

    The following originally appeared on The Upshot (copyright 2017, The New York Times Company) while I was on vacation.

    When you have a health problem, your first stop is probably to your primary care doctor. If you’ve found it harder to see your doctor in recent years, you could be tempted to blame the Affordable Care Act. As the health law sought to solve one problem, access to affordable health insurance, it risked creating another: too few primary care doctors to meet the surge in appointment requests from the newly insured.

    Studies published just before the 2014 coverage expansion predicted a demand for millions more annual primary care appointments, requiring thousands of new primary care providers just to keep up. But a more recent study suggests primary care appointment availability may not have suffered as much as expected.

    The study, published in April in JAMA Internal Medicine, found that across 10 states, primary care appointment availability for Medicaid enrollees increased since the Affordable Care Act’s coverage expansions went into effect. For privately insured patients, appointment availability held steady. All of the gains in access to care for Medicaid enrollees were concentrated in states that expanded Medicaid coverage. For instance, in Illinois 20 percent more primary care physicians accepted Medicaid after expansion than before it. Gains in Iowa and Pennsylvania were lower, but still substantial: 8 percent and 7 percent.

    Though these findings are consistent with other research, including a study of Medicaid expansion in Michigan, they are contrary to intuition. In places where coverage gains were larger — in Medicaid expansion states — primary care appointment availability grew more.

    “Given the duration of medical education, it’s not likely that thousands of new primary care practitioners entered the field in a few years to meet surging demand,” said the Penn health economist Daniel Polsky, the lead author on the study. There are other ways doctor’s offices can accommodate more patients, he added.

    One way is by booking appointment requests further out, extending waiting times. The study findings bear this out. Waiting times increased for both Medicaid and privately insured patients. For example, the proportion of privately insured patients having to wait at least 30 days for an appointment grew to 10.5 percent from 7.1 percent.

    The study assessed appointment availability and wait times, both before the 2014 coverage expansion and in 2016, using so-called secret shoppers. In this approach, people pretending to be patients with different characteristics — in this case with either Medicaid or private coverage — call doctor’s offices seeking appointments.

    Improvement in Medicaid enrollees’ ability to obtain appointments may come as a surprise. Of all insurance types, Medicaid is the least likely to be accepted by physicians because it tends to pay the lowest rates. But some provisions of the Affordable Care Act may have enhanced Medicaid enrollees’ ability to obtain primary care.

    The law increased Medicaid payments to primary care providers to Medicare levels in 2013 and 2014 with federal funding. Some states extended that enhanced payment level with state funding for subsequent years, but the study found higher rates of doctors’ acceptance of Medicaid even in states that didn’t do so.

    The Affordable Care Act also included funding that fueled expansion of federally qualified health centers, which provide health care to patients regardless of ability to pay. Because these centers operate in low-income areas that are more likely to have greater concentrations of Medicaid enrollees, this expansion may have improved their access to care.

    Other trends in medical practice might have aided in meeting growing appointment demand. “The practice and organization of medical care has been dynamic in recent years, and that could partly explain our results,” Mr. Polsky said. “For example, if patient panels are better managed by larger organizations, the trend towards consolidation could absorb some of the increased demand.”

    Although the exact explanation is uncertain, what is clear is that the primary care system has not been overwhelmed by coverage expansion. Waiting times have gone up, but the ability of Medicaid patients to get appointments has improved, with no degradation in that aspect for privately insured patients.


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  • Answering questions about Medicare Advantage

    Readers asked some questions about my most recent piece on Medicare Advantage. Here they are, with my answers.

    1. Isn’t it true that the government pays Medicare Advantage plans a lot less today than they did in 2010, the year of focus of the study you wrote about?

    Almost! According to government statistics, in 2010, Medicare Advantage plans received payments from the Medicare program equivalent to 113 percent of what it would cost a similar beneficiary to be covered by the traditional program. In 2017, that figure is 100 percent, but grows to 104 percent if you more accurately account for differences in the health of Medicare Advantage enrollees and traditional Medicare beneficiaries.

    2. If the government is now paying the same (or almost the same) for an enrollee in Medicare Advantage as for a traditional Medicare beneficiary, what’s the problem?

    Well, some believe that we should be taking advantage of market efficiency to save the government money, which was part of the original motivation for including private plan alternatives in Medicare. One key point of my piece was to compare what Medicare Advantage plans receive from the government to what it costs the plans to provide care, including marketing, administration, and profit as well. On that basis, in 2010, the plans received 8.5 percent more in government revenue than their costs. In 2017, that figure is 11 percent. What this means, as I wrote, is that Medicare Advantage plans are more efficient at managing care than the traditional program, but that taxpayers aren’t benefiting from that efficiency as much as they could be.

    3. Where does that extra money go?

    Medicare Advantage plans are supposed to use the additional revenue to enhance their benefits — either by providing coverage for things traditional Medicare does not cover (e.g., eyeglasses and hearing aids) or by reducing cost sharing. There is no doubt plans do this, as I wrote in my piece. And this is of tremendous benefit to enrollees, particularly lower income ones that cannot afford a supplemental plan to fill in the gaps in traditional Medicare.

    A post on the Health Affairs blog documents in greater detail the kinds of additional benefits Medicare Advantage plans provide, beyond what’s covered by traditional Medicare. Just over half get basic dental benefits, three-quarters get eye exam coverage, just under half get a hearing aid benefit, and about one-third get help paying for gym memberships. The vast majority of Medicare Advantage enrollees that get these benefits, and others, do so with no additional premium.

    But there is some doubt that plans provide additional benefits like these as efficiently as they could. Because the Medicare Advantage market is not as competitive as it might be, studies have shown that plans may pay more for benefits than they should, and enrollees receive less value from them than their costs. However, it’s also the case that the Affordable Care Act limits Medicare Advantage spending on things like marketing, management, and profit to 15 percent of revenue.

    4. Isn’t it true that sicker patients tend to leave Medicare Advantage?

    Yes. This is something I wrote about in another Upshot post. Because Medicare Advantage plans have networks, enrollees are not covered for just any doctor they wish. Medicare Advantage plans may also impose other restrictions on care, like requiring prior authorization for some services. For sicker patients, such practices impose a heavier burden, because they need more care and see more doctors. Some of those patients choose to leave Medicare Advantage and return to the traditional Medicare program, which has an open network and does not attempt to manage care.

    5. So, given all this, what is the value of Medicare Advantage?

    Medicare Advantage plans have been found to be of higher quality than traditional Medicare. They also reduce wasteful use of health care by managing care, something the traditional program doesn’t do at all. Finally, they fill in gaps in coverage and cost sharing of the traditional program. They’re able to do so when the traditional program is not because changing traditional Medicare would require legislation, and it’s hard to achieve political consensus on anything in health care these days.

    The bottom line is that Medicare Advantage plans offer choices that some beneficiaries value. They can deliver the Medicare benefit more efficiently and with higher quality. Yet, taxpayers do pay more to plans than they could, given plans’ own costs. Paying less might mean plans leave the market and that enrollees get less. There are always tradeoffs.


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  • Medicare Advantage plans spend less on care than traditional Medicare, but are paid more for it

    The following originally appeared on The Upshot (copyright 2017, The New York Times Company).

    The Medicare Advantage program was supposed to save taxpayers money by allowing insurers to offer older Americans private alternatives to Medicare. The plans now cover 19 million people, a thirdof all those who qualify for Medicare. Enrollee satisfaction is generally high, and studies show that plans offer higher quality than traditional Medicare. But the government pays insurers more than they pay out for patient care — in some years, it turns out, a great deal more.

    Concern about Medicare Advantage’s cost has found sharp expression in a recent suit brought by the Justice Department charging UnitedHealth with excessive billing of the government. While that suit plays out, research published by the National Bureau of Economic Research provides context.

    The study, released in January, found that the revenue Medicare Advantage plans received in 2010 exceeded the amount they paid out for medical care by a hefty 30 percent. At more than $2,000 per enrollee per year, that probably topped $20 billion dollars, nearly all from federal payments, not enrollee premiums. The study relied on Medicare Advantage billing data obtained from three large insurers across 36 states, a type of data the government doesn’t yet release.

    Paradoxically, even though Medicare Advantage plans cost taxpayers more than traditional Medicare, they spend less on care. In fact, one of the motivations of the program is to capture that lower spending as savings for taxpayers. It hasn’t worked out that way.

    “Our study found that health care spending for enrollees in Medicare Advantage plans is 10 to 25 percent lower than for comparable enrollees in traditional Medicare,” said Amy Finkelstein, an M.I.T. economist and one of the study’s authors. “Yet government payments to plans is far above their lower health care costs.” The study was also conducted by four economists at Stanford: Vilsa Curto, Liran Einav, Jonathan Levin and Jay Bhattacharya.

    The analysis raises two questions: How do Medicare Advantage plans spend so much less on care? And, given that, how do we account for their higher costs to taxpayers?

    One reason for the lower spending is that Medicare Advantage enrollees use less care or use lower-cost care. For example, compared with traditional Medicare patients, Medicare Advantage patients are more likely to go home after a hospital visit, rather than to a skilled nursing facility. Medicare Advantage patients see specialists relatively less often and receive fewer inpatient operations, but more outpatient ones, which are cheaper. All of these are what you’d expect from care management techniques used by Medicare Advantage: referral requirements and narrow networks of doctors, for instance.

    Previous studies have also shown that Medicare Advantage enrollees use less of some kinds of care, including hospital care, versus traditional Medicare beneficiaries.

    “This is exactly what Medicare Advantage plans were designed to do,” said Dr. Bruce Landon, a physician with Harvard Medical School. “They manage the utilization of services while also assuring that enrollees receive recommended care, all at lower cost to patients.” Dr. Landon’s research on the program found that Medicare Advantage enrollees use 20 percent to 30 percent less emergency department and outpatient surgical care, as well as receive fewer hip and knee replacements.

    Medicare Advantage plans also attract enrollees who tend to be healthier than traditional Medicare beneficiaries, a feature that yielded intriguing results in light of the lawsuit against UnitedHealth. When the M.I.T.-Stanford team compared the two kinds of Medicare patients, they found that Medicare Advantage patients were 25 percent less costly than traditional Medicare patients. But when the team more rigorously matched the health of both sets of patients, the Medicare Advantage patients were just 10 percent less costly. This drop does not prove the suit’s claims of overbilling, but it allows for the possibility.

    Why does the government pay Medicare Advantage plans so much more than it costs them to cover care? It’s partly an intentional, if controversial, design of the program. Congress has established payment formulas and authorized bonus programs intended to help the private market.

    The government also pays insurers for administrative and marketing expenses. Yet even when these additional expenses are factored in, the government still pays plans an excess. According to the Medicare Payment Advisory Commission, federal payments to the plans exceeded health care costs and other expenses by 8.5 percent in 2010. Though the Affordable Care Act has reduced payments to plans and limits the amount they can attribute to administration and marketing, they still receive government payments in excess of their costs today.

    Not all of the “excess” federal money goes to the insurers’ bottom line. Traditional Medicare entails significant cost sharing for beneficiaries; they are responsible for 20 percent of the costs of doctors visits, for example. Most Medicare Advantage plans don’t require as much cost sharing or out-of-pocket payments. And some of the influence of Medicare Advantage plans’ managed care techniques rub off on the traditional program, too, reducing spending — a spillover effect that partly explains the slowdown in growth of Medicare spending.

    But is the cost of Medicare Advantage worth the benefits it delivers? It’s hard to know without knowing more about patients’ diagnoses, services used and other data. The Medicare program had been collecting such data since 2012 and was planning to release it, but, expressing concerns about its quality, recently put off doing so.


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