• Healthcare Triage News: But, But, Medicaid Recipients Are Already Working

      02/15/2018
      Aaron Carroll

    Recently, the Trump administration put forward plans to force all the able-bodied lazy people with Medicaid coverage to finally get jobs. The problem with this is that pretty much all the Medicaid recipients who can work already have jobs. So, how’s all this going to work?

    @aaronecarroll

     
      Health Policy
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  • A new study finds cost shifting, but I’m skeptical

      02/13/2018
      Austin Frakt

    A new NBER working paper by Michael Darden, Ian McCarthy, and Eric Barrette claims to have found evidence of hospital cost shifting. I’m not so sure.

    I will skip the throat clearing about what hospital cost shifting is, why or when we should or should not expect it to occur in theory, and what the prior literature says in some detail about whether it occurs in practice. Go read this Upshot post and all it links to for that. I will only say that based on the prior literature, we should begin consideration of the new paper with some skepticism about claims of cost shifting — it is reasonable to believe it doesn’t happen.

    Therefore, even to find, with credible methods, a modest degree of cost shifting — like $0.10 per dollar of public payer shortfall is shifted to private payers — would be a big deal.

    What Darden et al. found isn’t modest. It’s huge. They estimated that more than half of Medicare payment shortfalls are recouped by jacking up prices charged to private insurers — 56 cents on the dollar, to be precise. Yow! (Right here you should wonder why hospitals would stop at 56 cents on the dollar. If your answer is, “that’s the limit of their market power,” you’re on the right track. That also means they’ve exhausted their market power and, unless they acquire more, cost shifting should halt. And right there is why more than rare claims of cost shifting aren’t credible.)

    But, without even looking at methods, we should be careful about taking this figure to mean that there really is cost shifting at a rate of 56 cents on the dollar. Given prior work, a Bayesian might, at most, update his/her thinking from “there is no cost shifting” to “there could be a little cost shifting.” However, the methods might not even warrant that.

    So, what’s up with the methods? Craig Garthwaite did a nice job pointing out a few issues, starting with this tweet:

    Let’s unpack a few of his concerns, which I share. First of all, the headline result of massive cost shifting is based on examining how private hospital prices change due to changes in hospitals’ Medicare penalty status. That is, Medicare financially penalizes hospitals for lower quality in several ways, which the paper examines. The study found that hospitals that change from not-penalized to penalized status increase their private prices more than hospitals that don’t. From that, they back out a cost shift rate of 56 cents on the dollar.

    But there’s another way to estimate what the cost shift rate is, not by looking at changes in penalty status, but by looking at what the penalty amount is. How much does a hospital cost shift when it is penalized an additional dollar? When estimated this way, the authors find small and statistically insignificant evidence of cost shifting, which is a highly credible finding on its face. (See footnote 17 of the paper.)

    So, one has to ask, why might hospitals that become penalized differ from those that don’t, and in ways that are associated with increases in private prices? About this, Craig made a very good point: Hospitals were aware in advance of their risk of being penalized. Those that looked like they would be may have invested more in quality improvements. For some, those improvements didn’t translate into avoiding the penalty, but they did increase the value those hospitals were delivering. Private payers may have been willing to pay more for that additional quality. It’s possible they’re even willing to pay more for investments in quality that haven’t yet translated into actual improvements.

    Separately, it’s also possible that hospitals that respond to potential penalties change their marginal costs, which would change their profit- (or revenue-) maximizing price. This could look like cost shifting, but it’s still a response to a change in quality or, more generally, cost structure. It wouldn’t be a response to Medicare reimbursement shortfalls in the sense that if Medicare just cut payments without linking them to quality, one would not expect the same change in private prices.

    The BIG IDEA here is that firms (here, hospitals) respond to incentives in ways that change their production function (their costs and the value they provide). In fact, this is the point of Medicare quality penalty programs. They should affect what hospitals do and that, itself, can affect prices, as explained above. That’s not cost shifting. Not being able to control for that in a cost shifting study is a big problem. The particular approach taken in this paper likely doesn’t address this problem, leading to estimates that should not be attributed to cost shifting.

    I will close by adding that this paper is highly useful for tracking down claims of cost shifting made by hospital executives and policymakers. See the main text as well as footnote 1.

    PS: I should make explicit what should be obvious. I would appear to have a large interest in arguing away findings of hospital cost shifting, given my prior writing on the issue. I am so aware of that apparent conflict that I had a few colleagues without that conflict look over this post before publishing. All of their input was incorporated to their satisfaction.

    @afrakt

     
      Health Policy
      cost shifting
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  • Healthcare Triage: The Ups and Downs of Evidence-Based Medicine

      02/13/2018
      Aaron Carroll

    This week on HCT, we’re talking about evidence-based medicine. We talk about it a lot here on the show, but what exactly does the term mean? Why is evidence-based medicine useful, and what can we do to use it more effectively?

    @aaronecarroll

     
      Health Policy
      evidence-based medicine, Healthcare Triage, Upshot
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  • Healthcare Triage: Blood Pressure Guidelines Have Changed, and PANIC!

      02/07/2018
      Aaron Carroll

    Actually, don’t panic. Or maybe do panic. I don’t know. The American Heart Association released new blood pressure guidelines late last in 2017. New coverage was breathless, and claimed millions of Americans suddenly had high blood pressure. But, it’s a little more complicated than that.

    @aaronecarroll

     
      Health Policy
      blood pressure, Healthcare Triage, hypertension, Upshot
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  • JAMA Forum: The economy and health

      02/07/2018
      Austin Frakt

    It’s important to recognize that the financial effects of a shrinking or growing economy—employment and reduced income—can accrue to different people than its health effects. This is demonstrated in an intriguing study by Ann Stevens, PhD, Douglas Miller, PhD, Marianne Page, PhD, and Mateusz Filipski, PhD. They found that increases in mortality during strong economic conditions are concentrated among the elderly, particularly older women living in nursing homes. One mechanism for this phenomenon is that employment levels in skilled nursing facilities—particularly for nursing staff—go down when the unemployment rate falls. This might occur because nurses who would otherwise work in those facilities are able to find better jobs elsewhere, or their other household members are able to gain employment. Moreover, it may be the case that during economic expansions, the nursing staff that facilities are able to retain are of lower quality. Since quality is positively correlated with nursing home staff levels, this connection between employment rates and nursing home mortality is plausible.

    That’s from my latest on the JAMA Forum. Go read the rest!

    @afrakt

     
      Economics, Explaining Research
      income, JAMA Forum, mortality, wealth
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  • Healthcare Triage News: The Flu is Terrible!

      02/01/2018
      Aaron Carroll

    This year’s influenza is really bad. Hospitalizations are up, and health departments in 49 states report widespread flu. Apparently, if you don’t want the flu, go to Hawaii. Just kidding. You can still get a flu shot, and you don’t have to go to Hawaii!

    @aaronecarroll

     
      Health Policy
      Healthcare Triage, influenza
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  • The CDC Director bought tobacco stocks. Should we laugh or cry?

      02/01/2018
      Bill Gardner

    The Director of the Centers for Disease Control resigned yesterday after Politico disclosed that

    [She] bought shares in a tobacco company one month into her leadership of the agency charged with reducing tobacco use — the leading cause of preventable disease and death and an issue she had long championed.

    The CDC’s core mission is the prevention of mortality and morbidity. According to the CDC,

    Smoking is the leading cause of preventable death. Worldwide, tobacco use causes nearly 6 million deaths per year, and current trends show that tobacco use will cause more than 8 million deaths annually by 2030.

    Investing in a tobacco stock while running the CDC is such brazenly deviant behaviour that one wants to laugh. But there is something significant at stake.

    C. S. Peirce remarked that asserting a proposition entails a commitment to its truth.

    What is the nature of assertion? We have no magnifying-glass that can enlarge its features, and render them more discernible; but in default of such an instrument we can select for examination a very formal assertion, the features of which have purposely been rendered very prominent, in order to emphasize its solemnity. […] This ingredient, the assuming of responsibility, which is so prominent in solemn assertion, must be present in every genuine assertion. For clearly, every assertion involves an effort to make the intended interpreter believe what is asserted, to which end a reason for believing it must be furnished. But if a lie would not endanger the esteem in which the utterer was held, nor otherwise be apt to entail such real effects as he would avoid, the interpreter would have no reason to believe the assertion.

    Saying something with the intention that others should believe it makes us responsible, to the best of our abilities, for the truth of that statement. When scientific journals require authors to give their final approval of a manuscript, that ritual expresses that responsibility and commitment. Conversely, when someone repeatedly lies, we learn that their statements are just performances, with at best accidental connections to facts.

    Something similar happens with values. When you espouse a value, you assert that it is a reason motivating your actions. Hence leaders of organisations are responsible for ensuring that the actions of employees comport with the organisation’s values. So when people behave in ways that traduce their espoused values, we learn that those espousals are just performances — empty signals of virtue — not the provision of reasons for action.

    It’s wise to be sceptical about the statements of fact and espousals of values by leaders of nations or organisations. Nevertheless, it corrodes democracy when leaders have little honesty or integrity. We can’t have reasoned public discourse about laws or policy if there’s no glue attaching statements to facts or actions to values.

    @Bill_Gardner

     
      Uncategorized
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