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The Changing Role of Government in Financing Health Care: An International Perspective by Mark Stabile and Sarah Thomson (National Bureau of Economic Research)

This paper explores the changing role of government involvement in health care financing policy outside the United States. It provides a review of the economics literature in this area to understand the implications of recent policy changes on efficiency, costs and quality. Our review reveals that there has been some convergence in policies adopted across countries to improve financing incentives and encourage efficient use of health services. In the case of risk pooling, all countries with competing pools experience similar difficulties with selection and are adopting more sophisticated forms of risk adjustment. In the case of hospital competition, the key drivers of success appear to be what is competed on and measurable rather than whether the system is public or private. In the case of both the success of performance-related pay for providers and issues resulting from wait times, evidence differs both within and across jurisdictions. However, the evidence does suggest that some governments have effectively reduced wait times when they have chosen explicitly to focus on achieving this goal. Many countries are exploring new ways of generating revenues for health care to enable them to cope with significant cost growth. However, there is little evidence to suggest that collection mechanisms alone are effective in managing the cost or quality of care.

Impact of Mortality-Based Performance Measures on Hospital Pricing: the Case of Colon Cancer Surgeries by Avi Dor, Partha Deb, Michael Grossman, Gregory Cooper, Siran Koroukian and Fang Xu (National Bureau of Economic Research)

We estimate price regressions for surgical procedures used to treat colon cancer, a leading cause of cancer mortality. Using a claims database for self-insured employers, we focus on transaction prices, rather than more commonly available billing data that do not reflect actual payments made. Although the responsiveness of prices to hospital performance depends on the impact of quality on the slope of the quantity-demand of the payers, which are not known a priory, it is often assumed that higher performing hospitals are able to command higher prices. To test this hypothesis we construct performance rankings, based on hospital excess-mortality and incorporate them into our price models. We are interested in the type information available to large payers who negotiate prices on behalf of their members. To get a cancer-specific index we emulate the widely-reported risk-adjustment methodology used in the federal Hospital Compare reporting system for ranking cardiac performance. The effects were consistently negative in all models (adverse quality reduces price), though not significant. However, we observe a rational pricing structure whereby higher treatment complexity is reflected in higher price differentials, controlling for patient characteristics and market structure.

Worsening Trends in the Management and Treatment of Back Pain by John Mafi, Ellen McCarthy, Roger Davis, and Bruce Landon (JAMA)

Back pain treatment is costly and frequently includes overuse of treatments that are unsupported by clinical guidelines. Few studies have evaluated recent national trends in guideline adherence of spine-related care […] We assessed imaging, narcotics, and referrals to physicians (guideline discordant indicators). In addition, we evaluated use of nonsteroidal anti-inflammatory drugs or acetaminophen and referrals to physical therapy (guideline concordant indicators). […] Nonsteroidal anti-inflammatory drug or acetaminophen use per visit decreased from 36.9% in 1999-2000 to 24.5% in 2009-2010 (unadjusted P < .001). In contrast, narcotic use increased from 19.3% to 29.1% (P < .001). Although physical therapy referrals remained unchanged at approximately 20%, physician referrals increased from 6.8% to 14.0% (P < .001). The number of radiographs remained stable at approximately 17%, whereas the number of computed tomograms or magnetic resonance images increased from 7.2% to 11.3% during the study period (P < .001). These trends were similar after stratifying by short-term vs long-term presentations, visits to PCPs vs non-PCPs, and adjustment for age, sex, race/ethnicity, PCP status, symptom duration, region, and metropolitan location. […] Despite numerous published clinical guidelines, management of back pain has relied increasingly on guideline discordant care. Improvements in the management of spine-related disease represent an area of potential cost savings for the health care system with the potential for improving the quality of care.

Going After the Money: Curbing the Rapid Growth in Medicare Expenditures for Medical Services More Than 30 Days After Hospital Admission by Ashish Jha (JAMA)

Only the Beginning — What’s Next at the Health Insurance Exchanges? by Henry Aaron and Kevin Lucia (New England Journal of Medicine)

Michigan’s Approach to Medicaid Expansion and Reform by John Ayanian (New England Journal of Medicine)

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