Many tertiary care hospitals (acquirers) acquire non-tertiary care hospitals (targets), and some of these mergers lead to a significant increase in referrals from the target to the acquirer. This study examines the hospitals’ motives for integration and for increasing referrals using hospital discharge data from the Pittsburgh area. I develop and estimate a model of referral choice based on a reputation mechanism. The results suggest that low- or average-quality acquirers exploit their targets’ monopoly power to steer patients to the acquirers. Distinguished acquirers, on the other hand, seem to have motives other than patient steering, including the integrated delivery of care.
Reforming Beneficiary Cost Sharing to Improve Medicare Performance, by Stephen Zuckerman, Baoping Shang, and Timothy Waidmann
This paper explores options for reforming Medicare cost sharing in an effort to provide better financial protection for those beneficiaries with the greatest health care needs. Using data from the Health and Retirement Study (HRS) and the Medicare Current Beneficiary Survey (MCBS), we consider how unified annual deductibles, alternative coinsurance rates, and a limit on out-of-pocket spending would alter program spending, beneficiary cost sharing, and premiums for supplemental coverage. We show that adding an out-of-pocket limit and raising deductibles and coinsurance slightly would provide better safeguards to beneficiaries with high costs than the current Medicare benefit structure. Our estimates also suggest that policies protecting these beneficiaries could be structured in a way that would add little to overall program costs.
Why Did Medicare Spending Growth Slow Down? by Chapin White
So-called excess growth in Medicare spending per beneficiary has varied widely and has slowed in recent years. The annual rate of excess growth fell from 5.6 percent during 1975–1983, to 2.1 percent during 1983–1997, to only 0.5 percent during 1997–2005. Changes in payment policies and regulations can help explain the observed slowdown. These include new prospective payment systems for hospitals and postacute care providers, and controls on aggregate Medicare physician spending. Competing explanations—increases in managed care enrollment, changes in Medicare cost sharing, and a systemwide spending slowdown—do not account for the slowdown.
Measuring the Impact of Health Insurance on Levels and Trends in Inequality, by Richard V. Burkhauser, Kosali I. Simon
A substantial part of the inequality literature in the United States has focused on yearly levels and trends in income and its distribution over time. Recent findings in that literature show that median income appears to be stagnating with income growth primarily coming at higher income levels. But the value of health insurance is an important and growing source of economic well being for American households that is missed by focusing solely on income. In this paper we take estimates of the value of different types of health insurance received by households and add them to usual pre tax post transfer measures of income from the Current Population Survey’s March Annual Demographic Supplement for income years 1995-2008 to investigate their impact on levels and trends in measured inequality. We show that ignoring the value of health insurance coverage will substantially understate the level of economic well being of Americans and its upward trend and overstate the level of inequality and its upward trend. As an application of our fuller measure of income, we consider how two provisions of current health reform proposals to expand health insurance affect the level and distribution of economic well being.
Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline, by Patricia A. Davis, Jim Hahn, Paulette C. Morgan, Julie Stone, Sibyl Tilson.