• Reading list

    Changes In US Spending On Mental Health And Substance Abuse Treatment, 1986–2005, And Implications For Policy, by Tami L. Mark, Katharine R. Levit, Rita Vandivort-Warren, Jeffrey A. Buck and Rosanna M. Coffey

    The United States invests a sizable amount of money on treatments for mental health and substance abuse: $135 billion in 2005, or 1.07 percent of the gross domestic product. We provide treatment spending estimates from the period 1986–2005 to build understanding of past trends and consider future possibilities. We find that the growth rate in spending on mental health medications—a major driver of mental health expenditures in prior years—declined dramatically. As a result, mental health and substance abuse spending grew at a slightly slower rate than gross domestic product in 2004 and 2005, and it continued to shrink as a share of all health spending. Of note, we also find that Medicaid’s share of total spending on mental health grew from 17 percent in 1986 to 27 percent in 2002 to 28 percent in 2005. The recent recession, the full implementation of federal parity law, and such health reform-related actions as the planned expansion of Medicaid all have the potential to improve access to mental health and substance abuse treatment and to alter spending patterns further. Our spending estimates provide an important context for evaluating the effect of those policies.

    High-Deductible Health Plans and Costs and Utilization of Maternity Care, by Katy Backes Kozhimannil, Haiden A. Huskamp, Amy Johnson Graves, Stephen B. Soumerai, Dennis Ross-Degnan, and J. Frank Wharam,

    Objective: To evaluate the impact of switching from an HMO to a high-deductible health plan on the costs and utilization of maternity care.

    Study Design: Pre-post design, with a control group.

    Methods: We compared 229 women who delivered babies before or after their employers mandated a switch from HMO coverage to a high-deductible health plan, with a control group of 2180 matched women who delivered babies while their employers remained in an HMO plan. Administrative claims from a large Massachusetts-based health insurance program were used in a difference-indifferences regression analysis.

    Results: Mean out-of-pocket maternity care costs for high-deductible group members increased from $356 for women who delivered before the insurance transition (n = 86) to $942 for women who delivered after the transition (n = 143), compared with a change from $262 (n = 711) to $282 (n = 1569) for HMO members, a relative increase of 106% (P <.001) for high-deductible members. Delivery after transition to a high-deductible plan was not associated with changes in the odds of receiving early prenatal care (odds ratio [OR], 1.02; 95% confidence interval [CI], 0.32-3.19), recommended prenatal visits (OR, 1.64; 95% CI, 0.89-3.02), or postpartum care (OR, 0.74; 95% CI, 0.42-1.32).

    Conclusions: Switching from an HMO to a high-deductible plan with exemptions for routine care increased out-of-pocket member costs for maternity care, but had no apparent adverse impacts on receipt of recommended prenatal and postpartum care.

    Effects of Health Savings Account–Eligible Plans on Utilization and Expenditures, by Mary E. Charlton, Barcey T. Levy, Robin R. High, John E. Schneider, and John M. Brooks

    Objective: To assess the impact of a health savings account (HSA)-eligible plan on utilization and expenditures in an employer-sponsored Midwestern health plan which offered a traditional plan from 2003 through 2004 that was fully replaced by an HSA-eligible plan in 2005 and 2006.

    Study Design: Retrospective pre–post design with a control group.

    Methods: Medical and pharmacy claims of plan members younger than 65 years who were continuously enrolled throughout the 4-year study period were used to evaluate the impact of switching to the HSA-eligible plan. Expenditure and utilization measures were compared with those for a control group covered by employers in the same industry and geographic location, while controlling for patient characteristics.

    Results: The HSA-eligible plan was associated with significantly lower total expenditures (-17.4%), fewer and less costly office visits (-13.6% and -20.3%, respectively), fewer emergency department (ED) visits (-20.1%), lowerpharmacy expenditures (-29.2%), lower expenses per drug (-27.9%), a reduced likelihood of mammograms (odds ratio [OR] = 0.55, P <.05) and Papanicolaou tests (OR = 0.66, P <.05), and a borderline significant reduction in routine physical exams (OR = 0.76, P <.10). The HSA-eligible plan also was associated with increased outpatient facility expenditures (5.1%, P <.05).

    Conclusion: Employer-sponsored HSA-eligible plans appear to be associated with lower healthcare expenditures and/or utilization, particularly for office visits, ED visits, and pharmacy. However, they also may discourage preventive care, leading to increased long-term medical costs. Employers offering HSA-eligible plans should ensure that there are no financial barriers for preventive services.

    Selection in Insurance Markets: Theory and Empirics in Pictures, by Liran Einav, Amy Finkelstein

    We present a graphical framework for analyzing both theoretical and empirical work on selection in insurance markets. We begin by using this framework to review the “textbook” adverse selection environment and its implications for insurance allocation, social welfare, and public policy. We then discuss several important extensions to this classical treatment that are necessitated by important real world features of insurance markets and which can be easily incorporated in the basic framework. Finally, we use the same graphical approach to discuss the intuition behind recently developed empirical methods for testing for the existence of selection and examining its welfare consequences. We conclude by discussing some important issues that are not well-handled by this framework and which, perhaps not unrelatedly, have been little addressed by the existing empirical work.

    How Effective Are Public Policies to Increase Health Insurance Coverage among Young Adults? by Phillip B. Levine, Robin McKnight, and Samantha Heep

    This paper assesses the impact of policies to increase insurance coverage for young adults. The introduction of SCHIP in 1997 enabled low-income teens up to age 19 to gain access to public health insurance. More recent policies enabled young adults between the ages of 19 and (typically) 24 to remain covered under their parents’ health insurance. We use the discrete break in coverage at age 19 to evaluate the impact of SCHIP, and quasi-experimental variation to evaluate the impact of “extended parental coverage” laws. Our results suggest that both types of policies were effective at increasing health insurance coverage.

    Economics, History, and Causation, by Randall Morck and Bernard Yeung

    Economics and history both strive to understand causation: economics using instrumental variables econometrics and history by weighing the plausibility of alternative narratives. Instrumental variables can lose value with repeated use because of an econometric tragedy of the commons bias: each successful use of an instrument potentially creates an additional latent variable bias problem for all other uses of that instrument – past and future. Economists should therefore consider historians’ approach to inferring causality from detailed context, the plausibility of alternative narratives, external consistency, and recognition that free will makes human decisions intrinsically exogenous.

    The Wyden–Brown Bill — Short on State Flexibility, by Stuart Butler

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    • Just a comment on the high-deuctble paper. We have been trending that way as a nation. The HDHP seem to be picking up steam. If they are effective at controlling spending, we should be seeing that in total health care spending.

      Steve