Reading list

The Doctor Might See You Now: The Supply Side Effects of Public Health Insurance Expansions, by Craig L. Garthwaite (American Economic Journal: Economic Policy)

In the United States, public health insurance programs cover over 90 million individuals. Expansions of these programs, such as the recently passed Patient Protection and Affordable Care Act (PPACA), may have large effects on physician behavior. This study finds that following the implementation of the State Children’s Health Insurance Program (SCHIP), physicians decreased the number of hours spent with patients, but increased their program participation. Suggestive evidence shows that this decrease resulted from shorter office visits. These findings are consistent with the predictions from a mixed-economy model of physician behavior and provide evidence of crowd out resulting from the creation of SCHIP.

Does it Matter if Your Health Insurer is For-Profit? Effects of Ownership on Premiums, Insurance Coverage, and Medical Spending, by Leemore Dafny and Subramaniam Ramanarayanan (The National Bureau of Economic Research)

The majority of private health insurance in the U.S. is administered or issued by for-profit insurers, but little is known about how for-profit status affects outcomes. We find that plausibly exogenous increases in local for-profit market share induced by conversions of Blue Cross and Blue Shield affiliates in 11 states (and 28 distinct geographic markets) had no significant impact on average premiums, uninsurance rates, or medical loss ratios. However, we do find significant increases in Medicaid enrollment and a reallocation of medical spending toward rivals of BCBS. Moreover, in markets where the converting BCBS affiliate had substantial market share, fully-insured premiums for employer plans increased significantly. The results suggest that the welfare effects of subsidies for new not-for-profit insurers, such as those in the Affordable Care Act, are likely to depend on entrants’ eventual market share.

Access to Care After Massachusetts’ Health Care Reform: A Safety Net Hospital Patient Survey, by Danny McCormick, Assaad Sayah, Hermione Lokko, Steffie Woolhandler and Rachel Nardin (Journal of General Internal Medicine)

BACKGROUND:  Massachusetts’ health care reform substantially decreased the percentage of uninsured residents. However, less is known about how reform affected access to care, especially according to insurance type.

OBJECTIVE:  To assess access to care in Massachusetts after implementation of health care reform, based on insurance status and type.

DESIGN AND PARTICIPANTS:  We surveyed a convenience sample of 431 patients presenting to the Emergency Department of Massachusetts’ second largest safety net hospital between July 25, 2009 and March 20, 2010.

MAIN MEASURES:  Demographic and clinical characteristics, insurance coverage, measures of access to care and cost-related barriers to care.

KEY RESULTS:  Patients with Commonwealth Care and Medicaid, the two forms of insurance most often newly-acquired under the reform, reported similar or higher utilization of and access to outpatient visits and rates of having a usual source of care, compared with the privately insured. Compared with the privately insured, a significantly higher proportion of patients with Medicaid or Commonwealth Care Type 1 (minimal cost sharing) reported delaying or not getting dental care (42.2 % vs. 27.1 %) or medication (30.0 % vs. 7.0 %) due to cost; those with Medicaid also experienced cost-related barriers to seeing a specialist (14.6 % vs. 3.5 %) or getting recommended tests (15.6 % vs. 5.9 %). Those with Commonwealth Care Types 2 and 3 (greater cost sharing) reported significantly more cost-related barriers to obtaining care than the privately insured (45.0 % vs. 16.0 %), to seeing a primary care doctor (25.0 % vs. 6.0 %) or dental provider (58.3 % vs. 27.1 %), and to obtaining medication (20.8 % vs. 7.0 %). No differences in cost-related barriers to preventive care were found between the privately and publicly insured.

CONCLUSIONS:  Access to care improved less than access to insurance following Massachusetts’ health care reform. Many newly insured residents obtained Medicaid or state subsidized private insurance; cost-related barriers to access were worse for these patients than for the privately insured.

Financial Performance of Health Plans in Medicaid Managed Care, by Mike McCue (Medicare & Medicaid Research Review)

Findings: Plans that are Medicaid dominant and publicly traded incurred a lower medical loss ratio and higher administrative cost ratio than multi-product and non-publicly traded plans. Medicaid dominant plans also earned a higher operating profit margin. Plans offering commercial and Medicare products are operating at a loss for their Medicaid line of business.

Policy Implications: Health plans that do not specialize in Medicaid are losing money. Higher medical cost rather than administrative cost is the underlying reason for this financial loss. Since Medicaid enrollees do not account for their primary book of business, these plans may not have invested in the medical management programs to reduce inappropriate emergency room use and avoid costly hospitalization.

The New Demographic Transition: Most Gains in Life Expectancy Now Realized Late in Life, by Karen N. Eggleston and Victor R. Fuchs (Journal of Economic Perspectives)

 The share of increases in life expectancy realized after age 65 was only about 20 percent at the beginning of the 20th century for the United States and 16 other countries at comparable stages of development; but that share was close to 80 percent by the dawn of the 21st century, and is almost certainly approaching 100 percent asymptotically. This new demographic transition portends a diminished survival effect on working life. For high-income countries at the forefront of the longevity transition, expected lifetime labor force participation as a percent of life expectancy is declining. Innovative policies are needed if societies wish to preserve a positive relationship running from increasing longevity to greater prosperity.

The Supreme Court’s Surprising Decision On The Medicaid Expansion: How Will The Federal Government And States Proceed?, by Sara Rosenbaum and Timothy M. Westmoreland (Health Affairs)

In National Federation of Independent Business v. Sebelius, the US Supreme Court upheld the constitutionality of the requirement that all Americans have affordable health insurance coverage. But in an unprecedented move, seven justices first declared the mandatory Medicaid eligibility expansion unconstitutional. Then five justices, led by Chief Justice John Roberts, prevented the outright elimination of the expansion by fashioning a remedy that simply limited the federal government’s enforcement powers over its provisions and allowed states not to proceed with expanding Medicaid without losing all of their federal Medicaid funding. The Court’s approach raises two fundamental issues: First, does the Court’s holding also affect the existing Medicaid program or numerous other Affordable Care Act Medicaid amendments establishing minimum Medicaid program requirements? And second, does the health and human services secretary have the flexibility to modify the pace or scope of the expansion as a negotiating strategy with the states? The answers to these questions are key because of the foundational role played by Medicaid in health reform.

Case Studies At Denver Health: ‘Patient Dumping’ In The Emergency Department Despite EMTALA, The Law That Banned It, BY Sara Rosenbaum, Lara Cartwright-Smith, Joel Hirsh and Philip S. Mehler (Health Affairs)

The Emergency Medical Treatment and Labor Act was enacted in 1986 to prevent hospitals from turning away patients with emergency medical conditions, often because they were uninsured—a practice commonly known as “patient dumping.” Twenty-five years later, Denver Health—a large, urban, safety-net hospital—continues to experience instances in which people with emergency conditions, many of whom are uninsured, end up in the safety-net setting after having been denied care or receiving incomplete care elsewhere. We present five case studies and discuss potential limitations in the oversight and enforcement of the 1986 law. We advocate for a more effective system for reporting and acting on potential violations, as well as clearer standards governing compliance with the law.

Greater Adherence To Diabetes Drugs Is Linked To Less Hospital Use And Could Save Nearly $5 Billion Annually, by Ashish K. Jha, Ronald E. Aubert, Jianying Yao, J. Russell Teagarden and Robert S. Epstein (Health Affairs)

Improving adherence to medication offers the possibility of both reducing costs and improving care for patients with chronic illness. We examined a national sample of diabetes patients from 2005 to 2008 and found that improved adherence to diabetes medications was associated with 13 percent lower odds of subsequent hospitalizations or emergency department visits. Similarly, losing adherence was associated with 15 percent higher odds of these outcomes. Based on these and other effects, we project that improved adherence to diabetes medication could avert 699,000 emergency department visits and 341,000 hospitalizations annually, for a saving of $4.7 billion. Eliminating the loss of adherence (which occurred in one out of every four patients in our sample) would lead to another $3.6 billion in savings, for a combined potential savings of $8.3 billion. These benefits were particularly pronounced among poor and minority patients. Our analysis suggests that improved adherence among patients with diabetes should be a key goal for the health care system and policy makers. Strategies might include reducing copayments for certain medications or providing feedback about adherence to patients and providers through electronic health records.

When the Cost Curve Bent — Pre-Recession Moderation in Health Care Spending, by Charles Roehrig, Ani Turner, Paul Hughes-Cromwick, and George Miller (The New England Journal of Medicine)

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