What are consumers willing to pay for a broad network health plan?: Evidence from covered California

Health Insurance Marketplaces have received considerable attention for their narrow network health plans. Yet, little is known about consumer tastes for network breadth and how they affect plan selection. I estimate demand for health plans in California’s Marketplace, Covered California. Using 2017 individual enrollment data and provider network directories, I develop a geospatial measure of network breadth that reflects the physical locations of households and network providers. I find that households are sensitive to network breath in their plan choices. Mean willingness to pay for a broad network plan relative to a narrow network plan, defined as a two standard deviation, 17.44 percentage point increase in network breadth, is $45.83 in post-subsidy monthly premiums. Variation in WTP indicates a selection mechanism exists whereby older households sort into broader network plans. I also find that households are highly premium sensitive, which may be a result of plan standardization in Covered California.     

Improving target price calculations in Medicare bundled payment programs

ObjectiveTo compare the predictive accuracy of two approaches to target price calculations under Bundled Payments for Care Improvement‐Advanced (BPCI‐A): the traditional Centers for Medicare and Medicaid Services (CMS) methodology and an empirical Bayes approach designed to mitigate the effects of regression to the mean.Data sourcesMedicare fee‐for‐service claims for beneficiaries discharged from acute care hospitals between 2010 and 2016.Study designWe used data from a baseline period (discharges between January 1, 2010 and September 30, 2013) to predict spending in a performance period (discharges between October 1, 2015 and June 30, 2016). For 23 clinical episode types in BPCI‐A, we compared the average prediction error across hospitals associated with each statistical approach. We also calculated an average across all clinical episode types and explored differences by hospital size.Data collection/extraction methodsWe used a 20% sample of Medicare claims, excluding hospitals and episode types with small numbers of observations.Principal findingsThe empirical Bayes approach resulted in significantly more accurate episode spending predictions for 19 of 23 clinical episode types. Across all episode types, prediction error averaged $8456 for the CMS approach versus $7521 for the empirical Bayes approach. Greater improvements in accuracy were observed with increasing hospital size.ConclusionsCMS should consider using empirical Bayes methods to calculate target prices for BPCI‐A.     

The Effect of Health Plan Characteristics on Medicare+Choice Enrollment

Objective. To provide national estimates of the effect of out-of-pocket premiums and benefits on Medicare beneficiaries' choice among managed care health plans.
Data Sources/Study Setting. The data represent the population of all Medicare+Choice (M+C) plans offered to Medicare beneficiaries in the United States in 1999.
Study Design. The dependent variable is the log of the ratio of the market share of the j th health plan to the lowest cost plan in the beneficiary's county of residence. The explanatory variables are measures of premiums and benefits in the j th health plan relative to the premiums and benefits in the lowest cost plan.
Data Collection Methods. The data are from the 1999 Medicare Compare database, and M+C enrollment data from the Centers for Medicare and Medicaid Services (CMS).
Principal Findings. A $10 increase in an M+C plan's out-of-pocket premium, relative to its competitors, is associated with a decrease of four percentage points in the j th plan's market share (i.e., from 25 to 21 percent), holding the premiums of competing plans constant.
Conclusions. Although our price elasticity estimates are low, the market share losses associated with small changes in a health plan's premium, relative to its competitors, may be sufficient to discipline premiums in a competitive market. Bidding behavior by plans in the Medicare Competitive Pricing Demonstration supports this conclusion.     

The effects of early pregnancy loss on health outcomes and health care utilization and costs

ObjectiveTo evaluate the effects of early pregnancy loss on subsequent health care use and costs.Data SourcesLinked administrative health databases from Manitoba, Canada.Study DesignThis was a population‐based cohort study. The exposure of interest was first recorded ectopic pregnancy or miscarriage (EPM). Outcomes included visits to all ambulatory care providers, family physicians (FPs), specialists, and hospitals, as well as the costs associated with these visits. We also assessed the impact of EPM on a global measure of health service utilization and the incidence and costs of psychotropic medications.Data Collection/Extraction MethodsWe identified women who experienced their first recorded loss (EPM) from 2003–2012 and created a propensity score model to match these women to women who experienced a live birth, with outcome measures available through 31 December 2014. We used a difference in differences approach with multivariable negative binomial models and generalized estimating equations (GEE) to assess the impact of EPM on the aforementioned health care utilization indicators.Principal FindingsEPM was associated with a short‐term increase in visits to, and costs associated with, certain ambulatory care providers. These findings were driven in large part by increased visits/costs to FPs (rate difference [RD]: $19.92 [95% CI: $16.33, $23.51]) and obstetrician‐gynecologists (OB‐GYNs) (RD $9.41 [95% CI: $8.42, $10.40]) in the year immediately following the loss, excluding care associated with the loss itself. We also detected an increase in hospital stays and costs and a decrease in the use of psychotropic medications relative to matched controls.ConclusionPregnancy loss may lead to subsequent increases in certain types of health care utilization. While the absolute costs associated with post‐EPM care are relatively small, the observed patterns of service utilization are informative for providers and policy makers seeking to support women following a loss.     

State policies limiting premium surcharges for tobacco and their impact on health insurance enrollment

ObjectiveThe Affordable Care Act allows insurers to charge up to 50% higher premiums to tobacco users, making tobacco use the only behavioral factor that can be used to rate premiums in the nongroup insurance market. Some states have set more restrictive limits on rating for tobacco use, and several states have outlawed tobacco premium surcharges altogether. We examined the impact of state level tobacco surcharge policy on health insurance enrollment decisions among smokers.Study DesignWe compared insurance enrollment in states that did and did not allow tobacco surcharges, using a difference‐in‐difference approach to compare the policy effects among smokers and nonsmokers. We also used geographic variation in tobacco surcharges to examine how the size of the surcharge affects insurance coverage, again comparing smokers to nonsmokers.Data CollectionWe linked data from two components of the Current Population Survey—the 2015 and 2019 Annual Social and Economic Supplement and the Tobacco Use Supplement, which we combined with data on marketplace plan premiums. We also collected qualitative data from a survey of smokers who did not have insurance through an employer or public program.Principal FindingsAllowing a tobacco surcharge reduced insurance enrollment among smokers by 4.0 percentage points (P = .01). Further, smokers without insurance through an employer or public program were 9.0 percentage points less likely (P < .01) to enroll in a nongroup plan if they were subject to a tobacco surcharge. In states with surcharges, enrollment among smokers was 3.4 percentage points lower (P < .01) for every 10 percentage point increase in the tobacco surcharge.ConclusionsTobacco use is the largest cause of preventable illness in the United States. State tobacco surcharge policy may have a substantial impact on whether tobacco users choose to remain insured and consequently their ability to receive care critical for preventing and treating tobacco‐related disease.     

Quality and Cost of Care by Hospital Teaching Status: What Are the Differences?

Policy Points

• In two respects, quality of care tends to be higher at major teaching hospitals: process of care and long‐term survival of cancer patients following initial diagnosis. There is also evidence that short‐term (30‐day) mortality is lower on average at such hospitals, although the quality of evidence is somewhat lower.
• Quality of care is mulitdimensional. Empirical evidence by teaching status on dimensions other than survival is mixed.
• Higher Medicare payments for care provided by major teaching hospitals are partially offset by lower payments to nonhospital providers. Nevertheless, the payment differences between major teaching and nonteaching hospitals for hospital stays, especially for complex cases, potentially increase prices other insurers pay for hospital care.

ContextThe relative performance of teaching hospitals has been discussed for decades. For private and public insurers with provider networks, an issue is whether having a major teaching hospital in the network is a “must.” For traditional fee‐for‐service Medicare, there is an issue of adequacy of payment of hospitals with various attributes, including graduate medical education (GME) provision. Much empirical evidence on relative quality and cost has been published. This paper aims to (1) evaluate empirical evidence on relative quality and cost of teaching hospitals and (2) assess what the findings indicate for public and private insurer policy.MethodsComplementary approaches were used to select studies for review. (1) Relevant studies highly cited in Web of Science were selected. (2) This search led to studies cited by these studies as well as studies that cited these studies. (3) Several literature reviews were helpful in locating pertinent studies. Some policy‐oriented papers were found in Google under topics to which the policy applied. (4) Several papers were added based on suggestions of reviewers.FindingsQuality of care as measured in process of care studies and in longitudinal studies of long‐term survival of cancer patients tends to be higher at major teaching hospitals. Evidence on survival at 30 days post admission for common conditions and procedures also tends to favor such hospitals. Findings on other dimensions of relative quality are mixed. Hospitals with a substantial commitment to graduate medical education, major teaching hospitals, are about 10% to 20% more costly than nonteaching hospitals. Private insurers pay a differential to major teaching hospitals at this range''s lower end. Inclusive of subsidies, Medicare pays major teaching hospitals substantially more than 20% extra, especially for complex surgical procedures.ConclusionsBased on the evidence on quality, there is reason for patients to be willing to pay more for inclusion of major teaching hospitals in private insurer networks at least for some services. Medicare payment for GME has long been a controversial policy issue. The actual indirect cost of GME is likely to be far less than the amount Medicare is currently paying hospitals.     

Association Between Clinician Specialization in Nursing Home Care and Nursing Home Clinical Quality Scores

ImportanceWhile the number of prescribing clinicians (physicians and nurse practitioners) who provide any nursing home care remained stable over the past decade, the number of clinicians who focus their practice exclusively on nursing home care has increased by over 30%.ObjectivesTo measure the association between regional trends in clinician specialization in nursing home care and nursing home quality.DesignRetrospective cross-sectional study.Setting and ParticipantsPatients treated in 15,636 nursing homes in 305 US hospital referral regions between 2013 and 2016.MeasuresClinician specialization in nursing home care for 2012–2015 was measured using Medicare fee-for-service billings. Nursing home specialists were defined as generalist physicians (internal medicine, family medicine, geriatrics, and general practice) or advanced practitioners (nurse practitioners and physician assistants) with at least 90% of their billings for care in nursing homes. The number of clinicians was aggregated at the hospital referral region level and divided by the number of occupied Medicare-certified nursing home beds. Nursing Home Compare quality measure scores for 2013–2016 were aggregated at the HHR level, weighted by occupied beds in each nursing home in the hospital referral region. We measured the association between the number of nursing home specialists per 1000 beds and the clinical quality measure scores in the subsequent year using linear regression.ResultsAn increase in nursing home specialists per 1000 occupied beds in a region was associated with lower use of long-stay antipsychotic medications and indwelling bladder catheters, higher prevalence of depressive symptoms, and was not associated with urinary tract infections, use of restraints, or short-stay antipsychotic use.Conclusions and ImplicationsHigher prevalence of nursing home specialists was associated with regional improvements in 2 of 6 quality measures. Future studies should evaluate whether concentrating patient care among clinicians who specialize in nursing home practice improves outcomes for individual patients. The current findings suggest that prescribing clinicians play an important role in nursing home care quality.     

Accessibility to the health insurance of the medical union in alexandria

Utilization of care is very important because of its link to access, quality of care and because of its importance to outcome. The aim of the study was to clarify the barriers towards accessibility to the Health Insurance of the Medical Union plan and to explain reasons why participants covered by other health insurance systems are using the Health Insurance Medical Union (HIMU). The study was carried out at the health insurance project situated in Alexandria Medical Syndicate. The insured members of HIMU included four specialties namely; physicians, pharmacists, dentists and veterinarians and their families. The sample amounted to 782 members. The highest reasons for participation in the project were freedom of choice of laboratory and/or radiology clinics 73.9%, affiliated providers (physicians and hospitals) offer good quality care to members 62.6%, and simplicity of getting services and/or referral system 59.2%. Whereas the highest reasons for not participating or continuing with the project were high premiums for members: high premium of parents accounted for the highest percentage (13.8%) followed by that of the spouse 9.3%, then high premium for members 5%, and high premium for children 4.9%. The reason that the period of participation was unsuitable for members (October-November-December) accounted for 4.9%. Recommendations: as a result of reviewing the system of determining premiums there were possibilities of a decrease in the annual premium for those beneficiaries who revealed low subsidies, decreasing cost sharing paid by beneficiaries for both outpatient and inpatient services in some essential services e.g. pregnancy and delivery, as well as vigorous control procedures regarding quality of medical care provided, art of care and price of medical services.     

Examining the bidirectional relationship between food insecurity and healthcare spending

ObjectiveTo improve food insecurity interventions, we sought to better understand the hypothesized bidirectional relationship between food insecurity and health care expenditures.Data SourceNationally representative sample of the civilian noninstitutionalized population of the United States (2016‐2017 Medical Expenditure Panel Survey [MEPS]).Study DesignIn a retrospective longitudinal cohort, we conducted two sets of analyses: (a) two‐part models to examine the association between food insecurity in 2016 and health care expenditures in 2017; and (b) logistic regression models to examine the association between health care expenditures in 2016 and food insecurity in 2017. We adjusted for demographic and socioeconomic variables as well as 2016 health care expenditures and food insecurity.Data CollectionHealth care expenditures, food insecurity, and medical condition data from 10 886 adults who were included in 2016‐2017 MEPS.Principal FindingsFood insecurity in 2016, compared with being food secure, was associated with both a higher odds of having any health care expenditures in 2017 (OR 1.29, 95% CI: 1.04 to 1.60) and greater total expenditures ($1738.88 greater, 95% CI: $354.10 to $3123.57), which represents approximately 25% greater expenditures. Greater 2016 health care expenditures were associated with slightly higher odds of being food insecure in 2017 (OR 1.007 per $1000 in expenditures, 95% CI: 1.002 to 1.012, P =0.01). Exploratory analyses suggested that poor health status may underlie the relationship between food insecurity and health care expenditures.ConclusionsA bidirectional relationship exists between food insecurity and health care expenditures, but the strength of either direction appears unequal. Higher health care expenditures are associated with a slightly greater risk of being food insecure (adjusted for baseline food insecurity status) but being food insecure is associated with substantially greater subsequent health care expenditures (adjusted for baseline health care expenditures). Interventions to address food insecurity and poor health may be helpful to break this cycle.     

Employer contribution and premium growth in health insurance

We study whether employer premium contribution schemes could impact the pricing behavior of health plans and contribute to rising premiums. Using 1991–2011 data before and after a 1999 premium subsidy policy change in the Federal Employees Health Benefits Program (FEHBP), we find that the employer premium contribution scheme has a differential impact on health plan pricing based on two market incentives: 1) consumers are less price sensitive when they only need to pay part of the premium increase, and 2) each health plan has an incentive to increase the employer's premium contribution to that plan. Both incentives are found to contribute to premium growth. Counterfactual simulation shows that average premium would have been 10% less than observed and the federal government would have saved 15% per year on its premium contribution had the subsidy policy change not occurred in the FEHBP. We discuss the potential of similar incentives in other government-subsidized insurance systems such as the Medicare Part D and the Health Insurance Marketplace under the Affordable Care Act.     

Physician trajectories of abandoning long‐course breast radiotherapy and their cost impact

ObjectiveTo examine variation in trajectories of abandoning conventionally fractionated whole‐breast irradiation (CF‐WBI) for adjuvant breast radiotherapy among physician peer groups and the associated cost implications.Data SourcesMedicare claims data were obtained from the Chronic Conditions Data Warehouse for fee‐for‐service beneficiaries with breast cancer in 2011‐2014.Study DesignWe used social network methods to identify peer groups of physicians that shared patients. For each physician peer group in each time period (T1 = 2011‐2012 and T2 = 2013‐2014), we calculated a risk‐adjusted rate of CF‐WBI use among eligible women, after adjusting for patient clinical characteristics. We applied a latent class growth analysis to these risk‐adjusted rates to identify distinct trajectories of CF‐WBI use among physician peer groups. We further estimated potential savings to the Medicare program by accelerating abandonment of CF‐WBI in T2 using a simulation model.Data Collection/Extraction MethodsUse of conventionally fractionated whole‐breast irradiation was determined from Medicare claims among women ≥ 66 years of age who underwent adjuvant radiotherapy after breast conserving surgery.Principal FindingsAmong 215 physician peer groups caring for 16 988 patients, there were four distinct trajectories of abandoning CF‐WBI: (a) persistent high use (mean risk‐adjusted utilization rate: T1 = 94.3%, T2 = 90.6%); (b) decreased high use (T1 = 81.3%, T2 = 65.3%); (c) decreased medium use (T1 = 60.1%, T2 = 44.0%); and (d) decreased low use (T1 = 31.6%, T2 = 23.6%). Peer groups with a smaller proportion of patients treated at free‐standing radiation facilities and a larger proportion of physicians that were surgeons tended to follow trajectories with lower use of CF‐WBI. If all physician peer groups had practice patterns in T2 similar to those in the “decreased low use” trajectory, the Medicare program could save $83.3 million (95% confidence interval: $58.5 million‐$112.2 million).ConclusionsPhysician peer groups had distinct trajectories of abandoning CF‐WBI. Physician composition and setting of radiotherapy were associated with the different trajectories. Distinct practice patterns across the trajectories had important cost implications.     

Where Does the Money Go? Analyzing the Patient Experience in Safety-Net Hospitals

BackgroundLow-income, publicly insured admissions historically cost more to treat than does the average patient. To ensure that hospitals are reimbursed an adequate amount for care of indigent populations, Medicare reimburses hospitals an additional percentage amount according to federally set financial schedule. At 15% of a disproportionate patient percentage, a hospital is reimbursed an extra 2.5% of the standard prospective payment rate.ObjectiveThis research seeks to determine whether hospital qualification as a Medicare Disproportionate Share Hospital results in higher patient experience ratings.MethodsA regression discontinuity method was used to determine the effect of lagged Disproportionate Share Hospital (DSH) status on next year patient experience ratings. The Hospital Consumer Assessment of Healthcare Providers and Systems data provide publicly available patient ratings.ResultsOn average, hospital ratings increase by 6% as a result of DSH status. Hospital ratings increase by an average of 6.5% when nonprofit hospitals are analyzed. This finding is primarily driven by patient facility cleanliness and medical provider communication ratings.ConclusionsThe federal mandate that individuals purchase health insurance in the United States coupled with the state expansion of Medicaid coverage will theoretically eliminate the need for Medicare DSH payments. It is calculated, however, that hospitals will need increased Medicaid reimbursements of more than $300 per patient to make up for the loss of Medicare DSH reimbursements. Hospitals will likely suffer financially as a direct result of reduced Medicare reimbursements through the DSH program.     

Evaluating national trends in outcomes after implementation of a star rating system: Results from dialysis facility compare

ObjectiveTo examine which factors are driving improvement in the Dialysis Facility Compare (DFC) star ratings and to test whether nonclinical facility characteristics are associated with observed longitudinal changes in the star ratings.Data SourcesData were collected from eligible patients in over 6,000 Medicare‐certified dialysis facilities from three annual star rating and individual measure updates, publicly released on DFC in October 2015, October 2016, and April 2018.Study DesignChanges in the star rating and individual quality measures were investigated across three public data releases. Year‐to‐year changes in the star ratings were linked to facility characteristics, adjusting for baseline differences in quality measure performance.Data CollectionData from publicly reported quality measures, including standardized mortality, hospitalization, and transfusion ratios, dialysis adequacy, type of vascular access for dialysis, and management of mineral and bone disease, were extracted from annual DFC data releases.Principal FindingsThe proportion of four‐ and five‐star facilities increased from 30.0% to 53.4% between October 2015 and April 2018. Quality improvement was driven by the domain of care containing the dialysis adequacy and hypercalcemia measures. Additionally, independently owned facilities and facilities belonging to smaller dialysis organizations had significantly lower odds of year‐to‐year improvement than facilities belonging to either of the two large dialysis organizations (Odds Ratio [OR]: 0.736, 95% Confidence Interval [CI]: 0.631‐0.856 and OR: 0.797, 95% CI: 0.723‐0.879, respectively).ConclusionsThe percentage of four‐ and five‐star facilities has increased markedly over a three‐year time period. These changes were driven by improvement in the specific quality measures that may be most directly under the control of the dialysis facility.     

Medicaid Long-term Care Policies and Rates of Nursing Home Successful Discharge to Community

ObjectivesSuccessful discharge of nursing home (NH) residents to community has been reported in Nursing Home Compare (NHCompare) as a quality indicator, yet it is likely influenced by the availability of home- and community-based services (HCBS). Medicaid NH reimbursement rates and bed-hold policies have been shown to be related to quality of care, which may also affect successful discharge. This study explores the relationship of state Medicaid long-term care policies and successful discharge.DesignLongitudinal study of Medicaid policies and NHCompare successful discharge rates over 3 time periods, 2014-2015, 2015-2016, and 2016-2017, using generalized estimating equation models.Setting and participants11,694 unique NHs.MeasuresRisk-adjusted rates of successful discharge were downloaded from NHCompare. Truven's “Medicaid Expenditures for Long-term Services and Supports” reports provided states' expenditures on HCBS and NHs. Details of bed-hold policies in 2014 were obtained from the Medicaid and CHIP Payment and Access Commission. Data on NH and market characteristics were extracted from LTCFocUs.org and Area Health Resources File.ResultsThe national average-adjusted successful discharge rates were 49.7%, 56.8%, and 56.2% in 2014-2015, 2015-2016, and 2016-2017, respectively. In 2015, states spent between 30.6% (Mississippi) and 82.2% (Oregon) on HCBS, with an overall average of 53.1%. States reimbursed NHs, on average, $185.7 per resident day. Five percent increase in Medicaid spending for HCBS was statistically significantly associated with 0.47% higher successful discharge rates. Compared to NHs in states with reimbursement rates in the first quartile (≤$152), NHs in the second ($153-$178), third ($179-$212), and fourth (≥$213) quartiles were associated with 2.33%, 1.86%, and 1.15% higher successful discharge rates (all P < .01). Results were stronger in states without bed-hold policies.Conclusions/ImplicationsThis study provides promising evidence to state governments that shifting expenditures from institutions to communities as well as more generous reimbursements to NHs may improve quality of care in NHs.     

Effects of forced disruption in Medicaid managed care on children with asthma

ObjectiveTo evaluate the effect of a forced disruption to Medicaid managed care plans and provider networks on health utilization and outcomes for children with persistent asthma.Data SourcesMedicaid managed care administrative claims data from 2013 to 2016, obtained from a southeastern state.Study DesignA difference‐in‐difference analysis compared patients’ outpatient, inpatient, and emergency department (ED) utilization and receipt of recommended services before and after implementation of a statewide redistribution of patients among nine managed care plans.Data Collection/Extraction MethodsEnrollment data for children with asthma were linked to the administrative claims. Children were included if they had a diagnosis of persistent asthma in 2013 and if they were enrolled continuously throughout 2014‐2016.Principal FindingsAmong the 28 537 children with asthma, 26% were forced to switch their managed care plan after the redistribution. Of these, 67% also switched their primary care provider (PCP). Relative to those who remained in their plan, disruption was associated with an additional 2.1 percentage‐point decrease in the number of children who had an outpatient visit per quarter [95%CI −2.8, −1.3], from 71% to 66% (compared to plan stayers: 74% to 71%). Among children experiencing a change to their plan, there was overall a decrease in the proportion of children receiving an asthma‐specific visit per quarter, but there was less of a decrease in children that also changed their PCP [1.6 percentage points, 95%CI 0.7, 2.5], from 9.7% to 8.3% (compared to those who did not switch their PCP: 12% to 8.6%). Indicators of asthma care quality and emergent care utilization were not significantly different between the two periods.ConclusionsWhile there was a decrease in the number of outpatient visits associated with forced disruption of Medicaid managed care plans for children with persistent asthma, there were no consistent associations with worse asthma quality performance or higher emergent health care utilization.