Survey results show that adults are willing to pay higher insurance premiums for generous coverage of specialty drugs

Generous coverage of specialty drugs for cancer and other diseases may be valuable not only for sick patients currently using these drugs, but also for healthy people who recognize the potential need for them in the future. This study estimated how healthy people value insurance coverage of specialty drugs, defined as high-cost drugs that treat cancer and other serious health conditions like multiple sclerosis, by quantifying willingness to pay via a survey. US adults were estimated to be willing to pay an extra $12.94 on average in insurance premiums per month for generous specialty-drug coverage--in effect, $2.58 for every dollar in out-of-pocket costs that they would expect to pay with a less generous insurance plan. Given the value that people assign to generous coverage of specialty drugs, having high cost sharing on these drugs seemingly runs contrary to what people value in their health insurance.     

Health benefits in 2004: four years of double-digit premium increases take their toll on coverage

This paper reports changes in employer-based insurance during the past year and since 2001. From spring 2003 to spring 2004, premiums increased 11.2 percent (compared with 13.9 percent last year). Since 2000, premiums have increased 59 percent. Since 2001, employee contributions have grown by 57 percent for single coverage and 49 percent for family coverage, and the percentage of workers covered by their own employer's health plan has fallen from 65 percent in 2001 to 61 percent in 2004. The worst of the current round of premium inflation appears to be over, but employers plan to increase employee cost sharing next year [corrected]     

The effects of retiree health insurance plan characteristics on retirees’ choice and employers’ costs

To moderate the rate of growth of retiree health insurance costs, employers can modify plans and move retirees into less expensive plans. We examine policy modifications implemented by the North Carolina State Health Plan. We investigate whether incentives produce the desired plan elections and whether these changes, along with cost shifting, produce the expected reductions in cost growth. Using individual-level administrative data, along with aggregated data on expenditures for retirees, we estimate the effects of the introduction and subsequent repeal of a Comprehensive Wellness Initiative for non-Medicare eligible retirees, as well as increases in coinsurance and copayments and the introduction of a premium for all retirees. Over a third of non-Medicare retirees shifted into the least generous plan between June 2009 and December 2012. The level effects on annual costs and unfunded accrued liabilities were relatively modest, but growth rates were diminished. Increases in the retiree premiums reduced the state's projected costs.     

An efficient employer strategy for dealing with adverse selection in multiple-plan offerings: an MSA example

This paper outlines a feasible employee premium contribution policy, which would reduce the inefficiency associated with adverse selection when a limited coverage insurance policy is offered alongside a more generous policy. The "efficient premium contribution" is defined and is shown to lead to an efficient allocation across plans of persons who differ by risk, but it may also redistribute against higher risks. A simulation of the additional option of a catastrophic health plan (CHP) accompanied by a medical savings account (MSA) is presented. The efficiency gains from adding the MSA/catastrophic health insurance plan (CHP) option are positive but small, and the adverse consequences for high risks under an efficient employee premium are also small.     

Mental health parity: what are the gaps in coverage?

BACKGROUND: Mental health benefits in private health insurance plans in the United States are typically less generous than benefits for physical health care services, driving reform efforts to achieve parity in coverage. While there is growing evidence about the effects such legislation would have on the utilization and cost of mental health services, less is known about the impact parity would have on reducing the risk of large out-of-pocket expenses that families would face in the event of mental illness. AIMS OF THE STUDY: We seek to understand the impact that mental health parity would have on the out-of-pocket burden that families would face in the event of mental illness. We focus in particular on variations in coverage across the privately insured population. METHODS: We compare out-of-pocket spending for hypothetical episodes of mental health treatment, first under current insurance coverage in the United States and then under a reform policy of full mental health parity. We exploit detailed informtion on actual health plan benefits using a nationally-representative sample of the privately insured population under age 65 from the 1987 National Medical Expenditure Survey (NMES) that has been carefully aged and reweighted to represent 1995 population and benefit characteristics. RESULTS: Our results show that existing benefits of the U.S. privately insured population under age 65 leave most people at risk of high out-of-pocket costs in the event of a serious mental illness. Moreover, the generosity of existing mental health benefits varies widely across subgroups, particularly across firm size. We find significantly lower out-of-pocket costs when simulating full parity coverage. However, our results show those with less generous mental health coverage tend to have less generous physical health coverage, as well. CONCLUSIONS: Parity would substantially increase generosity of mental health coverage for most of the privately insured population. The wide variation in the generosity of existing mental health benefits suggests that there are likely to be differential impacts from a parity mandate. Those with limited physical health coverage would still be at significant financial risk for catastrophic mental illness.     

Using contingent choice methods to assess consumer preferences about health plan design

Introduction

American insurers are designing products to contain healthcare costs by making consumers financially responsible for their choices. Little is known about how consumers will view these new designs. Our objective is to examine consumer preferences for selected benefit designs.

Methods

We used the contingent choice method to assess willingness to pay for six health plan attributes. Our sample included subscribers to individual health insurance products in California, US. We used fitted logistic regression models to explore how preferences for the more generous attributes varied with the additional premium and with the characteristics of the subscriber.

Results

High quality was the most highly valued attribute based on the amounts consumers report they are willing to pay. They were also willing to pay substantial monthly premiums to reduce their overall financial risk. Individuals in lower health were willing to pay more to reduce their financial risk than individuals in better health.

Discussion/conclusion

Consumers may prefer tiered-benefit designs to those that involve overall increases in cost sharing. More consumer information is needed to help consumers better evaluate the costs and benefits of their insurance choices.     

Interactions between use of and insurance for specialty ambulatory mental health services

BACKGROUND: There is continuing interest in the effects of coinsurance rates on the use of ambulatory mental health services. Persons who expect to use mental health services may choose coverage with more generous mental health benefits, as such treatment may be expected to be a recurring activity. However, it may also be the case that if the expected need for such services is somehow reflected in lower perceived human capital in the labor market, then persons who have a higher probability of use may face a less generous set of health insurance options. These behaviors imply some simultaneity in the determinants of the coinsurance rate facing an individual and their mental health use. AIM OF THE STUDY: To explore the joint determination of the use of and coinsurance for ambulatory mental health services, using non-experimental data for a nationally representative sample of the non-institutionalized who had employer-based health insurance in the United States. METHODS: I estimate an instrument for the ambulatory mental health coinsurance rate. I then estimate two models of the demand for ambulatory mental health care as a function of the coinsurance rate for this type of care and other factors, one using the actual coinsurance rate and the other using the estimated instrument for the coinsurance rate. RESULTS: In the instrumental equation, an index of the mental distress of the key worker most likely to be the policy-holder has no statistically significant effect on the worker's coinsurance rate. However, a similar measure for other members of the worker's family has a positive and statistically significant effect on the worker's coinsurance rate. In the demand equations, neither the actual coinsurance rate nor its instrument has a statistically significant coefficient. DISCUSSION: Having another family member who may need mental health care results in some effort to seek a health plan with a higher coinsurance rate for such services. While the mental health index for the key worker would motivate the same type of seeking behavior, a higher level for this index for the key worker might also be correlated with a lower level of perceived human capital in a prospective employer's eyes, and this might result in a more restricted set of plan options for mental health care in the labor market. The absence of statistical significant for the coefficients of the actual coinsurance rate and its instrument also provides some limited but suggestive evidence of employer-side selection effects. LIMITATIONS: It was not possible to model the full complexity of health plans. CONCLUSIONS: The discussions of selection bias with regard to mental health insurance and service use should be expanded to include demand-side effects in the labor market, in addition to the supply-side effects on the part of workers that are often considered. IMPLICATIONS FOR HEALTH CARE PROVISION AND USE: It may be difficult to determine the effects on ambulatory mental health care of changes in health insurance provisions. IMPLICATIONS FOR HEALTH POLICY FORMULATION: Caution needs to be used in making estimates of the effects of changes in insurance coverage for ambulatory mental health care. Persons who find their benefits improved may not respond at the rate expected, because initial coinsurance rates are already in part intertwined with expected use. IMPLICATIONS FOR FURTHER RESEARCH: More analyses of the range of selection effects in labor markets and their impacts on health insurance are warranted.     

The effect of three-tier formulary adoption on medication continuation and spending among elderly retirees

OBJECTIVE: To assess the effect of three-tier formulary adoption on medication continuation and spending among elderly members of retiree health plans. DATA SOURCES: Pharmacy claims and enrollment data on elderly members of four retiree plans that adopted a three-tier formulary over the period July 1999 through December 2002 and two comparison plans that maintained a two-tier formulary during this period. STUDY DESIGN: We used a quasi-experimental design to compare the experience of enrollees in intervention and comparison plans. We used propensity score methods to match intervention and comparison users of each drug class and plan. We estimated repeated measures regression models for each class/plan combination for medication continuation and monthly plan, enrollee, and total spending. We estimated logit models of the probability of nonpersistent use, medication discontinuation, and medication changes. DATA COLLECTION/EXTRACTION METHODS: We used pharmacy claims to create person-level drug utilization and spending files for the year before and year after three-tier adoption. PRINCIPAL FINDINGS: Three-tier formulary adoption resulted in shifting of costs from plan to enrollee, with relatively small effects on medication continuation. Although implementation had little effect on continuation on average, a small minority of patients were more likely to have gaps in use and discontinue use relative to comparison patients. CONCLUSIONS: Moderate cost sharing increases from three-tier formulary adoption had little effect on medication continuation among elderly enrolled in retiree health plans with relatively generous drug coverage.     

Design, implementation, and evaluation of a community financing scheme for hospital care in developing countries: a pre-paid health plan in the Bwamanda health zone, Zaire

Unless scarce resources can be mobilized and used efficiently, health for all by the year 2000 will remain a vain attempt. Innovative financing schemes exploring increased cost recovery from the users of the health system are explored throughout the world. In Bwamanda, Zaire, a community financing scheme for hospital care was developed through the application of operations research. A preference heuristic with considerable involvement of health providers and the community was used to identify the type of financing scheme and resulted in a pre-paid health plan, while a mathematical model was developed to determine the premiums to charge. The implementation of the health plant is briefly described. An evaluation of the effects of the pre-paid plan on the accessibility and equity of health care, as well as on the financial sustainability of the hospital, is presented and discussed: a steadily increasing membership of the health plan illustrates its appropriateness, while a doubling of the cost recovery of the hospital's operating costs after two years seems promising; the hospitalization rate of members of the health plan was significantly higher than for non-members. These findings suggest that a health zone may be an appropriate level for the organization of a regional pre-paid health plan. Problems of equity, full cost recovery, and replicability of the financing scheme are discussed.     

Obesity, weight management, and health care costs: a primer.

Rational decision-making regarding health care spending for weight management requires an understanding of the cost of care provided to obese patients and the potential cost-effectiveness or cost savings of interventions. The purpose of this review is to assist health plans and disease management leaders in making informed decisions for weight management services. Among the review's findings, obesity and severe obesity are strongly and consistently associated with increased health care costs. The cost-effectiveness of obesity-related interventions is highly dependent on the risk status of the treated population, as well as the length, cost, and effectiveness of the intervention. Bariatric surgery offers high initial costs and uncertain long-term cost savings. From the perspective of a payor, obesity management services are as cost-effective as other commonly offered health services, though not likely to offer cost savings. Behavioral health promotion interventions in the worksite setting provide cost savings from the employer's perspective, if decreased rates of absenteeism are included in the analysis.     

Reconsidering the moral hazard-risk avoidance tradeoff

The received model for optimal demand-side cost sharing trades off moral hazard and risk avoidance. This model appears to lie behind recent increases in initial cost sharing, such as those embodied in Health Savings Accounts and Health Reimbursement Accounts. At the same time there is evidence that lower cost sharing for certain drugs can reduce future total health care costs and/or improve future health, and this may be true of other medical services as well. To the degree that individuals remain in the same common insurance pool, lower cost sharing that induces increases in certain services that reduce total costs, including future costs, represents a classic case for a subsidy and will minimize an employer's labor costs. Even if total costs increase, the value of a change in health could increase more. In that case such a subsidy is consistent with recent work in behavioral economics for those with self-control problems.     

Employer Health Insurance and Local Labor Market Conditions

Theory suggests that an employer's decisions about the amount of health insurance included in the compensation package may be influenced by the practices of other employers in the market. We test the role of local market conditions on decisions of small employers to offer insurance and their dollar contribution to premiums using data from two large national surveys of employers. These employers are more likely to offer insurance and to make greater contributions in communities with tighter labor markets, less concentrated labor purchasers, greater union penetration, and a greater share of workers in big business and a small share in regulated industries. However, our data do not support the notion that marginal tax rates affect employers' offer decision or contributions.     

Does free complementary health insurance help the poor to access health care? Evidence from France

The French government introduced a 'free complementary health insurance plan' in 2000, which covers most of the out-of-pocket payments faced by the poorest 10% of French residents. This plan was designed to help the non-elderly poor to access health care. To assess the impact of the introduction of the plan on its beneficiaries, we use a longitudinal data set to compare, for the same individual, the evolution of his/her expenditures before-and-after enrollment in the plan. This before-and-after analysis allows us to remove most of the spuriousness due to individual heterogeneity. We also use information on past coverage in a difference-in-difference analysis to evaluate the impact of specific benefits associated with the plan. We attempt at controlling for changes other than enrollment through a difference-in-difference analysis within the eligible (rather than enrolled) population. Our main result is the plan's lack of an overall effect on utilization. This result is likely attributable to the fact that those who were enrolled automatically in the free plan (the majority of enrollees), already benefited from a relatively generous plan. The significant effect among those who enrolled voluntarily in the free plan was likely driven by those with no previous complementary coverage.     

Physician incentive compensation in group practice: a review with suggestions for improvement

Without a well-developed compensation plan, not only will medical groups fail to address their responsibility for minimizing health care cost inflation, but they may also experience dissension, resignations, inability to attract new practitioners and varying levels of output among the group members.     

基于成本核算的公立医院补偿机制改革——美国经验及对我国的启示

长期以来,我国公立医院财政补助不以成本核算为基础,主要按人员编制、床位数为标准进行补偿.本文介绍了美国结合成本核算进行公立医院补偿机制改革的主要历程：从以实际成本为基础获得适当补偿,发展为按标准临床项目诊疗分组预付费.我国公立医院补偿机制出现以下问题：财政补偿没有以医院成本核算为基础,医疗服务收费普遍低于成本,技术劳务价值在收费价格上未得到合理体现,存在“以药补医”现象.美国经验启示我国应当以成本为基础,理顺医疗服务比价关系,建立科学合理的医疗服务价格体系;借助全成本信息,合理制定财政补偿政策;依托病种成本核算和DRGs,参与定价和谈判,确定支付标准.     

试点地区临床路径管理补偿机制设计

目的:提高医务人员和医疗机构开展临床路径管理的依从性和积极性.方法:专家咨询法、试点干预研究.结果:为试点地区设计了补偿机制调整的框架以及具体的测算方案.方案突出了补偿机制规范医院和医生行为的激励性因素,避免了零和博弈的结局.结论:临床路径管理试点补偿机制设计需基于尊重现实的原则,并尽量确保各利益相关者的收益.     

Recruiting and retaining dental labor in federal facilities: Harder than pulling teeth?

The U.S. Veterans Administration (VA) is a large publicly financed health system that has long struggled with provider shortages. Shortages may arise at the VA because it offers different compensation than private sector employment options or because of differences in the way that labor is supplied to public versus private employers. In the mid‐2000s, the VA adopted a more generous and flexible pay schedule for its dentists. We exploit this salary schedule change to study the impact of a positive wage shock on dental labor supplied to the VA, within a difference‐in‐differences framework. We find limited effects on VA separation and new hire rates overall—though early career dentists appear more sensitive to the wage change. More generous pay has its clearest effects on employment type for VA dentists, reducing the likelihood of being part‐time by roughly 10%.     

New York court allows late claim for AIDS phobia

Beulah Crawford, a hospital dietary aide who suffered an occupational needlestick, may add a claim of "AIDS phobia" in a workers' compensation suit against her employer. The New York Supreme Court's Appellate Division ruled against the employer's contention that the 2-year statute of limitations in the Workers' Compensation Law should apply to psychiatric claims that result from occupational injuries. However, the original injury claim must be filed on time. Crawford previously had been awarded workers' compensation benefits because she lost use of her left hand. The ruling could be costly to employers, as psychological injuries are more difficult to verify with the passage of time.     

Family physicians' observations of their practice, well being, and health care in the United States.

OBJECTIVE: Our goal was to characterize how family physicians perceive recent changes in the health care system and how content they are with various factors. STUDY DESIGN: We performed a cross-sectional mailed survey. POPULATION: The survey was completed by a random sample of 361 family physicians practicing in the United States. OUTCOME MEASURES: The survey evaluated attitudes about corporate managed care, health care reform, career satisfaction, compensation, personal life satisfaction, workload stress, personal well-being, and residency training. We reported percentages for Likert-rated survey items, factor analysis of the survey, and a regression model for statistical prediction of the 4 major factors. RESULTS: Relative to survey data gathered in 1996, fewer family physicians in our survey reported that they were satisfied with their careers (59% vs 82%); fewer were satisfied with their compensation (55% vs 65%); and fewer would again choose family practice as their specialty (66% vs 75%). Thirty-one percent worried that they were "burning out" as physicians, and 48% reported that they had experienced more stress-related symptoms in the past year. Only 7% agreed that corporate managed care is the best way to provide the health care America needs at a cost society can afford, but only 36% unequivocally endorsed the concept of a national health plan. Forty-two percent of the respondents reported that they had witnessed bad patient outcomes they perceived to be attributable to managed care business processes. CONCLUSIONS: The morale and career satisfaction of family physicians seems to have eroded in recent years, and discontent is common. As a group, family physicians are unhappy with the current health care system and quite unified about certain specific reforms, yet they are far from such consensus about more sweeping reform.