- Diagnose 100s of diseases with 1 drop of blood
- $2.6 billion.
- Medicare to update ACO rules.
- Does size matter?
- Higher cost burden: obesity vs. substance abuse?
In a well thought out piece in the New Republic, Michael Hobbes argues the answer isn’t ‘yes’ or ‘no’, but the expectations for aid programs to completely reinvigorate an economy or improve health care dramatically are often overestimated. Consider the case of a program that distributes food to individuals who are malnurished.
In Udaipur, India, a survey found that poor people had enough money to increase their food spending by as much as 30 percent, but they chose to spend it on alcohol, tobacco, and festivals instead. Duflo and Banerjee interviewed an out-of-work Indonesian agricultural worker who had been under the food-poverty line for years, but had a TV in his house.
You don’t need a Ph.D. to understand the underlying dynamic here: Cheap food is boring. In many developing countries, Duflo and Banerjee found that even the poorest people could afford more than 2,000 calories of staple foods every day. But given the choice between the fourth bowl of rice in one day and the first cigarette, many people opt for the latter.
Development projects often focus on a single goal (e.g., school attendence, calories consumed, quality of life), but in reality, the individuals receiving the aid have a utility function that depends on multiple factors.
The article is interesting throughout.
Which states have decided to receive additional federal funds to expand the share of people they cover under Medicaid? The Kaiser Family Foundation has the answer.
The president of the American College of Emergency Physicians, Michael Gerardi, was recently interviewed about his plans for the organization. One of his key initiatives will be to stop the practice of housing psychiatric patients in the ER. According to Dr. Gerardi:
It is inhumane that a lot of patients, especially adolescent patients, sometimes live in an emergency department for days. We have stories of patients in the emergency department waiting for a bed, a patient bed, for over a week.
That’s got to stop.
In fact, there are models out there now where you can take a person in a mental health crisis to a separate screening and treatment center, not an emergency department, and you have the same outcomes with safety and more humane treatment. In fact, their length of stay are dramatically shorter in these — it’s called the Alameda model — outpatient centers.
How much of Dr. Gerardi’s objective is focused on what is best for psychiatric patients and how much is motiviated by helping ER docs and ER providers to get out of the (likely less profitable) business of treating mental illness.
Monica Oss of Open Minds makes an important point, that even if the status quo is suboptimal, banning psychiatric ER boarding may not be welfare improving if there are no alternatives available to patients with serious mental illness.
My concern is that psychiatric boarding will be “banned” without formal alternatives developed for these consumers. In an era of parity and expanded health care coverage, there should be funding for these alternatives. But monitoring whether the “ban” increases rates of homelessness and incarceration is critical to assuring we don’t repeat past policy mistakes.
An interesting topic that the Healthcare Economist will be monitoring.
In most goods and services you buy, the answer is yes. A Tesla is more expensive than a KIA; a large house is more expensive than a big house; a night at the Ritz Carlton is more expensive than a night at the Motel 6.
Nevertheless, in healthcare, many policy wonks believe that cost and quality may not be tightly related. One reasons is that many prices (e.g., Medicare reimbursement rates) are set administratively and thus high quality providers often cannot charge higher cost. In addition, patient are limited in their ability to observe quality of care, both before purchasing the service as well as afterwards.
A paper by Dowd et al. (2014) uses Data Envelopment Analysis (DEA) to create an aggregate measure of value that combines cost and quality. They find that more cost-effective physician practices–as measured by DEA input efficiency scores–have lower levels avoidable or unncessary utilization of health care services. However, the authors also find that “rates of preventive screening and monitoring of chronically ill beneficiaries increase with efficiency.”
Does this mean that physician practices should just provide as few services as possible? Likely no.
This finding could be the result of many factors. First, low-cost providers may have significant value in signaling to the market that they are high quality. Thus, low-cost quality initiatives–such as cancer screenings–may help improve their market share at little additional cost. High-quality/high-cost providers may have little value focusing on broad, population-level quality metrics and may instead focus on specialized, high-quality care. Second, the firms who are low cost may be part of accountable care organizations (ACOs). ACOs typically receive bonuses for reducing patient cost and improving quality.
In summary, finding that “efficient” providers are low cost does not mean that reducing reimbursement rates or performing fewer services will lead to better patient outcomes.
A McKesson study cites 7 trends in value-based reimbursement:
Check out the full report for more details.
Health insurance premiums appear will rise modestly or even decline for many Obamacare plans in state Health Insurance Exchanges. A RWJ brief reports:
Premium increases will be quite low between 2014 and 2015. In the rating areas we examine in the 17 states plus the District of Columbia, six states will have average premium reductions across the carriers’ lowest cost silver plans, 10 will have small premium increases (defined as 5% or less), and two will have increases greater than 5 percent. Across the 39 rating regions studied within those states, 18 will have average percentage premium reductions across their carriers’ lowest cost silver plans, 11 will have small increases, and 10 will have larger increases (greater than 5%).
Although this is mostly good news, the individuals in rural areas may not be as fortunate.
Larger premium increases are more likely to occur in rural areas. For example, the rural counties studied in Tennessee will see a 21.4 percent increase in the average lowest cost silver premiums offered by carriers in 2015. Premiums will increase in the study’s selected rural counties in Michigan by 6.7 percent, in New York by 7.9 percent, and in West Virginia by 9.0 percent.