- What projects are funded by the CMS Innovation Center?
- Sick in America.
- Does drinking coffee improve your health?
- Diagnostic technology and variation in treatment choices.
- Healthcare Economist on Find The Best.
- Stephen A.
Tags: Links
Jaan Sidorov of the Disease Management Care Blog hosts this week’s edition of the Health Wonk Review.
Tags: HWR
Fixed effects (FE) regressions are a useful tool for controlling for time-invariant factors in a regression specification. When using a linear OLS model, FE represent the average value of the dependent variable for that individual after controlling for covariates. Estimating a fixed effects model for non-linear regressions, however, can be problematic.
For instance, if you try to estimate the fixed effects coefficients in a probit model, you will introduce an incidental parameters problem. Assume that the panel data has N individuals over T time periods. If T is fixed, as N grows large (i.e., N→∞) your covariate estimates (β) become biased. This occurs because the number of “nuisance parameters” grow quickly as N increases.
There does exist a “fixed effects logit estimator”, but this estimator does not actually use a fixed effects method. Rather it is a conditional maximum likelihood estimator (cMLE). In the two period model, it conditions on the fact that the event occurred in one or the other time period.
- Pr(yi1=1|yi1+yi2=1) = 1-F(Δxβ)
- Pr(yi2=1|yi1+yi2=1) = F(Δxβ)
“The conditional-likelihood estimator is thus equivalent to a logit estimator of the dependent variable 1(Δy=1) on the independent variables Δx for the subsample of observations satisfying yi1 + yi2=1.”
Abrevaya (1996) provides an example of how this bias can occur in a two period example and explains the conditional logit model in more detail.
- Jason Abrevaya (1996) “The equivalence of two estimators of the fixed-effects logit model” Economic Letters Volume 55, Issue 1, 15 August 1997, Pages 41–4
Tags: Fixed Effects, Incidental Parameter Problem, Logit, Probit
Despite lower costs than previously projected, the Medicare Trust Fund is still in bad shape.
he estimated exhaustion date for Medicare’s Hospital Insurance (HI) trust fund, “…remains at 2024,the same year shown in last year’s report. As in past years…the fund is not adequately financed over the next 10 years. HI expenditures in 2011 were lower than the previous estimate, but the projected level grows more rapidly than shown in last year’s report because of changes in HI provider assumptions and the projected faster growth in earnings after 2014….HI expenditures have exceeded income annually since 2008, and projected amounts continue doing so through the short-range period until the fund becomes exhausted in 2024.”
More important the the exhaustion of the trust fund is how fast Medicare spending grows relative to the overall economy. Like in previous years, the growth in Medicare spending is expected to grow quickly as baby boomers retire.
“Medicare’s costs under the Trustees’ current-law assumptions rise from their current level of 3.7 percent of GDP to 6.0 percent in 2040 and 6.7 percent in 2085.” These projections are unrealistically low as they assume large cuts (~25%) to physician reimbursement level. A more reasonable assumption is that the annual ‘doc fix’ will continue in perpetuity and thus costs will rise even more. Under this alternative assumption:
“Medicare costs would rise to 6.5 percent of GDP in 2040 and 7.8 percent in 2085. Under the full scenario, in which adherence to the ACA cost-saving measures also erodes, costs would rise to 7.0 percent of GDP in 2040 and 10.3 percent in 2085.”
Thus, CMS actuaries project that one out of every 10 dollars in the economy will be spent on Medicare by 2085 if current trends continue.
As stated in the title of this post, we’re fucked.
Medicare recently released the Medicare Spending per Beneficiary (MSPB) measure on Hospital Compare. This measure includes all payments to doctors, hospitals or other facilities for services provided to a patient during the three days before the hospital stay, during the stay, and during the 30 days after discharge from the hospital. Kaiser Health news provides an analysis of this measure and also provides an interactive graph of state level efficiency and a list of hospital MSPB scores.
The Kaiser Health News article notes that:
“Patients treated at most or all hospitals in Las Vegas, Fort Lauderdale, Newark, Miami, Los Angeles and Orange County, Calif., tended to cost more than the national median, which is $17,988. Patients treated at most or all hospitals in Anchorage, Des Moines, Honolulu, Minneapolis and Portland, Ore., tended to cost Medicare less.”
The article also recaps the opinions of a number of industry and policy thought leaders.
Jennifer Faerberg, director of health care affairs at the Association of American Medical Colleges stated that differences in the MSPB measure across hospitals is primary due to how well hospitals can control post-acute costs. This is generally true. The MSPB measure controls for the type of admission (i.e., MS-DRG) of the index admission. Thus, differences in the MSPB measure are due principally to differences in post-acute spending and the frequency with which the patient is readmitted to the hospital within the 30 days after the initial hospitalization.
Some policy experts were critical of the MSPB measure:
Nancy Foster, a vice president at the American Hospital Association, said the data do not answer key questions: Did the patients that got more services fare better than others? Could the patients that cost Medicare less actually have benefitted from more care? ”What we don’t know is if those additional investments yield differences in outcomes,” Foster said.
Foster makes a good point; the MSPB measure should not be analyzed in isolation. CMS does not only measures hospital efficiency, but also includes a number of hospital quality measures.
Elliott Fisher, one of the main researchers from the Dartmouth Atlas, questioned the practical usefulness of the new information. “As a hospital administrator I would go, how does this help me?” he said. “We just don’t know whether a lot of specialists are running through the hospital doing everything they can to every patient who is horizontal, or whether they’re discharging every patient to a rehab facility. Those are two very different causes of high costs.”
However, CMS did distribute a “hospital specific report” that detailed where the average spending went (e.g., inpatient, skilled nursing facility, home health physician) in the periods before, during and after the index hospital admission. Each of these quantities is compared to the state and national average spending levels for each type of service.
Disclaimer: The Healthcare Economist worked with CMS and a team at Acumen to develop the MSPB measure.
Tags: Efficiency, hospital, Hospital Compare, Kaiser Health News, Medicare Spendiyng per Beneficiary
In a few hours, Department of Health and Human Services (HHS) Secretary Kathleen Sebelius will address a keynote speech to graduates at Georgetown University. This is a controversial appearance. One provision of the health of the Health Reform (i.e., the ACA) mandates that employer cover contraception coverage. Although Georgetown University has agreed to provide these benefits, other religious institutions (e.g., Catholic hospitals) argue that this mandate impinges on their religious freedom.
Should the government mandate coverage of contraception? Today, the Healthcare Economist provides multiple views.
Those who support the contraception coverage mandate. Why should your job determine your health benefits? Shouldn’t all individuals have access to a minimum level of healthcare regardless of their employer. Although Catholic hospitals have argued that mandating contraception coverage impinges on their religious freedom, but not covering contraception the religious views of the employer are hoisted on their employees.
Those who do not support the contraception coverage mandate. Why should the government tell employers what services to cover? Even more importantly, why should the government tell employers to covers services against which the employer has religious objections. Of course, it may seem ‘unfair’ that employees who want to use contraception do not receive coverage. However, these employees are free to work for other firms. Further, these employees are not barred from purchasing the contraception.
The policy wonk. This argument can also be seen as a part of a larger debate about mandated benefits. Mandated benefits may improve outcomes by facilitating access to care. Further, it may help consumers compare health plans since all plans would be required to offer a minimum benefit level. The key drawback of having a minimum benefits package is the expense. Covering more service is expensive. It is not only expensive to provide the services, but is also administratively expensive. For instance, if the government mandates coverage for cancer treatment, a plan must specify which specific types cancer drugs and procedures are covered. Over time, provider special interest interest group will lobby to have their (profitable) services included in the mandated benefits package. Thus, although mandated benefits may improve access to care in the short-run, in the long-run it will be difficult to maintain a mandated benefit package that does not lead to significant increased growth rates in health care costs.
Tags: Sebeilus
In honor of National Women’s Health Week, U.S. Senators Tom Carper (D-Del.), Thad Cochran (R-Miss.), Mary Landrieu (D-La.), and Kelly Ayotte (R-N.H.) hosted a briefing on the text4baby program today.
What is Text4Baby?
Text4Baby is a free national health texting service that promote senrollment in both Medicaid and the Children’s Health Insurance Program (CHIP) and provide pregnant women and new mothers free text messages on important health care issues.
One question is who would sign up for Text4Baby? There are abundant resources available on the internet giving tips for pre-natal care and childrearing. Why does the government need to create a text service offering parenting advice? This initiative could be useful for individuals without internet access or limited internet access (e.g., only at work and/or at a library). However, one would think that private companies could also provide a similar service. Since new mothers often a desirable demographic for advertisers, one would think that health tips sponsored by companies would readily be financially sustainable. Thus, it seems that the government would have a limited role here.
However, Text4baby is the largest mobile health initiative in the country and in just over two years has enrolled over 345,000 individuals in the service. Why have so many people enrolled?
One reason is that individuals may trust the government more than other sources. More relevant may be that individuals can sign up for CHIP and Medicaid through the Text4baby system. Any program that can simplify the enrollment process for Medicaid and CHIP likely is in high demand.
Thus, is the demand for Text4baby due to the medical advice it offers or due to the fact that it facilitates enrollment in public health insurance programs? I would bet the latter.
Tags: Text4baby
Is tele-medicine/internet-medicine the wave of the future? Or do these alternative treatment methods just make it easier for patients and providers to engage in fraudulent and/or unsafe behaviors?
In response to concerns about tele-medicine’s effect on patient safety, many states have begun prohibiting physicians from prescribing drugs without conducting a prior physical examination. In fact, more than 30 states have instituted this type of rule since 1998.
A paper by Cotet and Benjamin investigates this regulation which they call the physical examination requirement (PER). They hypothesize that:
“The imposition of the PER thus created a tradeoff between access and safety (or quality) in the provision of healthcare services. By raising the implicit cost of nontherapeutic use of potentially harmful drugs (such as Oxycontin) and by improving diagnoses, PER offered the promise of higher quality care. However, the PER also slowed the diffusion of telemedicine, making it more difficult and more costly for patients to receive care.”
To evaluate the impact of PER, Cotet and Benjamin use a difference-in-difference empirical strategy to compare changes in mortality for states that adopted PER and against changes in mortality among states that did not (also controlling for changes in state and county characteristics over time). Applying this strategy to the Compressed Mortality Files—for mortality measures—and the Behavioral Risk Factor Surveillance System (BRFSS)—for morbidity measures, the author conclude the following:
“The adoption of PER is associated with a 1% rise in disease-related mortality rates the equivalent of 8.5 deaths per 100,000 people, presumably because it raised the implicit cost of, and thus reduced access to, medical care. In addition, the adoption of the PER is associated with a 6.7% reduction in injury-related mortalities, the equivalent of 2.5 deaths per 100,000 people. Thus, the reduction in injury mortality is smaller than the elevation of disease-related mortality, yielding a rise in overall mortality.”
- How much does it cost to insure your family?
- Should your doctor be using Facebook?
- Can the Facebook IPO save California’s budget?
- Britain: “the clearest failure seemed to be health care.”
- Less is more.
- NBA Playoffs: Advanced Box Scores and the Troxler Effect.
- Cavalcade of Risk #157.
Tags: Links
China standard is living as funds from export industries eventually trickle down into the earnings of (some) ordinary Chinese. Where are the Chinese spending their newfound wealth? In part, the answer is self-beautification procedures. According to the Economist:
“China performs more cosmetic surgery than any country except America and Brazil. Almost 1.3m licensed procedures were carried out in 2010, according to the International Society of Aesthetic Plastic Surgery (as well as many more unlicensed ones). The market, which barely existed 15 years ago, is now worth some $2.4 billion. China’s growing wealth, and its obsession with celebrity culture, is fuelling the increase. Beauty is also deemed an advantage in the competitive white-collar workplace. People in search of a job submit a photograph with their application…The three most common procedures are double eyelid surgery, liposuction and nose jobs.”
Not all is well, however.
“…a leading plastic surgeon, called for higher standards after botched surgery complaints reached 20,000 a year. Her plea echoes that of Ma Xiaowei, a vice-minister of health, who said that during a random inspection of plastic surgery clinics in 2010, fewer than half met national standards.
…As many as 70% of China’s cosmetic procedures take place in unlicensed salons that offer simple procedures such as face-slimming injections. Some doctors, badly paid in state-run hospitals, moonlight in illegal salons.“
Tags: China, Plastic Surgery, Regulation
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