Unbiased Analysis of Today's Healthcare Issues

Friday links

Written By: Jason Shafrin - Nov• 21•14

HWR: Turkey Edition

Written By: Jason Shafrin - Nov• 20•14

David Harlow has posted a most excellent Health Wonk Review: The Turkey Edition at HealthBlawg – great substantive content and fun, too! Even a video of Gruber Gate is there if you’re interested.


Does International Development Work?

Written By: Jason Shafrin - Nov• 18•14

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.

Medicaid Expansion States

Written By: Jason Shafrin - Nov• 17•14

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.

  • Alabama Not Moving Forward at this Time
  • Alaska  Not Moving Forward at this Time
  • Arizona Implementing the Medicaid Expansion 
  • Arkansas Implementing the Medicaid Expansion
  • California  Implementing the Medicaid Expansion
  • Colorado Implementing the Medicaid Expansion
  • Connecticut Implementing the Medicaid Expansion
  • Delaware Implementing the Medicaid Expansion
  • District of Columbia Implementing the Medicaid Expansion
  • Florida Not Moving Forward at this Time
  • Georgia Not Moving Forward at this Time
  • Hawaii Implementing the Medicaid Expansion
  • Idaho Not Moving Forward at this Time
  • Illinois Implementing the Medicaid Expansion
  • Indiana Open Debate
  • Iowa Implementing the Medicaid Expansion
  • Kansas Not Moving Forward at this Time
  • Kentucky Implementing the Medicaid Expansion
  • Louisiana Not Moving Forward at this Time
  • Maine Not Moving Forward at this Time
  • Maryland Implementing the Medicaid Expansion
  • Massachusetts Implementing the Medicaid Expansion
  • Michigan Implementing the Medicaid Expansion
  • Minnesota Implementing the Medicaid Expansion
  • Mississippi Not Moving Forward at this Time
  • Missouri Not Moving Forward at this Time
  • Montana Not Moving Forward at this Time
  • Nebraska Not Moving Forward at this Time
  • Nevada Implementing the Medicaid Expansion
  • New Hampshire Implementing the Medicaid Expansion
  • New Jersey Implementing the Medicaid Expansion
  • New Mexico Implementing the Medicaid Expansion
  • New York Implementing the Medicaid Expansion
  • North Carolina Not Moving Forward at this Time
  • North Dakota Implementing the Medicaid Expansion
  • Ohio Implementing the Medicaid Expansion
  • Oklahoma Not Moving Forward at this Time
  • Oregon Implementing the Medicaid Expansion
  • Pennsylvania Implementing the Medicaid Expansion
  • Rhode Island Implementing the Medicaid Expansion
  • South Carolina Not Moving Forward at this Time
  • South Dakota Not Moving Forward at this Time
  • Tennessee Not Moving Forward at this Time
  • Texas Not Moving Forward at this Time
  • Utah Open Debate
  • Vermont Implementing the Medicaid Expansion
  • Virginia Not Moving Forward at this Time
  • Washington Implementing the Medicaid Expansion
  • West Virginia Implementing the Medicaid Expansion
  • Wisconsin Not Moving Forward at this Time
  • Wyoming Not Moving Forward at this Time

Psych Boarding in the ER

Written By: Jason Shafrin - Nov• 16•14

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.

Friday Links

Written By: Jason Shafrin - Nov• 14•14

CoR #221

Written By: Jason Shafrin - Nov• 13•14

Claire Wilkinson hosts this week’s collection of post-election risk-related blog posts. Check it out at “Terms + Conditions“.

Does more spending improve quality?

Written By: Jason Shafrin - Nov• 11•14

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.


Trends in Value-based reimbursement

Written By: Jason Shafrin - Nov• 10•14

A McKesson study cites 7 trends in value-based reimbursement:

  • Rapid adoption of VBR. About 90% of payers and 81% of providers are already using
    some mix of value-based reimbursement (VBR) combined with fee-for-service (FFS).
  • Collaborative regions are more aligned with VBR. Collaborative regions, where one or two payers and providers stand out, are more aligned with VBR.  Regions with more fragmentation have less VBR.
  • ACOs drive VBR. Accountable Care Organizations (ACOs) are significantly closer to VBR adoption than non-ACOs.
  • Pay-for-Performance leads the pack. Of the existing value-based models, payers and providers project that the proportion of their total business (inclusive of commercial and
    Medicare) that is aligned with pay-for-performance (P4P) will experience the most growth.
  • IT systems are not there yet. Currently, 15% of payers and 22% of providers characterize P4P as “very difficult” or “extremely difficult” to implement. They also rated Episode of Care/Bundled Payment and others (e.g., Shared Savings) as very or extremely difficult. The key obstacles to implementing these value- based models, payers and providers agree, are a lack of standards, analytical tools, and the need for better business IT infrastructure and systems that support these models—all while taking action to reduce administrative burdens and costs to remain financially sound.
  • Technology is the key to successful VBR. Integrating IT systems and giving payers and providers useful tools is key.
  • Clinical buy-in is vital. The largest proportion of payers and providers pointed to a lack of clinician buy-in and engagement with VBR as the number one challenge to its success (20% of payers and 17% of providers).

Check out the full report for more details.

Obamacare premium increases overstated?

Written By: Jason Shafrin - Nov• 09•14

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.