April 2011

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Challenges in Care Coordination

April 29, 2011 in Medical Home, Medicare, Supply of Medical Services | 1 comment

Why is it so difficult to get physicians to work together to coordinate care for their patients?  Here’s why:

“The typical primary care physician has 229…other physicians working in 117…practices with which care must be coordinated, equivalent to an additional 99 physicians and 53 practices for every100 Medicare beneficiaries managed by the primary care physician.”

Most Medicare patients like the ability to see any doctors they choose.  However, this flexibility creates significant care coordination issues.  Medicare patients who are willing to sacrifice some provider choice to improve care integration, likely opt for Medicare Advantage’s managed care plans like Kaiser.  In the fee-for-service world that currently exists, however, care coordination is not a simple proposition.

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Quotation of the Day

April 29, 2011 in Quotation | No comments

“No man ever steps in the same river twice, for it’s not the same river and he’s not the same man.”

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Health Wonk Review

April 28, 2011 in Carnivals | No comments

The “Spring Has Sprung and Mud Still Flung” edition of the Health Wonk Review is up at the always-informative Incidental Economist blog.

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Cash and Counselling

April 28, 2011 in Health Insurance, Optimal Ins (Theory) | 1 comment

Many economists claim that insurance that gives  sick people cash to pay for their medical treatments is more efficient than insurance that provides in-kind medical services directly.  Although providing in-kind services is more likely to decrease the number of false claimants than insurance that provides cash, cash benefits allow beneficiaries to control how they spend their money.  These patients will generally be more frugal since any savings in medical spending goes directly into their pocket.

The Cash and Counselling demonstration is one effort to give beneficiaries cash when they become disabled.  A Health Affairs paper by Foster et al. describes the demonstration.

“About 1.2 million Medicaid beneficiaries receive disability-related supportive services in their homes. Most receive them from government-regulated agencies, whose professional staff arrange services and monitor quality, but a growing number manage their services themselves.As one model of consumer-directed supportive services, Cash and Counseling gives consumers a flexible monthly allowance to purchase disability-related goods and services (including hiring relatives as workers), provides counseling and financial assistance to help them plan and manage their responsibilities, and allows them to designate representatives (such as family members) to make decisions on their behalf.”

Did it work?

“Our survey of 1,739 elderly and nonelderly adults showed that relative to agency-directed services, Cash and Counseling greatly improved satisfaction and reduced most unmet needs. Moreover, contrary to some concerns, it did not adversely affect participants’ health and safety.”

Rather than spending this money on formal care services, almost all beneficiaries used their cash benefit  to hire family members or friends.  Other funds were directed to pay for assistive equipment, personal care supplies, and medications.  Could the Cash and Counselling model be a viable care alternative, especially for high cost patients?

Source:

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Wednesday Afternoon Links

April 27, 2011 in Current Events | No comments

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How the Recession Changing Tiebout Sorting

April 27, 2011 in Economics - General | No comments

Typically tiebout sorting works like this:

“Sharofsky does know — very well — about another Cherry Hill [NJ] institution: its stellar public schools. He’s president of the Cherry Hill Teachers Union. Those teachers can brag that 95 percent of the students they teach go on to college. Not bad in one the state’s largest and most diverse suburban districts. Teachers’ salaries here average $54,000 a year and can go up to $100,000. Families — like Sharofsky’s — move to this suburb, right across the bridge from Philadelphia, for the education.

To support their schools, Cherry Hill residents pay some of the highest property taxes in the nation. According to the Tax Foundation, the town is among the top 10 communities with the highest tax burden relative to home value — in 2009, about $5,600 a year for the median homeowner.”

With the state taking a bigger cut, will there be less Tiebout sorting? I would guess so.  In fact, because of the recent contraction in the economy and resulting squeeze on state budgets, the state of New Jersey is not letting Cherry Hill residents keep as high a share of their tax payments. Governor Chris Christie gave millions of Cherry Hill’s surplus money to schools whose budget was even more in need.  Thus, Cherry Hill is a less attractive option if it has high taxes, but the quality of the schools regresses.

In California most education funding is funneled directly from the state, even if some funds are raised through local property taxes.  Is there less Tiebout sorting in California than other States?

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Determining Population Size

April 26, 2011 in Econometrics | No comments

How do ecologists determine the size of a population?    One method is the mark and recapture (a.k.a. capture/recapture method).  This method relies on having two separate trials to capture (either physically or in data) members of certain population and determines the population size based on the proportion of specimens who are captured in both trials.

The key assumption for the capture/recapture method is that the probability of capturing any given specimen is independent for each trial.  If one was doing a capture/recapture study and one could more easily capture fat and old birds, then the likelihood of catching the same bird in the second trial would increase.  This would inflate the value of m, and thus the approximation of the population would be too low.

One application of the capture/recapture method is McClish et al. (1997)‘s examination of the size of the elderly cancer population in Virgina.  The authors estimate  the likelihood cancer patients appear in both the Virgina Cancer Registry (VCR) and the Medicare claims files (MEDPAR) for Virginia resident 65 and older.

“Capture-recapture techniques were used to estimate the actual cancer population size, based on the concordance and discordance of the data sources. If VCR identifies M cases and MEDPAR identifies n cases, m of which are common to both sources, then the estimated number of cases in the entire population of cases at reporting hospitals will be N = [(M + 1) X (n + 1 )/(m + 1)] – 1. With this estimate of the population, the sensitivity of each source alone, as well as those of the combined sources, was estimated.”

The variance of the total population is simply:

  • var(N) = [(M+1)(n+1)(M-m)(n-m)]/[m+1)(m+1)(m+2)]

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Trends in Medicare Part D

April 25, 2011 in Medicare, Medicare Part D, Pharmaceuticals | 1 comment

Recent research from Avalere Health, LLC using Medicare Part D reveals some interesting trends.  Overall, premiums for fee-for-service prescription drug plans (PDPs) increased by 3%.  For beneficiaries who enrolled in a Top 10 plan, however, premiums actually decreased by 6%.  This result was driven by a 12% decrease in premiums for the largest PDP, AARP MedicareRxPreferred and the recent arrival of the low cost Humana-Walmart-Preferred Rx Plan.

Although the total number of Special Needs Plans (SNP) has held fairly steady over time, the number of enrollees in a dual-eligible SNP has risen by 11% between 2010 and 2011.  Additional information on SNPs is below.

Within the Medicare Advantage program, enrollment in HMO and PPO plans continues to grow as PFFS enrollment declines.

Additional Part D trends are highlighted below.  This spreadsheet provides even more detail.

Plan Consolidation in 2011

  • The top 3 PDP plans made up 45.4% of all PDP enrollees.  The top 10 plans made up 73.2% of all PDP enrollees.
  • CIGNA Medicare Rx Plan One joined the top 10 PDPs as did the Humana Walmart-Preferred Rx Plan.
  • UnitedHealth, Humana, and Kaiser provide MA benefits to 44% of all MA enrollees

Part D Sponsor Acquisition and Plan Consolidation

  • CVS Caremark will acquire Universal American’s PDP plans and members after Q1 of 2011
  • AARP MedicareRxSaver consolidated into AARP MedicareRxPreferred
  • PrescriberRxBronze consolidated into Community CCRxBasic

Prices

  • Overall, PDP premiums increased by 3%.  For beneficiaries who enrolled in a Top 10 plan, however, premiums actually decreased by 6%.  This result was driven by a 12% decrease in premiums for the largest PDP, AARP MedicareRxPreferred and the advent of the low cost Humana-Walmart-Preferred Rx Plan.

Special Needs Plans

According to the CMS website, Special Needs Plans (SNPs) were created by Congress in the Medicare Modernization Act (MMA) of 2003 as a new type of Medicare managed care plan focused on certain vulnerable groups of Medicare beneficiaries: the institutionalized, dual-eligibles and beneficiaries with severe or disabling chronic conditions. These beneficiaries are typically older, with multiple comorbid conditions, and thus are more challenging and costly to treat.  Dual-eligible SNPs also offer the opportunity of enhanced benefits by combining those available through Medicare and Medicaid…Specific legislative and regulatory provisions allow SNPs to focus on specific subsets of the Medicare population with the intent to improve care and control costs for these beneficiaries. Consistent, comparable measures that reflect the service delivery and outcomes important to these populations and that promote quality improvement and maturation of SNP products are necessary.

The fifteen SNP-specific chronic conditions approved for 2010 are: 1) Chronic alcohol and other drug dependence; 2) certain auto-immune disorders; 3) cancer (excluding pre-cancer conditions; 4) certain cardiovascular disorders; 5) chronic heart failure; 6) dementia; 7) diabetes mellitus; 8 ) end-stage liver disease; 9) end-stage renal disease requiring dialysis; 10) certain hematologic disorders; 11) HIV/AIDS; 12) certain chronic lung disorders; 13) certain mental health disorders; 14) certain neurologic disorders; and 15) stroke.

 

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Quotation of the Day

April 22, 2011 in Miscellaneous | No comments

“And I tell you, if you have the desire for knowledge and the power to give it physical expression, go out and explore.  If you are a brave man you will do nothing: if you are fearful you may do much, for none but cowards have ned to prove their bravery. Some will tell you that you are mad and nearly all will say, ‘What is the use?’ For we are a nation of shopkeepers, and no shopkeeper will look at research which does not promise him a financial return within a year.  And so you will sledge nearly alone, but those with whom you sledge will not be shopkeepers: that is worth a good deal.  If you march your Winter Journeys you will have your reward, so long as all you want is a penguin’s egg.”

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Employer-Sponsored Insurance after Health Reform

April 21, 2011 in Health Reform | No comments

Much of health reform’s efforts has been focused on expanding coverage to those without employer-sponsored insurance (ESI).  For instance, the ACA mandated expanded Medicaid eligibility and the creation of a health insurance exchange for those not eligible for a group plan or those who work for small employers.

One area of study which has been neglected, however, is the effect of health reform on ESI.  For non-elderly Americans, ESI is still the primary mechanism through which individuals finance the provision of health care services.  A recent Urban Institute report uses a simulation model to estimate how health reform would effect coverage through ESI.  I discuss this article after the jump.

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