Health insurance: Incentivizing overspending or fueling innovation?

Based on a study by Frankovic and Kuhn (2022), the answer is both. However, the value of increased innovation–as measured through longevity gains–more than offset inefficiencies from overspending. Specifically, the authors use an overlapping generations model where individuals can purchase health insurance and medical progress depends on health care sector return on investment. The authors…

Impact of medication cost-sharing on adherence, clinical outcomes, health care utilization, and costs

This is the paraphrased title of a paper by Fusco et al. (2023). The authors conduct a systematic literature review of studies published between 2010 and 2020 and find that among the 79 articles screened: The majority of publications found that, regardless of disease area, increased cost-sharing was associated with worse adherence, persistence, or discontinuation.…

Prior authorization: Burden on physicians and recommendations for change

Prior authorization policies may save money for payers, but they impose significant costs on patients and providers. A JAMA Viewpoint by Anderson, Darden and Jain (2022) examines various approaches for improving prior authorization in Medicare Advantage. In a recent survey of 1004 physicians, 88% reported that the burden associated with prior authorization requirements was high…

Medicare Advantage and Lake Wobegon

That is the connection made between Medicare Advantage (MA) Star Ratings under the Quality Bonus Program (QBP) and Garrison Keillor well-known segment on the Prairie Home Companion in a recent paper by Teno and Ankuda (2022). To better understand this linkage, first recall the famous quote from Mr. Keillor: That’s the news from Lake Wobegon,…

VA vs. private hospitals

How do efficiently is care provided for patients at Veteran Affairs’ hospitals as compared to private hospitals? This is not an easy question to answer as the composition of patients differs between these hospitals. Even among dually-eligible individuals–those with both VA and commercial insurance–individuals treated at VA hospitals are generally more severely ill. To better…

ICER’s 2022 “Barriers to Fair Access Assessment” Protocol

How does ICER plan to determine whether health plans offer fair access to pharmaceuticals? I summarized their approach last year as outlined in their white paper titled “Cornerstones of ‘Fair’ Drug Coverage: Appropriate Cost-Sharing and Utilization Management Policies for Pharmaceuticals.” Last month, final protocol for their “Barriers to Fair Access Assessment“. While the approach follows…

How can physicians earn a ‘gold card’?

Prior authorization is a pain. A paper by Howell et al. (2021) found that the total cost of various utilization management schemes is $93.3 billion of which physicians devote $26.7 billion worth of time to navigate utilization management systems. Payers would argue that prior authorization helps to control costs and stop the prescribing of unnecessary…