Brad Wright has posted Health Wonk Review: August Recess Edition at Wright on Health.
Getting Obamacare subsidies may be too easy or too hard depending on your perspective. From MSN:
In May 970,000 people had citizenship data errors in their Obamacare applications. As of August, 450,000 of those cases have been resolved, 210,000 are in progress and 60,000 new documents arrive every day. The 310,000 remaining applicants will receive two more phone calls and one more email…
Critics of the health care law have noted that the government doesn’t have a system in place to verify information it receives from consumers. Last month the Government Accountability Office was able to gain subsidized health insurance for 11 out of 18 fake accounts.
Some people may say that government regulation is cumbersome and people are not getting the funds to purchase the insurance they need. Others may cite the GAO statistics saying that it’s easy to scam the system. Your personal values for providing subsidies to individuals in need vs. avoiding fraud likely will determine how you interpret this story.
In pay-for-performance (P4P) or value-based purchasing (VBP) schemes, health care provider reimbursement rates depend on performance. Physicians can receive bonuses for following best practices, and hospitals can increase reimbursement rates from Medicare if they improve clinical processes and patient satisfaction. As an economist, rewarding good performance with financial payments makes perfect sense. Or does it?
…as long as the task involved only mechanical skill, bonuses worked as would be expected: the higher the pay, the better the performance. But when we included a task that required even rudimentary cognitive skill, the outcome was the same as in the India study: the offer of a higher bonus led to poorer performance.
If this empirical finding holds true, then P4P would seem to make sense for rewarding a few basic, high-value health care processes. For instance, a P4P scheme to reward physicians who provide the proper vaccinations makes sense. A P4P program that tries to identify every best practice possible and reward each one is doomed to fail because: (i) the informational burden of not only measuring best practices but updating them over time is immense, and (ii) P4P will focus providers attention only on the activities they are rewarded for and will distract their attention from the difficult cases that require more creative thinking. Doctors and hospitals have long grumbled to policymakers and payers about P4P. According to Ariely’s research, they may be right after all.
Obamacare mandates that individuals need to buy health insurance or else they will face a financial penalty. This threat, however, is not credible unless there are affordable health insurance options for most Americans. What are states doing to hold down health insurance rates in the ACA’s health insurance exchanges? A RWJF working paper provides some options which I describe below:
CVS’s Minute Clinic isn’t the only game in town for quick primary care visits anymore. Wal-Mart is getting into the primary care game with $40 office visits with nurse practitioners. MSN Money reports:
Wal-Mart is making its long-awaited move into delivering primary care: The retailer has quietly opened half a dozen primary care clinics across South Carolina and Texas and plans to launch six more before January.
The clinics will be staffed by nurse practitioners in a partnership with QuadMed.
The clinics will be open 12 hours a day on weekdays and 8 hours per day on weekends.
Why did Wal-Mart choose Texas and South Carolina?
“Both Texas and South Carolina have primary care access problems, [but] interestingly, the access problem is specifically related to cost,” she [Alicia Daugherty] says. “And neither state is expanding Medicaid, so both will continue to have a group of uninsured who will prioritize cost when seeking care. Obviously, both also have high rates of obesity, smoking, chronic conditions, and poverty.”
This is the finding from a CBO working paper by Stocking et al. (2014). They use measure how plan bids change as the number of plans in an area change controlling for year, region, plan sponsor fixed effects, whether the plan was a Medicare Advantage Part D Plan (MA-PD), and whether the plan has a high share of low-income subsidy (LIS) beneficiaries. The authors find the following:
Consistent with economic theory, we find that increases in the number of plan sponsors within a market were associated with lower bids and lower overhead and profits of plans in that market. [A]mong stand-alone plans…each additional plan sponsor entering [a] market was associated with a reduction in bids…of 0.4 percent…which corresponds to an elasticity of -0.071….an additional plan sponsor nationwide was associated with a reduction in government spending of $7 million to $17 million each year.
However, these are only the average results. The authors also find that the size of the incumbant and the new entrants matter.
The bids of a larger “incumbent” plan that enrolls 5 percent of the regional beneficiary pool are less responsive (elasticity = -0.01) to changes in the number of plan sponsors than the bids of a smaller “fringe” plan that enrolls less than 0.25 percent (elasticity = -0.12).
Generally, health is just so heavily regulated. It’s just a painful business to be in. It’s just not necessarily how I want to spend my time. Even though we do have some health projects, and we’ll be doing that to a certain extent. But I think the regulatory burden in the U.S. is so high that think it would dissuade a lot of entrepreneurs.
Between 2000 and 2007 annual health expenditures in the US grew by 6.6% per year. Between 2008 and 2011, however, the growth rate was only 3.3 percent per year. Are structural changes (e.g., the ACA) helping cause the slowdown?
According to Dranove et al. (2014), the answer is likely ‘no’. The authors use new data from the Health Care Cost Initiative (HCCI) which collects claims data from insurance companies such as Aetna, Humana, and UnitedHealthcare. Economic forces rather than structural changes in the healthcare system have lead to decelerating health care spending.
By exploiting regional variations in the severity of the slowdown, we determined that the economic slowdown explained approximately 70 percent of the slowdown in health spending growth for the people in our sample. This suggests that the recent decline is not primarily the result of structural changes in the health sector or of components of the Affordable Care Act, and that—absent other changes in the health care system—an economic recovery will result in increased health spending.