Unbiased Analysis of Today's Healthcare Issues

Measles death in the US

Written By: Jason Shafrin - Jul• 02•15

Vox reports:

We started 2015 with one of the worst measles outbreaks in recent history, which originated at Disneyland in California. And today, the US just recorded its first measles death in a dozen years.

According to a news release from the Washington State health department, the (still unidentified) woman was probably exposed to the extremely contagious virus while at a medical facility during an outbreak in Clallam County.

If you or your children haven’t gotten your MMR shot, get vaccinated. See this CDC chart for details.

Is Ebola back?

Written By: Jason Shafrin - Jul• 01•15

Troubling news from Liberia. The BBC reports:

A second case of Ebola has been confirmed in Liberia, following the death of a teenager from the virus on Sunday, officials say.

The country had been declared Ebola-free more than seven weeks ago.

The new case was in Nedowein, the same village where the boy died, the ministry of information said.
Liberia’s authorities quarantined the area after the teenager’s death and said his funeral was carried out safely.

Liberia has recorded close to 5,000 lives lost to the virus.

Vermont Creating an All-Payer Claims Database?

Written By: Jason Shafrin - Jul• 01•15

A claims database from all health insurers would but a great resource for researchers. States also want to use these data, however, to negotiate better prices. The question is, can a state legally compel health insurers to disclose prices?

That is what a court case from Vermont involves. The Incidental Economist writes:

the Supreme Court this morning agreed to hear Gobeille v. Liberty Mutual, a case with significant implications for the states’ authority over the health-care sector.

At issue in the case is whether Vermont can force health insurers—including employers that self-insure—to tell state officials the prices they pay for medical care. Vermont wants to put that information in an “all-payer claims database” to enable regulators and consumers to get a picture of how the health-care market operates in the state

On the one hand, pricing transparancy is generally a good thing. On the other hand, insurers are private businesses and it is unclear whether the government could or should force them to disclose these prices. Further, health insurers and their prices–to public payers at least–are highly regulated.

Another question is whether self-insured employers also have to disclose their prices.

What are your thoughts on this issue? Please add to the comments.

ACA and narrow networks

Written By: Jason Shafrin - Jun• 29•15

One way for insurers to reduce health care costs is to restrict patient access to only lower cost providers.  This phenomenon is known as narrow networks.  On the one hand, narrow networks can promote efficiency by driving down provider price and directing patients to the highest value physicians.  Alternatively, if insurers use narrow networks to direct patients to providers based solely on cost, the quality of care patients receive in narrow networks may decline.

What share of silver plans in health insurance exchanges use narrow networks?  This is the question Polksy and Weiner (2015) address in their issue brief.  They use data from 1,065 unique silver plans sold in all states (plus DC) as provided by HIX Compare to identify the size of different provider networks for each insurer. They found that:

By our measures, 41% of networks are small or x-small: 11% of networks are x-small, meaning they include less than 10% of office-based practicing physicians in the area and another 30% are small, including between 10% and 25% of physicians. At the other end of the spectrum, 11% are x-large, which we define as networks including more than 60% of physicians.

As the figure below shows, although only 36% of networks are narrow with respect to primary care physicians, for oncologists 59% of networks are narrow. Thus, access to high cost oncology services is more limited. It is not clear whether narrow networks are moving patients towards oncology specialist or simply reducing patient access to care. Additional research is needed to determine how narrow networks affect patient outcomes, particularly for patients with cancer.

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Source:

Monday Links

Written By: Jason Shafrin - Jun• 28•15

Obamacare subsidies stand

Written By: Jason Shafrin - Jun• 26•15

Although I mentioned on Wednesday that there are some bills pending that could strip away some aspects of the Affordable Care Act (i.e., medical device tax, IPAB), the core components of the ACA were upheld by the Supreme Court. The BBC reports:

In a 6-3 decision, the justices said that tax subsidies that make health insurance affordable for low-income individuals can continue.
The ruling preserves the law known as Obamacare, which Mr Obama considers a major part of his presidential legacy.

What was all the commotion about?

In the court, opponents argued that a phrase included in the law, “established by the state,” meant the federal government could only provide subsidies to people in states that set up their own exchanges.

In other words, individuals who enrolled in the health care exchanges would not be eligible for subsidies if the legislation was read literally. With the King ruling, however, the subsidies were upheld.

Vox has 10 facts to know about the decision.

The King verdict’s coverage, however, is rightfully being trumped by another Supreme Court case handed down today.

Obamacare’s slow repeal?

Written By: Jason Shafrin - Jun• 24•15

While we are waiting for the King v. Burwell verdict, which could repeal large sections of Obamacare, the house of representatives has already approved rolling back some ACA provisions. Modern Healthcare reports:

Lawmakers postponed final passage of the proposed Protecting Seniors’ Access to Medicare Act despite a majority voting in favor of the bill. The measure would repeal the Independent Payment Advisory Board, a 15-member body of outside experts established by the Affordable Care Act to propose recommendations to control Medicare spending growth.

Not only did a vote to repeal IPAB get approved, but lawmakers also approved a bill to repeal the medical device tax. MedPageToday reports:

The House voted 280-140 to repeal the medical device tax, a 2.3% excise tax charged to the makers and importers of artificial hips, pacemakers and other medical equipment. Now, the debate moves to the Senate where passage of the Protect Medical Innovation Act, the repeal bill’s official title, is much less certain.

The medical device tax was implemented in 2013, and is expected to yield $26 to $30 billion in revenues over the next decade, which will be used to help finance other aspects of the Affordable Care Act, namely healthcare expansion.

Although the core tenets of the Affordable Care Act–subsidies for low-income individuals and the creation of health insurance exchanges–is still intact, the ACA’s provisions are clearly no longer set in stone.

ACA leading to health insurance consolidation?

Written By: Jason Shafrin - Jun• 22•15

That is what Bloomberg is reporting:

Insurance companies are looking at mergers to cut costs and keep profits expanding as a surge in enrollment from the the Patient Protection and Affordable Care Act. Humana, which is exploring a sale after being approached by Cigna about a potential deal, Bloomberg News reported last month,

Analysts have been working to figure out how a potential deal frenzy will shake out. If Anthem targets Cigna, Aetna is likely to pursue Humana, Chris Rigg, an analyst at Susquehanna Financial Group, said in a research note.

“Alternatively, if Cigna really doesn’t want to sell, than the obvious defense is to buy Humana at any cost,” he said. “Crazy times.”

Industry consolidation may create some efficiencies, but also could result in an oligopolies in many markets with consumers having few insurance options, particularly in the highly regulated ACA health insurance exchange marketplaces.

Claims-based Measures of Disability

Written By: Jason Shafrin - Jun• 21•15

How does one measure disability?  This is a difficult question.  Many health economists face an even more difficult question: how does one measured disability in claims?

A paper by Ben-Shalom and Stapleton attempts to answer this question using six definitions:

  • Chronic Illness and Disability Payment System (CDPS). Developed by Rick Kronick  et al. 2000 (one of my dissertation committee members) and coauthors as system to support risk-adjusted Medicaid payments to HMOs.  It is similar to the Medicare Advantage HCC system but applied to Medicaid.
  • Access Risk Classification System (ARCS) algorithm,. This algorithm classifies people with disabilities according to their ability to access routine care. ARCS relies on ICD-9 diagnosis codes, procedure codes (HCPCS and CPT codes) and the number of prescriptions.  It was developed by Palsbo et al. (2008).
  • SSDI eligibility. Another method of identifying disability is based on eligibility decisions by the Social Security Administration (SSA) for Social Security Disability Insurance (SSDI).
  • Psychiatric disorders: The patient was considered to have a psychiatric disorder if they have schizophrenia, affective disorder, or psychotic, neurotic, personality, and other nonpsychotic mental disorders. The following ICD-9 codes were used: 295–301, 306–7, 309–10, and 314–315.
  • Cognitive disorders. A person was classified as having cognitive disorders if they have denmentia or Alzheimers, which are based on the following ICD-9 codes: 290.x, 290.3, 290.4, 290.8 and 331.0.
  • Intellectual disorders. A person was classified as having an intellectual disorder if htye have a mild (ICD-9 code: 317), moderate (318.0), severe (318.1), profound (318.2) or unspecified (319) intellectual disability.

They test these algorithms against patients self-reports of disability in the Medicare Current Beneficiary Survey data.  The authors conclude that:

The predictive performance of the regression-based models is better than that of the individual claims-based indicators. At a predicted probability threshold chosen to maximize the sum of sensitivity and specificity, sensitivity is 0.72 for beneficiaries age 65 or older and specificity is 0.65. For those under 65, sensitivity is 0.54 and specificity is 0.67. The findings also suggest ways to improve predictive performance for specific disability populations of interest to researchers.

(more…)

End of Week Links

Written By: Jason Shafrin - Jun• 18•15