Unbiased Analysis of Today's Healthcare Issues

Health Reform in Minnesota

Written By: Jason Shafrin - Jun• 15•14

Was health reform successful in Minnesota?  If the metric of interest is reducing the number of uninsured, the answer is certainly yes.  A State Health Access Data Assistance Center (SHADAC) report finds:

The number of uninsured in Minnesota fell from 445,000 (8.2 percent of the population) to about 264,500 (4.9 percent of the population).

How was this figure achieved?  Were people buying into the health insurance exchanges?  Not entirely.

Coverage in the private health insurance market also increased. Te total number of Minnesotans with private group coverage (primarily employer-sponsored coverage) was relatively stable with a decline of about 6,000 (a 0.2 percent change); growth in self-insured plans was balanced by a decline in fully-insured coverage. The nongroup market grew by almost 36,000 and included gainsboth inside and outside of MNsure

So how did the previously uninsured gain access to health insurance in Minnesota. The answer is, the government.

Tis increase in health insurance coverage was primarily driven by an increase in the number of Minnesotans enrolled in state health insurance programs, Medical Assistance (Minnesota’s Medicaid program) and MinnesotaCare. Enrollment increased by over 155,000 for these two programs combined


Friday Links

Written By: Jason Shafrin - Jun• 13•14

Are market leaders raising health insurance premiums?

Written By: Jason Shafrin - Jun• 12•14

That is the headline from an Avalere report. The top 5 Exchange plans in the state of Washington increased premiums between 6 and 12%. The Exchange plans with market share ranks of 6 or 7, on the other hand, had increases between 0-2% and the 8th place plans even cut rates by almost 7%. Is this a case of the big guys gouging patients?

Actually, the answer is no. Although market leaders did increase rates as a percentage, the premium rates for the top 5 exchange plans in Washington State are actually below plans 6-8. For instance, Blue Cross (the market leader) raised rates by 8.1%, but their 2015 rates ($273.81/month) are still the lowest of all Washington plans. On the other hand Kaiser raised rates by only about 1%, but its 2015 rates ($335.21/month ) are among the highest in Washington.

What can explain this phenomenon. First, this could be a case of regression to the mean where the lowest price plans raise their rates. Second, it could be the case that market leaders intentionally underpriced the plans to gain market share with the intention of later raising rates. Changing health insurance has transcaction cost. For instance, you need to find a new doctor. Additionally, if you pick a new plan, you need to research which plan is best for you and your family which can be time intesive. Thus, underpricing health insurance in the first year of the Exchange may have been an optimal strategy. Third, this could be the case of increase competition. Health plans with lower market share may want to gain market share. One way to do this is to lower their prices (or in this case, increase prices more slowly than the big guys).

Cavalcade des risques #210

Written By: Jason Shafrin - Jun• 11•14

Monsieur Jeff Root of RootFin hosts this week’s round-up of risky posts from the home of Brie, Merlot and Deneuve. It’s a great one, too, with an interesting selection of posts covering everything from Paget’s Disease to the World Cup

Burden of Autism: $236 billion

Written By: Jason Shafrin - Jun• 10•14

Autism (and autism spectrum disorder (ASD)) and autism are disorders are characterized, in varying degrees, by difficulties in social interaction, verbal and nonverbal communication and repetitive behaviors.  CDC identified about 1 in 68 American children as on the autism spectrum.

One question is, how much does it cost to take care of an austistic child?  A recent study finds that:

…the lifetime cost of being diagnosed with autism in the United States is somewhere between $1.43 million and $2.44 million.

The figure at the low end of the range is for people on the autism spectrum who don’t have intellectual disabilities. The higher tally is for people who do, according to a study published Monday by the journal JAMA Pediatrics.

These costs include not only special education for the children, but also parents’ lost productivity at work to care for the child. For adults, the largest costs include additionally living expenses for housing staffed with medical personnel, medical expenses and the lost productivity on the job.

What is the total cost of autism in the US? Nearly a quarter of a trillion dollars.

The study authors relied on estimates from the Centers for Disease Control and Prevention to estimate that there are 3,540,909 Americans with some form of autism. Assuming that 40% of them have an intellectual disability, the total cost of autism in the U.S. is on the order of $236 billion per year.


The Efficiency Frontier in Health Economics

Written By: Jason Shafrin - Jun• 09•14

Which treatments are better than others? Ideally, medicines that provide large health benefits and cost little will be preferred to those that offer little health benefits and/or cost a lot.

In health economics, one way to systematically evaluate different treatments is the efficiency frontier. The efficiency frontier methodology is an extension of the standard approach of incremental cost-effectiveness ratios. The Instituts für Qualität und Wirtschaftlichkeit im Gesundheitswesen (IQWiG,Institute for Quality and Efficiency in Healthcare) is Germany’s agency responsible for assessing the quality and efficiency of medical treatments (e.g., pharmaceuticals, diagnostic and screening methods). The provide an overview of the efficiency frontier concept which I summarize below.

Will a VA scandal happen in England?

Written By: Jason Shafrin - Jun• 08•14

The VA scandal of long wait times is now well-known. Part of the reason why patients were left off official wait lists–ironically–was because VA senior staffers wanted to reduce wait times. Senior VA staff monitored wait times closely to check for any upticks. Some of the VA management at the Phoenix hospital believed the only way to hit their wait time target and save face with upper management was to keep a separate, off-the-books waiting list.

The VA, however, is not the only government organization that monitors wait times. In the UK, the National Health service also closely monitors wait times and sets wait time performance targets for all English hospitals. Like the VA in the US, hospitals in England are incentivized to reduce official waiting times for procedures such as elective surgery.

Using data from the Hospital Episode Statistics between 2006 and 2009, Marques et al. (2014) find that:

…although official waiting times decreased drastically in our study period, total waiting time in secondary care has not declined. Patients with shorter official waits spent a longer time in a ‘work-up’ period prior to inclusion in the official waiting list, and socio-economic inequities persisted in waiting times for joint replacement. We found no evidence that target policies achieved efficiency gains during our study period.

For the VA in the US and the NHS in England, wait time targets do not appear to be successful means of increasing access to care.


HWR: Wonkers Hard at Work Edition

Written By: Jason Shafrin - Jun• 06•14

Joe Paduda has posted  the latest & greatest Health Wonk Review at Managed Care Maters  - he says this issue is quick but not dirty!

End of week links

Written By: Jason Shafrin - Jun• 05•14


Brazil’s Health Care System and the World Cup

Written By: Jason Shafrin - Jun• 04•14

The World Cup starts June 12 in Brazil.  Although the event is sure to draw attention around the world, protesters have taken to the streets demanding that Brazil use the money for these events to improve the countries, health care and education services it provides to its citizens.  Brazil’s projected budget for hosting the World Cup is $13.3 billion, and this figure does not even count the $18 billion Brazil is estimated to spend to host the Olympics


Today, I review Brazil’s health system.  My initial post on Brazil’s health care system is here, but this post adds more recent content and updates some health care statitsics.