Unbiased Analysis of Today's Healthcare Issues

The Placebo Blocker

Written By: Jason Shafrin - May• 20•15

Courtesy of xkcd.


Depression Among the Elderly & Medicare Part D

Written By: Jason Shafrin - May• 19•15

How did the enactment of Medicare Part D affect the mental health of the elderly? This is the question Ayyagari and Shane attempt to answer in their recent JHE paper.

The authors use data from the Health and Retirement Study (HRS) between 2010 and 2010 to measure changes in depressive symptoms among patients aged 60-70. The key endpoint of interest is an abridged version of the Center for Epidemiologic Studies (CESD) scale. HRS has detailed measures of mental health, demographic, and socioeconomic variables, it does not include detailed information on prescription drug use or spending. To address this shortcoming, the authors also use the Medical Expenditure Panel Survey (MEPS).

In the baseline specification, the authors use a difference-in-difference approach to measure difference CESD levels between 65-70 years olds and 60-64 year olds before and after 2006 (when Medicare Part D was implemented). The authors also use an IV approach. The measure whether or not the individual had prescription drug coverage and use whether the person was age ≥65 after 2006 as an instrument for prescription drug coverage.

The authors found the found that depressive symptoms among the elderly decreased significantly after the introduction of Medicare Part D.

Using our preferred specification, we find that Medicare Part D resulted in a 14.8% decline in depressive symptoms and a 21.2% decline in the likelihood of experiencing 3 or more depressive symptoms…our estimates are comparable to estimates from prior studies on the relationship between insurance coverage and mental health.

Increasing insurance coverage does increase premiums, but it also improves access to care and–at least in the case of mental health–dramatically improves patient outcomes.


ACA and Commercial Underwriting

Written By: Jason Shafrin - May• 18•15

The ACA (aka Oabamacare) has a “guaranteed issue” provision that requires insurers to offer coverage to all individuals who apply.  The ACA also prohibits insurers from taking into account patients’ pre-existing conditions when setting premiums and mandates the coverage of certain services, such as preventive services and an annual check-up.

This sounds like a great idea.  Everyone can get insurance; sick people don’t cost more; and everyone gets lots of benefits.

However, this poses a significant challenge for insurers. InsureBlog writes:

“The guaranteed-issue aspect of the ACA essentially negates underwriting,” Stark said, referring to Obamacare rules requiring health insurers to allow anyone to enroll, even if they’re already sick. “Health insurance companies have struggled with plan pricing for the past few years because they now must sell to anyone, regardless of preexisting conditions.

Thus, insurers must set premiums based on the average cost of insuring a large group of people without knowing the composition of people who make up their group of enrollees. An alternative to the ACA–from the Best of Both Worlds proposal–would allow insurers to set premiums that reflect their true health care costs. To ensure premiums are affordable, this proposal proposes subsidies to the poor, especially the sick poor.

Although the ACA does lower premiums for the sickest individuals, moving away from market prices is likely to have problematic long-run consequences.

Links to start the week

Written By: Jason Shafrin - May• 17•15

FDA to Consider Patient Preferences

Written By: Jason Shafrin - May• 14•15

Typically, the FDA evaluates drugs and devices based on whether they are safe and effective. Patient treatment preferences play little to no role in whether a drug or device is approved by the FDA. However, times are a changing.

On Wednesday, the FDA released draft guidance whereby they recommend the inclusion of patient preference information into biotechnology firms’ submissions for approval of medical devices. The Regulatory Affairs Profession Societies website reports:

“US Food and Drug Administration’s (FDA) Center for Devices and Radiological Health (CDRH) have unveiled a proposed framework for the collection and use of patient preference information (PPI) in medical device development.”

Why did the FDA have a change of heart? They begin their draft guidance as follows:

The U.S. Food and Drug Administration (FDA or the Agency) values the experience and perspectives of patients with devices. The Agency understands that patients and caregivers who live with a disease or condition on a daily basis and utilize devices in their care may have developed their own insights and perspectives on the benefits and risks of devices under PMA, HDE, or de novo review. FDA believes that patients can and should bring their own experiences to bear in helping the Agency evaluate the benefit-risk profile of certain devices. This kind of input can be important to consider during regulatory decision-making for certain devices. For this reason, FDA’s guidance document “Factors to Consider When Making Benefit-Risk Determinations in Medical Device Premarket Approval and De Novo Classifications”…explains that reviewers may consider certain data measuring patient perspectives during the premarket review process for premarket approval applications (PMAs) and de novo classification requests, when such information is available.

This shift means that device makers will need to be able to reliably collect and quantify patient preferences across products.

Some good news

Written By: Jason Shafrin - May• 13•15

The Ebola epidemic in Liberia has ended according to the WHO.  The NY Times reports:

“The outbreak of Ebola virus disease in Liberia is over,” the W.H.O. said in a statement read by Dr. Alex Gasasira, the group’s representative to Liberia, in a packed conference room at the emergency command center in Monrovia, the capital.

For those still interested in Ebola, CDC has the 1 things you need to know about Ebola and Vox has a review of reporters’ coverage of the epidemic.

Here is a CDC map of total Ebola cases and Days since last Ebola case in West Africa as of May 13, 2015.

Total Cases


Days since Last Case


Mid-Week Links

Written By: Jason Shafrin - May• 12•15

Innovation vs. Equity in Health Care Philanthropy

Written By: Jason Shafrin - May• 11•15

In the Denver Post, Dottie Lamm makes discusses Larry Ellison’s hope to live forever and his donation towards anti-aging research.  Ellison has donated $450 million to anti-aging research. Ms. Lamm worries that this research will only benefit the rich.

If such measures are available only to billionaires, or millionaires, or even to “one-percenters,” I see a dismal world where healthy, spritely, “reinvented” 105-year-olds walk around, proudly robust and dementia-free. At the same time, many poor and even working-class Americans at the bottom of the economic heap would exist at the same level they do now, lacking preventive care.

Ms. Lamm also cites Bill Gates:

Microsoft founder Bill Gates, who has donated his millions mainly toward health and education in the less developed world, chides billionaires like Ellison. “It seems pretty ego-centric while we still have malaria and TB, for rich people to fund things so they can live longer,” he says.

Clearly, the safest bet and the one with the highest payoff for individuals currently living is to donate the funds to existing treatments that have been shown to be effective. In the long-run, however, Mr. Ellison’s donation may prove more effective for future generations.

Consider the case of the cell phone. Once cell phones were invented, society could have taken one of two tracks. The first track would be to use resources to provide all currently living individuals with a cell phone. A second track would be spend large amounts of money on research to improving the phone. In the end, the second path was largely chosen and we now have the smartphone. At first, smart phones were only affordable for the well off in the first world. However, as the smartphone technology has become less expensive, smart phones are now accessbile for the majority of individuals in the rich world and a large share of individuals in 2nd and 3rd World countries.

On the other hand, the smart phone route is fraught with risk. It could have been the case that smart phone technology was not feasible or was prohibitively expensive to manufacture. Clearly, every investment in R&D will not yield a revolutionary technology such as the smart phone.

Thus, do not dismiss Ellison’s donation as a purely self-interested ploy. We clearly need a balance of Ellison’s and Gates'; those who invest in the future and those who work to redistribute resources to those currently in need.

HWR at Medicare Resources Blog

Written By: Jason Shafrin - May• 10•15

Steve Anderson says the cat is out of the bag – he tapped into “a general vibe of grumpiness out there in the health policy blogosphere” posting The Grumpy Cat Edition of Health Wonk Review at his MedicareResources.org blog.

What is the CPS?

Written By: Jason Shafrin - May• 05•15

The CPS is the Current Population Survey (CPS). This survey is administered by the Census and is one of the most widely used surveys in social science, particularly economics. A paper by Pascale et al. (2015) provides an overview of the survey and its quesitons related to health insurance:

The CPS is a monthly labor survey of the civilian noninstitutional population. Interviews are conducted in person or through telephone interviewing. The survey is based on a rotating panel design in which households are interviewed once a month for 4 consecutive months, are dormant for 8 months, and then in sample for another four consecutive months, for a total time span of 16 months in sample. In February through April of each year, the basic monthly questionnaire is supplemented with additional questions on income and health insurance (the ASEC).

In early spring of 2014, the CPS redesigned the health insurance questions on the ASEC. Some of the redesign was to facilitate more rapid interviewing in order to not require all members of a household to repeat coverage information for which they are a dependent. To examine how this change effects responses, the authors randomly assigned individuals to answer the old and new survey questions. They found:

Our results indicate that the odds of being insured at some point during the previous calendar year were higher in the new versus the old CPS, and the integrated calendar-year/point-in-time question series in the new CPS generated estimates of past calendar-year coverage that were higher than and distinct from estimates of coverage at a point-in-time….The test resulted in higher estimates of ESI [employer-sponsored insurance] than the control by 3.91 percentage points (p < .0021), and the control resulted in higher estimates of coverage from someone outside the household by almost a percentage point (p < .0060), and more military coverage by 1.82 percentage points (p = .0001). We found no significant differences in reporting of directly purchased coverage, or Medicaid or Medicare—as individual categories or combined with each other.