Unbiased Analysis of Today's Healthcare Issues

Tuesday Links

Written By: Jason Shafrin - May• 04•15

Dartmouth, France?

Written By: Jason Shafrin - May• 03•15

The Dartmouth Atlas is well known for examining regional variation in practice patterns in the U.S. It looks like researchers in France are taking a similar approach to evaluate their own single payer system. A paper by Mercier, Georgescu and Bousquet (2015) find:

We assessed disparities in potentially avoidable hospitalizations in France in 2012 and analyzed their determinants. The standardized rate of potentially avoidable hospitalizations ranged from 0.1 to 44.4 cases per 1,000 inhabitants, at the ZIP code level. Increased potentially avoidable hospitalizations were associated with higher mortality, lower density of acute care beds and ambulatory care nurses, lower median income, and lower education levels. This study unveils considerable variation in the rate of potentially avoidable hospitalizations in spite of France’s mandatory, publicly funded health insurance system.

The authors find that primary care organizations play a role in the rate of avoidable hospitalizations in a given geographic region.


Quotation of the Day

Written By: Jason Shafrin - Apr• 30•15

“We are what we pretend to be, so we must be careful about what we pretend to be.”

-Kurt Vonnegut

Medicare Advantage vs. FFS

Written By: Jason Shafrin - Apr• 29•15

Austin Frakt summarizes some recent research presented at AcademyHealth.

There are three principle MA plan types: HMOs, PPOs, and private fee for service (PFFS) plans. It’s HMOs that are lowest in cost, because they tend to offer the most restrictive networks. As Biles et al. report, based on 2012 data, HMOs have costs 7 percent below traditional Medicare on average. But PPOs’ and PFFS plans’ costs are 12-18 above those of traditional Medicare. PPO networks are less restrictive than HMOs’, and PFFS plans do not establish networks at all.

Although it looks like only certain types of Medicare Advantage (MA) plans are a good deal for CMS, there is likely significant adverse selection occuring whereby sicker patients choose PPOs and PFFS and healthier patients choose HMOs. Although plan payments are risk-adjusted, there will almost certainly be unobservable differences in patient health status across different types of MA plans and between MA plans and traditional Medicare FFS.

Health in Baltimore

Written By: Jason Shafrin - Apr• 28•15

Baltimore is in the news, and not for the best reasons.  The arrest and eventual death of Freddie Gray have unleashed a series of protests and riots.  One conference where the Healthcare Economist had a poster presentation–the American Heart Association (AHA) Quality of Care and Outcomes Research (QCOR) Scientific Sessions (conference) was cancelled this week due to the protests.

Today we focus on the health of the residents in Baltimore–particularly African American residents.  Quartz reports that:

In Baltimore, the average life expectancy is 73.5 years, five years less than the national average, and for African Americans the divide is even higher: at 70.2, their life expectancy is 5.6 years lower than the US average.

Cardiovascular disease and HIV are much higher among African Americans in Baltimore than the national average.

According to a 2011 Baltimore City Health Department Report, in the Sandtown-Winchester/Harlem Park neighborhood, life expectancy is only 65.3. The teen birth rate is almost twice as high as the citywide average and infant mortality is also twice as high.

Slate reports that the incarceration rate in Mr. Gray’s neighborhood was also extremely high:

For starters, look at the juvenile arrest rate: Citywide, Baltimore saw 145.1 kids out of every thousand arrested between 2005 and 2009; in Sandtown-Winchester/Harlem Park, that number was 252.3. As the Baltimore Sun pointed out in an op-ed, that means a quarter of all 10-to-17-year-olds in Gray’s neighborhood were arrested at some point during the time period in question.

It is a sad situation. An tragic death. Riots. Chaos. Although the level of frustration is understandable, at least some community members will not tolerate this level of chaos.

FDA’s Breakthrough Therapy Designation

Written By: Jason Shafrin - Apr• 27•15

Many of you may have heard of the FDA’s Fast Track Development program. For drugs that treat a serious medical condition and address an unmet medical need, the FDA will provide expedited review. In fact, the FDA has 4 different accelerated review processes:

  • Breakthrough Therapy
  • Priority Review
  • Accelerated Approval
  • Fast Track

These other 3 programs, however, have been in effect for 15 years already, the Breakthrough Therapy Designation (BTD) is the new kid on the block. A breakthrough therapy is one where the treatment of interest shows significant improvement over existing therapy for a serious or life-threatening disease.  Brookings summarizes the BTD program as:

BTD was established in 2012 under the Food and Drug Administration Safety and Innovation Act, and is intended to expedite the development and review of drugs that show signs of extraordinary benefit at early stages of the clinical development process. However, BTD is not an automatic approval. The drug still has to undergo clinical testing and review by the FDA. Rather, BTD is designed to facilitate and shorten the clinical development process, which can otherwise take many years to complete.

The FDA considers the following criteria when considering a treatment for BTD:

  1. the quantity and quality of the clinical evidence being submitted;
  2. the available therapies that the drug is being compared to; and
  3. the magnitude of treatment effect shown on the outcome being studied.

Of the 293 requsts for a BTD designation to date, 82 have successfully received the designation, and 23 of these have subsequently been approved for marketing. Note that 10 of the 23 approvals were actually for new indications for previously-approved drugs.

Does home health care reduce long-term care costs?

Written By: Jason Shafrin - Apr• 26•15

It has long been posited that increased used of home health care will decrease the use of long-term care.  Clearly, there are some patients who need assistance, but for whom long-term care is not needed.  If most of these people who would use home health care would otherwise be in long-term care, home health care costs will decrease long-term care costs.  On the other hand, if most people who use home health services would have not needed long-term care services (e.g., they would receive care from a family member) then increasing use of home health can increase cost to payers.

A paper by Guo, Konetzka and Manning (2015) examines just this question using  Medicaid claims data for adult enrollees of the Cash and Counseling Demonstration and Evaluation (CCDE) program.

We find that the use of Medicaid-financed home care services significantly reduced but only partially offset utilization and Medicaid expenditures on nursing facility services. A $1000 increase in Medicaid home care expenditures avoided 2.75 days in nursing facilities and reduced annual Medicaid nursing facility costs by $351 among people over age 65 when selection bias is addressed.

The authors use participation in the CCDE program as an instrument. “Although expanding the amount of home care services used by the treatment group was not a primary goal of the intervention, this is what happened. Cash and Counseling expanded the supply of home care workers because treatment group participants were allowed to hire family and friends.”

It is not surprising that increasing use of home health services decreased long-term care costs but the offset was not one for one. However, overall patient utility was likely higher as more patients had access to home health services than otherwise. An investigation of the societal merits of a home health program would also need to take into account any deadweight loss that would occur in order to fund these programs.


Everything PPACA HWR

Written By: Jason Shafrin - Apr• 23•15

Joe Paduda has posted The Everything-PPACA edition of Health Wonk Review at Managed Care Matters.  The ongoing rollout of the Affordable Care Act is the primary subject of this edition, but check it out – there is much more to be found!

Standard Gamble, Time Trade-off and Visual Analog Scale

Written By: Jason Shafrin - Apr• 22•15

Would you rather live for 5 years in perfect health or 10 years with some debilitating disease?  How much do you value living for a year with this debilitating disease compared to a year in full health?  These questions may seem like ones from philosophy, but they are ones that health economics ask all the time.  The goal of these questions is to try to determine how much value patients place on going from a poor health state to a better one.

Many treatments improve patient health but do not decrease mortality.  In these cases, health economists which to measure the value patients receive in terms of improvement in health status.  A paper by Stiggelbout and de Haes (2001) describe three approaches for measuring the value of different health states.  I review their paper below.


EMRs and the Medical Alphabet

Written By: Jason Shafrin - Apr• 21•15

Here at the Healthcare Economist, I have noted that electronic medical records (EMR) are not the cure-all for healthcare delivery.   EMRs have a number of problems in and of themselves.  However, I do certainly acknowledge that going from a medical alphabet (see below) to a regular old English alphabet is a huge advance.



Hat tip: TIE and Healthcare IT News.