Unbiased Analysis of Today's Healthcare Issues

How to reduce spending on unnecessary care (the answer is not what you think)

The way to solve this question is easy, right?  The first step is to define what constitutes unnecessary care.  Then identify the highest cost manifestations of unnecessary care.  Then, create interventions that stop providers from providing this care.  Simple, right? Maybe not according to a paper by Mafi et al. (2017).  The authors appear to […]

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Measuring Hospital Efficiency

Medicare recently released the Medicare Spending per Beneficiary (MSPB) measure on Hospital Compare. This measure includes all payments to doctors, hospitals or other facilities for services provided to a patient during the three days before the hospital stay, during the stay, and during the 30 days after discharge from the hospital. Kaiser Health news provides […]

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Healthcare Cost and Utilization Project Databases

The Agency for Healthcare Research and Quality’s (AHRQ)  Healthcare Cost and Utilization Project (HCUP) is a family of databases and tools intended to improve the quality, safety, efficiency, and effectiveness of the U.S.   health care system.  HCUP results from Federal-State-Industry partnership to build a comprehensive all payer data system.  A summary of the databases available from […]

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Why does cost effective care spread so slowly

According to Fuchs and Millstein, here’s why: Insurers hesitation to standardize coverage.  Standardization of coverage would force insurance companies to compete primarily on the basis of price, which would put pressure on their profits. Employers bear too much of the marginal cost from employees choosing expensive health plans.  Because companies wish to avoid alienating employees, […]

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Efficiency vs. Equity

Most economists focus on the concept of “economic efficiency.” The basic concept of economic efficiency is to maximize the overall resources available to society.  However, often times economists ignore the importance of equity (i.e., the distribution of resources within a society). Tyler Cowen reminds us that seeking economic efficiency blindly is not ideal, especially in […]

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Episode-Based Performance Measures: A reality?

Pay-for-performance has become very fashionable of late. One way to measure physician performance is with episode groupers. This software groups together some or all of the services related to the care of a patient’s chronic or acute medical conditions. Policymakers can then use the episode as the unit of observation for: feedback on physician performance, […]

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Common Efficiency Measures

Measuring efficiency is a difficult business. As AHRQ,  “In most cases, individuals and firms will define efficiency as a relationship between what it costs them and what service or outcome they receive, rather than as a trait inherent in the provider.” Further, efficiency can be measured as either production efficiency or allocative efficiency.  “For example, […]

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Measuring Hospital Efficiency

Efficiency in the field of economics increases when either 1) outputs are increased for a given level of inputs, or 2) inputs are decreased for a given level of output. Estimating efficiency in the medical field is more difficult, however, since the output (marginal health improvement) is difficult to measure. In the area of hospitals, […]

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Health Care Efficiency: Academic vs. Vendor Measures

Measuring efficiency in health care is extremely difficult.  If there was an accurate scientific measure of patient health (e.g., a 1-100 scale) before and after treatment.  That way, one could measure changes in health before and after treatment per every dollar spent.  However, measuring health outcomes is very difficult.  In the academic literature, hospital efficiency most commonly […]

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Is American Health Care Inefficient?

Economists generally define efficiency in two manners: productive efficiency and allocative efficiency.  Productive efficiency means producing a good or service using fewest inputs.  A car company who produces a car that costs $20,000 to manufacture is less efficient than a company that can produce that same car (at the same quality) at a cost of […]

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