Health insurance, medical debt, and financial well-being.

We study the financial protection provided by health insurance through two natural experiments-the Affordable Care Act's under 26 provision and Medicare eligibility. In both cases, the coverage expansion sharply reduces medical debt in collections for consumers within the affected ages but does not systematically improve credit outcomes not directly related to medical care. This is consistent with the infrequent repayment rate and lack of persistence on credit reports that we document for medical collections, which mute a key channel through which reductions in medical collections could directly affect the other financial outcomes studied here. These results help clarify the role of health insurance in broader financial health and suggest that, at least among the populations studied here, medical debts in collection may often be a symptom rather than a cause of wider financial distress as measured on credit reports.

The Impact of the COVID-19 Pandemic on Elective Inpatient Surgical Admissions: Evidence From Maryland.

BACKGROUND: The COVID-19 pandemic led to large-scale cancellation and deferral of elective surgeries. We quantified volume declines, and subsequent recoveries, across all hospitals in Maryland. MATERIALS AND METHODS: Data on elective inpatient surgical volumes were assembled from the Maryland Health Service Cost Review Commission for years 2019-2020. The data covered all hospitals in the state. We compared the volume of elective inpatient surgeries in the second (Q2) and fourth quarters (Q4) of 2020 to those same quarters in 2019. Analysis was stratified by patient, hospital, and service characteristics. RESULTS: Surgical volumes were 55.8% lower in 2020 Q2 than in 2019 Q2. Differences were largest for orthopedic surgeries (74.3% decline), those on Medicare (61.4%), and in urban hospitals (57.3%). By 2020 Q4, volumes for most service lines were within 15% of volumes in 2019 Q4. Orthopedic surgery remained most affected (44.5% below levels in 2019 Q4) and Plastic Surgery (21.9% lower). CONCLUSIONS: COVID-19 led to large volume declines across hospitals in Maryland followed by a partial recovery. We observed large variability, particularly across service lines. These results can help contextualize case-specific experiences and inform research studying potential health effects of these delays and cancellations.

Branded Price Variation in the United States Drug Market, 2010 to 2019.

The transaction price for branded drugs in the United States often varies widely by the eventual payer, a fact that can complicate research and policy discussions surrounding drug pricing. We combine publicly-available data on branded drug prices from a host of sources-prices paid by Medicare (Parts B and D), the Veterans Affairs Administration (VA), those included in the Federal Supply Schedule (FSS), invoice prices paid by pharmacies described in National Average Drug Acquisition Costs (NADAC), list prices, and payments ultimately received by drug makers-to illustrate how prices vary across the U.S. market and how these relationships changed from 2010 to 2019. We document large variation across payers and find VA prices are generally the lowest, averaging nearly 50% below list prices during our study period, which is meaningfully lower than the average prices manufacturers ultimately receive. Some net prices, like those in Part D and average payments received by manufacturers, have diverged substantially from list prices in the last decade and are now much closer to the published VA and FSS prices. In part, this reflects unexpected net price increases among published VA and FSS prices that is worthy of future study.

The influence of Medicare Part D on the list pricing of brand drugs.

OBJECTIVE: To compare the Medicare Part D market share of brand drugs with their net-to-list price ratio. DATA SOURCES AND STUDY SETTING: SSR Health Brand Net Price Tool and Medical Expenditure Panel Survey, 2007-2019. STUDY DESIGN: For each drug, we calculated the ratio of net to list price and the percent of users that were Medicare-eligible. We compared these cross-sectionally in each year and estimated a difference-in-differences model comparing drugs with high or low Medicare market shares (MMS) after following changes to program incentives in 2010. DATA COLLECTION/EXTRACTION METHODS: The sample included brand drugs without generic competitors appearing in both datasets. PRINCIPAL FINDINGS: Net-to-list price ratios were negatively correlated with MMS in the later years of our sample. In 2019, a 10% increase in MMS was associated with a significant 4.6% [95% CI: 2.1%, 7.1%] decrease in net-to-list ratio. Difference-in-differences showed net-to-list price ratios of drugs with above median MMS fell relative to those with below median MMS. By 2019, we observe an absolute reduction of -0.2 [95% CI: -0.29, -0.11], representing 28% reduction relative to the average ratio in 2010. CONCLUSIONS: Greater exposure to the Medicare Part D market was associated with larger differences between net and list prices of drugs.

Abandoning List Prices In Medicaid Drug Reimbursement Did Not Affect Spending.

State fee-for-service Medicaid programs have traditionally based payments to pharmacies for drugs on a percentage of the drugs' list price. Because list prices have increased more quickly than the prices actually paid by pharmacies, estimating appropriate reimbursements has become challenging. In recent years most states have switched to models where payments were based instead on results from a survey of pharmacy invoices. We examined how this changed fee-for-service Medicaid drug spending. We found that the policy change had minimal, if any, effects on overall Medicaid drug spending. This was at least partially explained by concomitant sharp increases in dispensing fees paid to pharmacies, designed to help cover operating expenses and profit margins. We discuss ways to improve invoice-based pricing approaches and lower costs if desired.

Unlike Medical Spending, Medical Bills In Collections Decrease With Patients' Age.

Health policy is often designed to help protect patients' financial security. However, there is limited understanding of the role medical debt plays in household finances. We used credit report data on more than four million Americans to study the age profile of people whose medical bills were sent to a US collections agency in 2016. We found that, unlike health care use and spending, medical collections decreased substantially with age. The average size of medical debt decreased nearly 40 percent from patients age twenty-seven to sixty-four, with increases in health insurance coverage and incomes likely playing important mediating roles. However, the frequency of medical collections-that is, the proportion of people with a collection by age-was less closely tied to insurance coverage rates. A potential explanation is that most medical collections were relatively modest in size, with more than half of them less than $600 annually. As a result, medical collections could still occur under typical insurance plans. We discuss how these results could inform policies targeting medical debt and insurance regulation, such as restrictions on age rating.

Mystery Of The Chargemaster: Examining The Role Of Hospital List Prices In What Patients Actually Pay.

Hospitals in the United States maintain chargemasters that contain the official list prices for all billable services. The prices vary widely across hospitals and are more than three times what hospitals are paid for treating a patient, on average. From this it is tempting to conclude that list prices are a strange, yet ultimately inconsequential, quirk of US health care. However, using both state and national data sets covering the period 2002-14, we found considerable evidence suggesting that list prices reflect hospitals' strategic behavior and have meaningful effects on payments made by and on behalf of patients. Specifically, we found that list prices varied predominantly across hospitals and within markets, were well predicted by observable hospital characteristics, and were positively related to prices actually paid by patients and their insurers. Moreover, analyses of data before and after the implementation of California's Hospital Fair Pricing Act suggest that high list prices causally increased payments from the uninsured. However, list prices had at most a limited relationship with care quality.