Shifts in Medicaid and Uninsured Payer Mix at Safety-Net and Non-Safety-Net Hospitals During the Great Recession.

EXECUTIVE SUMMARY: There has been ongoing concern regarding the viability of safety-net hospitals (SNHs), which care for vulnerable populations. The authors examined payer mix at SNHs and non-SNHs during a period covering the Great Recession using data from the 2006 to 2012 Healthcare Cost and Utilization Project State Inpatient Databases from 38 states. The number of privately insured stays decreased at both SNHs and non-SNHs. Non-SNHs increasingly served Medicaid-enrolled and uninsured patients; in SNHs, the number of Medicaid stays decreased and uninsured stays remained stable. These study findings suggest that SNHs were losing Medicaid-enrolled patients relative to non-SNHs before the Medicaid expansion under the Affordable Care Act (ACA). Postexpansion, Medicaid stays will likely increase for both SNHs and non-SNHs, but the increase at SNHs may not be as large as expected if competition increases. Because hospital stays with private insurance and Medicaid help SNHs offset uncompensated care, a lower-than-expected increase could affect SNHs' ability to care for the remaining uninsured population. Continued monitoring is needed once post-ACA data become available.

Pharmaceutical pricing in emerging markets: effects of income, competition, and procurement.

This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across countries. We focus on drugs to treat HIV/AIDS, TB, and malaria in middle and low-income countries (MLICs), with robustness checks to other therapeutic categories and the full income range of countries. We examine the effects of per capita income, income dispersion, competition from originator and generic substitutes, and whether the drugs are sold to retail pharmacies versus tendered procurement by non-government organizations. The cross-national income elasticity of prices is 0.27 across the full income range of countries but is 0.0-0.10 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Although generics are priced roughly 30% lower than originators on average, the variance is large. Additional generic competitors only weakly affect prices, plausibly because generic quality uncertainty leads to competition on brand rather than price. Tendered procurement that imposes quality standards attracts multinational generic suppliers and significantly reduces prices of originator and generic drugs, compared with their respective prices to retail pharmacies.

Comparing New Prescription Drug Availability and Launch Timing in the United States and Other OECD Countries.

Prescription drug research and development is, particularly in its most expensive later stages, an increasingly global endeavor undertaken by large, multinational firms. However, the availability of the resulting new drugs in individual countries and the timing of their launch can vary because of regulatory differences, business decisions, and other factors. The now-enacted Inflation Reduction Act of 2022 and other policy proposals aim to lower U.S. prices for brand-name drugs that are between three and four times as expensive as in other higher-income countries. Some stakeholders assert that lower U.S. prices will prevent U.S. patients from accessing some drugs sold in other countries or delay the launch of new drugs in the United States. To address these concerns, the author uses 2018 to 2022 data to compare the availability and timing of entry of new prescription drugs between the United States and other high-income countries.

Comparing Insulin Prices in the United States to Other Countries: Updated Results Using 2022 Data.

Manufacturers' list prices for insulin have increased dramatically over the past decade in the United States. In this study, the authors present results from a comparison of U.S. and international prices for insulins using a price index approach. They compare prices for all insulins and different categories of insulin in the United States and 33 comparison Organisation for Economic Co-operation and Development countries. They present separate comparisons using U.S. manufacturer gross prices reflected at pharmacies and estimated manufacturer net prices after applying rebates paid by manufacturers. This study updates a prior RAND Corporation study, Comparing Insulin Prices in the United States to Other Countries: Results from a Price Index Analysis, with more-recent data and includes new supplementary analyses, editorial changes, and updates to reflect the evolving insulin market landscape.

International Prescription Drug Price Comparisons: Estimates Using 2022 Data.

Understanding the extent to which prescription drug prices are higher in the United States than in other countries-after accounting for differences in the volume and mix of drugs-is useful when developing and targeting policies to address both growth in drug spending and the financial impact of prescription drugs on consumers. This study summarizes findings from comparisons of drug prices in the United States and other high-income countries based on 2022 data and presents results for specific types of drugs, including brand-name originator drugs and unbranded generic drugs, and from sensitivity analyses.

Prescription Drug Supply Chains: An Overview of Stakeholders and Relationships.

The authors describe the stakeholders involved in prescription drug supply chains and the flows of products, payments, and information between stakeholders. Many stakeholders and steps are involved in the life cycle of a prescription drug as it moves from chemical synthesis and formulation through dispensing or administration to patients. The specific steps involved in prescription drug supply chains often differ depending on the type of drug, the channel of distribution, and the patient's source of prescription drug coverage. Although the authors present a typical supply chain for retail pharmacy drugs, they also highlight the important supply chain distinctions for specific distribution channels and for specific types of drugs. Disparate sources exist describing each component of the supply chain, but, to the authors' knowledge, this study is the first to compile them to facilitate understanding of their interdependence and complexity. The typical stakeholders, relationships, and financial incentives in prescription drug supply chains vary depending on the characteristics of a drug and how it reaches patients. Even within a specific type of drug and a particular distribution channel, differences in business practices complicate a universal description of drug supply chains. There are four common core components of drug supply chains: manufacturing, distribution, coverage and payment, and prescribing and demand. Although prescription drugs are generally available to dispense when prescribed in the United States, there are important exceptions that warrant further investigation. The ability of policymakers to identify, assess, and respond to shortages and disruptions in supply chains is hampered by incomplete data.

Variation in Estimated Surgical Procedure Times Across Patient Characteristics and Surgeon Specialty.

Importance: The time involved in performing a procedure is a key factor in determining physician payments by Medicare. However, there are long-standing concerns regarding the accuracy of the time estimates generated by the American Medical Association/Specialty Society Relative Value Scale Update Committee surveys that are used in the valuation process, and there have been calls to use other data sources to estimate procedure times. Objective: To compare estimated procedure times that come from claims with the times used in Medicare's valuation process. Design and Setting: Building off prior work using Medicare fee-for-service claims, procedure times were estimated from linked anesthesia claims data for 1349 different Current Procedure Terminology codes that are typically performed with anesthesia. All procedures in the nation performed in 2018 for Medicare fee-for-service beneficiaries were included in the analysis. These estimated times were compared with the times used in the valuation process. Analysis took place from February to November 2021. Main Outcomes and Measures: Estimated procedure times using anesthesia claims were compared with the procedure time used in valuation by calculating an estimated-to-valuation procedure time ratio for each code. The valuation procedure time is publicly reported by Medicare. The mean and median ratio are presented over all procedures and for select high-volume codes as well as by patient characteristics (age, sex, and risk score) and specialty of the physician performing the procedure. Results: Across 4.9 million procedures in this analysis, the mean estimated procedure time was 27% lower than the time used in the valuation process. There were notable exceptions, for which the mean estimated procedure time equaled or exceeded the valuation time including total hip arthroplasty (5% longer) and total knee arthroplasty (equal duration). Within a given code, older patients and those with more illness had longer procedure times. There was substantial variation across specialties in the percent difference between mean estimated and valuation procedure times ranging from gastroenterology (36% shorter) and ophthalmology (35% shorter) to cardiac surgery (2% longer) and thoracic surgery (7% longer). Conclusions and Relevance: Claims-based procedure times could be used to improve the accuracy of valuations for procedures.

Claims-Based Reporting of Post-Operative Visits for Procedures with 10- or 90-Day Global Periods: Updated Results Using Calendar Year 2018 Data.

Medicare payments for most surgical procedures cover both procedures and post-operative visits occurring within a global period of either ten or 90 days following procedures. There have been concerns that fewer post-operative visits are provided than the number of post-operative visits considered when the procedure was valued. To help inform accurate valuation of procedures with global periods, the Centers for Medicare & Medicaid Services (CMS) required select practitioners to report on post-operative visits after select procedures with 10- or 90-day global periods. The authors of this article summarize patterns of post-operative visits for procedures furnished during calendar year 2018, building on prior research that analyzed data for procedures with July 1, 2017, through June 30, 2018, service dates. During calendar year 2018, 96.5 percent of procedures with 10-day global periods did not have an associated post-operative visit. Approximately two-thirds of procedures with 90-day global periods had an associated post-operative visit; however, the ratio of observed to expected post-operative visits provided for 90-day global period procedures was only 0.38. Underreporting of post-operative visits might be driving these low rates. However, in sensitivity analyses limited to practitioners who were actively reporting their post-operative visits, post-operative patterns were largely similar to the main analysis. Collectively, these findings suggest that a large share of expected post-operative visits are not delivered, and that underreporting is unlikely to fully explain the low ratio of expected post-operative visits provided.

Claims-Based Reporting of Post-Operative Visits for Procedures with 10- or 90-Day Global Periods: Updated Results Using Calendar Year 2019 Data.

Medicare payments for most surgical procedures cover both procedures and post-operative visits occurring within a global period of either 10 or 90 days following procedures. There have been concerns that fewer post-operative visits are provided than the number of post-operative visits considered when the procedure was valued. To help inform accurate valuation of procedures with global periods, the Centers for Medicare & Medicaid Services (CMS) required select practitioners to report on post-operative visits after select procedures with 10- or 90-day global periods. The authors of this article summarize patterns of post-operative visits for procedures furnished during calendar year 2019, building on prior research that analyzed data for procedures furnished from July 1, 2017, through June 30, 2018, and for the entire 2018 calendar year. During calendar year 2019, 96.5 percent of procedures with 10-day global periods did not have an associated post-operative visit. Approximately two-thirds of procedures with 90-day global periods had an associated post-operative visit; however, the ratio of observed to expected post-operative visits provided for 90-day global period procedures was only 0.38. Underreporting of post-operative visits might be driving these low rates. However, in sensitivity analyses limited to practitioners who were actively reporting their post-operative visits, post-operative patterns were largely similar to the main analysis. Collectively, these findings suggest that many expected post-operative visits are not delivered and that underreporting is unlikely to fully explain the low ratio of expected post-operative visits provided.

Using Claims-Based Estimates of Post-Operative Visits to Revalue Procedures with 10- and 90-Day Global Periods: Updated Results Using Calendar Year 2019 Data.

Medicare payment for many health care procedures covers not only the procedure itself but also most post-operative care over a fixed period of time (the ""global period""). The Centers for Medicare & Medicaid Services (CMS) sets payment rates assuming that a certain number and type of post-operative visits specific to each procedure typically occur. This article describes how CMS might use claims-based data on the number of post-operative visits to adjust valuation for procedures with 10- and 90-day global periods. There are links between the number of bundled post-operative visits and the components of valuation addressed in this study: work, practice expense (PE), and malpractice relative value units (RVUs). There is some ambiguity regarding how a reduction in post-operative visits translates into changes in work RVUs. In contrast, a reduction in post-operative visits has clear implications on physician time and direct PE. Changes in physician work, physician time, and direct PE will, in turn, affect the allocation of pools of PE and malpractice RVUs to individual services. The idiosyncrasies of the resource-based relative value scale system used to determine payment for Medicare services result in some ambiguity about how procedures should be revalued to reflect reductions in post-operative visits. These results may inform further policy development around revaluation for global procedures.

Access to Medical Treatment for Injured Workers in California: Year 1 Annual Report.

An estimated 16 million workers use workers' compensation (WC) insurance annually in California. Many recent policy changes might have affected access to care for injured workers. For this study, the authors assess the various dimensions of access to care in the evolving policy environment to ensure that injured workers have adequate access to needed medical care and the opportunity to achieve better health outcomes. Access to care is an important domain to monitor, especially among vulnerable populations, as patients with better access to care systems are more likely to receive comprehensive, higher-quality care and are therefore more likely to experience better outcomes. The key objective of this study is to describe access to medical care among injured workers in the state of California, as mandated by Labor Code Section 5307.2. The authors analyze administrative and medical service bill data to examine changes over time for measures related to access to care for injured workers. The authors aim to highlight potential access-to-care barriers in the WC system and to understand whether changes in the WC system may be increasing access for injured workers. Overall, there were increases in claims, bill lines, and spending per provider. Although these increases were moderate to large in number, many of the differences were not statistically significant. These results suggest a concentration of treatment for injured workers, in which a relatively smaller number of providers furnished care to injured workers. Increasing concentration could offer opportunities for specialization in the treatment of work-related injuries. On the other hand, increasing concentration could lead to future access barriers related to scheduling.

Associations Between the Patient Protection and Affordable Care Act Medicaid Primary Care Payment Increase and Physician Participation in Medicaid.

Importance: The Patient Protection and Affordable Care Act (ACA) increased 2013 to 2014 Medicaid payment rates for qualifying primary care physicians (PCPs) and services to higher Medicare payment levels, with the goal of improving primary care access for Medicaid enrollees. Objectives: To evaluate the payment increase policy and to assess whether it was associated with changes in Medicaid participation rates or Medicaid service volume among PCPs. Design, Setting, and Participants: This study used 2012 to 2015 IMS Health aggregated medical claims and encounter data from PCPs eligible for the payment increase practicing in all states except Alaska and Hawaii and included 20 723 PCPs with observations in each month from January 1, 2012, to December 31, 2015. Data are for professional services performed in ambulatory settings, including office, hospital outpatient department, and emergency department. Regression models were used to test whether outcomes differed in months subject to higher payment rates relative to months before the increase and after the expiration of the increase in some states. The models controlled for time-invariant physician characteristics and time-varying characteristics, such as Medicaid enrollment. Interaction terms were included to estimate differential associations in subgroups of states (eg, by Medicaid managed care penetration) and physicians (eg, by specialty). Main Outcomes and Measures: Physician-month records subject to higher Medicaid payment rates were flagged using state-specific implementation and end dates for the payment increase. Five outcomes were measured for each physician-month observation, including (1) an indicator for seeing any patients enrolled in Medicaid, (2) an indicator for seeing more than 5 patients enrolled in Medicaid, (3) the Medicaid share of total patients, (4) a count of new patient evaluation and management visits furnished to patients enrolled in Medicaid, and (5) a count of existing patient evaluation and management visits furnished to patients enrolled in Medicaid. Results: Among 20 723 PCPs, the payment increase had no association with PCP participation in Medicaid or Medicaid service volume. The estimated average marginal effects for all 5 outcomes were not statistically distinguishable from 0. This null result was robust to sensitivity analyses, including different time trend specifications and analyses focusing on the payment increase implementation and expiration time frames. Descriptively, the Medicaid share of patients increased by about 25% from 2012 to 2015, although the share did not increase differentially in states and months subject to higher payment rates. Conclusions and Relevance: The limited duration and design of the payment increase may have dampened its effectiveness. Future efforts to improve access through payment changes or other means can benefit from better understanding of the outcomes of this policy.

Biosimilar Cost Savings in the United States: Initial Experience and Future Potential.

The Biologics Price Competition and Innovation Act (BPCIA), enacted as part of the 2010 Patient Protection and Affordable Care Act (ACA), authorized the U.S. Food and Drug Administration (FDA) to create a new regulatory approval pathway for biosimilars, which are biologic drugs that are very similar to already approved "reference" biologics in terms of potency, safety, and efficacy, but are manufactured by different companies. In the seven years since the ACA, many drug manufacturers worked to push new biosimilars through development and FDA review. As of July 2017, there were three marketed biosimilars and two more that were approved by the FDA but not yet marketed. BPCIA's shorter, lower-cost biosimilar approval pathway was designed to introduce competition among biologic manufacturers. This article estimates potential future savings from biosimilars in the United States, summarizes the experience to date with the first marketed biosimilar in the United States, and discusses key policy issues surrounding biosimilars. We estimate that biosimilars will reduce direct spending on biologic drugs by $54 billion from 2017 to 2026, or about 3 percent of total estimated biologic spending over the same period, with a range of $24 to $150 billion. While our estimate uses recent data and transparent assumptions, we caution that actual savings will hinge on industry and regulatory decisions as well as potential policy changes to strengthen the biosimilar market.

Early Impact of the Affordable Care Act Coverage Expansion on Safety-Net Hospital Inpatient Payer Mix and Market Shares.

OBJECTIVE: To examine the impact of the Affordable Care Act's coverage expansion on safety-net hospitals (SNHs). STUDY SETTING: Nine Medicaid expansion states. STUDY DESIGN: Differences-in-differences (DID) models compare payer-specific pre-post changes in inpatient stays of adults aged 19-64 years at SNHs and non-SNHs. DATA COLLECTION METHODS: 2013-2014 Healthcare Cost and Utilization Project State Inpatient Databases. PRINCIPAL FINDINGS: On average per quarter postexpansion, SNHs and non-SNHs experienced similar relative decreases in uninsured stays (DID = -2.2 percent, p = .916). Non-SNHs experienced a greater percentage increase in Medicaid stays than did SNHs (DID = 13.8 percent, p = .041). For SNHs, the average decrease in uninsured stays (-146) was similar to the increase in Medicaid stays (153); privately insured stays were stable. For non-SNHs, the decrease in uninsured (-63) plus privately insured (-33) stays was similar to the increase in Medicaid stays (105). SNHs and non-SNHs experienced a similar absolute increase in Medicaid, uninsured, and privately insured stays combined (DID = -16, p = .162). CONCLUSIONS: Postexpansion, non-SNHs experienced a greater percentage increase in Medicaid stays than did SNHs, which may reflect patients choosing non-SNHs over SNHs or a crowd-out of private insurance. More research is needed to understand these trends.

Avoiding the Tragedy of the Commons in Health Care: Policy Options for Covering High-Cost Cures.

In this article, Mattke and his colleagues discuss the risk that strategic behavior by health insurers could unravel the market for curative therapies for chronic diseases. Because the cost of these cures is front-loaded but the benefits accrue over time, insurers might attempt to delay treatment or avoid patients who require it, in the hope that they might change insurers. The authors discuss policy options to remedy this potential free-rider problem through alignment of incentives at the patient level, coordination among payers, and government intervention. They present a framework to analyze policy options and real-world case studies. While implementing those policy options is far from easy, stakeholders need to collaborate in order to establish equitable mechanisms that fairly distribute the cost and benefits of high-cost cures.

Implementing a Drug Formulary for California's Workers' Compensation Program.

California Assembly Bill 1124 required the state's Division of Workers' Compensation in the Department of Industrial Relations to establish a drug formulary for all injured workers covered by the state's workers' compensation program. Such formularies serve to reinforce safe and effective prescribing patterns for practitioners and payers. In California, the formulary will need to be consistent with the Medical Treatment Utilization Schedule guidelines that define medically appropriate care for California's injured workers, create incentives to encourage prescribing of medically appropriate drugs, and reduce the administrative burdens associated with utilization review and medical necessity disputes. The objective of this study is to support the Division of Workers' Compensation in establishing the formulary. The authors compare and evaluate the strengths and weaknesses of four existing formularies and the formulary used by California's Medicaid program. The authors then analyze the issues involved in structuring the drug formulary for California to be consistent with the treatment guidelines, explore related policies that should be addressed in implementing the formulary, and offer recommendations.