The Effect Of Next Generation Accountable Care Organizations On Medicare Expenditures.

The Next Generation Accountable Care Organization (NGACO) model (active during 2016-21) tested the effects of high financial risk, payment mechanisms, and flexible care delivery on health care spending and value for fee-for-service Medicare beneficiaries. We used quasi-experimental methods to examine the model's effects on Medicare Parts A and B spending. Sixty-two ACOs with more than 4.2 million beneficiaries and more than 91,000 practitioners participated in the model. The model was associated with a $270 per beneficiary per year, or approximately $1.7 billion, decline in Medicare spending. After shared savings payments to ACOs were included, the model increased net Medicare spending by $56 per beneficiary per year, or $96.7 million. Annual declines in spending for the model grew over time, reflecting exit by poorer-performing NGACOs, improvement among the remaining NGACOs, and the COVID-19 pandemic. Larger declines in spending occurred among physician practice ACOs and ACOs that elected population-based payments and risk caps greater than 5 percent.

Analysis of Affordable Health Care.

BACKGROUND: Lack of affordable health care affects the uninsured, commercially insured, and Medicare beneficiaries. Yet, the wide variation in providers' prices and practice styles suggests that more affordable care already may be available and data on low value and wasteful care suggest that lower cost care need not come at the expense of better quality. Although price variation has received the most attention in the literature and legislation, total cost of care is a function of both unit prices (fees) and the quantity of services. OBJECTIVE: To partition provider-specific variation in total annual risk-adjusted per capita expenditures on health care services into variation in unit prices (fees) versus quantities of services, and to explore the relationship between low value, avoidable, discretionary, and recommended care to total health expenditures. The analysis is important because both prices and quantities of services can affect affordability and reductions in prices versus quantities have very different effects on providers' profits. SETTING: 2018 data from the Minnesota State Employees Group Insurance Program (SEGIP) that offers a tiered cost-sharing health insurance benefit design to 130,000 State employees and their dependents (SEGIP "members"). EXPOSURE: Each year during open enrollment, SEGIP members choose a primary care clinic (PCC). The PCC can make decisions regarding both unit prices and prescribed services. PCCs are placed in one of four cost-sharing tiers based on the total annual risk-adjusted per capita health expenditures for the SEGIP members who choose their clinic. Members choosing higher cost PCCs face higher deductibles, copayments, and maximum out-of-pocket spending limits. MEASURES: Overall prices and use of inpatient, outpatient hospital, professional, and pharmaceutical services, total and avoidable use of emergency department visits and inpatient admissions, low value care, testing for patients with pneumonia, and recommended preventive care. RESULTS: Differences in total risk-adjusted annual per capita health expenditures across the care systems were substantial. Higher cost providers had both higher unit prices and higher use of services. Variation in the quantity of health care services explained more of the variance in total spending than variation in prices. Prices for professional services and use of inpatient, outpatient hospital, and pharmaceutical services, and ambulatory care sensitive admissions, contributed significantly to high total expenditures. Lower cost PCCs in the lowest cost-sharing tier had higher rates of low value care and lower emergency department visits per capita. Neither the number of investigations for patients with pneumonia nor the receipt of recommended mammography screening varied systematically by tier. CONCLUSIONS: Efforts to identify and expand sources of affordable care, including improved information and incentives for consumers, need to account for variation in both prices and quantities of services. Efforts to encourage more efficient use of health care services by providers need to consider the effect of those efforts on the provider's internal costs and thus their profits.

Fee-for-service payment is not the (main) problem.

OBJECTIVE: To understand the effect of physician payment incentives on the allocation of health care resources. DATA SOURCES/STUDY SETTING: Review and analysis of the literature on physician payment incentives. STUDY DESIGN: Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency. PRINCIPAL FINDINGS: Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices that are close to the provider's marginal cost - by giving consumers information on provider-specific prices and a strong incentive to choose lower cost providers. However, efficient pricing of services ultimately will need to be supplemented by incentives for efficient production of health and functional status. CONCLUSIONS: The problem with current FFS payment is not paying a fee for each service, per se, but the way in which the fees are determined.

Cost-sharing payments for out-of-network care in commercially insured adults.

OBJECTIVES: Providers who do not contract with insurance plans are considered out-of-network (OON) providers. There were 2 objectives in this study: (1) to examine the variations of OON cost sharing, both at the state level and by care settings, and (2) to investigate the pattern of OON care use and cost sharing associated with OON care over time. STUDY DESIGN: Secondary data analysis using claims data of employer-sponsored insurance enrollees. METHODS: The study sample included adults aged 18 to 64 years who were continuously enrolled for at least a full calendar year with medical and prescription drug coverage and for whom OON care payment data were available. We examined levels and distributions of cost sharing for OON care from 2012 to 2017, in both emergency department (ED) and non-ED care settings. Outcome measures included annual use of health plan-covered OON care and total out-of-pocket (OOP) cost sharing for OON care. We also measured the use of and cost-sharing spending for OON care based on urgency and site of service. Logistic regression models were constructed to estimate the probability of OON care. Among those with each type of OON care, a generalized linear regression model was used to estimate the OOP spending on OON care. RESULTS: Slowly decreasing rates of OON care over time occurred in different care settings and at different urgency levels. The cost-sharing amounts for OON care rose rapidly from 2012 through 2016, before slowing slightly in 2017. The growth of cost sharing for OON care during nonemergent hospitalizations especially increased from $671 to $1286 during the study period. The amount enrollees spent on OON care grew in most states, but there were substantial variations. CONCLUSIONS: Cost-sharing payments for OON care represent a growing financial burden for some enrollees. Consumers should be held harmless from higher cost sharing for OON care when it occurs without their knowledge or consent. Further, health plan network adequacy may also merit closer scrutiny. Leveraging provider participation in narrow networks must be balanced with broader consumer protections.

Health Care Service Use Among Elderly Seasonal Migrators.

Elderly seasonal migrators share time between homes in different states, presenting challenges for care coordination and patient attribution methods. Medicare has prioritized alternative payment models, putting health care providers at risk for quality and value of services delivered to their attributed patients, regardless of the location of care. Little research is available to guide providers and payers on the service use of seasonal migrators. The authors use claims data on fee-for-service (FFS) Medicare beneficiaries' locations throughout the year to (1) identify seasonal migrators and (2) describe the care they receive in each seasonal home, focusing on primary care and emergency department (ED) visits and the relationships between the two. In all, 5.5% of the Medicare aged FFS population were identified as seasonal migrators, with 4.1% following the traditional snowbird pattern of migration, spending warm months in the north and cold months in the south. Migrators had higher rates of ED visits and primary care treatable (PCT) ED visits than the nonmigratory groups, controlling for location, age, race, sex, Medicaid status, season, and comorbidities. They also had more visits with specialist physicians, more days with outpatient services, and more days seeing a physician in any setting. Having local primary care strongly reduced rates of both PCT ED visits and total ED visits for all migration categories, with the greatest reduction seen in PCT ED visits by migrators (local primary care was associated with a 58% reduction in PCT ED visits by snowbirds and a 65% reduction in PCT ED visits by other migrators).

Decomposition of moral hazard.

This study seeks to simulate the portion of moral hazard that is due to the income transfer contained in the coinsurance price reduction. Healthcare spending of uninsured individuals from the MEPS with a priority health condition is compared with the predicted counterfactual spending of those same individuals if they were insured with either (1) a conventional policy that paid off with a coinsurance rate or (2) a contingent claims policy that paid off by a lump sum payment upon becoming ill. The lump sum payment is set to be equal to the insurer's predicted spending under the coinsurance policy. The proportion of moral hazard that is efficient is calculated as the proportion of total moral hazard that is generated by this lump sum payment. We find that the efficient proportion of moral hazard varies from disease to disease, but is the highest for those with diabetes and cancer.

Texas Medicaid Payment Reform: Fewer Early Elective Deliveries And Increased Gestational Age And Birthweight.

Infants born at full term have better health outcomes. However, one in ten babies in the United States are born via a medically unnecessary early elective delivery: induction of labor, a cesarean section, or both before thirty-nine weeks gestation. In 2011 the Texas Medicaid program sought to reduce the rate of early elective deliveries by denying payment to providers for the procedure. We examined the impact of this policy on clinical care practice and perinatal outcomes by comparing the changes in Texas relative to comparison states. We found that early elective delivery rates fell by as much as 14 percent in Texas after this payment policy change, which led to gains of almost five days in gestational age and six ounces in birthweight among births affected by the policy. The impact on early elective delivery was larger in magnitude for minority patients. Other states may look to this Medicaid payment reform as a model for reducing early elective deliveries and disparities in infant health.

Affordable Care Act's Mandate Eliminating Contraceptive Cost Sharing Influenced Choices Of Women With Employer Coverage.

Patient cost sharing for contraceptive prescriptions was eliminated for certain insurance plans as part of the Affordable Care Act. We examined the impact of this change on women's patterns of choosing prescription contraceptive methods. Using claims data for a sample of midwestern women ages 18-46 with employer-sponsored coverage, we examined the contraceptive choices made by women in employer groups whose coverage complied with the mandate, compared to the choices of women in groups whose coverage did not comply. We found that the reduction in cost sharing was associated with a 2.3-percentage-point increase in the choice of any prescription contraceptive, relative to the 30 percent rate of choosing prescription contraceptives before the change in cost sharing. A disproportionate share of this increase came from increased selection of long-term contraception methods. Thus, the removal of cost as a barrier seems to be an important factor in contraceptive choice, and our findings about long-term methods may have implications for rates of unintended pregnancy that require further study.

Validation of an algorithm to determine the primary care treatability of emergency department visits.

OBJECTIVES: We propose a new claims-computable measure of the primary care treatability of emergency department (ED) visits and validate it using a nationally representative sample of Medicare data. STUDY DESIGN AND SETTING: This is a validation study using 2011-2012 Medicare claims data for a nationally representative 5% sample of fee-for-service beneficiaries to compare the new measure's performance to the Ballard variant of the Billings algorithm in predicting hospitalisation and death following an ED visit. OUTCOMES: Hospitalisation within 1 day or 1 week of an ED visit; death within 1 week or 1 month of an ED visit. RESULTS: The Minnesota algorithm is a strong predictor of hospitalisations and deaths, with performance similar to or better than the most commonly used existing algorithm to assess the severity of ED visits. The Billings/Ballard algorithm is a better predictor of death within 1 week of an ED visit; this finding is entirely driven by a small number of ED visits where patients appear to have been dead on arrival. CONCLUSIONS: The procedure-based approach of the Minnesota algorithm allows researchers to use the clinical judgement of the ED physician, who saw the patient to determine the likely severity of each visit. The Minnesota algorithm may thus provide a useful tool for investigating ED use in Medicare beneficiaries.

PQRS Participation, Inappropriate Utilization of Health Care Services, and Medicare Expenditures.

Medicare's Physician Quality Reporting System (PQRS) is the largest quality-reporting system in the U.S. health care system and a basis for the new value-based modifier system for physician payment. The PQRS allows health care providers to report measures of quality of care that include both the process of care and physiological outcomes. Using a multivariate difference-in-differences model, we examine the relationship of PQRS participation to three claims-computable measures of inappropriate utilization of health care services and risk-adjusted per capita Medicare expenditures. The data are a national random sample of PQRS-participating providers matched to nonparticipating providers by zip code and caseload. We found few significant relationships in the overall analysis. However, the magnitude and statistical significance of the desirable associations increased in subgroups of providers and beneficiaries more prone to overutilization (e.g., males, older beneficiaries, beneficiaries treated in larger medical practices or by nonphysicians, and practices in rural areas), and among beneficiaries with heart conditions, diabetes, and eye problems.

Estimating True Resource Costs of Outpatient Care for Medicare Beneficiaries: Standardized Costs versus Medicare Payments and Charges.

OBJECTIVE: To compare standardized estimates of the true resource costs of outpatient health care to the allowable and billed charges for that care among Medicare Fee for Service (FFS) beneficiaries. DATA SOURCES/STUDY SETTING: Medicare Carrier and Outpatient Standard Analytic (SAF) files linked to participant data in the Study of Osteoporotic Fractures from 2004 through 2010. Participants were 3,435 female Medicare Fee for Service enrollees age 80 and older recruited in one rural and three metropolitan areas of the United States. STUDY DESIGN: We estimated standardized costs for Carrier and OP-SAF claims using Medicare payment weights, and compared them to allowable and billed charges for those claims. We used semilog linear regression to estimate the associations of age, race, bone mineral density, prior fracture, and geriatric depression scale score with allowable charges, billed charges, and standardized costs. RESULTS: Estimated associations of patient characteristics with standardized costs were not statistically different than the associations with allowable charges (chi-squared [χ(2)]: 8.6, p = .13) but were different from associations with billed charges (χ(2): 25.5, p < .001). CONCLUSION: Allowable charges for outpatient utilization in the Carrier file and OP-SAF may be good surrogates for standardized costs that reflect patient medical and surgical acuity.

Estimation of standardized hospital costs from Medicare claims that reflect resource requirements for care: impact for cohort studies linked to Medicare claims.

OBJECTIVE: To compare cost estimates for hospital stays calculated using diagnosis-related group (DRG) weights to actual Medicare payments. DATA SOURCES/STUDY SETTING: Medicare MedPAR files and DRG tables linked to participant data from the Study of Osteoporotic Fractures (SOF) from 1992 through 2010. Participants were women age 65 and older recruited in three metropolitan and one rural area of the United States. STUDY DESIGN: Costs were estimated using DRG payment weights for 1,397 hospital stays for 795 SOF participants for 1 year following a hip fracture. Medicare cost estimates included Medicare and secondary insurer payments, and copay and deductible amounts. PRINCIPAL FINDINGS: The mean (SD) of inpatient DRG-based cost estimates per person-year were $16,268 ($10,058) compared with $19,937 ($15,531) for MedPAR payments. The correlation between DRG-based estimates and MedPAR payments was 0.71, and 51 percent of hospital stays were in different quintiles when costs were calculated based on DRG weights compared with MedPAR payments. CONCLUSIONS: DRG-based cost estimates of hospital stays differ significantly from Medicare payments, which are adjusted by Medicare for facility and local geographic characteristics. DRG-based cost estimates may be preferable for analyses when facility and local geographic variation could bias assessment of associations between patient characteristics and costs.

Maternity leave duration and postpartum mental and physical health: implications for leave policies.

This study examines the association of leave duration with depressive symptoms, mental health, physical health, and maternal symptoms in the first postpartum year, using a prospective cohort design. Eligible employed women, eighteen years or older, were interviewed in person at three Minnesota hospitals while hospitalized for childbirth in 2001. Telephone interviews were conducted at six weeks (N = 716), twelve weeks (N = 661), six months (N = 625), and twelve months (N = 575) after delivery. Depressive symptoms (Edinburgh Postnatal Depression Scale), mental and physical health (SF-12 Health Survey), and maternal childbirth-related symptoms were measured at each time period. Two-stage least squares analysis showed that the relationship between leave duration and postpartum depressive symptoms is U-shaped, with a minimum at six months. In the first postpartum year, an increase in leave duration is associated with a decrease in depressive symptoms until six months postpartum. Moreover, ordinary least squares analysis showed a marginally significant linear positive association between leave duration and physical health. Taking leave from work provides time for mothers to rest and recover from pregnancy and childbirth. Findings indicate that the current leave duration provided by the Family and Medical Leave Act, twelve weeks, may not be sufficient for mothers at risk for or experiencing postpartum depression.

The 3-year disease management effect: understanding the positive return on investment.

OBJECTIVE: Conventional wisdom suggests that health promotion programs yield a positive return on investment (ROI) in year 3. In the case of the University of Minnesota's program, a positive ROI was achieved in the third year, but it was due entirely to the effectiveness of the disease management (DM) program. The objective of this study is to investigate why. METHODS: Differences-in-differences regression equations were estimated to determine the effect of DM participation on spending (overall and service specific), hospitalizations, and avoidable hospitalizations. RESULTS: Disease management participation reduced expenditures overall, and especially in the third year for employees, and reduced hospitalizations and avoidable hospitalizations. CONCLUSIONS: The positive ROI at Minnesota was due to increased effectiveness of DM in the third year (mostly due to fewer hospitalizations) but also to the simple durability of the average DM effect.

Value-based purchasing for physician services.

Growth in Medicare expenditures has forced legislators and policymakers to look for ways to slow spending and get more value for their money. This article reviews previous federal efforts to control Medicare costs as well as current ones required by the Patient Protection and Affordable Care Act. It also describes a proposal for value-based purchasing that the authors developed under contract to the Centers for Medicare and Medicaid Services. This approach uses two measurement systems-one for physicians who practice primarily in outpatient settings and one for physicians who practice primarily in the hospital.

Medical groups can reduce costs by investing in improved quality of care for patients with diabetes.

A major feature of many new contracts between providers and payers is shared savings programs, in which providers can earn a percentage of the savings if the cost of the care they provide is lower than the projected cost. Unless providers are also held accountable for meeting quality benchmarks, some observers fear that these programs could erode quality of care by rewarding only cost savings. We estimated the effects on Medicare expenditures of improving the quality of care for patients with diabetes. Analyzing 234 practices that provided care for 133,703 diabetic patients, we found a net savings of $51 per patient with diabetes per year for every one-percentage-point increase in a score of the quality of care. Cholesterol testing for all versus none of a practice's patients with diabetes, for example, was associated with a dramatic drop in avoidable hospitalizations. These results show that improving the quality of care for patients with diabetes does save money.

The effect of adult HIFA waiver expansions on insurance coverage of children.

This article evaluates the effect of the Health Insurance Flexibility and Accountability (HIFA) demonstrations on uninsurance rates among children. HIFA could increase the probability that children would have health insurance either by directly enrolling a child into a HIFA program or by creating a "spillover" effect from adults onto children by making parents of children already eligible for public programs eligible for HIFA. Data were drawn from the Current Population Survey from 2000 to 2007. The estimation approach was a probit model using a difference-in-differences approach. The authors find that the HIFA wavier demonstrations had no measureable effect on the uninsurance rate among children, either through direct eligibility or through a "spillover" effect from parental eligibility. This suggests that public programs that integrate family insurance coverage into a single structure are likely to be more effective at reducing the rate of uninsurance than different programs for different members of the same family.

The effect of HIFA waiver expansions on uninsurance rates in adult populations.

RESEARCH OBJECTIVE: To evaluate the effect of the Health Insurance Flexibility and Accountability (HIFA) demonstrations on the rate of uninsured. The policy purpose of the HIFA demonstrations is to encourage "new comprehensive state approaches" that will increase the number of insured. HIFA interventions include changes in benefit packages, eligibility rules for public programs, and state subsidization of private health insurance premiums. Some states emphasized private insurance (premium assistance), whereas others placed greater emphasis on expanded eligibility for public insurance. DATA SOURCES/STUDY SETTING: Data were drawn from the Current Population Survey from 2000 to 2007. The target populations for the HIFA waiver demonstrations consisted of individuals who were eligible for the HIFA waiver demonstrations in demonstration states. STUDY DESIGN: The estimation approach was a probit model using a difference-in-differences approach. PRINCIPAL FINDINGS: In states that fully implemented their HIFA waiver, HIFA increased the rate of insurance coverage by 6.4 percentage points on average in the targeted adult population, suggesting that approximately 118,848 adults gained health insurance due to HIFA. Total HIFA adult enrollment in the six states studied was 280,739. The effect size varied by state, with Maine having the largest effect and Illinois the smallest. The results were robust to different specifications of the control group. CONCLUSIONS: Our findings suggest that public insurance initiatives that provide states with flexibility regarding eligibility and plan design are a viable policy approach to reducing uninsurance rates.

Postpartum depression and health services expenditures among employed women.

OBJECTIVE: To investigate the association of postpartum depression with health services expenditures among employed women. METHODS: Women, aged 18 years and older, were recruited from three community hospitals in Minnesota while hospitalized for childbirth in 2001. Using Andersen's Behavioral Model, we regressed the natural log of the price-weighted sum of self-reported health services used from hospital discharge until 11 weeks postpartum on depression status at 5 weeks postpartum (Edinburgh Postnatal Depression Scale). RESULTS: Five percent of the women met the depression threshold. Two-stage least squares analyses showed that depressed women incurred 90% higher health services expenditures than nondepressed women. Older age, poverty, non-public assistance insurance status, and increased maternal symptoms also were associated with higher expenditures. CONCLUSIONS: Higher health expenditures among postpartum depressed women highlight the importance of addressing mental health issues in the workplace.