The Complexity Of Billing And Paying For Physician Care.

The administrative costs of providing health insurance in the US are very high, but their determinants are poorly understood. We advance the nascent literature in this field by developing new measures of billing complexity for physician care across insurers and over time, and by estimating them using a large sample of detailed insurance "remittance data" for the period 2013-15. We found dramatic variation across different types of insurance. Fee-for-service Medicaid is the most challenging type of insurer to bill, with a claim denial rate that is 17.8 percentage points higher than that for fee-for-service Medicare. The denial rate for Medicaid managed care was 6 percentage points higher than that for fee-for-service Medicare, while the rate for private insurance appeared similar to that of Medicare Advantage. Based on conservative assumptions, we estimated that the health care sector deals with $11 billion in challenged revenue annually, but this number could be as high as $54 billion. These costs have significant implications for analyses of health insurance reforms.

Do health insurers innovate? Evidence from the anatomy of physician payments.

One of private health insurers' main roles in the United States is to negotiate physician payment rates on their beneficiaries' behalf. We show that these rates are often set in reference to a government benchmark, and ask how often private insurers customize their fee schedules away from this default. We exploit changes in Medicare's payments and dramatic bunching in markups over Medicare's rates to address this question. Although Medicare's rates are influential, 25 percent of physician services in our data, representing 45 percent of covered spending, deviate from the benchmark. Heterogeneity in the pervasiveness and direction of deviations suggests that the private market coordinates around Medicare's pricing for simplicity but abandons it when sufficient value is at stake.

Antibiotic Use in Cold and Flu Season and Prescribing Quality: A Retrospective Cohort Study.

BACKGROUND: Excessive antibiotic use in cold and flu season is costly and contributes to antibiotic resistance. The study objective was to develop an index of excessive antibiotic use in cold and flu season and determine its correlation with other indicators of prescribing quality. METHODS AND FINDINGS: We included Medicare beneficiaries in the 40% random sample denominator file continuously enrolled in fee-for-service benefits for 2010 or 2011 (7,961,201 person-years) and extracted data on prescription fills for oral antibiotics that treat respiratory pathogens. We collapsed the data to the state level so they could be merged with monthly flu activity data from the Centers for Disease Control and Prevention. Linear regression, adjusted for state-specific mean antibiotic use and demographic characteristics, was used to estimate how antibiotic prescribing responded to state-specific flu activity. Flu-activity associated antibiotic use varied substantially across states-lowest in Vermont and Connecticut, highest in Mississippi and Florida. There was a robust positive correlation between flu-activity associated prescribing and use of medications that often cause adverse events in the elderly (0.755; P<0.001), whereas there was a strong negative correlation with beta-blocker use after a myocardial infarction (-0.413; P=0.003). CONCLUSIONS: Adjusted flu-activity associated antibiotic use was positively correlated with prescribing high-risk medications to the elderly and negatively correlated with beta-blocker use after myocardial infarction. These findings suggest that excessive antibiotic use reflects low-quality prescribing. They imply that practice and policy solutions should go beyond narrow, antibiotic specific, approaches to encourage evidence-based prescribing for the elderly Medicare population.

Do Physicians' Financial Incentives Affect Medical Treatment and Patient Health?

We investigate whether physicians' financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts physician payments, generating area-specific price shocks. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 3 percent increase in care provision. Elective procedures such as cataract surgery respond much more strongly than less discretionary services. Non-radiologists expand their provision of MRIs, suggesting effects on technology adoption. We estimate economically small health impacts, albeit with limited precision.