Consequences of a shortage and rationing: Evidence from a pediatric vaccine.

Shortages and rationing are common in health care, yet we know little about the consequences. We examine an 18-month shortage of the pediatric Haemophilus Influenzae Type B (Hib) vaccine. Using insurance claims data and variation in shortage exposure across birth cohorts, we find that the shortage reduced uptake of high-value primary doses by 4 percentage points and low-value booster doses by 26 percentage points. This suggests providers largely complied with rationing recommendations. In the long-run, catch-up vaccination occurred but was incomplete: shortage-exposed cohorts were 4 percentage points less likely to have received the ir booster dose years later. We also find that the shortage and rationing caused provider switches, extra provider visits, and negative spillovers to other care.

Why do narrow network plans cost less?

Narrow network health insurance plans have been shown to have lower premiums and lower costs to insurers. This paper decomposes and quantifies the magnitudes for various mechanisms by which networks may reduce premiums and costs. Using data on the Colorado non-group market, we examine three mechanisms through which a narrow network might achieve lower costs: (1) enroll a population with lower utilization, (2) negotiate lower prices, or (3) steer patients away from high-cost hospitals. We find that all three mechanisms play a role. Narrow plans are partly able to achieve lower costs because they both steer patients to lower cost hospitals and, for a given hospital, negotiate lower prices than broad plans. The lower negotiated prices mechanism accounts for 15% of the cost savings to narrow network plans, and the steering away from higher cost hospitals accounts for about 18%. Both of these mechanisms can be ways to efficiently lower costs. The remaining 67% of the cost savings is due to lower utilization of narrow network plan enrollees. These findings are important for policymakers considering how to balance containing healthcare costs with concern for the appropriate regulation of narrow network plans.

Guidelines for Measuring Disease Episodes: An Analysis of the Effects on the Components of Expenditure Growth.

OBJECTIVE: To provide guidelines to researchers measuring health expenditures by disease and compare these methodologies' implied inflation estimates. DATA SOURCE: A convenience sample of commercially insured individuals over the 2003 to 2007 period from Truven Health. Population weights are applied, based on age, sex, and region, to make the sample of over 4 million enrollees representative of the entire commercially insured population. STUDY DESIGN: Different methods are used to allocate medical-care expenditures to distinct condition categories. We compare the estimates of disease-price inflation by method. PRINCIPAL FINDINGS: Across a variety of methods, the compound annual growth rate stays within the range 3.1 to 3.9 percentage points. Disease-specific inflation measures are more sensitive to the selected methodology. CONCLUSION: The selected allocation method impacts aggregate inflation rates, but considering the variety of methods applied, the differences appear small. Future research is necessary to better understand these differences in other population samples and to connect disease expenditures to measures of quality.

No Shot: US Vaccine Prices And Shortages.

In 2004 an Institute of Medicine report warned of vaccine shortages, raising concerns about disease outbreaks. More than a decade later, we looked for progress in reducing vaccine shortages. We analyzed data on vaccine sales and shortages reported by practitioners and patients to the Food and Drug Administration and the American Society of Health-System Pharmacists in the period 2004-13. We found that the number of annual vaccine shortages peaked in 2007, when there were shortages of seven vaccines; there were only two shortages in 2013. There were no shortages of vaccines with a mean price per dose greater than $75 during the study period. Furthermore, we found that a 10 percent increase in price was associated with a nearly 1 percent decrease in the probability of a shortage. Government payers should carefully consider the benefits of averting shortages when evaluating prices for vaccines, including older vaccines whose prices have been subject to congressional price caps.

Implications of utilization shifts on medical-care price measurement.

The medical-care sector often experiences changes in medical protocols and technologies that cause shifts in treatments. However, the commonly used medical-care price indexes reported by the Bureau of Labor Statistics hold the mix of medical services fixed. In contrast, episode expenditure indexes, advocated by many health economists, track the full cost of disease treatment, even as treatments shift across service categories (e.g., inpatient to outpatient hospital). In our data, we find that these two conceptually different measures of price growth show similar aggregate rates of inflation over the 2003-2007 period. Although aggregate trends are similar, we observe differences when looking at specific disease categories.

Geographic variation in commercial medical-care expenditures: a framework for decomposing price and utilization.

This study introduces a new framework for measuring and analyzing medical-care expenditures. The framework focuses on expenditures at the disease level that are decomposed between price and utilization. We find that both price and utilization differences are important contributors to expenditure differences across commercial markets. Further examination shows that for some diseases utilization drives variation while for others price is more important. Finally, when disease-specific measures are aggregated across diseases, much of the important disease-specific variation is masked, leading to much smaller measures of aggregate variation.

Medical care price indexes for patients with employer-provided insurance: nationally representative estimates from MarketScan Data.

OBJECTIVE: Commonly observed shifts in the utilization of medical care services to treat diseases may pose problems for official price indexes at the Bureau of Labor Statistics (BLS) that do not account for service shifts. We examine how these shifts may lead to different price estimates than those observed in official price statistics at the BLS. DATA SOURCES: We use a convenience sample of enrollees with employer-provided insurance from the MarketScan database for the years 2003 to 2007. Population weights that consider the age, sex, and geographic distribution of enrollees are assigned to construct representative estimates. STUDY DESIGN: We compare two types of price indexes: (1) a Service Price Index (SPI) that is similar to the BLS index, which holds services fixed and measures the prices of the underlying treatments; (2) a Medical Care Expenditure Index (MCE) that measures the cost of treating diseases and allows for utilization shifts. PRINCIPAL FINDINGS: Over the entire period of study the CAGR of the SPI grows 0.7 percentage points faster than the preferred MCE index. CONCLUSIONS: Our findings suggest that the health component of inflation may be overstated by 0.7 percentage points per year, and real GDP growth may be understated by a similar amount. However, more work may be necessary to precisely replicate the indexes of the BLS to obtain a more accurate measure of these price differences.

Measuring health care costs of individuals with employer-sponsored health insurance in the U.S.: A comparison of survey and claims data.

As the core nationally representative health expenditure survey in the United States, the Medical Expenditure Panel Survey (MEPS) is increasingly being used by statistical agencies to track expenditures by disease. However, while MEPS provides a wealth of data, its small sample size precludes examination of spending on all but the most prevalent health conditions. To overcome this issue, statistical agencies have turned to other public data sources, such as Medicare and Medicaid claims data, when available. No comparable publicly available data exist for those with employer-sponsored insurance. While large proprietary claims databases may be an option, the relative accuracy of their spending estimates is not known. This study compared MEPS and MarketScan estimates of annual per person health care spending on individuals with employer-sponsored insurance coverage. Both total spending and the distribution of annual per person spending differed across the two data sources, with MEPS estimates 10 percent lower on average than estimates from MarketScan. These differences appeared to be a function of both underrepresentation of high expenditure cases and underestimation across the remaining distribution of spending.