Hospital behavior over the private equity life cycle.

Private equity is an increasing presence in US healthcare, with unclear consequences. Leveraging unique data sources and difference-in-differences designs, we examine the largest private equity hospital takeover in history. The affected hospital chain sharply shifts its advertising strategy and pursues joint ventures with ambulatory surgery centers. Inpatient throughput is increased by allowing more patient transfers, and crucially, capturing more patients through the emergency department. The hospitals also manage shorter, less treatment-intensive stays for admitted patients. Outpatient surgical care volume declines, but remaining cases focus on higher complexity procedures. Importantly, behavior changes persist even after private equity divests.

Private equity and healthcare firm behavior: Evidence from ambulatory surgery centers.

Healthcare firms regularly seek outside capital; yet, we have an incomplete understanding of external investor influence on provider behavior. We investigate the effects of private equity investment, divestment, and an initial public offering (IPO) on ambulatory surgery centers (ASCs). Throughput is unchanged while charges grow by up to 50% for the same service mix. Affected ASCs witness declines in privately insured cases and rely more on Medicare business. Private equity increases physician ASC ownership stakes, and both simultaneously divest when the ASC is sold. Our findings appear more consistent with private equity influencing the financing of ASCs, rather than treatment approaches.

Prevalence of Buprenorphine Providers Requiring Cash Payment From Insured Women Seeking Opioid Use Disorder Treatment.

CONTEXT: Medications for opioid use disorder (OUD) are known to be effective, especially in reducing the risk of overdose death. Yet, many individuals suffering from OUD are not receiving treatment. One potential barrier can be the patient's ability to access providers through their insurance plans. DATA AND METHODS: We used an audit (simulated patient) study methodology to examine appointment-granting behavior by buprenorphine prescribers in 10 different US states. Trained callers posed as women with OUD and were randomly assigned Medicaid or private insurance status. Callers request an OUD treatment appointment and then asked whether they would be able to use their insurance to cover the cost of care, or alternatively, whether they would be required to pay fully out-of-pocket. FINDINGS: We found that Medicaid and privately insured women were often asked to pay cash for OUD treatment--40% of the time over the full study sample. Such buprenorphine provider requests happened more than 60% of the time in some states. Areas with more providers or with more generous provider payments were not obviously more willing to accept the patient's insurance benefits for OUD treatment. Rural providers were less likely to require payment in cash in order for the woman to receive care. CONCLUSIONS: State-to-state variation was the most striking pattern in our field experiment data. The wide variation suggests that women of reproductive age with OUD in certain states face even greater challenges to treatment access than perhaps previously thought; however, it also reveals that some states have found ways to curtail this problem. Our findings encourage greater attention to this public health challenge and possibly opportunities for shared learning across states.

Physician patient sharing relationships within insurance plan networks.

OBJECTIVE: To quantify shared patient relationships between primary care physicians (PCPs) and cardiologists and oncologists and the degree to which those relationships were captured within insurance networks. DATA SOURCES: Secondary analysis of Vericred data on physician networks, CareSet data on physicians' shared Medicare patients, and insurance plan attributes from Health Insurance Compare. Data validation exercises used data from Physician Compare and IQVIA. STUDY DESIGN: Cross-sectional study of the PCP-to-specialist in-network shared patient percentage (primary outcome). We also categorized networks by insurance market segment (Medicare Advantage [MA], Medicaid managed care, small-group or individually purchased), insurance plan type, and network breadth. DATA EXTRACTION: We analyzed data on 219,982 PCPs, 29,400 cardiologists, and 22,745 oncologists who, in 2021, accepted MA (n = 941 networks), Medicaid managed care (n = 293), and individually-purchased (n = 332) and small-group (n = 501) plans. PRINCIPAL FINDINGS: Networks captured, on average, 64.6% of PCP-cardiology shared patient ties, and 61.8% of PCP-oncologist ties. Less than half of in-network ties (44.5% and 38.9%, respectively) were among physicians with a common organizational affiliation. After adjustment for network breadth, we found no evidence of differences in the shared patient percentage across insurance market segments or networks of different types (p-value >0.05 for all comparisons). An exception was among national versus local and regional networks, where we found that national plans captured fewer shared patient ties, particularly among the narrowest networks (58.4% for national networksvs. 64.7% for local and regional networks for PCP-cardiology). CONCLUSIONS: Given recent trends toward narrower networks, our findings underscore the importance of incorporating additional and nuanced measures of network composition to aid plan selection (for patients) and to guide regulatory oversight.

Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients.

Medicare pricing is known to indirectly influence provider prices and care provision for non-Medicare patients; however, Medicare's regulatory externalities beyond fee-setting are less well understood. We study how physicians' outpatient surgery choices for non-Medicare patients responded to Medicare removing a ban on ambulatory surgery center (ASC) use for a specific procedure. Following the rule change, surgeons began reallocating both Medicare and commercially insured patients to ASCs. Specifically, physicians became 70% more likely to use ASCs for the policy-targeted procedure among their non-Medicare patients. These novel findings demonstrate that Medicare rulemaking affects physician behavior beyond the program's statutory scope.

Association between physician practice Medicaid acceptance and employing nurse practitioners and physician assistants: A longitudinal analysis.

BACKGROUND: Access to care is often a challenge for Medicaid beneficiaries due to low practice participation. As demand increases, practices will likely look for ways to see Medicaid patients while keeping costs low. Employing nurse practitioners (NPs) and physician assistants (PAs) is one low-cost and effective means to achieve this. However, there are no longitudinal studies examining the relationship between practice Medicaid acceptance and NP/PA employment. PURPOSE: The purpose of this study was to examine the association of practice Medicaid acceptance with NP/PA employment over time. METHODS: Using SK&A data (2009-2015), we constructed a panel of 102,453 unique physician practices to assess for changes in Medicaid acceptance after newly employing NPs and PAs. We employed practice-level fixed effects linear regressions. RESULTS: Our results showed that, among practices employing both NPs and PAs, there was a roughly 2% increase in the likelihood of Medicaid participation over time. When stratifying our sample by practice size and specialty, the positive correlation localized to small primary care and medical practices. When both NPs and PAs were present, small primary care practices had a 3.3% increase and small medical practices had a 6.9% increase in the likelihood of accepting Medicaid. CONCLUSION: NP and PA employment was positively associated with increases in Medicaid participation. PRACTICE IMPLICATIONS: As more individuals gain coverage under Medicaid, organizations will need to decide how to adapt to greater patient demand. Our results suggest that hiring NPs and PAs may be a potential lower cost strategy to accommodate new Medicaid patients.

Treatment consolidation after vertical integration: Evidence from outpatient procedure markets.

Hospital ownership of physician practices has grown across the US, and these strategic decisions seem to drive higher prices and spending. Using detailed physician ownership information and a universe of Florida discharge records, we show novel evidence of hospital-physician integration foreclosure effects within outpatient procedure markets. Following hospital acquisition, physicians shift nearly 10% of their Medicare and commercially insured cases away from ambulatory surgery centers (ASCs) to hospitals and are up to 18% less likely to use an ASC at all. Altering physician choices over treatment setting can be in conflict with patient and payer cost, convenience, and quality preferences.

Medicaid prevalence and opioid use disorder treatment access disparities.

OBJECTIVE: To examine how variation in the size of the local Medicaid population moderates Medicaid-to-private treatment access differentials for women with opioid use disorder (OUD). DATA SOURCES: County-level information on total Medicaid enrollment combined with randomized field experiment data from 10 diverse states that used a simulated patient (audit) methodology to examine buprenorphine providers' appointment granting behavior. STUDY DESIGN: We used multiple regression modeling approaches to capture the moderating influence of Medicaid prevalence on differences in the likelihood of receiving an insurance-covered appointment between Medicaid and privately insured female patients. DATA EXTRACTION: Completed calls to buprenorphine treatment providers. PRINCIPAL FINDINGS: We find a 0.37 percentage point (p value <0.01) narrowing of the Medicaid-to-private access gap with each one percentage point increase in the local insured population on Medicaid. There is effectively no difference in the likelihood of being granted an insurance-covered appointment across the two payer groups in the top tercile of Medicaid penetration. CONCLUSIONS: When Medicaid is a common source of insurance within the local population, buprenorphine providers are much less likely to discriminate between Medicaid and privately insured prospective patients. Efforts to enhance equitable access across patient groups are perhaps best targeted where Medicaid prevalence is lower.

Long-run growth of ambulatory surgery centers 1990-2015 and Medicare payment policy.

OBJECTIVE: To examine long-run growth in the ambulatory surgery center (ASC) industry and potential factors influencing its trajectory. DATA SOURCES: National data for all Medicare-certified ASCs (1990-2015) and outpatient discharge records from the state of Florida in 2007. STUDY DESIGN: We documented the number of ASCs in the United States over time and decomposed the trend into underlying ASC market entry and exit behavior. We then examined the plausibility of 2008 Medicare payment reforms to influence the trend changes. DATA EXTRACTION METHODS: Data on ASC openings and closures are obtained from the Centers for Medicare and Medicaid Services Provider of Service files. Secondary data on ASC volume in Florida are obtained from the Florida Agency for Health Care Administration. PRINCIPAL FINDINGS: The number of ASCs in the United States grew 5%-10% annually between 1990 and 2007 but by 1% or less beginning in 2008. This change coincided with substantive reductions in Medicare payments for key ASC services. The annual number of new ASCs was as much as 50% lower following the payment change. CONCLUSIONS: ASCs are an important competitor for outpatient services, but growth has slowed dramatically. Sharp changes in new ASC entry align with less generous Medicare fees.

Higher Medicare Spending On Imaging And Lab Services After Primary Care Physician Group Vertical Integration.

In recent years direct ownership of physician practices by hospitals and health systems (that is, vertical integration) has become a prominent feature of the US health care system. One unexplored impact of vertical integration is the impact on referral patterns for common diagnostic tests and procedures and the associated spending. Using a 100 percent sample of 2013-16 Medicare fee-for-service claims data, we examined whether hospital and health system ownership of physician practices was associated with changes in site of care and Medicare reimbursement rates for ten common diagnostic imaging and laboratory services. After vertical integration, the monthly number of diagnostic imaging tests per 1,000 attributed beneficiaries performed in a hospital setting increased by 26.3 per 1,000, and the number performed in a nonhospital setting decreased by 24.8 per 1,000. Hospital-based laboratory tests increased by 44.5 per 1,000 attributed beneficiaries, and non-hospital-based laboratory tests decreased by 36.0 per 1,000. Average Medicare reimbursement rose by $6.38 for imaging tests and $0.57 for laboratory tests, which translates to $40.2 million and $32.9 million increases in Medicare spending, respectively, for the entire study period. This study highlights how the growing trend of vertical integration, combined with differences in Medicare payment between hospitals and nonhospital providers, leads to higher Medicare spending.

Hospital Pricing Following Integration with Physician Practices.

The past decade has witnessed a new wave of hospital-physician integration, with the fraction of hospitals owning any office-based physician practice increasing from 28% in 2009 to 53% in 2015 nationwide. We offer one of the first hospital-level longitudinal analyses in examining how hospital-physician integration affects hospital prices in the modern healthcare environment. We find a robust 3-5% increase in hospital prices following integration. There is little indication that hospital quality is commensurately higher or that patient mix has changed following integration. Our supplementary analyses point to stronger bargaining leverage and foreclosure of rival hospitals as potential mechanisms for the estimated price effects.

Private coverage mandates, business cycles, and provider treatment intensity.

The Affordable Care Act (ACA) is the source of multiple large-scale health insurance expansions affecting various segments of the US population. Although much has been done to quantify the first-order effects of these policies, less empirical investigation has been devoted to the effects on the supply-side of health care. We focus on a well-known ACA initiative (the young adult dependent coverage mandate) to offer novel evidence on two fronts: the policy's heterogeneous effect across different labor markets and the potential for the policy-induced shift in payer mix to influence provider treatment decisions. First, we show that the federal mandate's direct effect on young adult private insurance take-up is strongly mitigated by the Great Recession. Second, we demonstrate that providers do not treat young adults more aggressively when more of them hold private coverage. Policymakers should keep these broader considerations and more diffuse risk protection implications in mind when contemplating changes to the law.

Removing Medicare's outpatient ban and Medicare and private surgical trends.

OBJECTIVES: To examine changes in hospital outpatient surgery trends and case mix for Medicare and privately insured patients needing total knee arthroplasty (TKA) following Medicare's removal of TKA from its Inpatient Only list on January 1, 2018. STUDY DESIGN: A retrospective analysis of all hospital discharge records in Florida from 2012 through 2018. METHODS: We tracked inpatient vs outpatient performance of TKAs at the state and hospital levels. We also combined our primary data with physician practice organization information to assess variation in the policy response according to physician-hospital ownership status. Supplementary analyses examined policy-induced changes in inpatient TKA case mix. RESULTS: We observed an immediate shift of roughly 15% of Medicare TKA cases to the outpatient setting. Importantly, there was a simultaneous near doubling of the number of TKAs performed as a hospital outpatient procedure among privately insured patients younger than 60 years. Hospitals allocated a similar proportion of TKA cases to the outpatient setting across the 2 payer groups, and we found evidence of selection against the potentially riskiest Medicare TKA patients for outpatient delivery. Vertically integrated orthopedic physicians retained their Medicare and privately insured TKA cases within the inpatient (higher-cost) setting. CONCLUSIONS: Market and financial pressures are encouraging more outpatient care delivery; however, the speed of transition is dictated, in part, by regulatory constraints. Our results suggest that Medicare policy may influence surgical treatment approaches for Medicare and privately insured patients. Spillover implications need to be considered when weighing future Medicare regulatory decisions.

An Employer-Provider Direct Payment Program Is Associated With Lower Episode Costs.

Bundled payment has shown promise in reducing medical spending while maintaining quality. However, its impact among commercially insured populations has not been well studied. We examined the impacts on episode cost and patient cost sharing of a program that applies bundled payments for orthopedic and surgical procedures in a commercially insured population. The program we studied negotiates preferred prices for selected providers that cover the procedure and all related care within a thirty-day period after the procedure and waives cost sharing for patients who receive care from these providers. After implementation, episode prices for three selected surgical procedures declined by $4,229, a 10.7 percent relative reduction. Employers captured approximately 85 percent of the savings, or $3,582 per episode (a 9.5 percent relative decrease), and patient cost-sharing payments decreased by $498 per episode (a 27.7 percent relative decrease).

Breadth and Exclusivity of Hospital and Physician Networks in US Insurance Markets.

Importance: Little is known about the breadth of health care networks or the degree to which different insurers' networks overlap. Objective: To quantify network breadth and exclusivity (ie, overlap) among primary care physician (PCP), cardiology, and general acute care hospital networks for employer-based (large group and small group), individually purchased (marketplace), Medicare Advantage (MA), and Medicaid managed care (MMC) plans. Design, Setting, and Participants: This cross-sectional study included 1192 networks from Vericred. The analytic unit was the network-zip code-clinician type-market, which captured attributes of networks from the perspective of a hypothetical patient seeking access to in-network clinicians or hospitals within a 60-minute drive. Exposures: Enrollment in a private insurance plan. Main Outcomes and Measures: Percentage of in-network physicians and/or hospitals within a 60-minute drive from a hypothetical patient in a given zip code (breadth). Number of physicians and/or hospitals within each network that overlapped with other insurers' networks, expressed as a percentage of the total possible number of shared connections (exclusivity). Descriptive statistics (mean, quantiles) were produced overall and by network breadth category, as follows: extra-small (<10%), small (10%-25%), medium (25%-40%), large (40%-60%), and extra-large (>60%). Networks were analyzed by insurance type, state, and insurance, physician, and/or hospital market concentration level, as measured by the Hirschman-Herfindahl index. Results: Across all US zip code-network observations, 415 549 of 511 143 large-group PCP networks (81%) were large or extra-large compared with 138 485 of 202 702 MA (68%), 191 918 of 318 082 small-group (60%), 60 425 of 149 841 marketplace (40%), and 21 781 of 66 370 MMC (40%) networks. Large-group employer networks had broader coverage than all other network plans (mean [SD] PCP breadth: large-group employer-based plans, 57.3% [20.1]; small-group employer-based plans, 45.7% [21.4]; marketplace, 36,4% [21.2]; MMC, 32.3% [19.3]; MA, 47.4% [18.3]). MMC networks were the least exclusive (a mean [SD] overlap of 61.3% [10.5] for PCPs, 66.5% [9.8] for cardiology, and 60.2% [12.3] for hospitals). Networks were narrowest (mean [SD] breadth 42.4% [16.9]) and most exclusive (mean [SD] overlap 47.7% [23.0]) in California and broadest (79.9% [16.6]) and least exclusive (71.1% [14.6]) in Nebraska. Rising levels of insurer and market concentration were associated with broader and less exclusive networks. Markets with concentrated primary care and insurance markets had the broadest (median [interquartile range {IQR}], 75.0% [60.0%-83.1%]) and least exclusive (median [IQR], 63.7% [52.4%-73.7%]) primary care networks among large-group commercial plans, while markets with least concentration had the narrowest (median [IQR], 54.6% [46.8%-67.6%]) and most exclusive (median [IQR], 49.4% [41.9%-56.9%]) networks. Conclusions and Relevance: In this study, narrower health care networks had a relatively large degree of overlap with other networks in the same geographic area, while broader networks were associated with physician, hospital, and insurance market concentration. These results suggest that many patients could switch to a lower-cost, narrow network plan without losing in-network access to their PCP, although future research is needed to assess the implications for care quality and clinical integration across in-network health care professionals and facilities in narrow network plans.

Treatment flows after outsourcing public insurance provision: Evidence from Florida Medicaid.

While politics can determine what public goods are available, elected officials must decide on the method of allocation. Commonly, governments provide public health insurance directly or pay private parties to administer it on their behalf. Such contracting can leverage private sector expertise but also raises agency concerns. In particular, little is known about how private provision of public health insurance impacts medical decision-making and treatment flows for low-income populations. An example comes from the Medicaid program, which has increasingly relied on outside insurers to deliver health services to enrollees. We exploit a large legislative intervention in Florida to show that Medicaid managed care (MMC) organizations generally do not skimp on short-run treatment delivery in the inpatient setting. In fact, patients with severe and chronic illnesses receive more inpatient services under these contracts, especially in relation to managing care transitions. We also document increased competition in the MMC market following the state's policy intervention.

Association of Pregnancy and Insurance Status With Treatment Access for Opioid Use Disorder.

Importance: Medications for opioid use disorder, including buprenorphine hydrochloride and methadone hydrochloride, are highly effective at improving outcomes for individuals with the disorder. For pregnant women, use of these medications also improves pregnancy outcomes, including the risk of preterm birth. Despite the known benefits of medications for opioid use disorder, many pregnant and nonpregnant women with the disorder are not receiving them. Objective: To determine whether pregnancy and insurance status are associated with a woman's ability to obtain an appointment with an opioid use disorder treatment clinician. Design, Setting, and Participants: In this cross-sectional study with random assignment of clinicians and simulated-patient callers (performed in "secret shopper" format), outpatient clinics that provide buprenorphine and methadone were randomly selected from publicly available treatment lists in 10 US states (selected for variability in opioid-related outcomes and policies) from March 7 to September 5, 2019. Pregnant vs nonpregnant woman and private vs public insurance assigned randomly to callers to create unique patient profiles. Simulated patients called the clinics posing as pregnant or nonpregnant women to obtain an initial appointment with a clinician. Main Outcomes and Measures: Appointment scheduling, wait time, and out-of-pocket costs. Results: A total of 10 871 unique patient profiles were assigned to 6324 clinicians. Among all women, 2312 of 3420 (67.6%) received an appointment with a clinician who prescribed buprenorphine, with lower rates among pregnant vs nonpregnant callers (1055 of 1718 [61.4%] vs 1257 of 1702 [73.9%]; relative risk, 0.83; 95% CI, 0.79-0.87). For clinicians who prescribed methadone, there was no difference in appointment access for pregnant vs nonpregnant callers (240 of 271 [88.6%] vs 237 of 265 [89.4%]; relative risk, 0.99; 95% CI, 0.93-1.05). Insurance was frequently not accepted, with 894 of 3420 buprenorphine-waivered prescribers (26.1%) and 174 of 536 opioid treatment programs (32.5%) granting appointments only when patients agreed to pay cash. Median wait times did not differ between pregnant and nonpregnant callers among buprenorphine prescribers (3 days [interquartile range, 1-7 days] vs 3 days [interquartile range, 1-7 days]; P = .43) but did differ among methadone prescribers (1 day [interquartile range, 1-4 days] vs 2 days [interquartile range, 1-6 days]; P = .049). For patients agreeing to pay cash, the median out-of-pocket costs for initial appointments were $250 (interquartile range, $155-$300) at buprenorphine prescribers and $34 (interquartile range, $15-$120) at methadone prescribers. Conclusions and Relevance: In this cross-sectional study with random assignment of clinicians and simulated-patient callers, many women, especially pregnant women, faced barriers to accessing treatment. Given the high out-of-pocket costs and lack of acceptance of insurance among many clinicians, access to affordable opioid use disorder treatment is a significant concern.

Recruiting and retaining dental labor in federal facilities: Harder than pulling teeth?

The U.S. Veterans Administration (VA) is a large publicly financed health system that has long struggled with provider shortages. Shortages may arise at the VA because it offers different compensation than private sector employment options or because of differences in the way that labor is supplied to public versus private employers. In the mid-2000s, the VA adopted a more generous and flexible pay schedule for its dentists. We exploit this salary schedule change to study the impact of a positive wage shock on dental labor supplied to the VA, within a difference-in-differences framework. We find limited effects on VA separation and new hire rates overall-though early career dentists appear more sensitive to the wage change. More generous pay has its clearest effects on employment type for VA dentists, reducing the likelihood of being part-time by roughly 10%.

Stable isotope and dental caries data reveal abrupt changes in subsistence economy in ancient China in response to global climate change.

Prior to the introduction of wheat and barley from Central Asia during the Neolithic period, northern Chinese agricultural groups subsisted heavily on millet. Despite being the focus of many decades of intensive interest and research, the exact route(s), date(s), and mechanisms of the spread and adoption of wheat and barley into the existing well-established millet-based diet in northern China are still debated. As the majority of the important introduced crops are C3 plants, while the indigenous millet is C4, archaeologists can effectively identify the consumption of any introduced crops using stable carbon isotope analysis. Here we examine published stable isotope and dental caries data of human skeletal remains from 77 archaeological sites across northern and northwestern China. These sites date between 9000 to 1750 BP, encompassing the period from the beginning of agriculture to wheat's emergence as a staple crop in northern China. The aim of this study is to evaluate the implications of the spread and adoption of these crops in ancient China. Detailed analysis of human bone collagen δ13C values reveals an almost concurrent shift from a C4-based to a mixed C3/ C4- based subsistence economy across all regions at around 4500-4000 BP. This coincided with a global climatic event, Holocene Event 3 at 4200 BP, suggesting that the sudden change in subsistence economy across northern and northwestern China was likely related to climate change. Moreover, the substantially increased prevalence of dental caries from pre-to post-4000 BP indicates an increase in the consumption of cariogenic cereals during the later period. The results from this study have significant implications for understanding how the adoption of a staple crop can be indicative of large-scale environmental and socio-political changes in a region.