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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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%.

Horizontal and vertical integration's role in meaningful use attestation over time.

OBJECTIVE: To compare rates of attestation and attrition from the MU program by independent, horizontally integrated, and vertically integrated physicians and to assess whether MU created pressure for independent physicians to join integrated organizations. DATA SOURCE/STUDY SETTING: Secondary Data from SK&A and Medicare MU Files, 2011-2016. Office-based physicians in the 50 United States and District of Columbia. STUDY DESIGN: We compared attestation rates among physicians that remained independent or integrated throughout the study period. We then assessed the association between changing integration and MU attestation in multivariate regression models. PRINCIPAL FINDINGS: Our sample included 291 234 physicians. Forty nine percent of physicians that remained independent throughout the period attested to MU at least once during the program, compared with 70 percent of physicians that remained horizontally or vertically integrated physicians. Only approximately 50 percent of independent physicians that attested between 2011 and 2013 attested in 2015, representing significantly more attrition than we observed among integrated physicians. In multivariate regression models, physicians that joined these organizations were more likely to have attested to MU prior to integrating and this difference increased following integration. CONCLUSIONS: These findings point toward a growing digital divide between physicians who remain independent and integrated physicians that may have been exacerbated by the MU program. Targeted public policy, such as new regional extension centers, should be considered to address this disparity.

Economic downturns and nurse attachment to federal employment.

The impact of the financial crisis has been uneven-with differences across industries and occupations. Jobs linked to health care appear better insulated, with nurses specifically showing labor force gains during the recent recession. What is not known is how important public sector employment opportunities are for these national nursing trends. Observing the universe of nurses working for one of the largest (and publicly operated) health care employers, we show that worsening economic conditions lead to stronger job attachment. Relatedly, older nurses also seem more willing to delay retirement and instead transition to part-time positions during a downturn.

Magnet hospital recognition in hospital systems over time.

BACKGROUND: Magnet hospitals are recognized for nursing excellence and high-value patient outcomes, yet little is known about which and when hospitals pursue Magnet recognition. Concurrently, hospital systems are becoming a more prominent feature of the U.S. health care landscape. PURPOSE: The aim of the study was to examine Magnet adoption among hospital systems over time. APPROACH: Using American Hospital Association surveys (1998-2012), we characterized the proportion of Magnet hospitals belonging to systems. We used hospital level fixed-effects regressions to capture changes in a given system hospital's Magnet status over time in relation to a variety of conditions, including prior Magnet adoption by system affiliates and nonaffiliates in local and geographically distant markets and whether these relationships varied by degree of system centralization. RESULTS: The proportion of Magnet hospitals belonging to a system is increasing. Prior Magnet adoption by a hospital within the local market was associated with an increased likelihood of a given system hospital becoming Magnet, but the effect was larger if there was prior adoption by affiliates (7.4% higher likelihood) versus nonaffiliates (2.7% higher likelihood). Prior adoption by affiliates and nonaffiliates in geographically distant markets had a lesser effect. Hospitals belonging to centralized systems were more reactive to Magnet adoption of nonaffiliate hospitals as compared with those in decentralized systems. CONCLUSIONS: Hospital systems take an organizational perspective toward Magnet adoption, whereby more system affiliates achieve Magnet recognition over time. PRACTICE IMPLICATIONS: The findings are relevant to health care and nursing administrators and policymakers interested in the diffusion of an empirically supported organizational innovation associated with quality outcomes, particularly in a time of increasing hospital consolidation and system expansion. We identify factors associated with Magnet adoption across system hospitals and demonstrate the importance of considering diffusion of organizational innovations in relation to system centralization. We suggest that decentralized system hospitals may be missing potential benefits of such organizational innovations.

Does Spending More Get More? Health Care Delivery and Fiscal Implications From a Medicare Fee Bump.

While salient features of the Affordable Care Act include insurance expansions and private coverage reforms, various other provisions are embedded within the law. We focus on a temporary 10 percent fee increase for primary care visits supplied to publicly insured (Medicare) beneficiaries. Using administrative and survey data, we assess the price shock's impact on service volume, physician labor supply, and quality of care. Primary care physicians (PCPs) in independent practices demonstrate, at most, a marginal 2 percent increase in new patient visits while horizontally and vertically integrated PCPs show no change. Both PCP organizational types witness declines in established patient visits, on average, but there is marked heterogeneity: established patient visits increase by 1 to 2 percent among PCPs with fewer Medicare claims in the pre-period. The Medicare fee bump did not observably impact other labor supply outcomes and quality of care margins. We estimate that the policy introduced a $1.5 billion transfer from taxpayers to providers during the initiative's first three years.

Do coverage mandates affect direct-to-consumer advertising for pharmaceuticals? Evidence from parity laws.

Direct-to-consumer advertising (DTCA) for prescription drugs is a relatively unique feature of the US health care system and a source of tens of billions of dollars in annual spending. It has also garnered the attention of researchers and policymakers interested in its implications for firm and consumer behavior. However, few economic studies have explored the DTCA response to public policies, especially those mandating coverage of these products. We use detailed advertising expenditure data to assess if pharmaceutical firms increase their marketing efforts after the implementation of relevant state and federal health insurance laws. We focus on mental health parity statutes and related drug therapies-a potentially ripe setting for inducing stronger consumer demand. We find no clear indication that firms expect greater value from DTCA after these regulatory changes. DTCA appears driven by other considerations (e.g., product debut); however, it remains a possibility that firms respond to these laws through other, unobserved channels (e.g., provider detailing).

Physician Competition in the Era of Accountable Care Organizations.

OBJECTIVE: To calculate physician concentration levels for all U.S. markets using detailed data on integration and accountable care organization (ACO) participation. DATA SOURCE: 2015 SK&A office-based physician survey linked to all commercial and public payer ACOs. STUDY DESIGN: We construct three separate Herfindahl-Hirschman Index (HHI) measures and plot their distributions. We then investigate how prevailing levels of concentration change when incorporating more detailed organizational features into the HHI measure. PRINCIPAL FINDINGS: Horizontal and vertical integration strongly influences measures of physician concentration; however, ACOs have limited impact overall. ACOs are often present in competitive markets, and only in a minority of these markets do ACOs substantively increase physician concentration. CONCLUSIONS: Monitoring ACO effects on physician competition will likely have to proceed on a case-by-case basis.

Supply-side effects from public insurance expansions: Evidence from physician labor markets.

Medicaid and the Child Health Insurance Programs (CHIP) are key sources of coverage for U.S. children. Established in 1997, CHIP allocated $40 billion of federal funds across the first 10 years but continued support required reauthorization. After 2 failed attempts in Congress, CHIP was finally reauthorized and significantly expanded in 2009. Although much is known about the demand-side policy effects, much less is understood about the policy's impact on providers. In this paper, we leverage a unique physician dataset to examine if and how pediatricians responded to the expansion of the public insurance program. We find that newly trained pediatricians are 8 percentage points more likely to subspecialize and as much as 17 percentage points more likely to enter private practice after the law passed. There is also suggestive evidence of greater private practice growth in more rural locations. The sharp supply-side changes that we observe indicate that expanding public insurance can have important spillover effects on provider training and practice choices.