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.

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.

Physician payments under health care reform.

This study examines the impact of major health insurance reform on payments made in the health care sector. We study the prices of services paid to physicians in the privately insured market during the Massachusetts health care reform. The reform increased the number of insured individuals as well as introduced an online marketplace where insurers compete. We estimate that, over the reform period, physician payments increased at least 11 percentage points relative to control areas. Payment increases began around the time legislation passed the House and Senate-the period in which their was a high probability of the bill eventually becoming law. This result is consistent with fixed-duration payment contracts being negotiated in anticipation of future demand and competition.

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.