Reducing Medicare Advantage Benchmarks Will Decrease Plan Generosity, But Those Effects Will Likely Be Modest.

Concerns that Medicare Advantage (MA) plans are overpaid have motivated calls to reduce MA benchmarks-the dollar amounts set by the Centers for Medicare and Medicaid Services (CMS) against which MA plans bid to set premiums and fund extra benefits. However, cutting benchmarks may lead to higher MA enrollee premiums and decreased plan generosity. We assessed the relationships between MA benchmarks and plan generosity and benefits. We estimated that a $1,000 per year decrease in benchmarks would lead to small increases in annual premiums of about $60 and increases in annual deductibles of about $27. Copays would also increase modestly, and the propensity to offer benefits would generally decline by less than 5 percentage points, with the greatest impact being on the availability of dental, hearing, and vision benefits. These results suggest that although cuts to MA benchmarks would adversely affect plan generosity, those effects would be modest.

Can amputation save the hospital? The impact of the Medicare Rural Flexibility Program on demand and welfare.

This paper seeks to understand the impact of the Medicare Rural Hospital Flexibility (Flex) Program on hospital choice and consumer welfare for rural residents. The Flex Program created a new class of hospital, the Critical Access Hospital (CAH), which receives more generous Medicare reimbursements in return for limits on capacity and length of stay. We find that conversion to CAH status resulted in a 4.7 percent drop in inpatient admissions to participating hospitals, almost all of which was driven by factors other than capacity constraints. The Flex Program increased consumer welfare if it prevented the exit of at least 6.5 percent of randomly selected converting hospitals.

Pediatric Price Transparency: Still Opaque With Opportunities for Improvement.

OBJECTIVES: Price transparency is gaining importance as families' portion of health care costs rise. We describe (1) online price transparency data for pediatric care on children's hospital Web sites and state-based price transparency Web sites, and (2) the consumer experience of obtaining an out-of-pocket estimate from children's hospitals for a common procedure. METHODS: From 2015 to 2016, we audited 45 children's hospital Web sites and 38 state-based price transparency Web sites, describing availability and characteristics of health care prices and personalized cost estimate tools. Using secret shopper methodology, we called children's hospitals and submitted online estimate requests posing as a self-paying family requesting an out-of-pocket estimate for a tonsillectomy-adenoidectomy. RESULTS: Eight children's hospital Web sites (18%) listed prices. Twelve (27%) provided personalized cost estimate tool (online form n = 5 and/or phone number n = 9). All 9 hospitals with a phone number for estimates provided the estimated patient liability for a tonsillectomy-adenoidectomy (mean $6008, range $2622-$9840). Of the remaining 36 hospitals without a dedicated price estimate phone number, 21 (58%) provided estimates (mean $7144, range $1200-$15 360). Two of 4 hospitals with online forms provided estimates. Fifteen (39%) state-based Web sites distinguished between prices for pediatric and adult care. One had a personalized cost estimate tool. CONCLUSIONS: Meaningful prices for pediatric care were not widely available online through children's hospital or state-based price transparency Web sites. A phone line or online form for price estimates were effective strategies for hospitals to provide out-of-pocket price information. Opportunities exist to improve pediatric price transparency.

The Effect of Physician and Hospital Market Structure on Medical Technology Diffusion.

OBJECTIVE: To examine the influence of physician and hospital market structures on medical technology diffusion, studying the diffusion of drug-eluting stents (DESs), which became available in April 2003. DATA SOURCES/STUDY SETTING: Medicare claims linked to physician demographic data from the American Medical Association and to hospital characteristics from the American Hospital Association Survey. STUDY DESIGN: Retrospective claims data analyses. DATA COLLECTION/EXTRACTION METHODS: All fee-for-service Medicare beneficiaries who received a percutaneous coronary intervention (PCI) with a cardiac stent in 2003 or 2004. Each PCI record was joined to characteristics on the patient, the procedure, the cardiologist, and the hospital where the PCI was delivered. We accounted for the endogeneity of physician and hospital market structure using exogenous variation in the distances between patient, physician, and hospital locations. We estimated multivariate linear probability models that related the use of a DES in the PCI on market structure while controlling for patient, physician, and hospital characteristics. PRINCIPAL FINDINGS: DESs diffused faster in markets where cardiology practices faced more competition. Conversely, we found no evidence that the structure of the hospital market mattered. CONCLUSIONS: Competitive pressure to maintain or expand PCI volume shares compelled cardiologists to adopt DESs more quickly.

For Third Enrollment Period, Marketplaces Expand Decision Support Tools To Assist Consumers.

The design of the Affordable Care Act's online health insurance Marketplaces can improve how consumers make complex health plan choices. We examined the choice environment on the state-based Marketplaces and HealthCare.gov in the third open enrollment period. Compared to previous enrollment periods, we found greater adoption of some decision support tools, such as total cost estimators and integrated provider lookups. Total cost estimators differed in how they generated estimates: In some Marketplaces, consumers categorized their own utilization, while in others, consumers answered detailed questions and were assigned a utilization profile. The tools available before creating an account (in the window-shopping period) and afterward (in the real-shopping period) differed in several Marketplaces. For example, five Marketplaces provided total cost estimators to window shoppers, but only two provided them to real shoppers. Further research is needed on the impact of different choice environments and on which tools are most effective in helping consumers pick optimal plans.

Seeing Health Insurance and HealthCare.gov Through the Eyes of Young Adults.

PURPOSE: We describe young adults' perspectives on health insurance and HealthCare.gov, including their attitudes toward health insurance, health insurance literacy, and benefit and plan preferences. METHODS: We observed young adults aged 19-30 years in Philadelphia from January to March 2014 as they shopped for health insurance on HealthCare.gov. Participants were then interviewed to elicit their perceived advantages and disadvantages of insurance and factors considered important for plan selection. A 1-month follow-up interview assessed participants' plan enrollment decisions and intended use of health insurance. Data were analyzed using qualitative methodology, and salience scores were calculated for free-listing responses. RESULTS: We enrolled 33 highly educated young adults; 27 completed the follow-up interview. The most salient advantages of health insurance for young adults were access to preventive or primary care (salience score .28) and peace of mind (.27). The most salient disadvantage was the financial strain of paying for health insurance (.72). Participants revealed poor health insurance literacy with 48% incorrectly defining deductible and 78% incorrectly defining coinsurance. The most salient factors reported to influence plan selection were deductible (.48) and premium (.45) amounts as well as preventive care (.21) coverage. The most common intended health insurance use was primary care. Eight participants enrolled in HealthCare.gov plans: six selected silver plans, and three qualified for tax credits. CONCLUSIONS: Young adults' perspective on health insurance and enrollment via HealthCare.gov can inform strategies to design health insurance plans and communication about these plans in a way that engages and meets the needs of young adult populations.

Twitter sentiment predicts Affordable Care Act marketplace enrollment.

BACKGROUND: Traditional metrics of the impact of the Affordable Care Act (ACA) and health insurance marketplaces in the United States include public opinion polls and marketplace enrollment, which are published with a lag of weeks to months. In this rapidly changing environment, a real-time barometer of public opinion with a mechanism to identify emerging issues would be valuable. OBJECTIVE: We sought to evaluate Twitter's role as a real-time barometer of public sentiment on the ACA and to determine if Twitter sentiment (the positivity or negativity of tweets) could be predictive of state-level marketplace enrollment. METHODS: We retrospectively collected 977,303 ACA-related tweets in March 2014 and then tested a correlation of Twitter sentiment with marketplace enrollment by state. RESULTS: A 0.10 increase in the sentiment score was associated with an 8.7% increase in enrollment at the state level (95% CI 1.32-16.13; P=.02), a correlation that remained significant when adjusting for state Medicaid expansion (P=.02) or use of a state-based marketplace (P=.03). CONCLUSIONS: This correlation indicates Twitter's potential as a real-time monitoring strategy for future marketplace enrollment periods; marketplaces could systematically track Twitter sentiment to more rapidly identify enrollment changes and potentially emerging issues. As a repository of free and accessible consumer-generated opinions, this study reveals a novel role for Twitter in the health policy landscape.

Scope-of-practice laws for nurse practitioners limit cost savings that can be achieved in retail clinics.

Retail clinics have the potential to reduce health spending by offering convenient, low-cost access to basic health care services. Retail clinics are often staffed by nurse practitioners (NPs), whose services are regulated by state scope-of-practice regulations. By limiting NPs' work scope, restrictive regulations could affect possible cost savings. Using multistate insurance claims data from 2004-07, a period in which many retail clinics opened, we analyzed whether the cost per episode associated with the use of retail clinics was lower in states where NPs are allowed to practice independently and to prescribe independently. We also examined whether retail clinic use and scope of practice were associated with emergency department visits and hospitalizations. We found that visits to retail clinics were associated with lower costs per episode, compared to episodes of care that did not begin with a retail clinic visit, and the costs were even lower when NPs practiced independently. Eliminating restrictions on NPs' scope of practice could have a large impact on the cost savings that can be achieved by retail clinics.

Trends underlying employer-sponsored health insurance growth for Americans younger than age sixty-five.

Little is known about the trends in health care spending for the 156 million Americans who are younger than age sixty-five and enrolled in employer-sponsored health insurance. Using a new source of health insurance claims data, we estimated per capita spending, utilization, and prices for this population between 2007 and 2011. During this period per capita spending on employer-sponsored insurance grew at historically slow rates, but still faster than per capita national health expenditures. Total per capita spending for employer-sponsored insurance grew at an average annual rate of 4.9 percent, with prescription spending growing at 3.3 percent and medical spending growing at 5.3 percent. Out-of-pocket medical spending increased at an average annual rate of 8.0 percent, whereas out-of-pocket prescription drug spending growth was flat. Growth in the use of medical services and prescription drugs slowed. Medical price growth accelerated, and prescription price growth decelerated. As a result, changes in utilization contributed less than changes in price did to overall spending growth for those with employer-sponsored insurance.

Care guides: employing nonclinical laypersons to help primary care teams manage chronic disease.

Lay persons ("care guides") without previous clinical experience were hired by a primary care clinic, trained for 2 weeks, and assigned to help 332 patients and their providers manage their diabetes, hypertension, and congestive heart failure. One year later, failure by these patients to meet nationally recommended guidelines was reduced by 28%, P < .001. Improvement was seen in tobacco usage, blood pressure control, pneumonia vaccination, low-density lipoprotein cholesterol levels, annual eye examinations, aspirin use, and microalbuminuria testing. Care guides served an average of 111 patients at an annual per patient cost of $392. Further testing of this model is warranted.

Does information matter? Competition, quality, and the impact of nursing home report cards.

OBJECTIVE: We evaluate the effects of the Nursing Home Quality Initiative (NHQI), which introduced quality measures to the Centers for Medicare and Medicaid Services' Nursing Home Compare website, on facility performance and consumer demand for services. DATA SOURCES: The nursing home Minimum Data Set facility reports from 1999 to 2005 merged with facility-level data from the On-Line Survey, Certification, and Reporting System. STUDY DESIGN: We rely on the staggered rollout of the report cards across pilot and nonpilot states to examine the effect of report cards on market share and quality of care. We also exploit differences in nursing home market competition at baseline to identify the impacts of the new information on nursing home quality. RESULTS: The introduction of the NHQI was generally unrelated to facility quality and consumer demand. However, nursing homes facing greater competition improved their quality more than facilities in less competitive markets. CONCLUSIONS: The lack of competition in many nursing home markets may help to explain why the NHQI report card effort had a minimal effect on nursing home quality. With the introduction of market-based reforms such as report cards, this result suggests policy makers must also consider market structure in efforts to improve nursing home performance.

Market power and contract form: evidence from physician group practices.

We examine how the market power of physician groups affects the form of their contracts with health insurers. We develop a simple model of physician contracting based on 'behavioral economics' and test it with data from two sources: a survey of physician group practices in Minnesota; and the physician component of the Community Tracking Survey. In both data sets we find that increases in groups' market power are associated with proportionately more fee-for-service revenue and less revenue from capitation.

Trends in unionization of nursing homes.

Unionization may have important implications for the delivery of nursing home care, but little is known about this phenomenon. Since 1985, the proportion of nursing home workers covered by union contracts declined from 14.6% to 9.9%. The first national-scale data on facility-level unionization reveals that unions are more common in nursing homes with more residents, in hospital-based or chain-affiliated facilities, and in facilities serving a higher proportion of Medicaid patients. With new federal policy proposals aimed at substantially lowering the cost of organizing workers, policymakers will want to consider the potential impact of nursing home unionization on worker, patient, and market outcomes.

Managed care and medical expenditures of Medicare beneficiaries.

This paper investigates the impact of Medicare HMO penetration on the medical care expenditures incurred by Medicare fee-for-service (FFS) enrollees. We find that increasing penetration leads to reduced spending on FFS beneficiaries. In particular, our estimates suggest that the increase in HMO penetration during our study period led to approximately a 7% decline in spending per FFS beneficiary. Similar models for various measures of health care utilization find penetration-induced reductions consistent with our spending estimates. Finally, we present evidence that suggests our estimated spending reductions are driven by beneficiaries who have at least one chronic condition.

National health care costs of peripheral arterial disease in the Medicare population.

Lower extremity peripheral arterial disease (PAD) is prevalent in the Medicare population and is associated with high rates of myocardial infarction, stroke, amputation, and death. Nevertheless, national health expenditures for PAD are not known. We hypothesized that PAD-related costs are high, increase with age, and that treatment rates would be less than known PAD prevalence. The objective was to determine national health care expenditures for PAD in the United States. PAD-related treatment costs were calculated in the elderly, non-disabled Medicare population. The cost analysis relied on the 5% control population for the linked SEER-Medicare data and Medicare claims for the calendar year 2001, identifying PAD cases based on diagnosis and procedure codes. Costs were aggregated separately for inpatient and outpatient treatment and estimates adjusted to reflect the Medicare population. A total of $4.37 billion was spent on PAD-related treatment and 88% of expenditures were for inpatient care. Medicare program outlays totaled $3.87 billion, while enrollees (or their supplemental insurance) spent the remaining $500 million. In total, 6.8% of the elderly Medicare population received treatment for PAD. Treatment increased with age at rates of 4.5%, 7.5%, and 11.8% for individuals aged 65-74, 75-84, and >85 years, respectively. PAD-related costs accounted for approximately 13% of all Medicare Part A and B expenditures for the PAD-treated cohort, and 2.3% of total Medicare Part A and B expenditures. In conclusion, US national PAD-related costs are high, associated with inpatient care, and increase with age. PAD is treated at rates lower than the known PAD prevalence as only approximately one-third of the population with known PAD had detectable PAD-related health care costs in our analysis. The potential impact of earlier PAD detection and use of outpatient preventive strategies on total national PAD health care costs is unknown.

The impact of Medicare coverage policies on health care utilization.

OBJECTIVE: To determine whether Medicare coverage policies affect utilization of services in Medicare. DATA SOURCES: We constructed an analysis data set for eight different procedures using secondary data obtained from Medicare claims (1999-2002) and Medicare coverage policies posted on Center for Medicare and Medicaid Services website. STUDY DESIGN: We analyzed the impact of coverage policies using difference-in-difference approach in a regression framework. PRINCIPAL FINDINGS: We found that in only one case (transesophageal echocardiography) out of eight did utilization change (reduced by 13.6 percent) after the effective date of the local policies. There is no systematic pattern that policies affect utilization, and the type of coverage policy does not seem to play an important role in its impact. CONCLUSIONS: Coverage policies have the potential but do not consistently impact utilization as policy makers intend and expect them to do. These findings raise significant policy questions about the effectiveness of Medicare coverage policies, which deserve further study.