Physician responses to Medicare reimbursement rates.

This paper investigates how office-based physicians respond to Medicare reimbursement changes. Using variation from an Affordable Care Act policy that increased reimbursements for office-based care in four states, we use a triple difference analysis, comparing physicians with higher and lower reimbursement changes in treated states to similar physicians in untreated states. We find two mechanisms through which physicians respond. First, the reimbursement change affected integration-physicians with larger increases in office-based reimbursement were less likely to vertically integrate with hospitals and more likely to continue providing office-based care than physicians with smaller reimbursement increases. Second, we find some evidence that physicians who continued practicing in an office setting increased the volume of services provided.

Hospital Ownership of Physicians: Hospital Versus Physician Perspectives.

Although there has been significant interest from health services researchers and policy makers about recent trends in hospitals' ownership of physician practices, few studies have investigated the strengths and weaknesses of available data sources. In this article, we compare results from two national surveys that have been used to assess ownership patterns, one of hospitals (the American Hospital Association survey) and one of physicians (the SK&A survey). We find some areas of agreement, but also some disagreement, between the two surveys. We conclude that full understanding of the causes and consequences of hospital ownership of physicians requires data collected at the both the hospital and the physician level. The appropriate measure of integration depends on the research question being investigated.

Medicare Advantage Plans Pay Hospitals Less Than Traditional Medicare Pays.

There is ongoing debate about how prices paid to providers by Medicare Advantage plans compare to prices paid by fee-for-service Medicare. We used data from Medicare and the Health Care Cost Institute to identify the prices paid for hospital services by fee-for-service (FFS) Medicare, Medicare Advantage plans, and commercial insurers in 2009 and 2012. We calculated the average price per admission, and its trend over time, in each of the three types of insurance for fixed baskets of hospital admissions across metropolitan areas. After accounting for differences in hospital networks, geographic areas, and case-mix between Medicare Advantage and FFS Medicare, we found that Medicare Advantage plans paid 5.6 percent less for hospital services than FFS Medicare did. Without taking into account the narrower networks of Medicare Advantage, the program paid 8.0 percent less than FFS Medicare. We also found that the rates paid by commercial plans were much higher than those of either Medicare Advantage or FFS Medicare, and growing. At least some of this difference comes from the much higher prices that commercial plans pay for profitable service lines.