Analyzing Individual-Level Secondary Data with Instrumental Variable Methods Is Useful for Studying the Effects of Air Pollution on Dementia.

We hypothesize that analyzing individual-level secondary data with instrumental variable (IV) methods can advance knowledge of the long-term effects of air pollution on dementia. We discuss issues in measurement using secondary data and how IV estimation can overcome biases due to measurement error and unmeasured variables. We link air-quality data from the Environmental Protection Agency's monitors with Medicare claims data to illustrate the use of secondary data to document associations. Additionally, we describe results from a previous study that uses an IV for pollution and finds that PM2.5's effects on dementia are larger than non-causal associations.

Choice Inconsistencies among the Elderly: Evidence from Plan Choice in the Medicare Part D Program: Comment.

Consumers' enrollment decisions in Medicare Part D can be explained by Abaluck and Gruber's (2011) model of utility maximization with psychological biases or by a neoclassical version of their model that precludes such biases. We evaluate these competing hypotheses by applying nonparametric tests of utility maximization and model validation tests to administrative data. We find that 79 percent of enrollment decisions from 2006 to 2010 satisfied basic axioms of consumer theory under the assumption of full information. The validation tests provide evidence against widespread psychological biases. In particular, we find that precluding psychological biases improves the structural model's out-of-sample predictions for consumer behavior.

Paying Attention or Paying Too Much in Medicare Part D.

We study whether people became less likely to switch Medicare prescription drug plans (PDPs) due to more options and more time in Part D. Panel data for a random 20 percent sample of enrollees from 2006--2010 show that 50 percent were not in their original PDPs by 2010. Individuals switched PDPs in response to higher costs of their status quo plans, saving them money. Contrary to choice overload, larger choice sets increased switching unless the additional plans were relatively expensive. Neither switching overall nor responsiveness to costs declined over time, and above-minimum spending in 2010 remained below the 2006 and 2007 levels.

Sinking, Swimming, or Learning to Swim in Medicare Part D.

Under Medicare Part D, senior citizens choose prescription drug insurance offered by numerous private insurers. We examine nonpoor enrollees' actions in 2006 and 2007 using panel data. Our sample reduced overspending by $298 on average, with gains by 81 percent of them. The greatest improvements were by those who overspent most in 2006 and by those who switched plans. Decisions to switch depended on individuals' overspending in 2006 and on individual-specific effects of changes in their current plans. The oldest consumers and those initiating medications for Alzheimer's disease improved by more than average, suggesting that real-world institutions help overcome cognitive limitations.

Variations in the use of an innovative technology by payer: the case of drug-eluting stents.

BACKGROUND: Despite receiving identical reimbursement for treating heart disease patients with bare metal stents (BMS) or drug-eluting coronary stents (DES), cardiologists' use of the new technology (DES) may have varied by patient payer type as DES diffused. Payer-related factors that differ between hospitals and/or differential treatment inside hospitals might explain any overall differences by payer type. OBJECTIVES: To assess the association between payer and DES use and to examine between-hospital and within-hospital variation in DES use over time. METHODS: We conducted a retrospective analysis of 4.1 million hospitalizations involving DES or BMS from 2003 to 2008 Nationwide Inpatient Sample. We estimated hybrid-fixed effects logit models and calculated the adjusted within-quarter, cross-payer differences in DES use. RESULTS: Coronary stent patients with Medicaid or without insurance were significantly less likely to receive DES than were patients with private insurance throughout the study period. The differences fluctuated over time as the popularity of DES relative to BMS increased and decreased. The within-hospital gaps paralleled the overall differences, and were largest in Q3 2003 (Medicaid: 11.9, uninsured: 10.9% points) and Q4 2008 (Medicaid: 12.8, uninsured: 20.7% points), and smallest in Q4 2004 (Medicaid: 1.4, uninsured: 1.1% points). The between-hospital adjusted differences in DES use by payer were small and rarely significant. CONCLUSIONS: We found substantial differences in DES use by payer within hospitals, suggesting physicians selected the new technology for patients in a manner associated with patients' payer type.

Influence of patient race on physician prescribing decisions: a randomized on-line experiment.

BACKGROUND: Prior research reports black patients have lower medication use for hypercholesterolemia, hypertension, and diabetes. OBJECTIVE: To assess whether patient race influences physicians' prescribing. DESIGN: Web-based survey including three clinical vignettes (hypercholesterolemia, hypertension, diabetes), with patient race (black, white) randomized across vignettes. SUBJECTS: A total of 716 respondents from 5,141 eligible sampled primary care physicians (14% response rate). INTERVENTIONS: None MEASUREMENTS: Medication recommendation (any medication vs none, on-patent branded vs generic, and therapeutic class) and physicians' treatment adherence forecast (10-point Likert scale, 1-definitely not adhere, 10-definitely adhere). RESULTS: Respondents randomized to view black patients (n = 371) and white patients (n = 345) recommend any medications at comparable rates for hypercholesterolemia (100.0% white vs 99.5% black, P = 0.50), hypertension (99.7% white vs 99.5% black, P = 1.00), and diabetes (99.7% white vs 99.7% black, P = 1.00). Patient race influenced medication class chosen in the hypertension vignette; respondents randomized to view black patients recommended calcium channel blockers more often (20.8% black vs 3.2% white) and angiotensin-converting enzyme inhibitors less often (47.4% black vs 62.6% white) (P < 0.001). Patient race did not influence medication class for hypercholesterolemia or diabetes. Respondents randomized to view black patients reported lower forecasted patient adherence for hypertension (P < 0.001, mean: 7.3 black vs 7.7 white) and diabetes (P = 0.05 mean: 7.4 black vs 7.6 white), but race had no meaningful influence on forecasted adherence for hypercholesterolemia (P = 0.15, mean: 7.2 black vs 7.3 white). CONCLUSION: Racial differences in outpatient prescribing patterns for hypertension, hypercholesterolemia, and diabetes are likely attributable to factors other than prescribing decisions based on patient race.

Physician clinical information technology and health care disparities.

The authors develop a conceptual framework regarding how information technology (IT) can alter within-physician disparities, and they empirically test some of its implications in the context of coronary heart disease. Using a random experiment on 256 primary care physicians, the authors analyze the relationships between three IT functions (feedback and two types of clinical decision support) and five process-of-care measures. Endogeneity is addressed by eliminating unobserved patient characteristics with vignettes and by proxying for omitted physician characteristics. The results indicate that IT has no effects on physicians' diagnostic certainty and treatment of vignette patients overall. The authors find that treatment and certainty differ by patient age, gender, and race. Consistent with the framework, IT's effects on these disparities are complex. Feedback eliminated the gender disparities, but the relationships differed for other IT functions and process measures. Current policies to reduce disparities and increase IT adoption may be in discord.

Medicare Part D's effects on elderly patients' drug costs and utilization.

OBJECTIVE: To analyze Medicare Part D's net effect on elderly patients' use of and out-of-pocket (OOP) costs for prescription drugs and to compare these with standardized results from prior studies. STUDY DESIGN: Our dataset contains 1.4 billion prescriptions from Wolters Kluwer Health from December 2004 through December 2007 for patients whose age as of 2007 was more than 57 years. METHODS: Days' supply per capita, OOP cost per day's supply, and number of individuals filling prescriptions were compared before and after January 2006 for those over age 66 years versus those age 58-64 years. Adjustment was made for under-reporting of pure cash prescriptions in the data. RESULTS: Elderly patients' utilization in the first year of Part D increased compared with that of near-elderly patients by 8.1% for days' supply and 4.8% for the number of individuals filling prescriptions, and their OOP costs declined by 17.2%. Although elderly patients' OOP costs in the second year were reduced an additional 5.8%, days' supply increased by only an additional 1.0%. Correcting for the under-reporting of pure cash prescriptions yielded effects of 8.1% and -3.5% for days' supply and -15.6% and -7.2% for OOP costs in 2006 and 2007, respectively. A standardized comparison with previous estimates from Walgreens data showed that our utilization estimates were 2.6 times larger. CONCLUSION: Part D lowered elderly patients' OOP costs and increased utilization, primarily during the first year of the program. Magnitudes vary substantially across studies because of differences in data and methods.

Primary care physicians' views of Medicare Part D.

OBJECTIVE: To examine physicians' attitudes about the impact of Medicare Part D and how it varied among seniors, particularly Medicare-Medicaid dual-eligible enrollees. STUDY DESIGN: Web-based survey of primary care physicians in North Carolina (generous Medicaid formulary) and Florida, Massachusetts, and Texas (restrictive Medicaid formularies). METHODS: Of 5141 eligible primary care physicians, 716 (14%) responded between November 2007 and March 2008. We examined Part D's effects on access overall and for selected populations. We used descriptive and regression analyses to assess physicians' views about Part D's effects on dual-eligible enrollees and how those views differed between North Carolina and the other states. All analyses were weighted for nonresponse. RESULTS: More respondents had a favorable (48%) than an unfavorable (37%) view of Part D overall, and 55% reported Part D improved access to prescription drugs in general. However, 44% reported access declined for individuals with prior drug coverage, and 64% reported Part D formularies were insufficient for their patients' needs. Nearly half (49%) reported dual-eligible enrollees' access was worse under Part D in 2007 relative to Medicaid before 2006; 63% reported higher administrative burden. Physicians reported Part D lowered dual-eligible enrollees' access and increased providers' burden more in North Carolina than in the 3 restrictive Medicaid states. CONCLUSION: Primary care physicians held generally positive but widely varying views of Part D. Respondents expressed concerns about access to prescription drugs under Part D, particularly for dual-eligible enrollees. Improving the transparency and generosity of Part D formulary coverage may improve access.

How similar are states' Medicaid preferred drug lists?

OBJECTIVE: To compare the generosity and consistency of 10 states' Medicaid preferred drug lists (PDLs) in high-volume therapeutic classes. STUDY DESIGN: Descriptive comparisons of 7 of the top 10 therapeutic classes by Medicaid sales and of the top 10 most populous states with Medicaid PDLs. METHODS: A PDL specifies which drugs are available to patients without receiving prior approval from the state. State PDLs were collected in January 2008 to determine the status (covered or not covered) of 110 different drugs in each state. The US Food and Drug Administration Orange Book provided patent status for each drug. States were compared for generosity and similarity of coverage overall, by patent status, and by therapeutic class. RESULTS: For 42 (38%) of the drugs, there was wide consistency in PDL design, with at least 9 states classifying the drug with the same PDL status. For the other 62% of drugs, there was greater variation, with 2 or more states classifying the drugs differently than the others. Generosity and consistency also varied by therapeutic class and patent status. CONCLUSION: For most drugs, Medicaid PDLs are not implemented consistently across states, suggesting that states do not rely on common clinical evidence to make value-based coverage decisions. Greater involvement by the federal government in designing or regulating monopolistic Medicare Part D PDLs may result in similar inconsistencies.

Hospital-physician gainsharing in cardiology.

The Health and Human Services Office of Inspector General has approved a handful of gainsharing arrangements in which physicians receive cash payments for reducing hospital spending. Gainsharing might reduce costs by aligning hospital and physician incentives, but concerns remain about quality and access. We examine the effects of thirteen gainsharing programs on coronary stent patients. Compared to other hospitals, gainsharing hospitals reduced costs by 7.4 percent per patient, with 91 percent of the savings from lower prices and 9 percent from lower utilization. The available measures of access and quality suggest that neither was reduced, nor was access to drug-eluting stents before 2006.

Have HMOs broadened their hospital networks?: Changes in HMO hospital networks in California, 1999-2003.

OBJECTIVE: This study uses empirical data to study changes in the structure and use of HMO hospital provider networks in California. STUDY DESIGN: Data from California HMOs are used to test whether there have been structural changes in HMO size, geographic coverage, hospital network design, and patient channeling for inpatient care over the period 1999-2003. METHODS: Three different measures of HMO network breadth, access, and channeling were analyzed between 1999 and 2003. Actual patient admission data linked to health plan code variables are used to identify inpatient hospital discharges covered by each HMO in California and to which hospital each HMO sends its patients in each year between 1999 and 2003. RESULTS: Despite consolidation in the total number of HMOs, the share of all hospital admissions accounted for by HMOs remained substantial. In terms of network breadth, there were minimal changes over time in the percent of available hospitals included in HMO networks. There was a slight increase in distance traveled for HMO' patient who were admitted, the opposite of what would be expected if networks were being broadened. Finally, channeling, as measured by the concentration of a payers' patients within its network hospitals did not change significantly. CONCLUSIONS: We found little evidence that there have been systematic changes in either the structure or use of HMO hospital networks in California between 1999 and 2003, suggesting that these factors played a limited role in explaining the return of growth in health care costs.

Medicaid preferred drug lists' costs to physicians.

BACKGROUND: Medicaid preferred drug lists (PDLs) might reduce costs for Medicaid programs while creating costs to physicians. OBJECTIVES: To measure the costs from complying with Medicaid PDLs for primary care physicians and cardiologists, and to quantify the costs of a hypothetical PDL for Medicare Part D. RESEARCH DESIGN: We analyzed cardiologists' and primary care physicians' experiences with Medicaid PDLs for antihypertensives and statins in 9 states. Physicians' prescribing volumes and PDL compliance were generated by combining pharmacy claims data from Wolters Kluwer Health with the state PDLs. These data were augmented with a survey of physicians. A Monte Carlo simulation was used to randomly assign each relevant physician in the state to a survey response. Estimates of the cost of a potential Part D PDL relied on the volume of Part D claims reported by Centers for Medicare and Medicaid Services (CMS) through May 2006. RESULTS: Physicians' PDL-related costs averaged $8.02 [95% confidence interval (CI): $7.25-$8.78] per prescription. Average cost per prescription not covered by the PDL was $14.41 (95% CI: $13.29-$15.53), and average cost per prescription covered by the PDL was $6.59 (95% CI: $5.91-$7.28). Medicaid PDL costs per physician averaged $1110 (95% CI: $1061-$1161) annually for statins and antihypertensives alone, and this varied across states. Similar restrictions under Medicare Part D across all therapeutic classes would have cost physicians $3.18 billion (95% CI: $2.88-$3.49 billion) in 2006. CONCLUSIONS: Medicaid PDLs generate considerable costs to physicians, as would adoption of PDLs in Medicare Part D. Policymakers should weigh these and other costs against the benefits of PDLs.

Physician practice size and variations in treatments and outcomes: evidence from Medicare patients with AMI.

Little is known about the relationships between physician practice size and patient treatments or outcomes. We examined whether the practice size of attending physicians was related to within-hospital differences in care for Medicare patients with acute myocardial infarction (AMI). We found that patients treated by solo physicians were less likely to receive cardiac catheterization and angioplasty within a day of admission and more likely to die than other patients in the same hospital, even after a number of patient and physician characteristics were taken into account. These differences suggest that solo practitioners are less likely to follow guidelines calling for quick use of angioplasty.

Physician practice revenues and use of information technology in patient care.

OBJECTIVES: Although information technology (IT) may improve efficiency and quality of patient care, the adoption of clinical IT by physicians has been limited. This study investigates the relationships between physician practice revenue and use of clinical IT. RESEARCH DESIGN: We undertook a cross-sectional analysis of data on 6849 U.S. physicians in physician-owned practices who responded to the 2000-2001 Community Tracking Study Physician Survey. Physician practice revenues, measured as the percentage of total revenues, is defined along 2 dimensions: type (capitation, noncapitated managed care, or fee-for-service) and source (Medicare, Medicaid, or private/other). Analyses were adjusted for physician and practice characteristics and geographic location. MEASURES: The proportion of physicians using IT for 5 functions of patient care: treatment guidelines, formularies, patient notes or lists, electronic prescriptions, and data exchange with other physicians. RESULTS: Practice revenues are associated with differences in physicians' use of IT in patient care. Above-average Medicaid revenue was associated with 20% higher use of IT overall (incidence density ratio = 1.20, 95% confidence interval [CI] = 1.12-1.30). Above-average capitation revenue corresponds to higher use of IT overall (incidence density ratio = 1.10, 95% CI = 1.02-1.19) and greater odds of using IT for guidelines (odds ratio = 1.26, 95% CI = 1.05-1.53). Above-average noncapitated managed care revenue, however, has no apparent relationship with IT use. CONCLUSIONS: Differences in the type and source of physician revenues were associated with differences in the use of IT in patient care in 2000-2001. The relationships between practice revenues and IT use varied across clinical IT functions.

Which physicians are affected most by Medicaid preferred drug lists for statins and antihypertensives?

BACKGROUND: To limit quickly rising prescription drug expenditures, many state Medicaid programmes have implemented preferred drug lists (PDLs) and prior authorisation (PA). Lessons from Medicaid efforts may be informative for Medicare, which started covering outpatient prescription drugs recently. OBJECTIVES: To examine how the cost of compliance with Medicaid PDLs for antihypertensives and statins varied across physicians, and to assess the effects of PDLs on physician prescribing patterns and access for Medicaid patients. DATA AND METHODS: An anonymous survey of primary care physicians and cardiologists in nine states with PDLs was conducted in December 2005 and January 2006. Survey responses were augmented with physician prescribing data, practice location characteristics, and publicly available information about state PDLs. We analysed six physician-level outcome measures: annual PDL-related costs; the proportion of Medicaid prescriptions covered by the PDL; the proportion of Medicaid prescriptions written for an alternative to a physician's most preferred drug because of PDLs; the proportion of times no drug was prescribed to a Medicaid patient because of PDLs; whether they restricted their new Medicaid patient caseload because of PDLs; and whether they decreased the proportion of prescriptions not covered by the Medicaid PDL for non-Medicaid patients. We assessed how these outcomes varied with Medicaid caseload, physician practice size, and socioeconomic characteristics of the practice's ZIP Code. RESULTS: Costs from complying with Medicaid PDLs for statins and antihypertensives were greatest for physicians in solo practices with high Medicaid caseloads located in poor areas. Although all physicians' prescribing patterns were influenced to some extent by PDLs, those with high volumes of Medicaid prescriptions were affected more. They more frequently prescribed Medicaid patients a less-preferred medication or nothing at all, and were more likely to alter their prescribing to non-Medicaid patients. Physicians with low Medicaid prescription volumes in areas with fewer minorities were more likely to limit their willingness to treat new Medicaid patients. CONCLUSION: The burden of Medicaid PDLs fell greatest on physicians in disadvantaged areas and their patients.

Patient and provider assessments of adherence and the sources of disparities: evidence from diabetes care.

OBJECTIVE: To (1) compare diabetes patients' self-assessments of adherence with their providers' assessments; (2) determine whether there are systematic differences between the two for certain types of patients; and (3) consider how the cognitive processing that providers use to assess adherence might explain these differences. DATA SOURCES/STUDY SETTING: Primary survey data were collected in 1998 from 156 patient provider pairs in two subspecialty endocrinology clinics in a large Midwestern city. STUDY DESIGN: Data were collected in a cross-sectional survey study design. Providers were surveyed immediately after seeing each diabetes patient, and patients were surveyed via telephone within 1 week of clinic visits. DATA COLLECTION/EXTRACTION METHODS: Bivariate descriptive results and multivariate regression analyses are used to examine how patient characteristics relate to four measures of overall adherence assessments: (1) patients' self-assessments; (2) providers' assessments of patient adherence; (3) differences between those assessments; and (4) absolute values of those differences. PRINCIPAL FINDINGS: Patient self-assessments are almost entirely independent of observable characteristics such as sex, race, and age. Provider assessments vary with observable characteristics such as patient race and age but not with less readily observable factors such as education and income. For black patients, we observe that relative to white patients, providers' assessments are significantly farther away from-although not systematically farther above or below-patients' self-assessments. CONCLUSIONS: Providers appear to rely on observable cues, particularly age and race, to make inferences about an individual patient's adherence. These findings point to a need for further research of various types of provider cognitive processing, particularly in terms of distinguishing between prejudice and uncertainty. If disparities in assessment stem more from information and communication problems than from provider prejudice, policy interventions should facilitate providers' systematic acquisition and processing of information, particularly for some types of patients.

The effects of price competition and reduced subsidies for uncompensated care on hospital mortality.

OBJECTIVE: To determine whether hospital mortality rates changed in New Jersey after implementation of a law that changed hospital payment from a regulated system based on hospital cost to price competition with reduced subsidies for uncompensated care and whether changes in mortality rates were affected by hospital market conditions. DATA SOURCES/STUDY SETTING: State discharge data for New Jersey and New York from 1990 to 1996. Study Design. We used an interrupted time series design to compare risk-adjusted in-hospital mortality rates between states over time. We compared the effect sizes in markets with different levels of health maintenance organization penetration and hospital market concentration and tested the sensitivity of our results to different approaches to defining hospital markets. DATA COLLECTION/EXTRACTION METHODS: The study sample included all patients under age 65 admitted to New Jersey or New York hospitals with stroke, hip fracture, pneumonia, pulmonary embolism, congestive heart failure, hip fracture, or acute myocardial infarction (AMI). PRINCIPAL FINDINGS: Mortality among patients in New Jersey improved less than in New York by 0.4 percentage points among the insured (p=.07) and 0.5 percentage points among the uninsured (p=.37). There was a relative increase in mortality for patients with AMI, congestive heart failure, and stroke, especially for uninsured patients with these conditions, but not for patients with the other four conditions we studied. Less competitive hospital markets were significantly associated with a relative decrease in mortality among insured patients. CONCLUSIONS: Market-based reforms may adversely affect mortality for some conditions but it appears the effects are not universal. Insured patients in less competitive markets fared better in the transition to price competition.

Reference pricing of pharmaceuticals for Medicare: evidence from Germany, The Netherlands, and New Zealand.

This paper describes three prototypical systems of therapeutic reference pricing (RP) for pharmaceuticals--Germany, the Netherlands, and New Zealand--and examines their effects on the availability of new drugs, reimbursement levels, manufacturer prices, and out-of-pocket surcharges to patients. RP for pharmaceuticals is not simply analogous to a defined contribution approach to subsidizing insurance coverage. Although a major purpose of RP is to stimulate competition, theory suggests that the achievement of this goal is unlikely, and this is confirmed by the empirical evidence. Other effects of RP differ across countries in predictable ways, reflecting each country's system design and other cost-control policies. New Zealand's RP system has reduced reimbursement and limited the availability of new drugs, particularly more expensive drugs. Compared to these three countries, if RP were applied in the United States, it would likely have a more negative effect on prices of onpatent products because of the more competitive U.S. generic market, and on research and development (R&D) and the future supply of new drugs, because of the much larger U.S. share of global pharmaceutical sales.