Findings

Healthy Debate

Kevin Lewis

January 18, 2011

Projecting The Impact Of The Affordable Care Act On California

Peter Long & Jonathan Gruber
Health Affairs, January 2011, Pages 63-70

Abstract:
The Affordable Care Act is the most fundamental legislative transformation of the US health care system in forty years. This analysis estimates that the act will provide health insurance for an additional 3.4 million people in California in 2016. This will mean that nearly 96 percent of documented residents of California under age sixty-five will be insured. Enrollment in Medi-Cal, the state's Medicaid program, is expected to increase by 1.7 million people, while 4.0 million people are expected to enroll in the state's planned new health insurance exchange. Employer-sponsored insurance and spending on health insurance will decline slightly. Low-income households will experience substantial financial benefits, but families at the highest income levels will pay more.

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The Politics of Social Policy in America: The Causes and Effects of Indirect versus Direct Social Spending

Christopher Faricy
Journal of Politics, January 2011, Pages 74-83

Abstract:
The United States has a divided social system in that both the public and private sectors provide citizens with benefits and services. The effects of political party control on public social policy are widely known. An area of study less understood is how partisanship influences private social benefits. I develop and test a theory that political parties' choice between indirect and direct social expenditures is primarily motivated by a desire to alter the balance between public and private power in society. First, I find no statistically conclusive evidence that Democratic control of the federal government results in higher levels of total social spending. Additionally, my results show that Republican control of the legislature results in a higher ratio of indirect to direct social spending. These results have implications for determining the beneficiaries of social benefits and economic inequality.

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The Impact of Tort Reform on Employer-Sponsored Health Insurance Premiums

Ronen Avraham, Leemore Dafny & Max Schanzenbach
Journal of Law, Economics, & Organization, forthcoming

Abstract:
We evaluate the effect of tort reform on employer-sponsored health insurance premiums by exploiting state-level variation in the timing of reforms. Using a dataset of health plans representing over 10 million Americans annually between 1998 and 2006, we find that the most common set of tort reforms during this period reduces premiums of employer-sponsored self-insured health plans by 2.1%. Of the four individual reforms comprising this set, caps on noneconomic damages and collateral source reforms have the greatest impact. We do not find reductions in premiums for fully insured plans, which in our sample are almost entirely Health Maintenance Organizations (HMOs). Further analysis reveals that self-insured HMOs are also unresponsive to reforms. Taken together, these findings suggest that HMOs reduce "defensive medicine," even absent reform. The results are the first direct evidence that tort reform reduces healthcare costs in aggregate; prior research has largely focused on particular medical conditions.

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Limitation Riders and Congressional Influence over Bureaucratic Policy Decisions

Jason MacDonald
American Political Science Review, November 2010, Pages 766-782

Abstract:
Limitation riders, which allow the U.S. Congress to forbid agencies from spending money for specific uses, enable congressional majorities to exert greater influence over bureaucratic policy decisions than is appreciated by research on policy making in the United States. I develop a theory of limitation riders, explaining why they lead to policy outcomes that are preferable to a majority of legislators compared to outcomes that would occur if this tool did not exist. I assess this perspective empirically by analyzing the volume of limitation riders reported in bills from 1993 to 2002 and all limitation riders forbidding regulatory actions from 1989 to 2009. In addition to supporting the conclusion that Congress possesses more leverage over agencies' decisions than is currently appreciated, the findings have implications for advancing theories of delegation.

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Consumers, Health Insurance and Dominated Choices

Anna Sinaiko & Richard Hirth
Journal of Health Economics, forthcoming

Abstract:
We analyze employee health plan choices when the choice set offered by their employer includes a dominated plan. During our study period, one-third of workers were enrolled in the dominated plan. Some may have selected the plan before it was dominated and then failed to switch out of it. However, a substantial number actively chose the dominated plan when they had an unambiguously better choice. These results suggest limitations in the ability of health reform based solely on consumer choice to achieve efficient outcomes and that implementation of health reform should anticipate, monitor and account for this consumer behavior.

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Recession Contributes To Slowest Annual Rate Of Increase In Health Spending In Five Decades

Anne Martin et al.
Health Affairs, January 2011, Pages 11-22

Abstract:
In 2009, US health care spending grew 4.0 percent - a historically low rate of annual increase - to $2.5 trillion, or $8,086 per person. Despite the slower growth, the share of the gross domestic product devoted to health spending increased to 17.6 percent in 2009 from 16.6 percent in 2008. The growth rate of health spending continued to outpace the growth of the overall economy, which experienced its largest drop since 1938. The recession contributed to slower growth in private health insurance spending and out-of-pocket spending by consumers, as well as a reduction in capital investments by health care providers. The recession also placed increased burdens on households, businesses, and governments, which meant that fewer financial resources were available to pay for health care. Declining federal revenues and strong growth in federal health spending increased the health spending share of total federal revenue from 37.6 percent in 2008 to 54.2 percent in 2009.

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An Evaluation of Financial Incentive Policies for Organ Donations in the United States

Alison Wellington & Edward Sayre
Contemporary Economic Policy, January 2011, Pages 1-13

Abstract:
This paper examines the association between financial incentives and organ donations. Although the National Organ Transplant Act of 1984 prohibits financial compensation for organs for transplant, we focus on the impact of laws that influence the relative cost of deceased and live organ donations on the supply of organs for transplant. First, we hypothesize that states that have relatively stringent funeral regulations, which have been associated with higher whole-body donations, will have fewer organ donations. Second, we examine the impact of two common state laws that offer financial compensation to live donors: one that allows a tax deduction for costs incurred and the other which entitles government employees up to 30 days of paid leave. We find no evidence to support that these laws affect organ donations.

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The Inverse Benefit Law: How Drug Marketing Undermines Patient Safety and Public Health

Howard Brody & Donald Light
American Journal of Public Health, forthcoming

Abstract:
Recent highly publicized withdrawals of drugs from the market because of safety concerns raise the question of whether these events are random failures or part of a recurring pattern. The inverse benefit law, inspired by Hart's inverse care law, states that the ratio of benefits to harms among patients taking new drugs tends to vary inversely with how extensively the drugs are marketed. The law is manifested through 6 basic marketing strategies: reducing thresholds for diagnosing disease, relying on surrogate endpoints, exaggerating safety claims, exaggerating efficacy claims, creating new diseases, and encouraging unapproved uses. The inverse benefit law highlights the need for comparative effectiveness research and other reforms to improve evidence-based prescribing.

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The Vagaries Of Public Support For Government Actions In Case Of A Pandemic

Karen Hilyard, Vicki Freimuth, Donald Musa, Supriya Kumar & Sandra Crouse Quinn
Health Affairs, December 2010, Pages 2294-2301

Abstract:
Government health measures in a pandemic are effective only with strong support and compliance from the public. A survey of 1,583 US adults early in the 2009 H1N1 (swine influenza) pandemic shows surprisingly mixed support for possible government efforts to control the spread of the disease, with strong support for more extreme measures such as closing borders and weak support for more basic, and potentially more effective, policies such as encouraging sick people to stay home from work. The results highlight challenges that public health officials and policy makers must address in formulating strategies to respond to a pandemic before a more severe outbreak occurs.

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Mental health parity legislation, cost-sharing and substance-abuse treatment admissions

Dhaval Dave & Swati Mukerjee
Health Economics, February 2011, Pages 161-183

Abstract:
Treatment is highly cost-effective in reducing an individual's substance abuse (SA) and associated harms. However, data from Treatment Episodes (TEDS) indicate that per capita treatment admissions substantially lagged behind increases in heavy drug use from 1992 to 2007. Only 10% of individuals with clinical SA disorders receive treatment, and almost half who forgo treatment point to accessibility and cost constraints as barriers to care. This study investigates the impact of state mental health and SA parity legislation on treatment admission flows and cost-sharing. Fixed effects specifications indicate that mandating comprehensive parity for mental health and SA disorders raises the probability that a treatment admission is privately insured, lowering costs for the individual. Despite some crowd-out of charity care for private insurance, mandates reduce the uninsured probability by a net 2.4 percentage points. States mandating comprehensive parity also see an increase in treatment admissions. Thus, increasing cost-sharing and reducing financial barriers may aid the at-risk population in obtaining adequate SA treatment. Supply constraints mute effect sizes, suggesting that demand-focused interventions need to be complemented with policies supporting treatment providers. These results have implications for the effectiveness of the 2008 Federal Mental Health Parity and Addiction Equity Act in increasing SA treatment admissions and promoting cost-sharing.

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Who receives statins? Variations in physician prescribing patterns for patients with coronary heart disease

Simon Condliffe, Charles Link & Bryan Townsend
Applied Economics Letters, November 2010, Pages 1647-1652

Abstract:
Using a nationally representative data set including patients most likely to benefit from statins, we find racial/ethnic and insurance-related disparities in physician prescribing patterns. Whites and patients who have private insurance are more likely to be prescribed a statin than nonwhites and those with public insurance. Because coronary heart disease is the leading cause of death in the USA and currently is estimated to cost over $150 billion annually, observed differences in prescribing patterns along these dimensions should be part of discussions dealing with health care reform.

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Do the poor cost much more? The relationship between small area income deprivation and length of stay for elective hip replacement in the English NHS from 2001 to 2008

Richard Cookson & Mauro Laudicella
Social Science & Medicine, January 2011, Pages 173-184

Abstract:
The Blair/Brown reforms of the English NHS in the early to mid 2000s gave hospitals strong new incentives to reduce waiting times and length of stay for elective surgery. One concern was that these efficiency-oriented reforms might harm equity, by giving hospitals new incentives to select against socio-economically disadvantaged patients who stay longer and cost more to treat. This paper aims to assess the magnitude of these new selection incentives in the test case of hip replacement. Anonymous hospital records are extracted on 274,679 patients admitted to English NHS Hospital Trusts for elective total hip replacement from 2001/2 through 2007/8. The relationship between length of stay and small area income deprivation is modelled allowing for other patient characteristics (age, sex, number and type of diagnoses, procedure type) and hospital effects. After adjusting for these factors, we find that patients from the most deprived tenth of areas stayed just 6% longer than others in 2001/2, falling to 2% by 2007/8. By comparison, patients aged 85 or over stayed 57% longer than others in 2001/2, rising to 71% by 2007/8, and patients with seven or more diagnoses stayed 58% longer than others in 2001/2, rising to 73% by 2007/8. We conclude that the Blair/Brown reforms did not give NHS hospitals strong new incentives to select against socio-economically deprived hip replacement patients.

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Value-Based Insurance Plus Disease Management Increased Medication Use And Produced Savings

Teresa Gibson et al.
Health Affairs, January 2011, Pages 100-108

Abstract:
We evaluated the effects of implementing a value-based insurance design program for patients with diabetes in two groups within a single firm. One group participated in disease management; the other did not. We matched members of the two groups to similar enrollees within the company that did not offer the value-based program. We found that participation in both value-based insurance design and disease management resulted in sustained improvement over time. Use of diabetes medications increased 6.5 percent over three years. Adherence to diabetes medical guidelines also increased, producing a return on investment of $1.33 saved for every dollar spent during a three-year follow-up period.

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Can Targeted Transfers Improve Birth Outcomes? Evidence from the Introduction of the WIC Program

Hilary Hoynes, Marianne Page & Ann Huff Stevens
Journal of Public Economics, forthcoming

Abstract:
The goal of federal food and nutrition programs in the United States is to improve the nutritional well-being and health of low income families. A large body of literature evaluates the extent to which the Supplemental Program for Women Infants and Children (WIC) has accomplished this goal, but most studies have been based on research designs that compare program participants to non-participants. If selection into these programs is non-random then such comparisons will lead to biased estimates of the program's true effects. In this study we use the rollout of the WIC program across counties to estimate the impact of the program on infant health. We find that the implementation of WIC led to an increase in average birth weight and a decrease in the fraction of births that are classified as low birth weight. We find no evidence that these estimates are driven by changes in fertility or selection into live births. Our preferred estimates suggest that WIC initiation raised average birth weight by 2 grams, or by 7 grams among infants born to mothers with low education levels. These translate into estimated birth weight increases among participating mothers of approximately 18 to 29 grams. Estimated treatment on the treated impacts among infants born to participating mothers with low education are of similar magnitude.

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Variability in the Measurement of Hospital-wide Mortality Rates

David Shahian et al.
New England Journal of Medicine, 23 December 2010, Pages 2530-2539

Background: Several countries use hospital-wide mortality rates to evaluate the quality of hospital care, although the usefulness of this metric has been questioned. Massachusetts policymakers recently requested an assessment of methods to calculate this aggregate mortality metric for use as a measure of hospital quality.

Methods: The Massachusetts Division of Health Care Finance and Policy provided four vendors with identical information on 2,528,624 discharges from Massachusetts acute care hospitals from October 1, 2004, through September 30, 2007. Vendors applied their risk-adjustment algorithms and provided predicted probabilities of in-hospital death for each discharge and for hospital-level observed and expected mortality rates. We compared the numbers and characteristics of discharges and hospitals included by each of the four methods. We also compared hospitals' standardized mortality ratios and classification of hospitals with mortality rates that were higher or lower than expected, according to each method.

Results: The proportions of discharges that were included by each method ranged from 28% to 95%, and the severity of patients' diagnoses varied widely. Because of their discharge-selection criteria, two methods calculated in-hospital mortality rates (4.0% and 5.9%) that were twice the state average (2.1%). Pairwise associations (Pearson correlation coefficients) of discharge-level predicted mortality probabilities ranged from 0.46 to 0.70. Hospital-performance categorizations varied substantially and were sometimes completely discordant. In 2006, a total of 12 of 28 hospitals that had higher-than-expected hospital-wide mortality when classified by one method had lower-than-expected mortality when classified by one or more of the other methods.

Conclusions: Four common methods for calculating hospital-wide mortality produced substantially different results. This may have resulted from a lack of standardized national eligibility and exclusion criteria, different statistical methods, or fundamental flaws in the hypothesized association between hospital-wide mortality and quality of care.

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Trafficking in part(s): The commercial kidney market in a Manila slum, Philippines

Sallie Yea
Global Social Policy, December 2010, Pages 358-376

Abstract:
Organ trafficking is the least researched of all forms of human trafficking. As a result of the ways the phenomenon is framed within academic accounts, government responses and media constructions, almost any situation involving the existence of a commercial market for organs is located within a human trafficking framework. This article takes issue with the presumption of trafficking in commercial kidney markets, using the thriving underground kidney market of Baseco, Manila as a site for this discussion. Two interrelated arguments are made in the article. First, the contextual specificities of the commercial organ market get lost within a universalizing discourse of human trafficking that is also reproduced within much of the academic literature on the topic. Second, commercial organ providers in my research site of the urban slum of Baseco present only 'degrees' of trafficking; meaning that only some elements of trafficking as defined by the United Nations and the Philippines government are present. This means that providers often slip through the anti-human trafficking responses of the Philippines government. The outcome of this is that kidney providers are not the object of any other social policy interventions which could enhance their livelihood and health situations.

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Housing arrangements among a national sample of adults with chronic schizophrenia living in the United States: A descriptive study

Jack Tsai, Scott Stroup & Robert Rosenheck
Journal of Community Psychology, January 2011, Pages 76-88

Abstract:
There has been no recent national description of where and with whom people with chronic mental illness reside. Using data from the Clinical Antipsychotic Trials of Intervention Effectiveness, the living arrangements of 1,446 clients with schizophrenia from 57 sites throughout the United States were characterized over 1 year. At baseline, 46% of participants were living with family members and loved ones, 5% were living with other nonrelatives, 18% were living alone independently, 17% were in an institution, and 14% were not stably housed. Participants who were living alone independently showed higher clinical and psychosocial functioning than participants in other living arrangements. Over 1 year, the majority of participants remained in the same living arrangements, and those who were not stably housed had more severe schizophrenia symptomatology. These findings highlight the large number of people with schizophrenia living with others and the possible need for diverse housing services.


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