Medically Necessary
Does Physician-Hospital Vertical Integration Signal Care-Coordination? Evidence from Mover-Stayer Analysis of Commercially Insured Enrollees
William Encinosa & Avi Dor
Journal of Health Economics, May 2025
Abstract:
The sharp growth in physician groups being purchased by hospitals has sparked extensive policy debate, with little evidence on the merits of such integration. We fill the gap by examining care-coordination under integration. We exploit the fact that integration varies across MSAs and focus on PPO patients with employment-based moves between MSAs. We develop a mover-stayer model with heterogenous effects to examine whether vertically integrated practices treat patients differently, or whether they just treat different patients. Moving to a more integrated market causes an increase in care coordination indices. Specifically, moving to an area with more specialty care integration causes an increase in team referrals between primary and specialty care, less lab and imaging use, less out-of-network care, and reductions in spending. That is, systems are able to narrow the scope of specialty services overall, hence creating greater social efficiencies. Moving to a market with more integrated primary care causes an increase in preventive care, decreased inpatient use by women, but an increase in spending.
The Effects of Deleting Medical Debt from Consumer Credit Reports
Victor Duarte et al.
NBER Working Paper, April 2025
Abstract:
One in seven Americans carry medical debt, with $88 billion reported on consumer credit reports. In April 2023, the three major credit bureaus stopped reporting medical debts below $500. We study the effects of this information deletion on consumer credit scores, credit limits and utilization, repayment behavior, and payday borrowing. Using a machine learning model, we show that small medical debts are not meaningfully predictive of defaults, suggesting their deletion should have minimal effect on lending decisions. We test this prediction using two complementary research designs. First, a regression discontinuity analysis comparing individuals above and below the $500 threshold finds no direct benefits from the information deletion, ruling out small changes in credit access. Second, to assess indirect effects, we classify consumers based on whether their predicted default probability increases or decreases when debts are deleted. A difference-in-differences analysis comparing these groups before and after the 2023 policy change reveals no evidence of negative spillover effects. Finally, we show that larger medical debts (? $500) are also not meaningfully predictive of default, suggesting that eliminating medical debts entirely from credit reports, as planned under a January 2025 decision by the Consumer Financial Protection Bureau, is unlikely to affect credit outcomes.
Financial Risk and the Decision of Small Employers to Self-Fund Health Insurance: Evidence from Stop Loss Regulation in California
Mark Meiselbach & Matthew Eisenberg
American Journal of Health Economics, forthcoming
Abstract:
Health expenditures are a key source of financial risk to employers in the United States because many employers self-fund their health insurance. Stop loss insurance can mitigate this risk, yet it is unknown how state regulations governing stop loss insurance influence employers' health insurance decisions. We study the impact of stop loss regulation in California, which made self-funding riskier for small employers, on health insurance decisions. Using 2002-20 Medical Expendiute Panel Survey-Insurer/Employer Component data and a difference-in-differences design, we evaluate the impact of stop loss regulation on rates of self-funding and health insurance offers among small employers in California. We find that stop loss regulation reduces the probability that a small employer offers self-funded health insurance by an approximate 5 percentage points and reduces the probability that a small employer offers any health insurance by between 1.6 and 4.5 percentage points. Further, we investigate whether the law prevents adverse selection in the fully insured small group market, but do not find statistically significant evidence that the law impacted premiums in this market. Our findings suggest that stop loss regulation discourages small employers from self-funding but may also reduce the probability that small employers offer any health insurance.
A Blessing or a Curse? Teletriage Service in Healthcare
Xu Guan, Krista Li & Hao Wu
Management Science, forthcoming
Abstract:
Teletriage is a telehealth service that uses telecommunication technologies to remotely assess patients' conditions and determine their needs for medical treatment. This paper examines how teletriage affects patients' decisions to seek treatment and when healthcare providers (e.g., medical businesses, hospitals, or clinics) should launch teletriage services. Our findings reveal that teletriage can encourage more mild patients to seek treatment, discouraging more severe patients. This occurs when teletriage lacks sufficient precision and patients' hassle cost of seeking treatment falls outside a moderate range. Specifically, when hassle costs are low, patients are generally inclined to seek treatment, but teletriage can misclassify severe patients, leading them to avoid necessary care. Conversely, when hassle costs are high, patients tend to stay home, yet teletriage can misidentify mild patients, prompting them to seek unnecessary treatment. As a result, even if teletriage is costless, healthcare providers may abandon this service even though teletriage always increases patient surplus by improving their assessment of their medical needs. Interestingly, patients can be better off seeking treatment from providers who charge higher prices as these providers are more likely to adopt teletriage services. These results caution healthcare policymakers that teletriage can exacerbate healthcare inefficiency instead of alleviating it. Nevertheless, to improve patient surplus, the government should sometimes subsidize providers to offer teletriage or allow providers to charge a higher treatment fee.
Can Educational Outreach Improve Experts' Decision Making? Evidence from a National Opioid Academic Detailing Program
Jonathan Zhang
Review of Economics and Statistics, forthcoming
Abstract:
Healthcare providers often deviate from guidelines, leading to worse outcomes. I study the impact of academic detailing (also known as educational outreach) to primary care teams on safer pain management, risk evaluation, harm reduction, and opioid use disorder treatment. Using data from over 5 million patients, I find detailing improves provider behavior: it increases naloxone prescribing, prescription drug monitoring queries, and reduces opioid prescriptions for three years. Patients have fewer emergency visits and hospitalizations for overdoses, suicides, and accidents, especially heavy opioid users. Importantly, pain scores remain stable despite reduced opioid use, highlighting detailing's role in fostering safer, effective care.
Estimated Impact Of Medically Tailored Meals On Health Care Use And Expenditures In 50 US States
Shuyue Deng et al.
Health Affairs, April 2025, Pages 433-442
Abstract:
Medically tailored meals (MTMs) can reduce health care use among high-risk patients with diet-related conditions. However, the potential impact of providing coverage for MTMs across fifty US states remains unknown. Using a population-based, open-cohort simulation model, we estimated state-specific one-year and five-year changes in annual hospitalizations, health care spending, and cost-effectiveness of MTMs for patients with diet-related diseases and limitations in activities of daily living, covered by Medicaid, Medicare, or private insurance. Assuming full uptake among eligible people, MTMs were net cost saving in the first year in forty-nine states, with the largest savings seen in Connecticut ($6,299 per patient). The exception was Alabama, where MTMs were cost-neutral. The number of treated patients needed to avert one hospitalization ranged from 2.3 (Maryland) to 6.9 (Colorado). These findings can inform state-level policy makers and health plans considering MTM coverage through state-specific strategies.
The Effects of Post-Acute Care Payment Reform on the Need For and Receipt of Caregiving
Rachel Werner et al.
American Journal of Health Economics, forthcoming
Abstract:
Alternative payment models, such as bundled payment, have been proposed as a solution to the high costs of health care. While these models are typically effective at constraining spending on post-acute care, the decrease in consumption of formal post-acute care may result in a compensatory increase in the need for and use of informal or family caregiving. We estimate the effect of a large, randomized experiment with Medicare bundled payment on the need for and receipt of caregiving. Using data on over 2 million Medicare beneficiaries undergoing knee or hip replacement and a difference-in-differences approach, we find that the mandatory bundled payment caused a 1 to 2 percentage point absolute increase (a 9 percent to 14-15 percent relative increase) in both the need for and receipt of help with activities of daily living at the end of a home health episode, help that was likely provided by family caregivers. This increased caregiver burden was corroborated by a large shift away from nursing-home-based post-acute care (or care in a skilled nursing facility or SNF) after knee or hip replacement, a shift toward home health care, and an accompanying decline in the intensity of home care.
Spillovers From Medicaid Contraceptive Use to Non-Medicaid Patients: Evidence From New York
Kevin Callison, Marisa Carlos & Barton Willage
Health Economics, May 2025, Pages 821-826
Abstract:
This study examines spillovers from a 2014 New York Medicaid policy change that increased reimbursement for immediate postpartum long-acting reversible contraceptive (LARC) insertion. Using administrative data on hospital deliveries from 2011 through 2019, we analyze whether physicians who inserted immediate postpartum LARCs for Medicaid patients following the policy change were more likely to subsequently perform the procedure on non-Medicaid patients. We find significant spillovers, as physicians who first perform an immediate postpartum Medicaid LARC insertion following the 2014 payment reform are 9.3 percentage points more likely to perform immediate postpartum non-Medicaid LARC insertions; an association that increases with the physician's share of Medicaid deliveries. To distinguish between physician-specific and hospital-specific factors driving spillovers, we compare physicians within the same hospital-year. Results indicate approximately half the spillover is due to physician-specific factors and half to hospital-specific factors. Our findings highlight how targeted reimbursement policies can have broader impacts beyond the intended population and demonstrate the influence of both individual physician behavior and institutional factors in shaping clinical practice patterns. Understanding these spillover dynamics is important for policymakers and healthcare providers aiming to promote effective and equitable contraceptive care across patient populations.
Instrumental Variables Methods Reveal Larger Effects of Menopausal Hormone Therapy in the Landmark Women's Health Initiative Clinical Trial
Joshua Angrist et al.
NBER Working Paper, April 2025
Abstract:
Landmark results from the Women's Health Initiative trial showed that random assignment to menopausal hormone therapy (MHT) elevated risks of breast cancer and other adverse events. Recent analyses argue that MHT risks are small. These analyses report intention-to-treat (ITT) effects, ignoring the fact that many women assigned intervention were non-adherent, while many women assigned control initiated treatment. Instrumental variable (IV) methods and adherence data allow us to estimate effects of MHT on compliers who took MHT if and only if assigned. IV estimates show risks and benefits that are substantially larger than the ITT estimates used to inform MHT guidelines.
The Incentive to Treat: Physician Agency and the Expansion of the 340B Drug Pricing Program
Danea Horn
Journal of Health Economics, May 2025
Abstract:
The 340B Drug Pricing Program incentivizes healthcare providers to increase medication use. It does this by allowing certain safety-net hospitals and clinics to purchase outpatient drugs at considerable discounts from manufacturers but be reimbursed at full price by payers. Yet, previous literature has left largely unstudied how the 340B program influences physician prescribing behavior. In this paper, I provide evidence of physician agency among 340B providers in the treatment of breast cancer. I leverage the staggered diffusion of the program to identify the impact of 340B participation on prescribing behavior and patient outcomes. Physicians who join the 340B program increase the share of patients who receive pharmaceutical treatments and increase the intensity of per-patient prescribing. I also find significant increases in prescribing medications that are not included in clinical treatment recommendations and medications to treat side effects. Despite more intensive treatment use, I find no statistically significant change in survival.