Alvin E. Headen

Economic Disability and Health Determinants of the Hazard of Nursing Home Entry

A Cox proportional hazards model was used to estimate economic determinants of the conditional probability of first nursing home entry during a 34-month period for a panel of disabled older persons who resided in the community at the initial survey. Allowing for death that competes with first entry and end-of-survey censoring produced the following results. Wealth significantly reduces the hazard of nursing home entry. The price elasticity of the hazard of nursing home entry is estimated to be -0.7. Also, nursing home entry is positively related to the opportunity cost of informal caregiver time faced by the family.

Wage, Returns to Ownership, and Fee Responses to Physician Supply

The labor and entrepreneurial components of reported physician net income are separated in an analysis of input and output market performance. A wage equation, corrected for selectivity bias, is estimated for employee physicians and the results indicate that the performance of the labor market for primary care physicians is consistent with competitive theory. The parameters are used to predict opportunity wage rates for self-employed physicians. Differences between net income per hour and the predictions indicate that 16 percent of net income from practice is attributable to entrepreneurship. Evidence of negative selectivity into employee status is also found. Copyright 1990 by MIT Press.

Long-term economic growth stimulus of human capital preservation in the elderly

Health care is a crucial factor in US economic growth, because growing health care costs have made US corporations less competitive than their counterparts in countries where central governments assume most of those costs. In this paper we illustrate a second, possibly more powerful, effect of health care expenditures on the long term pace of US economic growth, i.e., that such investments in aging populations helps preserve human capital to later ages. In addition, as current investment in health care improves health and functional status, the future demand for health care as well as future health care costs will be constrained. These are crucial factors in countries experiencing rapid population aging. US labor force projections do not directly represent the effects of health care investment on the health of the future labor force, and federal health cost projections do not reflect the trajectory of health changes. Health dynamic projections suggest the effects of health care investment are large and growth stimulating. Projections done for the time period used by the Congressional Budget Office in budget mark-ups (2010–2020) are presented in the supporting information.

Effects of Medicaid Access Restrictions on Statin Utilisation for Patients Treated by Physicians Practising in Poor and Minority Neighbourhoods

AbstractObjectives: To explore whether Medicaid preferred drug lists (PDL) impact the utilisation of restricted statin (cholesterol-reducing) medication for all Medicaid patients equally or disproportionately impact patients who are treated by doctors prescribing in poor or minority neighbourhoods. Study design: A retrospective, regression-based analysis, using a pharmacy claims database combined with demographic variables derived from census for the zip code of the practising physician. Methods: Changes in the proportion of statin prescriptions filled for off-PDL (restricted) medicines before and after the adoption of a Medicaid PDL were examined in six states (Alabama, Florida, Georgia, Texas, Virginia, West Virginia). Two non-PDL states were used as controls for underlying market dynamics (New York, North Carolina). Demographics of physicians’ neighbourhoods (poverty and ethnicity) were used to examine the variation in prescribing based on the characteristics of physicians’ areas of practice. Results: The decline in the use of restricted prescriptions (off-PDL drugs) after a PDL varied considerably from state to state, with the greatest decline in Florida (97%) and the smallest decline in Texas (65%). There was a statistically significant and positive association between the degree of decline in the use of restricted medications and the share of impoverished households and the share of the minority population in Alabama, Florida and Texas. Conclusion: The analysis indicates that there is considerable variation in the impact of a preferred drug list by state, and that in certain states the prescriptions filled after a PDL adhere more closely to Medicaid-imposed restrictions in poorer or more ethnically diverse neighbourhoods. This could imply that because of the PDL, in these poorer and more ethnically diverse neighbourhoods, there is a greater change in physicians’ prescribing practice, fewer patients receive the restricted medication by prior authorisation, and more patients experience a disruption in their medication regimen and any resultant unintended consequences. This is an area worthy of future exploration, particularly as the oldest and most vulnerable of these patients transition into Medicare part D for their prescription coverage and may experience changes in formulary.

Price discrimination in physician services markets based on race: New test of an old implicit hypothesis

Prior econometric studies of physician fee determination report that fees are positively related to the proportion of the market area that is black and negatively related to the proportion of the market area that is white, but the studies provide only sketchy explanations for these results. This article presents a price discrimination model which explains the empirical results and provides the specific prediction that low income self-pay consumers in the black community constitute the group that pays higher prices for physician services. The study then replicates prior econometric results on a more recent national database, but finds that the results are sensitive to specification. When geographic differences are controlled for in the empirical model, the results fade and a statistical test indicates that the expanded specification is superior to the specification which replicated the price discrimination result. The conclusion is that there is no compelling evidence of price discrimination in physician services markets based on race.

General health conditions and medical insurance issues concerning black women

In the last 30 years the health status of black women has improved. However, the likelihood of health problems from complications of pregnancy and childbirth or prolonged illness from combined effects of diabetes, hypertension, and obesity remains. The need for continuity of care for these conditions and the low economic status of black women suggest that current policy shifts away from emphasis on increased access to medical care will adversely affect the health status of black women. Policies to contain health-care costs should therefore be designed to assure appropriate access to needed care for black women and other low-income groups.

Medicaid Preferred Drug Lists: Cost Containment and Side Effects

In response to the rates of increase in the cost of fulfilling the responsibility of providing enrollees with financial access to prescription pharmaceuticals, initiatives to constrain pharmaceutical spending have become common features of state Medicaid programmes. Notable initiatives include generic substitution, patient co-payments for drugs, dispensing limits on the number of prescriptions or refills allowed per month, and preferred drug lists (PDL). This issue provides evidence regarding whether Medicaid PDL programmes achieve their immediate objective of changing the composition of drugs prescribed by physicians for their enrollees, and on the potential long-term side effects of the programmes. Each state that implements a PDL programme develops a list of ‘preferred’ drugs within each therapeutic class that Medicaid enrollees can be prescribed without prior authorisation. Prior authorisation raises the cost to physicians of prescribing non-PDL drugs and thereby provides a financial incentive for physicians to increase the share of PDL drugs in the composition of prescriptions they write. Short-term cost savings to the Medicaid programme occur when affected physicians change prescribing patterns because PDL drugs are less costly than non-PDL drugs. Long-term implications depend on whether the switch to the increased use of PDL drugs is associated with increased efficiency or reduced quality, and whether the programme is implemented in ways that enhance or conflict with other policy goals. The potential for reduced quality from switching prescriptions for other than medical indications is implicitly acknowledged in the Centers for Medicare and Medicaid rationale for Medicare Part D protected classes. It states that ‘‘. . .the factors described in our formulary guidance indicated that interruption of therapy in these categories could cause significant negative outcomes to beneficiaries. . .’’. In this volume, Mucha et al. present evidence of substantial variation in the perpatient-per-month costs of medications in the six protected classes. Other papers provide evidence that the ways in which some states have implemented Medicaid PDL programmes may have reduced quality, and may conflict with other policy goals such as reducing racial and ethnic disparities in health. Lichtenberg presents evidence that suggest that PDL implementation may have slowed the rate of increase in the quality of health improvements for Medicaid enrollees. He reports that for elderly persons, states that had larger increases in drug vintage are associated with smaller increases in the number of hospital discharges per elderly individual; and smaller increases in the number of hospital discharges to nursing homes and in the number of in-hospital deaths per elderly individual. Newer drugs are thus associated with improved quality of health outcomes and to the extent that they are excluded from PDL because of cost, their quality gains to the Medicaid enrollees may be delayed. Abdelgawad and Egbuonu-Davis provide evidence of a physician casemix effect. They report that the share of all physicians who are ‘high Medicaid’ prescribers decline more in the states that implemented a PDL compared with those that INTRODUCTION Pharmacoeconomics 2006; 24 Suppl. 3: 1–3 1170-7690/06/0003-0001/

Retiree health insurance and pension coverage : variations by firm characteristics

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