Christopher C. Afendulis

Expanded Use Of Imaging Technology And The Challenge Of Measuring Value

The availability of computed tomography (CT) and magnetic resonance imaging (MRI) scanning has grown rapidly, but the value of increased availability is not clear. We document the relationship between CT and MRI availability and use, and we consider potentially important sources of benefits. We discuss key questions that need to be addressed if value is to be well understood. In an example we study, expanded imaging may be valuable because it provides quicker access to more precise diagnostic information, although evidence for improved health outcomes is limited. This may be a common situation; thus, a particularly important question is how non-health-outcome benefits of imaging can be quantified.

The Impact of Medicare Part D on Hospitalization Rates

OBJECTIVE To determine whether the change in prescription drug insurance coverage associated with Medicare Part D reduced hospitalization rates for conditions sensitive to drug adherence. DATA SOURCES/STUDY SETTING Hospital discharge data from 2005 to 2007 for 23 states, linked with state-level data on drug coverage. STUDY DESIGN We use a difference-in-difference-in-differences approach, comparing changes in the probability of hospitalization before and after the introduction of the Part D benefit in 2006, for individuals aged 65 and older (versus individuals aged 60-64) in states with low drug coverage in 2005 (versus those in states with high pre-Part D drug coverage). DATA COLLECTION/EXTRACTION METHODS Hospitalization rates for selected ambulatory care sensitive conditions in 23 states were computed using data from the Census and Health Care Utilization Project. Drug coverage rates were computed using data from several sources. PRINCIPAL FINDINGS For the conditions studied, our point estimates suggest that Part D reduced the overall rate of hospitalization by 20.5 per 10,000 (4.1 percent), representing approximately 42,000 admissions, about half of the reduction in admissions over our study period. Conclusions. The increase in drug coverage associated with Medicare Part D had positive effects on the health of elderly Americans, which reduced use of nondrug health care resources.

Medicare Prospective Payment and the Volume and Intensity of Skilled Nursing Facility Services

In 1998, Medicare adopted a per diem Prospective Payment System (PPS) for skilled nursing facility care, which was intended to deter the use of high-cost rehabilitative services. The average per diem decreased under the PPS, but because per diems increased for greater therapy minutes, the ability of the PPS to deter the use of high-intensity services was questionable. In this study, we assess how the PPS affected the volume and intensity of Medicare services. By volume we mean the product of the number of Medicare residents in a facility and the average length-of-stay, by intensity we mean the time per week devoted to rehabilitation therapy. Our results indicate that the number of Medicare residents decreased under PPS, but rehabilitative services and therapy minutes increased while length-of-stay remained relatively constant. Not surprisingly, when subsequent Medicare policy changes increased payment rates, Medicare volume far surpassed the levels seen in the pre-PPS period.

A Bayesian Procedure for File Linking to Analyze End-of-Life Medical Costs

End-of-life medical expenses are a significant proportion of all health care expenditures. These costs were studied using costs of services from Medicare claims and cause of death (CoD) from death certificates. In the absence of a unique identifier linking the two datasets, common variables identified unique matches for only 33% of deaths. The remaining cases formed cells with multiple cases (32% in cells with an equal number of cases from each file and 35% in cells with an unequal number). We sampled from the joint posterior distribution of model parameters and the permutations that link cases from the two files within each cell. The linking models included the regression of location of death on CoD and other parameters, and the regression of cost measures with a monotone missing data pattern on CoD and other demographic characteristics. Permutations were sampled by enumerating the exact distribution for small cells and by the Metropolis algorithm for large cells. Sparse matrix data structures enabled efficient calculations despite the large dataset (≈1.7 million cases). The procedure generates m datasets in which the matches between the two files are imputed. The m datasets can be analyzed independently and results can be combined using Rubin’s multiple imputation rules. Our approach can be applied in other file-linking applications. Supplementary materials for this article are available online.

The impact of the Affordable Care Act on Medicare Advantage plan availability and enrollment.

OBJECTIVE To assess the impact of the Patient Protection and Affordable Care Acts (ACA) changes in Medicare Advantage (MA) payment rates on the availability of and enrollment in MA plans. DATA SOURCES Secondary data on MA plan offerings, contract offerings, and enrollment by state and county, in 2010-2011. STUDY DESIGN We estimated regression models of the change in the number of plans, the number of contracts, and enrollment as a function of quartiles of FFS spending and pre-ACA MA payment generosity. Counties in the lowest quartile of spending are treated most generously by the ACA. PRINCIPAL FINDINGS Relative to counties in the highest quartile of spending, the number of plans in counties in the first, second, and third quartiles rose by 12 percent, 7.6 percent, and 5.4 percent, respectively. Counties with more generous MA payment rates before the ACA lost significantly more plans. We did not find a similar impact on the change in contracts or enrollment. CONCLUSIONS The ACA-induced MA payment changes reduced the number of plan choices available for Medicare beneficiaries, but they have yet affected enrollment patterns.

Managed Care, Information, and Diffusion: The Case of Treatment for Heart-Attack Patients

Growth in the size and power of managedcare organizations seems to have had widespread effects on the health-care system. Not only may health maintenance organizations (HMOs) and other forms of managed care influence the care provided to the patients that they cover, but the activities of these organizations may also bring about broader changes in the delivery of health care. Such “spillover effects” of managed care could ultimately affect even health care for patients who have not joined managed-care organizations. While previous literature on the relationship between area HMO market share and spending is consistent with the presence of spillover effects (e.g., Baker, 1999), few studies have examined treatment patterns directly (e.g., Heidenreich et al., 2002). Nevertheless, the potential for changes in patient care are of central importance for gaining a full understanding of the overall effects of managed care on the health-care system. This paper examines the relationship between area HMO activity and the use of two relatively common therapies for heart-attack patients: percutaneous transluminal coronary angioplasty (PTCA) and coronary artery bypass graft surgery (CABG). We study patients covered by fee-for-service Medicare who suffered a new acute myocardial infarction (AMI, or heart attack) between 1985 and 1999. If HMO activity does have an impact on the use of PTCA or CABG for these fee-for-service patients, it will signal the ability of HMOs to influence treatment patterns outside of their own patients. We also investigate the extent to which information dissemination plays a role in managedcare spillover effects. The HMOs may have networks and other information-dissemination mechanisms, as well as financial and other points of leverage over treatment decisions, which allow them to alter physicians’ treatment decisions more effectively than less-managed health plans. Assuming that HMOs find it in their interest to encourage changes in treatment in response to new medical information, their efforts could lead to changes in physician practice patterns that are generally applied. We explore the role of information dissemination by studying the use of primary PTCA, defined here as PTCA performed within one day of an AMI patient being brought to the hospital. Prior to 1993, the typical immediate treatment for an AMI patient with a recently blocked artery was the administration of thrombolytic drugs to dissolve blood clots. Available evidence at that time suggested that the immediate use of PTCA was harmful (e.g., E. J. Topol et al., 1987). However, in 1993 three landmark studies were published simultaneously in the New England Journal of Medicine (Raymond J. Gibbons et al., 1993; Cindy L. Grines et al., 1993; Felix Zijlstra et al., 1993), demonstrating that immediate angioplasty was superior to thrombolytic therapy in improving blood flow and preventing the affected artery (or arteries) from becoming blocked again. A series of additional studies followed, demonstrating the superiority of primary PTCA for additional clinical endpoints (e.g., W. D. Weaver et al., 1997). If areas with high HMO market shares are differently able to alter physician practice patterns in response to new medical knowledge, we hypothesize that a differential trend may be observable in the use of primary PTCA in areas with higher and lower HMO market share * Baker: Department of Health Research and Policy, HRP Redwood Building, Room 110, Stanford University, Stanford, CA 94305-5405, and NBER; Afendulis: Center for Primary Care and Outcomes Research, 117 Encina Commons, Stanford, CA 94305-6019, and NBER; Heidenreich: VA Palo Alto Healthcare System, 111C, 3801 Miranda Avenue, Palo Alto, CA 94304, and Stanford University. The data used in this study are proprietary. This research was supported by AHRQ grant 5 R01 HS10925-03, and a career development award from the VA Health Services Research and Development Service for Heidenreich. We are grateful to Mark McClellan for assistance with the data and comments on a much earlier draft of this paper.

Enrollment in Medicare Advantage plans in Miami-Dade County: evidence of status quo bias?

Evidence from behavioral economics reveals that decision making in health care settings can be affected by circumstances and choice architecture. This paper conducts an analysis of choice of private Medicare plans (Medicare Advantage [MA] plans) in Miami-Dade County. We provide a detailed description of the choice of MA plans available in Miami over much of the program’s history. Our analysis suggests that first becoming eligible for Medicare is the key transition point for MA and that there is a significant status quo bias in the MA market. Policy that regulates the MA market should anticipate, monitor, and account for this consumer behavior.

The Effect of Medicare Advantage on Hospital Admissions and Mortality

Medicare currently allows beneficiaries to choose between traditional Medicare and privately run plans in the Medicare Advantage (MA) program. Because enrollment in MA is optional, conventional observational estimates of the programs impact are potentially subject to selection bias. To address this issue, we use a discontinuity in the rules governing MA payments to health plans that gives greater payments to plans operating in counties in metropolitan statistical areas with populations of 250,000 or more. The sharp difference in payment rates at this population cutoff creates a greater incentive for plans to increase the generosity of benefits and therefore enroll more beneficiaries in MA in counties just above versus just below the cutoff. We find that the expansion of MA on this margin reduces beneficiaries’ hospital use and mortality.

Early Impact Of CareFirst’s Patient-Centered Medical Home With Strong Financial Incentives

In 2011 CareFirst BlueCross BlueShield, a large mid-Atlantic health insurance plan, implemented a payment and delivery system reform program. The model, called the Total Care and Cost Improvement Program, includes enhanced payments for primary care, significant financial incentives for primary care physicians to control spending, and care coordination tools to support progress toward the goal of higher-quality and lower-cost patient care. We conducted a mixed-methods evaluation of the initiatives first three years. Our quantitative analyses used spending and utilization data for 2010-13 to compare enrollees who received care from participating physician groups to similar enrollees cared for by nonparticipating groups. Savings were small and fully shared with providers, which suggests no significant effect on total spending (including bonuses). Our qualitative analysis suggested that early in the program, many physicians were not fully engaged with the initiative and did not make full use of its tools. These findings imply that this and similar payment reforms may require greater time to realize significant savings than many stakeholders had expected. Patience may be necessary if payer-led reform is going to lead to system transformation.

The impact of global budgets on pharmaceutical spending and utilization: Early experience from the alternative quality contract

In 2009, Blue Cross Blue Shield of Massachusetts implemented a global budget-based payment system, the Alternative Quality Contract (AQC), in which provider groups assumed accountability for spending. We investigate the impact of global budgets on the utilization of prescription drugs and related expenditures. Our analyses indicate no statistically significant evidence that the AQC reduced the use of drugs. Although the impact may change over time, early evidence suggests that it is premature to conclude that global budget systems may reduce access to medications.