Jack Hadley

Sicker and poorer--the consequences of being uninsured: a review of the research on the relationship between health insurance, medical care use, health, work, and income.

Health services research conducted over the past 25 years makes a compelling case that having health insurance or using more medical care would improve the health of the uninsured. The literatures broad range of conditions, populations, and methods makes it difficult to derive a precise quantitative estimate of the effect of having health insurance on the uninsureds health. Some mortality studies imply that a 4% to 5% reduction in the uninsureds mortality is a lower bound; other studies suggest that the reductions could be as high as 20% to 25%. Although all of the studies reviewed suffer from methodological flaws of varying degrees, there is substantial qualitative consistency across studies of different medical conditions conducted at different times and using different data sets and statistical methods. Corroborating process studies find that the uninsured receive fewer preventive and diagnostic services, tend to be more severely ill when diagnosed, and receive less therapeutic care. Other literature suggests that improving health status from fair or poor to very good or excellent would increase both work effort and annual earnings by approximately 15% to 20%.

Measuring hospital efficiency with frontier cost functions.

This paper uses a stochastic frontier multiproduct cost function to derive hospital-specific measures of inefficiency. The cost function includes direct measures of illness severity, output quality, and patient outcomes to reduce the likelihood that the inefficiency estimates are capturing unmeasured differences in hospital outputs. Models are estimated using data from the AHA Annual Survey, Medicare Hospital Cost Reports, and MEDPAR. We explicitly test the assumption of output endogeneity and reject it in this application. We conclude that inefficiency accounts for 13.6 percent of total hospital costs. This estimate is robust with respect to model specification and approaches to pooling data across distinct groups of hospitals.

Patterns of breast carcinoma treatment in older women: Patient preference and clinical and physician influences

Older women have high rates of breast carcinoma, and there are substantial variations in the patterns of care for this population group.

The Contribution of Insurance Coverage and Community Resources to Reducing Racial/Ethnic Disparities in Access to Care

OBJECTIVE To examine the extent to which health insurance coverage and available safety net resources reduced racial and ethnic disparities in access to care. DATA SOURCES Nationally representative sample of 11,692 African American, 10,325 Hispanic, and 74,397 white persons. Nonelderly persons with public or private health insurance and those who were uninsured. STUDY DESIGN Two cross-sectional surveys of households conducted during 1996-1997 and 1998-1999. DATA COLLECTION Commonly used measures of access to and utilization of medical care were constructed for individuals. These measures include the following. (1) percent reporting unmet medical needs, (2) percent without a regular health care provider, and (3) no visit with a physician in the past year. FINDINGS More than 6.5 percent of Hispanic and African Americans reported having unmet medical needs compared to less than 5.6 percent of white Americans. Hispanics were least likely to see the same doctor at their usual source of care (59 percent), compared to African Americans (66 percent) and whites (75 percent). Similarly, Hispanics were less likely than either African Americans or whites to have seen a doctor in the last year (65 percent compared to 76 percent or 79 percent). For Hispanics, more than 80 percent of the difference from whites was due to differences in measured characteristics (e.g., insurance coverage, income, and available safety net services). Differences in measured characteristics between African Americans and whites explained less than 80 percent of the access disparities. CONCLUSION Lack of health insurance was the single most important factor in white-Hispanic differences for all three measures and for two of the white-African American differences. Income differences were the second most important factor, with one exception. Community characteristics generally were much less important, with one exception. The positive effects of insurance coverage in reducing disparities outweigh benefits of increasing physician charity care or access to emergency rooms.

Variations in breast carcinoma treatment in older Medicare beneficiaries: Is it black and white?

To evaluate associations between race and breast carcinoma treatment.

Measuring and predicting surgeons' practice styles for breast cancer treatment in older women.

Background.Few measures exist to assess physicians’ practice style, and there are few data on physicians’ practice styles and patterns of care. Objectives.To use clinical vignettes to measure surgeons’ “propensity” for local treatments for early-stage breast cancer and to describe factors associated with propensity. Research Design and Subjects.A cross-sectional mailed survey with telephone follow-up of a random sample of 1,000 surgeons treating Medicare beneficiaries in fee-for-service settings. Measures.Outcome measures include treatment propensity, self-reported practice, and actual treatment received by the surgeons’ patients. Results.Propensities were significantly associated with actual treatment, controlling for covariates. Area Medicare fees were the strongest predictor of propensity, followed by region, attitudes, volume, and gender. For instance, after other factors were considered, surgeons practicing in areas with the highest breast-conserving surgery (BCS) fees were 8.61 (95% CI 2.26–32.73) times more likely to have a BCS propensity than surgeons in areas with the lowest fees. Surgeons with the strongest beliefs in patient participation in treatment decisions were nearly 6 times (95% CI 1.67–20.84) more likely to have a BCS propensity than surgeons with the lowest such beliefs, controlling for covariates. Male surgeons were also independently more likely to have a mastectomy propensity than female surgeons. Conclusions.Surgeons’ propensities explain some of the observed variations in breast cancer treatment patterns among older women. Standardized scenarios provide a practical method to measure practice style and could be used to evaluate physician contributions to shared decision making, practice patterns, costs and outcomes, and adherence to guidelines.

PROFITS, COMMUNITY ROLE, AND HOSPITAL CLOSURE : AN URBAN AND RURAL ANALYSIS

The number of hospital closures increased substantially after the implementation of Medicares Prospective Payment System (PPS). This acceleration in closures raised a number of concerns over current payment policies and their impact on access. This paper investigates hospital closures that occurred in 1985 through 1988. A hospitals financial status and mission or community standing were found to be determinants of hospital closure. Closed hospitals are much less likely to be publicly owned but more likely to offer fewer facilities and services, and have fewer cases. This may suggest that the patients directly affected by the closure can be absorbed by other hospitals or other nonhospital providers. Profitability is associated with the Medicare case-mix index and the share of Medicare patients. The findings also suggest that the case mix index may be rewarding some small hospitals in excess of the costs attributable to case-mix. For both urban and rural hospitals, a low share of Medicare patients increased the risk of hospital closure, independently of the relationship between Medicare share and profit. The share of Medicare patients also affected closure indirectly, through its effects on profit. Competition appears to affect the odds of closure through its effects on the number of cases. In addition, hospitals in areas with small or declining population are more at risk than other hospitals in both urban and rural areas.

POPULATION CHARACTERISTICS OF MARKETS OF SAFETY-NET AND NON-SAFETY-NET HOSPITALS

Research ObjectivesTo compare and contrast the markets of urban safety-net (USN) hospitals with the markets of other urban hospitals.Study DesignTo develop profiles of the actual inpatient markets of hospitals, we linked 1994 patient-level information from hospital discharge abstracts from nine states with 1990 data at the ZIP code level from the US Census Bureau. Each hospitals market was characterized by its racial and ethnic composition, median household income, poverty rate, and educational attainment. Measures of hospital competition were also calculated for each hospital. The analysis compared the market profiles of USN hospitals to those of other urban hospitals. We also compared the level of hospital competition and financial status of USN and other urban hospitals.Principal FindingsThe markets of USN hospitals had higher proportions of racial and ethnic minorities and non-English-speaking residents. Adults residing in markets of USN hospitals were less educated. Families living in markets of USN hospitals had lower incomes and were more likely to be living at or below the federal poverty level. USN hospitals and other urban hospitals faced similar levels of competition and had similar margins. However, USN hospitals were more dependent on Medicare disproportionate share payments and on state and local government subsidies to remain solvent.ConclusionUSN hospitals disproportionately serve vulnerable minority and low-income communities that otherwise face financial and cultural barriers to health care. USN hospitals are dependent on the public subsidies they receive from federal, state, and local governments. Public policies and market pressures that affect the viability of USN hospitals place the access to care by vulnerable populations at risk. Public policy that jeopardizes public subsidies places in peril the financial health of these institutions. As Medicare and Medicaid managed care grow, USN hospitals may lose these patient revenues and public subsidies based on their Medicaid and Medicare patient volumes. The loss of these funds would hinder the ability of USN hospitals to finance uncompensated care for uninsured and underinsured patients.

FINANCIAL PRESSURE AND COMPETITION : CHANGES IN HOSPITAL EFFICIENCY AND COST-SHIFTING BEHAVIOR

Using data from the American Hospital Association and the Medicare program, the authors analyzed the effects of financial pressure and market competition on changes in several measures of performance of 1,435 acute care hospitals between 1987 and 1989. Over the observation period, the least profitable hospitals constrained their growth in total expenses to half that for the most profitable hospitals (13.3% versus 27.6%) by limiting the growth of their staffs and their total assets. These changes were associated with a reduction in inefficiency of 1.8% (11.2%) compared with a very slight increase in inefficiency for the highest profit group. Similarly, hospitals in highly competitive markets controlled expenses relative to those in the least competitive areas. However, they also experienced slower revenue growth than did less competitive hospitals so that, in relative terms, their profit rates fell. The authors found no evidence to suggest that financial pressures created by either low profits or market competition resulted in hospitals engaging in cost-shifting. The authors conclude that health care reforms or market forces that put financial pressures on hospitals can result in cost-containment and improved efficiency without significant cost-shifting.

Economic Evaluation of Breast Cancer Treatment: Considering the Value of Patient Choice

PURPOSE To use 5 years of primary data to compare the incremental cost-effectiveness of breast conservation and radiation versus mastectomy with the restriction of choice to a single therapy versus providing a choice of either therapy. PATIENTS AND METHODS We evaluated a random retrospective cohort of 2,517 Medicare beneficiaries treated for newly diagnosed stage I or II breast cancer from 1992 through 1994. The outcome measures were quality-adjusted life-years (QALYs) and 5-year medical costs. Risk and propensity score adjustments were used in the analysis. RESULTS A breast conservation and radiation regimen has significantly higher costs than mastectomy in the first year after surgery; the adjusted 5-year costs are