Jonathan S. Skinner

Precautionary Saving and Social Insurance

Micro data studies of household saving often find a significant group in the population with virtually no wealth, raising concerns about heterogeneity in motives for saving. In particular, this heterogeneity has been interpreted as evidence against the life cycle model of saving. This paper argues that a life cycle model can replicate observed patterns in household wealth accumulation after accounting explicitly for precautionary saving and asset-based, means-tested social insurance. We demonstrate theoretically that social insurance programs with means tests based on assets discourage saving by households with low expected lifetime income. In addition, we evaluate the model using a dynamic programming model with four state variables. Assuming common preference parameters across lifetime income groups, we are able to replicate the empirical pattern that low-income households are more likely than high-income households to hold virtually no wealth. Low wealth accumulation can be explained as a utility-maximizing response to asset-based, means-tested welfare programs.

The Importance of Precautionary Motives in Explaining Individual and Aggregate Saving

This paper examines predictions of a life-cycle simulation model -- in which individuals face uncertainty regarding their length of life, earnings, and out-of-pocket medical expenditures, and imperfect insurance and lending markets -- for individual and aggregate wealth accumulation. Relative to life-cycle or buffer-stock alternatives, our augmented life-cycle model better matches a variety of features of U.S. data, including: (1) aggregate wealth, (2) cross-sectional differences in wealth-age and consumption-age profiles by education group, and (3) short-run time-series co-movements of consumption and income.

Slowing the Growth of Health Care Costs — Lessons from Regional Variation

Most observers see rising health care costs as an inexorable force. Dr. Elliott Fisher, Dr. Julie Bynum, and Jonathan Skinner write that by learning from regions that have attained sustainable growth rates and building on successful models of delivery-system and payment-system reform, we might manage to “bend the cost curve.”

Regional variations in diagnostic practices.

BACKGROUND Current methods of risk adjustment rely on diagnoses recorded in clinical and administrative records. Differences among providers in diagnostic practices could lead to bias. METHODS We used Medicare claims data from 1999 through 2006 to measure trends in diagnostic practices for Medicare beneficiaries. Regions were grouped into five quintiles according to the intensity of hospital and physician services that beneficiaries in the region received. We compared trends with respect to diagnoses, laboratory testing, imaging, and the assignment of Hierarchical Condition Categories (HCCs) among beneficiaries who moved to regions with a higher or lower intensity of practice. RESULTS Beneficiaries within each quintile who moved during the study period to regions with a higher or lower intensity of practice had similar numbers of diagnoses and similar HCC risk scores (as derived from HCC coding algorithms) before their move. The number of diagnoses and the HCC measures increased as the cohort aged, but they increased to a greater extent among beneficiaries who moved to regions with a higher intensity of practice than among those who moved to regions with the same or lower intensity of practice. For example, among beneficiaries who lived initially in regions in the lowest quintile, there was a greater increase in the average number of diagnoses among those who moved to regions in a higher quintile than among those who moved to regions within the lowest quintile (increase of 100.8%; 95% confidence interval [CI], 89.6 to 112.1; vs. increase of 61.7%; 95% CI, 55.8 to 67.4). Moving to each higher quintile of intensity was associated with an additional 5.9% increase (95% CI, 5.2 to 6.7) in HCC scores, and results were similar with respect to laboratory testing and imaging. CONCLUSIONS Substantial differences in diagnostic practices that are unlikely to be related to patient characteristics are observed across U.S. regions. The use of clinical or claims-based diagnoses in risk adjustment may introduce important biases in comparative-effectiveness studies, public reporting, and payment reforms.

Use of hospitals, physician visits, and hospice care during last six months of life among cohorts loyal to highly respected hospitals in the United States

Abstract Objective To evaluate the use of healthcare resources during the last six months of life among patients of US hospitals with strong reputations for high quality care in managing chronic illness. Design Retrospective cohort study based on claims data from the US Medicare programme. Participants Cohorts receiving most of their hospital care from 77 hospitals that appeared on the 2001 US News and World Report “best hospitals” list for heart and pulmonary disease, cancer, and geriatric services. Main outcome measures Use of healthcare resources in the last six months of life: number of days spent in hospital and in intensive care units; number of physician visits; percentage of patients seeing 10 or more physicians; percentage enrolled in hospice. Terminal care: percentage of deaths occurring in hospital; percentage of deaths occurring in association with a stay in an intensive care unit. Results Extensive variation in each measure existed among the 77 hospital cohorts. Days in hospital per decedent ranged from 9.4 to 27.1 (interquartile range 11.6-16.1); days in intensive care units ranged from 1.6 to 9.5 (2.6-4.5); number of physician visits ranged from 17.6 to 76.2 (25.5-39.5); percentage of patients seeing 10 or more physicians ranged from 16.9% to 58.5% (29.4-43.4%); and hospice enrolment ranged from 10.8% to 43.8% (22.0-32.0%). The percentage of deaths occurring in hospital ranged from 15.9% to 55.6% (35.4-43.1%), and the percentage of deaths associated with a stay in intensive care ranged from 8.4% to 36.8% (20.2-27.1%). Conclusion Striking variation exists in the utilisation of end of life care among US medical centres with strong national reputations for clinical care.

Are Regional Variations in End-of-Life Care Intensity Explained by Patient Preferences?: A Study of the US Medicare Population

Objective:We sought to test whether variations across regions in end-of-life (EOL) treatment intensity are associated with regional differences in patient preferences for EOL care. Research Design:Dual-language (English/Spanish) survey conducted March to October 2005, either by mail or computer-assisted telephone questionnaire, among a probability sample of 3480 Medicare part A and/or B eligible beneficiaries in the 20% denominator file, age 65 or older on July 1, 2003. Data collected included demographics, health status, and general preferences for medical care in the event the respondent had a serious illness and less than 1 year to live. EOL concerns and preferences were regressed on hospital referral region EOL spending, a validated measure of treatment intensity. Results:A total of 2515 Medicare beneficiaries completed the survey (65% response rate). In analyses adjusted for age, sex, race/ethnicity, education, financial strain, and health status, there were no differences by spending in concern about getting too little treatment (39.6% in lowest spending quintile, Q1; 41.2% in highest, Q5; P value for trend, 0.637) or too much treatment (44.2% Q1, 45.1% Q5; P = 0.797) at the end of life, preference for spending their last days in a hospital (8.4% Q1, 8.5% Q5; P = 0.965), for potentially life-prolonging drugs that made them feel worse all the time (14.4% Q1, 16.5% Q5; P = 0.326), for palliative drugs, even if they might be life-shortening (77.7% Q1, 73.4% Q5; P = 0.138), for mechanical ventilation if it would extend their life by 1 month (21% Q1, 21.4% Q5; P = 0.870) or by 1 week (12.1% Q1, 11.7%; P = 0.875). Conclusions:Medicare beneficiaries generally prefer treatment focused on palliation rather than life-extension. Differences in preferences are unlikely to explain regional variations in EOL spending.

Mortality After Acute Myocardial Infarction in Hospitals That Disproportionately Treat Black Patients

Background— African Americans are more likely to be seen by physicians with less clinical training or to be treated at hospitals with longer average times to acute reperfusion therapies. Less is known about differences in health outcomes. This report compares risk-adjusted mortality after acute myocardial infarction (AMI) between US hospitals with high and low fractions of elderly black AMI patients. Methods and Results— A prospective cohort study was performed for fee-for-service Medicare patients hospitalized for AMI during 1997 to 2001 (n=1 136 736). Hospitals (n=4289) were classified into approximate deciles depending on the extent to which the hospital served the black population. Decile 1 (12.5% of AMI patients) included hospitals without any black AMI admissions during 1997 to 2001. Decile 10 (10% of AMI patients) included hospitals with the highest fraction of black AMI patients (33.6%). The main outcome measures were 90-day and 30-day mortality after AMI. Patients admitted to hospitals disproportionately serving blacks experienced no greater level of morbidities or severity of the infarction, yet hospitals in decile 10 experienced a risk-adjusted 90-day mortality rate of 23.7% (95% CI 23.2% to 24.2%) compared with 20.1% (95% CI 19.7% to 20.4%) in decile 1 hospitals. Differences in outcomes between hospitals were not explained by income, hospital ownership status, hospital volume, census region, urban status, or hospital surgical treatment intensity. Conclusions— Risk-adjusted mortality after AMI is significantly higher in US hospitals that disproportionately serve blacks. A reduction in overall mortality at these hospitals could dramatically reduce black-white disparities in healthcare outcomes.

Surgical Treatment of Spinal Stenosis with and without Degenerative Spondylolisthesis: Cost-Effectiveness after 2 Years

BACKGROUND The SPORT (Spine Patient Outcomes Research Trial) reported favorable surgery outcomes over 2 years among patients with stenosis with and without degenerative spondylolisthesis, but the economic value of these surgeries is uncertain. OBJECTIVE To assess the short-term cost-effectiveness of spine surgery relative to nonoperative care for stenosis alone and for stenosis with spondylolisthesis. DESIGN Prospective cohort study. DATA SOURCES Resource utilization, productivity, and EuroQol EQ-5D score measured at 6 weeks and at 3, 6, 12, and 24 months after treatment among SPORT participants. TARGET POPULATION Patients with image-confirmed spinal stenosis, with and without degenerative spondylolisthesis. TIME HORIZON 2 years. PERSPECTIVE Societal. INTERVENTION Nonoperative care or surgery (primarily decompressive laminectomy for stenosis and decompressive laminectomy with fusion for stenosis associated with degenerative spondylolisthesis). OUTCOME MEASURES Cost per quality-adjusted life-year (QALY) gained. RESULTS OF BASE-CASE ANALYSIS Among 634 patients with stenosis, 394 (62%) had surgery, most often decompressive laminectomy (320 of 394 [81%]). Stenosis surgeries improved health to a greater extent than nonoperative care (QALY gain, 0.17 [95% CI, 0.12 to 0.22]) at a cost of

Design of the Spine Patient outcomes Research Trial (SPORT).

77,600 (CI,

The cost effectiveness of surgical versus nonoperative treatment for lumbar disc herniation over two years: evidence from the Spine Patient Outcomes Research Trial (SPORT).

49,600 to