Robert Rosenman

Idiopathic intracranial hypertension in the USA: the role of obesity in establishing prevalence and healthcare costs.

This study documents for the first time the extraordinary costs to take care of patients with a chronic, non‐fatal, relatively rare disorder who have been incorrectly thought to have an insignificant and self‐limiting illness. Idiopathic intracranial hypertension (IIH) occurs worldwide and in all racial groups and is found predominantly in obese women (∼90%) of childbearing age. Although the incidence of IIH is increasing as a result of the rapid increase in obesity, the disorder in general receives little recognition, and no recognition of the extensive burden of healthcare costs placed on patients, their families and society. We established for the first time both the prevalence of IIH in the USA and the direct and indirect costs of IIH using a prevalence‐based model. IIH patients had an exceptionally high hospital admission rate of 38% (in 2007), a partial reflection of unsatisfactory treatment options. The total hospital costs per IIH admission in 2007 were four times greater than for a population‐based per person admission. Total economic costs of IIH patients exceeded

Cost inefficiency in Washington hospitals: a stochastic frontier approach using panel data.

444 million. Programmes designed to reduce obesity prior to and after diagnosis and better therapeutics will have a tremendous economic impact.

Data Envelopment Analysis to determine efficiencies of health maintenance organizations

We analyze a sample of Washington State hospitals with a stochastic frontier panel data model, specifying the cost function as a generalized Leontief function which, according to a Hausman test, performs better in this case than the translog form. A one-stage FGLS estimation procedure which directly models the inefficiency effects improves the efficiency of our estimates. We find that hospitals with higher casemix indices or more beds are less efficient while for-profit hospitals and those with higher proportion of Medicare patient days are more efficient. Relative to the most efficient hospital, the average hospital is only about 67% efficient.

Productivity growth and convergence in US agriculture: new cointegration panel data results

We use Data Envelopment Analysis (DEA) to measure the relative technical efficiencies of 164 HMOs licensed to practice in the United States in 1995 with data collected from the American Association of Health Plans. Health care output measures used in the analysis are the number of commercial, Medicare and Medicaid lives covered in each plan. Inputs to the model are health care utilization measures such as the number of medical and surgical inpatient days, number of maternity and newborn stays in days, number of outpatient and emergency room visits and the number of non‐invasive and invasive procedures performed on patients in an ambulatory setting. Mean efficiency of health plans was 40% (of the most efficient). We use multivariate analysis to try and explain variations in efficiency. Enrollment influences efficiency, with larger HMOs being more efficient than those with fewer enrollees. Plans with a more even distribution of Commercial, Medicare and Medicaid patients were more efficient on average than plans with heterogeneous mixes in enrollment. HMOs with Medicare patients are significantly less efficient, with efficiency decreasing with increasing Medicare participation in plan membership. Health plans in operation for longer periods of time had greater outputs with the same inputs. Health plans that had a majority of their enrollees in network or IPA type arrangements were more efficient as were for‐profit plans compared to not‐for‐profits. Policy implications are discussed.

Cost Shifting Revisited: The Case of Service Intensity

Dynamic effects of health and inter-state and inter-industry knowledge spillovers, Total Factor Productivity (TFP) growth and convergence in US agriculture are examined using recently developed procedures for panel data and a growth accounting model. Strong evidence is found to support the hypothesis that TFP converges to a steady state. Health care supply in rural areas and research spillovers from other states and from nonagricultural sectors are found to have significant impacts on the productivity growth rate in both the short and the long run. These results suggest a richer set of opportunities for policy makers to enhance productivity growth than previously considered.

The Property Rights Theory of the Firm and Mixed Competition: A Counter-Example in the US Health Care Industry

This paper examines whether a health care providers choice of service intensity for any patient group affects its cost shifting behavior. Our theoretical models indicate that firms may respond to lower prospective payment by decreasing service intensity to all of its patient groups, thereby giving firms an alternative to cost shifting. Additionally, the conditions under which cost shifting and lower service intensity occur are identical, regardless of profit status. Using a panel of California hospitals, we found that nonprofit hospitals do cost shift, while profit-maximizing hospitals do not. However, both firms respond to lower prospective payment by decreasing service intensity, thus supporting our theoretical conclusion that lower service intensity can be used as an alternative to cost shifting.

Predictors of HMO efficiency

We present a counter-example to the conventional property rights theory of the firm, which indicates that not-for-profit firms are incapable of directly competing against strictly profit-maximizing firms without the presence of barriers to entry, outside assistance, changing profit status or economies of scale and scope. We employ a modified Bertrand duopoly model of mixed competition in the health care industry to show that, even when these four conditions do not hold, not-for-profit firms may still be able to compete and possibly dominate the market. Consequently, market fundamentals, rather than market intervention, regulation or uncertainty, determine a not-for-profit providers success or failure in the market. A necessary requirement is that the not-for-profit manager must care about non-pecuniary benefits but be willing to accept lower than normal returns. Moreover, under specific cost and demand conditions, a not-for-profits ability to compete may actually be enhanced by increasing its production of non-pecuniary benefits.

Do hospitals practice cream skimming

This study looks at a variety of factors that may affect Health Maintenance Organization (HMO) efficiency, focusing on the economic incentives that derive from ownership. Previous studies have found that HMO efficiency depends largely on the extent to which ambulatory services substitute for inpatient services. Our analysis supports this conclusion, but takes it one step further. We demonstrate that owners who also provide health care services-specifically physicians and hospitals-may have an incentive to use more of their particular service. Our empirical results show that hospital-owned HMOs do in fact use more inpatient services than do HMOs owned by physicians or others, indicating that hospital-owned HMOs will be less efficient.

Welfare recipient work choice and in-kind benefits in Washington state

‘Cream skimming’ refers to choosing patients for some characteristic(s) other than their need for care, which enhances the profitability or reputation of the provider. Under capitation or other fixed payment schemes, this often means choosing less ill patients. We present a new methodology to measure cream skimming by hospitals. Our approach also provides a measure of a hospitals gain in productive efficiency by caring for patients with lower illness severity. Using a panel of Washington state hospitals, we find evidence that hospitals do practice cream skimming. However, we find little evidence to suggest that cream skimming varies by hospital size, profit status or time.

The relationship between service intensity and the quality of health care: an exploratory data analysis.

We analyze the work choice of welfare recipients. Potential welfare recipients compare their on and off welfare utility from after-tax income and in-kind benefits via employment or welfare, and choose whether to work. Our null hypothesis, which we reject, is that benefits affect only the decision to work or not, not the hours worked, which will depend on wages. Using Temporary Assistance for Needy Families (TANF) administrative data from Washington state, we find that employer provided health insurance and child care subsidies significantly raise exit rates of TANF recipients and induce greater work effort. Other work inducing factors include wages and the Earned Income Tax Credit, while increased levels of Medicaid, Food Stamps and the income guarantee increase welfare dependency.