Russell J. Funk

Derivatives and Deregulation: Financial Innovation and the Demise of Glass-Steagall

Regulators, much like market actors, rely on categorical distinctions. Innovations that are ambiguous to regulatory categories but not to market actors present a problem for regulators and an opportunity for innovative firms. Using a wide range of primary and secondary, qualitative and quantitative sources, we trace the history of one class of innovative financial derivatives—interest rate and foreign exchange swaps—to show how these instruments undermined the separation of commercial and investment banking established by the Glass–Steagall Act of 1933 even as overt political action failed to do so. Swaps did not fit neatly into existing product categories—futures, securities, loans—and thus evaded regulatory scrutiny for many years. The market success of swaps put commercial and investment banks into direct competition and, in so doing, undermined Glass–Steagall. Drawing on this case, we theorize that ambiguous innovations may disrupt the regulatory status quo and shift the political burden onto parties that want to maintain existing regulations. Our findings also suggest that category-spanning innovations may be more valuable to market participants if regulators find them difficult to interpret.

Association Between Physician Teamwork and Health System Outcomes After Coronary Artery Bypass Grafting

Background—Patients undergoing coronary artery bypass grafting (CABG) must often see multiple providers dispersed across many care locations. To test whether teamwork (assessed with the bipartite clustering coefficient) among these physicians is a determinant of surgical outcomes, we examined national Medicare data from patients undergoing CABG. Methods and Results—Among Medicare beneficiaries who underwent CABG between 2008 and 2011, we mapped relationships between all physicians who treated them during their surgical episodes, including both surgeons and nonsurgeons. After aggregating across CABG episodes in a year to construct the physician social networks serving each health system, we then assessed the level of physician teamwork in these networks with the bipartite clustering coefficient. Finally, we fit a series of multivariable regression models to evaluate associations between a health system’s teamwork level and its 60-day surgical outcomes. We observed substantial variation in the level of teamwork between health systems performing CABG (SD for the bipartite clustering coefficient was 0.09). Although health systems with high and low teamwork levels treated beneficiaries with comparable comorbidity scores, these health systems differed over several sociocultural and healthcare capacity factors (eg, physician staff size and surgical caseload). After controlling for these differences, health systems with higher teamwork levels had significantly lower 60-day rates of emergency department visit, readmission, and mortality. Conclusions—Health systems with physicians who tend to work together in tightly-knit groups during CABG episodes realize better surgical outcomes. As such, delivery system reforms focused on building teamwork may have positive effects on surgical care.

Differences between physician social networks for cardiac surgery serving communities with high versus low proportions of black residents.

Background:Compared with white patients, black patients are more likely to undergo cardiac surgery at low-quality hospitals, even when they live closer to high-quality ones. Opportunities for organizational interventions to alleviate this problem remain elusive. Objectives:To explore physician isolation in communities with high proportions of black residents as a factor contributing to racial disparities in access to high-quality hospitals for cardiac surgery. Research Design:Using national Medicare data (2008–2011), we mapped physician social networks at hospitals where coronary artery bypass grafting procedures were performed, measuring their degree of connectedness. We then fitted a series of multivariate regression models to examine for associations between physician connectedness and the proportion of black residents in the hospital service area (HSA) served by each network. Measures:Measures of physician connectedness (ie, repeat-tie fraction, clustering, and number of external ties). Results:After accounting for regional differences in healthcare capacity, the social networks of physicians practicing in areas with more black residents varied in many important respects from those of HSAs with fewer black residents. Physicians serving HSAs with many black residents had a smaller number of repeated interactions with each other than those in other HSAs (P<0.001). When these physicians did interact, they tended to assemble in smaller groups of highly interconnected colleagues (P<0.001). They also had fewer interactions with physicians outside their immediate geographic area (P=0.048). Conclusions:Physicians in HSAs with many black residents are more isolated than those in HSAs with fewer black residents. This isolation may negatively impact on care coordination and information sharing. As such, planned delivery system reforms that encourage minorities to seek care within their established local networks may further exacerbate existing surgical disparities.

Assessing the reach of health reform to outpatient surgery with social network analysis.

OBJECTIVE To assess the proportion of outpatient surgery currently delivered in ambulatory surgery centers (ASCs) unconnected to nearby hospitals. BACKGROUND The ASC as a site for outpatient surgery represents one of the fastest growing sectors in health care. Because most are freestanding, ASCs may have little connection to local health systems, possibly placing them outside health reforms reach. METHODS Using all-payer data from Florida (2005-2009), we identified all ASCs and hospitals active in the state. Using the tools of social network analysis, we then measured each ASCs strength of connection to nearby hospitals on the basis of the number of surgeons shared between facilities. Finally, we determined the proportion of all procedures and charges accounted for by (1) ASCs that are strongly connected to their local health system, (2) those that are weakly connected, and (3) those that are unconnected. RESULTS Of the 1.4 million procedures performed in Florida ASCs each year, fewer than 250,000 occur at unconnected and weakly connected ASCs. Put differently, 83% of the

Physician referral patterns and racial disparities in total hip replacement: A network analysis approach

4.3 billion in charges for ASC-based care originate from facilities that have substantial integration with their local health system. Although weakly and strongly connected ASCs are similar from an organizational perspective, unconnected ones tend to focus on a single specialty (P = 0.026) and are staffed by fewer physicians (P = 0.013). Furthermore, there is a trend toward fewer unconnected ASCs over time (P = 0.080). CONCLUSIONS Most ASCs are strongly connected to their local health system. Thus, efforts to constrain spending should target population-based rates of surgery, not unconnected ASCs.

Association of Informal Clinical Integration of Physicians With Cardiac Surgery Payments

Background Efforts to reduce racial disparities in total hip replacement (THR) have focused mainly on patient behaviors. While these efforts are no doubt important, they ignore the potentially important role of provider- and system-level factors, which may be easier to modify. We aimed to determine whether the patterns of interaction among physicians around THR episodes differ in communities with low versus high concentrations of black residents. Materials and methods We analyzed national Medicare claims from 2008 to 2011, identifying all fee-for-service beneficiaries who underwent THR. Based on physician encounter data, we then mapped the physician referral networks at the hospitals where beneficiaries’ procedures were performed. Next, we measured two structural properties of these networks that could affect care coordination and information sharing: clustering, and the number of external ties. Finally, we estimated multivariate regression models to determine the relationship between the concentration of black residents in the community [as measured by the hospital service area (HSA)] served by a given network and each of these 2 network properties. Results Our sample included 336,506 beneficiaries (mean age 76.3 ± SD), 63.1% of whom were women. HSAs with higher concentrations of black residents tended to be more impoverished than those with lower concentrations. While HSAs with higher concentrations of black residents had, on average, more acute care beds and medical specialists, they had fewer surgeons per capita than those with lower concentrations. After adjusting for these differences, we found that HSAs with higher concentrations of black residents were served by physician referral networks that had significantly higher within-network clustering but fewer external ties. Conclusions We observed differences in the patterns of interaction among physicians around THR episodes in communities with low versus high concentrations of black residents. Studies investigating the impact of these differences on access to quality providers and on THR outcomes are needed.

An Experimental Assessment of Interventions for Improving Women’s Professional Networking: Results from IT

Importance To reduce inefficiency and waste associated with care fragmentation, many current programs target greater clinical integration among physicians. However, these programs have led to only modest Medicare spending reductions. Most programs focus on formal integration, which often bears little resemblance to actual physician interaction patterns. Objectives To examine how physician interaction patterns vary between health systems and to assess whether variation in informal integration is associated with care delivery payments. Design, Setting, and Participants National Medicare data from January 1, 2008, through December 31, 2011, identified 253 545 Medicare beneficiaries (aged ≥66 years) from 1186 health systems where Medicare beneficiaries underwent coronary artery bypass grafting (CABG) procedures. Interactions were mapped between all physicians who treated these patients—including primary care physicians and surgical and medical specialists—within a health system during their surgical episode. The level of informal integration was measured in these networks of interacting physicians. Multivariate regression models were fitted to evaluate associations between payments for each surgical episode made on a beneficiary’s behalf and the level of informal integration in the health system where the patient was treated. Exposures The informal integration level of a health system. Main Outcomes and Measures Price-standardized total surgical episode and component payments. Results The total 253 545 study participants included 175 520 men (69.2%; mean [SD] age, 74.51 [5.75] years) and 78 024 women (34.3%; 75.67 [5.91] years). One beneficiary of the 253 545 participants did not have sex information. The low level of informal clinical integration included 84 598 patients (33.4%; mean [SD] age, 75.00 [5.93] years); medium level, 84 442 (33.30%; 74.94 [5.87] years); and high level, 84 505 (33.34%; 74.66 [5.72] years) (P < .001). Informal integration levels varied across health systems. After adjusting for patient, health-system, and community factors, higher levels of informal integration were associated with significantly lower total episode and component payments (&bgr; coefficients for informal integration were −365.87 [95% CI, −451.08 to −280.67] for total episode payments, −182.63 [−239.80 to −125.46] for index hospitalization, −43.13 [−55.53 to −30.72] for physician services, −74.48 [−103.45 to −45.51] for hospital readmissions, and −62.04 [−88.00 to −36.07] for postacute care; P < .001 for each association). When beneficiaries were treated in health systems with higher informal integration, the greatest savings of lower estimated payments were from hospital readmissions (13.0%) and postacute care services (5.8%). Conclusions and Relevance Informal integration is associated with lower spending. Although most programs that seek to promote clinical integration are focused on health systems’ formal structures, policy makers may also want to address informal integration.

Identifying Natural Alignments Between Ambulatory Surgery Centers and Local Health Systems: Building Broader Communities of Surgical Care.

Professional networks are vital for individuals’ career advancement. Research demonstrates, however, that women are often disadvantaged in their access to such networks. Using a randomized field experiment at an IT conference, we found that women had worse networking outcomes than men. Relative to men, women met 42% fewer new contacts, spent 48% less time talking to them, and added 25% fewer LinkedIn connections. We theorized that in fields where women are underrepresented (e.g., IT) two networking barriers—search and social—differentially affect men and women. We designed and experimentally tested interventions for reducing these barriers. The search intervention was designed to facilitate locating diverse contacts and information. The social intervention was designed to facilitate helping behavior and connecting across social boundaries. We find that the search intervention increased the number of new contacts women met by 57%, the time they spent talking with them by 90%, the number of LinkedIn connections they added by 29%, and their odds of changing jobs by a factor of 1.6. The social intervention increased the time women spent talking to new contacts by 66%. The interventions did not improve men’s outcomes. Our results show that simple interventions can help women grow their networks and find jobs.

PD25-09 CLINICAL INTEGRATION IS ASSOCIATED WITH LOWER COSTS OF CARE AMONG PATIENTS UNDERGOING PROSTATECTOMY

Objective: To develop and compare methods for identifying natural alignments between ambulatory surgery centers (ASCs) and hospitals that anchor local health systems. Measures: Using all-payer data from Florida’s State Ambulatory Surgery and Inpatient Databases (2005–2009), we developed 3 methods for identifying alignments between ASCS and hospitals. The first, a geographic proximity approach, used spatial data to assign an ASC to its nearest hospital neighbor. The second, a predominant affiliation approach, assigned an ASC to the hospital with which it shared a plurality of surgeons. The third, a network community approach, linked an ASC with a larger group of hospitals held together by naturally occurring physician networks. We compared each method in terms of its ability to capture meaningful and stable affiliations and its administrative simplicity. Results: Although the proximity approach was simplest to implement and produced the most durable alignments, ASC surgeon’s loyalty to the assigned hospital was low with this method. The predominant affiliation and network community approaches performed better and nearly equivalently on these metrics, capturing more meaningful affiliations between ASCs and hospitals. However, the latter’s alignments were least durable, and it was complex to administer. Conclusions: We describe 3 methods for identifying natural alignments between ASCs and hospitals, each with strengths and weaknesses. These methods will help health system managers identify ASCs with which to partner. Moreover, health services researchers and policy analysts can use them to study broader communities of surgical care.

The dark side of brokerage: Conflicts between individual and collective pursuits of innovation

provide price-standardized and risk-adjusted total and component cost data for episodes of care that include the index admission and 90 days post-discharge. For this analysis, we compared 90-day episode costs for patients with 0, 1, or 2 deviations from the NOTES uncomplicated radical prostatectomy pathway. RESULTS: From 244 MUSIC patients with BCBSM insurance, 154 (63%) were matched with radical prostatectomy episode cost data from MVC. The average age of matched cases was 59 years, and 97% were performed robotically (Table). The mean 90-day episode costs for the entire cohort was