THE PRICE AIN'T RIGHT? HOSPITAL PRICES AND HEALTH SPENDING ON THE PRIVATELY INSURED

Unsanitized and Unfair: How COVID-19 Bailout Funds Refuel Inequity in the US Health Care System

CONTEXT

The CARES Act of 2020 allocated provider relief funds to hospitals and other providers. We investigate whether these funds were distributed in a way that responded fairly to COVID-19-related medical and financial need. The US health care system is bifurcated into the "haves" and "have nots." The health care safety net hospitals, which were already financially weak, cared for the bulk of COVID-19 cases. In contrast, the "have" hospitals suffered financially because their most profitable procedures are elective and were postponed during the COVID-19 outbreak.

METHODS

To obtain relief fund data for each hospital in the United States, we started with data from the HHS website. We use the RAND Hospital Data tool to analyze how fund distributions are associated with hospital characteristics.

FINDINGS

Our analysis reveals that the "have" hospitals with the most days of cash on hand received more funding per bed than hospitals with fewer than 50 days of cash on hand (the "have nots").

CONCLUSIONS

Despite extreme racial inequities, which COVID-19 exposed early in the pandemic, the federal government rewards those hospitals that cater to the most privileged in the United States, leaving hospitals that predominantly serve low-income people of color with less.

Regulating Hospital Prices Based On Market Concentration Is Likely To Leave High-Price Hospitals Unaffected

Concern about high hospital prices for commercially insured patients has motivated several proposals to regulate these prices. Such proposals often limit regulations to highly concentrated hospital markets. Using a large sample of 2017 US commercial insurance claims, we demonstrate that under the market definition commonly used in these proposals, most high-price hospitals are in markets that would be deemed competitive or "moderately concentrated," using antitrust guidelines. Limiting policy actions to concentrated hospital markets, particularly when those markets are defined broadly, would likely result in poor targeting of high-price hospitals. Policies that target the undesired outcome of high price directly, whether as a trigger or as a screen for action, are likely to be more effective than those that limit action based on market concentration.

Clinic price reductions in a tiered total cost benefit design

OBJECTIVES

To understand responses of primary care clinics to inclusion in a tiered total cost of care insurance benefit design.

STUDY DESIGN

We used a qualitative design beginning with longitudinal analysis of administrative data on consumer clinic choice, clinic tier placement, and clinic actions, followed by in-depth interviews with key informants from clinics, administering health plans, and program administrators.

METHODS

We collected data via semistructured interviews with purposively sampled key informants selected from clinics that prospectively reduced prices to move to, or remain in, a tier with lower cost sharing. Data from interview transcripts were coded using qualitative coding software and analyzed for thematic responses.

RESULTS

Our findings suggest that clinics respond to the incentives in the tiered cost-sharing benefit design. Two motivations cited by clinics are (1) concern over developing a reputation as a high-cost clinic and (2) concern about the possible loss of patients due to higher cost sharing. Some clinics have agreed to price reductions or risk-sharing arrangements to move to, or remain in, a tier with lower cost sharing. Clinic informants reported that price reductions alone are not scalable. They sought greater transparency in tier assignment and increased data sharing to help them reduce costly or unnecessary utilization.

CONCLUSIONS

Managers of primary care clinics respond to a tiered benefit design that holds them accountable for total cost of care. They respond by offering price discounts and expressing interest in reducing costly referrals and unnecessary use of services.

Differences in Cancer Care Expenditures and Utilization for Surgery by Hospital Type Among Patients With Private Insurance

IMPORTANCE

With rising expenditures on cancer care outpacing other sectors of the US health system, national attention has focused on insurer spending, particularly for patients with private insurance, for whom price transparency has historically been lacking. The type of hospital at which cancer care is delivered may be an important factor associated with insurer spending for patients with private insurance.

OBJECTIVE

To examine differences in spending and utilization for patients with private insurance undergoing common cancer surgery at National Cancer Institute (NCI) centers vs community hospitals.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective cross-sectional study included adult patients with an incident diagnosis of breast, colon, or lung cancer who underwent cancer-directed surgery from 2011 to 2014. Mean risk-adjusted spending and utilization outcomes were examined for each hospital type using multilevel generalized linear mixed-effects models, adjusting for patient, hospital, and region characteristics. Data were collected from the Health Care Cost Institute's national multipayer commercial claims data set, which encompasses claims paid by 3 of the 5 largest commercial health insurers in the United States (ie, Aetna, Humana, and UnitedHealthcare). Data analyses were conducted from February 2018 to February 2019.

EXPOSURES

Hospital type at which cancer surgery was performed: NCI, non-NCI academic, or community.

MAIN OUTCOMES AND MEASURES

Spending outcomes were surgery-specific insurer prices paid and 90-day postdischarge payments. Utilization outcomes were length of stay (LOS), emergency department (ED) use, and hospital readmission within 90 days of discharge.

RESULTS

The study included 66 878 patients (51 569 [77.1%] women; 31 585 [47.2%] aged ≥65 years) with incident breast (35 788 [53.5%]), colon (21 378 [32.0%]), or lung (9712 [14.5%]) cancer undergoing cancer surgery at 2995 hospitals (5522 [8.3%] at NCI centers; 10 917 [16.3%] at non-NCI academic hospitals; 50 439 [75.4%] at community hospitals). Treatment at NCI centers was associated with higher surgery-specific insurer prices paid compared with community hospitals ($18 526 [95% CI, $16 650-$20 403] vs $14 772 [95% CI, $14 339-$15 204]; difference, $3755 [95% CI, $1661-$5849]; P < .001) and 90-day postdischarge payments ($47 035 [95% CI, $43 289-$50 781] vs $41 291 [95% CI, $40 350-$42 231]; difference, $5744 [95% CI, $1659-9829]; P = .006). There were no significant differences in LOS, ED use, or hospital readmission within 90 days of discharge.

CONCLUSIONS AND RELEVANCE

In this cross-sectional study, surgery at NCI centers vs community hospitals was associated with higher insurer spending for a surgical episode without differences in care utilization among patients with private insurance undergoing cancer surgery. A better understanding of the factors associated with prices and spending at NCI cancer centers is needed.

Elective versus nonelective brain tumor resections: a 5-year propensity score matching cost comparison analysis

OBJECTIVE

Elective surgical cases generally have lower costs, higher profit margins, and better outcomes than nonelective cases. Investigating the differences in cost and profit between elective and nonelective cases would help hospitals in planning strategies to withstand financial losses due to potential pandemics. The authors sought to evaluate the exact cost and profit margin differences between elective and nonelective supratentorial tumor resections at a single institution.

METHODS

The authors collected economic analysis data in all patients who underwent supratentorial tumor resection at their institution between January 2014 and December 2018. The patients were grouped into elective and nonelective cases. Propensity score matching was used to adjust for heterogeneity of baseline characteristics between the two groups.

RESULTS

There were 143 elective cases and 232 nonelective cases over the 5 years. Patients in the majority of elective cases had private insurance and in the majority of nonelective cases the patients had Medicare/Medicaid (p < 0.01). The total charges were significantly lower for elective cases ($168,800.12) compared to nonelective cases ($254,839.30, p < 0.01). The profit margins were almost 6 times higher for elective than for nonelective cases ($13,025.28 vs $2,128.01, p = 0.04). After propensity score matching, there was still a significant difference between total charges and total cost.

CONCLUSIONS

Elective supratentorial tumor resections were associated with significantly lower costs with shorter lengths of stay while also being roughly 6 times more profitable than nonelective cases. These findings may help future planning for hospital strategies to survive financial losses during future pandemics that require widespread cancellation of elective cases.

Soft Consolidation In Medicare ACOs: Potential For Higher Prices Without Mergers Or Acquisitions

Antitrust guidance specifies that participation in Medicare accountable care organizations (ACOs) is sufficient to meet clinical integration standards for separately owned providers to jointly negotiate with insurers. Accordingly, ACO participation may facilitate price increases through a less conventional, "softer" consolidation that would not be categorically challenged as price fixing. Using commercial claims and data on health system membership and ACO participation, we found some abrupt, large price increases for independent primary care practices that joined health system-led ACOs but were not acquired by systems. These price jumps were rare, however, increasing prices by just 4 percent, on average, among all independent practices in system-led ACOs. Additional analyses suggested minimal increases in health systems' primary care prices or market shares from ACO contracting. Thus, the price jumps were more consistent with an extension of existing pricing power from systems to some independent practices than with a major expansion of system market power. Nevertheless, the potential for growth of these arrangements through ACOs argues for closer monitoring and evaluation.

National variation in the delivery of radiation oncology procedures in the non-facility-based setting

PURPOSE

Though utilization of medical procedures has been shown to vary considerably across the United States, similar efforts to characterize variation in the delivery of radiation therapy (RT) procedures have not been forthcoming. Our aim was to characterize variation in the delivery of common RT procedures in the Medicare population. We hypothesized that delivery would vary significantly based on provider characteristics.

METHODS

The Centers for Medicare and Medicaid Services (CMS) Physician and Other Supplier Public Use File was linked to the CMS Physician Compare (PC) database by physician NPI to identify and sum all treatment delivery charges submitted by individual radiation oncologists in the non-facility-based (NFB) setting in 2016. Multivariable logistic regression analysis was carried out to determine provider characteristics (gender, practice rurality, practice region, and years since graduation) that predicted for the delivery of 3D conformal RT (3DCRT), intensity modulated RT (IMRT), stereotactic body RT (SBRT), stereotactic radiosurgery (SRS), low dose rate (LDR) brachytherapy, and high dose rate (HDR) brachytherapy delivery in the Medicare patient population. The overall significance of categorical variables in the multivariable logistic regression model was assessed by the likelihood ratio test (LRT).

RESULTS

In total, 1,802 physicians from the NFB practice setting were analyzed. Male gender predicted for greater LDR brachytherapy delivery (OR 8.19, 95% CI 2.58-26.05, p < 0.001), but not greater delivery of other technologies. Metropolitan practice was the only predictor for greater HDR brachytherapy utilization (OR 12.95, 95% CI 1.81-92.60, p = 0.01). Practice region was predictive of the delivery of 3DCRT, SRS and SBRT (p < 0.01, p < 0.001, and p < 0.001, respectively). With the Northeast as the reference region, 3DCRT was more likely to be delivered by providers in the South (OR 1.33, 95% CI 1.09-1.62, p < 0.01) and the West (OR 1.38, 95% CI 1.11-1.71, p < 0.01). At the same time, SRS use was less likely in the Midwest (OR 0.71, 95% CI 0.55-0.91, p < 0.01), South (OR 0.49, 95% CI 0.40-0.61, p < 0.001), and West (OR 0.43, 95% CI 0.34-0.55, p < 0.001). SBRT, on the other hand, was more commonly utilized in the Midwest (OR 2.63, 95% CI 1.13-6.13, p = 0.03), South (OR 3.44, 95% CI 1.58-7.49, p < 0.01), and West (OR 4.87, 95% CI 2.21-10.72, p < 0.001). HDR brachytherapy use was also more likely in the Midwest (OR 1.97, 95% CI 1.11-3.49, p = 0.02) and West (OR 1.87, 95% CI 1.08-3.24, p = 0.03). While the degree held by the billing physician did not predict for delivery of a given procedure, greater years since graduation was related to decreased likelihood of SBRT use (OR 0.98, 95% CI 0.96-0.99, p < 0.001) and increased likelihood of LDR brachytherapy use (OR 1.02, 95% CI 1.00-1.04, p = 0.02).

CONCLUSIONS

Substantial geographic variation in the use of specific RT technologies was identified. The degree to which this variation reflects effective care, preference-sensitive care, or supply-sensitive care warrants further investigation.

Large self-insured employers lack power to effectively negotiate hospital prices

OBJECTIVES

Self-insured employers cover more people than Medicare, Medicaid, or direct purchasers of private insurance.This study examined the ability of self-insured employers to negotiate hospital prices and the relationship between hospital prices and employer market power in the United States.

STUDY DESIGN

Repeated cross-section analysis of commercial claims.

METHODS

We used the US Census Bureau County Business Patterns data to estimate employer market power at the metropolitan statistical area (MSA)-year level and used the Truven Health MarketScan commercial claims to estimate mean hospital prices and price ratios at the MSA-year level (2010-2016). We calculated descriptive statistics for employer market power, mean hospitalization prices, and a case mix-adjusted price ratio measure during the study period and analyzed the 10 most concentrated labor markets. We estimated MSA-year-level ordinary least squares regressions of hospitalization price and the price ratio measure on employer market power.

RESULTS

Large self-insured employers had concentrated market power in very few MSAs in 2016. The mean value of our employer market power measure was 62 for 2016, compared with the mean value of 5410 for hospital market power in the United States. Regression analyses find a slight relationship: A 1-point increase in employer market power was associated with a $6.61 decrease in the hospitalization price (mean = $20,813), but this result becomes statistically insignificant once the models control for hospital wages.

CONCLUSIONS

Employer market power is low in most MSAs. Self-insured employers may consider building purchase alliances with state and local government employee groups to enhance their market power and lower negotiated prices for hospital services.

Taking the Pulse of Hospitals' Response to the New Price Transparency Rule

As of January 1, 2021, most U.S. hospitals are required to publish pricing information on their website to promote more informed decision making by consumers regarding their care. In a nationally representative sample of 470 hospitals, we analyzed whether hospitals met price transparency information reporting requirements and the extent to which complete reporting was associated with ownership status, bed size category, system affiliation, and location in a metropolitan area. Fewer than one quarter of sampled hospitals met the price transparency information requirements of the new rule, which include five types of standard charges in machine-readable form and the consumer-shoppable display of 300 shoppable services. Our analyses of hospital reporting by organizational and market attributes revealed limited differences, with some exceptions for nonprofit and system-member hospitals demonstrating greater responsiveness with respect to the consumer-shoppable aspects of the rule.

Spending On Targeted Therapies Reduced Mortality In Patients With Advanced-Stage Breast Cancer

Costly targeted therapies are playing an increasingly important role in treating cancer. To characterize trends in spending on targeted therapies for breast cancer and to estimate the association of these therapies with cancer mortality, we analyzed cancer diagnoses in the Surveillance, Epidemiology, and End Results Program-Medicare linked database. We categorized total cancer spending into spending on targeted therapies, spending on nontargeted therapies, and spending on other cancer care. Diagnosis-year spending on targeted therapies increased from $1,024 per patient in 2000 to $18,809 per patient in 2015 for patients with advanced-stage cancer and from $82 to $3,289 for patients with early-stage cancer. For patients with advanced-stage cancer, a $1,000 increase in spending on targeted therapies in the diagnosis year was associated with a 0.55-percentage-point decrease in adjusted three-year cancer mortality, whereas for patients with early-stage cancer, there was no association. The other two types of spending (on nontargeted therapies and other cancer care) were not associated with mortality among patients with either advanced- or early-stage cancer. Our results indicate that among various types of cancer treatments, only targeted therapies generated meaningful survival gains for patients with advanced-stage breast cancer.

Understanding Regional Variation in the Cost of Breast Cancer Screening Among Privately Insured Women in the United States

BACKGROUND

Breast cancer screening for women aged 40-49 years is prevalent and costly, with costs varying substantially across US regions. Newer approaches to mammography may improve cancer detection but also increase screening costs. We assessed factors associated with regional variation in screening costs.

METHODS

We used Blue Cross Blue Shield Axis, a large US commercial claims database accessed through secure portal, to assess regional variation in screening utilization and costs. We included screening mammography±digital breast tomosynthesis (DBT), screening ultrasound, diagnostic mammography±DBT, diagnostic ultrasound, magnetic resonance imaging and biopsy, and evaluated their utilization and costs. We assessed regional variation in annual per-screened-beneficiary costs and examined potential savings from reducing regional variation.

RESULTS

Of the 2,257,393 privately insured women, 41.2% received screening mammography in 2017 (range: 26.6%-54.2% across regions). Wide regional variation was found in the DBT proportion (0.7%-91.1%) and mean costs of DBT ($299; range: $113-714) and 2-dimensional (D) mammograms ($213; range: $107-471). In one-fourth of the regions, the mean DBT cost was lower than the mean 2D mammography cost in the full sample. Regional variation in the per-screened-beneficiary cost (mean: $353; range: $151-751) was mainly attributable to variation in the cost of DBT (accounting for 23.4% of regional variation) and 2D mammography (23.0%). Reducing regional variation by decreasing the highest values to the national mean was projected to save $79-335 million annually.

CONCLUSIONS

The mean mammogram cost for privately insured women ages 40-49 varies 7-fold across regions, driving substantial variation in breast cancer screening costs. Reducing this regional variation would substantially decrease the screening costs.

How important is price variation between health insurers?

Prices negotiated between payers and providers affect a health insurance contract's value via enrollees' cost-sharing and self-insured employers' costs. However, price variation across payers is difficult to observe. We measure negotiated prices for hospital-payer pairs in Massachusetts and characterize price variation. Between-payer price variation is similar in magnitude to between-hospital price variation. Administrative-services-only contracts, in which insurers do not bear risk, have higher prices. We model negotiation incentives and show that contractual form and demand responsiveness to negotiated prices are important determinants of negotiated prices.

Quality and Cost of Care by Hospital Teaching Status: What Are the Differences?

Policy Points In two respects, quality of care tends to be higher at major teaching hospitals: process of care and long-term survival of cancer patients following initial diagnosis. There is also evidence that short-term (30-day) mortality is lower on average at such hospitals, although the quality of evidence is somewhat lower. Quality of care is mulitdimensional. Empirical evidence by teaching status on dimensions other than survival is mixed. Higher Medicare payments for care provided by major teaching hospitals are partially offset by lower payments to nonhospital providers. Nevertheless, the payment differences between major teaching and nonteaching hospitals for hospital stays, especially for complex cases, potentially increase prices other insurers pay for hospital care.

CONTEXT

The relative performance of teaching hospitals has been discussed for decades. For private and public insurers with provider networks, an issue is whether having a major teaching hospital in the network is a "must." For traditional fee-for-service Medicare, there is an issue of adequacy of payment of hospitals with various attributes, including graduate medical education (GME) provision. Much empirical evidence on relative quality and cost has been published. This paper aims to (1) evaluate empirical evidence on relative quality and cost of teaching hospitals and (2) assess what the findings indicate for public and private insurer policy.

METHODS

Complementary approaches were used to select studies for review. (1) Relevant studies highly cited in Web of Science were selected. (2) This search led to studies cited by these studies as well as studies that cited these studies. (3) Several literature reviews were helpful in locating pertinent studies. Some policy-oriented papers were found in Google under topics to which the policy applied. (4) Several papers were added based on suggestions of reviewers.

FINDINGS

Quality of care as measured in process of care studies and in longitudinal studies of long-term survival of cancer patients tends to be higher at major teaching hospitals. Evidence on survival at 30 days post admission for common conditions and procedures also tends to favor such hospitals. Findings on other dimensions of relative quality are mixed. Hospitals with a substantial commitment to graduate medical education, major teaching hospitals, are about 10% to 20% more costly than nonteaching hospitals. Private insurers pay a differential to major teaching hospitals at this range's lower end. Inclusive of subsidies, Medicare pays major teaching hospitals substantially more than 20% extra, especially for complex surgical procedures.

CONCLUSIONS

Based on the evidence on quality, there is reason for patients to be willing to pay more for inclusion of major teaching hospitals in private insurer networks at least for some services. Medicare payment for GME has long been a controversial policy issue. The actual indirect cost of GME is likely to be far less than the amount Medicare is currently paying hospitals.

Prices and market power in mental health care: Evidence from a major policy change in the Netherlands

In the Dutch health care system of managed competition, insurers and mental health providers negotiate on prices for mental health services. Contract prices are capped by a regulator who sets a maximum price for each mental health service. In 2013, the majority of the contract prices equaled these maximum prices. We study price setting after a major policy change in 2014. In 2014, mental health care providers had to negotiate prices with each individual health insurer separately, instead of with all insurers collectively as in 2013. Moreover, after a cost-price revision, the regulator increased in 2014 maximum prices by about 10%. Insurers and mental health providers reacted to this policy change by setting most contract prices below the new maximum prices. We find that in 2014 mental health providers with more market power, that is, a higher willingness-to-pay measure, contracted significantly higher prices. Some insurers negotiated significantly lower prices than other insurers but these differences are unrelated to an insurers' market share.

A multilevel mixed-effects regression analysis of the association between hospital, community and state regulatory factors, and family income eligibility limits for free and discounted care among U.S. not-for-profit, 501(c)(3), hospitals, 2010 to 2017

Background

Not-for-profit hospitals are facing an uncertain financial future, especially following the COVID-19 pandemic. Nevertheless, they are legally obligated to provide free and discounted health care services to communities. This study investigates the hospital, community, and state regulatory factors and whether these factors are associated with family income eligibility levels for free and discounted care.

Methods

Data were sourced from Internal Revenue Service Form 990, several data files from the Centers for Medicare and Medicaid, demographic and community factors from the Census Bureau, supplemental files from The Hilltop Institute, Community Benefit Insight, and Kaiser Family Foundation. The study employs multilevel mixed-effects linear and ordered logit regressions to estimate the association between the hospital, community, state policies, and the hospital’s family income eligibility limit for free and discounted care.

Results

A plurality of hospitals (49.96%) offered a medium level of family income eligibility limit (160–200% of the federal poverty level (FPL)) for free care. In comparison, about 53% (52.94%) offered a low level (0–300 of FPL) eligibility limit for discounted care. Holding all else equal, hospitals designated as critical access, safety net, those in rural areas or located in disadvantaged areas were associated with an increased probability of offering low eligibility limits for free and discounted care. Hospitals in a joint venture, located in highly concentrated markets or states with minimum community benefits requirements, were associated with an increased probability of offering high eligibility limits.

Conclusion

State and community factors appear to be associated with the eligibility level for free and discounted care. Hospitals serving low-income or rural communities seem to offer the least relief. The federal and state policymakers might need to consider relief to these hospitals with a requirement for them to provide a specific set of minimum community benefits.

An Employer-Provider Direct Payment Program Is Associated With Lower Episode Costs

Bundled payment has shown promise in reducing medical spending while maintaining quality. However, its impact among commercially insured populations has not been well studied. We examined the impacts on episode cost and patient cost sharing of a program that applies bundled payments for orthopedic and surgical procedures in a commercially insured population. The program we studied negotiates preferred prices for selected providers that cover the procedure and all related care within a thirty-day period after the procedure and waives cost sharing for patients who receive care from these providers. After implementation, episode prices for three selected surgical procedures declined by $4,229, a 10.7 percent relative reduction. Employers captured approximately 85 percent of the savings, or $3,582 per episode (a 9.5 percent relative decrease), and patient cost-sharing payments decreased by $498 per episode (a 27.7 percent relative decrease).

Removing Medicare's outpatient ban and Medicare and private surgical trends

OBJECTIVES

To examine changes in hospital outpatient surgery trends and case mix for Medicare and privately insured patients needing total knee arthroplasty (TKA) following Medicare's removal of TKA from its Inpatient Only list on January 1, 2018.

STUDY DESIGN

A retrospective analysis of all hospital discharge records in Florida from 2012 through 2018.

METHODS

We tracked inpatient vs outpatient performance of TKAs at the state and hospital levels. We also combined our primary data with physician practice organization information to assess variation in the policy response according to physician-hospital ownership status. Supplementary analyses examined policy-induced changes in inpatient TKA case mix.

RESULTS

We observed an immediate shift of roughly 15% of Medicare TKA cases to the outpatient setting. Importantly, there was a simultaneous near doubling of the number of TKAs performed as a hospital outpatient procedure among privately insured patients younger than 60 years. Hospitals allocated a similar proportion of TKA cases to the outpatient setting across the 2 payer groups, and we found evidence of selection against the potentially riskiest Medicare TKA patients for outpatient delivery. Vertically integrated orthopedic physicians retained their Medicare and privately insured TKA cases within the inpatient (higher-cost) setting.

CONCLUSIONS

Market and financial pressures are encouraging more outpatient care delivery; however, the speed of transition is dictated, in part, by regulatory constraints. Our results suggest that Medicare policy may influence surgical treatment approaches for Medicare and privately insured patients. Spillover implications need to be considered when weighing future Medicare regulatory decisions.

Provider-Level Variation in Treatment Planning of Radiation Oncology Procedures in the United States

PURPOSE

Variation in the use of radiation oncology procedures and technologies is poorly characterized. We sought to identify associations between the treatment planning codes used to bill for radiotherapy procedures and the demographic characteristics of the radiation oncologists submitting them.

METHODS

The Physician and Other Supplier Public Use File was linked to the Physician Compare database by using the physician National Provider Identifier for the year 2016. Analysis was stratified by practice setting, considering both the freestanding non-facility-based (NFB) setting and the facility-based (FB) setting. Multivariable logistic regression was used to determine provider characteristics (gender, practice rurality, and years since graduation) that predicted for the use of 3D-conformal RT (3DCRT) planning, intensity-modulated RT (IMRT) planning, and brachytherapy planning in the Medicare population.

RESULTS

Three thousand twenty-nine physicians were linked for analysis. In both the FB and NFB settings together, male gender predicted for decreased likelihood of 3DCRT planning (OR, 0.70, 95% CI, 0.62 to 0.80, P < .001) and increased likelihood of IMRT planning (OR, 1.35, 95% CI, 1.19 to 1.54, P < .001). Brachytherapy planning was also more likely with increasing years since medical school graduation (OR, 1.03, 95% CI, 1.01 to 1.04, P < .001) in the combined FB and NFB settings. These significant associations persisted when examining the NFB and FB settings individually. In both settings overall, brachytherapy planning was more likely in male providers (OR, 1.75, 95% CI, 1.10 to 2.76, P = .02) and also more likely for providers practicing in metropolitan regions compared with those practicing in rural areas (OR, 3.01, 95% CI, 1.23 to 7.39, P = .02).

CONCLUSION

Male gender predicts for utilization of IMRT planning, whereas female gender predicts for utilization of 3DCRT planning. Future research is warranted to better understand the role that provider gender and rurality play in the selection of radiation planning techniques for Medicare patients.

Discovering healthcare provider behavior patterns through the lens of Medicare excess charge

BACKGROUND

The phenomenon of excess charge, where a healthcare service provider bills Medicare beyond the limit allowed for a medical procedure, is quite common in the United States public healthcare system. For example, in 2014, healthcare providers charged an average of 3.27 times (and up to 528 times) the allowable limit for cataract surgery. Previous research contends that such excess charges may be indicative of the actual amount that providers bill to non-Medicare patients and subsequent cost-shifting behavior, where a healthcare provider tries to recoup underpayment by Medicare from privately insured, self-pay, out-of-network, and uninsured patients.

OBJECTIVES

The objective of this study is to examine the drivers of a provider's excess charge patterns, especially the extent to which the degree of excess charges may be associated with physician characteristics, Medicare reimbursement policy, or socioeconomic status and demographics of a provider's patient base.

METHODS

Using data from the 2014 Medicare Provider Utilization files, we identify three procedures with the highest variation in Medicare reimbursements to study the excess charge phenomenon. We then employ a two-step cluster analysis within each procedure to identify distinct provider groups.

RESULTS

Each procedure code yielded distinct healthcare provider segments with specific patient demographics and related behavior patterns. Cluster silhouette coefficients indicate that these segments are unique. Three random subsamples from each procedure establish the stability of the clusters.

CONCLUSIONS

For each of the three procedures investigated in this study, a sizeable number of healthcare providers serving poorer, riskier patients are often paid significantly lower than their peers, and subsequently have the highest excess charges. For some providers, excess charges reveal possible cost-shifting to private insurance. Patterns of excess charges also indicate an imbalance of market power, especially in areas with lower provider competition and access to health care, thus leading to urban-rural healthcare disparities. Our results reinforce the call for price transparency and an upper limit to overbilling.

Differences Between Public And Private Hospital Payment Rates Narrowed, 2012-16

In 2000-12 payments for inpatient hospital stays, emergency department visits, and outpatient hospital care for privately insured patients grew much faster than payments for Medicare and Medicaid patients. This widening of private-public payment gaps slowed or even reversed itself in 2012-16.

Healthcare resource utilization and costs associated with first-line ibrutinib compared to chemoimmunotherapy treatment among Medicare beneficiaries with chronic lymphocytic leukemia

OBJECTIVE

This retrospective observational study aimed to compare healthcare resource utilization and costs of Medicare beneficiaries with chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) who received ibrutinib versus chemoimmunotherapy (CIT) in first line (1 L).

METHODS

Fee-for-service (FFS) and Medicare Advantage (MA) claims data were used to identify adults with a CLL/SLL diagnosis initiating 1 L ibrutinib single agent or CIT between 4 March 2016 and 30 September 2017 (index date). HRU and costs (Medicare spending) were evaluated during 1 L Oncology Care Model (1 L OCM) episodes (the first six months post-index) and over the observed 1 L duration. Patients' baseline characteristics were balanced using inverse probability of treatment weighting. Mean monthly cost differences (MMCDs) obtained from ordinary least square regressions were used to compare costs between ibrutinib and CIT cohorts.

RESULTS

In the Medicare FFS dataset (ibrutinib: n = 2014; CIT: n = 2050), ibrutinib patients incurred significantly higher monthly pharmacy costs (1 L OCM: MMCD = $4878, p < .0001; 1 L duration: MMCD= $4892, p < .0001) that were fully offset by lower monthly medical costs (1 L OCM: MMCD= -$8289, p < .0001; 1 L duration: MMCD=-$5888, p < .0001), yielding a monthly total healthcare cost reduction (1 L OCM: MMCD=-$3411, p < .0001; 1 L duration: MMCD=-$996, p < .0001) relative to CIT patients. In the MA dataset (ibrutinib: n = 293; CIT: n = 303), ibrutinib was also associated with a monthly total healthcare cost reduction (1 L OCM: MMCD=-$10,459; 1 L duration: MMCD=-$5492).

CONCLUSIONS

In Medicare patients with CLL/SLL, 1 L ibrutinib single agent was associated with total monthly cost savings relative to 1 L CIT, driven by lower monthly medical costs that fully offset higher monthly pharmacy costs.

Implementation Cost Analysis of an Intensive Comprehensive Aphasia Program

OBJECTIVE

To identify and measure the costs of implementing an intensive comprehensive aphasia program (ICAP).

DESIGN

Retrospective cost analysis of a clinical ICAP. Cost inputs were gathered directly from the provider of the ICAP. We performed several sensitivity analyses to examine major cost drivers and to separate start-up costs from operating costs.

SETTING

Urban rehabilitation hospital.

PARTICIPANTS

Adults with aphasia.

MAIN OUTCOME MEASURES

Total implementation cost to the provider.

RESULTS

Implementation cost of running the ICAP for the first time was $133,644 for a cohort of 8 participants with aphasia. Break-even charges per participant ranged from $15,278 for 10 participants to $19,700 for 6 participants. After accounting for start-up costs and efficiencies gained, the fourth and subsequent programs were estimated to cost $84,855 each. The majority of the costs were personnel costs, and the cost of the speech language pathologist's time was the main cost driver in this analysis.

CONCLUSIONS

Initial implementation costs are high compared with subsequent programs. Future work should examine effectiveness of an ICAP compared with other treatments to determine its cost-effectiveness.

Can Asia provide models for tax-based European health systems? A comparative study of Singapore and Sweden

Singapore's health system generates similar levels of health outcomes as does Sweden's but for only 4.4% rather than 11.0% of gross domestic product, with Singapore's resulting health sector savings being re-directed to help fund both long-term care and retirement pensions for its elderly citizens. This paper contrasts the framework of financial risk-sharing and the configuration and management of health service providers in these two high-income, small-population countries. Two main institutional distinctions emerge from this country case comparison: (1) Key differences exist in the practical configuration of solidarity for payment of health care services, reflecting differing cultural roots and social expectations, which in turn carry substantial implications for financing long-term care and pensions. (2) Differing arrangements exist in the organization of health service institutions, in particular balancing public as against private sector responsibilities for owning, operating and managing these two countries' respective hospitals. These different structural characteristics generate fundamental differences in health sector financial and delivery outcomes in one developed country in Far East Asia as compared with a well-respected tax-funded health system in Western Europe. In the post-COVID era, as Western European policymakers find themselves forced to adjust their publicly funded health systems to (further) reductions in economic growth rates and overall tax receipts, and as the cost of the information revolution continues to rise while efforts to fund better coordinated social and home care services for growing numbers of chronically ill elderly remain inadequate, this two-country case comparison highlights a series of health system design questions that could potentially provide alternative health sector financing and service delivery strategies.

Do We Get What We Pay For? Examining the Relationship Between Payments and Clinical Outcomes in High-Volume Elective Surgery in a Commercially-Insured Population

Studies evaluating the cost and quality of healthcare services have produced inconsistent results. We seek to determine if higher paid hospitals have higher quality outcomes compared to those receiving lower payments, after accounting for clinical and market level factors. Using inpatient commercial claims from the IBM^® MarketScan^® Research Databases, we used an ordinal logistic regression to analyze the association between hospital median payments for elective hip and knee procedures and 3 quality outcomes: prolonged length of stay, complication rate, and 30-day readmission rate. Patient-level and market factor covariates were appropriately adjusted. Hospital-level payments were found to be not significantly correlated with hospital quality of care. This research suggests that higher payments cannot predict higher quality outcomes. This finding has implications for provider-payer negotiations, value-based insurance designs, strategies to increase high-value care provision, and consumer choices in an increasingly consumer-oriented healthcare landscape.

Getting The Price Right: How Some Countries Control Spending In A Fee-For-Service System

Although the US has the highest health care prices in the world, the specific mechanisms commonly used by other countries to set and update prices are often overlooked, with a tendency to favor strategies such as reducing the use of fee-for-service reimbursement. Comparing policies in three high-income countries (France, Germany, and Japan), we describe how payers and physicians engage in structured fee negotiations and standardize prices in systems where fee-for-service is the main model of outpatient physician reimbursement. The parties involved, the frequency of fee schedule updates, and the scope of the negotiations vary, but all three countries attempt to balance the interests of payers with those of physician associations. Instead of looking for policy importation, this analysis demonstrates the benefits of structuring negotiations and standardizing fee-for-service payments independent of any specific reform proposal, such as single-payer reform and public insurance buy-ins.

Variations in surgical spending within hospital systems for complex cancer surgery

BACKGROUND

Approximately 70% of hospitals today are part of larger health systems. Proponents of hospital consolidation tout its potential to reduce health spending and improve outcomes, but to the authors' knowledge the available evidence has suggested that this promise is unrealized. Variations in costs and outcomes within systems may highlight opportunities for collaborative quality improvement and practice standardization. To assess this potential, the authors sought to measure variations in episode spending within and across hospital systems among Medicare beneficiaries undergoing complex cancer surgery.

METHODS

Using 100% Medicare claims data, the authors identified fee-for-service Medicare patients who were undergoing elective pancreatectomy, lung resection, or colectomy for cancer from 2014 through 2016. Risk-adjusted, price-standardized payments for the surgical episode from admission through 30 days after discharge were calculated. The authors then assessed the reliability-adjusted variations at the hospital and system levels.

RESULTS

Average episode payments varied nearly as much within hospital systems for pancreatectomy ($1946 between the lowest and highest spending systems; 95% CI, $1910-$1972), lung resection ($625 between the lowest and highest spending systems; 95% CI, $621-$630), and colectomy ($813 between the lowest and highest spending systems; 95% CI, $809-$817) as they did between the lowest and highest spending hospitals (pancreatectomy: $2034; lung resection: $1789; and colectomy: $770). For pancreatectomy, this variation was driven by index hospitalization spending whereas both index hospitalization and postacute care use drove variations for lung resection and colectomy.

CONCLUSIONS

In this analysis of Medicare patients undergoing complex cancer surgery, wide variations in surgical episode spending were noted both within and across hospital systems. System leaders may seek to better understand variations in practices among their hospitals to standardize care and reduce variations in outcomes, use, and costs.

The likely economic impact of fewer elective surgical procedures on US hospitals during the COVID-19 pandemic

BACKGROUND

To help control the coronavirus disease 2019 pandemic, elective procedures have been cancelled in most US hospitals by government order. The purpose of this study is to estimate national hospital reimbursement and net income losses owing to elective surgical procedure cancellation during the coronavirus disease 2019 pandemic.

METHODS

The National Inpatient Sample and the Nationwide Ambulatory Surgery Sample were used to identify all elective surgical procedures performed in the inpatient setting and in hospital-owned outpatient surgery departments throughout the United States. Total cost, reimbursement, and net income was determined for all elective surgical procedures.

RESULTS

The estimated total annual cost of elective inpatient and outpatient surgical procedures in the United States was $147.2 billion, and estimated total hospital reimbursement was $195.4 to $212.2 billion. This resulted in a net income of $48.0 to $64.8 billion per year to the US hospital system. Cancellation of all elective procedures would result in estimated losses of $16.3 to $17.7 billion per month in revenue and $4 to $5.4 billion per month in net income to US hospitals.

CONCLUSION

Cancellation of elective procedures during the coronavirus disease 2019 pandemic has a substantial economic impact on the US hospital system.

An Economic Perspective on the Affordable Care Act: Expectations and Reality

The Affordable Care Act (ACA) was enacted in 2010 to address both high uninsured rates and rising health care spending through insurance expansion reforms and efforts to reduce waste. It was expected to have a variety of impacts in areas within the purview of economics, including effects on health care coverage, access to care, financial security, labor market decisions, health, and health care spending. To varying degrees, legislative, executive, and judicial actions have altered its implementation, affecting the extent to which expectations in each of these dimensions have been realized. We review the ACA's reforms, the subsequent actions that countered them, and the expected and realized effects on coverage, access to care, financial security, health, labor market decisions, and health care spending.

Comparatively Ineffective? PCORI and the Uphill Battle to Make Evidence Count in US Medicine

The Patient-Centered Outcomes Research Institute (PCORI) was established as part of the Affordable Care Act to promote research on the comparative effectiveness of treatment options. Advocates hoped this information would help reduce wasteful spending by identifying low-value treatments, but many conservatives and industry groups feared PCORI would ration care and threaten physicians' autonomy. PCORI faced three challenges during its first decade of operation: overcoming the controversy of its birth and escaping early termination, shaping medical practice, and building a public reputation for relevance. While PCORI has won reauthorization, it has not yet had a major impact on the decisions of clinicians or payers. PCORI's modest footprint reflects not only the challenges of getting a new organization off the ground but also the larger political, financial, and cultural barriers to the uptake of medical evidence in the US health care system. The growing attention among policymakers and researchers to provider prices (rather than utilization) as the driver of health care spending could be helpful to the political prospects of the evidence-based medicine project by making it appear to be less as rationing driven by costs and more as an effort to improve quality and uphold medical professionalism.

Do the uninsured demand less care? Evidence from Maryland's hospitals

Uninsured individuals receive fewer healthcare services for at least three reasons: responsibility for the entire bill, higher prices, and potential provider reductions for concern of nonpayment. I isolate reductions when uninsured patients are solely financially responsible by capitalizing on Maryland's highly regulated health care system. Prices are set by the state, are uniform across all patients, and hospitals are compensated for free care and bad debt. I use a unique feature of the data, multiple readmissions for patients who gain or lose insurance between visits, to isolate the reductions in quantity demanded when individuals are faced with paying the full price without an insurance contribution. A Blinder-Oaxaca decomposition estimates uninsured individuals receive 6% fewer services after accounting for differences in patient, illness, and hospital characteristics than when these same individuals are insured.

Trends in Total and Out-of-Pocket Expenditures for Visits to Primary Care Physicians, by Insurance Type, 2002-2017

PURPOSE

Total and out-of-pocket visit expenditures for primary care physician visits may affect how primary care is delivered. We determined trends in these expenditures for visits to US primary care physicians.

METHODS

Using the 2002-2017 Medical Expenditure Panel Survey, we ascertained changes in total and out-of-pocket visit expenditures for primary care visits for Medicare, Medicaid, and private insurance. We calculated mean values for each insurer using a generalized linear model and a 2-part model, respectively.

RESULTS

Analyses were based on 750,837 primary care visits during 2002-2017. Over time, the proportion of primary care visits associated with private insurance or no insurance decreased, while Medicare- or Medicaid-associated visits increased. The proportion of visits with $0 out-of-pocket expenditure increased, primarily from an increase in $0 private insurance visits. Total expenditure per visit increased for private insurance and Medicare visits, but did not notably change for Medicaid visits. Out-of-pocket expenditures rose primarily from increases in private insurance visits with higher expenditures of this type. Medicare and Medicaid had minimal change in out-of-pocket expenditure per visit.

CONCLUSIONS

Between 2002 and 2017, mean total expenditures and out-of-pocket expenditures increased for primary care visits, but at notably lower rates than those previously documented for emergency department visits. A rise in total expenditure per visit was identified for private insurance and Medicare, but not for Medicaid. Out-of-pocket expenditures increased marginally related to changes in out-of-pocket expenditures for private insurance visits. We would expect increasing difficulty with primary care physician access, particularly for Medicaid patients, if the current trends continue.

Power and Purchasing: Why Strategic Purchasing Fails

Policy Points Strategically purchasing health care has been and continues to be a popular policy idea around the world. Key asymmetries in information, market power, political power, and financial power hinder the effective implementation of strategic purchasing. Strategic purchasing has consistently failed to live up to its promises for these reasons. Future strategies based on strategic purchasing should tailor their expectations to its real effectiveness.

CONTEXT

Strategic purchasing of health care has been a popular policy idea around the world for decades, with advocates claiming that it can lead to improved quality, patient satisfaction, efficiency, accountability, and even population health. In this article, we report the results of an inquiry into the implementation and effects of strategic purchasing.

METHODS

We conducted three in-depth case studies of England, the Netherlands, and the United States. We reviewed definitions of purchasing, including its slow acquisition of adjectives such as strategic, and settled on a definition of purchasing that distinguishes it from the mere use of contracts to regulate stable interorganizational relationships. The case studies review the career of strategic purchasing in three different systems where its installation and use have been a policy priority for years.

FINDINGS

No existing health care system has effective strategic purchasing because of four key asymmetries: market power asymmetry, information asymmetry, financial asymmetry, and political power asymmetry.

CONCLUSIONS

Further investment in policies that are premised on the effectiveness of strategic purchasing, or efforts to promote it, may not be worthwhile. Instead, policymakers may need to focus on the real sources of power in a health care system. Policy for systems with existing purchasing relationships should take into account the asymmetries, ways to work with them, and the constraints that they create.

Do hospitals respond to changing incentive structures? Evidence from Medicare's 2007 DRG restructuring

In 2007, the Centers for Medicare and Medicaid restructured the diagnosis related group (DRG) system by expanding the number of categories within a DRG to account for complications present within certain conditions. This change allows for differential reimbursement depending on the severity of the case. We examine whether this change incentivized hospitals to upcode patients as sicker to increase their reimbursements. Using the National Inpatient Survey data from HCUP from 2005 to 2010 and three methods to detect the presence of upcoding, our most conservative estimate is an additional three percent of reimbursement is attributable to upcoding. We find evidence of upcoding in government, non-profit, and for-profit hospitals. We find spillover effects of upcoding impacting not only Medicare payers, but also private insurance companies as well.

Randomized trial shows healthcare payment reform has equal-sized spillover effects on patients not targeted by reform

Changes in the way health insurers pay healthcare providers may not only directly affect the insurer's patients but may also affect patients covered by other insurers. We provide evidence of such spillovers in the context of a nationwide Medicare bundled payment reform that was implemented in some areas of the country but not in others, via random assignment. We estimate that the payment reform-which targeted traditional Medicare patients-had effects of similar magnitude on the healthcare experience of nontargeted, privately insured Medicare Advantage patients. We discuss the implications of these findings for estimates of the impact of healthcare payment reforms and more generally for the design of healthcare policy.

Use of Optimal Evidence-Based Anticancer Drug Regimens in Physician Offices Versus Hospital Outpatient Facilities

PURPOSE:

Cancer care has increasingly shifted from physician offices (MDOs) to hospital-based outpatient departments (HOPDs). This study compared the proportion of patients receiving optimal, evidence-based anticancer drug regimens and the cost of care when administered in these sites.

METHODS:

Patients with breast, lung, or colorectal cancer were identified from a large health insurance database. Anticancer drug regimens were considered on pathway when they were on the payer’s program list of optimal regimens when administered. Anticancer drug–related costs included all patient- and plan-paid costs on claims for anticancer drugs over the 6-month postindex period; total per-patient costs were summed over all claims in that period.

RESULTS:

A total of 38,140 patients (MDO, n = 18,998; HOPD, n = 19,142) were included. On-pathway status was similar in HOPDs (59.5%; 95% CI, 58.6% to 60.4%) versus MDOs (60.8%; 95% CI, 59.8% to 61.8%; P = .069). HOPDs had substantially higher costs. Adjusted cancer drug–related costs were $63,763 (95% CI, $62,301 to $65,224) for HOPDs versus $36,500 (95% CI, $35,729 to $37,271) for MDOs ( P < .001); adjusted total costs were $115,843 (95% CI, $113,642 to $118,044) for HOPDs versus $77,346 (95% CI, $76,072 to $78,620) for MDOs ( P < .001). For Medicare Advantage, adjusted total costs were $61,812 for HOPDs compared with $62,769 for MDOs; adjusted drug-related costs were $31,610 for HOPDs compared with $33,168 for MDOs. For commercial insurance, total costs were $119,288 for HOPDs compared with $77,613 for MDOs; drug-related costs were $65,930 for HOPDs compared with $36,366 for MDOs.

CONCLUSION:

Total and cancer drug–related per-patient costs were higher in HOPDs versus MDOs, but on-pathway status was similar. The cost differential between HOPDs and MDOs was driven by commercially insured members rather than Medicare Advantage members.

Sources of Geographic Variation in Health Care Spending Among Individuals With Employer Sponsored Insurance

We use health care claims data from the Health Care Cost Institute to estimate the share of geographic variation in health care spending attributable to person-specific (demand) and place-specific (supply) factors. We exploit patient migration across 112 metropolitan areas between 2012 and 2016. Using an event study approach, we find that moving to an area with 10% higher (lower) spending leads to a 4.2% increase (decrease) in individual medical spending. Our estimate implies that 42% of variation in health care spending among the commercially insured is attributable to place-specific factors. We show that variation in both price and utilization jointly determine the place-specific impact on individual spending. All else equal, we find that moving to an area with 10% higher (lower) prices, on average leads to a 5% increase (decrease) in spending, while moving to an area with 10% higher (lower) utilization leads to a 3.6% increase (decrease).

Does Multispecialty Practice Enhance Physician Market Power?

In health care, vertical integration - common ownership of producers of complementary services - may have both pro- and anti-competitive effects. We use data on 40 million commercially-insured individuals from the Health Care Cost Institute to construct price indices for office visits to general-practice and specialist physicians for the years 2008-2012. Controlling for generalist market concentration, we find that generalists charge higher prices when they are integrated with specialists, and that the effect of integration is larger in more concentrated specialist markets. Conversely, controlling for specialist market concentration, specialists charge higher prices when integrated with generalists, with larger effects in more concentrated generalist markets. Our results suggest that multispecialty practice enhances physician market power.

The impact of price transparency on consumers and providers: A scoping review

Escalating levels of healthcare spending and price variation in the healthcare market have driven government and insurer interest in price transparency tools that are intended to help consumers shop for services and reduce overall healthcare spending. However, it is unclear whether the objectives of price transparency are being achieved. We conducted a scoping review to synthesize the impact of price transparency on consumer, provider, and purchaser behaviours and outcomes. Price transparency tools had weak impact overall on consumers due to low uptake, and mixed effects on providers. Price-aware patients chose less costly services that led to out-of-pocket cost savings and savings for health insurers; however, these savings did not translate into reductions in aggregate healthcare spending. Disclosure of list prices had no effect, however disclosure of negotiated prices prompted supply-side competition which led to decreases in prices for shoppable services.

The association between patient sharing network structure and healthcare costs

STUDY QUESTION

While physician relationships (measured through shared patients) are associated with clinical and utilization outcomes, the extent to which this is driven by local or global network characteristics is not well established. The objective of this research is to examine the association between local and global network statistics with total medical spending and utilization.

DATA SOURCE

Data used are the 2011 Massachusetts All Payer Claims Database.

STUDY DESIGN

The association between network statistics and total medical spending and utilization (using standardized prices) is estimated using multivariate regression analysis controlling for patient demographics and health status.

DATA COLLECTION

We limit the sample to continuously enrolled commercially insured patients in Massachusetts in 2011.

PRINCIPAL FINDINGS

Mean patient age was 45 years, and 56.3% of patients were female. 73.4% were covered by a health maintenance organization. Average number of visits was 5.43, with average total medical spending of $4,911 and total medical utilization of $4,252. Spending was lower for patients treated by physicians with higher degree (p<0.001), eigenvector centrality (p<0.001), clustering coefficient (p<0.001), and measures reflecting the normalized degree (p<0.001) and eigenvector centrality (p<0.001) of specialists connected to a patient's PCP. Spending was higher for patients treated by physicians with higher normalized degree, which accounts for physician specialty and patient panel size (p<0.001). Results were similar for utilization outcomes, although magnitudes differed indicating patients may see different priced physicians.

CONCLUSIONS

Generally, higher values of network statistics reflecting local connectivity adjusted for physician characteristics are associated with increased costs and utilization, while higher values of network statistics reflecting global connectivity are associated with decreased costs and utilization. As changes in the financing and delivery system advance through policy changes and healthcare consolidation, future research should examine mechanisms through which this structure impacts outcomes and potential policy responses to determine ways to reduce costs while maintaining quality and coordination of care.

WHAT THIS STUDY ADDS

It is unknown whether local and global measures of physician network connectivity associated with spending and utilization for commercially insured patients?In this social network analysis, we found generally higher values of network statistics reflecting local connectivity are associated with increased costs and utilization, while higher values of network statistics reflecting global connectivity are associated with decreased costs and utilization.Understanding how to influence local and global physician network characteristics may be important for reducing costs while maintaining quality.

Association of a national insurer's reference-based pricing program and choice of imaging facility, spending, and utilization

OBJECTIVE

To examine the association of a national insurer's reference-based pricing (RBP), program for outpatient advanced imaging-a benefit design to encourage patients to choose lower-price facilities.

DATA SOURCE/STUDY SETTING

Administrative and medical claims data for three self-insured employers that introduced RBP and a comparison group without RBP.

STUDY DESIGN

Difference-in-difference comparison of pre-RBP (2014) and post-RBP (2015-6) care between intervention and comparison groups.

DATA COLLECTION/EXTRACTION METHOD

We identified 137 680 imaging procedures (4602 intervention group; 133 078 comparison group) in 2014-2016.

PRINCIPAL FINDINGS

In the first post-RBP year (2015), there was no change in choice of facility; by the second year, RBP-exposed enrollees were 21.9 pp (95% CI: 18.5, 25.3) more likely to choose a lower-priced facility and net prices were $101.05 (95% CI: -$130.65, -$71.46), a difference of 8.1 percent lower. RBP was associated with higher patient out-of-pocket spending in the first post-RBP year ($31.82; 95% CI: $10.91, $52.73). There was no change in utilization, and higher-priced providers did not lower prices in the postperiod. Net savings represented 0.3 percent of outpatient spending.

CONCLUSIONS

Reference-based pricing for advanced imaging was associated with a shift to lower-priced facilities, but net impact on outpatient spending was modest. Patients paid increased out-of-pocket costs, though the amount declined after the first year of the program.

Low risk, high reward? Repeated competitive biddings with multiple winners in health care

We study physiotherapy providers' prices in repeated competitive biddings where multiple providers are accepted in geographical districts. Historically, only very few districts have rejected any providers. We show that this practice increased prices and analyze the effects the risk of rejection has on prices. Our data are derived from three subsequent competitive biddings. The results show that rejecting at least one provider decreased prices by more than 5% in the next procurement round. The results also indicate that providers have learned to calculate their optimal bids, which has also increased prices. Further, we perform counterfactual policy analysis of a capacity-rule of acceptance. The analysis shows that implementing a systematic acceptance rule results in a trade-off between direct cost savings and service continuity at patients' usual providers.

Understanding Geographic Variation in Systemic Overuse Among the Privately Insured

BACKGROUND

Medical care overuse is a significant source of patient harm and wasteful spending. Understanding the drivers of overuse is essential to the design of effective interventions.

OBJECTIVE

We tested the association between structural factors of the health care delivery system and regional differences systemic overuse.

RESEARCH DESIGN

We conducted a retrospective analysis of deidentified claims for 18- to 64-year-old adults from the IBM MarketScan Commercial Claims and Encounters Database. We calculated a semiannual Johns Hopkins Overuse Index for each of the 375 Metropolitan Statistical Areas in the United States, from January 2011 to June 2015. We fit an ordinary least squares regression to model the Johns Hopkins Overuse Index as a function of regional characteristics of the health care system, adjusted for confounders and time.

RESULTS

The supply of regional health care resources was associated with systemic overuse in commercially insured beneficiaries. Regional characteristics associated with systemic overuse included number of physicians per 1000 residents (P=0.001) and higher Medicare malpractice geographic price cost index (P<0.001). Regions with a higher density of primary care physicians (P=0.008) and a higher proportion of hospital-based providers (P=0.016) had less systemic overuse. Differences in hospital and insurer market power were inversely associated with systemic overuse.

CONCLUSIONS

Systemic overuse is associated with observable, structural characteristics of the regional health care system. These findings suggest that interventions that aim to improve care efficiency via reductions in overuse should focus on the structural drivers of this phenomenon, rather than on the eradication of individual overused procedures.

Most Patients Undergoing Ground And Air Ambulance Transportation Receive Sizable Out-Of-Network Bills

"Surprise" out-of-network bills have come under close scrutiny, and while ambulance transportation is known to be a large component of the problem, its impact is poorly understood. We measured the prevalence and financial impact of out-of-network billing in ground and air ambulance transportation. For members of a large national insurance plan in 2013-17, 71 percent of all ambulance rides involved potential surprise bills. For both ground and air ambulances, out-of-network charges were substantially greater than in-network prices, resulting in median potential surprise bills of $450 for ground transportation and $21,698 for air transportation. Though out-of-network air ambulance bills were larger, out-of-network ground ambulance bills were more common, with an aggregate impact of $129 million per year. Out-of-network air ambulance bills averaged $91 million per year, rising from $41 million in 2013 to $143 million in 2017. Federal proposals to limit surprise out-of-network billing should incorporate protections for patients undergoing ground or air ambulance transportation.

Market Share of US Catholic Hospitals and Associated Geographic Network Access to Reproductive Health Services

IMPORTANCE

Access to reproductive health services is a public health goal. It is unknown how geographic and health plan network availability of Catholic and non-Catholic hospitals may be associated with access to reproductive health services in the United States.

OBJECTIVE

To characterize the market share of Catholic hospitals in the United States, both overall and within Marketplace health insurance plans' hospital networks.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional study of US counties used data on hospitals' Catholic affiliation and discharges, hospital networks in Marketplace health insurance plans, and US Census population data to construct a national, county-level data set. The Catholic hospital market share overall in each county and in Marketplace plans' hospital networks in each county were calculated. The study examined whether the Catholic hospital market share was different within Marketplace networks compared with the counties they served. Data analysis was conducted in May and June 2018.

MAIN OUTCOMES AND MEASURES

The overall Catholic hospital market share was calculated on the basis of the share of discharges in Catholic hospitals in a county compared with all hospital discharges. Overall market share was categorized as minimal (≤2%), low (>2% to ≤20%), high (>20% to ≤70%), or dominant (>70%). The Catholic hospital market share in Marketplace networks was calculated as the share of Catholic hospital discharges in each Marketplace network.

RESULTS

The sample included 4450 hospitals in 3101 counties. Overall, 26.1% of US counties had minimal Catholic hospital market share, 38.6% had low Catholic hospital market share, and 35.3% had high or dominant Catholic hospital market share; 38.7% of US reproductive-aged women resided in counties with high or dominant Catholic hospital market share. Among counties with Catholic hospital market share greater than 2%, the distribution of the median Marketplace network's Catholic hospital market share (median [interquartile range], 4.6% [0%-24.3%]) was lower than overall Catholic hospital market share (median [interquartile range], 18.5% [8.1%-36.5%]). The median Marketplace hospital network had a lower Catholic hospital market share than the county overall in 68.0% of US counties with Catholic hospital market share greater than 2%.

CONCLUSIONS AND RELEVANCE

In this national study, 35.3% of counties had high or dominant Catholic hospital market share serving an estimated 38.7% of US women of reproductive age. Marketplace health insurance plans' hospital networks included a lower share of Catholic hospitals than the counties they serve.

Changes in Quality of Care after Hospital Mergers and Acquisitions

BACKGROUND

The hospital industry has consolidated substantially during the past two decades and at an accelerated pace since 2010. Multiple studies have shown that hospital mergers have led to higher prices for commercially insured patients, but research about effects on quality of care is limited.

METHODS

Using Medicare claims and Hospital Compare data from 2007 through 2016 on performance on four measures of quality of care (a composite of clinical-process measures, a composite of patient-experience measures, mortality, and the rate of readmission after discharge) and data on hospital mergers and acquisitions occurring from 2009 through 2013, we conducted difference-in-differences analyses comparing changes in the performance of acquired hospitals from the time before acquisition to the time after acquisition with concurrent changes for control hospitals that did not have a change in ownership.

RESULTS

The study sample included 246 acquired hospitals and 1986 control hospitals. Being acquired was associated with a modest differential decline in performance on the patient-experience measure (adjusted differential change, -0.17 SD; 95% confidence interval [CI], -0.26 to -0.07; P = 0.002; the change was analogous to a fall from the 50th to the 41st percentile) and no significant differential change in 30-day readmission rates (-0.10 percentage points; 95% CI, -0.53 to 0.34; P = 0.72) or in 30-day mortality (-0.03 percentage points; 95% CI, -0.20 to 0.14; P = 0.72). Acquired hospitals had a significant differential improvement in performance on the clinical-process measure (0.22 SD; 95% CI, 0.05 to 0.38; P = 0.03), but this could not be attributed conclusively to a change in ownership because differential improvement occurred before acquisition.

CONCLUSIONS

Hospital acquisition by another hospital or hospital system was associated with modestly worse patient experiences and no significant changes in readmission or mortality rates. Effects on process measures of quality were inconclusive. (Funded by the Agency for Healthcare Research and Quality.).