Pricing distortions in Medicare's physician fee schedule and patient satisfaction with care quality and access

Health-care quality and information failure: Evidence from Nigeria

Low-quality health services are a problem across low- and middle-income countries. Information failure may contribute, as patients may have insufficient knowledge to discern the quality of health services. That decreases the likelihood that patients will sort into higher quality facilities, increasing demand for better health services. This paper presents results from a health survey in Nigeria to investigate whether patients can evaluate health service quality effectively. Specifically, this paper demonstrates that although more than 90% of patients agree with any positive statement about the quality of their local health services, satisfaction is significantly associated with the diagnostic ability of health workers at the facility. Satisfaction is not associated with more superficial characteristics such as infrastructure quality or prescriptions of medicines. This suggests that patients may have sufficient information to discern some of the most important elements of quality, but that alternative measures are crucial for gauging the overall quality of care.

Supplemental Insurance and Racial Health Disparities under Medicare Part B

OBJECTIVE

To assess the impact of preferences, socioeconomic status (SES), and supplemental insurance (SI) on racial/ethnic disparities in the probability and use of services at physicians' offices, hospitals, and emergency departments among Medicare beneficiaries enrolled in Part B.

RESEARCH DESIGN AND SUBJECTS

This study includes black and white beneficiaries from the 2009-2011 panel of the Medicare Current Beneficiary Survey who were enrolled in Medicare Part B. Logit and negative binomial multivariate regression analysis were used in conjunction with rank-and-replace methods to determine factors influencing utilization and black-white utilization disparities.

PRINCIPAL FINDINGS

Among Part B beneficiaries, significant disparities exist for each studied service. Examining contributing factors, 12-19 percent of the black-white health-adjusted difference in the probability of use is explained by differences in SES, whereas differences in the distribution of SI accounts for 20 percent or more. For volume, SES is found to account for 2-11 percent of differences with SI making up another 9-10 percent.

CONCLUSIONS

A substantial portion of the difference in black-white beneficiary use of outpatient services is due to SI. Policies aimed at increasing coverage are likely to increase the probability of visits with modest increases in volume.

Medicare Part B Intensity and Volume Offset

Under Medicare Part B, adjustments to the fee schedule are made under the assumption that physicians and hospitals make up for fee reductions through increased service provision called 'volume offsetting'. While historically, researchers have found evidence of volume offsetting, more recent studies have called into question its magnitude and existence. This study is the first to propose and empirically evaluate an alternative hypothesis of offsetting, namely the alteration of billed or provided services as a means of 'intensity offsetting'. Evaluating both forms of offsetting, it finds strong evidence of intensity offsetting and little to no evidence of volume offsetting. Simulating a 10% reduction in the Medicare fee schedule, this study estimates that across different procedures between 22% and 59% of a fee reduction will be offset through alterations in service intensity.