Who Ordered That? The Economics of Treatment Choices in Medical Care

The impact of an innovative payment method on medical expenditure, efficiency, and quality for inpatients with different types of medical insurance: evidence from a pilot city, China

BACKGROUND

Since 2020, China has implemented an innovative payment method called Diagnosis-Intervention Packet (DIP) in 71 cities nationwide. This study aims to assess the impact of DIP on medical expenditure, efficiency, and quality for inpatients covered by the Urban Employee Basic Medical Insurance (UEBMI) and Urban and Rural Residents Basic Medical Insurance (URRBMI). It seeks to explore whether there are differences in these effects among inpatients of the two insurance types, thereby further understanding its implications for health equity.

MATERIALS AND METHODS

We conducted interrupted time series analyses on outcome variables reflecting medical expenditure, efficiency, and quality for both UEBMI and URRBMI inpatients, based on a dataset comprising 621,125 inpatient reimbursement records spanning from June 2019 to June 2023 in City A. This dataset included 110,656 records for UEBMI inpatients and 510,469 records for URRBMI inpatients.

RESULTS

After the reform, the average expenditure per hospital admission for UEBMI inpatients did not significantly differ but continued to follow an upward pattern. In contrast, for URRBMI inpatients, the trend shifted from increasing before the reform to decreasing after the reform, with a decline of 0.5%. The average length of stay for UEBMI showed no significant changes after the reform, whereas there was a noticeable downward trend in the average length of stay for URRBMI. The out-of-pocket expenditure (OOP) per hospital admission, 7-day all-cause readmission rate and 30-day all-cause readmission rate for both UEBMI and URRBMI inpatients showed a downward trend after the reform.

CONCLUSION

The DIP reform implemented different upper limits on budgets based on the type of medical insurance, leading to varying post-treatment prices for UEBMI and URRBMI inpatients within the same DIP group. After the DIP reform, the average expenditure per hospital admission and the average length of stay remained unchanged for UEBMI inpatients, whereas URRBMI inpatients experienced a decrease. This trend has sparked concerns about hospitals potentially favoring UEBMI inpatients. Encouragingly, both UEBMI and URRBMI inpatients have seen positive outcomes in terms of alleviating patient financial burdens and enhancing the quality of care.

The medical competence of health care providers in sub-Saharan Africa: Evidence from 16 127 providers across 11 countries

Despite a consensus that quality of care is critically deficient in low-income countries, few nationally representative studies provide comparable measures of quality of care across countries. To address this gap, we used nationally representative data from in-person administrations of clinical vignettes to measure the competence of 16 127 health care providers across 11 sub-Saharan African countries. Rather than large variations across countries, we found that 81% of the variation in competence is within countries and the characteristics of health care providers do not explain most of this variation. Professional qualifications-including cadre and education-are only weakly associated with competence: across our sample, one-third of nurses are more competent than the average doctor in the same country and one-quarter of doctors are less competent than the average nurse. Finally, while younger cohorts do tend to be more competent, perhaps reflecting improvements in medical education, it would take 25 decades of turnover to improve care by 10 percentage points, on average, if we were to rely on such improvements alone. These patterns necessitate a fundamentally different approach to health care human resource management, calling into question typical staffing policies based on qualifications and seniority rather than directly measured quality.

Explaining why increases in generic use outpace decreases in brand name medicine use in multisource markets and the role of regulation

BACKGROUND

Healthcare systems worldwide face escalating pharmaceutical expenditures despite interventions targeting pricing and generic substitution. Existing studies often overlook unwarranted volume increases in multisource markets due to differential physician perceptions of brand name and generics.

OBJECTIVE

This study aims to explain the outpacing of generic medicine use over brand name use in multisource markets and assess the regulatory role, specifically examining the impact of reference pricing on volume and intensity increases.

METHODS

Analyzing German multisource prescription medicine markets from 2011 to 2014, we evaluate regulatory mechanisms and explore whether brand name and generic medicines constitute separate market segments. Using an Oaxaca-Blinder decomposition approach, we divide the differential in brand name versus generic medicine use rates into market structure and unobserved segment effects.

RESULTS

Generic use rates surpass same-market brand name substitution by 3.87 prescriptions per physician and medicine, on average. Reference pricing mitigated volume increase, treatment intensity and expenditure. Disparities in quantity and expenditure dynamics between brand name and generic segments are partially explained by market structure and segment effects.

CONCLUSION

Generic medicine use effectively reduces expenditures but contributes to increased net prescription rates. Reference pricing may control medicine use, but divergent physician perceptions of brand name and generics, revealed by identified segment effects, call for nuanced policy interventions.

Experimental evidence on the role of shared protocols as coordination device on clinical best practices

Our experiment assesses the level of coordination on clinical best practice among physicians and investigates whether the release of guidelines helps in supporting coordination. Based on three clinical vignettes using current national guidelines, physicians evaluate the appropriateness of each of the proposed courses of action. Afterwards, physicians are allowed to ask which action corresponds to national guidelines and change their ratings, if desired. On average, slightly more than half of the sample coordinated on appropriateness evaluations. Empirical analysis indicates that several organizational and individual variables influence the level of coordination. Additionally, the release of national guidelines improved both the level of conformity and coordination. Our findings suggest changes in implementation practices to increase the impact of these shared protocols in the health field.

Insurance barriers and inequalities in health care access: evidence from dual practice

BACKGROUND

We investigate access disparities in pharmaceutical care among German patients with type 2 diabetes, focusing on differences between public and private health insurance schemes. The primary objectives include investigating whether patients with private health insurance experience enhanced access to antidiabetic care and analyzing whether the treatment received by public and private patients is influenced by the practice composition, particularly the proportion of private patients.

METHODS

We estimate fixed effect regression models, to isolate the effect of insurance schemes on treatment choices. We utilize data from a prescriber panel comprising 681 physicians collectively serving 68,362 patients undergoing antidiabetic treatments.

RESULTS

The analysis reveals a significant effect of the patient's insurance status on antidiabetic care access. Patients covered by private insurance show a 10-percentage-point higher likelihood of receiving less complex treatments compared to those with public insurance. Furthermore, the composition of physicians' practices plays a crucial role in determining the likelihood of patients receiving less complex treatments. Notably, the most pronounced disparities in access are observed in practices mirroring the regional average composition.

CONCLUSIONS

Our findings underscore strategic physician navigation across diverse health insurance schemes in ambulatory care settings, impacting patient access to innovative treatments.

The unexpected costs of expertise: evidence from highly specialized physicians

High U.S. spending on health care is commonly attributed to its intensity of specialized, high-tech medical care. A growing body of research focuses on physicians whose medical decisions shape treatment intensity, costs, and patient outcomes. Often overlooked in this research is the assignment of physician skills to patient conditions, which may strongly affect health outcomes and productivity. This matching may be especially important in the case of hospital admissions as high-frequency fluctuations in patient flow make it challenging to maintain effective matches between the best-suited physicians and their patients. This paper focuses on hospitals' responses to demand shocks induced by unscheduled high-risk admissions. I show that these demand shocks result in physician-patient mismatches when hospitals are congested. Specifically, highly specialized physicians who are brought in to treat unscheduled high-risk admissions also treat previously admitted lower-risk patients. This leads to increased treatment intensity for lower-risk patients, which I attribute to persistence in physician practice style. Despite the greater treatment intensity, I find no detectable improvement in health outcomes, which prima facie could be viewed as waste. However, this paper demonstrates that such mismatches mostly happen when the cost of maintaining preferred physician-patient matching is high, which reflects hospitals' conscientious assessment of costs and benefits and should not be simply interpreted as inefficiency. These findings provide vital information for policy-makers looking to identify waste in utilization and create incentives to enhance efficiency in the health care sector.

Physician Variation and the Impact of Payment Model in Cardiac Imaging

BACKGROUND

The influence of fee-for-service reimbursement on cardiac imaging has not been compared with other payment models. Furthermore, variation in ordering practices is not well understood.

METHODS AND RESULTS

This retrospective, population-based cohort study using linked administrative data from Alberta, Canada included adults with chronic heart disease (atrial fibrillation, coronary artery disease, and heart failure) seen by cardiac specialists for a new outpatient consultation April 2012 to December 2018. Generalized linear mixed-effects models estimated the association of payment model (including the ability to bill to interpret imaging tests) and the use of cardiac imaging and quantified variation in cardiac imaging. Among 31 685 adults seen by 308 physicians at 136 sites, patients received an observed mean of 0.67 (95% CI, 0.67-0.68) imaging tests per consultation. After adjustment, patients seeing fee-for-service physicians had 2.07 (95% CI, 1.68-2.54) and fee-for-service physicians with ability to interpret had 2.87 (95% CI, 2.16-3.81) times the rate of receiving a test than those seeing salaried physicians. Measured patient, physician, and site effects accounted for 31% of imaging variation and, following adjustment, reduced unexplained site-level variation 40% and physician-level variation 29%.

CONCLUSIONS

We identified substantial variation in the use of outpatient cardiac imaging related to physician and site factors. Physician payment models have a significant association with imaging use. Our results raise concern that payment models may influence cardiac imaging practice. Similar methods could be applied to identify the source and magnitude of variation in other health care processes and outcomes.

Passing on the hot potato. Dutch municipalities under financial pressure have incentives to shift the costs of social care for older people to the central government

In view of the impending ageing of the population, countries have been searching for ways to restructure their social care system. Reforms often involve a decentralisation of authority from central to local government. Although such a decentralisation presents the opportunity to be receptive to social demand, it could provide the incentive for local governments that bear the burden of the costs to (partly) transfer their costs back to the central level. In this paper we examine the impact of fiscal distress of municipalities on cost-shifting behaviour to the central long-term care system in the Netherlands. Using data on both the municipal level as well as the level of individual applicants for the period 2016-2019, we find that municipalities with fiscal distress in social care have higher percentages of applications for centrally funded long-term care. However, we also observe that higher percentages of applications and rejections are positively correlated suggesting that the Dutch independent need assessor has the capacity to (partly) discard cost-shifted applications.

Exploring the impact of clawback on pharmaceutical expenditure: A case study of public hospitals in Greece

Several European administrations have applied various mechanisms promoting cost containment to stabilise their budgets for pharmaceutical expenditure. Since 2016, Greece has adopted the clawback as a policy to contain the NHS hospitals' pharmaceutical expenditure, which increased significantly in the 2016-2020 period. The present study reviews the impact of this policy on the operation of NHS hospitals, the uninterrupted supply and rational use of their medicines, along with the sustainability of their finances. The trend of pharmaceutical expenditure for the period 2016-2020 is combined with further analysis of detailed drug consumption data of 15 sampled NHS hospitals. The data is classified by Anatomical Therapeutic Category (ATC) and the percentage of clawback distributed to each ATC and pharmaceutical company is calculated. It was found that a large proportion of the clawback is allocated to a few therapeutic categories (ATCs) and consequently, few pharmaceutical companies are particularly burdened. The increased burden on pharmaceutical companies, due to the continuous increase in the excessive pharmaceutical expenditure of the NHS hospitals and their limited budget, endangers the uninterrupted supply of medicines to hospitals and the viability of pharmaceutical companies. This issue was discussed in a scientific consensus group*, in which participants proposed ways to keep the level of pharmaceutical expenditure in line with patients' needs, the country's economic potential, and the sustainability of pharmaceutical companies.

Variation in Low-Value Service Use Across Veterans Affairs Facilities

BACKGROUND

It is unclear whether extensive variation in the use of low-value services exists even within a national integrated delivery system like the Veterans Health Administration (VA).

OBJECTIVE

To quantify variation in the use of low-value services across VA facilities and examine associations between facility characteristics and low-value service use.

DESIGN

In this retrospective cross-sectional study of VA administrative data, we constructed facility-level rates of low-value service use as the mean count of 29 low-value services per 100 Veterans per year. Adjusted rates were calculated via ordinary least squares regression including covariates for Veteran sociodemographic and clinical characteristics. We quantified the association between adjusted facility-level rates and facility geographic/operational characteristics.

PARTICIPANTS

5,242,301 patients across 139 VA facilities.

MAIN MEASURES

Use of 29 low-value services within six domains: cancer screening, diagnostic/preventive testing, preoperative testing, imaging, cardiovascular testing and procedures, and surgery.

KEY RESULTS

The mean rate of low-value service use was 20.0 services per 100 patients per year (S.D. 6.1). Rates ranged from 13.9 at the 10th percentile to 27.6 at the 90th percentile (90th/10th percentile ratio 2.0, 95% CI 1.8‒2.3). With adjustment for patient covariates, variation across facilities narrowed (S.D. 5.2, 90th/10th percentile ratio 1.8, 95% CI 1.6‒1.9). Only one facility characteristic was positively associated with low-value service use percent of patients seeing non-VA clinicians via VA Community Care, p < 0.05); none was associated with total low-value service use after adjustment for other facility characteristics. There was extensive variation in low-value service use within categories of facility operational characteristics.

CONCLUSIONS

Despite extensive variation in the use of low-value services across VA facilities, we observed substantial use of these services across facility operational characteristics and at facilities with lower rates of low-value service use. Thus, system-wide interventions to address low-value services may be more effective than interventions targeted to specific facilities or facility types.

Providers, peers and patients. How do physicians' practice environments affect patient outcomes?

We study how physicians' practice environments affect their treatment decisions and quality of care. Using clinical registry data from Sweden, we compare stent choices of cardiologists moving across hospitals over time. To disentangle changes in practice styles attributable to hospital- and peer group-specific factors, we exploit quasi-random variation on cardiologists working together on the same days. We find that migrating cardiologists' stent choices rapidly adapt to their new practice environment after relocation and are equally driven by the hospital and peer environments. In contrast, while decision errors increase, treatment costs and adverse clinical events remain largely unchanged despite the altered practice styles.

Financial incentives and antibiotic prescribing patterns: Evidence from dispensing physicians in a public healthcare system

To ensure sufficient access to healthcare in remote areas, some countries allow physicians to directly dispense prescribed drugs through on-site pharmacies. Depending on the medication prescribed, this may pose a significant financial incentive for physicians to over-prescribe. This study, therefore, explored the effect of on-site pharmacies on antibiotic dispensing in a social health insurance system. Investigating physicians' prescribing behavior is especially relevant in the case of antibiotics, as over-utilization expedites antimicrobial resistance, leading to the development of untreatable bacterial infections. The empirical analysis was based on comprehensive administrative data on 13,741 antibiotic prescriptions issued by all 4044 public general practitioners (GPs) in Austria between 2016 and 2019. Switches from dispensing to non-dispensing status (and vice versa) were exploited in a difference-in-difference framework to mitigate a potential selection bias. GPs with the right to dispense over the entire observed period were used as the control group, and those who had either lost or gained the right to dispense as the treatment group. The results from a log-linear mixed model show that not currently operating an on-site pharmacy is associated with a 9.2% lower dispensing rate (i.e., antibiotics per 1000 yearly consultations). The results are robust to potential differences between GPs who switch from dispensing to non-dispensing and those who switch from non-dispensing to dispensing, to potential patient sorting, and to different functional forms. A prescribing effect interpretation (i.e., financial incentives give rise to more prescriptions for antibiotics) explains the observed volume effect provided that the share of unfilled antibiotic prescriptions issued by non-dispensing physicians does not exceed 4%.

The formation of physician altruism

We study how patient-regarding altruism is formed by medical education. We elicit and structurally estimate altruistic preferences using experimental data from a large sample of medical students (N = 733) in Germany at different progress stages in their studies. The estimates reveal substantial heterogeneity in altruistic preferences of medical students. Patient-regarding altruism is highest for freshmen, significantly declines for students in the course of medical studies, and tends to increase again for last year students, who assist in clinical practice. Also, patient-regarding altruism is higher for females and positively associated to general altruism. Altruistic medical students have gained prior practical experience in healthcare, have lower income expectations, and are more likely to choose surgery and pediatrics as their preferred specialty.

Technology adoption and market allocation: The case of robotic surgery

The adoption of health care technology is central to improving productivity in this sector. To provide new evidence on how technology affects health care markets, we focus on one area where adoption has been particularly rapid: surgery for prostate cancer. Within just eight years, robotic surgery grew to become the dominant intensive prostate cancer treatment method. Using a difference-in-differences design, we show that adopting a robot drives prostate cancer patients to the hospital. To test whether this result reflects market expansion or business stealing, we also consider market-level effects of adoption and find effects that are significant but smaller, suggesting that adoption expands the market while also reallocating some patients across hospitals. Marginal patients are relatively young and healthy, inconsistent with the concern that adoption broadens the criteria for intervention to patients who would gain little from it. We conclude by discussing implications for the social value of technology diffusion in health care markets.

The Effect of Biosimilar Prescription Targets for Erythropoiesis-Stimulating Agents on the Prescribing Behavior of Physicians in Germany

OBJECTIVES

This study aimed to aid decision makers by analyzing the impact of introducing biosimilar prescription targets on physician prescribing behavior in the prescription of biologic erythropoiesis-stimulating agents in Germany.

METHODS

We combined secondary data of regional level biosimilar prescription targets and secondary data of routinely collected claims data of dispensed prescriptions by physicians operating within the statutory health insurance system in ambulatory care across 7 German regions from 2009 to 2015. Two-way fixed-effects regression analysis was used to identify the average treatment effect of introducing biosimilar prescription targets at the physician level. The main outcome of interest was the share of biosimilar prescriptions on all prescriptions within the substance group. We compared 6 regions that introduced biosimilar prescription targets with 1 region without any prescription target policy.

RESULTS

Introducing biosimilar prescription targets increased the average share of biosimilars between 6 percentage points (P < .05) in Hamburg and up to 20 percentage points (P < .001) in Saxony-Anhalt. Stratification of specialists by prescription volume and adoption status indicated heterogeneous effects. We identified similar but higher effects for high-volume prescribers. Disentangling of effects with regard to the composition of biosimilar share suggested that the increase in biosimilar share was driven by increased biosimilar use accompanied by a nonsignificant decrease in original biologics prescriptions.

CONCLUSIONS

Prescription targets to alter physician prescribing behavior meet their intended goals by increasing biosimilar share. Physicians partly responded to the policy by decreasing overall prescriptions of the target substance. Prescription targets might be a useful tool, but decision makers need to consider all aspects of potential responses.

Exploring physician agency under demand-side cost sharing-An experimental approach

The assumption of patient-regarding physicians has been widely adopted in the health economics literature. Physicians' patient-regarding preferences are often described as the concern for the health benefits of medical treatments, and thus closely related to the norms and ethics of the medical profession. In this paper, we ask whether physicians' patient-regarding preferences include a concern for their patient's consumption opportunities alongside patient's health benefits. To identify and quantify physicians' preferences, we design and conduct an incentivized laboratory experiment where choices determine separately the health benefits and the consumption opportunities of a real patient admitted to the nearest hospital. We find strong evidence that future physicians care about their patients' consumption opportunities.

Payment schemes and treatment responses after a demand shock in mental health care

We study whether two groups of mental health care providers-each paid according to a different payment scheme-adjusted the duration of their patients' treatments after they faced an exogenous 20% drop in the number of patients. For the first group of providers, self-employed providers, we find that they did not increase treatment duration to recoup their income loss. Treatment duration thresholds in the stepwise fee-for-service payment function seem to have prevented these providers to treat patients longer. For the second group of providers, large mental health care institutions who were subject to a budget constraint, we find an average increase in treatment duration of 8%. Prior rationing combined with professional uncertainty can explain this increase. We find suggestive evidence for overtreatment of patients as the longer treatments did not result in better patient outcomes, i.e. better General Assessment of Functioning scores.

Discontinuity in care: Practice closures among primary care providers and patient health care utilization

We evaluate the consequences for patients of being matched to a new primary care provider due to practice closures. Using an event study and population-level data of patients and providers in Denmark, we find that the transition between providers is smooth; among re-matched patients, there is little change in primary care utilization at the extensive margin. Second, we document a 17% increase in fee-for-service per visit and a large increase in the probability that the patient initiates drug therapy targeting chronic and underdiagnosed diseases (hypertension, hyperlipidemia, and diabetes). Additionally, the re-matched patients are more likely to be admitted to inpatient care for these diseases. The increase in therapeutic initiation is not primarily because the new providers are relatively predisposed to prescribing these drugs. Instead, it appears that when patients match to new providers, there is a consequential reassessment of patients' medical needs which leads to the initiation of new treatment.

Hospital response to a case-based payment scheme under regional global budget: The case of Guangzhou in China

Both developed and developing countries have been searching for effective provider payment methods to control health expenditure inflation. In January 2018, Guangzhou city in Southern China initiated an innovative case-based payment method for inpatient care under the framework of the regional global budget, called the Diagnosis-Intervention Packet (DIP). Contrary to the usual practice of the case-based payment, the DIP payment scheme includes a price adjustment mechanism through which the actual reimbursement for each case is determined ex post. By employing the difference-in-difference method and data from Beijing and Guangzhou, we evaluate the effects of the DIP payment on medical expenditures and provider behaviors. We find that total health expenditures per case have decreased by 3.5%, which is mainly driven by a substantial decrease in drug expenditures. It suggests that the DIP payment reform achieved a short-term success in slowing down the growth of health expenditures. However, the average point volume per case for local inpatients with social health insurance coverage has increased by more than 3%, primarily due to an increasing likelihood of performing at least one procedure. We also find suggestive evidence of up-coding. All these results suggest that healthcare providers have taken strategic behaviors in response to the DIP payment. These findings hold lessons for the ongoing payment reforms in China and other countries.

Place-Based Drivers of Mortality: Evidence from Migration

We estimate the effect of current location on elderly mortality by analyzing outcomes of movers in the Medicare population. We control for movers' origin locations as well as a rich vector of pre-move health measures. We also develop a novel strategy to adjust for remaining unobservables, using the correlation of residual mortality with movers' origins to gauge the importance of omitted variables. We estimate substantial effects of current location. Moving from a 10th to a 90th percentile location would increase life expectancy at age 65 by 1.1 years, and equalizing location effects would reduce cross-sectional variation in life expectancy by 15 percent. Places with favorable life expectancy effects tend to have higher quality and quantity of health care, less extreme climates, lower crime rates, and higher socioeconomic status.

Designing Payment Contracts for Healthcare Services to Induce Information Sharing: The Adoption and the Value of Health Information Exchanges (HIEs)

Recent initiatives to improve healthcare quality and reduce costs have centered around payment mechanisms and IT-enabled health information exchanges (HIEs). Such initiatives profoundly influence both providers’ choices in terms of healthcare effort levels and HIE adoption and patients’ choice of providers. Using a game-theoretical model of a healthcare setup, we examine the role of payment models in aligning providers’ and patients’ incentives for realizing socially optimal (i.e., first-best) choices. We show that the traditional fee-for-service (FFS) payment model does not necessarily induce the first-best solution. The pay-for-performance (P4P) model may induce the first-best solution under some conditions if provider switching by patients during a health episode is socially suboptimal, making provider coordination less of an issue. We identify an episode-based payment (EBP) model that can always induce the first-best solution. The proposed EBP model reduces to the P4P model if the P4P model induces the first-best solution. In other cases, the first-best inducing EBP model is multilateral in the sense that the payment to a provider depends not only on the provider’s own efforts and outcomes but also on those of other providers. Furthermore, the payment in this EBP model is sequence dependent in the sense that payment to a provider is contingent upon whether the patient visits a given provider first or second. We show that the proposed EBP model achieves the lowest healthcare cost, not necessarily at the expense of care quality or provider payment, relative to FFS and P4P. Although our proposed contract is complex, it sets an optimality baseline when evaluating simpler contracts and also characterizes aspects of payment that need to be captured for socially desirable actions. We further show that the value of HIEs depends critically on the payment model as well as on the social desirability of patient switching. Under all three payment models, the HIE value is higher when switching by at least some patients is desirable than when switching by any patient is undesirable. Moreover, the HIE value is highest under the FFS model and lowest under the P4P model. Hence, assessing the value of HIEs in isolation from the underlying payment mechanism and patient-switching behavior may result in under- or overestimation of the HIE value. Therefore, as payment models evolve over time, there is a real need to reevaluate the HIE value and the government subsidies that induce providers to adopt HIEs.

Hospital reimbursement and capacity constraints: Evidence from orthopedic surgeries

Health care providers' response to payment incentives may have consequences for both fiscal spending and patient health. This paper studies the effects of a change in the payment scheme for hospitals in Norway. In 2010, payments for patients discharged on the day of admission were substantially decreased, while payments for stays lasting longer than one day were increased. This gave hospitals incentives to shift patients from one-day stays to two-day stays, or to decrease the admission of one-day stays. I study hospital responses using two separate difference-in-differences estimation strategies, exploiting, first, the difference in price changes across diagnoses, and secondly, the difference in bed capacity across hospitals. Focusing on orthopedic patients, I find no evidence that hospitals respond to price changes, and capacity constraints do not appear to explain this finding. Results imply that the current payment policy yields little scope for policymakers to affect the health care spending and treatment choices.

Maternity ward crowding, procedure use, and child health

This paper studies the impact of day-to-day variation in maternity ward crowding on medical procedure use and the health of infants and mothers. Exploiting data on the universe of Danish admissions to maternity wards in the years 2000-2014, we first document substantial day-to-day variation in admissions. Exploiting residual variation in crowding, we find that maternity wards change the provision of medical procedures and care on crowded days relative to less crowded days, and they do so in ways that alleviate their workload. We find very small and precisely estimated effects of crowding on child and maternal health. Thus our results suggest that, for the majority of uncomplicated births, maternity wards in Denmark can cope with the observed inside-ward variation in daily admissions without detectable health risks.

Stirring the pot: Switching from blended fee-for-service to blended capitation models of physician remuneration

In Canada's most populous province, Ontario, family physicians may choose between the blended fee-for-service (Family Health Group [FHG]) and blended capitation (Family Health Organization [FHO] payment models). Both models incentivize physicians to provide after-hours (AH) and comprehensive care, but FHO physicians receive a capitation payment per enrolled patient adjusted for age and sex, plus a reduced fee-for-service while FHG physicians are paid by fee-for-service. We develop a theoretical model of physician labor supply with multitasking to predict their behavior under FHG and FHO, and estimable equations are derived to test the predictions empirically. Using health administrative data from 2006 to 2014 and a two-stage estimation strategy, we study the impact of switching from FHG to FHO on the production of a capitated basket of services, after-hours services and nonincentivized services. Our results reveal that switching from the FHG to FHO reduces the production of capitated services to enrolled patients and services to nonenrolled patients by 15% and 5% per annum and increases the production of after-hours and nonincentivized services by 8% and 15% per annum.

Physician Behavior under Prospective Payment Schemes-Evidence from Artefactual Field and Lab Experiments

Recent experimental studies analyze the behavior of physicians towards patients and find that physicians care for their own profit as well as patient benefit. In this paper, we extend the experimental analysis of the physician decision problem by adding a third party which represents the health insurance that finances medical service provision under a prospective payment scheme. Our results show that physicians take into account the payoffs of the third party, which can lead to underprovision of medical care. We conduct a laboratory experiment in neutral as well as in medical framing using students and medical doctors as subjects. Subjects in the medically framed experiments behave weakly and are more patient orientated in contrast to neutral framing. A sample of medical doctors exhibits comparable behavior to students with medical framing.

Regional variation in health care utilization and mortality

Geographic variation in health care utilization has raised concerns of possible inefficiencies in health care supply, as differences are often not reflected in health outcomes. Using comprehensive Norwegian microdata, we exploit cross-region migration to analyze regional variation in health care utilization. Our results indicate that place factors account for half of the difference in utilization between high and low utilization regions, while the rest reflects patient demand. We further document heterogeneous impacts of place across socioeconomic groups. Place factors account for 75% of the regional utilization difference for high school dropouts, and 40% for high school graduates; for patients with a college degree, the impact of place is negligible. We find no statistically significant association between the estimated place effects and overall mortality. However, we document a negative association between place effects and utilization-intensive causes of death such as cancer, suggesting high-supply regions may achieve modestly improved health outcomes.

Doctors' response to queues: Evidence from a Portuguese emergency department

We evaluate how doctors in an emergency department react to the number of patients waiting for treatment. Our outcomes reflect the time spent with the patient, the intensity of treatment, and discharge destination. Using visit-level data in a Lisbon-area hospital, we use a fixed effects model to exploit variation in the queue size while addressing endogeneity using the number of arrivals to the hospital in the previous 60 min as an instrumental variable. Furthermore, we estimate doctors' reactions separately for patients with different degrees of urgency, as measured by the Manchester triage system. Results show that doctors discharge patients more rapidly as queues become longer, and this effect is stronger for patients that do not have life-threatening conditions. We also find that the intensity of diagnosis/treatment procedures decreases when patients face longer queues, driven by the extensive margin. Finally, doctors are less likely to admit patients to inpatient care. We interpret the results in the light of the doctors' incentives literature, explaining how these agents behave in the context of a National Health Service, with no financial incentives.

Paying for efficiency: Incentivising same-day discharges in the English NHS

We study a pay-for-efficiency scheme that encourages hospitals to admit and discharge patients on the same calendar day when clinically appropriate. Since 2010, hospitals in the English NHS are incentivised by a higher price for patients treated as same-day discharge than for overnight stays, despite the former being less costly. We analyse administrative data for patients treated during 2006-2014 for 191 conditions for which same-day discharge is clinically appropriate - of which 32 are incentivised. Using difference-in-difference and synthetic control methods, we find that the policy had generally a positive impact with a statistically significant effect in 14 out of the 32 conditions. The median elasticity is 0.24 for planned and 0.01 for emergency conditions. Condition-specific design features explain some, but not all, of the differential responses.

Electronic medical records and medical procedure choice: Evidence from cesarean sections

This paper examines how hospital adoption of electronic medical records (EMRs) impacts medical procedure choice in the context of cesarean section deliveries. It provides a unique contribution by tying the literature on EMR diffusion to the literature on the utilization of expensive medical technology and provider practice style. Exploiting within-hospital variation in three types of EMR adoption, we find that computerized physician order entry, an advanced EMR system that typically incorporates decision support, reduces C-section rates for low-risk mothers by 2.5%. Obstetric-specific EMR systems and physician documentation have no statistically significant effect on C-section rates. In addition, we find that the computerized practitioner order entry effect occurs predominantly in hospitals that were already performing fewer C-sections and does not change the behavior of already high-intensity providers.

The Impact of E-Visits on Visit Frequencies and Patient Health: Evidence from Primary Care

Secure messaging, or "e-visits," between patients and providers has sharply increased in recent years, and many hope they will help improve healthcare quality, while increasing provider capacity. Using a panel data set from a large healthcare system in the United States, we find that e-visits trigger about 6% more office visits, with mixed results on phone visits and patient health. These additional visits come at the sacrifice of new patients: physicians accept 15% fewer new patients each month following e-visit adoption. Our data set on nearly 100,000 patients spans from 2008 to 2013, which includes the rollout and diffusion of e-visits in the health system we study. Identification comes from difference-in-differences estimates leveraging variation in the timing of e-visit adoption by both patients and providers. We conduct several robustness checks, including matching analyses and an instrumental variable analysis to account for possible time-varying characteristics among patient e-visit adopters.

Biologic treatment of Japanese patients with inflammatory bowel disease

BACKGROUND

There is little information regarding the use of biologics in Inflammatory Bowel Disease (IBD) patients in Japan. The aim of this study was to determine the factors associated with the use of biologics in the treatment of Japanese patients with IBD.

METHODS

An online survey was conducted among Japanese patients with IBD (n = 1035). Socioeconomic as well as treatment related information was collected. Logistic regression was applied to analyze the determinants of biologic treatment.

RESULTS

Younger age (≤ 40 years vs. > 65 years; OR:0.24), time since diagnosis (< 2 years vs. < 15 years; OR: 4.16), surgical history (OR:1.98) and visiting university hospitals (university hospitals vs. clinics; OR: 0.47) were associated with biologic treatment for Japanese IBD patients.

CONCLUSIONS

Currently, biologics have been used in younger IBD patients which may give rise to the presence of an age bias in biologic treatment. Further studies are required to confirm these results and to define appropriate IBD patients who should be treated with biologic agent.

Risk attitudes in medical decisions for others: An experimental approach

The aim of this paper is to investigate how risk attitudes in medical decisions for others vary across health contexts. A lab experiment was designed to elicit the risk attitudes of 257 medical and nonmedical students by assigning them the role of a physician who must decide between treatments for patients. An interval regression model was used to estimate individual coefficients of relative risk aversion, and an estimation model was used to test for the effect of type of medical decision and experimental design characteristics on elicited risk aversion. We find that (a) risk attitudes vary across different health contexts, but risk aversion prevails in all of them; (b) students enrolled in health-related degrees show a higher degree of risk aversion; and (c) real rewards for third parties (patients) make subjects less risk-averse. The results underline the importance of accounting for attitudes towards risk in medical decision making.

Can Physicians Affect Patient Adherence With Medication?

Non-compliance with medication therapy remains an unsolved and expensive problem for healthcare systems around the world, yet we know little about the factors that affect a patient's decision to follow treatment recommendations. In particular, there is little evidence on the extent to which doctors can influence patient adherence behavior. This study uses a unique panel dataset comprising all prescription drug users, physicians, and all prescription drug sales in Denmark over 7 years to analyze the contributions of doctor-specific, patient-specific, and drug-specific factors to the adherence decision. We find that physicians exert substantial influence on patient compliance. Further, the quality of the match between a doctor and a patient accounts for a substantial portion of the variation in adherence outcomes. This suggests that the sorting of patients across doctors is an important mechanism that affects patient adherence beyond the effects of individual patient-specific and physician-specific factors. Copyright © 2016 John Wiley & Sons, Ltd.

Healthcare Provider Type and Switch to Biologics in Psoriasis: Evidence from Real-World Practice

BACKGROUND

Previous research indicates an uneven uptake of biologics in patients with moderate-to-severe psoriasis in Sweden. Therefore, it is essential to scrutinise variations in treatment patterns.

OBJECTIVE

The aim of this study was to evaluate the extent to which the uptake of biologics for psoriasis differs between types of healthcare provider.

METHODS

Three types of provider were identified within 52 units participating in the Swedish National Registry for Systemic Psoriasis Treatment (PsoReg): university hospitals, non-university hospitals and individual practices. Biologics-naïve patients (n = 3165) were included in analyses to investigate the probability of switch to biologics. The numbers of patients fulfilling the criteria for moderate-to-severe psoriasis [Psoriasis Area and Severity Index (PASI) ≥10 and Dermatology Life Quality Index (DLQI) ≥10] among patients who switched to biologics and patients who did not switch were reported. A logistic regression model was used to calculate how healthcare provider type influenced the probability of switch to biologics whilst adjusting for patient characteristics and disease severity.

RESULTS

During registration, 16% of patients switched to biologics while 84% remained on conventional systemic treatment. In 7% of patients, the criteria PASI ≥10 and DLQI ≥10 was fulfilled at their last visit without switching to biologics, whereas in 10% of patients the criteria was not fulfilled prior to switch. After controlling for patient characteristics and disease severity, small or no difference in the probability of switch was observed between provider types.

CONCLUSIONS

Disease severity does not explain the decision to switch or not to switch to biologics for a disproportionate number of patients. There seems to be an uneven uptake of biologics in Swedish clinical practice, but the type of healthcare provider cannot explain this variation. More research is needed on what factors influence the prescription of biologics.