Physician agency, consumerism, and the consumption of lower-limb MRI scans

The Effects of Physician Vertical Integration on Referral Patterns, Patient Welfare, and Market Dynamics

The growth of physician vertical integration raises concerns about distorted referral patterns, higher spending, and market foreclosure. Using 100% Medicare data, we combine reduced-form analysis with a discrete choice model to estimate the effects of physician vertical integration on patients' provider choices and welfare for two common "downstream" surgical procedures. Physician-hospital integration results in an approximately 10% increase in referrals to higher-priced facilities instead of lower-priced providers. Our counterfactual analysis implies that if all primary care physicians become integrated, total Medicare spending will increase by $315 million.

Effect of patient death on referrals to cardiac specialists

In this paper, I examine how patient death affects referrals from referring physicians to cardiac surgeons. I use Medicare data to identify pairs of referring physicians and cardiac surgeons who experience a patient death after a major surgical procedure to examine how these events affect referrals. I construct counterfactuals for affected pairs using pairs that experience a patient death but five quarters in the future. I find that there is a significant decline in the number of referrals and probability of a referral from the referring physician to the cardiac surgeon after the patient's death.

Price Transparency in United States' Health Care: A Narrative Policy Review of the Current State and Way Forward

Health care price transparency is gaining momentum as a tangible policy intervention that can unleash market principles to increase competition, help begin to decrease U.S. health care expenditures, and provide Americans with access to affordable, high-quality health care. Indeed, pricing reform is required to facilitate patient shopping in health care. In this narrative policy review, we offer a brief history of health care price transparency efforts and an overview of the health care price transparency literature. Further, we highlight the current rules and legislative initiatives aimed at achieving the full potential of health care price transparency. Lastly, we offer key takeaways and highlight suggestions for future policy directions, including the need to ensure hospital and insurance compliance through more appropriate penalties and incentives, importance of reducing regulation to promote financial upside that can be obtained by both patients and providers who actively promote shopping for lower cost, higher quality health care goods and services, and the need for transparent and easily found quality metrics, including outcomes most important to patients, driven by physicians "on the ground" with patient input.

Do urgent care centers reduce Medicare spending?

We ask how urgent care centers (UCCs) impact healthcare costs and utilization among nearby Medicare beneficiaries. When residents of a zip code are first served by a UCC, total Medicare spending rises while mortality remains flat. In the sixth year after entry, 4.2% of the Medicare beneficiaries in a zip code that is served use a UCC, and the average per-capita annual Medicare spending in the zip code increases by $268, implying an incremental spending increase of $6,335 for each new UCC user. UCC entry is also associated with a significant increase in hospital stays and increased hospital spending accounts for half of the total increase in annual spending. These results raise the possibility that, on balance, UCCs increase costs by steering patients to hospitals.

Current Controversies in Radiology on Cost, Reimbursement, and Price Transparency: AJR Expert Panel Narrative Review

Many believe that fundamental reform of the U.S. healthcare system is overdue and necessary given rising national healthcare expenditures, poor performance on key population health metrics, meaningful health disparities, concerns about potential financial toxicity of care, inadequate price transparency, pending insolvency of Medicare Part A, increasing commercial insurance premiums, and significant uninsured and underinsured populations. The Medicare Payment Advisory Commission (MedPAC), an independent congressional agency, believes that part of this reform includes redistribution of reimbursements away from specialties such as radiology. Thus, despite an increase in the Medicare population and spending, Medicare payments for medical imaging have been decreasing for years. Further, the No Surprises Act, a federal law intended to curb the problem of surprise medical billing, was re-purposed in federal rule-making to reduce reimbursement from commercial payers to certain specialties including radiology. In this article, we examine challenges facing the U.S. healthcare system, focusing on cost, reimbursement, and price transparency, and the role of radiology in addressing such challenges. Medical imaging is a minor contributor to national healthcare expenditures, but provides an outsized impact on patient care. The radiology community should work together to demonstrate the value of medical imaging and reduce inappropriate utilization of low-value care.

Transparency and Variability in Pricing for Pediatric Outpatient Imaging in US Children's Hospitals

This cross-sectional study assesses price transparency compliance and price variability for outpatient imaging services among top US children’s hospitals.

Do high-deductible health plans affect price paid for childbirth?

OBJECTIVE

To test whether out-of-pocket costs and negotiated hospital prices for childbirth change after enrollment in high-deductible health plans (HDHPs) and whether price effects differ in markets with more hospitals.

DATA SOURCES

Administrative medical claims data from 2010 to 2014 from three large commercial insurers with plans in all U.S. states provided by the Health Care Cost Institute (HCCI).

STUDY DESIGN

I identify employer groups that switched from non-HDHPs in 1 year to HDHPs in a subsequent year. I estimate enrollees' change in out-of-pocket costs and negotiated hospital prices for childbirth after HDHP switch, relative to a comparison group of employers that do not switch plans. I use a triple-difference design to estimate price changes for enrollees in markets with more hospital choices. Finally, I re-estimate models with hospital-fixed effects.

DATA COLLECTION

From the HCCI sample, childbearing women enrolled in an employer-sponsored plan with at least 10 people.

PRINCIPAL FINDINGS

Switching to an HDHP increases out-of-pocket cost $227 (p < 0.001; comparison group base $790) and has no meaningful effect on hospital-negotiated prices (-$26, p = 0.756; comparison group base $5821). HDHP switch is associated with a marginally statistically significant price increase in markets with three or fewer hospitals ($343, p = 0.096; comparison group base $5806) and, relative to those markets, with a price decrease in markets with more than three hospitals (-$512; p = 0.028). Predicted prices decrease from $5702 to $5551 after HDHP switch in markets with more than three hospitals due primarily to lower prices conditional on using the same hospital.

CONCLUSIONS

Prices for childbirth in markets with more hospitals decrease after HDHP switch due to lower hospital prices for HDHPs relative to prices at those same hospitals for non-HDHPs. These results reinforce previous findings that HDHPs do not promote price shopping but suggest negotiated prices may be lower for HDHP enrollees.

Concordance of Disclosed Hospital Prices With Total Reimbursements for Hospital-Based Care Among Commercially Insured Patients in the US

Importance

To improve health care price transparency and promote cost-conscious selection of health care organizations and practitioners, the Centers for Medicare & Medicaid Services (CMS) required that hospitals share payer-specific negotiated prices for selected shoppable health services by January 2021. While this regulation improves price transparency, it is unclear whether disclosed prices reflect total costs of care, since many hospital-based services are delivered and billed separately by independent practitioners or other health care entities.

Objective

To assess the extent to which prices disclosed under the new hospital price transparency regulation are correlated with total costs of care among commercially insured individuals.

Design, Setting, and Participants

This cross-sectional study used a large database of commercial claims from 2018 to analyze encounters at US hospitals for shoppable health care services for which price disclosure is required by CMS. Data were analyzed from November 2020 to February 2021.

Exposures

Whether the service was billed by the hospital or another entity.

Main Outcomes and Measures

Outcomes of interest were the percentage of encounters with at least 1 service billed by an entity other than the hospital providing care, number of billing entities, amounts billed by nonhospital entities, and the correlation between hospital and nonhospital reimbursements.

Results

The study analyzed 4 545 809 encounters for shoppable care. Independent health care entities were involved in 7.6% (95% CI, 6.7% to 8.4%) to 42.4% (95% CI, 39.1% to 45.6%) of evaluation and management encounters, 15.9% (95% CI, 15.8% to 16%) to 22.2% (95% CI, 22% to 22.4%) of laboratory and pathology services, 64.9% (95% CI, 64.2% to 65.7%) to 87.2% (95% CI, 87.1% to 87.3%) of radiology services, and more than 80% of most medicine and surgery services. The median (IQR) reimbursement of independent practitioners ranged from $61 ($52-$102) to $412 ($331-$466) for evaluation and management, $5 ($4-$6) to $7 ($4-$12) for laboratory and pathology, $26 ($20-$32) to $210 ($170-$268) for radiology, and $47 ($21-$103) to $9545 ($7750-$18 277) for medicine and surgery. The reimbursement for services billed by the hospital was not strongly correlated with the reimbursement of independent clinicians, ranging from r = -0.11 (95% CI, -0.69 to 0.56) to r = 0.53 (95% CI, 0.13 to 0.78).

Conclusions and Relevance

This cross-sectional study found that independent practitioners were frequently involved in the delivery of shoppable hospital-based care, and their reimbursement may have represented a substantial portion of total costs of care. These findings suggest that disclosed hospital reimbursement was usually not correlated with total cost of care, limiting the potential benefits of the hospital price transparency rule for improving consumer decision-making.