Prices for Common Services at Quaternary vs Nonquaternary Hospitals

This study uses commercial claims data to assess whether quaternary hospitals charge higher prices for common, unspecialized services also offered by nonquaternary hospitals.

Role of prices in driving the variation in spending across medical groups

OBJECTIVE

To understand the relative role of prices versus utilization in the variation in total spending per patient across medical groups.

DATA SOURCES

We conducted a cross-sectional analysis of medical claims for commercially insured adults from a large national insurer in 2018.

STUDY DESIGN

After assigning patients to a medical group based on primary care visits in 2018, we calculated total medical spending for each patient in that year. Total spending included care provided by clinicians within the medical group and care provided by other providers, including hospitals. It did not include drug spending. We estimated the case mix adjusted spending per patient for each medical group. Within each market, we categorized medical groups into quartiles based on the group's spending per patient. To decompose spending variation into price versus utilization, we compared spending differences between highest and lowest quartile medical groups under two scenarios: (1) using actual prices (2) using a standardized price (same price used for a given service across the nation).

PRINCIPAL FINDINGS

In total, 3,921,736 patients were assigned to 7284 medical groups. Per-patient spending in the highest quartile of spending medical groups was $1813 higher than per-patient spending in the lowest spending quartile of medical groups (50% higher relative spending). This overall difference was primarily driven by differences in inpatient care, imaging, and specialty care. In the scenario where we used standardized prices, the difference in spending between medical groups in the top and bottom quartiles decreased to $1425, implying that 79% of the $1813 difference in spending between the top and bottom quartile groups is explained by utilization and the remaining 21% by prices. The likely explanation for the modest impact of prices is that patients cared for by a given medical group receive care across a wide range of providers.

CONCLUSIONS

Prices explained a modest fraction of the differences in spending between medical groups.

Facility Fees for Colonoscopy Procedures at Hospitals and Ambulatory Surgery Centers

This cross-sectional study investigates commercial facility fee differences for colonoscopy procedures between US hospitals and ambulatory surgery centers located within the same county and contracting with the same insurers.

Benchmarking Changes And Selective Participation In The Medicare Shared Savings Program

In 2017 the Medicare Shared Savings Program (MSSP) began incorporating regional spending into accountable care organization (ACO) benchmarks, thus favoring the participation of ACOs and practices with lower baseline spending than their region. To characterize providers' responses to these incentives, we isolated changes in spending due to changes in the mix of ACOs and practices participating in the MSSP. In contrast to earlier participation patterns, the composition of the MSSP after 2017 increasingly shifted to providers with lower preexisting levels of spending relative to their region, consistent with a selection response. Changes occurred through the entry of new ACOs with lower baseline spending, the exit of higher-spending ACOs, and the reconfiguration of participant lists favoring lower-spending practices within continuing ACOs. These participation patterns varied meaningfully by ACO type. Although compositional changes could not be definitively tied to benchmarking changes, the disproportionate participation of providers with lower baseline spending implies substantial costs and the need for ACO benchmarking reforms.

Hospital Survival In Rural Markets: Closures, Mergers, And Profitability

Financial distress among rural hospitals in the US has increased in recent years. Using national hospital data, we investigated how the decline in profitability has affected hospital survival, either independently or with a merger. The answer has direct implications for access to care and competition in rural markets. We assessed the rate of hospital closures and mergers in predominantly rural markets during the period 2010-18, focusing on hospitals that were unprofitable at baseline. A minority of unprofitable hospitals (7 percent) closed. A larger share (17 percent) merged, most commonly with organizations from outside of their local geographic market. Most unprofitable hospitals (77 percent) continued to operate through 2018 without closure or merger. About half of these hospitals returned to profitability. At the market level, 22 percent of markets served by unprofitable hospitals lost a competitor to closure or within-market merger. Out-of-market mergers affected 33 percent of markets with an unprofitable hospital. Overall, our results suggest that rural markets are experiencing meaningful rates of hospital closures and mergers, yet many hospitals have survived despite poor financial performance. Policies targeting access to care will continue to be important. Similar attention will be needed to address the competitive effects of hospital closures and mergers on prices and quality.

Reducing Medicare Advantage Benchmarks Will Decrease Plan Generosity, But Those Effects Will Likely Be Modest

Concerns that Medicare Advantage (MA) plans are overpaid have motivated calls to reduce MA benchmarks-the dollar amounts set by the Centers for Medicare and Medicaid Services (CMS) against which MA plans bid to set premiums and fund extra benefits. However, cutting benchmarks may lead to higher MA enrollee premiums and decreased plan generosity. We assessed the relationships between MA benchmarks and plan generosity and benefits. We estimated that a $1,000 per year decrease in benchmarks would lead to small increases in annual premiums of about $60 and increases in annual deductibles of about $27. Copays would also increase modestly, and the propensity to offer benefits would generally decline by less than 5 percentage points, with the greatest impact being on the availability of dental, hearing, and vision benefits. These results suggest that although cuts to MA benchmarks would adversely affect plan generosity, those effects would be modest.

Association of Evaluation and Management Payment Policy Changes With Medicare Payment to Physicians by Specialty

Importance

US primary care physicians (PCPs) have lower mean incomes than specialists, likely contributing to workforce shortages. In 2021, the Centers for Medicare & Medicaid Services increased payment for evaluation and management (E/M) services and relaxed documentation requirements. These changes may have reduced the gap between primary care and specialist payment.

Objectives

To simulate the effect of the E/M payment policy change on total Medicare physician payments while holding volume constant and to compare these simulated changes with observed changes in total Medicare payments and E/M coding intensity, before (July-December 2020) and after (July-December 2021) the E/M payment policy change.

Design, Setting, and Participants

Retrospective observational study of US office-based physicians who were in specialties with 5000 or more physicians billing Medicare and who had 50 or more fee-for-service Medicare visits before and after the E/M payment policy change.

Exposures

E/M payment policy changes.

Main Outcomes and Measures

Outcomes included physician-level simulated volume-constant payment change, total observed Medicare payment change, and share of high-intensity (ie, level 4 or 5) E/M visits before and after the E/M payment policy change. For each specialty, the median change in each outcome was reported. The payment gap between primary care and specialty physicians was calculated as the difference between total Medicare payments to the median primary care and median specialty physician.

Results

The study population included 180 624 physicians. Repricing 2020 services yielded a simulated volume-constant payment change ranging from a 3.3% (-$4557.0) decrease for the median radiologist to an 11.0% ($3683.1) increase for the median family practice physician. After the E/M payment change, the median high-intensity share of E/M visits increased for physicians of nearly all specialties, ranging from a -4.4 percentage point increase (dermatology) to a 17.8 percentage point increase (psychiatry). The median change in total Medicare payments by specialty ranged from -4.2% (-$1782.9) for general surgery to 12.1% ($3746.9) for family practice. From July-December 2020 to July-December 2021, the payment gap between the median primary care physician and the median specialist shrank by $825.1, from $40 259.8 to $39 434.7 (primary care, $41 193.3 in July-December 2020 and $45 962.4 in July-December 2021; specialist, $81 453.1 in July-December 2020 and $85 397.1 in July-December 2021)-a relative decrease of 2.0%.

Conclusions and Relevance

Among US office-based physicians receiving Medicare payments in 2020 and 2021, E/M payment policy changes were associated with changes in Medicare payment by specialty, although the payment gap between primary care physicians and specialists decreased only modestly. The findings may have been influenced by the COVID-19 pandemic, and further research in subsequent years is needed.

Organization and Performance of US Health Systems

IMPORTANCE

Health systems play a central role in the delivery of health care, but relatively little is known about these organizations and their performance.

OBJECTIVE

To (1) identify and describe health systems in the United States; (2) assess differences between physicians and hospitals in and outside of health systems; and (3) compare quality and cost of care delivered by physicians and hospitals in and outside of health systems.

EVIDENCE REVIEW

Health systems were defined as groups of commonly owned or managed entities that included at least 1 general acute care hospital, 10 primary care physicians, and 50 total physicians located within a single hospital referral region. They were identified using Centers for Medicare & Medicaid Services administrative data, Internal Revenue Service filings, Medicare and commercial claims, and other data. Health systems were categorized as academic, public, large for-profit, large nonprofit, or other private systems. Quality of preventive care, chronic disease management, patient experience, low-value care, mortality, hospital readmissions, and spending were assessed for Medicare beneficiaries attributed to system and nonsystem physicians. Prices for physician and hospital services and total spending were assessed in 2018 commercial claims data. Outcomes were adjusted for patient characteristics and geographic area.

FINDINGS

A total of 580 health systems were identified and varied greatly in size. Systems accounted for 40% of physicians and 84% of general acute care hospital beds and delivered primary care to 41% of traditional Medicare beneficiaries. Academic and large nonprofit systems accounted for a majority of system physicians (80%) and system hospital beds (64%). System hospitals were larger than nonsystem hospitals (67% vs 23% with >100 beds), as were system physician practices (74% vs 12% with >100 physicians). Performance on measures of preventive care, clinical quality, and patient experience was modestly higher for health system physicians and hospitals than for nonsystem physicians and hospitals. Prices paid to health system physicians and hospitals were significantly higher than prices paid to nonsystem physicians and hospitals (12%-26% higher for physician services, 31% for hospital services). Adjusting for practice size attenuated health systems differences on quality measures, but price differences for small and medium practices remained large.

CONCLUSIONS AND RELEVANCE

In 2018, health system physicians and hospitals delivered a large portion of medical services. Performance on clinical quality and patient experience measures was marginally better in systems but spending and prices were substantially higher. This was especially true for small practices. Small quality differentials combined with large price differentials suggests that health systems have not, on average, realized their potential for better care at equal or lower cost.

Changes in use of low-value services during the COVID-19 pandemic

The COVID-19 pandemic led to a significant disruption, then recovery, of health care services use. Prior research has not examined the relative rates of resumption of high-value and low-value care. We examined the use of 6 common low-value services that received a D grade from the US Preventive Services Task Force compared with clinically comparable high-value services in a large commercially insured population nationwide from before the pandemic to April 1, 2021. We found that, overall, low-value services and high-value services were disrupted similarly. In aggregate, low-value care declined to 56.2% and high-value care to 53.2% in the initial month of the pandemic (April 2020) relative to baseline (number of visits in 2019 normalized by relevant enrolled population), then rebounded to 83.1% of baseline for low-value services and 95.0% of baseline for high-value services by January 2021. Substantial heterogeneity appeared across clinical contexts, such as prostate cancer screening for men 70 years and older rebounding to 111.8% of baseline and asymptomatic chronic obstructive pulmonary disease screening remaining at 38.5% of baseline in January 2021. This suggests that although, on average, resuming lower-value services may have been perceived to be a lesser priority by providers and patients, the pandemic may have had heterogeneous effects on consumer and provider decision-making along the dimension of clinical value. This enhances our understanding of how disruptions affect the relationship between clinical value and usage of different services and suggests the need for more targeted interventions to reduce low-value care.

The merits of administrative benchmarks for population-based payment programs

The different approaches to setting benchmarks for population-based payment models (empirical, bidding based, and administratively set) have unique advantages and challenges.

Coding-Driven Changes In Measured Risk In Accountable Care Organizations

Claims data, which form the foundation of risk adjustment in payment for health care services, may reflect efforts to capture more-or more severe-clinical conditions rather than true changes in health status. This can distort payments. We quantify this in the context of Medicare's accountable care organization (ACO) program by comparing risk scores derived from two different measurement approaches. One approach uses diagnoses coded on claims based on Centers for Medicare and Medicaid Services Hierarchical Condition Categories (HCC), and the other uses self-reported, survey-based health data from the Consumer Assessment of Healthcare Providers and Systems (CAHPS). During 2013-16 HCC-based risk scores grew faster than CAHPS-based risk scores (2.1 percent versus 0.3 percent annually), and the gap in HCC- and CAHPS-based risk score growth varied widely across ACOs. The average gap in risk score growth appears to be the result primarily of HCC coding practices rather than poor performance of the CAHPS model, suggesting that coding practices (not necessarily driven by ACO contracts) may account for most of the observed risk score growth for ACO beneficiaries.

Physician Practice Interruptions in the Treatment of Medicare Patients During the COVID-19 Pandemic

This study uses Medicare data to assess physician practice interruptions during the 2019-2020 period of the COVID-19 pandemic and provides preliminary evidence on whether those interruptions suggest early retirements or exit from medical practice.

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.

Public Payment Rates For Hospitals And The Potential For Consolidation-Induced Cost Shifting

The theory of hospital cost shifting posits that reductions in public prices lead to higher commercial prices. The cost-shifting narrative and the empirical strategies used to evaluate it typically assume no connection between public prices and the number of hospitals operating in the market (market structure). We raise the possibility of "consolidation-induced cost shifting," which recognizes that changes in public prices for hospital care can affect market structure and, through that mechanism, affect commercial prices. We investigated the first leg of that argument: that public payment may affect hospital market structure. After controlling for many confounders, we found that hospitals with a higher share of Medicare patients had lower and more rapidly declining profits and an increased likelihood of closure or acquisition compared with hospitals that were less reliant on Medicare. This is consistent with the existence of consolidation-induced cost shifting and implies that reductions in public prices must be undertaken cautiously. Mechanisms to limit closure- or acquisition-induced increases in commercial hospital prices may be important.

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.

Using Consistently Low Performance to Identify Low-Quality Physician Groups

Importance

There has been a growth in the use of performance-based payment models in the past decade, but inherently noisy and stochastic quality measures complicate the assessment of the quality of physician groups. Examining consistently low performance across multiple measures or multiple years could potentially identify a subset of low-quality physician groups.

Objective

To identify low-performing physician groups based on consistently low performance after adjusting for patient characteristics across multiple measures or multiple years for 10 commonly used quality measures for diabetes and cardiovascular disease (CVD).

Design, Setting, and Participants

This cross-sectional study used medical and pharmacy claims and laboratory data for enrollees ages 18 to 65 years with diabetes or CVD in an Aetna health insurance plan between 2016 and 2019. Each physician group's risk-adjusted performance for a given year was estimated using mixed-effects linear probability regression models. Performance was correlated across measures and time, and the proportion of physician groups that performed in the bottom quartile was examined across multiple measures or multiple years. Data analysis was conducted between September 2020 and May 2021.

Exposures

Primary care physician groups.

Main Outcomes and Measures

Performance scores of 6 quality measures for diabetes and 4 for CVD, including hemoglobin A1c (HbA1c) testing, low-density lipoprotein testing, statin use, HbA1c control, low-density lipoprotein control, and hospital-based utilization.

Results

A total of 786 641 unique enrollees treated by 890 physician groups were included; 414 655 (52.7%) of the enrollees were men and the mean (SD) age was 53 (9.5) years. After adjusting for age, sex, and clinical and social risk variables, correlations among individual measures were weak (eg, performance-adjusted correlation between any statin use and LDL testing for patients with diabetes, r = -0.10) to moderate (correlation between LDL testing for diabetes and LDL testing for CVD, r = .43), but year-to-year correlations for all measures were moderate to strong. One percent or fewer of physician groups performed in the bottom quartile for all 6 diabetes measures or all 4 cardiovascular disease measures in any given year, while 14 (4.0%) to 39 groups (11.1%) were in the bottom quartile in all 4 years for any given measure other than hospital-based utilization for CVD (1.1%).

Conclusions and Relevance

A subset of physician groups that was consistently low performing could be identified by considering performance measures across multiple years. Considering the consistency of group performance could contribute a novel method to identify physician groups most likely to benefit from limited resources.

Wide State-Level Variation In Commercial Health Care Prices Suggests Uneven Impact Of Price Regulation

Prices charged for health care services in the commercial insurance market are high and vary widely within and between market areas. As a result, prices have been the focus of much policy debate. We extended the literature on commercial prices by examining state-level price variation in the commercial market, relative to Medicare, for a broader set of states and a wider set of services than had been examined. We assessed the potential impact on provider revenue of setting commercial prices at Medicare rates. Consistent with the existing literature, we found that average commercial prices for inpatient and outpatient facility services were about double Medicare fees, while commercial prices for professional services were about 60 percent higher. Finally, average hospital revenue would fall about 35 percent if commercial prices were limited to Medicare rates, but this would vary widely by state. If Medicaid rates were also increased to match Medicare rates, hospital revenue would likely fall by about 30 percent. Given the potentially large impact, policies to address the market failures that lead to high and variable prices in the commercial insurance sector are needed, but they should be structured to avoid the large disruptions that could occur if there were a very rapid transition to Medicare rates in the commercial market.

Assessment of Patient Attribution to Care From Medical Oncologists, Surgeons, or Radiation Oncologists After Newly Diagnosed Cancer

This cohort study uses data from the Surveillance, Epidemiology, and End Results–Medicare Linked Database to assess the attribution of patients with newly diagnosed lung, breast, colorectal, or prostate cancer to care from multidisciplinary specialists—medical oncologists, surgeons, or radiation oncologists—within 6 months after diagnosis.

Variation in spending associated with primary care practices

OBJECTIVES

To measure variation in spending and inpatient prices associated with the primary care physician (PCP) practice to which patients are attributed.

STUDY DESIGN

Cross-sectional analysis of claims data.

METHODS

We used random effect models to estimate case mix-adjusted spending across large PCP practices within 3-digit zip codes. We compare inpatient prices for patients in high-spending practices with those in low-spending practices.

RESULTS

The physician practice to which a patient was attributed is associated with significant differences in spending after controlling for patient comorbidities and geography. Patients attributed to practices in the top quartile of total medical expenses have about 30% higher spending than patients attributed to practices in the bottom quartile of adjusted spending in their 3-digit zip code. If patients attributed to practices in the top 2 quartiles had spending equivalent to those in the median practice, total spending would drop by 8%. Price variation accounts for a meaningful amount of the variation, with inpatient prices 17% higher in top-quartile vs bottom-quartile practices. We cannot disaggregate the large variation in utilization into practice patterns and unmeasured case mix (including unmeasured differences in patients' socioeconomic status) vs random health shocks, but correlation in spending patterns across years suggests that some persistent differences in spending patterns exist.

CONCLUSIONS

There are meaningful opportunities to reduce spending by changing patient PCP selection, encouraging patients to use lower-priced specialists and hospitals, and eliminating wasteful care. Attention must be paid to the best ways to reap these savings.

After 25 years, AJMC® looks to the future: a Q&A with Michael E. Chernew, PhD, and A. Mark Fendrick, MD

To mark the 25th anniversary of the journal, each issue in 2020 includes an interview with a health care thought leader. The December issue features a conversation with the journal's co-editors-in-chief, Michael E. Chernew, PhD, and A. Mark Fendrick, MD.

Paying Patients To Switch: Impact Of A Rewards Program On Choice Of Providers, Prices, And Utilization

Employers and insurers are experimenting with benefit strategies that encourage patients to switch to lower-price providers. One increasingly popular strategy is to financially reward patients who receive care from such providers. We evaluated the impact of a rewards program implemented in 2017 by twenty-nine employers with 269,875 eligible employees and dependents. For 131 elective services, patients who received care from a designated lower-price provider received a check ranging from $25 to $500, depending on the provider's price and service. In the first twelve months of the program we found a 2.1 percent reduction in prices paid for services targeted by the rewards program. The reductions in price resulted in savings of $2.3 million, or roughly $8 per person, per year. These effects were primarily seen in magnetic resonance imaging and ultrasounds, with no observed price reduction among surgical procedures.

Contributions Of Public Health, Pharmaceuticals, And Other Medical Care To US Life Expectancy Changes, 1990-2015

Life expectancy in the US increased 3.3 years between 1990 and 2015, but the drivers of this increase are not well understood. We used vital statistics data and cause-deletion analysis to identify the conditions most responsible for changing life expectancy and quantified how public health, pharmaceuticals, other (nonpharmaceutical) medical care, and other/unknown factors contributed to the improvement. We found that twelve conditions most responsible for changing life expectancy explained 2.9 years of net improvement (85 percent of the total). Ischemic heart disease was the largest positive contributor to life expectancy, and accidental poisoning or drug overdose was the largest negative contributor. Forty-four percent of improved life expectancy was attributable to public health, 35 percent was attributable to pharmaceuticals, 13 percent was attributable to other medical care, and -7 percent was attributable to other/unknown factors. Our findings emphasize the crucial role of public health advances, as well as pharmaceutical innovation, in explaining improving life expectancy.

Spending variation among ACOs in the Medicare Shared Savings Program

OBJECTIVES

Understanding variation in spending across organizations, rather than across geographic areas, is important because care is delivered by organizations and interventions increasingly focus on organizations. Accountable care organizations (ACOs) are particularly important to study given their incentives to reduce spending. Analyzing spending differences across ACOs may help identify cost savings opportunities.

STUDY DESIGN

Cross-sectional analysis of Medicare claims.

METHODS

We stratified ACOs into quartiles based on the deviation between each ACO's risk-adjusted spending and average risk-adjusted fee-for-service spending in the same market (hospital referral region). We compared spending between top- and bottom-quartile ACOs on each of 7 major service categories and 10 clinical condition groups to identify areas of potential savings. We simulated spending reductions if ACOs with high adjusted spending reduced spending to the levels of lower-spending ACOs.

RESULTS

In 2016, geographically adjusted and risk-adjusted total per-beneficiary spending for the highest-spending quartile of ACOs was 14% higher than for ACOs in the lowest quartile. Variation between high- and low-spending ACOs was greatest, at 27%, in the use of skilled nursing facilities-a service category in which ACOs have reduced spending by the greatest percentage. Inpatient care was the largest driver of absolute dollar differences in spending, however, accounting for 37% of the total spread. If spending in ACOs above median adjusted spending were brought down to the median, savings would be 3% to 4%.

CONCLUSIONS

By extending the variations literature to focus on ACOs, we illustrated that meaningful further savings opportunities exist both within and across markets.

Impact of an Episode-Based Payment Initiative by Commercial Payers in Arkansas on Procedure Volume: an Observational Study

BACKGROUND

Episode-based payment (EBP) is gaining traction among payers as an alternative to fee-for-service reimbursement. However, there is concern that EBP could influence the number of episodes.

OBJECTIVE

To examine how procedure volume changed after the introduction of EBP in 2013 and 2014 under the Arkansas Health Care Payment Improvement Initiative.

DESIGN

Using 2011-2016 commercial claims data, we estimate a difference-in-differences model to assess the impact of EBP on the probability of a beneficiary having an episode for four procedures that were reimbursed under EBP in Arkansas: total joint replacement, cholecystectomy, colonoscopy, and tonsillectomy.

PARTICIPANTS

Commercially insured beneficiaries in Arkansas serve as our treatment group, while commercially insured beneficiaries in neighboring states serve as our comparison group.

INTERVENTIONS

Statewide implementation of EBP for various clinical conditions by two of Arkansas' largest commercial insurers.

MAIN MEASURES

For a given procedure type, the primary outcomes are the annual rate of procedures (number of procedures per 1000 beneficiaries) and the probability of a beneficiary undergoing that procedure in a given quarter.

KEY RESULTS

The relationship between EBP and procedure volume varies across procedures. After EBP was implemented, the probability of undergoing colonoscopy increased by 17.2% (point estimate, 2.63; 95% CI, 1.18 to 4.08; p < 0.001; Arkansas pre-period mean, 15.29). The probability of undergoing total joint replacement increased by 9.9% (point estimate, 0.091; 95% CI, - 0.011 to 0.19; p = 0.08; Arkansas pre-period mean, 0.91), though this effect is not significant. There is no discernable impact on cholecystectomy or tonsillectomy volume.

CONCLUSIONS

We do not find clear evidence of deleterious volume expansion. However, because the impact of EBP on procedure volume may vary by procedure, payers planning to implement EBP models should be aware of this possibility.

Association Between Switching to a High-Deductible Health Plan and Discontinuation of Type 2 Diabetes Treatment

IMPORTANCE

High-deductible health plans (HDHPs) are a common cost-savings option for employers but may lead to underuse of necessary treatments because beneficiaries bear the full cost of health care, including medications, until a deductible is met.

OBJECTIVES

To evaluate the association between switching from a non-HDHP to an HDHP and discontinuation of antihyperglycemic medication and to assess whether the association differs in patients using branded vs generic antihyperglycemic medications.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective matched cohort study used administrative claims from MarketScan databases to identify commercially insured adult patients with type 2 diabetes who used at least 1 antihyperglycemic medication in 2013. Patients in the HDHP cohort (n = 1490) were matched by propensity scores to a non-HDPH control cohort (n = 1490). Data were collected and analyzed from January 1, 2013, through December 31, 2014.

EXPOSURES

Switching from a non-HDHP in 2013 to a full replacement HDHP in 2014 (no non-HDHP option offered) vs staying on a non-HDHP.

MAIN OUTCOMES AND MEASURES

Difference-in-differences models estimated discontinuation of branded and generic antihyperglycemic medications.

RESULTS

Among the 2980 patients included in the analysis (1932 men [64.8%]; mean [SD] age, HDHP cohort: 52.6 [6.9] years; non-HDHP cohort: 52.7 [7.3] years), no difference between the HDHP and non-HDHP cohorts was found in unadjusted follow-up discontinuation rates for all antihyperglycemic medications (255 [22.7%] vs 255 [23.3%]; P = .72); however, among patients using branded medication, a significantly greater proportion of patients in the HDHP group did not refill branded medications (81 of 396 [20.5%] vs 61 of 437 [14.0%]; P = .009). Difference-in-differences models were not statistically significant.

CONCLUSIONS AND RELEVANCE

These findings suggest switching to an HDHP is associated with discontinuation specifically of branded medications. Unintended health consequences may result and should be considered by employers making health care benefit decisions.

Multimodality cancer care and implications for episode-based payments in cancer

Most patients receiving multimodality cancer care receive care from different practices. Therefore, episode-based payments in oncology must hold multiple providers accountable for costs and quality.

Association Between Clinical Practice Group Adherence to Quality Measures and Adverse Outcomes Among Adult Patients With Diabetes

IMPORTANCE

Clinical practice group performance on quality measures associated with chronic disease management has become central to reimbursement. Therefore, it is important to determine whether commonly used process and disease control measures for chronic conditions correlate with utilization-based outcomes, as they do in acute disease.

OBJECTIVE

To examine the associations among clinical practice group performance on diabetes quality measures, including process measures, disease control measures, and utilization-based outcomes.

DESIGN, SETTING, AND PARTICIPANTS

This retrospective, cross-sectional analysis examined commercial claims data from a national health insurance plan. A cohort of eligible beneficiaries with diabetes aged 18 to 65 years who were enrolled for at least 12 months from January 1, 2010, through December 31, 2014, was defined. Eligible beneficiaries were attributed to a clinical practice group based on the plurality of their primary care or endocrinology office visits. Data were analyzed from October 1, 2018, through April 30, 2019.

MAIN OUTCOMES AND MEASURES

For each clinical practice group, performance on current diabetes quality measures included 3 process measures (2 testing measures [hemoglobin A1c {HbA1c} and low-density lipoprotein {LDL} testing] and 1 drug use measure [statin use]) and 2 disease control measures (HbA1c <8% and LDL level <100 mg/dL). The rates of utilization-based outcomes, including hospitalization for diabetes and major adverse cardiovascular events (MACEs), were also measured.

RESULTS

In this cohort of 652 258 beneficiaries with diabetes from 886 clinical practice groups, 42.9% were aged 51 to 60 years, and 52.6% were men. Beneficiaries lived in areas that were predominantly white (68.1%). At the clinical practice group level, except for high correlation between the 2 testing measures, correlations among different quality measures were weak (r range, 0.010-0.244). Rate of HbA1c of less than 8% had the strongest correlation with hospitalization for MACE (r = -0.046; P = .03) and diabetes (r = -0.109; P < .001). Rates of HbA1c control at the clinical practice group level were not significantly associated with likelihood of hospitalization at the individual level. Performance on the process and disease control measures together explained 3.9% of the variation in the likelihood of hospitalization for a MACE or diabetes at the individual level.

CONCLUSIONS AND RELEVANCE

In this study, performance on utilization-based measures-intended to reflect the quality of chronic disease management-was only weakly associated with direct measures of chronic disease management, namely, disease control measures. This correlation should be considered when determining the degree of financial emphasis to place on hospitalization rates as a measure of quality in treatment of chronic diseases.

Health Care Spending, Utilization, and Quality 8 Years into Global Payment

BACKGROUND

Population-based global payment gives health care providers a spending target for the care of a defined group of patients. We examined changes in spending, utilization, and quality through 8 years of the Alternative Quality Contract (AQC) of Blue Cross Blue Shield (BCBS) of Massachusetts, a population-based payment model that includes financial rewards and penalties (two-sided risk).

METHODS

Using a difference-in-differences method to analyze data from 2006 through 2016, we compared spending among enrollees whose physician organizations entered the AQC starting in 2009 with spending among privately insured enrollees in control states. We examined quantities of sentinel services using an analogous approach. We then compared process and outcome quality measures with averages in New England and the United States.

RESULTS

During the 8-year post-intervention period from 2009 to 2016, the increase in the average annual medical spending on claims for the enrollees in organizations that entered the AQC in 2009 was $461 lower per enrollee than spending in the control states (P<0.001), an 11.7% relative savings on claims. Savings on claims were driven in the early years by lower prices and in the later years by lower utilization of services, including use of laboratory testing, certain imaging tests, and emergency department visits. Most quality measures of processes and outcomes improved more in the AQC cohorts than they did in New England and the nation in unadjusted analyses. Savings were generally larger among subpopulations that were enrolled longer. Enrollees of organizations that entered the AQC in 2010, 2011, and 2012 had medical claims savings of 11.9%, 6.9%, and 2.3%, respectively, by 2016. The savings for the 2012 cohort were statistically less precise than those for the other cohorts. In the later years of the initial AQC cohorts and across the years of the later-entry cohorts, the savings on claims exceeded incentive payments, which included quality bonuses and providers' share of the savings below spending targets.

CONCLUSIONS

During the first 8 years after its introduction, the BCBS population-based payment model was associated with slower growth in medical spending on claims, resulting in savings that over time began to exceed incentive payments. Unadjusted measures of quality under this model were higher than or similar to average regional and national quality measures. (Funded by the National Institutes of Health.).

What are the potential savings from steering patients to lower-priced providers? a static analysis

OBJECTIVES

Healthcare payers are increasingly using price transparency and benefit design to encourage patients to choose lower-priced providers. We quantify potential savings from shifting patients to lower-priced providers. If there is limited price variation or if higher-priced providers command little market share, savings could be minimal.

STUDY DESIGN

Using 2013-2014 commercial claims for 697,381 enrollees in California, we characterized within-market price variation and the relationship between providers' market shares and relative prices for 3 nonemergent, shoppable outpatient services: laboratory tests, imaging services, and durable medical equipment (DME). In a stylized policy simulation that holds provider price and utilization constant, we computed potential savings if patients who visited providers with prices above the median price shifted to the median-priced provider in their geographic market for the same service.

METHODS

Observational analyses.

RESULTS

Of the service categories examined, laboratory tests had greatest within-market price variation (median coefficient of variation of 100% vs 87% for imaging services and 43% for DME). Roughly half of services (53%, 47%, and 54% for laboratory tests, imaging services, and DME, respectively) were billed by providers with prices above their market median. Shifting these patients to the median-priced provider in their markets could save 42%, 45%, and 15% of spending on laboratory tests, imaging services, and DME, respectively, together representing savings of 11% of total outpatient spending and 7% of the sum of inpatient and outpatient spending.

CONCLUSIONS

Steering patients from higher- to lower-priced providers within geographic markets in targeted service categories could generate substantial healthcare savings.

Changes In End-Of-Life Care In The Medicare Shared Savings Program

End-of-life care is often overly aggressive and inconsistent with patients' preferences. Although end-of-life care could therefore be a natural target for accountable care organizations (ACOs) in their efforts to reduce spending, identifying and curbing wasteful care for patients at high risk of death may be challenging. To date, the impact of ACOs on end-of-life care has not been quantified. Using fee-for-service Medicare claims through 2015 and a difference-in-differences approach, we found evidence of some changes in end-of-life care associated with providers' participation in the Medicare Shared Savings Program among both decedents and patients at high risk of death. Although generally suggestive of less aggressive care, most effects were small and inconsistent across cohorts of ACOs entering the program in different years. This suggests that ACOs have not yet substantially altered end-of-life care patterns and that additional incentives, time, or both may be needed. Alternatively, curbing wasteful end-of-life care might not be a viable source of substantial savings under population-based payment models.

Initial Opioid Prescriptions among U.S. Commercially Insured Patients, 2012-2017

BACKGROUND

The United States is undergoing a crippling opioid epidemic, spurred in part by overuse of prescription opioids by adults 25 to 64 years of age. Of concern are long-duration and high-dose initial prescriptions, which place the patients and their friends and relatives at heightened risk for long-term opioid use, misuse, overdose, and death.

METHODS

We estimated the incidence of initial opioid prescriptions in each month between July 2012 and December 2017 using administrative-claims data from across the United States (accessed through Blue Cross-Blue Shield [BCBS] Axis); monthly incidence was estimated as the percentage of enrollees who received an initial opioid prescription among those who had not used opioids (i.e., no opioid prescription or a diagnosis of opioid use disorder in the 6 months before a given month). We then estimated the percentage of enrollees initiating opioid therapy who received a long-duration or high-dose initial opioid prescription in each month during this period. We also calculated the number of providers who initiated opioid therapy in any patient who had not used opioids in each month and examined monthly trends in the duration and dose of initial opioid prescriptions in prescriber and patient subgroups. Our study sample included 63,817,512 enrollees who had not used opioids (mean, 15,897,673 per month).

RESULTS

The monthly incidence of initial opioid prescriptions among enrollees who had not used opioids declined by 54%, from 1.63% in July 2012 to 0.75% in December 2017. This decline was accompanied by a decreasing number of providers (from 114,043 in July 2012 to 80,462 in December 2017) who initiated opioid therapy in any patient who had not used opioids. Nonetheless, among the shrinking subgroup of physicians who initiated opioid therapy in such patients, high-risk prescribing (i.e., prescriptions for more than a 3-day supply or for a dose of 50 morphine milligram equivalents per day or higher) persisted at a monthly rate of 115,378 prescriptions per 15,897,673 enrollees who had not used opioids.

CONCLUSIONS

As the opioid crisis progressed between July 2012 and December 2017, many providers stopped initiating opioid therapy. Although the number of initial opioid prescriptions declined, a subgroup of providers continued to write high-risk initial opioid prescriptions. (Funded by the National Institute on Aging and a gift from Owen and Linda Robinson.).

Social Risk Adjustment of Quality Measures for Diabetes and Cardiovascular Disease in a Commercially Insured US Population

IMPORTANCE

Patients' social risk factors may be associated with physician group performance on quality measures.

OBJECTIVE

To examine the association of social risk with change in physician group performance on diabetes and cardiovascular disease (CVD) quality measures in a commercially insured population.

DESIGN, SETTING, AND PARTICIPANTS

In this cross-sectional study using claims data from 2010 to 2014 from a US national health insurance plan, the performance of 1400 physician groups (physicians billing under the same tax identification number) was estimated. After base adjustments for age and sex, changes in variation across groups and reordering of rankings resulting from additional adjustments for clinical, social, or both clinical and social risk factors were analyzed. In all models, only within-group associations were adjusted to distinguish the association of patients' social risk factors with outcomes while excluding physician groups' distinct characteristics that could also change observed performance. Data analysis was conducted between April and July 2018.

MAIN OUTCOMES AND MEASURES

Process measures (hemoglobin A1c [HbA1c] testing, low-density lipoprotein cholesterol [LDL-C] testing, and statin use), disease control measures (HbA1c and LDL-C level control), and use-based outcome measures (hospitalizations for ambulatory-sensitive conditions) were calculated with base adjustment (age and sex), clinical adjustment, social risk factor adjustment, and both clinical and social adjustments. Quality variance in physician group performance and changes in rankings following these adjustments were measured.

RESULTS

This study identified 1 684 167 enrollees (859 618 [51%] men) aged 18 to 65 years (mean [SD] age, 50 [10.7] years) with diabetes or CVD. Performance rates were high for HbA1c and LDL-C level testing (mean ranged from 79.5% to 87.2%) but lower for statin use (54.7% for diabetes cohort and 44.2% for CVD cohort) and disease control measures (57.9% on LDL-C control for diabetes cohort and 40.0% for CVD cohort). On average, only 8.8% of enrollees with diabetes and 1.0% of enrollees with CVD in a group were hospitalized. The addition of clinical and social risk factors to base adjustment reduced variance across physician groups for most measures (percentage change in SD ranged from -13.9% to 1.6%). Although overall agreement between performance scores with base vs full adjustment was high, there was still substantial reordering for some measures. For example, social risk adjustment resulted in reordering for disease control in the diabetes cohort. Of the 1400 physician groups, 330 (23.6%) had performance rankings for HbA1c control that increased or decreased by at least 10 percentile points after adding social risk factors to age and sex. Both clinical and social risk adjustment affected rankings on hospital admissions.

CONCLUSIONS AND RELEVANCE

Accounting for social risk may be important to mitigate adverse consequences of performance-based payments for physician groups serving socially vulnerable populations.

Medicare Spending after 3 Years of the Medicare Shared Savings Program

BACKGROUND

Health care providers who participate as an accountable care organization (ACO) in the voluntary Medicare Shared Savings Program (MSSP) have incentives to lower spending for Medicare patients while achieving high performance on a set of quality measures. Little is known about the extent to which early savings achieved by ACOs in the program have grown and been replicated by ACOs that entered the program in later years. ACOs that are physician groups have stronger incentives to lower spending than hospital-integrated ACOs.

METHODS

Using fee-for-service Medicare claims from 2009 through 2015, we performed difference-in-differences analyses to compare changes in Medicare spending for patients in ACOs before and after entry into the MSSP with concurrent changes in spending for local patients served by providers not participating in the MSSP (control group). We estimated differential changes (i.e., the between-group difference in the change from the pre-entry period) separately for hospital-integrated ACOs and physician-group ACOs that entered the MSSP in 2012, 2013, or 2014.

RESULTS

MSSP participation was associated with differential spending reductions in physician-group ACOs. These reductions grew with longer participation in the program and were significantly greater than the reductions in hospital-integrated ACOs. By 2015, the mean differential change in per-patient Medicare spending was -$474 (-4.9% of the pre-entry mean, P<0.001) for physician-group ACOs that entered in 2012, -$342 (-3.5% of the pre-entry mean, P<0.001) for those that entered in 2013, and -$156 (-1.6% of the pre-entry mean, P=0.009) for those that entered in 2014. The corresponding differential changes for hospital-integrated ACOs were -$169 (P=0.005), -$18 (P=0.78), and $88 (P=0.14), which were significantly lower than for physician-group ACOs (P<0.001). Spending reductions in physician-group ACOs constituted a net savings to Medicare of $256.4 million in 2015, whereas spending reductions in hospital-integrated ACOs were offset by bonus payments.

CONCLUSIONS

After 3 years of the MSSP, participation in shared-savings contracts by physician groups was associated with savings for Medicare that grew over the study period, whereas hospital-integrated ACOs did not produce savings (on average) during the same period. (Funded by the National Institute on Aging.).

Comparison of Approaches for Aggregating Quality Measures in Population-based Payment Models

OBJECTIVE

To assess the impact of alternative methods of aggregating individual quality measures on Accountable Care Organization (ACO) overall scores.

DATA SOURCE

2014 quality scores for Medicare ACOs.

STUDY DESIGN

We compare ACO overall scores derived using CMS' aggregation approach to those derived using alternative approaches to grouping and weighting measures.

PRINCIPAL FINDINGS

Alternative grouping and weighting methods based on statistical criteria produced overall quality scores similar to those produced using CMS' approach (κ = 0.80 to 0.95). Scores derived from giving specific domains greater weight were less similar (κ = 0.51 to 0.93).

CONCLUSIONS

How measures are grouped into domains and how these domains are weighted to generate overall scores can have important implications for ACO's shared savings payments.

National Rates of Initiation and Intensification of Antidiabetic Therapy Among Patients With Commercial Insurance

OBJECTIVE

Prompt initiation and intensification of antidiabetic therapy can delay or prevent complications from diabetes. We sought to understand the rates of and factors associated with the initiation and intensification of antidiabetic therapy among commercially insured patients in the U.S.

RESEARCH DESIGN AND METHODS

Using 2008-2015 commercial claims linked with laboratory and pharmacy data, we created an initiation cohort with no prior antidiabetic drug use and an HbA_1c ≥8% (64 mmol/mol) and an intensification cohort of patients with an HbA_1c ≥8% (64 mmol/mol) who were on a stable dose of one noninsulin diabetes drug. Using multivariable logistic regression, we determined the rates of and factors associated with initiation and intensification. In addition, we determined the percent of variation in treatment patterns explained by measurable patient factors.

RESULTS

In the initiation cohort (n = 9,799), 63% of patients received an antidiabetic drug within 6 months of the elevated HbA_1c test. In the intensification cohort (n = 10,941), 82% had their existing antidiabetic therapy intensified within 6 months of the elevated HbA_1c test. Higher HbA_1c levels, lower generic drug copayments, and more frequent office visits were associated with higher rates of both initiation and intensification. Better patient adherence prior to the elevated HbA_1c level, existing therapy with a second-generation antidiabetic drug, and lower doses of existing therapy were also associated with intensification. Patient factors explained 7.96% of the variation in initiation and 7.35% of the variation in intensification.

CONCLUSIONS

Approximately two-thirds of patients were newly initiated on antidiabetic therapy, and four-fifths of those already receiving antidiabetic therapy had it intensified within 6 months of an elevated HbA_1c in a commercially insured population. Patient factors explain 7-8% of the variation in diabetes treatment patterns.

Medicare ACO Program Savings Not Tied To Preventable Hospitalizations Or Concentrated Among High-Risk Patients

It has been widely assumed that better management and coordination of care for chronic conditions and high-risk patients would be the leading mechanisms for achieving savings in accountable care organizations (ACOs), specifically by reducing acute care needs through enhanced outpatient and preventive care. We examined the extent to which changes in spending and hospitalizations for ACO patients in the Medicare Shared Savings Program (MSSP) have been consistent with this expectation. By 2014, participation in the MSSP was associated with significant reductions in total Medicare fee-for-service spending for ACO patients but with proportionately smaller reductions in hospitalizations and some increases in hospitalizations for ambulatory care-sensitive conditions. In addition, spending reductions were not clearly concentrated among high-risk patients: Reductions for those patients accounted for only 38 percent of the total reduction among ACOs entering the MSSP in 2012, and reductions among 2013 MSSP entrants were almost entirely concentrated among lower-risk patients. These findings suggest that, on average, care coordination and management efforts focused on ambulatory care-sensitive conditions and high-risk patients have not been the major drivers of early savings in the MSSP.