Search

Physician-based transparency approaches have been advanced as a strategy for informing patients of the likely financial consequences of using services. The structure of health care pricing and insurance coverage, and the low uptake of existing tools, suggest these approaches are likely to be unwieldy and unsuccessful. They may also generate new ethical challenges. [ABSTRACT FROM AUTHOR]

Mental illnesses affect roughly 20 percent of the US population. Like other health conditions, mental illnesses impose costs on individuals; they also generate costs that extend to family members and the larger society. Care for mental illnesses has evolved quite differently from the rest of health care sector. While medical care in general has seen major advances in the technology of treatment this has not been the case to the same extent for the treatment of mental illnesses. Relative to other illnesses, the cost of care for mental illnesses has grown more slowly and the social cost of illness has grown more rapidly. In this essay we offer evidence about the forces underpinning these patterns and emphasize the challenges stemming from the heterogeneity of mental illnesses. We examine institutions and rationing mechanisms that affect the ability to make appropriate matches between clinical problems and treatments. We conclude with a review of implications for policy and economic research. [ABSTRACT FROM AUTHOR]

Policy PointsWe compared the structure of health care systems and the financial effects of the COVID‐19 pandemic on health care providers in the United States, England, Germany, and Israel: systems incorporating both public and private insurers and providers.The negative financial effects on health care providers have been more severe in the United States than elsewhere, owing to the prevalence of activity‐based payment systems, limited direct governmental control over available provider capacity, and the structure of governmental financial relief.In a pandemic, activity‐based payment reverses the conventional financial positions of payers and providers and may prevent providers from prioritizing public health because of the desire to avoid revenue loss caused by declines in patient visits. [ABSTRACT FROM AUTHOR]

The Affordable Care Act was designed to provide financial protection to Americans in their use of the health care system. This required addressing two intertwined problems: cost barriers to accessing coverage and care, and barriers to comprehensive risk protection provided by insurance. We reviewed the evidence on whether the law was effective in achieving these goals. We found that the Affordable Care Act generated substantial, widespread improvements in protecting Americans against the financial risks of illness. The coverage expansions reduced uninsurance rates, especially relative to earlier forecasts; improved access to care; and lowered out-of-pocket spending. The insurance market reforms also made it easier for people to get and stay enrolled in coverage and ensured that those who were insured had true financial risk protection. But subsequent court decisions and congressional and executive branch actions have left millions uninsured and allowed the risk of inadequate insurance to resurface. [ABSTRACT FROM AUTHOR]

Democratic candidates for president in 2020 will likely include some type of public plan in their health care reform platforms. Existing public plans take many forms and often incorporate private elements, as do most proposals to extend such plans. We review the types of public plans in the current system. We describe and assess the range of proposals to extend these plans or elements of them to additional populations. We suggest questions that candidates could use to guide their decisions about the scope and content of their health policy proposals. Developmental work during campaigns will contribute to success in turning candidates' promises into accomplishments. [ABSTRACT FROM AUTHOR]

This review critically evaluates perspectives on waste in the US health care sector. The conventional discussion of waste is often imprecise and blames factors outside the purview of the health care system. Taking an economic perspective, we propose that productive inefficiency is a more tractable concept than waste. We then review the literature on the efficiency of health providers. We discuss the evidence on whether supply- and demand-side policies, such as value-based payment and cost sharing, can raise efficiency, finding that many of these policies have effects that are meaningful but small.We then turn to the literature on variations, where we argue that the body of evidence suggests there are large efficiency gaps, though these gaps are smaller than the initial eye-catching results that began this strand of research. Ultimately, these findings provide a potential roadmap for efficiency gains, a process in which a diverse array of policies compound, over time, to bring the US system closer to the efficiency frontier. [ABSTRACT FROM AUTHOR]

One often-discussed option for controlling Medicare spending is to switch to a premium-support design. This would shift part of the risk of future health care cost increases from the federal treasury to Medicare beneficiaries. The economics of risk bearing suggests that this would be a mistake for three reasons. First, political decisions, not beneficiary choices, are the critical determinants of future health care costs. Second, only Congress can take into account the consequences of cost-containment decisions for both current and future generations. Third, the federal government is best able to diversify against the risk of future cost growth. Tying Medicare spending to the government's budget so that Congress sees the benefits of tough cost containment choices is the only way to force the program to make those politically difficult decisions. Economic efficiency is served by retaining the program's current structure instead of shifting risk to beneficiaries. [ABSTRACT FROM AUTHOR]

An introduction is presented in which the editor discusses various reports within the issue on topics including implementation of the Affordable Care Act (ACA), the production and consumption of research evidence in the policy process, and the personal cost of health care for the insured people in the U.S.

Mental illnesses provide a difficult set of challenges to American health and social institutions. Those challenges have been a continuous concern of David Mechanic's over the course of his career. In this article we trace the development of modern economic and organizational structures that drive the delivery of mental health care in the early part of the twenty-first century. We show how the nature of mental disorders themselves and the treatment for addressing those illnesses pose fundamental difficulties to health care organizational and financing structures. We analyze the factors that have caused the dramatic changes in how American society has addressed mental illnesses over the past fifty years. Specifically, we note the central influence that mainstream health, income support, and disability programs have had in shaping mental health care. We argue that the interaction of the unique features of mental illnesses and changes in mainstream health and social policy led mental health care to evolve so differently from general medical care. [ABSTRACT FROM AUTHOR]

National health care expenditures constitute revenue to the health care system. However, little is known about how this revenue is distributed across sectors. This article calculates revenues and detailed expenditures for physicians' offices, hospitals, and outpatient care centers in 1997, 2002, 2007, and 2012, using a range of Census Bureau and Bureau of Labor Statistics sources. Between 1997 and 2012, spending on these three sectors rose by $580 billion, and employment rose by 1.7 million people. Just under half of all 2012 revenues were spent on labor compensation. The labor compensation share of spending declined slightly; within these sectors, the share of compensation paid to physicians and nurses increased. Although employment of nonprofessional labor grew during the study period, this group did not account for much of the sector's increased spending. The plurality of the 1997-2012 spending increase went to producers of purchased materials and services, which now account for more than one-third of payments. [ABSTRACT FROM AUTHOR]

Two prior studies, conducted in 1966 and in 1979, examined the role of economic research in health policy development. Both concluded that health economics had not been an important contributor to policy. Passage of the Affordable Care Act offers an opportunity to reassess this question. We find that the evolution of health economics research has given it an increasingly important role in policy. Research in the field has followed three related paths over the past century--institutionalist research that described problems; theoretical research, which proposed relationships that might extend beyond existing institutions; and empirical assessments of structural parameters identified in the theoretical research. These three strands operating in concert allowed economic research to be used to predict the fiscal and coverage consequences of alternative policy paths. This ability made economic research a powerful policy force. Key conclusions of health economics research are clearly evident in the Affordable Care Act. [ABSTRACT FROM AUTHOR]

About half of the $2.1 trillion of US health services spending constitutes compensation to employees. We examined how the wages paid to health-sector employees compared to those paid to workers with similar qualifications in other sectors. Overall, we found that health care workers are paid only slightly more than workers elsewhere in the US economy, but the patterns are starkly different for nonprofessional and professional employees. Nonprofessional health care workers earn slightly less than their counterparts elsewhere in the economy. By contrast, the average nurse earns about 40 percent more than the median comparable worker in a different sector. The average physician earns about 50 percent more than a comparable worker in another sector of the economy, and this differential has increased sharply since 1993. Cost containment is likely to lead to reductions in the earnings of health care professionals, but it will also require using fewer or less skilled employees to produce a given service. [ABSTRACT FROM AUTHOR]

BACKGROUND: Prior literature suggests that the fragmented U.S. health care system places a large administrative burden on physicians. Less is known about how this burden varies with physician contracting practices. OBJECTIVE: To assess the extent to which physician practice outcomes vary with the number of managed care contracts held or the availability of such contracts. DESIGN, PARTICIPANTS, AND MAIN MEASURES: We perform secondary data analyses of the first four rounds of the nationally representative Community Tracking Study Physician Survey (1996-2005), which includes 36,340 physicians (21,567 PCPs [primary care physicians] and 14,773 specialists) across the four survey periods. Our measures include reported hours in patient care, share of hours outside patient care, adequacy of time with patients, career satisfaction, and income. RESULTS: Doctors who contract with more plans report spending more time in patient care (per 11 additional contracts, about 30 min per week for PCPs and 20 min per week for specialists), report spending a modestly larger share of their time outside patient care (per 11 additional contracts, about 10 min per week for PCPs and specialists), are slightly more likely to report inadequate time with patients (odds ratio 1.005 per additional contract for PCPs), and earn higher incomes (per 11 additional contracts, about 3 % more per year for specialists). CONCLUSIONS: Contracting opportunities confer significant benefits on physicians, although they do add modest costs in terms of time spent outside patient care and lower adequacy of time with patients. Simplifications that reduce the administrative burden of contracting may improve care by optimizing allocation of physician effort. [ABSTRACT FROM AUTHOR]

Higher health care prices in the United States are a key reason that the nation's health spending is so much higher than that of other countries. Our study compared physicians' fees paid by public and private payers for primary care office visits and hip replacements in Australia, Canada, France, Germany, the United Kingdom, and the United States. We also compared physicians' incomes net of practice expenses, differences in financing the cost of medical education, and the relative contribution of payments per physician and of physician supply in the countries' national spending on physician services. Public and private payers paid somewhat higher fees to US primary care physicians for office visits (27 percent more for public, 70 percent more for private) and much higher fees to orthopedic physicians for hip replacements (70 percent more for public, 120 percent more for private) than public and private payers paid these physicians' counterparts in other countries. US primary care and orthopedic physicians also earned higher incomes ($186,582 and $442,450, respectively) than their foreign counterparts. We conclude that the higher fees, rather than factors such as higher practice costs, volume of services, or tuition expenses, were the main drivers of higher US spending, particularly in orthopedics. [ABSTRACT FROM AUTHOR]

Many advocates of US health reform point to the nation's relatively low life-expectancy rankings as evidence that the health care system is performing poorly. Others say that poor US health outcomes are largely due not to health care but to high rates of smoking, obesity, traffic fatalities, and homicides. We used cross-national data on the fifteen-year survival of men and women over three decades to examine the validity of these arguments. We found that the risk profiles of Americans generally improved relative to those for citizens of many other nations, but Americans' relative fifteen-year survival has nevertheless been declining. For example, by 2005, fifteen-year survival rates for forty-five-year-old US white women were lower than in twelve comparison countries with populations of at least seven million and per capita gross domestic product (GDP) of at least 60 percent of US per capita GDP in 1975. The findings undercut critics who might argue that the US health care system is not in need of major changes. [ABSTRACT FROM AUTHOR]

The article investigates technological innovations and costs in health care as they relate to the case of robot-assisted surgery. It mentions that the number of robot-assisted procedures has escalated from 80,000 to 205,000. It cites that robotic surgical instruments empower surgeons to operate remote-controlled robotic arms, facilitating the use of laparoscopic procedures. It also mentions that laparoscopic surgery has been linked to shorter hospitalization, decreased postoperative pain and reduced risk for infection and blood transfusion need.

Research Objective: This study offers a novel approach to workforce planning in the physician market. Rather than projecting the future demand for physician services, a human capital model is used to estimate the societal cost of producing a physician service. The socially optimal workforce is one at which (at optimal practice scale), the societal cost of producing a physician service is equal to the societal benefit obtained from the service. Study Design: Physician human capital consists of two components: the underlying human capital (productivity) of those who become physicians and the job-specific investments (physician training) added to this underlying capital. The value of physicians' underlying human capital is estimated using a regression analysis of the National Longitudinal Sample of Youth (NLSY). For those in the survey who did not go on to become doctors, income over time is modeled as a function of a rich set of variables measured in youth, including family background, educational attainment and a range of high-school level performance tests. This equation is then used to forecast an age-earnings profile for doctors based on the characteristics in youth of those NLSY cohort participants who subsequently became doctors. Next, published estimates are used to measure the total cost (wherever paid) of investments in physician training. Combining these estimates, the social cost per primary care physician provided visit and Medicare relative value unit (RVU) is determined. Principal Findings: Physicians are drawn from the highest performing group of high school students. The earnings of comparable students who do not become doctors and the predicted earnings of would be doctors are substantially above the population mean. The opportunity cost of physician human capital is thus very high. The estimated societal cost per primary care physician visit is substantially higher than the average co-payment. The societal cost per primary care physician provided RVU is generally higher than the current Medicare compensation rate per RVU. The private return to primary care physician training is relatively low, in the range of 7-9%. Conclusions: At current levels of supply, the marginal social costs of primary care visits appear to be equal to or greater than marginal social benefits of many primary care services. In considering expansions of primary care capacity, it may be efficient to increase the use of complementary, lower-skilled practitioners. [ABSTRACT FROM AUTHOR]

This article uses Organisation for Economic Co-operation and Development (OECD) data to assess whether a single-payer health system delivers more care at less cost than do other universal coverage models. Single-payer plans are defined as those that rely on a limited number of revenue sources and systems in which financing is concentrated and private insurance for hospital and medical services is limited. Single-payer advocates argue that this organizational model is best able to reduce administrative costs, control provider payments, and limit the supply of services. This analysis shows that single-payer-like systems do not do a consistently better job of controlling physician incomes but do achieve some administrative cost savings compared to more fragmented systems. Overall, single-payer systems are modestly less costly than their peers and spend a slightly smaller share of the gross domestic product (GDP) on health. There are, however, substantial variations both over time and across countries in the performance of the single-payer-like nations, as well as among the nations in the other universal coverage model categories. Overall, the differences in system performance among the universal coverage OECD countries are very small, while the difference between the performance of any one of these countries and the United States is enormous and persistent. [ABSTRACT FROM AUTHOR]

Senator John McCain's (R-AZ) health plan would eliminate the current tax exclusion of employer payments for health coverage, replace the exclusion with a refundable tax credit for those who purchase coverage, and encourage Americans to move to a national market for nongroup insurance. Middle-range estimates suggest that initially this change will have little impact on the number of uninsured people, although within five years this number will likely grow as the value of the tax credit falls relative to rising health care costs. Moving toward a relatively unregulated nongroup market will tend to raise costs, reduce the generosity of benefits, and leave people with fewer consumer protections. [ABSTRACT FROM AUTHOR]

Inequality in access to health care services, through private purchase, appears to pose policy challenges greater than inequality in other spheres. This paper explores how inequality in access to health care services relates to social welfare. I examine the sources of private demand for health insurance and the ramifications of this demand for health, for patterns of government spending on health care services, and for individual and social well-being. Finally, I consider a novel policy approach to addressing the externalities of health service consumption. [ABSTRACT FROM AUTHOR]

The article discusses issues confronting mandates which can be an effective tool in expanding health insurance coverage in the U.S. It discusses that the Massachusetts policymakers have painstakingly crafted interlocking health insurance initiatives and mandates, including an unprecedented individual mandate, in hopes of achieving near-universal coverage. In this article Sherry Glied and colleagues identify three common attributes of highly successful mandates including an affordable cost of compliance.

The article presents information related to the rise in health care cost. The author states that health care buyers and policymakers often focus in the short term on altering the structure of health care contracts to reduce expenditures at a point in time. Private and public health insurance, along with government subsidies to the purchasers of insurance and directly to providers, shelter consumers of medical services from many of the financial consequences of their decisions. This separation between the price paid by patients and the total cost of the services they use leads to moral hazard, which may generate excessive and excessively costly service use. As a result, there is considerable potential for reductions in expenditures at a point in time, both by making service use decisions more efficient and through the selection of lower-cost providers. Historically, the main strategy for reducing moral hazard in health insurance has been consumer cost sharing. Paying a larger share of the health care bill should lead consumers to be more careful about the quantity of services they consume and the prices they pay. A great deal of evidence shows that cost sharing does reduce health care costs. The best evidence comes from the RAND health insurance experiment conducted between 1974 and 1982.

A response by Gabriel I. Barbash and Sherry A. Glied to several letters to the editor on their article "New Technology and Health Care Costs: The Case of Robot-Assisted Surgery" in the August 19, 2010 issue is presented.

The article presents the author's views on a study by G. A. Melnick and J. Zwanziger, which contrasted health spending in California with other U.S. states. The study considers the variables of spending on physicians and drugs, hospitals and on competition within California. The study confirms that the growth of competition in California hospital markets has reduced their margins, which changed the nature of care given to patients. Specifically, competition-induced changes raised the issue of access to care for the uninsured and other vulnerable groups.

The article focuses on the authors' views on behavioral health care services. According to the authors, people with private health insurance who seek care for mental health conditions get more limits to coverage than do those who require care for other health conditions. They believe that such restrictions reduce the use of mental health services and force people with severe mental health problems to face high financial costs for necessary treatment.

Introduction: Although growing evidence links residential evictions to health, little work has examined connections between eviction and healthcare utilization or access. In this study, eviction records are linked to Medicaid claims to estimate short-term associations between eviction and healthcare utilization, as well as Medicaid disenrollment.Methods: New York City eviction records from 2017 were linked to New York State Medicaid claims, with 1,300 evicted patients matched to 261,855 non-evicted patients with similar past healthcare utilization, demographics, and neighborhoods. Outcomes included patients' number of acute and ambulatory care visits, healthcare spending, Medicaid disenrollment, and pharmaceutical prescription fills during 6 months of follow-up. Coarsened exact matching was used to strengthen causal inference in observational data. Weighted generalized linear models were then fit, including censoring weights. Analyses were conducted in 2019-2021.Results: Eviction was associated with 63% higher odds of losing Medicaid coverage (95% CI=1.38, 1.92, p<0.001), fewer pharmaceutical prescription fills (incidence rate ratio=0.68, 95% CI=0.52, 0.88, p=0.004), and lower odds of generating any healthcare spending (OR=0.72, 95% CI=0.61, 0.85, p<0.001). However, among patients who generated any spending, average spending was 20% higher for those evicted (95% CI=1.03, 1.40, p=0.017), such that evicted patients generated more spending on balance. Marginally significant estimates suggested associations with increased acute, and decreased ambulatory, care visits.Conclusions: Results suggest that eviction drives increased healthcare spending while disrupting healthcare access. Given previous research that Medicaid expansion lowered eviction rates, eviction and Medicaid disenrollment may operate cyclically, accumulating disadvantage. Preventing evictions may improve access to care and lower Medicaid costs. [ABSTRACT FROM AUTHOR]

A letter to the editor is presented in response to an article on the role played by medical interventions in improving the quality of life of people in the U.S., that was published in the November 2010 issue, along with a response from Peter A. Muennig and Sherry A. Glied to the letter.

Recent increases in market concentration among health plans, hospitals, and medical groups raise questions about what impact such mergers are having on costs to consumers. We examined the impact of market concentration on the growth of health insurance premiums between 2014 and 2015 in two Affordable Care Act state-based Marketplaces: Covered California and NY State of Health. We measured health plan, hospital, and medical group market concentration using the well-known Herfindahl-Hirschman Index (HHI) and used a multivariate regression model to relate these measures to premium growth. Both states exhibited a positive association between hospital concentration and premium growth and a positive (but not statistically significant) association between medical group concentration and premium growth. Our results for health plan concentration differed between the two states: It was positively associated with premium growth in New York but negatively associated with premium growth in California. The health plan concentration finding in Covered California may be the result of its selectively contracting with health plans. [ABSTRACT FROM AUTHOR]