Imperfect risk adjustment, risk preferences, and sorting in competitive health insurance markets

Research trends in contemporary health economics: a scientometric analysis on collective content of specialty journals

INTRODUCTION

Health economics is a thriving sub-discipline of economics. Applied health economics research is considered essential in the health care sector and is used extensively by public policy makers. For scholars, it is important to understand the history and status of health economics-when it emerged, the rate of research output, trending topics, and its temporal evolution-to ensure clarity and direction when formulating research questions.

METHODS

Nearly 13,000 articles were analysed, which were found in the collective publications of the ten most specialised health economic journals. We explored this literature using patterns of term co-occurrence and document co-citation.

RESULTS

The research output in this field is growing exponentially. Five main research divisions were identified: (i) macroeconomic evaluation, (ii) microeconomic evaluation, (iii) measurement and valuation of outcomes, (iv) monitoring mechanisms (evaluation), and (v) guidance and appraisal. Document co-citation analysis revealed eighteen major research streams and identified variation in the magnitude of activities in each of the streams. A recent emergence of research activities in health economics was seen in the Medicaid Expansion stream. Established research streams that continue to show high levels of activity include Child Health, Health-related Quality of Life (HRQoL) and Cost-effectiveness. Conversely, Patient Preference, Health Care Expenditure and Economic Evaluation are now past their peak of activity in specialised health economic journals. Analysis also identified several streams that emerged in the past but are no longer active.

CONCLUSIONS

Health economics is a growing field, yet there is minimal evidence of creation of new research trends. Over the past 10 years, the average rate of annual increase in internationally collaborated publications is almost double that of domestic collaborations (8.4% vs 4.9%), but most of the top scholarly collaborations remain between six countries only.

Potentially Inappropriate Medication Use in Community-Dwelling Older Adults Living with Dementia

Background: The Beers Criteria identifies potentially inappropriate medications (PIMs) that should be avoided in older adults living with dementia. Objective: The aim of this study was to provide estimates of the prevalence and persistence of PIM use among community-dwelling older adults living with dementia in 2011-2017. Methods: Medicare claims data were used to create an analytic dataset spanning from 2011 to 2017. The analysis included community-dwelling Medicare fee-for-service beneficiaries aged 65 and older who were enrolled in Medicare Part D plans, had diagnosis for dementia, and were alive for at least one calendar year. Dementia status was determined using Medicare Chronic Conditions Date Warehouse (CCW) Chronic Condition categories and Charlson Comorbidity Index. PIM use was defined as 2 or more prescription fills with at least 90 days of total days-supply in a calendar year. Descriptive statistics were used to report the prevalence and persistence of PIM use. Results: Of 1.6 million person-year observations included in the sample, 32.7% used one or more PIMs during a calendar year in 2011-2017. Breakdown by drug classes showed that 14.9% of the sample used anticholinergics, 14.0% used benzodiazepines, and 11.0% used antipsychotics. Conditional on any use, mean annual days-supply for all PIMs was 270.6 days (SD = 102.7). The mean annual days-supply for antipsychotic use was 302.7 days (SD = 131.2). Conclusion: Significant proportion of community-dwelling older adults with dementia used one or more PIMs, often for extended periods of time. The antipsychotic use in the community-dwelling older adults with dementia remains as a significant problem.

The pattern of health insurance economic resilience in the Covid 19 pandemic shock

Objective

Health insurance is based on people’s significant risks in receiving health services that they cannot afford alone. Since the outbreak of the corona epidemic, the health insurance system has suffered many economic problems. Designing a model of a health insurance system based on the requirements of a resilient economy can improve the functions of this system in the corona crisis.

Results

In this research 12, structural components were obtained in the form of 4 conceptual components. The 4 main conceptual components are Knowledge-based economy, Economic stability, Economic resilience, and justice. The knowledge-based economy is the basis for the formation of economic resilience in the health insurance systems. Health insurance systems will achieve two crucial intermediate results, namely economic resilience, and economic stability, by building the basic infrastructure of a knowledge-based economy. In the long run, maintaining such intermediate results is the foundation of justice in the health insurance system.

Supplementary Information

The online version contains supplementary material available at 10.1186/s13104-021-05779-2.

ACA Marketplace Premiums Grew More Rapidly In Areas With Monopoly Insurers Than In Areas With More Competition

Premiums have increased rapidly in the two most recent years of the health insurance Marketplaces, with notable variation across state rating areas. Some experts have speculated that these increases are due to greater enrollment among sicker patients, the expiration of market stabilization policies, or the federal government's discontinuation of funding for cost-sharing subsidies. However, these factors do not explain why some rating areas have experienced rapid premium growth, while others have experienced more modest increases. I used a comprehensive database of information about premiums and market characteristics for rating areas in states with federally facilitated Marketplaces to demonstrate that higher premiums are associated with local health insurance monopolies. In 2018, Marketplace premiums were 50 percent ($180) higher, on average, in rating areas with monopolist insurers, compared to those with more than two insurers. This was driven by large premium increases for the monopolist insurers' lowest-cost plans. Understanding how insurer competition has affected enrollment, costs, and quality will help guide future individual-market reforms.

Paying Medicare Advantage plans: To level or tilt the playing field

Medicare beneficiaries are eligible for health insurance through the public option of traditional Medicare (TM) or may join a private Medicare Advantage (MA) plan. Both are highly subsidized but in different ways. Medicare pays for most of costs directly in TM, and subsidizes MA plans based on a "benchmark" for each beneficiary choosing a private plan. The level of this benchmark is arguably the most important policy decision Medicare makes about the MA program. Many analysts recommend equalizing Medicare's subsidy across the options - referred to in policy circles as a "level playing field." This paper studies the normative question of how to set the level of the benchmark, applying the versatile model developed by Einav and Finkelstein (EF) to Medicare. The EF framework implies unequal subsidies to counteract risk selection across plan types. We also study other reasons to tilt the field: the relative efficiency of MA vs. TM, market power of MA plans, and institutional features of the way Medicare determines subsidies and premiums. After review of the empirical and policy literature, we conclude that in areas where the MA market is competitive, the benchmark should be set below average costs in TM, but in areas characterized by imperfect competition in MA, it should be raised in order to offset output (enrollment) restrictions by plans with market power. We also recommend specific modifications of Medicare rules to make demand for MA more price elastic.

Measuring efficiency of health plan payment systems in managed competition health insurance markets

Adverse selection in health insurance markets leads to two types of inefficiency. On the demand side, adverse selection leads to plan price distortions resulting in inefficient sorting of consumers across health plans. On the supply side, adverse selection creates incentives for plans to inefficiently distort benefits to attract profitable enrollees. Reinsurance, risk adjustment, and premium categories address these problems. Building on prior research on health plan payment system evaluation, we develop measures of the efficiency consequences of price and benefit distortions under a given payment system. Our measures are based on explicit economic models of insurer behavior under adverse selection, incorporate multiple features of plan payment systems, and can be calculated prior to observing actual insurer and consumer behavior. We illustrate the use of these measures with data from a simulated market for individual health insurance.

RISK CORRIDORS AND REINSURANCE IN HEALTH INSURANCE MARKETPLACES: Insurance for Insurers

Health Insurance Marketplaces established by the Affordable Care Act implement reinsurance and risk corridors. Reinsurance limits insurer costs associated with specific individuals, while risk corridors protect against aggregate losses. Both tighten the insurer's distribution of expected costs. This paper compares the economic costs and consequences of reinsurance and risk corridors. We simulate the insurer's cost distribution under reinsurance and risk corridors using data for a group of individuals likely to enroll in Marketplace plans from the Medical Expenditure Panel Survey. We compare reinsurance and risk corridors in terms of risk reduction and incentives for cost containment. We find that reinsurance and one-sided risk corridors achieve comparable levels of risk reduction for a given level of incentives. We also find that the policies being implemented in the Marketplaces (a mix of reinsurance and two-sided risk corridor policies) substantially limit insurer risk but perform similarly to a simpler stand-alone reinsurance policy.