Health care costs: on the rise again

Four years into MACRA: What has changed?

In 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA), a policy intended to transition Medicare away from pure fee-for-service care to value-based care. MACRA does this by evaluating the cost and quality of providers, resulting in financial bonuses and penalties in Medicare reimbursement. MACRA offers two tracks for participation, the Merit-based Incentive Payment System and the Advanced Alternative Payment Models. Although the payment rules are different for each of the tracks, common to both is an emphasis on holding providers accountable for high-quality, cost-efficient care. Early data suggest that the End-stage renal disease Seamless Care Organizations, an Advanced Alternative Payment Model, resulted in cost-savings concurrent with improved care quality. Additionally, on July 10th 2019, the President signed an executive order that further attempts to improve kidney disease care by shifting its focus away from in-center hemodialysis toward chronic kidney disease care, home-based dialysis, kidney transplantation, and innovating new therapies for kidney disease. These changes to nephrology reimbursement present a unique opportunity to improve patient outcomes in a cost-effective way. A multidisciplinary effort among policy makers, nephrology providers, and patient advocacy groups is critical to ensure these changes in care delivery safeguard and improve patient health.

The Medicare Access and CHIP Reauthorization Act: Implications for Nephrology

In response to rising Medicare costs, Congress passed the Medicare Access and Children's Health Insurance Program Reauthorization Act in 2015. The law fundamentally changes the way that health care providers are reimbursed by implementing a pay for performance system that rewards providers for high-value health care. As of the beginning of 2017, providers will be evaluated on quality and in later years, cost as well. High-quality, cost-efficient providers will receive bonuses in reimbursement, and low-quality, expensive providers will be penalized financially. The Centers for Medicare and Medicaid Services will evaluate provider costs through episodes of care, which are currently in development, and alternative payment models. Although dialysis-specific alternative payment models have already been implemented, current models do not address the transition of patients from CKD to ESRD, a particularly vulnerable time for patients. Nephrology providers have an opportunity to develop cost-efficient ways to care for patients during these transitions. Efforts like these, if successful, will help ensure that Medicare remains solvent in coming years.

Recent Trends in Primary Care Interest and Career Choices Among Medical Students at an Academic Medical Institution

Phenomenon: As an impending shortage of primary care physicians is expected, understanding career trajectories of medical students will be useful in supporting interest in primary care fields and careers. The authors sought to characterize recent trends in primary care interest and career trajectories among medical students at an academic medical institution that did not have a family medicine department.

APPROACH

Match data for 2,477 graduates who matched into resident training programs between 1989 and 2014 were analyzed to determine the proportion entering primary care residency programs. An online search and confirmatory phone call methodology was used to determine primary care career trajectories for the 795 graduates who matched into primary care residency programs between 1989 to 2010. Subanalyses were performed to characterize primary care career entrance among graduates who matched into the three primary care residency programs: Family Medicine, Categorical and Primary Care Internal Medicine, and Categorical and Primary Care Pediatrics.

FINDINGS

Between 1989 and 2014, 911 (37%) of all matched graduates matched into primary care residency programs. Of the 795 graduates who matched into these programs between 1989 and 2010, less than half (245; 31%) entered primary care careers. Of the graduates who ultimately entered primary care careers, 82% matched into either internal medicine or pediatrics residency programs and 18% matched into family medicine programs. Although there have been fluctuations in primary care interest that seem to parallel health care trends over the 26-year period, the overall percentage of graduates entering primary care residency programs and careers has remained fairly stable. Between 2006 and 2010, entrance into both primary care residency programs and primary care careers steadily increased. Despite this, the overall percentage of matched graduates who entered primary care careers over the 22-year study period (12%) was less than the national average (16%-18%). Insights: In the 26-year period between 1989 and 2014, primary care career interest increased slightly among medical students at this academic medical institution, with fluctuations that seem to coincide with national health care trends. Year-to-year fluctuations appear to be driven by rising numbers of Categorical Pediatrics and Categorical Internal Medicine matchers pursuing careers in primary care. There may be a need for specialized curricula and strategies to promote and retain interest in primary care at academic medical institutions, especially at institutions without family medicine training programs.

Do the Medicaid and Medicare programs compete for access to health care services? A longitudinal analysis of physician fees, 1998-2004

As the demand for publicly funded health care continues to rise in the U.S., there is increasing pressure on state governments to ensure patient access through adjustments in provider compensation policies. This paper longitudinally examines the fees that states paid physicians for services covered by the Medicaid program over the period 1998-2004. Controlling for an extensive set of economic and health care industry characteristics, the elasticity of states' Medicaid fees, with respect to Medicare fees, is estimated to be in the range of 0.2-0.7 depending on the type of physician service examined. The findings indicate a significant degree of price competition between the Medicaid and Medicare programs for physician services that is more pronounced for cardiology and critical care, but not hospital care. The results also suggest several policy levers that work to either increase patient access or reduce total program costs through changes in fees.

If slow rate of health care spending growth persists, projections may be off by $770 billion

Despite earlier forecasts to the contrary, US health care spending growth has slowed in the past four years, continuing a trend that began in the early 2000s. In this article we attempt to identify why US health care spending growth has slowed, and we explore the spending implications if the trend continues for the next decade. We find that the 2007-09 recession, a one-time event, accounted for 37 percent of the slowdown between 2003 and 2012. A decline in private insurance coverage and cuts to some Medicare payment rates accounted for another 8 percent of the slowdown, leaving 55 percent of the spending slowdown unexplained. We conclude that a host of fundamental changes--including less rapid development of imaging technology and new pharmaceuticals, increased patient cost sharing, and greater provider efficiency--were responsible for the majority of the slowdown in spending growth. If these trends continue during 2013-22, public-sector health care spending will be as much as $770 billion less than predicted. Such lower levels of spending would have an enormous impact on the US economy and on government and household finances.

Can all cause readmission policy improve quality or lower expenditures? A historical perspective on current initiatives

All-cause readmission to inpatient care is of wide policy interest in the United States and a number of other countries (Centers for Medicare and Medicaid Services, in the United Kingdom by the National Centre for Health Outcomes Development, and in Australia by the Australian Institute of Health and Welfare). Contemporary policy efforts, including high powered incentives embedded in the current US Hospital Readmission Reduction Program, and the organizationally complex interventions derived in anticipation of this policy, have been touted based on potential cost savings. Strong incentives and resulting interventions may not enjoy the support of a strong theoretical model or the empirical research base that are typical of strong incentive schemes. We examine the historical broad literature on the issue, lay out a 'full' conceptual organizational model of patient transitions as they relate to the hospital, and discuss the strengths and weaknesses of previous and proposed policies. We use this to set out a research and policy agenda on this critical issue rather than attempt to conduct a comprehensive structured literature review. We assert that researchers and policy makers should consider more fundamental societal issues related to health, social support and health literacy if progress is going to be made in reducing readmissions.

Impacts of rising health care costs on families with employment-based private insurance: a national analysis with state fixed effects

BACKGROUND

Given the rapid growth of health care costs, some experts were concerned with erosion of employment-based private insurance (EBPI). This empirical analysis aims to quantify the concern.

METHODS

Using the National Health Account, we generated a cost index to represent state-level annual cost growth. We merged it with the 1996-2003 Medical Expenditure Panel Survey. The unit of analysis is the family. We conducted both bivariate and multivariate logistic analyses.

RESULTS

The bivariate analysis found a significant inverse association between the cost index and the proportion of families receiving an offer of EBPI. The multivariate analysis showed that the cost index was significantly negatively associated with the likelihood of receiving an EBPI offer for the entire sample and for families in the first, second, and third quartiles of income distribution. The cost index was also significantly negatively associated with the proportion of families with EBPI for the entire year for each family member (EBPI-EYEM). The multivariate analysis confirmed significance of the relationship for the entire sample, and for families in the second and third quartiles of income distribution. Among the families with EBPI-EYEM, there was a positive relationship between the cost index and this group's likelihood of having out-of-pocket expenditures exceeding 10 percent of family income. The multivariate analysis confirmed significance of the relationship for the entire group and for families in the second and third quartiles of income distribution.

CONCLUSIONS

Rising health costs reduce EBPI availability and enrollment, and the financial protection provided by it, especially for middle-class families.

New estimates of the demand for physical and mental health treatment

Consumers' price responsiveness is central to US health-care reform proposals, but the best available estimates are now more than 25 years old. We estimate health-care demands by calculating expected end-of-year prices and incorporating them into a zero-inflated ordered probit model applied to several overlapping panels of data from 1996 to 2003. Results from our correlated random effects specification indicate that the price responsiveness of ambulatory mental health treatment has decreased substantially and is now slightly lower than physical health treatment. This suggests that concerns over moral hazard alone do not warrant less generous coverage for mental health. However, prescription drug demand is more price elastic.

The trend in mental health-related mortality rates in Australia 1916-2004: implications for policy

BACKGROUND

This study determines the trend in mental health-related mortality (defined here as the aggregation of suicide and deaths coded as "mental/behavioural disorders"), and its relative numerical importance, and to argue that this has importance to policy-makers. Its results will have policy relevance because policy-makers have been predominantly concerned with cost-containment, but a re-appraisal of this issue is occurring, and the trade-off between health expenditures and valuable gains in longevity is being emphasised now. This study examines longevity gains from mental health-related interventions, or their absence, at the population level. The study sums mortality data for suicide and mental/behavioural disorders across the relevant ICD codes through time in Australia for the period 1916-2004. There are two measures applied to the mortality rates: the conventional age-standardised headcount; and the age-standardised Potential Years of Life Lost (PYLL), a measure of premature mortality. Mortality rates formed from these data are analysed via comparisons with mortality rates for All Causes, and with circulatory diseases, cancer and motor vehicle accidents, measured by both methods.

RESULTS

This study finds the temporal trend in mental health-related mortality rates (which reflects the longevity of people with mental illness) has worsened through time. There are no gains. This trend contrasts with the (known) gains in longevity from All Causes, and the gains from decreases achieved in previously rising mortality rates from circulatory diseases and motor vehicle accidents. Also, PYLL calculation shows mental health-related mortality is a proportionately greater cause of death compared with applying headcount metrics.

CONCLUSIONS

There are several factors that could reverse this trend. First, improved access to interventions or therapies for mental disorders could decrease the mortality analysed here. Second, it is important also that new efficacious therapies for various mental disorders be developed. Furthermore, it is also important that suicide prevention strategies be implemented, particularly for at-risk groups. To bring the mental health sector into parity with many other parts of the health system will require knowledge of the causative factors that underlie mental disorders, which can, in turn, lead to efficacious therapies. As in any case of a knowledge deficit, what is needed are resources to address that knowledge gap. Conceiving the problem in this way, ie as a knowledge gap, indicates the crucial role of research and development activity. This term implies a concern, not simply with basic research, but also with applied research. It is commonplace in other sectors of the economy to emphasise the trichotomy of invention, innovation and diffusion of new products and processes. This three-fold conception is also relevant to addressing the knowledge gap in the mental health sector.

The missing technology: an international comparison of human capital investment in healthcare

This article explores human capital investment to understand cross-sectional variation and differences in growth of health spending among the US, Australia and Canada. Using a human capital model developed by Mincer, the article examines how rate of return to schooling and years of schooling impact wage rate levels in healthcare. The model is extended to approximate the probable trajectory of healthcare wage rate growth and thus the impact on health spending. The results suggest that a higher rate of return to schooling and a more educated healthcare workforce in the US may contribute to higher healthcare wage rates and thus contribute to higher health spending levels than in Canada and Australia. The results also suggest that average healthcare wage rates are growing at the rate of potential GDP; healthcare wage rates are not driving the growth of health spending.

Who is making lifestyle changes due to preventive health care information? A demographic analysis

This paper sought to describe from a set of demographic and lifestyle characteristics, the person who is significantly and positively impacted by preventive health care (PHC) information. Based on past research, six two-part hypotheses (PHC information and lifestyle) were developed, with a total examination of 12 possible relationships. Five of the six hypotheses were at least partially accepted, as were eight out of the 12 possible relationships. In addition, there was at least one significant relationship with a demographic variable in 12 of the 13 lifestyle change variables. It can be said with confidence that persons who are seeking and are positively impacted by PHC information are better educated, have higher incomes, are female, usually older, and married. The most important lifestyle changes emanating from PHC information are "changes in eating habits," "having periodic physician checkups," "utilizing nutritional labeling," and "joining a health club or wellness center." "Changes in social life," "sleeping habits," "getting regular exercise," and "attendance at health fairs and seminars" were also associated with the utilization of PHC information, but to a lesser extent.

Managed care's price bargaining with hospitals

Research has shown that managed care (MC) slowed the rate of growth in health care spending in the 1990s, primarily via lower unit prices paid. However, the mechanism of MC's price bargaining has not been well studied. This article uses a unique panel dataset with actual hospital prices in Massachusetts between 1994 and 2000 to examine the sources of MC's bargaining power. I find two significant determinants of price discounts. First, plans with large memberships are able to extract volume discounts across hospitals. Second, health plans that are more successful at channeling patients can extract greater discounts. Patient channeling can add to the volume discount that plans negotiate.

Ciência, tecnologia e inovação em saúde e desenvolvimento social e qualidade de vida: teses para debate

Este texto apresenta algumas teses importantes para o desenvolvimento da ciência e tecnologia em saúde, a serem discutidas na 13ª Conferência Nacional de Saúde. Nele foram analisados, com base na literatura, os fatores e processos que determinaram os padrões atuais de produção, incorporação e avaliação de tecnologias nos sistemas de serviços de saúde, que se inserem no contexto de medicalização das sociedades contemporâneas. Foram analisadas também as políticas públicas científicas e tecnológicas e de saúde propostas nos anos 90 nos países desenvolvidos e em desenvolvimento para aumentar o impacto do desenvolvimento científico e tecnológico sobre a saúde das populações. Foram identificadas as dificuldades que essas políticas enfrentam para alcançar o impacto desejado, e os desafios a serem superados no século XXI.

[From production to evaluation of health systems technologies: challenges for the 21st century]

The study analyzes factors and processes identified in the literature that determine the patterns of production, use and assessment of the health care technologies, which are part of the "medicalization" of contemporary societies. We also evaluate the scientific and technological public and health care policies proposed during the 1990s in developed and developing countries to enhance the impact of scientific and technological development on population health. Problems facing these policies were identified, as were the challenges to be overcome in the twenty-first century.

Managed care and the scale efficiency of US hospitals

Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992-1996 Health Care Utilization Project sample of hospitals to analyze the relationship between managed care penetration in local insurance markets and hospital scale efficiency. After controlling for hospital and market area variables, we find that managed care insurance, particularly the preferred provider type, is associated with increases in hospital scale efficiency in tertiary cases. The results presented here are consistent with the view that managed care can lead to reductions in health cost inflation by controlling the diffusion of technology via improvements in the scale efficiency of hospitals.

The rising prevalence of treated disease: effects on private health insurance spending

In this paper we present a new framework for understanding the factors driving the growth in private health insurance spending. Our analysis estimates how much of the rise in spending is attributable to a rise in treated disease prevalence and spending per treated case. Our results reveal that the rise in treated disease prevalence, rather than the rise in spending per treated case, was the most important determinant of the growth in private insurance spending between 1987 and 2002. A rise in population risk factors and the introduction of new technologies underlie these trends.

The impact of obesity on rising medical spending

Obese people incur higher health care costs at a given point in time, but how rising obesity rates affect spending growth over time is unknown. We estimate obesity-attributable health care spending increases between 1987 and 2001. Increases in the proportion of and spending on obese people relative to people of normal weight account for 27 percent of the rise in inflation-adjusted per capita spending between 1987 and 2001; spending for diabetes, 38 percent; spending for hyperlipidemia, 22 percent; and spending for heart disease, 41 percent. Increases in obesity prevalence alone account for 12 percent of the growth in health spending.