Getting Ryan-Wyden Wrong — The American Magazine

December 30, 2011

Although you would not know it from Emanuel’s editorial, there is nothing new about private health plans in the Medicare program. Private health plans have been offered to Medicare beneficiaries since the inception of Medicare in 1965. We have plentiful research on  the quality of care in capitated, private care plans versus “public” fee-for-service health plans for Medicare beneficiaries. (“Capitated” healthcare is that in which a medical provider is given a set fee per patient, as by an HMO, regardless of treatment required.) Two exhaustive reviews of the literature concluded that care in fee-for-service plans and capitated managed care plans was roughly equivalent. Capitated managed care plans do a little better on preventive care and fee-for-service plans do a little better on care of chronic illness.

Nor is there anything new about the specific version of premium support in the Wyden-Ryan proposal. Ralph Saul and the INA insurance company made the same proposal to Congress in 1979. In fact, it would be fair to say that virtually everyone who has taken a serious look at the Medicare program’s cost problems (which also date from the inception of the program) has come to the same conclusion. Instead of basing the program’s contribution to premiums on the cost of care in the traditional FFS health plan, the government contribution should be based on bids from competing health plans, including both private plans and traditional FFS Medicare. Jessica Vistnes and her colleagues at the Agency for Healthcare Research and Quality found that offering multiple health plans with a level dollar contribution to premiums minimized total healthcare costs compared to offering only one plan. Roger Feldman at the University of Minnesota recently estimated that premium support would result in immediate savings to the Medicare program of 9.5 percent of total program cost–5.6 percent more than the provisions in President Obama’s Affordable Care Act.

via Getting Ryan-Wyden Wrong — The American Magazine.


The dirty secret in Uncle Sam’s Friday trash dump – The Washington Post

December 29, 2011

the Medicare projections assume that the 2010 Affordable Care Act (ACA) will reduce health-care cost growth by 1.1 percent per year, despite doubts voiced by the GAO and a panel appointed by the Medicare board of trustees.

The panel and the GAO recommended including an alternate scenario in the year-end figures, in which the doc fix continues and the ACA cost reductions do not materialize. The result is a $12.4 trillion increase in the cost of the promises, to more than $46 trillion. Given Congress’s history with the doc fix, and the general paralysis in Washington, it’s hard to argue with the GAO’s lack of confidence in Congress’s ability to honor its own cost controls.

via The dirty secret in Uncle Sam’s Friday trash dump – The Washington Post.


Health Care Expenditure in the OECD Countries: Efficiency and Regulation by Pablo Hernández de Cos, Enrique Moral-Benito :: SSRN

December 28, 2011

The containment of health care expenditure is one of the major challenges facing public policymakers in the developed countries. This paper provides evidence of significant differences in the cross-country level of efficiency of health care expenditure, meaning that potential cost savings for the countries considered least efficient might be very high. Further, a significant relationship is found between the various health care policies and institutions in the OECD countries and the efficiency levels of health care systems. The findings are, however, highly sensitive to the efficiency-estimation methodology used.

via Health Care Expenditure in the OECD Countries: Efficiency and Regulation by Pablo Hernández de Cos, Enrique Moral-Benito :: SSRN.


Gingrich ’06 Memo: “Agree Entirely With Gov. Romney” on Health Care – ABC News

December 27, 2011

To conservatives, the biggest strike against Mitt Romney is the health care plan he put in place in Massachusetts, but Newt Gingrich lavished praise on Romney’s plan after it was passed in 2006.

“We agree entirely with Governor Romney and Massachusetts legislators that our goal should be 100 percent insurance coverage for all Americans,” Gingrich wrote in 2006.

And, Gingrich wrote, the key to achieving that goal was doing what Romney did in Massachusetts:  Requiring everybody who could afford it to buy health insurance.  In fact, Gingrich makes an impassioned case for the so-called individual mandate — which is also at the center of President Obama’s health plan — on conservative grounds.

via Gingrich ’06 Memo: “Agree Entirely With Gov. Romney” on Health Care – ABC News.


How Costly is Hospital Quality? A Revealed‐Preference Approach by John Romley, Dana Goldman :: SSRN

December 26, 2011

We analyze the cost of quality improvement in hospitals, dealing with two challenges. Hospital quality is multidimensional and hard to measure, while unobserved productivity may influence quality supply. We infer the quality of hospitals in Los Angeles from patient choices. We then incorporate ‘revealed quality’ into a cost function, instrumenting with hospital demand. We find that revealed quality differentiates hospitals, but is not strongly correlated with clinical quality. Revealed quality is quite costly, and tends to increase with hospital productivity. Thus, non‐clinical aspects of the hospital experience (perhaps including patient amenities) play important roles in hospital demand, competition, and costs.

via How Costly is Hospital Quality? A Revealed‐Preference Approach by John Romley, Dana Goldman :: SSRN.


Utilization of Infertility Treatments: The Effects of Insurance Mandates by Marianne Bitler, Lucie Schmidt :: SSRN

December 26, 2011

Over the last several decades, both delay of childbearing and fertility problems have become increasingly common among women in developed countries. At the same time, technological changes have made many more options available to individuals experiencing fertility problems. However, these technologies are expensive, and only 25% of health insurance plans in the United States cover infertility treatment. As a result of these high costs, legislation has been passed in 15 states that mandates insurance coverage of infertility treatment in private insurance plans. In this paper, we examine whether mandated insurance coverage for infertility treatment affects utilization. We allow utilization effects to differ by age and education, since previous research suggests that older, more educated women should be more likely to be directly affected by the mandates than younger women and less educated women, both because they are at higher risk of fertility problems and because they are more likely to have private health insurance which is subject to the mandate. We find robust evidence that the mandates do have a significant effect on utilization for older, more educated women that is larger than the effects found for other groups. These effects are largest for the use of ovulation-inducing drugs and artificial insemination.

via Utilization of Infertility Treatments: The Effects of Insurance Mandates by Marianne Bitler, Lucie Schmidt :: SSRN.


Immigrants, Welfare Reform, and the U.S. Safety Net by Marianne Bitler, Hilary Hoynes :: SSRN

December 26, 2011

Beginning with the 1996 federal welfare reform law many of the central safety net programs in the U.S. eliminated eligibility for legal immigrants, who had been previously eligible on the same terms as citizens. These dramatic cutbacks affected eligibility not only for cash welfare assistance for families with children, but also for food stamps, Medicaid, SCHIP, and SSI. In this paper, we comprehensively examine the status of the U.S. safety net for immigrants and their family members. We document the policy changes that affected immigrant eligibility for these programs and use the CPS for 1995-2010 to analyze trends in program participation, income, and poverty among immigrants (and natives). We pay particular attention to the recent period and examine how immigrants and their children are faring in the “Great Recession” with an eye toward revealing how these policy changes have affected the success of the safety net in protecting this population.

via Immigrants, Welfare Reform, and the U.S. Safety Net by Marianne Bitler, Hilary Hoynes :: SSRN.