The ProblemAdministrative costs account for one-quarter to one-third of total health-care spending in the United States—far greater than the amount necessary to deliver effective health care. Excessive administrative burden results in higher costs for physicians, insurers, and patients alike.The ProposalCutler proposes several reforms to the U.S. health-care system aimed at reducing administrative costs. Specifically, his proposal would establish a clearinghouse for bill submission, simplify prior authorization, harmonize quality reporting, and enhance data interoperability in the health-care system. Cutler’s proposal to lower administrative costs could save $50 billion annually.
Using decades of variation in the federal and state Earned Income Tax Credit (EITC) and the Panel Study of Income Dynamics (PSID) dataset, I examine the impact of exposure to EITC expansions in utero and during childhood on health outcomes in adulthood. In order to overcome the confounding relationship between family income and health outcomes, this study uses the maximum EITC benefit as the key variable. Reduced-form estimates show that EITC expansions had a positive impact on self-reported health status and other health measurements. Specifically, a $1000 increase in the maximum EITC exposure from ages 13 to 18 corresponds with a 0.125 point increase in the reported health status during adulthood. In addition, being exposed to EITC expansions in utero increases reported health status by 0.043 point. Relative to the range of reported health of 1 to 5 and the standard deviation of 0.97, these are very small effects. Nonetheless, these health effects are consequential, associating with increases in both family income and maternal labor supply. Labor supply induced time substitution effect competes with the income enhancement, with different relative impacts at different age intervals, creating a “U-shaped” overall health consequence.
Importance The United States spends more on health care than any other country, with costs approaching 18% of the gross domestic product (GDP). Prior studies estimated that approximately 30% of health care spending may be considered waste. Despite efforts to reduce overtreatment, improve care, and address overpayment, it is likely that substantial waste in US health care spending remains. Objectives To estimate current levels of waste in the US health care system in 6 previously developed domains and to report estimates of potential savings for each domain. Evidence A search of peer-reviewed and “gray” literature from January 2012 to May 2019 focused on the 6 waste domains previously identified by the Institute of Medicine and Berwick and Hackbarth: failure of care delivery, failure of care coordination, overtreatment or low-value care, pricing failure, fraud and abuse, and administrative complexity. For each domain, available estimates of waste-related costs and data from interventions shown to reduce waste-related costs were recorded, converted to annual estimates in 2019 dollars for national populations when necessary, and combined into ranges or summed as appropriate. Findings The review yielded 71 estimates from 54 unique peer-reviewed publications, government-based reports, and reports from the gray literature. Computations yielded the following estimated ranges of total annual cost of waste: failure of care delivery, $102.4 billion to $165.7 billion; failure of care coordination, $27.2 billion to $78.2 billion; overtreatment or low-value care, $75.7 billion to $101.2 billion; pricing failure, $230.7 billion to $240.5 billion; fraud and abuse, $58.5 billion to $83.9 billion; and administrative complexity, $265.6 billion. The estimated annual savings from measures to eliminate waste were as follows: failure of care delivery, $44.4 billion to $93.3 billion; failure of care coordination, $29.6 billion to $38.2 billion; overtreatment or low-value care, $12.8 billion to $28.6 billion; pricing failure, $81.4 billion to $91.2 billion; and fraud and abuse, $22.8 billion to $30.8 billion. No studies were identified that focused on interventions targeting administrative complexity. The estimated total annual costs of waste were $760 billion to $935 billion and savings from interventions that address waste were $191 billion to $282 billion. Conclusions and Relevance In this review based on 6 previously identified domains of health care waste, the estimated cost of waste in the US health care system ranged from $760 billion to $935 billion, accounting for approximately 25% of total health care spending, and the projected potential savings from interventions that reduce waste, excluding savings from administrative complexity, ranged from $191 billion to $282 billion, representing a potential 25% reduction in the total cost of waste. Implementation of effective measures to eliminate waste represents an opportunity reduce the continued increases in US health care expenditures.Do you want to read t
SEXUAL, health and aesthetic norms do not vary much across the West. Male circumcision is an exception. Over half of American boys are snipped, compared with 2-3% in Finland and Britain. The procedure is justified in America on grounds given little credence in Europe: that it makes genitals cleaner, nicer-looking and more socially acceptable.
Source: Snip snap – Male circumcision
This is why Nemours Children’s Health System developed the Prevention Business Case Financial Simulation Tool and accompanying user guide. While exploring strategies for Medicaid investment in preventative health services, Nemours discovered that there was a lack of tools and resources available to state Medicaid agencies and MCOs to make a business case for investing in prevention. To help these organizations fill this need, Nemours developed the Financial Simulation tool using existing research literature and partnering with the Maryland Department of Health to test and validate the tool with Maryland Medicaid data. The Financial Simulation tool provides key “return on investment” (ROI) information to any state interested in exploring and implementing childhood obesity prevention interventions.The tool allows states’ Medicaid agencies and MCOs to estimate the cost of investing in various childhood obesity treatment and prevention services; health care cost savings resulting from intervention; expected short and medium-term health benefits; and a timeline of savings in order to provide evidence of the business case for Medicaid obesity prevention interventions.
The impact of financial incentives on health and health care: Evidence from a large wellness program – Einav – 2019 – Health Economics – Wiley Online LibraryJanuary 10, 2019
Workplace wellness programs have become increasingly common in the United States, although there is not yet consensus regarding the ability of such programs to improve employees’ health and reduce health care costs. In this paper, we study a program offered by a large U.S. employer that provides substantial financial incentives directly tied to employees’ health. The program has a high participation rate among eligible employees, around 80%, and we analyze the data on the first 4 years of the program, linked to health care claims. We document robust improvements in employee health and a correlation between certain health improvements and reductions in health care cost. Despite the latter association, we cannot find direct evidence causally linking program participation to reduced health care costs, although it seems plausible that such a relationship will arise over longer horizons.
Hunger Pains? SNAP Timing, and Emergency Room Visits by Chad D. Cotti, John Gordanier, Orgul D. Ozturk :: SSRNJanuary 2, 2019
The impact of poor nutrition has been established as an important determinant of health. It has also been demonstrated that the single monthly treatment of SNAP benefits leaves meaningful nutritional deficiencies in recipient households during the final weeks of the benefits cycle. Further, health related behaviors have been documented to be altered on the date of food stamp receipt. This project exploits highly detailed and linked administrative data on health care utilization of food stamp recipients and randomized food stamp receipt dates to allow us to measure the impact of food stamp treatment days and the low nutritional periods created by the SNAP benefits cycle on the likelihood of emergency department (ER) utilization among the Medicaid population. Our main finding is that among SNAP receiving individuals in the ER on a particular day, the share that received benefits on that day is 3.5% lower than would be expected. This effect is present across all age groups, although the magnitude is smallest for young children. Further, we find that for individuals 55 and over, the share of ER visits that comes from individuals that are past the third week of their SNAP benefit month, i.e. received benefits more than 21 days ago, is 1.5% larger than would be expected. This suggests that these older individuals are more likely to visit the ER late in the SNAP benefit cycle, which is consistent with increased food insecurity as a possible mechanism linking the food stamp benefits cycle to emergency care utilization. We find no such effect for younger individuals.