Do Physicians’ Financial Incentives Affect Medical Treatment and Patient Health?

December 15, 2017

We investigate whether physicians’ financial incentives influence health care supply, technology diffusion, and resulting patient outcomes. In 1997, Medicare consolidated the geographic regions across which it adjusts physician payments, generating area-specific price shocks. Areas with higher payment shocks experience significant increases in health care supply. On average, a 2 percent increase in payment rates leads to a 3 percent increase in care provision. Elective procedures such as cataract surgery respond much more strongly than less discretionary services. Non-radiologists expand their provision of MRIs, suggesting effects on technology adoption. We estimate economically small health impacts, albeit with limited precision.

via American Economic Association

Elderly Alcohol Abuse and Alcoholism: Prevention and Rehabilitation

December 14, 2017

Alcohol abuse and alcoholism are prevalent in our society. This ubiquitous illness affects more lives each year. Alcoholism can be found in every economic level, every race, every nationality, the young, and the elderly. Alcoholism is one of the most destructive health problems (Krimmel, 1971).

Elderly alcohol abuse and alcoholism is examined regarding (a) the scope of the problem; (b) measures that may be used to prevent elderly alcoholism; and (c) rehabilitation for the elderly alcoholics.

via Elderly Alcohol Abuse and Alcoholism: Prevention and Rehabilitation by Kevin Synnott :: SSRN

Employment Status and Health Characteristics of Adults With Expanded Medicaid Coverage in Michigan

December 14, 2017

The Affordable Care Act (ACA) expanded Medicaid coverage to approximately 11 million working-age adults. Critics have raised concerns about providing Medicaid to adults capable of working. Several states have proposed work requirements in Section 1115 Medicaid waivers.1,2 Although none were approved during the Obama administration, the Trump administration is willing to consider such provisions.3 Prior analyses4 estimated that half of adults eligible for ACA Medicaid expansion were employed, and 62% of nondisabled adults were working or in school. Although these national estimates of Medicaid-eligible individuals are valuable, less is known about the employment experience of actual enrollees in Medicaid expansion states and which health characteristics may keep them from working. Complementary state-level analyses are needed as individual states consider whether to propose work requirements. This study examined the demographic and health characteristics associated with the employment status of current Medicaid expansion enrollees in Michigan, which expanded Medicaid under a Section 1115 waiver to nonelderly adults with incomes at or below 133% of the federal poverty level who do not otherwise qualify for Medicaid or Medicare based on disability or other criteria.

via Characteristics of Adults With Expanded Medicaid Coverage in Michigan | Health Care Reform | JAMA Internal Medicine | The JAMA Network

Congress Must Reform the Broken 340B Program

December 14, 2017

The Centers for Medicare and Medicaid Services recently finalized a rule, set to take effect January 1, that would reduce reimbursements to hospitals that administer 340B drugs. Currently, hospitals are reimbursed for the average sales price of a drug, plus an additional 6 percent to cover overhead costs.

This reimbursement rate makes sense when hospitals buy drugs at the average sales price. But it makes no sense when they buy drugs at a steep discount.

The CMS rule would change the reimbursement rate to the average sales price of a drug minus 22.5 percent. That’s more in line with hospitals’ actual acquisition costs. The change would save CMS $1.6 billion.

via Congress Must Reform the Broken 340B Program

Tracking Section 1332 State Innovation Waivers

December 14, 2017

Through Section 1332 of the Affordable Care Act (ACA), states may apply for innovation waivers to alter key ACA requirements in the individual and small group insurance markets. States can use the flexibility granted by 1332 waiver authority to shore up fragile insurance markets, address unique state insurance market issues, or experiment with alternative models of providing coverage to state residents. With Congressional efforts to repeal and replace the ACA on hold, attention will likely turn to 1332 waivers as states explore ways to address access and affordability issues in their individual and small group markets.

via Tracking Section 1332 State Innovation Waivers | The Henry J. Kaiser Family Foundation

Pharma & Healthcare #BeltwayBrief DEC 13, 2017 @ 08:01 AM 1,011 The Little Black Book of Billionaire Secrets Under New Bill, Medical Device Tax Might Vanish, But Only Temporarily

December 14, 2017

A controversial tax on medical device sales under the Affordable Care Act could be suspended again rather than disappear permanently under new legislation emerging in the Republican-led Congress.

The 2.3% tax on medical device sales that is part of the ACA has already been on a temporary hiatus since the beginning of 2016. That suspension is scheduled to expire at the end of the month.

But new legislation emerging in the U.S. House of Representatives would put the medical device tax on another hiatus. Reps Erik Paulsen (R-Minnesota) and Jackie Walorski (R-Indiana) said the proposed legislation would suspend the medical device tax for another five years under a new bill introduced Tuesday.

via Under New Bill, Medical Device Tax Might Vanish, But Only Temporarily

How Protected Classes in Medicare Part D Influence Drug Spending and Utilization: Evidence from the Synthetic Control Method

December 14, 2017

When the Medicare Part D prescription drug benefit was implemented in 2006, six drug classes were designated “protected classes.” Because responsibility for obtaining favorable drug prices depends on private insurers’ abilities to negotiate with pharmaceutical manufacturers using the threat of formulary exclusion, the protected class designation could undermine the insurers’ ability to control spending and utilization of drugs in these six classes. I estimate the effect of the protected class policy on total drug spending and utilization for Medicare beneficiaries. Following Abadie et al. (2010), I employ the synthetic control method on 2001-2011 data from the Medical Expenditure Panel Survey (MEPS). I find that protected status led to a significant increase of approximately $1.02 billion per class per year in overall spending for drugs in protected classes. Results for drug utilization were also positive but not significant. These results are important for informing the recent and ongoing deliberation by the Medicare program over whether to remove several classes from protection.

via How Protected Classes in Medicare Part D Influence Drug Spending and Utilization: Evidence from the Synthetic Control Method by Courtney Yarbrough :: SSRN