JAMA Forum: Hospitals Don’t Shift Costs From Medicare or Medicaid to Private Insurers – news@JAMA

January 5, 2017

Despite a substantial body of evidence to the contrary, many people believe hospitals shift costs in this way. For example, in 2014, Don George, MBA, the president and CEO of Blue Cross Blue Shield of Vermont wrote, “When government reimbursements are insufficient to cover the cost of the services a facility provides to Medicare or Medicaid beneficiaries, hospitals charge patients with private insurance enough to cover not only the cost of their services, but the shortfall created by government reimbursements as well.”In truth, it’s been nearly 2 decades since any rigorous study has found evidence of substantial cost shifting.

Recent work has found the opposite effect—when public programs pay hospitals less, so do private insurers. In a 2013 study published in Health Affairs, Chapin White, PhD, MPP, now a senior policy researcher at Rand Corporation, found that a 10% reduction in Medicare payments to hospitals was associated with a nearly 8% reduction in prices hospitals charge private insurers. Another study by him and Vivian Wu, PhD, now at the University of Southern California, published in Health Services Research in 2013, found that a reduction in hospital inpatient revenue from Medicare was associated with an even larger decline in total revenue, also suggesting hospitals cut prices charged to private payers.

Source: JAMA Forum: Hospitals Don’t Shift Costs From Medicare or Medicaid to Private Insurers – news@JAMA


Narrow Provider Networks for Employer Plans by Mark A. Hall, Paul Fronstin :: SSRN

January 5, 2017

The authors conducted in-depth qualitative research to examine questions around provider networks in employer health plans, particularly the development of so-called “narrow networks,” which have grown in the individual market exchanges under the Patient Protection and Affordable Care Act of 2010 (ACA). These narrow networks are characterized by offering considerably fewer health providers than is typical in the group market, and they are formed primarily based on price discounting. The research includes the review of peer-reviewed journals, news sources, and public policy reports; structured interviews with a convenience sample of human resource benefit directors at 11 large employers; and field research by health-policy experts in a dozen states. This paper describes the research in more detail and analyzes the reported facts and viewpoints.

Major findings include the following: Narrow provider networks are receiving renewed attention, following their increasing prominence in the ACA’s individual (nongroup) marketplace exchanges, which are highly price-competitive. So far, this renewed interest in narrow networks has not translated strongly to employers. For example, in 2016, only 7 percent of employers with health plans offered a narrow network. Also, in 2014, employers ranked narrow networks the least effective among several strategies to manage health insurance costs. Reasons employers give for their subdued interest include absence of a track record showing sustained (year-over-year) savings; concern about antagonizing workers; spotty availability of narrow networks, especially in rural areas; greater interest currently in other cost-savings strategies; and reluctance to adopt substantial changes in benefit structures until the future of the ACA’s so-called “Cadillac tax” is resolved. There are signs that employers’ interest in narrow networks may grow in the near future. More than one-third of employers with health plans that have 5,000 or more workers now offer some type of alternative network, including tiered or “high-performance” networks. Field reports indicate increasing adoption of narrow networks by both large and small employers, particularly in urban markets around the country. Where narrow networks are offered, their adoption could be increased by giving workers stronger financial incentives to consider them. Offering workers a fixed (“defined”) contribution that does not vary by choice of plan is one way to confer such incentives, and private exchanges are a way to offer workers a broader range of choice. Currently, however, neither defined contributions nor private exchanges are widely used by employers.

Source: Narrow Provider Networks for Employer Plans by Mark A. Hall, Paul Fronstin :: SSRN


The Cadillac Tax and Its Potential to Transform How Americans Purchase Health Care Services by Richard L. Kaplan :: SSRN

December 23, 2016

This Article examines one of the most contentious provisions of the Affordable Care Act – namely, the 40% excise tax on high-value health insurance provided by employers. This levy, commonly denominated the “Cadillac” tax, is scheduled to take effect in 2020 but has already induced many employers to raise annual deductibles on the health insurance they provide to reduce the value of such insurance and thereby lower their exposure to this new tax. After analyzing the administrative guidance proposed since the Cadillac tax’s enactment, this Article considers how that tax’s effective encouragement of high-deductible health insurance plans has inadvertently made the Health Savings Accounts that President George W. Bush promoted 15 years earlier much more appealing.

Source: The Cadillac Tax and Its Potential to Transform How Americans Purchase Health Care Services by Richard L. Kaplan :: SSRN


Obamacare Approved Fake Applicants | The Daily Caller

December 16, 2016

California and the District of Columbia through their state-run marketplaces, and Florida and Virginia through the federal marketplace, approved nine of the 12 fictitious applicants GAO created for special enrollment and subsidies. That’s because there are no laws requiring marketplaces to verify whether someone is eligible for special enrollment outside the normal enrollment period for life events, like gaining a dependent through marriage or a making permanent move.

Source: Obamacare Approved Fake Applicants | The Daily Caller


Study: Premium hikes add $10B to taxpayers’ health law tab

December 16, 2016

Taxpayers will fork over nearly $10 billion more next year to cover double-digit premium hikes for subsidized health insurance under President Barack Obama’s law, according to a study being released Thursday.

The analysis from the Center for Health and Economy comes as the Republican-led Congress is preparing to repeal “Obamacare” and replace it with a GOP alternative whose details have yet to be worked out. With incoming President Donald Trump likely to sign such legislation, historic coverage gains under the 2010 health law are at stake.

The study estimates that the cost of premium subsidies under the Affordable Care Act will increase by $9.8 billion next year, rising from $32.8 billion currently to $42.6 billion. The average monthly subsidy will increase by $76, or 26 percent, from $291 currently to $367 in 2017.

Source: Study: Premium hikes add $10B to taxpayers’ health law tab


Angelina Jolie’s breast cancer op-ed cost the health system $14 million in unnecessary tests – Vox

December 14, 2016

At about $3,000 per test, the researchers estimate this Jolie-inspired surge led to $14 million in health care spending in those two weeks alone.And the “Jolie effect” seemed to persist long after the op-ed appeared. Average monthly test rates increased from 16 tests per 100,000 women between January and April 2013 to 21 tests per 100,000 women after the op-ed during May through December that year.In sum, this looks like a case of celebrity-induced overtesting

Source: Angelina Jolie’s breast cancer op-ed cost the health system $14 million in unnecessary tests – Vox


The Affordable Care Act Didn’t Bend the Cost Curve | Policy Dose | US News

December 13, 2016

These recent statistics are highly damaging to the original and reasonable motivation for the Affordable Care Act – to bend the health care spending and cost curve downwards. In fact, we now seem to be going in the opposite direction, perhaps because the extra tens of billions of dollars being expended by the federal government on health care are adding fuel to the fire. The incoming Trump administration, in addition to repealing the health care law, would be wise to design health policies that will slow the growth in health insurance premiums and health care costs, thereby increasing worker take-home pay and spendable resources for all Americans and reducing government spending and deficits.

Source: The Affordable Care Act Didn’t Bend the Cost Curve | Policy Dose | US News