Public Attitudes Toward Healthcare Fraud: Reasons to Commit Fraud and Common Schemes

December 18, 2017

Cases of health care fraud have been on the rise in recent years and are believed to continue to increase over time. Every year a significant amount of the federal healthcare budget is lost to fraudulent claims by providers and/or to government agencies involved with the enforcement of the healthcare laws and prosecution of offenders. This study investigates the reasons for committing fraud and finds that the primary contributing factors are the explosion in the size of health care spending and the ever expanding network of providers and subscribers of health care services causing wide access to the system.

While fraud is committed against both public and private health care agencies, the primary emphasis for prevention and reporting of fraud is on the public side (Rosenbaum et. al., 2009). The research investigates whether there are any differences in public attitudes towards fraud committed against the public agencies versus the private insurance companies. The study selects two equal samples and mails to each group a survey that includes similar questions pertaining to either Medicare/Medicaid or private insurance companies. The results show that both groups of participants view the fee-for-service payment system where doctors and other providers are tempted to perform or bill for unnecessary services as the most important reason for fraud. In addition, both groups rated double billing and incorrect reporting of diagnosis or procedures as the top two schemes committed against health care agencies.

via Public Attitudes Toward Healthcare Fraud: Reasons to Commit Fraud and Common Schemes by Nasrollah Ahadiat :: SSRN

Subsidizing Altruism in Living Organ Donation

December 18, 2017

The current supply of deceased donor organs is insufficient to meet the growing demand for transplantable organs. Consequently, candidates for kidney transplantation are encouraged to find a living donor. In 2008, the Department of Health and Human Services began to reimburse donors’ travel‐related expenses via the National Living Donor Assistance Center (NLDAC). Using variation in transplant centers’ applications for donor assistance, we use a difference‐in‐difference model to estimate the relationship between the NLDAC and living donor kidney transplants. We find that among participating transplant centers, the program increased the number of living donor kidney transplants by approximately 14%.

via Subsidizing Altruism in Living Organ Donation by Kurt Schnier, Robert M. Merion, Nicole Turgeon, David H. Howard :: SSRN

The Impact of Federal Regulation on the 50 States

December 17, 2017

The federal regulation and state enterprise (FRASE) index ranks the 50 states and the District of Columbia according to the impact of federal regulation on the private-sector industries in each state’s economy. A ranking of 1 indicates the highest level of impact of federal regulation on a state’s economy, whereas a ranking of 51 means the lowest.

For several decades, the federal government has relied on regulations as the primary vehicle to intervene in economic activity across the United States. The continual buildup of regulations in the Code of Federal Regulations, shown in the figure below, is known as regulatory accumulation. The FRASE index is designed to quantify the effects of regulatory accumulation at the state level.

via The FRASE Index – QuantGov

Price Transparency and Incomplete Contracts in Health Care

December 8, 2017

Market-based health reform solutions dominate the post-Affordable Care Act landscape. Under these plans, competition is supposed to bring down ballooning prices, and patients are to act more like consumers, refusing low-value, medically unnecessary care. Whether one embraces these solutions, one thing is clear: they cannot work absent price transparency—which the U.S. system lacks. To the contrary, the law explicitly enforces open price term contracts between patients and providers.

This Article is the first to synthesize theories of incomplete contracts from traditional law and economics and recent work in the behavioral sciences and to apply these theories to the price transparency problem. It argues that doctrine is out of step with theory, and proposes a contract law solution: an information-forcing penalty default rule. Courts should impose an undesirable default to force the parties to contract around the default. When providers fail to include a price, and it would have been reasonable to do so, courts should fill the gap with a price of $0. Rather than risk not being paid, providers will include a price in the patient contract. Legislative action has been both slow and ineffective in fixing the crucial price transparency problem. At no other time in recent memory has the importance of contract theory been put into such sharp relief and, remarkably, in an area of law that is at the very core of the emerging political economy.

via Price Transparency and Incomplete Contracts in Health Care by Wendy Epstein :: SSRN

Can Public Reporting Cure Healthcare? The Role of Quality Transparency in Improving Patient-Provider Alignment

December 7, 2017

Increasing quality transparency is widely regarded as a strong mechanism for improving the alignment between patient choices and provider capabilities, and thus, is widely pursued by policymakers as an option for improving the healthcare system. We study the effect of increasing quality transparency on patient choices, hospital investments, societal outcomes (e.g., patients’ social welfare and inequality), and the healthcare market structure (e.g., medical or geographical specialization). We also examine potential reasons behind the failure of previous public reporting efforts, and use our analysis to identify ways in which such efforts can become more effective in future. Our analytical and numerical results calibrated with data reveal that increasing quality transparency promotes increased medical specialization, decreased geographical specialization, and induces hospitals to invest in their strength rather than their weakness. Furthermore, increasing quality transparency in the short-term typically improves the social welfare as well as the inequality among patients. In the long-term, however, we find that increasing transparency can decrease social welfare, and even a fully transparent system may not yield socially optimal outcomes. Hence, a policymaker concerned with societal outcomes needs to accompany increasing quality transparency with other policies that correct the allocation of patients to hospitals. Among such policies, we find that policies that incentivize hospitals are usually more effective than policies that incentivize patients. Finally, our results indicate that, to achieve maximal benefits from increasing quality transparency, policymakers should target younger, more affluent, or urban (i.e., high hospital density area) patients, or those with diseases that can be deferred.

via Can Public Reporting Cure Healthcare? The Role of Quality Transparency in Improving Patient-Provider Alignment by Soroush Saghafian, Wallace Hopp :: SSRN

The Unregulated Certification Mark(et) by Jeanne C. Fromer :: SSRN

February 12, 2017

Certification mark law — a branch of trademark law — itself enables consequences that undermine the law’s own goals through inadequate regulation or oversight. Because the law allows certification standards to be kept vague, high-level, and underdeveloped, a certifier can choose to exclude certain businesses inconsistently or arbitrarily, even when those businesses’ goods or services would seem to qualify for the certification mark (particularly to consumers). Moreover, even when a certification standard is clear and complete, certifiers can wield their marks anticompetitively. They can do so through redefinition — something certification mark law currently allows without oversight — to ensure that certain businesses’ goods or services will not qualify for the mark. Both of these forms of certification mark manipulation undermine the goals of certification marks: to protect consumers by providing them with succinct information on goods’ or services’ characteristics and to promote competition by ensuring that any businesses’ goods or services sharing certain characteristics salient to consumers qualify for a mark certifying those characteristics. The law should be restructured to curb this conduct. I advocate for robust procedural regulation of certification standardmaking and decisionmaking that would detect and punish poor certification behavior. Moreover, for anticompetitive behavior that nonetheless slips through the regulatory cracks, I suggest that attentive antitrust scrutiny be arrayed to catch it.

Source: The Unregulated Certification Mark(et) by Jeanne C. Fromer :: SSRN

Anonymity, Autonomy, and the Collection of Personal Data: Measuring the Privacy Impact of Google’s 2012 Privacy Policy Change by James C. Cooper :: SSRN

February 7, 2017

One of the most vexing problems in privacy policy is identifying consumer harm from unwanted observation; because it is highly subjective and is likely to vary greatly throughout the population, it doesn’t lend itself to easy measurement. Yet, these types of situations increasingly are the focal point of privacy policy discussions. The primary approach to attempt to quantify subjective harms has been to measure consumers’ willingness to exchange personal data for money in an experimental setting. This study takes a different tack, using field data to measure actual consumer response to a real-world reduction in the anonymity of online search. In March 2012, Google began to combine user information across platforms. To the extent that Google’s policy change reduced the anonymity associated with Google search, it may have reduced incentives to search sensitive or topics. Using a difference-in-difference estimator with top non-sensitive search terms as the control group, the results suggest that there was a small and short-term reduction in the Google Trends scores for sensitive search. There is no measured difference in reaction between high- and low-privacy demand states. Overall, the results indicate that any consumer welfare loss from Google’s policy change was small, and likely swamped by the demand-increasing impact of customization made possible from the cross-platform data sharing. That there is no measurable long-term substitution out of sensitive search may reflect the privacy advantages of searching for sensitive information on Google versus seeking the same information in an interpersonal setting. These findings suggest that privacy policy changes that are publicized should be treated like ordinary price changes — causing marginal consumers to exit and reducing consumer surplus for those who remain — not opportunities for regulatory intervention.

Source: Anonymity, Autonomy, and the Collection of Personal Data: Measuring the Privacy Impact of Google’s 2012 Privacy Policy Change by James C. Cooper :: SSRN