The growing awareness of the wide variation in health care prices, increased availability of price data, and increased patient cost sharing are expected to drive patients to shop for lower-cost medical services. We conducted a nationally representative survey of 2,996 nonelderly US adults who had received medical care in the previous twelve months to assess how frequently patients are price shopping for care and the barriers they face in doing so. Only 13 percent of respondents who had some out-of-pocket spending in their last health care encounter had sought information about their expected spending before receiving care, and just 3 percent had compared costs across providers before receiving care. The low rates of price shopping do not appear to be driven by opposition to the idea: The majority of respondents believed that price shopping for care is important and did not believe that higher-cost providers were of higher quality. Common barriers to shopping included difficulty obtaining price information and a desire not to disrupt existing provider relationships.
Americans Support Price Shopping For Health Care, But Few Actually Seek Out Price Information | RANDSeptember 7, 2017
This paper examines the link between legislative politics, hospital behavior, and health care spending. When trying to pass sweeping legislation, congressional leaders can attract votes by adding targeted provisions that steer money toward the districts of reluctant legislators. This targeted spending provides tangible local benefits that legislators can highlight when fundraising or running for reelection. We study a provision – Section 508 – that was added to the 2003 Medicare Modernization Act (MMA). Section 508 created a pathway for hospitals to apply to get their Medicare payment rates increased. We find that hospitals represented by members of the House of Representatives who voted ‘Yea’ on the MMA were significantly more likely to receive a 508 waiver than hospitals represented by members who voted ‘Nay.’ Following the payment increase generated by the 508 program, recipient hospitals treated more patients, increased payroll, hired nurses, added new technology, raised CEO pay, and ultimately increased their spending by over $100 million annually. Section 508 recipient hospitals formed the Section 508 Hospital Coalition, which spent millions of dollars lobbying Congress to extend the program. After the vote on the MMA and before the vote to reauthorize the 508 program, members of Congress with a 508 hospital in their district received a 22% increase in total campaign contributions and a 65% increase in contributions from individuals working in the health care industry in the members’ home states. Our work demonstrates a pathway through which the link between politics and Medicare policy can dramatically affect US health spending.
Hospitals in districts where a Republican congressman supported the Medicare Modernisation Act were five times more likely to receive a waiver than those in ones where a Republican lawmaker voted against. Those hospitals spent 25% more than they otherwise would have in the seven years after the law, according to the researchers. Between 2005 and 2010 the 29 hospitals that received the most lucrative waivers spent an average of $1.25bn more than if they had not received one.
This is how the uninsured rate data looked when CDC analysts reported separate uninsured rates for each income group:
Income under 100% of the federal poverty level, or $24,600 for a family of four in most of the country: The uninsured rate fell to 22.6%, from 24.7%.
Income from 100% to 138% of the federal poverty level: The uninsured rate fell to 23.9%, from 24.7%.
Income from 138% to 250% of the federal poverty level: The uninsured rate rose to 21.3%, from 19.1%.
Income from 250% to 400% of the federal poverty level: The uninsured rate rose to 12.3%, from 9.7%.
Featuring Bernard S. Black, Nicholas J. Chabraja Professor, Northwestern University, Pritzker School of Law; Megan McArdle, Columnist, Bloomberg View; Benjamin Sommers, Associate Professor of Health Policy and Economics, Harvard H.T. Chan School of Public Health; moderated by Michael F. Cannon, Director of Health Policy Studies, Cato Institute.
A key question in debates over whether states should implement Obamacare’s Medicaid expansion, and whether Congress should repeal Obamacare entirely, is whether government expansions of health insurance coverage improve health, and if so, how much. A new study by Bernard Black and colleagues finds that the uninsured “consume fewer healthcare services, but their health (while alive) does not deteriorate relative to the insured, and, in our central estimates, they do not die significantly faster than the insured.” Come hear Professor Black and leading scholars discuss one of the most important but least understood aspects of health reform.
If you can’t make it to the event, you can watch it live online at www.cato.org/live and join the conversation on Twitter using #CatoEvents. Follow @CatoEvents on Twitter to get future event updates, live streams, and videos from the Cato Institute.
As is the case with doctor, hospital and lab bills, the presence of a third-party payer results in higher prices for prescription drugs than would otherwise be the case if a pharmacy dealt directly with the patient. That’s because the third-party payer system severs the direct link between the consumer and the producer of goods and services that allows market forces to work. Doctors, hospitals, labs and pharmacies negotiate with a deeper-pocketed third party, not the consumer, to arrive at a price.
A March 2017 Consumer Reports interview with University of Minnesota professor of pharmacoeconomics Stephen Schondelmeyer summarizes the problem. Pharmacy retail chains are more concerned about what third parties such as insurers will pay, rather than what customers themselves can afford. They focus on setting high list prices to ensure that insurers don’t cut into their bottom line.
The average American’s lifetime risk of using a nursing home is substantially greater than previous research has suggested, according to a new RAND Corporation study.
Among persons age 57 to 61, 56 percent will stay in a nursing home at least one night during their lifetime, according findings published online by the journal Proceedings of the National Academy of Sciences.
Previous studies have generally corroborated the U.S. Department of Health and Human Services’ estimate that only 35 percent of older Americans are likely to use a nursing home in their later years.