Recent months have seen a flood of stories about drug prices, from Martin Shkreli’s dramatic price hikes on generic drugs to Sovaldi's eye-watering introductory price. But woven within these stories are different storylines, each with its own set of complications and policy solutions. Here we present five distinct drug pricing storylines.
Over the three days that LDI hosted the 6th Biennial Conference of the American Society of Health Economists (June 12 - 15, 2016) we asked a few presenters to blog about their work, and their posts appear below. The authors were among the 1,000 health economists who gathered in Philadelphia to deliver more than 500 presentations and display more than 250 posters about the field's latest research.
Monday, June 13, 2016: 8:30 AM, G65 (Huntsman Hall) Tuesday, June 14, 2016: 10:15 AM-11:45 AM, 401 (Fisher-Bennett Hall)
Value-based payment reform is a hurricane tsunami that is sucking roosting chickens into a paradigm-shifting funnel of value-enhancing destructive innovation. Or it might not work. University of Michigan researchers are trying to find out. We explore the effects of value-based payment reform in several sessions at the 2016 ASHEcon meeting. Much of this research focuses on two specific programs: Hospital Value-Based Purchasing (HVBP) and the Hospital Readmission Reduction Program (HRRP). Both reforms were initiated by the ACA and link performance on indicators of quality and value to Medicare payments beginning in 2013 fiscal year.
Monday, June 13, 2016: 8:30 AM, Robertson Hall (Huntsman Hall)
In our paper, my colleagues and I were interested in examining how much the decision to expand Medicaid affected insurance coverage in the first year of the expansion. We used data from government surveys that have higher response rates than some private surveys to try to ensure that we were considering the impact of health care reform on all low-income adults. We found that the percentage uninsured fell by a substantial 6 percentage points in non-expansion states, although the decline was nearly double, about 11 percentage points, in expansion states. But we weren’t just interested in coverage. We also considered effects on access to health care and whether adults were going to the doctor.
Monday, June 13, 2016: 1:55 PM, G65 (Huntsman Hall)
In our paper, we analyze variation in premiums, choices, and enrollment from 2014-2016 on the Health Insurance Marketplaces (HIMs). The economic theory behind HIMs suggests that in a dynamic marketplace with many firms exiting and entering, competition will restrain premium growth. We find evidence of slower growth rates in total (pre-subsidy) premiums in highly populated rating areas as compared to less populated areas. In addition, pre-subsidy premiums were lower, all else equal, in areas where more firms were present in the marketplaces. The number of firms operating in rating areas dropped slightly in 2016 in all rating areas, but more rapidly in areas with lower population density. These results suggest that as HIMs continue to develop and mature, and if premiums are higher in areas with less competition among firms, then there will continue to be a differential in premiums that the ACA did not intend to maintain. Additional research on premium affordability in rural areas is needed, and ongoing monitoring of the competitiveness of rural HIMs is critical.
Monday, June 13, 2016: 10:15 AM, F50 (Huntsman Hall)
In the paper, “Regulating High-Skilled Immigration and the Market for Medical Residents”, authors Anthony Lo Sasso (U. Illinois-Chicago) and Michael Richards (Vanderbilt U.) explore the causes and consequences of teaching hospitals’ shift away from H1B visa-sponsored residency trainees toward US citizens that received their medical education abroad. They find a sharp change in residency programs’ preferences for H1B applicants during a period of stricter immigration rules. Their study also suggests that altering the composition of graduating physician cohorts is not without consequences – especially for provider availability in underserved areas.
Monday, June 13, 2016: 1:55 PM, G50 (Huntsman Hall)
In the paper, “State Health Insurance Mandates and Labor Market Outcomes: New Evidence on Old Questions,” we revisit the relationship between private health insurance mandates and labor market outcomes. While much of the literature has estimated the contemporaneous effects of mandates, we explore the lifecycle impacts of high-cost private health insurance mandates on access to employer-sponsored health insurance (ESI) and labor market outcomes among new labor market entrants. Specifically, we ask the following questions: (1) do high cost mandates affect access to ESI and labor market outcomes; (2) will there be persistent differences over the lifecycle of two workers, one who enters a labor market characterized by highly regulated private health insurance contracts and the other who enters a labor market with limited regulation?
Tuesday, June 14, 2016: 3:20 PM, G55 (Huntsman Hall)
It’s hard not to like the concept of a patient-centered medical home (PCMH), with its emphasis on coordination of care across sites, improved patient engagement, evidence-based care, use of health information technology, expanded practice hours, and improved patient-provider communication. However, to date, the evidence on its effect on patient outcomes and health care costs has been quite mixed. In their paper, “The Inner Workings of the Patient‐Centered Medical Home Model,” Guy David, Philip A. Saynisch, and Aaron Smith-McLallen give us a possible reason for the mixed results: that treating the PCMH model as an undifferentiated intervention obscures meaningful variation in implementation across practices.
Monday, June 13, 2016: 10:15 AM, G50 (Huntsman Hall)
How has the Affordable Care Act (ACA) affected the employer health insurance system? Early on, there was concern that the ACA could weaken the employer health insurance system, as the greater availability of coverage outside of work would make it easier for employers to stop offering coverage. Using data from the Urban Institute’s Health Reform Monitoring Survey (HRMS), we find that employer-sponsored insurance coverage, offer, and take-up rates remained unchanged from June 2013 to March 2016. These findings are consistent with prior HRMS results from September 2014 and March 2015.
My colleagues and I examine how the ACA’s state-level expansions of Medicaid in 2014 affected preventive care and health behaviors. We use data from the Behavioral Risk Factor Surveillance System, and a “difference-in-differences” method that compares states that did and did not expand Medicaid, before and after January 1, 2014. As shown in our Figure 1 below, the expansion of Medicaid did indeed cause an increase in insurance coverage in those states, among our population of low-income childless adults.
Tuesday, June 14, 2016: 1:35 PM, B26 (Stiteler Hall)
The growth of large, multi-specialty group practices raises questions about how these organizations affect the price and use of health care. The promise of multi-specialty group practice is that it will break down the barriers that lead to poorly coordinated services across different providers. A potential concern, however, is that, due to their larger size, multispecialty practices may have the market power to charge higher prices. In this paper, Laurence Baker, Dan Kessler and I test whether a multi-specialty group practice can leverage market power in one clinical area into higher prices for services in other clinical areas. In other words, does multi-specialty group practice lead to higher prices through product tying? Our results indicate that the answer to this question is “yes”.
Wednesday, June 15, 2016: 12:20 PM, F50 (Huntsman Hall)
Health economists traditionally ask whether too much money is being spent on some procedures - whether we are on the “flat of the curve,'' where returns to additional spending are very low. Physicians often investigate instead which patients should be targeted with particular tests and treatments. Earlier work by two of us suggests that the physicians’ question may be the more important of the two. In at least one setting (CT scans for pulmonary embolism), the efficiency gains from more wisely allocating a diagnostic test to patients who stand to benefit most are 5-6 times larger than the gains from eliminating overuse of the test. This raises the question: why do inefficiencies persist in treatment decisions given that clinical guidelines exist? One possibility is that physicians are not aware of guidelines. A second possibility is that physicians largely follow guidelines, but existing guidelines are imperfect. A third possibility is that physicians are aware of guidelines but depart from them even in cases when they shouldn’t.
As opioid misuse and its treatment enter mainstream health care, it starts to compete for resources with other health conditions. Given the extent of the problem, the pressing question is whether we should now re-prioritize these resources—our attention, our efforts at prevention, and our funding for treatment? An important first step is to understand just how “bad” each condition is, and how much better it could be with treatment.