Category Archives: Health Care

Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees

Source: Jonathan Gruber, Robin McKnight, National Bureau of Economic Research (NBER), NBER Working Paper No. w20462, September 2014

From the abstract:
Recent years have seen enormous growth in limited network plans that restrict patient choice of provider, particularly through state exchanges under the ACA. Opposition to such plans is based on concerns that restrictions on provider choice will harm patient care. We explore this issue in the context of the Massachusetts GIC, the insurance plan for state employees, which recently introduced a major financial incentive to choose limited network plans for one group of enrollees and not another. We use a quasi-experimental analysis based on the universe of claims data over a three-year period for GIC enrollees. We find that enrollees are very price sensitive in their decision to enroll in limited network plans, with the state’s three month “premium holiday” for limited network plans leading 10% of eligible employees to switch to such plans. We find that those who switched spent considerably less on medical care; spending fell by almost 40% for the marginal complier. This reflects both reductions in quantity of services used and prices paid per service. But spending on primary care actually rose for switchers; the reduction in spending came entirely from spending on specialists and on hospital care, including emergency rooms. We find that distance traveled falls for primary care and rises for tertiary care, although there is no evidence of a decrease in the quality of hospitals used by patients. The basic results hold even for the sickest patients, suggesting that limited network plans are saving money by directing care towards primary care and away from downstream spending. We find such savings only for those whose primary care physicians are included in limited network plans, however, suggesting that networks that are particularly restrictive on primary care access may fare less well than those that impose only stronger downstream restrictions.

Income, Poverty and Health Insurance Coverage in the United States: 2013 Release

Source: U.S. Census Bureau, Press Release, CB14-169, September 16, 2014

The U.S. Census Bureau announced today that in 2013, the poverty rate declined from the previous year for the first time since 2006, while there was no statistically significant change in either the number of people living in poverty or real median household income. In addition, the poverty rate for children under 18 declined from the previous year for the first time since 2000. The following results for the nation were compiled from information collected in the 2014 Current Population Survey Annual Social and Economic Supplement.

The nation’s official poverty rate in 2013 was 14.5 percent, down from 15.0 percent in 2012. The 45.3 million people living at or below the poverty line in 2013, for the third consecutive year, did not represent a statistically significant change from the previous year’s estimate.

Median household income in the United States in 2013 was $51,939; the change in real terms from the 2012 median of $51,759 was not statistically significant. This is the second consecutive year that the annual change was not statistically significant, following two consecutive annual declines.

The percentage of people without health insurance coverage for the entire 2013 calendar year was 13.4 percent; this amounted to 42.0 million people.

These findings are contained in two reports: Income and Poverty in the United States: 2013 and Health Insurance Coverage in the United States: 2013. The Current Population Survey Annual Social and Economic Supplement was conducted between February and April 2014 and collected information about income and health insurance coverage during the 2013 calendar year. The Current Population Survey, sponsored jointly by the U.S. Census Bureau and U.S. Bureau of Labor Statistics, is conducted every month and is the primary source of labor force statistics for the U.S. population; it is used to calculate the monthly unemployment rate estimates. Supplements are added in most months; the Annual Social and Economic Supplement questionnaire is designed to give annual, calendar-year, national estimates of income, poverty and health insurance numbers and rates….
Income and Poverty in the United States: 2013
Source: Carmen DeNavas-Walt and Bernadette D. Proctor, U.S. Census Bureau, Current Population Reports, P60-249, September 2014

Health Insurance Coverage in the United States: 2013
Source: Jessica C. Smith and Carla Medalia, U.S. Census Bureau, Current Population Reports, P60-250, September 2014

The Top 3 Things You Need to Know About the 2013 Poverty and Income Data
Source: Melissa Boteach and Shawn Fremstad, Center for American Progress, September 16, 2014

By the Numbers: Income and Poverty, 2013
Source: David Cooper, Economic Policy Institute, Working Economics blog, September 16, 2014

Key numbers from today’s new Census report, Income and Poverty in the United States: 2013. All dollar values are adjusted for inflation (2013 dollars).

New Census Data Tell Us That Poverty Fell in 2013: Children and Young Adults Still Face the Greatest Risks
Source: Center for Law and Social Policy (CLASP), September 16, 2014

From the summary:
For the first time since 2000, the overall child poverty rate fell, according to U.S. Census Bureau Current Population Survey (CPS) data released today on income, poverty, and health insurance coverage in the year 2013. This is good news. The numbers indicate a return from the extraordinarily high child poverty rates experienced during the depths of the recession. But these decreases don’t diminish the unacceptably high number of children still living in poor families, particularly our youngest children and Black and Hispanic children….

The Impact of Massachusetts Health Care Reform on Access, Quality, and Costs of Care for the Already-Insured

Source: Karen E. Joynt, David C. Chan, Jie Zheng, E. John Orav and Ashish K. Jha,Health Services Research, Early View, September 14, 2014
(subscription required)

From the abstract:
Objective: To assess the impact of Massachusetts Health Reform (MHR) on access, quality, and costs of outpatient care for the already-insured. …

Study Design: We performed a retrospective difference-in-differences analysis of quantity of outpatient visits, proportion of outpatient quality metrics met, and costs of care for Medicare patients with ≥1 chronic disease in 2006 versus 2009. We used the remaining states in New England as controls.

Principal Findings: MHR was not associated with a decrease in outpatient visits per year compared to controls. Quality of care in MA improved more than controls for hemoglobin A1c monitoring, mammography, and influenza vaccination, and similarly to controls for diabetic eye examination, colon cancer screening, and pneumococcal vaccination. Average costs for patients in Massachusetts increased from $9,389 to $10,668, versus $8,375 to $9,114 in control states.

Conclusions: MHR was not associated with worsening in access or quality of outpatient care for the already-insured, and it had modest effects on costs. This has implications for other states expanding insurance coverage under the Affordable Care Act.

Do Workplace Health Promotion (Wellness) Programs Work?

Source: Ron Z. Goetzel, Rachel Mosher Henke, Maryam Tabrizi,Journal of Occupational & Environmental Medicine, Vol. 56 no. 9, September 2014
(subscription required)

From the abstract:
Objective: To respond to the question, “Do workplace health promotion programs work?”

Methods: A compilation of the evidence on workplace programs’ effectiveness coupled with recommendations for critical review of outcome studies. Also, reviewed are recent studies questioning the value of workplace programs.

Results: Evidence accumulated over the past three decades shows that well-designed and well-executed programs that are founded on evidence-based principles can achieve positive health and financial outcomes.

Conclusions: Employers seeking a program that “works” are urged to consider their goals and whether they have an organizational culture that can facilitate success. Employers who choose to adopt a health promotion program should use best and promising practices to maximize the likelihood of achieving positive results.

Obamacare Or Not, Republicans Should Focus On Reducing The Cost Of Health Care

Source: Avik Roy, Forbes, Vol. 193 no. 12 September 8, 2014

For all the endless talk about reforming the health care system these past five years, it’s remarkable how little we’ve done to solve its actual problems. Spending hundreds of billions of taxpayer dollars to subsidize insurance coverage for several million people? That’s the easy part. The hard part is addressing the fact that American health care is so expensive.

A Comparison Of Hospital Administrative Costs In Eight Nations: US Costs Exceed All Others By Far

Source: David U. Himmelstein, Miraya Jun, Reinhard Busse, Karine Chevreul, Alexander Geissler, Patrick Jeurissen, Sarah Thomson, Marie-Amelie Vinet and Steffie Woolhandler, Health Affairs, Vol. 33 no. 9, September 2014
(subscription required)

From the abstract:
A few studies have noted the outsize administrative costs of US hospitals, but no research has compared these costs across multiple nations with various types of health care systems. We assembled a team of international health policy experts to conduct just such a challenging analysis of hospital administrative costs across eight nations: Canada, England, Scotland, Wales, France, Germany, the Netherlands, and the United States. We found that administrative costs accounted for 25.3 percent of total US hospital expenditures—a percentage that is increasing. Next highest were the Netherlands (19.8 percent) and England (15.5 percent), both of which are transitioning to market-oriented payment systems. Scotland and Canada, whose single-payer systems pay hospitals global operating budgets, with separate grants for capital, had the lowest administrative costs. Costs were intermediate in France and Germany (which bill per patient but pay separately for capital projects) and in Wales. Reducing US per capita spending for hospital administration to Scottish or Canadian levels would have saved more than $150 billion in 2011. This study suggests that the reduction of US administrative costs would best be accomplished through the use of a simpler and less market-oriented payment scheme.

Do Health Care Costs Fuel Economic Inequality in the United States?

Source: David Blumenthal and David Squires, Commonwealth Fund blog, September 9, 2014

The growing debate over economic inequality in the developed world, highlighted by Thomas Piketty’s Capital in the Twenty-First Century, raises an interesting question that is particularly pertinent to the United States. Have escalating health care costs contributed to the huge economic gap between America’s rich and the rest? The evidence, it turns out, is suggestive, but not definitive.
From the perspective of the more than 150 million Americans who receive health insurance through their employers, health care costs may, in fact, be widening inequality. Economists generally agree that employers for the most part treat workers’ compensation in all forms—wages and benefits—as a single expense. When health insurance premiums go up, employers may reduce take-home pay to keep overall compensation in check. Because health costs have grown so quickly over the past several decades, an increasing share of workers’ total compensation has gone toward health insurance premiums. These higher premiums partly explain why middle-class wages have stagnated, lagging productivity gains. Rising health care spending—both on premiums and out-of-pocket costs—totally erased wage gains for a typical family from 1999 to 2009….

Wisconsin: Round 1 – State-Level Field Network Study of the Implementation of the Affordable Care Act

Source: Donna Friedsam, Thomas Kaplan, Sara Eskrich, Rockefeller Institute of Government, Brookings Institution, Fels Institute of Government, ACA Implementation Research Network, August 2014

Wisconsin’s implementation of the Affordable Care Act has set it apart from its neighboring states and put it on a unique path among states nationally. This approach has been referred to as “Obamacare with a twist.” A new study by the University of Wisconsin Population Health Institute reviews Wisconsin’s implementation process and milestones to date.
Press Release

2014 Employer Health Benefits Survey

Source: Kaiser Family Foundation and Health Research & Educational Trust (Kaiser/HRET), September 10, 2014

From the abstract:
This annual survey of employers provides a detailed look at trends in employer-sponsored health coverage, including premiums, employee contributions, cost-sharing provisions, and employer opinions. The 2014 survey included almost three thousand interviews with non-federal public and private firms.
Annual premiums for employer-sponsored family health coverage reached $16,834 this year, up 3 percent from last year, with workers on average paying $4,823 towards the cost of their coverage, according to the Kaiser Family Foundation/Health Research & Educational Trust (HRET) 2014 Employer Health Benefits Survey. Survey results are released here in a variety of ways, including a full report with downloadable tables, summary of findings, and an article published in the journal Health Affairs.
Press Release
Summary of Findings
Technical Supplement
Premiums and Worker Contributions Among Workers Covered by Employer-Sponsored Coverage, 1999-2014

Health Benefits In 2014: Stability In Premiums And Coverage For Employer-Sponsored Plans
Source: Gary Claxton, Matthew Rae, Nirmita Panchal, Heidi Whitmore, Anthony Damico and Kevin Kenward, Health Affairs, Web First, September 10, 2014
(subscription required)

From the abstract:
The annual Kaiser Family Foundation/Health Research and Educational Trust Employer Health Benefits Survey found that in 2014 the average annual premium (employer and worker contributions combined) for single coverage was $6,025, similar to 2013. The premium for family coverage was $16,834—3 percent higher than a year ago. Average deductibles and most other cost-sharing amounts were similar to those in 2013. On average, in 2014 covered workers paid nearly $5,000 per year for family health insurance premiums, and 18 percent of covered workers were in a plan with an annual single coverage deductible of $2,000 or more. Fifty-five percent of employers offered health benefits in 2014, similar to 2013. The Affordable Care Act has not yet led to substantial changes in the employer-based market. However, the next few years could present a different picture as delayed provisions and other changes take effect. This year’s survey included new questions on firms’ policies related to enrolling spouses and dependents, enrollment in private exchanges, and the use of narrow networks and financial incentives for wellness programs.