Smart Care
The Associations Between United States Medical Licensing Examination Performance and Outcomes of Patient Care
John Norcini et al.
Academic Medicine, March 2024, Pages 325-330
Method: This was a retrospective cohort study of 196,881 hospitalizations in Pennsylvania over a 3-year period (January 1, 2017 to December 31, 2019) for 5 primary diagnoses: heart failure, acute myocardial infarction, stroke, pneumonia, or chronic obstructive pulmonary disease. The 1,765 attending physicians for these hospitalizations self-identified as family physicians or general internists. A converted score based on USMLE Step 1, Step 2 Clinical Knowledge, and Step 3 scores was available, and the outcome measures were in-hospital mortality and log length of stay (LOS). The research team controlled for characteristics of patients, hospitals, and physicians.
Results: For in-hospital mortality, the adjusted odds ratio was 0.94 (95% confidence interval [CI] = 0.90, 0.99; P < .02). Each standard deviation increase in the converted score was associated with a 5.51% reduction in the odds of in-hospital mortality. For log LOS, the adjusted estimate was 0.99 (95% CI = 0.98, 0.99; P < .001). Each standard deviation increase in the converted score was associated with a 1.34% reduction in log LOS.
The Feasibility of Using Bayh-Dole March-In Rights to Lower Drug Prices: An Update
Lisa Larrimore Ouellette & Bhaven Sampat
NBER Working Paper, March 2024
Abstract:
In December 2023, the Biden-Harris Administration released a proposed framework for exercising government “march-in” rights on high-priced taxpayer-funded drugs. While both proponents and critics of the new rules view them as having broad scope, march-in rights can be exercised only on patents that result from federally funded research, and they can enable generic entry only if all patents on a drug were public-sector patents. In this paper, we examine the feasibility of using march-in rights to lower pharmaceutical prices by examining patents on drugs approved by the U.S. Food and Drug Administration (FDA) from 1985 to 2022. Our primary analyses focus on the 883 new molecular entities with at least one patent listed in the FDA’s Orange Book since 1985. While 9 percent of these drugs have a public-sector patent, only 2.5 percent have only public-sector patents. While the new march-in rules could be a tool to lower prices for a few drugs, their overall impact on prices or expenditures will likely be limited. In addition to the updated analyses, we provide links to the data used in the analyses.
Losing Medicaid and Crime
Monica Deza et al.
NBER Working Paper, March 2024
Abstract:
We study the impact of losing health insurance on criminal activity by leveraging one of the most substantial Medicaid disenrollments in U.S. history, which occurred in Tennessee in 2005 and lead to 190,000 non–elderly and non–disabled adults without dependents unexpectedly losing coverage. Using police agency–level data and a difference–in–differences approach, we find that this mass insurance loss increased total crime rates with particularly strong effects for non–violent crime. We test for several potential mechanisms and find that our results may be explained by economic stability and access to healthcare, in particular mental healthcare.
Tunneling and Hidden Profits in Health Care
Ashvin Gandhi & Andrew Olenski
NBER Working Paper, March 2024
Abstract:
This study examines “tunneling” practices through which health care providers covertly extract profit by making inflated payments for goods and services to commonly-owned related parties. While incentives to tunnel exist across sectors, health care providers may find it uniquely advantageous to do so. Masking profits as costs, thereby obscuring true profitability, may dissuade regulators from imposing stricter quality standards and encourage public payers to increase reimbursement rates. Likewise, tunneling effectively “shields” assets from malpractice liability risk, by moving them off the firm’s balance sheet. Using uniquely detailed financial data on the nursing home industry, we apply a difference-in-differences approach to study how firms’ stated costs change when they start transacting with a related party, allowing us to infer by how much these payments are inflated. We find evidence of widespread tunneling through inflated rents and management fees paid to related parties. Extrapolating these markups to all firms’ related party transactions, our estimates suggest that in 2019, 63% of nursing home profits were hidden and tunneled to related parties through inflated transfer prices.
Primary Care Physicians In Medicare Advantage Were Less Costly, Provided Similar Quality Versus Regional Average
Eran Politzer et al.
Health Affairs, March 2024, Pages 372-380
Abstract:
The use of many services is lower in Medicare Advantage (MA) compared with traditional Medicare, generating cost savings for insurers, whereas the quality of ambulatory services is higher. This study examined the role of selective contracting with providers in achieving these outcomes, focusing on primary care physicians. Assessing primary care physician costliness based on the gap between observed and predicted costs for their traditional Medicare patients, we found that the average primary care physician in MA networks was $433 less costly per patient (2.9 percent of baseline) compared with the regional mean, with less costly primary care physicians included in more networks than more costly ones. Favorable selection of patients by MA primary care physicians contributed partially to this result. The quality measures of MA primary care physicians were similar to the regional mean. In contrast, primary care physicians excluded from all MA networks were $1,617 (13.8 percent) costlier than the regional mean, with lower quality. Primary care physicians in narrow networks were $212 (1.4 percent) less costly than those in wide networks, but their quality was slightly lower. These findings highlight the potential role of selective contracting in reducing costs in the MA program.
Differences in Donor Heart Acceptance by Race and Gender of Patients on the Transplant Waiting List
Khadijah Breathett et al.
Journal of the American Medical Association, forthcoming
Design, Setting, and Participants: This cohort study used the United Network for Organ Sharing datasets to identify organ acceptance with each offer for US non-Hispanic Black (hereafter, Black) and non-Hispanic White (hereafter, White) adults listed for heart transplant from October 18, 2018, through March 31, 2023.
Results: Among 159 177 heart offers with 13 760 donors, there were 14 890 candidates listed for heart transplant; 30.9% were Black, 69.1% were White, 73.6% were men, and 26.4% were women. The cumulative incidence of offer acceptance was highest for White women followed by Black women, White men, and Black men (P < .001). Odds of acceptance were less for Black candidates than for White candidates for the first offer (odds ratio [OR], 0.76; 95% CI, 0.69-0.84) through the 16th offer. Odds of acceptance were higher for women than for men for the first offer (OR, 1.53; 95% CI, 1.39-1.68) through the sixth offer and were lower for the 10th through 31st offers.
Product Liability Litigation and Innovation: Evidence from Medical Devices
Alberto Galasso & Hong Luo
NBER Working Paper, March 2024
Abstract:
We examine the relationship between product liability litigation and innovation by systematically combining data on product liability lawsuits with data on new product introductions in a panel dataset of leading medical device firms. We first document a decline in the propensity to introduce new products for both defendant firms and other firms operating in litigated device categories. This decline, however, does not spill over to other device categories, and we also do not find any slowing down in firms' patenting activities. We then show that changes in two features of the regulatory environment -- (1) the availability of public information regarding adverse events and (2) federal law taking precedence over state law -- substantially affect the likelihood of litigation. These changes also provide quasi-exogenous variations in litigation that confirm our baseline findings. Finally, we show that litigation appears to induce firms to develop safer devices. Overall, our findings suggest that product liability litigation affects the rate and direction of technological progress, and that safety regulation and liability regimes interact with one another in significant ways.
Do For-Profit Hospitals Cream-Skim Patients? Evidence from Inpatient Psychiatric Care in California
Donghoon Lee et al.
NBER Working Paper, March 2024
Abstract:
The paper examines whether, among inpatient psychiatric admissions in California, for-profit (FP) hospitals engage in cream skimming, i.e., choosing patients for some characteristic(s) other than their need for care, which enhances the profitability of the provider. We propose a novel approach to identify cream skimming using cost outcomes. Naïve treatment effect estimates of hospital ownership type consist of the impact of differential patient case mix (selection) and hospital cost containment strategies (execution). In contrast, an instrumental variable (IV) approach can control for case mix and establish the causal effects of ownership type due to its execution. We interpret the difference in naïve and IV treatment effects to be driven by FP hospitals’ selection (cream skimming) based on unobserved patient case mix. We find that FP hospitals are more likely to treat high-cost patients than not-for-profit (NFP) hospitals, showing no evidence that FP hospitals engage in cream skimming. Our results may alleviate concerns surrounding the recent proliferation of FP psychiatric hospitals with regards to cream skimming.
Does Consolidation in Insurer Markets affect Insurance Enrollment and Drug Expenditures? Evidence from Medicare Part D
Pinka Chatterji et al.
NBER Working Paper, March 2024
Abstract:
Since the inception of Medicare Part D in 2006, mergers and acquisitions (M&A) and regulatory changes have led to increased concentration and reduced plan variety in the standalone prescription drug plan (PDP) portion of the market. We examine how this industry consolidation affects Medicare beneficiaries’ enrollment in PDPs and their out-of-pocket (OOP) drug expenditures using individual-level data from the 2006-2018 waves of the Health and Retirement Study (HRS) merged with PDP market-level characteristics. Overall, we find that lower plan variety in the PDP market decreases the likelihood that elderly individuals enroll in PDPs, and higher PDP market concentration increases OOP drug expenditures. Our main results are robust to considering possible effects of unobserved individual-level heterogeneity, region-specific time trends, and entry/exit of insurers, as well as to the use of an alternative identification scheme based on a quasi-experimental design. Further, we find that younger, more advantaged, and healthier individuals respond differently to industry consolidation compared to their older, less advantaged, and sicker counterparts. The former groups are more likely to adjust their PDP enrollment in response to reduced PDP variety and have higher OOP drug expenditures in response to increased PDP market concentration compared to the latter groups. Finally, we find that not only do lower PDP variety and greater PDP market concentration directly affect PDP enrollment and OOP drug expenditures, but these changes also affect Medicare beneficiaries indirectly through impacting PDP characteristics.
Long-Term Outcomes of Medical Management vs Bariatric Surgery in Type 2 Diabetes
Anita Courcoulas et al.
Journal of the American Medical Association, 27 February 2024, Pages 654-664
Design, Setting, and Participants: ARMMS-T2D (Alliance of Randomized Trials of Medicine vs Metabolic Surgery in Type 2 Diabetes) is a pooled analysis from 4 US single-center randomized trials conducted between May 2007 and August 2013, with observational follow-up through July 2022.
Results: A total of 262 of 305 eligible participants (86%) enrolled in long-term follow-up for this pooled analysis. The mean (SD) age of participants was 49.9 (8.3) years, mean (SD) body mass index was 36.4 (3.5), 68.3% were women, 31% were Black, and 67.2% were White. During follow-up, 25% of participants randomized to undergo medical/lifestyle management underwent bariatric surgery. The median follow-up was 11 years. At 7 years, HbA1c decreased by 0.2% (95% CI, −0.5% to 0.2%), from a baseline of 8.2%, in the medical/lifestyle group and by 1.6% (95% CI, −1.8% to −1.3%), from a baseline of 8.7%, in the bariatric surgery group. The between-group difference was −1.4% (95% CI, −1.8% to −1.0%; P < .001) at 7 years and −1.1% (95% CI, −1.7% to −0.5%; P = .002) at 12 years. Fewer antidiabetes medications were used in the bariatric surgery group. Diabetes remission was greater after bariatric surgery (6.2% in the medical/lifestyle group vs 18.2% in the bariatric surgery group; P = .02) at 7 years and at 12 years (0.0% in the medical/lifestyle group vs 12.7% in the bariatric surgery group; P < .001). There were 4 deaths (2.2%), 2 in each group, and no differences in major cardiovascular adverse events. Anemia, fractures, and gastrointestinal adverse events were more common after bariatric surgery.
Medicare Part D Plans Greatly Increased Utilization Restrictions On Prescription Drugs, 2011–20
Geoffrey Joyce et al.
Health Affairs, March 2024, Pages 391-397
Abstract:
Drug utilization management tools can be employed to ensure that medicines are prescribed cost-effectively, but they can also be implemented in ways that reduce adherence and harm patient health. We examined trends in the prevalence of utilization restrictions on non-protected-class compounds in Medicare Part D plans during the period 2011–20, including prior authorization and step therapy requirements as well as formulary exclusions. Part D plans became significantly more restrictive over time, rising from an average of 31.9 percent of compounds restricted in 2011 to 44.4 percent restricted in 2020. The prevalence of formulary exclusions grew particularly fast: By 2020, plan formularies excluded an average of 44.7 percent of brand-name-only compounds. Formulary restrictions were more common among brand-name-only compared with generic-available compounds, among more expensive compounds, and in stand-alone compared with Medicare Advantage prescription drug plans.