What’s the latest in health policy research? The Essential Scan aims to help keep you informed on the latest research and what it means for policymakers. It is produced by the USC-Brookings Schaeffer Initiative for Health Policy, a collaboration between the Brookings Institution and the USC Schaeffer Center for Health Policy & Economics. To sign up to receive the Essential Scan straight to your inbox, sign up here.
Study by: Ithai Z. Lurie and James Pearce
Leonard D. Schaeffer Chair in Health Policy Studies
Senior Fellow - Economic Studies
Director of Communications - USC Schaeffer Center
Staff Assistant - USC-Brookings Schaeffer Initiative for Health Policy
Most data used to inform our understanding of health insurance coverage in the U.S. is based on survey data, usually the Current Population Survey (CPS). While this data source has many benefits, its cross-sectional self-reporting design can frequently suffer from biases and limited sample sizes, which impacts accuracy and can result in undercounting public program participation. The Affordable Care Act established new reporting requirements for health insurance providers, creating administratively reported data on health insurance coverage beginning in 2015. A new study compares this new administrative data with survey data and finds that overall coverage counts are similar between the two data sets but coverage rates and uninsured rates differ, due to differences in population size. Medicaid coverage is well reported in administrative data, but underreported in surveys, especially among low-income individuals and people under the age of 40. Employer-sponsored coverage appears higher in survey data than in administrative data. These findings provide a benchmark for researchers and policy analysts by giving potential parameters for how to adjust coverage reporting depending on the type of data used. Full study here.
Net Spending on Retail Specialty Drugs Grew Rapidly, Especially for Private Insurance and Medicare Part D
Study by: Steven C. Hill, G. Edward Miller, and Yao Ding
There is no precise definition of specialty drugs, but the classification tends to include most injectables, biologicals, and other drugs that require specialized processes and assessments. They also tend to be more expensive than traditional medicines. Although specialty drugs make up a small percent of prescriptions filled, spending on specialty drugs accounted for approximately half of total annual spending on all retail, mail-order, and provider-administered drugs in 2018. But spending on specialty drugs is increasingly hard to measure due to rebate payments to insurers, pharmacy benefit managers, and state Medicaid agencies. A new study incorporates manufacturer rebates for both public and private payers and finds from 2010-2011 to 2016-2017 spending net of rebates more than doubled overall. The authors estimate rebates reduced gross spending on retail specialty drugs for private insurance by 24% and for Medicare Part D by 30% in 2016–17. Nevertheless, spending net of rebates tripled for Medicare Part D beneficiaries and more than doubled for the privately insured from 2010-2011 to 2016-2017. Within Medicaid, spending net of rebates on specialty drugs was essentially flat from 2010-2011 to 2016-2017. As policymakers consider myriad proposals to rein in drug spending, these trends may help inform the debate between incentivizing future development, maintaining access, and paying for these prescription drugs. Full study here.
Study by: Yongkang Zhang and Jing Li
Medicare per capita spending varies greatly across different states and regions in the United States, even after accounting for geographic differences in pricing and population health. There is little evidence that Medicare beneficiaries in high-spending regions have better health outcomes than those in low-spending regions, making it hard to warrant the difference in spending and alleged wasteful utilization. There are myriad studies concentrated on why this variation exists, but little analysis on the overall trends, how growth differs between regions over time, or the regional factors that are associated with an increase in spending. In this study, analysts find that the gap in price- and risk-adjusted Medicare per capita spending in high and low spending regions narrowed between 2007 and 2017. The difference in mean spending between the two shrunk from $3,388 in 2007 to $2,916 in 2017, a reduction of 14%. Areas with a higher baseline supply of post-acute care providers, such as hospice services and home health agencies, experienced lower spending growth after the implementation of ACA provisions. To that end, implementation of early provisions of the ACA, such as lower payment rate increases for providers, increased anti-fraud activities and delivery and payment reforms (such as readmission penalties) played a role in the reduction in variation. Full study here.
Study by: Amitabh Chandra, Pragya Kakani and Adam Sacarny
Significant disparities in health outcomes by race persist in the United States. Non-Hispanic Black Americans have an age-adjusted mortality rate 20% higher than non-Hispanic white Americans, a difference that appears to be increasing with the disproportional impact of COVID-19 on minority communities. Numerous factors are behind these disparities, including differences in the quality of care a provider delivers to their patients, and differences in health care providers selected by patients. In this study, analysts measure the role of hospital allocation in association with racial disparities among Black and white Medicare patients treated for heart attacks. Heart attacks are a condition that requires prompt care, hospital care is highly effective, and hospital quality has been validated. The researchers find Black patients were more likely to receive care at lower-performing hospitals than white patients, even when they both live in the same ZIP code. In the past two decades, the gap in performance between hospitals that tend to treat Black patients and hospitals tend to treat white patients has shrunk by over two-thirds. This improvement in performance cannot be attributed to reallocation of Black patients to better performing hospitals. Instead, the researchers point to extremely rapid performance improvements at hospitals that tend to treat Black patients. In addition, the use of beta blockers, a high-return, low-cost technology, also explains hospital improvement. Moving forward, technology diffusion and other performance improvement mechanisms may help further reduce disparities. Full study here.
Report Produced by USC-Brookings Schaeffer Initiative for Health Policy