What’s the latest in health policy research? The Essential Scan, produced by the Schaeffer Initiative for Innovation in Health Policy, aims to help keep you informed on the latest research and what it means for policymakers. If you’d like to receive the biweekly Essential Scan by email, you can sign up here.
More intensive diagnostic coding by Medicare Advantage plans could cost the program an additional $273 billion over 10 years
Richard Kronick finds that if the rate of growth in Medicare Advantage (MA) coding intensity persists, Medicare spending would increase by $273 billion over 10 years. Furthermore, even under a more conservative estimate of coding intensity growth he finds it would increase by $200 billion. Presently, the Centers for Medicare and Medicaid Services use a combination of both demographic and diagnostic information to calculate a risk score for patients, which is used to adjust payments to MA plans. Although average growth in the ratio of risk scores for MA beneficiaries to FFS beneficiaries was 2.3 percent from 2012 – 2014, the author used growth rates at and below the 1.5 percent average growth from 2009 – 2014. These findings support, as the author concludes, a return to the 2004 budget neutral approach to risk adjustment in MA that is accompanied by monitoring for adverse selection in MA. Full article here.
Success in ACA marketplaces supported by Medicaid expansion and a comprehensive regulatory approach; rural areas and provider concentration remain issues
Michael A. Morrisey, Alice M. Rivlin, Richard P. Nathan, and Mark A. Hall find that the local aspect of insurance markets, higher-than-expected claims, narrow networks, and provider competition were four key themes that came out of reports from five states on the competitiveness of the marketplaces created by the Affordable Care Act. Researchers from California, Florida, Michigan, North Carolina, and Texas interviewed state insurance regulators, insurers, providers, navigators, and other health care stakeholders in their state to evaluate competition on the individual health insurance exchanges. They noted that states like California and Michigan, which had been supportive of the law and its implementation, experienced greater success than more oppositional states that opted not to expand Medicaid, created additional hurdles to consumer assistance programs, or allowed grandfathered plans off the exchange to continue. However, success was not uniform: many rural areas and concentrated provider markets had less insurer competition on the exchanges, even in ACA-supportive states. These broad themes, as well as the details highlighted in the individual state reports, aimed to “gain insights for improving competition in the private health insurance industry and the implementation of the ACA” as well as inform any revisions to or replacements of the health insurance law. Full summary report here, as well as reports from California, Florida, Michigan, North Carolina, and Texas. See also the opinion piece by Leonard Schaeffer and Dana Goldman on the subject.
Older minorities face greater rates of work-related disability than whites; MALE FOREIGN-BORN HISPANICS HAD HIGHEST RATE OF WORKPLACE INJURY
Seth A. Seabury, Sophie Terp, and Leslie I. Boden find that male foreign-born Hispanics had the highest rate of workplace injuries at 13.7 per thousand followed by black men at more than 12 per thousand. Using 2006-13 data from the American Community Survey and from the four most recent panels of the Survey of Income and Program Participation, the authors evaluated the demographic variation in workplace injury and work-related disability. Men experienced a higher workplace injury rate than women, though women saw a greater range by race and ethnicity than men. Work-related disability rates for all minority groups aged 50 – 64 years (except “Other”) were higher than the rate for whites (e.g. non-Hispanic blacks with the highest rate of disability at 4.4 percent versus 2.5 percent among whites). While improved workplace health and safety policies may help alleviate some workplace injuries and disabilities, the authors underscore the role discrimination in hiring, promotion, and assignment may play in these disparities, and the resulting additional policies needed to tackle workplace injuries. Full article here.
“The results demonstrate the importance of having a strong safety net – especially for disabled workers – to reduce economic and physical hardship across demographic groups.”
– Dana Goldman, PhD, Director of the USC Schaeffer Center
Graphic Credit: Health Affairs
Hospital, provider consolidation had little association with ACO market penetration or participation
Hannah T. Neprash, Michael E. Chernew, and J. Michael McWilliams find that hospitals and providers were not only consolidating prior to the introduction of the payment reforms under the ACA, but also that there is minimal evidence associating consolidation with either accountable care organization (ACO) market penetration or with the providers’ ACO participation. Using data from 2008 – 2015, the authors find that areas with higher 2014 ACO market penetration had previously (2008-10) had greater competition among hospitals and insurers. Yet, they also had higher levels of integration among hospitals and providers. The authors found markets with higher ACO penetration experienced no greater growth in provider or hospital consolidation, or in commercial health care prices, than did markets with lower ACO penetration. While calling into question the assertion that payment reform is driving consolidation, these findings call for policies that address the broader trend toward less competitive provider markets. Full article here.
Keith M. Marzilli Ericson, Jon Kingsdale, Tim Layton, and Adam Sacarny find that both generic and personalized communications to health insurance marketplace consumers about the potential savings of switching plans increased shopping but did not result in greater numbers of consumers switching plans. Randomized Colorado-marketplace enrollees received personalized or generic letters and emails about the potential for savings by switching plans for coverage year 2016. The generic and personalized communications both raised the rate of marketplace website visitors by 23 percent. Households with a primary enrollee younger than age 50 were more responsive to both communications than those with an older primary enrollee. Similarly, households not eligible for subsidies were more responsive than those that were eligible. Yet, neither the generic nor the personalized communications had a significant effect on plan switching. The findings demonstrate that both generic and resource-intensive personalized communication can be effective nudges for getting consumers to shop for insurance, yet underscore the limitations of such informational nudges on actual plan changes. Full article here.
The Initiative is a partnership between the Economic Studies program at Brookings and the USC Schaeffer Center for Health Policy & Economics, and aims to inform the national health care debate with rigorous, evidence-based analysis leading to practical recommendations using the collaborative strengths of USC and Brookings.