The optimal negligence standard in health care under supply-side cost sharing

This paper elaborates on the optimal negligence standard in a world where physicians choose their level of care subject to erroneous court judgements and to the degree of supply-side cost sharing. Uncertain liability in malpractice lawsuits leads physicians to provide excessive and insufficient care, which results in a loss of social welfare. The standard that maximizes welfare depends on the cost share: Under traditional, close to full cost reimbursement it is lower than the first-best level of care, while under substantial supply-side cost sharing it increases and may even exceed the first best.      

Risk sharing between competing health plans and sponsors

In many countries, competing health plans receive capitation payments from a sponsor, whether government or a private employer. All capitation payment methods are far from perfect and have raised concerns about risk selection. Paying health plans partly on the basis of capitation and partly on the basis of actual costs ("risk sharing") reduces plans' incentives for selection but sacrifices some incentives for efficiency. This paper summarizes our empirical research on Dutch health plans with respect to various forms of risk sharing. All sponsors can improve their payment systems by either implementing or changing their form of risk sharing.     

Nearly half of families in high-deductible health plans whose members have chronic conditions face substantial financial burden

High-deductible health plans-typically with deductibles of at least $1,000 per individual and $2,000 per family-require greater enrollee cost sharing than traditional plans. But they also may provide more affordable premiums and may be the lowest-cost, or only, coverage option for many families with members who are chronically ill. We surveyed families with chronic conditions in high-deductible plans and families in traditional plans to compare health care-related financial burden-such as experiencing difficulty paying medical or basic bills or having to set up payment plans. Almost half (48 percent) of the families with chronic conditions in high-deductible plans reported health care-related financial burden, compared to 21 percent of families in traditional plans. Almost twice as many lower-income families in high-deductible plans spent more than 3 percent of income on health care expenses as lower-income families in traditional plans (53 percent versus 29 percent). As health reform efforts advance, policy makers must consider how to modify high-deductible plans to reduce the financial burden for families with chronic conditions.     

The cost benefit to health plans of pharmacotherapy for Alzheimer's disease

Treatment of Alzheimer's disease (AD) is a major public health issue, with the potential for significant impact on MCOs. As the number of people affected with AD continues to rise, the importance of this problem will grow as well. This article reviews patient and caregiver outcomes associated with reduced health care costs and their implications for MCOs. Cholinesterase inhibitors (ChEIs) are effective in treating cognitive, functional, and behavioral symptoms for patients with mild to moderate and moderate to severe AD. Treatment with memantine, an N-methyl-D-aspartate (NMDA) receptor antagonist, has been shown to benefit patients with moderate to severe AD. Pharmacoeconomic studies indicate that donepezil and memantine treatment may reduce total costs of care for AD patients and their caregivers, with potential economic benefits to MCOs.     

Local health departments' mission to the uninsured

It is often maintained that local health departments (LHDs) should not directly provide personal health services. However, our nationally representative sample revealed that most LHD directors (87%) believed LHDs must directly provide these services, primarily because they perceived a high level of unmet need among the uninsured. While only a minority believed LHDs should focus exclusively on the core functions, this proportion rose dramatically when we asked directors to assume that there were no uninsured people. Directors who perceived a high level of unmet need among the uninsured in their jurisdictions were much less likely to believe that LHDs should exclusively focus on the core functions. In theory, LHDs have a unique responsibility for assuring that the uninsured and vulnerable have access to personal health services. However, a majority of directors (67%) acknowledged that they have no enforceable means of assuring access to services the health department did not directly provide.     

Effects of employer-offered high-deductible plans on low-value spending in the privately insured population

Enrollment in plans with high deductibles has increased more than seven-fold in the last decade. Proponents of these plans argue that high deductibles could reduce wasteful spending by providing patients with incentives to limit use of low-value services that offer little or no clinical benefit. Others are concerned that patients may respond to these incentives by reducing their use of medical services indiscriminately and regardless of clinical benefit, which may negatively impact health outcomes. This study uses individual-level insurance claims data (2008–2013) and plausibly exogenous changes in plan offerings within firms over time to estimate the intent-to-treat and local-average treatment effects of high-deductible plan offerings on spending on 24 low-value services received in the outpatient setting. We find that firm offer of a high-deductible plan leads to a 13.7% ($5.23) reduction in average enrollee spending on low-value outpatient services and a 5.2% ($105.77) reduction in overall outpatient spending. We also find reductions in spending on measures of low-value imaging and laboratory services. We find some evidence that offering high-deductible plans disproportionately reduces low-value spending relative to overall spending, indicating that deductibles may be a way to incentivize value-based decision making.     

Plan choice,health insurance cost and premium sharing

We develop a model of premium sharing for firms that offer multiple insurance plans. We assume that firms offer one low quality plan and one high quality plan. Under the assumption of wage rigidities we found that the employee's contribution to each plan is an increasing function of that plan's premium. The effect of the other plan's premium is ambiguous. We test our hypothesis using data from the Employer Health Benefit Survey. Restricting the analysis to firms that offer both HMO and PPO plans, we measure the amount of the premium passed on to employees in response to a change in both premiums. We find evidence of large and positive effects of the increase in the plan's premium on the amount of the premium passed on to employees. The effect of the alternative plan's premium is negative but statistically significant only for the PPO plans.     

Effects of cost sharing in health insurance on disability days

We assess how cost sharing for medical services affects restricted activity days (RADs) and work loss disability days (WLDs), using data from a controlled experiment. We grouped the experimental insurance plans into four categories, one providing free care and the other three requiring varying amounts of cost sharing. RADs per person per year decreased by one to two days with greater cost sharing, with the strongest effects among those of average or poor health status, especially the non-poor. Unlike RADs, WLDs showed no systematic differences by plan.