ObjectiveTo estimate the effects of changes in Medicare inpatient hospital prices on hospitals’ overall revenues, operating expenses, profits, assets, and staffing.
Primary Data SourceMedicare hospital cost reports (1996–2009).
Study DesignFor each hospital, we quantify the year-to-year price impacts from changes in the Medicare payment formula. We use cumulative simulated price impacts as instruments for Medicare inpatient revenues. We use a series of two-stage least squares panel data regressions to estimate the effects of changes in Medicare revenues among all hospitals, and separately among not-for-profit versus for-profit hospitals, and among hospitals experiencing real price increases (“gainers”) versus decreases (“losers”).
Principal FindingsMedicare price cuts are associated with reductions in overall revenues even larger than the direct Medicare price effect, consistent with price spillovers. Among not-for-profit hospitals, revenue reductions are fully offset by reductions in operating expenses, and profits are unchanged. Among for-profit hospitals, revenue reductions decrease profits one-for-one. Responses of gainers and losers are roughly symmetrical.
ConclusionsOn average, hospitals do not appear to make up for Medicare cuts by “cost shifting,” but by adjusting their operating expenses over the long run. The Medicare price cuts in the Affordable Care Act will “bend the curve,” that is, significantly slow the growth in hospitals’ total revenues and operating expenses.
Medicare; hospitals; health care costs; payment
Objective. To describe the properties of the Patient-Centered Medical Home Assessment (PCMH-A) as a tool to stimulate and monitor progress among primary care practices interested in transforming to patient-centered medical homes (PCMHs).
Study Setting. Sixty-five safety net practices from five states participating in a national demonstration program for PCMH transformation.
Study Design. Longitudinal analyses of PCMH-A scores were performed. Scores were reviewed for agreement and sites were categorized over time into one of five categories by external facilitators. Comparisons to key activity completion rates and NCQA PCMH recognition status were completed.
Data Collection/Extraction Methods. Multidisciplinary teams at each practice completed the 33-item self-assessment tool every 6 months between March 2010 and September 2012.
Principal Findings. Mean overall PCMH-A scores increased (7.2, March 2010, to 9.1, September 2012; [p < .01]). Increases were statistically significant for each of the change concepts (p < .05). Facilitators agreed with scores 82% of the time. NCQA-recognized sites had higher PCMH-A scores than sites that were not yet recognized. Sites that completed more transformation activities and progressed over defined tiers reported higher PCMH-A scores. Scores improved most in areas where technical assistance was provided.
Conclusions. The PCMH-A was sensitive to change over time and provided an accurate reflection of practice transformation.
Process assessment; patient-centered care; primary health care
This study measures the change in health care use after enrollment into a new public insurance program for low-income childless adults.
Data Sources/Study Setting
The data sources include claims from a large integrated health system in rural Wisconsin and Medicaid enrollment files, January 2007–September 2012.
We employ a regression discontinuity design to measure the causal effect of public insurance enrollment on counts of outpatient, emergency department, and inpatient events for two years following enrollment for a sample of previously uninsured low-income adults in rural Wisconsin.
Public insurance enrollment led to substantial increases in outpatient visits including preventive visits but not mental health visits. Public insurance enrollment also led to increases in inpatient stays, but the study is inconclusive on whether it led to an increase in ED visits.
Public insurance expansions to childless adults have the potential to impact the use of health care. The large increase in Medicaid coverage and reduction in rates of uninsurance anticipated to result from the Affordable Care Act should increase the use of inpatient and outpatient services but will have an uncertain impact on the use of ED among rural populations.
Medicaid; ACA; utilization; health insurance coverage; rural; childless adult
Patients with heart failure (HF) have high rates of rehospitalization. Home health care (HHC) patients with HF are not well studied in this regard. The objectives of this study were to determine patient, HHC agency, and geographic (i.e., area variation) factors related to 30-day rehospitalization in a national population of HHC patients with HF, and to describe the extent to which rehospitalizations were potentially avoidable.
Chronic Condition Warehouse data from the Centers for Medicare & Medicaid Services.
Retrospective cohort design.
The 2005 national population of HHC patients was matched with hospital and HHC claims, the Provider of Service file, and the Area Resource File.
The 30-day rehospitalization rate was 26 percent with 42 percent of patients having cardiac-related diagnoses for the rehospitalization. Factors with the strongest association with rehospitalization were consistent between the multilevel model and Cox proportional hazard models: number of prior hospital stays, higher HHC visit intensity category, and dyspnea severity at HHC admission. Substantial numbers of rehospitalizations were judged to be potentially avoidable.
The persistently high rates of rehospitalization have been difficult to address. There are health care-specific actions and policy implications that are worth examining to improve rehospitalization rates.
Heart failure; epidemiology; outcomes research; home health care
To examine the association between residential segregation and geographic access to primary care physicians (PCPs) in metropolitan statistical areas (MSAs).
We combined zip code level data on primary care physicians from the 2006 American Medical Association master file with demographic, socioeconomic, and segregation measures from the 2000 U.S. Census. Our sample consisted of 15,465 zip codes located completely or partially in an MSA.
We defined PCP shortage areas as those zip codes with no PCP or a population to PCP ratio of >3,500. Using logistic regressions, we estimated the association between a zip code's odds of being a PCP shortage area and its minority composition and degree of segregation in its MSA.
We found that odds of being a PCP shortage area were 67 percent higher for majority African American zip codes but 27 percent lower for majority Hispanic zip codes. The association varied with the degree of segregation. As the degree of segregation increased, the odds of being a PCP shortage area increased for majority African American zip codes; however, the converse was true for majority Hispanic and Asian zip codes.
Efforts to address PCP shortages should target African American communities especially in segregated MSAs.
Primary care; racial; ethnic; health care disparities; segregation; physician shortage
To assess the impact of the Patient Protection and Affordable Care Act's (ACA) changes in Medicare Advantage (MA) payment rates on the availability of and enrollment in MA plans.
Secondary data on MA plan offerings, contract offerings, and enrollment by state and county, in 2010–2011.
We estimated regression models of the change in the number of plans, the number of contracts, and enrollment as a function of quartiles of FFS spending and pre-ACA MA payment generosity. Counties in the lowest quartile of spending are treated most generously by the ACA.
Relative to counties in the highest quartile of spending, the number of plans in counties in the first, second, and third quartiles rose by 12 percent, 7.6 percent, and 5.4 percent, respectively. Counties with more generous MA payment rates before the ACA lost significantly more plans. We did not find a similar impact on the change in contracts or enrollment.
The ACA-induced MA payment changes reduced the number of plan choices available for Medicare beneficiaries, but they have yet affected enrollment patterns.
Medicare; managed care; payment policy
Background and Objective
Medical groups have invested billions of dollars in electronic medical records (EMRs), but few studies have examined the cost-effectiveness of EMR-based clinical decision support (CDS). This study examined the cost-effectiveness of EMR-based CDS for adults with diabetes from the perspective of the health care system.
Clinical outcome and cost data from a randomized clinical trial of EMR-based CDS were used as inputs into a diabetes simulation model. The simulation cohort included 1,092 patients with diabetes with A1c above goal at baseline.
The United Kingdom Prospective Diabetes Study Outcomes Model, a validated simulation model of diabetes, was used to evaluate remaining life years, quality-adjusted life years (QALYs), and health care costs over patient lifetimes (40-year time horizon) from the health system perspective.
Patients in the intervention group had significantly lowered A1c (0.26 percent, p = .014) relative to patients in the control arm. Intervention costs were $120 (SE = 45) per patient in the first year and $76 (SE = 45) per patient in the following years. In the base case analysis, EMR-based CDS increased lifetime QALYs by 0.04 (SE = 0.01) and increased lifetime costs by $112 (SE = 660), resulting in an incremental cost-effectiveness ratio of $3,017 per QALY. The cost-effectiveness of EMR-based CDS persisted in one-way, two-way, and probabilistic sensitivity analyses.
Widespread adoption of sophisticated EMR-based CDS has the potential to modestly improve the quality of care for patients with chronic conditions without substantially increasing costs to the health care system.
To assess the independent association of food insecurity with processes of care and delays in filling prescriptions.
2007 California Health Interview Survey.
Associations of food insecurity with processes of care and delays in filling prescriptions were examined using multivariable logistic regression analyses adjusted for sociodemographic characteristics, barriers to accessing care, and health status.
Data were analyzed from adults currently receiving treatment for type 2 diabetes and who had seen a doctor in the prior 12 months (N = 3,401).
For diabetes patients currently receiving medical care, food insecurity was not associated with lower rates of performance of recommended processes of care, but it was associated with delays in filling prescriptions (aOR = 2.15, 95 percent CI 1.25, 3.71).
Food insecurity may increase delays in filling prescriptions in daily life, even though the performance of recommended processes of care in the clinic is not diminished.
Food insecurity; diabetes; quality of care; medication underuse
To compare methods of analyzing endogenous treatment effect models for nonlinear outcomes and illustrate the impact of model specification on estimates of treatment effects such as health care costs.
Secondary data on cost and utilization for inpatients hospitalized in five Veterans Affairs acute care facilities in 2005–2006.
We compare results from analyses with full information maximum simulated likelihood (FIMSL); control function (CF) approaches employing different types and functional forms for the residuals, including the special case of two-stage residual inclusion; and two-stage least squares (2SLS). As an example, we examine the effect of an inpatient palliative care (PC) consultation on direct costs of care per day.
Data Collection/Extraction Methods
We analyzed data for 3,389 inpatients with one or more life-limiting diseases.
The distribution of average treatment effects on the treated and local average treatment effects of a PC consultation depended on model specification. CF and FIMSL estimates were more similar to each other than to 2SLS estimates. CF estimates were sensitive to choice and functional form of residual.
When modeling cost or other nonlinear data with endogeneity, one should be aware of the impact of model specification and treatment effect choice on results.
Costs; endogeneity; nonlinear models; treatment effects; palliative care
To assess the Threshold Technique’s (TT) feasibility in community-wide surveys of U.S. Medicare beneficiaries’ preferences for end-of-life (EOL) care options.
Study participants were community-dwelling Medicare beneficiaries in four different regions in the U.S.
During personal interviews, participants considered four EOL scenarios, each presenting a choice between a less- and a more-intense care option.
Participants selected their initially-favored option. Depending on that choice, in the subsequent TT the length of life offered by the more-intense option was systematically increased or decreased until the participant “switched” to their initially-rejected option.
Participants were able to select an initially-favored option (in 3 of the 4 scenarios, this was the less-intense option). The majority of participants were able to engage with the subsequent TT. In all scenarios, regardless of the increase/decrease in the length of life offered by the more-intense option, the majority of participants were unwilling to “switch” to their initially-rejected option.
In surveys of populations’ preferential attitudes towards EOL care options, the TT was a feasible elicitation method, engaging most participants and measuring the strength of their attitudes. Further methodological work is merited, involving a) populations with various participant characteristics, and b) different attributes in the TT task itself.
population preferences; threshold technique; end-of-life; survey; Medicare
To examine the effects of the racial composition of residents on nursing homes’ financial and quality performance. The study examined Medicare and Medicaid certified nursing homes across the United States that submitted Medicare cost reports between the years of 1999 and 2004 (11,472 average per year).
Data were obtained from the Minimum Data Set (MDS), the On-Line Survey Certification and Reporting (OSCAR), Medicare Cost Reports, and the Area Resource File (ARF).
Panel data regression with random intercepts and negative binomial regression were conducted with state and year fixed effects.
Financial and quality performance differed between nursing homes with high proportions of Black residents and nursing homes with no or medium proportions of Black residents. Nursing homes with no Black residents had higher revenues and higher operating margins and total profit margins and they exhibited better processes and outcomes than nursing homes with high proportions of Black residents.
Nursing homes’ financial viability and quality of care are influenced by the racial composition of residents. Policymakers should consider initiatives to improve both the financial and quality performance of nursing homes serving predominantly Black residents.
nursing homes; racial composition; quality; financial performance; Blacks
To determine whether the rate of rehospitalization is lower among patients discharged to skilled nursing facilities (SNFs) with which a hospital has a strong linkage.
We used national Medicare enrollment, claims and the Minimum Data Set to examine 2.8 million newly discharged patients to 15,063 SNFs from 2,477 general hospitals between 2004 and 2006.
We examined the relationship between the proportion of discharges from a hospital to alternative SNFs on the rehospitalization of patients treated by that hospital-SNF pair using an instrumental variable approach. We used distances to alternative SNFs from residence of the patients of the originating hospital as the instrument.
Our estimates suggest that if the proportion of a hospital’s discharges to a SNF were to increase by 10 percentage points, the likelihood of patients treated by that hospital-SNF pair to be re-hospitalized within 30 days would decline by 1.2 percentage points, largely driven by fewer rehospitalizations within a week of hospital discharge.
Stronger hospital-SNF linkages, independent of hospital ownership, were found to reduce rehospitalization rates. As hospitals are held accountable for patients’ outcomes post-discharge under the Affordable Care Act, hospitals may steer their patients preferentially to fewer SNFs.
To use the experience from a health services research evaluation to provide guidance in team development for mixed methods research.
The Research Initiative Valuing Eldercare (THRIVE) team was organized by the Robert Wood Johnson Foundation to evaluate The Green House nursing home culture change program. This paper describes the development of the research team and provides insights into how funders might engage with mixed methods research teams to maximize the value of the team.
Like many mixed methods collaborations, the THRIVE team consisted of researchers from diverse disciplines, embracing diverse methodologies, and operating under a framework of non-hierarchical, shared leadership that required new collaborations, engagement, and commitment in the context of finite resources. Strategies to overcome these potential obstacles and achieve success included implementation of a Coordinating Center, dedicated time for planning and collaborating across researchers and methodologies, funded support for in-person meetings, and creative optimization of resources.
Challenges are inevitably present in the formation and operation of effective mixed methods research teams. However, funders and research teams can implement strategies to promote success.
mixed methods; team development; leadership; research funding
To determine if diabetes clinical standards consider increased hypoglycemia risk in vulnerable patients.
MEDLINE, the National Guidelines Clearinghouse, the National Quality Measures Clearinghouse, and supplemental sources.
Systematic review of clinical standards (guidelines, quality metrics, or pay-for-performance programs) for glycemic control in adult diabetes patients. The primary outcome was discussion of increased risk for hypoglycemia in vulnerable populations.
Data Collection/Extraction Methods
Manuscripts identified were abstracted by two independent reviewers using prespecified inclusion/exclusion criteria and a standardized abstraction form.
We screened 1166 titles, and reviewed 220 manuscripts in full text. 44 guidelines, 17 quality metrics, and 8 pay-for-performance programs were included. 5 (11%) guidelines, and no quality metrics or pay-for-performance programs met the primary outcome.
Clinical standards do not substantively incorporate evidence about increased risk for hypoglycemia in vulnerable populations.
Diabetes Mellitus; Quality and Safety; Health Disparities; Vulnerable Populations; Clinical Guidelines
To assess the value of a novel composite measure for identifying the best hospitals for major procedures.
We used national Medicare data for patients undergoing five high-risk surgical procedures between 2005 and 2008.
For each procedure, we used empirical Bayes techniques to create a composite measure combining hospital volume, risk-adjusted mortality with the procedure of interest, risk-adjusted mortality with other related procedures, and other variables. Hospitals were ranked based on 2005–2006 data and placed in one of three groups: 1-star (bottom 20 percent), 2-star (middle 60 percent), and 3-star (top 20 percent). We assessed how well these ratings forecasted risk-adjusted mortality rates in the next 2 years (2007–2008), compared to other measures.
For all five procedures, the composite measures based on 2005–2006 data performed well in predicting future hospital performance. Compared to 1-star hospitals, risk-adjusted mortality was much lower at 3-star hospitals for esophagectomy (6.7 versus 14.4 percent), pancreatectomy (4.7 versus 9.2 percent), coronary artery bypass surgery (2.6 versus 5.0 percent), aortic valve replacement (4.5 versus 8.5 percent), and percutaneous coronary interventions (2.4 versus 4.1 percent). Compared to individual surgical quality measures, the composite measures were better at forecasting future risk-adjusted mortality. These measures also outperformed the Center for Medicare and Medicaid Services (CMS) Hospital Compare ratings.
Composite measures of surgical quality are very effective at predicting hospital mortality rates with major procedures. Such measures would be more informative than existing quality indicators in helping patients and payers identify high-quality hospitals with specific procedures.
Administrative data uses; econometrics; modeling, multi-level; risk adjustment for clinical outcomes; quality of care/patient safety (measurement)
To test the hypothesis that more stringent quality regulations contribute to better quality nursing home care and to assess their cost-effectiveness.
Primary and secondary data from all states and U.S. nursing homes between 2005 and 2006.
We estimated seven models, regressing quality measures on the Harrington Regulation Stringency Index and control variables. To account for endogeneity between regulation and quality, we used instrumental variables techniques. Quality was measured by staffing hours by type per case-mix adjusted day, hotel expenditures, and risk-adjusted decline in activities of daily living, high-risk pressure sores, and urinary incontinence.
All states' licensing and certification offices were surveyed to obtain data about deficiencies. Secondary data included the Minimum Data Set, Medicare Cost Reports, and the Economic Freedom Index.
Regulatory stringency was significantly associated with better quality for four of the seven measures studied. The cost-effectiveness for the activities-of-daily-living measure was estimated at about 72,000 in 2011/ Quality Adjusted Life Year.
Quality regulations lead to better quality in nursing homes along some dimensions, but not all. Our estimates of cost-effectiveness suggest that increased regulatory stringency is in the ballpark of other acceptable cost-effective practices.
Nursing homes; quality of care; regulation; cost-effectiveness; comparative effectiveness