Who is participating in BPCI?

In 2013, Medicare launched the Bundled Payments for Care Improvement (BPCI) initiative.  There were 4 models included in the program: Model 1 (least comprehensive): includes Part A services for the index hospitalization alone, and thus most closely resembles current fee-for-service payment. Model 2 (most comprehensive): encompasses Part A and Part B services for the index hospitalization, readmissions, and all other post…

Which value-based payment system is best?

Clearly, there is no single answer to this question and the answer depends on a number of factors including the market structure, provider responsiveness to intrinsic vs. extrinsic motivation, provider sample size, and the ability to accurately measure quality of care.  Douglas Conrad (2015) uses agency theory to provide an overview of existing value-based payment systems.  The…

Are wellness programs legal?

A post at The Incidental Economist considers the issue: Workplace wellness programs discriminate. That’s what they do. Employees who adhere to a wellness program pay less for their coverage; those who don’t pay more. Wellness programs thus clash with federal rules that generally require employers to treat their employees even-handedly, regardless of health status. The…

Why Medicare Advantage is thriving

In the 1990s, managed care began to take over the health care marketplace. However, backlash against managed care lead to a retrenchment in managed care in the late 1990s.  A paper by Sinaiko and Zeckhauser (2015) notes that: After the MA-plan payment cuts imposed through the Balanced Budget Act of 1997, HMO availability dropped by nearly…

What are regression trees?

Regression trees are a way to partition your explanatory variables to (potentially) better predict an outcome of interest.  Regression trees start with a an outcome (let’s call it y) and a vector of explanatory variables (X).   Simple Example For instance, let y be health care spending, X=(X1,X2) where X1 is the patient’s age and X2 is the patient’s…