Should the US adopt global budgets for hospitals? Have some states done this already?

While I leave the answer to the first question for another day, the answer to the second question is ‘yes’. Done, Herring and Wu (2019) explain’s Maryland’s approach to global capitation payments for hospitals covering both inpatient and outpatient hospital services. Maryland is the only state that still operates an all‐payer rate‐setting system for hospitals,…

Trends in hospital consolidation

The National Institute for Health Care Management (NIHCM) has some nice slides describing trends in hospital consolidation. First, we see a trend of increased hospitalizations over time. Further, these mergers are not small. In 49% of cases, the acquired (i.e., smaller) hospital has revenue of >$100m and in 19% of cases the acquired hospitals has…

Is the hospital readmissions reduction program bad for patients?

The answer is ‘perhaps’ according to a new paper by Wadhera et al. (2018). They use data from 2005 to 2015, and apply an inverse probability–weighted 30-day and 45-day post-discharge mortality measure stratified by whether there was an associated readmission. They examine admissions for acute myocardial infarction, heart failure, and pneumonia. Among Medicare beneficiaries, the HRRP…

Do we need Hospital Compare if we have Yelp?

This is basically the question that Perez and Freedman (2018) ask.  They find the following: Among crowdsourcing sites’ best‐ranked hospitals, 50–60% were also the best ranked on [Hospital Compare’s] HC’s overall and patient experience ratings; 20% ranked as the worst. Best‐ranked hospitals had significantly better clinical quality scores than worst ranked hospitals, but were not…

340B Facts and Figures

The 340B program requires pharmaceutical firms to give large discounts to hospitals and clinics that serve high volumes of low-income patients.  This sounds like a good idea at first: give money to people who can’t afford their medicines.  However, when one reads the sentence above closely, it becomes clear that patients don’t receive these discounts:…

Market consolidation in California

Yesterday, I discussed the idea of managed competition in California.  One of the original tenets of managed competition was insurers having integrated, mutually exclusive provider networks.  This would mean much more consolidation on the provider side.  While this could improve quality, there is also a risk that prices could rise.  In fact, this is what…

Hospital group purchasing and drug prices

Yesterday I noted that competition is key to driving down prices in health insurance markets.  Competition is about expanding the number of suppliers available for a given product.  Now let’s think about the demand side.  Does reducing the number of purchasers increase or decrease price?  One could think that price would fall because buyers would…