Unbiased Analysis of Today's Healthcare Issues
A hospital in New York City faces higher labor costs than a hospital in Billings, Montana. To take into account these cost differences, Medicare adjusts hospital payments to reflect these cost differences using a hospital wage index. As currently constructed, however, many hospitals petition to be included in labor markets where they would receive a…
Many health policy experts believe that when Medicare or Medicaid decrease prices, hospitals will increase the prices they charge to the privately insured. Does this make sense? Ginsburg (2003) summarizes the debate: Most executives in hospitals, physician organizations, health plans, and businesses have long been convinced that reductions in rates paid to Medicare and Medicaid…
Over the course of the past decade, there has been a trend to move more and more treatment of chronically ill individuals outside the hospital and into ambulatory care. There is good reason for this. Ambulatory care is much less expensive than hospital care. In fact, the goal of treating patients more regularly in the…
In January, the CBO released a report titled The Budget and Economic Outlook: Fiscal Years 2010 to 2020. A summary of the findings is available on the CBO Director’s blog. Today, however, I focus on CBO’s evaluation of how changes in health care spending affect the federal budget. “Medicaid spending (excluding stimulus funding) increased by…
Regional differences in the cost of health care are due to differences in both the price and volume of medical care. Since, Medicare sets prices, there should be little variation in prices…right? Actually, Medicare payments have geographic adjustments based on a number of factors. For instances, the hospital wage index gives pay hospitals more in…
“The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requires the Department of Health and Human Services (DHHS) to develop a plan that will transition Medicare payments into a VBP [value based purchasing] program for physician and other professional services that is based on efficiency and the quality of services provided. The Act…
Accountable Care Organizations (ACOs) are the latest rage in the health policy world. The question is, what are ACOs. The Urban Institute’s Kelly Devers and Robert Berenson try to answer the following question: “Can Accountable Care Organizations Improve the Value of Health Care by Solving the Cost and Quality Quandaries?” The goal of ACOs is…
How does one evaluate a physician’s efficiency level? This process has five main dimensions. Which resource use measurement methodology to use. There are two main profiling methodologies: per capita and episode-based. How to account for differences in patient health status. This is done through risk adjustment. However, choosing the proper risk adjustment method is crucial…
One problem with any government-run health insurance program is that politicians have an incentive to make decisions that are attractive to small, wealthy, cohesive constituencies, rather than for the greater good. For instance, although CMS administrator tried to stem the tide of rising physician costs, Congress has repeatedly reinstated the physician raises. The following three…
Much of my own research has focused on how physician financial incentives affect the quantity and quality of medical care. It should come as no surprise that I found a recent New York Times article on the topic stimulating. Dr. Sandjeep Jauhar examines how hospital and physician financial incentives affect the length of a patient’s…