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Insurance

Authors: Elixhauser A, Macklin S, Zodet MW, et al.
Title: Health care for children and youth in the United States: 2001 annual report on access, utilization, quality, and expenditures.
Publication: Ambulatory Pediatrics 2(6):419-37.
Date: 2001.
Abstract: This report provides an update on insurance coverage, use of health care services and health expenditures for children and youth in the United States. In addition the report provides information on variation in hospitalization for children from a new 22-state hospital discharge data source specifically designed to study children. The study uses the Medical Expenditure Panel Survey (MEPS) and the Healthcare Cost and Utilization Project (HCUP) Database for Pediatric Studies (DPS), later renamed the Kids' Inpatient Database (KID), both of which are maintained by the Agency for Healthcare Research and Quality. Children's use of health care services varies considerably by what type of health insurance coverage they have. Expenditures for children entail a substantial out-of-pocket component, which may be quite large for children with major health problems and which may have a significant burden on low-income families. The data also show substantial differences in average length of hospitalization across states in the U.S., ranging from 2.7 to 4.0 days, and rates of hospitalization through the ED vary from 9% to 23%. Injuries are a major reason for hospitalization, accounting for 1 in 6 stays among 10-14 year olds. In the 10-17 age group, over 1 in 7 stays are due to mental disorders. Among 15-17 year olds, over one-third of all hospital stays are related to childbirth and pregnancy.

Authors: Dick AW, Allison RA, Haber SG, Brach C, Shenkman B
Title: Consequences of States' Policies for SCHIP Disenrollment.
Publication: Health Care Financing Review 23(3):65-88.
Date: 2002
Abstract: Policymakers are concerned about disenrollment from the State Children's Health Insurance Program (SCHIP). We describe disenrollment in Florida, Kansas, New York, and Oregon and assess the links between disenrollment and states' SCHIP policies. We find that SCHIP is used on a long-term basis (at least 2 years) for a significant group of new enrollees and as temporary coverage (fewer than 12 months) for many others. Recertification generates large disenrollments (about half of children still enrolled at the time), but as many as 25 percent return within 2 months. The increased disenrollment rate at recertification is completely eliminated by a policy of passive re-enrollment.
Availability: AHRQ Publication No. 02-R070 is available from the AHRQ Publications Clearinghouse.

Authors: Encinosa W, Seldon T.
Title: Designing Employer Health Benefits for Heterogeneous Workforces: Risk Adjustment and Its Alternatives.
Publication: Inquiry 38:270-9.
Date: Fall 2001
Abstract: Many health economists recommend that employers provide employees with a risk-adjusted choice among competing health insurance plans. Formal risk adjustment is, however, rarely if ever used by employers. This paper examines a range of health benefit design options that are available to employers, focusing attention not only on risk adjustment but also on its alternatives. We argue that while formal risk adjustment is rare, employers commonly use strategies that accomplish some of the same objectives and at less cost.

Author: Encinosa W.
Title: A comment on Neudeck and Podczeck's "adverse selection and regulation in health insurance markets."
Publication: Journal of Health Economics 20(4): 667-73.
Date: 2001
Abstract: Using the Grossman equilibrium concept, Neudeck and Podczeck [Journal of Health Economics 15:387] show that imposing a minimum standard on a perfectly competitive insurance market can result in anti-competitive effects: decreased welfare with some insurers earning positive profits. However, the Grossman concept precludes an insurer from offering two separating, cross-subsidizing health plans. When an insurer can offer multiple plans (as under both the Nash and Miyazaki-Wilson equilibrium concepts), minimum standards result in a doubleton equilibrium, never allow positive total profits, and increase welfare. This is of interest since in 1997 more than half of establishments in the US offering choice of multiple plans did so through a single insurer.

Author: Encinosa W.
Title: The economics of regulatory mandates on the HMO market.
Publication: Journal of Health Economics 20(1):85-107.
Date: 2001
Abstract: Recently proposed HMO regulations have involved mandates of two forms: (1) minimum quality standards, and (2) mandated increases in access to specialty care. The author shows that piecemeal regulation, which uses only one of either mandate, may decrease welfare for all HMO consumers. Under full regulation using both mandates, if the minimum standard is set too low, a floor-to-ceiling effect occurs. This involves HMOs setting quality at the minimum standard, even when their quality would be above the standard in an unregulated market. Finally, the author show how premiums may either increase or decrease under a mandate.

Author: Brooks JM, McClellan M, Wong HS.
Title: The marginal benefits of invasive treatments for acute myocardial infarction: Does insurance coverage matter?
Publication: Inquiry 37(1):75-90.
Date: 2000
Abstract: This paper applies instrumental variable (IV) techniques and estimates the average benefits of invasive surgical treatments for marginal acute myocardial infarction (AMI) patients by insurance coverage (i.e., Medicare, Medicaid, privately-insured non-HMO, privately-insured HMO, and self-pay) using data from Healthcare Cost and Utilization Project (HCUP), State Inpatient Database for the State of Washington, for 1988-93. The authors observed differences in average benefits for marginal patients across insurance subpopulations that cannot be explained by differences in measured clinical circumstances. The empirical results show that the insurance subpopulation with the greatest estimated marginal benefits are those with the lowest expected payment generosity to providers. Because of the relatively weak explanatory power of the instruments for three insurance subpopulations and because many of the parameter estimates across the insurance subpopulations are not statistically different from each other, policy recommendations should be approached cautiously, according to the authors. While more precise estimates are needed to make policy recommendations, application of IV estimation techniques to AMI patients demonstrates the usefulness of this approach to estimate treatment effects across patient populations (e.g., across types of insurance coverage) for medical conditions of interest to policymakers. These estimates may help determine whether treatments are over- or underutilized.
Availability: AHRQ Publication No. 00-R039 is available from the AHRQ Publications Clearinghouse.

Authors: Chernew M, Encinosa W, Hirth R.
Title: Optimal health insurance: The case of multiple treatment options
Publication: Journal of Health Economics 19:(5)585-609.
Date: 2000
Abstract: The authors explore optimal cost-sharing provisions for insurance contracts when individuals have observable, severe diseases with a discrete number of medically appropriate treatment options. Variation in preferences for alternative treatments is unobserved by the insurer and non-contractible. Interest in such situations is increasingly common, exemplified by disease carve-out programs and shared decision making tools. The authors demonstrate that optimal insurance charges a copay to patients choosing the high cost treatment and provides consumers of the low cost treatment a cash payment. A simulation of the effect of such a policy, based on prostate cancer, indicates a substantial reduction in moral hazard.

Author: Encinosa W, Sappington D.
Title: Adjusted community rate reforms to promote HMO participation in Medicare+ Choice.
Publication: Health Care Financing Review 21(1)19-29.
Date: 1999
Abstract: The authors review the financial regulations imposed on HMOs that participate in the Medicare+ Choice program, and identify elements of the regulations that may discourage HMO participation in the program. We propose modifications of the regulations that can encourage the participation of HMOs without affording them excessive profit. The modifications include smoothing and bounding profit estimates, and authorizing and encouraging expanded use of benefit stabilization funds.

Author: Friedman B, Jee J., Steiner C, et al.
Title: Tracking the State Children's Health Insurance Program with hospital data: National baselines, State variations, and some cautions.
Publication: Med Care Res Rev 56(4):440-55.
Date: 1999
Abstract: State and Federal agencies are concerned with the impact of the State Children's Health Insurance Program (SCHIP) on the health care of enrolled children. As part of a broad program evaluation, and at relatively low cost, analysts can track data on hospital admissions for ambulatory care sensitive (ACS) conditions. This article uses hospital data for 19 states to calculate baseline ACS rates and to discuss trends and cross-state variations just prior to the start of SCHIP. A few cautions and limitations are discussed. An unexpected result in the explorations was a substantial increase in the rate of ACS admissions for self-pay and Medicaid-enrolled children during the period of 1990-1995. During that same period, the admission rate for other insured children fell by more than a third. The comparisons across states are meant to be illustrative; they do reveal a relationship between the rate of asthma admissions and the proportion of self-pay plus Medicaid-enrolled cases.
Availability: AHRQ Pub. No. 00-R009 is available from the AHRQ Publications Clearinghouse.

Authors: Brooks J, Dor A, Wong H.
Title: Hospital-insurer bargaining: An empirical investigation of appendectomy pricing.
Publication: Journal of Health Economics 16:417-34.
Date: 1997
Abstract: Employers' increased sensitivity to health care costs has forced insurers to seek ways to lower costs through effective bargaining with providers. What factors determine the prices negotiated between hospitals and insurers? The hospital-insurer interaction is captured in the context of a bargaining model, in which the gains from bargaining are explicitly defined. Appendectomy was chosen because it is a well defined procedure with little clinical variation. The authors' results show that certain hospitals' institutional arrangements (e.g., hospital affiliations), HMO penetration, and greater hospital concentration improve hospitals' bargaining position. Furthermore, hospitals' bargaining effectiveness has diminished over time and varies across States.
Availability: AHCPR Publication No. 97-R089 is available from the AHRQ Publications Clearinghouse.

Authors: Brooks J, Dor A, Wong H.
Title: The impact of physician payments on hospital-insurer bargaining in the U.S.
Publication: In Governments and Health Systems: Implications of Differing Involvements, edited by Chinitz D, Cohen J. New York (NY): John Wiley and Sons, Ltd.
Date: 1997
Abstract: While there has been considerable research on the impact of hospital competition on the insurers' ability to extract price discounts from hospitals, the role physicians play in the hospital-insurer bargaining process has been largely ignored. The hospital-insurer interaction can be thought of as a two-player bargaining game in which financial pressures from physicians can alter incentives. An application of the Nash-bargaining game leads to an empirical specification of hospital pricing in which payments to physicians are explicitly recognized. The authors' results show that certain hospital institutional arrangements (e.g., ownership type and hospital affiliations) and greater hospital concentration improve hospitals bargaining position. Although the new estimation strategy does effect the results somewhat, they provide added confidence to the notion that price competition is on the rise among U.S. hospitals.

Authors: Coffey R, Ball J, Johantgen M, et al.
Title: The case for national health data standards.
Publication: Health Aff 16(5):58-72.
Date: 1997.
Abstract: Available on PubMed®
Availability: AHCPR Publication No. 98-R012 is available from the AHRQ Publications Clearinghouse.

Authors: Elixhauser A., Johantgen M, Andrews R.
Title: Descriptive statistics by insurance status for most frequent hospital diagnoses and procedures.
Publication: Rockville (MD): AHCPR.
Date: 1997
Abstract: This Research Note presents data on the top 50 diagnoses and top 50 procedures in U.S. hospitals. It illustrates differences by insurance status for a range of conditions identified in a nationwide sample of inpatients.
Availability: AHCPR Publication No. 97-0009 is available from the AHRQ Publications Clearinghouse.

Author: Fraser I.
Title: Access to health care.
Publication: In Health Politics and Policy, edited by L. R. T. Littman. Albany, (NY): Delmar Publishers.
Date: 1997
Abstract: This article examines threats to health care access, dynamics of coverage, and three important trends affecting access to health care in America—the downsizing and decentralization of public programs and restructuring of the private health care market, increased enrollment in managed care organizations, and the greater power of purchasers.
Availability: AHCPR Publication No. 98-R003 is available from the AHRQ Publications Clearinghouse.

Authors: Elixhauser A., Duffy S, Sommers J.
Title: Most frequent diagnoses and procedures for DRGs by insurance status.
Publication: Rockville (MD): AHCPR.
Date: 1996
Abstract: This Research Note describes the 50 most frequent diagnosis-related groups (DRGs), the 5 principal diagnoses most commonly recorded for each group, and the 5 principal procedures most commonly performed in U.S. community hospitals. The analysis is based on data from the 1992 Nationwide Inpatient Sample of the Healthcare Cost and Utilization Project (HCUP). Mean and median charges and length of stay for each DRG-diagnosis combination and each DRG-procedure combination are provided along with estimates of standard errors. Results are provided for all patients combined and for three patient groups defined by their insurance status: the privately insured, Medicaid, and self-pay patients.
Availability: AHCPR Publication No. 97-0006 is available from the AHRQ Publications Clearinghouse.

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