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Health Care Costs and Financing

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Quality partnerships yield advances in collaboration

In November 2005, users, researchers, funders, and developers of health care market data converged at a conference hosted by the Agency for Healthcare Research and Quality (AHRQ). A long-time supporter of research on health care costs, productivity, market forces, and organization, the Agency hosted the event to present recent research on health care and health insurance markets and to chart a course for future research endeavors. Further, the attendees were to adapt current or craft new measures of activities in the health care market.

Five papers from the conference appear in the Spring 2008 Inquiry, Volume 45, introduced by a conference overview from Michael Hagan and William Encinosa, senior economists at AHRQ, on pages 15-18. Each paper puts forth recommendations on how AHRQ can assist researchers interested in health care markets. The papers are briefly summarized here.

Lindrooth, R.C. "Research on the hospital market: Recent advances and continuing data needs," pp. 19-29. (AHRQ grant HS10730)

The author uses papers published on health economics to show how measures, data, and models of hospital services, locations, and competition are used to evaluate what drives consumers to choose hospitals. Evaluations could be bettered by tracking care utilization of all patients instead of just the Medicare population (commonly done because data are readily available), and by creating physician identifiers to link them with the care they provide to get a clearer picture of their role in hospital quality. The AHRQ-sponsored Healthcare Cost and Utilization Project databases could also serve as clearinghouses for data on care measures for heart attacks, heart failure, pneumonia, and surgery to aid research on consumer choice. Another useful measure for researching hospital choice is to collect distance data from a patient's ZIP code to the hospital.

Garrett, B. and Chernew, M. "Health insurance and labor markets: Concepts, open questions, and data needs," pp. 30-57.

By conducting literature reviews, the authors attempt to answer questions on the relationship between health insurance and the labor force. They examined the implications of employer-sponsored health insurance, including how premium costs affect wages and influence employees to elect or decline it, and whether employees who might be more productive elsewhere opt to stay with companies simply because of health benefits. The answers to these queries have public policy implications because initiatives, such as subsidizing premiums and mandating insurance coverage, can be complicated in light of limited data. The authors would like to have better measures on workers' and their families' health status and expenses to determine the value they place on employer-sponsored insurance. The article lists ways AHRQ can better organize data to assist researchers interested in examining the link between the labor and health insurance market, such as promoting standardized data collection and improving the Medical Expenditure Panel Survey Household Component/Insurance Component files.

Grabowski, D.C. "The market for long-term care services," pp. 58-74.

Addressing the lack of good measures to evaluate the long-term care market, the author states that good measures reflect market competition, consider the fact that patient choice is linked to facility quality, and can be linked to other market-level data (such as population) measures. The article's list of policy questions that could benefit from better measures and data include whether increased competition among nursing homes lowers costs, if nursing homes and home health care agencies compete with one another, and how assisted living influences the nursing home market. The author suggests that AHRQ can improve long-term care research by defining market boundaries, collecting market and regulatory data, providing de-identified data, standardizing Medicaid cost data, and encouraging research outside of nursing home settings.

Brooks, J.M., Doucette, W.R., Wan, S., and Klepser, D.G. "Retail pharmacy market structure and performance," pp. 75-88.

The authors explore current methods of research and data available to examine the retail pharmacy market and its effect on use, pricing, and service levels. Though vendors collect a wealth of data on payer prescription utilization, payment, and costs, researchers do not have access to this information. One remedy is to have AHRQ develop agreements with vendors to gain access to this data.

Simon, K. "Data needs for policy research on State-level health insurance markets," pp. 89-97.

States appear to be leading the way in health care transformation through initiatives such as expanding Medicaid eligibility and small group insurance reform. However, to assist States in making informed policy decisions, researchers need annual data on Medicaid enrollment, drug and service use, payments, policies, and spending. They also need economic measures on premiums, reimbursement rates, and health insurance plan characteristics. Ideally, this information would be stored in a central database. As a starting point, AHRQ can assist in the data compiling effort by creating a Web site that points researchers to existing data collection efforts or puts all available data in one place.

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