Pub Date : 2014-01-01DOI: 10.12778/235108618X15452373185291
Ji-quan Guo, S. Supakankunti
The purposes of this study are to calculate the treatment cost on the perspective of provider, to assess short outcome (complications avoided) as well as the cost - effectiveness of the surgical treatments for renal cell carcinoma. This study aims to compare the 30 patients of laparoscopic surgery with 30 patients of open surgery in Inner Mongolia Medical University Subsidiary Hospital in Inner Mongolia in China during 2010-201. The data source is from the medical records and hospital cost accounting bills. The results showed that the cost of laparoscopic surgery is $ 1326.2/person, the number of complications avoided patients are 24 out of 30 patients. Therefore, the average cost of each complications avoided is $55.25. Moreover, the cost of open surgery is 920.6/person, the number of complications avoided patients are 26 out of 30 patients and the average cost of each complications avoided is $35.4. In conclusion, from the provider perspective's point of view and based on the limited available database, the effectiveness of open surgery seems to be better than the effectiveness of laparoscopic surgery. However, the interpretation of the study results should be with caution regarding the implementation of a surgical procedure to treat this disease further since this study employed only one hospital data base and a short period of time. Over which the other members in the society dare not to doubt nor dispute.
{"title":"Cost-Effectiveness Analysis of Laparoscopic Surgery versus Open Surgery in Renal Cell Carcinoma at Inner Mongolia Medical University Subsidiary Hospital in Inner Mongolia, China","authors":"Ji-quan Guo, S. Supakankunti","doi":"10.12778/235108618X15452373185291","DOIUrl":"https://doi.org/10.12778/235108618X15452373185291","url":null,"abstract":"The purposes of this study are to calculate the treatment cost on the perspective of provider, to assess short outcome (complications avoided) as well as the cost - effectiveness of the surgical treatments for renal cell carcinoma. This study aims to compare the 30 patients of laparoscopic surgery with 30 patients of open surgery in Inner Mongolia Medical University Subsidiary Hospital in Inner Mongolia in China during 2010-201. The data source is from the medical records and hospital cost accounting bills. The results showed that the cost of laparoscopic surgery is $ 1326.2/person, the number of complications avoided patients are 24 out of 30 patients. Therefore, the average cost of each complications avoided is $55.25. Moreover, the cost of open surgery is 920.6/person, the number of complications avoided patients are 26 out of 30 patients and the average cost of each complications avoided is $35.4. In conclusion, from the provider perspective's point of view and based on the limited available database, the effectiveness of open surgery seems to be better than the effectiveness of laparoscopic surgery. However, the interpretation of the study results should be with caution regarding the implementation of a surgical procedure to treat this disease further since this study employed only one hospital data base and a short period of time. Over which the other members in the society dare not to doubt nor dispute.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"34 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2014-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"74855329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The adoption of new medical technologies in Russian public hospitals is an important part of healthcare modernization and thus is a subject for public finance and regulation. Here we examine the decision-making process on adoption of new technologies in Russian hospitals, and the institutional environment in which they are made. We find that public hospitals operate within a strategic-institutional model of decision making and tend to adopt technologies that bring indirect benefits to their heads/physicians. Unlike Western clinics, the interests of Russian hospital heads and physicians are driven by the possibilities to obtain income from a part of hospital activities: the provision of chargeable medical services to the population, as well as receiving informal payments from patients. The specifically Russian feature of the decision-making process is that hospitals are strongly dependent on health authorities’ decisions about new equipment acquisition. The inefficiency problems arise from the contradiction between hospitals’ and authorities’ financial motivation for acquiring new technologies: hospitals tend to adopt technologies that bring benefits to their heads/physicians and minimize maintenance and servicing costs, while authorities’ main concern is initial cost of technology. The main reason for inefficiency of medical technology adoption arises from centralization of procurement of medical equipment for hospitals that creates the preconditions for rent-seeking behaviour of persons making such decisions
{"title":"Adopting New Medical Technologies in Russian Public Hospitals: What Causes Inefficiency?","authors":"L. Zasimova, S. Shishkin","doi":"10.2139/ssrn.2359340","DOIUrl":"https://doi.org/10.2139/ssrn.2359340","url":null,"abstract":"The adoption of new medical technologies in Russian public hospitals is an important part of healthcare modernization and thus is a subject for public finance and regulation. Here we examine the decision-making process on adoption of new technologies in Russian hospitals, and the institutional environment in which they are made. We find that public hospitals operate within a strategic-institutional model of decision making and tend to adopt technologies that bring indirect benefits to their heads/physicians. Unlike Western clinics, the interests of Russian hospital heads and physicians are driven by the possibilities to obtain income from a part of hospital activities: the provision of chargeable medical services to the population, as well as receiving informal payments from patients. The specifically Russian feature of the decision-making process is that hospitals are strongly dependent on health authorities’ decisions about new equipment acquisition. The inefficiency problems arise from the contradiction between hospitals’ and authorities’ financial motivation for acquiring new technologies: hospitals tend to adopt technologies that bring benefits to their heads/physicians and minimize maintenance and servicing costs, while authorities’ main concern is initial cost of technology. The main reason for inefficiency of medical technology adoption arises from centralization of procurement of medical equipment for hospitals that creates the preconditions for rent-seeking behaviour of persons making such decisions","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"8 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81180256","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
L. Eldenburg, Fabio B. Gaertner, Theodore H. Goodman
Recent accounting research provides evidence that similar profit-based compensation incentives are used in for-profit and nonprofit hospitals. Because charity care reduces profits, such incentives should lead for-profit hospital managers to reduce charity care levels. Nonprofit hospital managers, however, may respond differently to the same incentives because they face a different set of institutional pressures and constraints. We compare the association between pay-for-performance incentives and charity care in for-profit and nonprofit hospitals. We find a negative and significant association between charity care and our proxy for profit-based incentives in for-profit hospitals, and no significant association in nonprofit hospitals. These results suggest that linking manager pay to profitability does not appear to discourage charity care in nonprofit hospitals. Apparently, the nonprofit mission, institutional pressures, and ownership constraints moderate the potentially negative effects of profit-based incentives. Because this evidence partially alleviates concerns over nonprofit compensation arrangements that mirror those used in for-profit hospitals, it should be of interest to regulators and policymakers. In addition, this study provides insights into accounting researchers about institutional and organizational influences that affect managerial responses to financial incentives in compensation contracts.
{"title":"The Influence of Ownership and Compensation Practices on Charitable Activities","authors":"L. Eldenburg, Fabio B. Gaertner, Theodore H. Goodman","doi":"10.2139/ssrn.1523971","DOIUrl":"https://doi.org/10.2139/ssrn.1523971","url":null,"abstract":"Recent accounting research provides evidence that similar profit-based compensation incentives are used in for-profit and nonprofit hospitals. Because charity care reduces profits, such incentives should lead for-profit hospital managers to reduce charity care levels. Nonprofit hospital managers, however, may respond differently to the same incentives because they face a different set of institutional pressures and constraints. We compare the association between pay-for-performance incentives and charity care in for-profit and nonprofit hospitals. We find a negative and significant association between charity care and our proxy for profit-based incentives in for-profit hospitals, and no significant association in nonprofit hospitals. These results suggest that linking manager pay to profitability does not appear to discourage charity care in nonprofit hospitals. Apparently, the nonprofit mission, institutional pressures, and ownership constraints moderate the potentially negative effects of profit-based incentives. Because this evidence partially alleviates concerns over nonprofit compensation arrangements that mirror those used in for-profit hospitals, it should be of interest to regulators and policymakers. In addition, this study provides insights into accounting researchers about institutional and organizational influences that affect managerial responses to financial incentives in compensation contracts.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"43 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84631219","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Juan M. Contreras, Elena S. Patel, Ignez M. Tristao
We analyze the contribution of production factors to revenue growth in almost the complete universe of U.S. hospitals, accounting for quality and productivity. Production factors (capital, labor, energy, materials and drugs) contributed 70% (drugs alone contributed 52%), better health outcomes (higher quality) contributed 5%, and better use of resources (productivity) contributed 25%. We find increasing returns to scale, a markup of between 15% and 36% and a much larger productivity dispersion in the hospital sector than the one found in manufacturing, with gains coming mainly from within-hospital productivity growth and almost zero coming from net entry.
{"title":"Production Factors, Productivity Dynamics and Quality Gains as Determinants of Healthcare Spending Growth in U.S. Hospitals","authors":"Juan M. Contreras, Elena S. Patel, Ignez M. Tristao","doi":"10.2139/ssrn.2344549","DOIUrl":"https://doi.org/10.2139/ssrn.2344549","url":null,"abstract":"We analyze the contribution of production factors to revenue growth in almost the complete universe of U.S. hospitals, accounting for quality and productivity. Production factors (capital, labor, energy, materials and drugs) contributed 70% (drugs alone contributed 52%), better health outcomes (higher quality) contributed 5%, and better use of resources (productivity) contributed 25%. We find increasing returns to scale, a markup of between 15% and 36% and a much larger productivity dispersion in the hospital sector than the one found in manufacturing, with gains coming mainly from within-hospital productivity growth and almost zero coming from net entry.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"12 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-09-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"81903548","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Medicare Part B pays physicians through a fixed fee schedule designed loosely as a system of average-cost reimbursement. This paper examines four difficulties faced by systems of this kind. First, Medicare's payment model would be improved if it accounted for the medical value and cost-effectiveness of treatments in addition to their input costs. Second, uniformly applied fee schedules are inefficient when physicians vary in their approaches to medical practice. Allowing Medicare to account for regional differences in practice styles, which are substantial, may have significant benefits. Third, differences in physicians' billing practices have similar, largely unstudied, implications. Proficient billers receive relatively high payments for incremental service provision, resulting in unintended variation in effective wages. Fourth, differences in services' cost structures point to an additional weakness in Medicare Part B's payment model. Average-cost reimbursement implies larger profit margins for capital-intensive services than for labor-intensive services. As implemented, Medicare's fee schedule has encouraged significant expansions in the adoption, utilization, and development of capital-intensive tests and treatments.
{"title":"Implications of Physician Ethics, Billing Norms, and Service Cost Structures for Medicare's Fee Schedule","authors":"Jeffrey Clemens","doi":"10.2139/ssrn.2331103","DOIUrl":"https://doi.org/10.2139/ssrn.2331103","url":null,"abstract":"Medicare Part B pays physicians through a fixed fee schedule designed loosely as a system of average-cost reimbursement. This paper examines four difficulties faced by systems of this kind. First, Medicare's payment model would be improved if it accounted for the medical value and cost-effectiveness of treatments in addition to their input costs. Second, uniformly applied fee schedules are inefficient when physicians vary in their approaches to medical practice. Allowing Medicare to account for regional differences in practice styles, which are substantial, may have significant benefits. Third, differences in physicians' billing practices have similar, largely unstudied, implications. Proficient billers receive relatively high payments for incremental service provision, resulting in unintended variation in effective wages. Fourth, differences in services' cost structures point to an additional weakness in Medicare Part B's payment model. Average-cost reimbursement implies larger profit margins for capital-intensive services than for labor-intensive services. As implemented, Medicare's fee schedule has encouraged significant expansions in the adoption, utilization, and development of capital-intensive tests and treatments.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-09-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83770671","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this study, we examine how the probability of driving after a binge-drinking episode varies with the location of consumption and type of alcohol consumed. We also investigate the relationship between the location of alcohol purchase and the number of alcohol-related fatal motor vehicle crashes. We find that binge-drinkers are significantly more likely to drive after consuming alcohol at establishments that sell alcohol for on-premises consumption, e.g., from bars or restaurants, particularly after drinking beer. Further, per capita sales of alcohol for off-premises consumption are unrelated to the rate of alcohol-related fatal motor vehicle crashes. When disaggregating alcohol types, per capita sales of beer for off-premises consumption are negatively associated with the rate of alcohol-related fatal motor vehicle crashes. In contrast, total per capita sales of alcohol from all establishments (on- and off-premises) are positively related to the rate of alcohol-related fatal motor vehicle crashes and the magnitude of this relationship is strongest for beer sales. Thus, policies that shift consumption away from bars and restaurants could lead to a decline in the number of motor vehicle crashes.
{"title":"Alcohol-Related Motor Vehicle Crash Risk and the Location of Alcohol Purchase","authors":"Chad Cotti, R. Dunn, Nathan Tefft","doi":"10.2139/ssrn.2323001","DOIUrl":"https://doi.org/10.2139/ssrn.2323001","url":null,"abstract":"In this study, we examine how the probability of driving after a binge-drinking episode varies with the location of consumption and type of alcohol consumed. We also investigate the relationship between the location of alcohol purchase and the number of alcohol-related fatal motor vehicle crashes. We find that binge-drinkers are significantly more likely to drive after consuming alcohol at establishments that sell alcohol for on-premises consumption, e.g., from bars or restaurants, particularly after drinking beer. Further, per capita sales of alcohol for off-premises consumption are unrelated to the rate of alcohol-related fatal motor vehicle crashes. When disaggregating alcohol types, per capita sales of beer for off-premises consumption are negatively associated with the rate of alcohol-related fatal motor vehicle crashes. In contrast, total per capita sales of alcohol from all establishments (on- and off-premises) are positively related to the rate of alcohol-related fatal motor vehicle crashes and the magnitude of this relationship is strongest for beer sales. Thus, policies that shift consumption away from bars and restaurants could lead to a decline in the number of motor vehicle crashes.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"170 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-09-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"91461567","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study examines the impact of the gubernatorial partisanship on the growth of health care expenditures for the panel data set of 50 U.S. states over the 1991 to 2009 period. Using the parametric regression discontinuity design, I find no partisan effect on the growth of state’s per capita real total personal health care expenditures. However, an analysis of the growth rates of the components of the health care expenditures suggests that there is a causal effect of party affiliation of the governors on “prescription drugs" component. These findings are robust to the inclusion of additional covariates in the parametric approach as well to the use of non-parametric regression discontinuity approach.
{"title":"Party Politics, Governors, and Healthcare Expenditures: A Regression Discontinuity Design Approach","authors":"Nayan Krishna Joshi","doi":"10.2139/ssrn.2358204","DOIUrl":"https://doi.org/10.2139/ssrn.2358204","url":null,"abstract":"This study examines the impact of the gubernatorial partisanship on the growth of health care expenditures for the panel data set of 50 U.S. states over the 1991 to 2009 period. Using the parametric regression discontinuity design, I find no partisan effect on the growth of state’s per capita real total personal health care expenditures. However, an analysis of the growth rates of the components of the health care expenditures suggests that there is a causal effect of party affiliation of the governors on “prescription drugs\" component. These findings are robust to the inclusion of additional covariates in the parametric approach as well to the use of non-parametric regression discontinuity approach.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83943330","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Recent clinical research has studied weight responses to varying diet composition, but the contribution of changes in macronutrient intake and physical activity to rising population weight remains unknown. Research on the economics of obesity typically assumes a “calories in, calories out�? framework, but a richer weight production model separating caloric intake into carbohydrates, fat, and protein, has not been explored. To estimate the contributions of changes in macronutrient intake and physical activity to changes in population weight, we conducted dynamic time series and structural VAR analyses of U.S. data between 1974 and 2006 and a panel analysis of 164 countries between 2001 and 2010. Findings from all analyses suggest that increases in carbohydrates are most strongly and positively associated with increases in obesity prevalence even when controlling for changes in total caloric intake and occupation-related physical activity. If anything, increases in fat intake are associated with decreases in population weight.
{"title":"Macronutrients and Obesity: Revisiting the Calories in, Calories out Framework","authors":"Daniel Riera-Crichton, Nathan Tefft","doi":"10.2139/ssrn.2279503","DOIUrl":"https://doi.org/10.2139/ssrn.2279503","url":null,"abstract":"Recent clinical research has studied weight responses to varying diet composition, but the contribution of changes in macronutrient intake and physical activity to rising population weight remains unknown. Research on the economics of obesity typically assumes a “calories in, calories out�? framework, but a richer weight production model separating caloric intake into carbohydrates, fat, and protein, has not been explored. To estimate the contributions of changes in macronutrient intake and physical activity to changes in population weight, we conducted dynamic time series and structural VAR analyses of U.S. data between 1974 and 2006 and a panel analysis of 164 countries between 2001 and 2010. Findings from all analyses suggest that increases in carbohydrates are most strongly and positively associated with increases in obesity prevalence even when controlling for changes in total caloric intake and occupation-related physical activity. If anything, increases in fat intake are associated with decreases in population weight.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"24 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-07-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87247201","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the effect of multitasking on overall worker performance, as measured by processing time, throughput rate, and output quality using microlevel operational data from the field. Specifically, we study the multitasking behavior of physicians in a busy hospital emergency department (ED). By drawing on recent findings in the experimental psychology literature and the nascent work in cognitive neuroscience, we develop several hypotheses for the effect of multitasking on worker performance. We first examine how multitasking affects a physician's processing time. We find that the total time taken to discharge a given number of patients has a U-shaped response to the level of physician multitasking; that is, multitasking initially helps to reduce the time taken, but only up to a certain threshold level, after which it increases in the level of multitasking. In addition, multitasking significantly impacts quality of care. Although lower levels of multitasking are associated with improved quality...
{"title":"Does Multitasking Improve Performance? Evidence from the Emergency Department","authors":"D. Kc","doi":"10.2139/ssrn.2261757","DOIUrl":"https://doi.org/10.2139/ssrn.2261757","url":null,"abstract":"This paper examines the effect of multitasking on overall worker performance, as measured by processing time, throughput rate, and output quality using microlevel operational data from the field. Specifically, we study the multitasking behavior of physicians in a busy hospital emergency department (ED). By drawing on recent findings in the experimental psychology literature and the nascent work in cognitive neuroscience, we develop several hypotheses for the effect of multitasking on worker performance. We first examine how multitasking affects a physician's processing time. We find that the total time taken to discharge a given number of patients has a U-shaped response to the level of physician multitasking; that is, multitasking initially helps to reduce the time taken, but only up to a certain threshold level, after which it increases in the level of multitasking. In addition, multitasking significantly impacts quality of care. Although lower levels of multitasking are associated with improved quality...","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-05-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87073017","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the new state-run Health Insurance Exchanges created as part of the Affordable Care Act (ACA), plans with different benefit coverage of health care costs are provided in order to expand consumer choices and increase consumer welfare. According to the ACA, premiums can differ based on enrollees’ characteristics and are risk-adjusted before returning to insurance plans in these markets. This paper analyzes how risk adjustment and premium discrimination affect consumers’ choices of plans theoretically and empirically. I develop a model to show that both risk adjustment and premium discrimination encourage consumers to enroll in plans with high benefit coverage under plausible assumptions. I simulate the equilibrium sorting using data for the Exchange-eligible population drawn from the Medical Expenditure Panel Survey. I also simulate the consumers’ plan choices under different scenarios of risk adjustment, and calculate the corresponding welfare effect.
{"title":"Plan Sorting Under Risk Adjustment and Premium Discrimination in Health Insurance Exchanges","authors":"Julie Shi","doi":"10.2139/ssrn.2244691","DOIUrl":"https://doi.org/10.2139/ssrn.2244691","url":null,"abstract":"In the new state-run Health Insurance Exchanges created as part of the Affordable Care Act (ACA), plans with different benefit coverage of health care costs are provided in order to expand consumer choices and increase consumer welfare. According to the ACA, premiums can differ based on enrollees’ characteristics and are risk-adjusted before returning to insurance plans in these markets. This paper analyzes how risk adjustment and premium discrimination affect consumers’ choices of plans theoretically and empirically. I develop a model to show that both risk adjustment and premium discrimination encourage consumers to enroll in plans with high benefit coverage under plausible assumptions. I simulate the equilibrium sorting using data for the Exchange-eligible population drawn from the Medical Expenditure Panel Survey. I also simulate the consumers’ plan choices under different scenarios of risk adjustment, and calculate the corresponding welfare effect.","PeriodicalId":11036,"journal":{"name":"Demand & Supply in Health Economics eJournal","volume":"49 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2013-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78624461","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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