Data sharing and dissemination strategies for fostering competition in health care.

OBJECTIVES: To introduce the concept of common models for data sharing and dissemination, highlight the current operational, technical, and political issues surrounding existing data sharing and dissemination initiatives in a health care market, and suggest an ideal model for future data initiatives. DATA SOURCES/STUDY SETTING: A literature review and case studies of existing data sharing and dissemination initiatives that promote the collection and use of comparative information on provider cost and quality. PRINCIPAL FINDINGS: Three broad types of common models for data sharing and dissemination have evolved over the past decade or so: (1) provider-initiated initiatives developed through collaboration among providers of health care; (2) purchaser-initiated activities driven by a coalition of purchasers; and (3) indirect collaboration-data-sharing initiatives between providers and purchasers with a significant facilitating or regulating role by a third group of stakeholders. The success of a data-sharing and dissemination strategy is determined by how the complex operational, technical, and political issues are addressed. General principles by which a health data initiative might abide include the following: standardized databases as the physical foundation, indicators that reflect the changing market; linkages between and across data sets for comprehensive and complete data; economic value; policy relevance; use of evolving technologies to collect, integrate, and disseminate data; and stakeholder support. CONCLUSIONS: Regulatory solutions alone will not overcome the complex political and technical challenges to data sharing and dissemination. The "ideal" model or process nurturing a market for health care information will incorporate compromise and negotiation to address the issues of data ownership and proprietary concerns, therefore securing the necessary political and financial support of the private sector.

The effect of marginal tax rate on the probability of employment-based insurance by risk group.

RESEARCH OBJECTIVE: To evaluate the effect of the tax subsidy on participation in employment-based health insurance for high- and low-risk individuals. The total exclusion of employer-paid health insurance premiums from taxable income has frequently been seen as contributing to excess insurance and hence welfare loss. However, less attention has been paid to quantifying the extent to which the tax subsidy mitigates the deleterious effects of adverse selection on the health insurance market. Adverse selection reduces pooling in an insurance market, so that high-risk individuals are either unable to obtain coverage or are forced to pay premiums that are unaffordable to all but the wealthiest. If there is an external benefit to society of an individual's purchase of medical care, then the presence of adverse selection may reduce the purchase of health care below the socially optimal level. Therefore, a mechanism for enhancing access to insurance and ultimately to medical care for high-risk individuals may be socially desirable. STUDY DESIGN: Data from the March 1996-March 1998 Current Population Survey (CPS). For each observation in the sample, state and federal income tax liability is calculated using code based on the ACIR Significant Features of Fiscal Federalism. The probability of having employment-based coverage in either one's own name or as a dependent is evaluated as a function of demographic variables such as age, education, marital status and family size, family income, type of employment, employer size, occupation, location, marginal tax rate, risk group (determined by self-assessed health status), and an interaction between risk group and tax rate. CPS data do not identify individuals who have declined offered coverage. Under alternative models of employer group decision making, the tax subsidy will have an important influence on the employer's decision to offer coverage. If offered, high-risk individuals accept coverage, while some low-risk individuals may decline coverage. PRINCIPAL FINDINGS: For all individuals, the probability of having coverage is an increasing function of the marginal tax rate. Those classified as high-risk because their own or a family member's self-assessed health status is fair or poor are less likely to have coverage than those considered low-risk. The effect of the tax subsidy on insurance coverage is greater for high-risk individuals than for individuals classified as low-risk. CONCLUSIONS: These preliminary results indicate that high-risk individuals benefit from the tax subsidy by increased access to employment-based coverage. Therefore, welfare loss from excess levels of health insurance may be mitigated by welfare gain through expanded access to health insurance and hence to health care for high-risk individuals. IMPLICATIONS FOR POLICY, DELIVERY, OR PRACTICE: Elimination or reduction of the tax exclusion of health insurance premiums may have the unintended consequences of disproportionately reducing the probability of obtaining coverage in the employment-based market for high-risk individuals.

Sources of health insurance in the U.S.: analysis of state-level data and implications for public health programs.

Lack of health insurance coverage is associated with lack of accessibility to preventive health care services such as mammography screening, clinical breast examination, Papanicolaou smear test, digital rectal examination, proctoscopy examination, and cholesterol screening. State and federal public health agencies must have an understanding of insurance coverage of the population to plan intervention programs aimed at early detection of medical conditions. Using data from the March Supplement of the Current Population Survey for the years 1994, 1995, and 1996, this study examines the sources of health insurance coverage in the U.S. The implications of the findings for public health programs are discussed.

Reforming the health care delivery system.

The health care delivery system is evolving rapidly. There have been changes in the way health care is financed, the types of treatments available, the sites of care, and the physician patient relationship. These changes have resulted primarily from reactions to health care cost inflation. Health care reform is likely to accelerate some of these changes. The threat/promise of health care reform has already accelerated the consolidation of the health care services market. Health care reform is likely to reduce the number of insurers, increase the number of Americans in managed health care plans, increase the number of physicians in group practice, change provider income, and in general make the health care delivery system more concentrated and vertically integrated.

The cost of providing health care benefits to early retirees.

Subsidized health care benefits would be guaranteed for early retirees ages fifty-five to sixty-four under President Bill Clinton's health care reform proposal. This is an important policy issue because persons in this age group are the least likely age cohort of the nonelderly population to be working. They are also the most likely to face high and uncertain health care costs. Previous research has shown that access to continuation of health insurance coverage encourages retirement before age sixty-five. These retirement effects can add substantially to the federal government's cost of providing health care benefits to early retirees. Based upon various assumptions for premium levels, the induced retirement effects of current workers, and the number of nonworkers qualifying for subsidized benefits, we present total annual cost estimates to the federal government, based on 1994 figures, ranging from $9.1 billion to $19.6 billion, to provide subsidized benefits to the nonworking population between the ages of fifty-five and sixty-four.

Health care economic factors and the effects of benefits plan design changes.

Medical benefits costs now exceed 13% of payroll, up from 5% in the early 1980s. Full reimbursement for more expensive hospital-based care, a technology and specialist supply explosion funded by Medicare and Medicaid, and cost shifting from these programs to private insurance have fueled this rapid growth. Benefits plans, which had provided essentially free care, have been changed slowly and incrementally to increase cost sharing and, thus, cost sensitivity on the part of employees. Many insurance plans also limit coverage by requiring that treatment be "nonexperimental" and "medically necessary." Long-term inquiry demonstrates that total expenditures, hospitalization rates, ambulatory visit rates, dental visits, and prescription drug use were significantly higher for free care than for plans with substantial copayments. A study sponsored by a business coalition in Houston showed that increased deductibles shifted care to the inpatient setting, raising total costs. Higher contribution rates reduced both inpatient and outpatient costs. Caps on payment for certain services, such as mental health care, reduced costs significantly with apparently minimal adverse effects on health.

Teaching hospital costs: the effects of medical staff characteristics.

This article examines the effect of medical staff behavior on the cost of hospital-based care and graduate medical education, and shows its implications for estimation of hospital costs. The empirical work brings a unique new data source for these characteristics to the estimation process. Our results indicate that there are important economies of scale and scope in hospital production, both for inpatient stays and for residency training. Controlling for medical staff characteristics significantly reduces the estimated costs of residency training. Staff characteristics may be capturing aspects of the quality of inpatient care and residency training provided by the hospital.

Employer health care plan design and its effect on plan costs.

This study uses claims data from employers in the Houston Area Health Care Coalition (HAHCC) for 1985 through the first half of 1987 to examine the effect of health care plan attributes on health care costs. Plan attributes affect the site of care and the costs of care. Utilization review clearly was effective in reducing the demand for inpatient services, but that reduction was in large measure matched by increases in care in the outpatient setting. Restrictions on mental health benefits also shifted the site of care. In contrast, neither premium sharing nor the plan's deductible had a significant impact on total plan charges. The study results demonstrate the need to have a comprehensive cost management strategy.

Collaborative production and resource allocation: the consequences of prospective payment for hospital care.

This article presents a model of the intensity of care provided by hospitals and physicians and how such intensity was affected by the change to prospective payment by Medicare. Prospective payment introduced an incentive for hospitals to shorten average length of stay, but in order to keep the patient recovery level constant, intensity of inpatient care was forced to increase. Physicians reacted to hospital changes by increasing their own intensity of care provided to inpatients. Implications of the model for admissions and physician office time are also explored. Empirical results indicate that for the period 1983-1987, spanning the introduction of PPS, both hospital and physician intensity of care per inpatient rose significantly.

The production of health care services and changing hospital reimbursement. The role of hospital-medical staff relationships.

The production of health care services has the unique feature that physicians do not face explicit costs for hospital inputs. This paper develops models of the production process given alternative hospital and medical staff relationships, and analyzes the impact of the change in hospital reimbursement under Medicare from a cost-based system to the Prospective Payment System (PPS). A basic theoretical result finds that the switch to PPS forces physicians to alter their input mix, changing both physician and hospital income. The effects of the introduction of PPS on hospital inputs, physician income, and hours of work are empirically examined.

Hospitals in transition: a perspective.

In recent years, a number of developments have had a far-reaching impact on the structure of the hospital industry. These include the emergence of for-profit corporate entities, the increasing need to access capital markets, income limitations imposed by the prospective payment system for Medicare, shortened lengths of stay, and competition among providers with an excess in bed capacity. Hospitals have responded by joining into various affiliations on a national scale, engaging in local joint ventures, and altering their mix of services.