The association of insurance plan characteristics with physician patient-sharing network structure.

Professional and social connections among physicians impact patient outcomes, but little is known about how characteristics of insurance plans are associated with physician patient-sharing network structure. We use information from commercially insured enrollees in the 2011 Massachusetts All Payer Claims Database to construct and examine the structure of the physician patient-sharing network using standard and novel social network measures. Using regression analysis, we examine the association of physician patient-sharing network measures with an indicator of whether a patient is enrolled in a health maintenance organization (HMO) or preferred provider organization (PPO), controlling for patient and insurer characteristics and observed health status. We find patients enrolled in HMOs see physicians who are more central and densely embedded in the patient-sharing network. We find HMO patients see PCPs who refer to specialists who are less globally central, even as these specialists are more locally central. Our analysis shows there are small but significant differences in physician patient-sharing network as experienced by patients with HMO versus PPO insurance. Understanding connections between physicians is essential and, similar to previous findings, our results suggest policy choices in the insurance and delivery system that change physician connectivity may have important implications for healthcare delivery, utilization and costs.

The association between patient sharing network structure and healthcare costs.

STUDY QUESTION: While physician relationships (measured through shared patients) are associated with clinical and utilization outcomes, the extent to which this is driven by local or global network characteristics is not well established. The objective of this research is to examine the association between local and global network statistics with total medical spending and utilization. DATA SOURCE: Data used are the 2011 Massachusetts All Payer Claims Database. STUDY DESIGN: The association between network statistics and total medical spending and utilization (using standardized prices) is estimated using multivariate regression analysis controlling for patient demographics and health status. DATA COLLECTION: We limit the sample to continuously enrolled commercially insured patients in Massachusetts in 2011. PRINCIPAL FINDINGS: Mean patient age was 45 years, and 56.3% of patients were female. 73.4% were covered by a health maintenance organization. Average number of visits was 5.43, with average total medical spending of $4,911 and total medical utilization of $4,252. Spending was lower for patients treated by physicians with higher degree (p<0.001), eigenvector centrality (p<0.001), clustering coefficient (p<0.001), and measures reflecting the normalized degree (p<0.001) and eigenvector centrality (p<0.001) of specialists connected to a patient's PCP. Spending was higher for patients treated by physicians with higher normalized degree, which accounts for physician specialty and patient panel size (p<0.001). Results were similar for utilization outcomes, although magnitudes differed indicating patients may see different priced physicians. CONCLUSIONS: Generally, higher values of network statistics reflecting local connectivity adjusted for physician characteristics are associated with increased costs and utilization, while higher values of network statistics reflecting global connectivity are associated with decreased costs and utilization. As changes in the financing and delivery system advance through policy changes and healthcare consolidation, future research should examine mechanisms through which this structure impacts outcomes and potential policy responses to determine ways to reduce costs while maintaining quality and coordination of care. WHAT THIS STUDY ADDS: It is unknown whether local and global measures of physician network connectivity associated with spending and utilization for commercially insured patients?In this social network analysis, we found generally higher values of network statistics reflecting local connectivity are associated with increased costs and utilization, while higher values of network statistics reflecting global connectivity are associated with decreased costs and utilization.Understanding how to influence local and global physician network characteristics may be important for reducing costs while maintaining quality.

The Role of Organizational Affiliations in Physician Patient-Sharing Relationships.

Provider consolidation may enable improved care coordination, but raises concerns about lack of competition. Physician patient-sharing relationships play a key role in constructing patient care teams, but it is unknown how organization affiliations affect these. We use the Massachusetts All Payer Claims Database to examine whether patient-sharing relationships are associated with sharing a practice site, medical group, and/or physician contracting network. Physicians were 17 percentage points more likely to have a patient-sharing relationship if they shared a practice site and 4 percentage points more likely if they shared a medical group, as compared with sharing no affiliation. However, there was no detectable increased probability of a patient-sharing relationship within the same physician contracting network. Our finding that physician patient-sharing relationships are concentrated within organizational boundaries at practice site and medical group levels helps illuminate referral incentives and provide insight into the role of organizational affiliations in patient care team construction.

How product standardization affects choice: Evidence from the Massachusetts Health Insurance Exchange.

This paper examines the effect of choice architecture on Massachusetts' Health Insurance Exchange. A policy change standardized cost-sharing parameters of plans across insurers and altered information presentation. Post-change, consumers chose more generous plans and different brands, but were not more price-sensitive. We use a discrete choice model that allows the policy to affect how attributes are valued to decompose the policy's effects into a valuation effect and a product availability effect. The brand shifts are largely explained by the availability effect and the generosity shift by the valuation effect. A hypothetical choice experiment replicates our results and explores alternative counterfactuals.

Money earlier or later? Simple heuristics explain intertemporal choices better than delay discounting does.

Heuristic models have been proposed for many domains involving choice. We conducted an out-of-sample, cross-validated comparison of heuristic models of intertemporal choice (which can account for many of the known intertemporal choice anomalies) and discounting models. Heuristic models outperformed traditional utility-discounting models, including models of exponential and hyperbolic discounting. The best-performing models predicted choices by using a weighted average of absolute differences and relative percentage differences of the attributes of the goods in a choice set. We concluded that heuristic models explain time-money trade-off choices in experiments better than do utility-discounting models.

Designing and regulating health insurance exchanges: lessons from Massachusetts.

The Massachusetts health care reform provides preliminary evidence on the function of health insurance exchanges and individual insurance markets. This paper describes the type of products consumers choose and the dynamics of consumer choice. Evidence shows that choice architecture, including product standardization and the use of heuristics (rules of thumb), affects choice. In addition, while consumers often choose less generous plans in the exchange than in traditional employer-sponsored insurance, there is considerable heterogeneity in consumer demand, as well as some evidence of adverse selection. We examine the role of imperfect competition between insurers, and document the impact of pricing and product regulation on the level and distribution of premiums. Given our extensive choice data, we synthesize the evidence of the Massachusetts exchange to inform the design and regulation on other exchanges.

Cost-effectiveness analysis in markets with high fixed costs.

We consider how to conduct cost-effectiveness analysis when the social cost of a resource differs from the posted price. From the social perspective, the true cost of a medical intervention is the marginal cost of delivering another unit of a treatment, plus the social cost (deadweight loss) of raising the revenue to fund the treatment. We focus on pharmaceutical prices, which have high markups over marginal cost due to the monopoly power granted to pharmaceutical companies when drugs are under patent. We find that the social cost of a branded drug is approximately one-half the market price when the treatment is paid for by a public insurance plan and one-third the market price for mandated coverage by private insurance. We illustrate the importance of correctly accounting for social costs using two examples: coverage for statin drugs and approval for a drug to treat kidney cancer (sorafenib). In each case, we show that the correct social perspective for cost-effectiveness analysis would be more lenient than researcher recommendations.