Health Economics Commons^™

Does Medical Malpractice Law Improve Health Care Quality?, Michael D. Frakes, Anupam B. Jena

Faculty Scholarship

Despite the fundamental role of deterrence in justifying a system of medical malpractice law, surprisingly little evidence has been put forth to date bearing on the relationship between medical liability forces on the one hand and medical errors and health care quality on the other. In this paper, we estimate this relationship using clinically validated measures of health care treatment quality constructed using data from the 1979 to 2005 National Hospital Discharge Surveys and the 1987 to 2008 Behavioral Risk Factor Surveillance System records. Drawing upon traditional, remedy-centric tort reforms — e.g., damage caps — we estimate that the current …

Years Of Good Life Based On Income And Health: Re-Engineering Cost-Benefit Analysis To Examine Policy Impact On Wellbeing And Distributive Justice, Richard Cookson, Owen Cotton-Barrett, Matthew D. Adler, Miqdad Asaria, Toby Ord

Faculty Scholarship

No abstract provided.

Black Health Matters: Disparities, Community Health, And Interest Convergence, Mary Crossley

Articles

Health disparities represent a significant strand in the fabric of racial injustice in the United States, one that has proven exceptionally durable. Many millions of dollars have been invested in addressing racial disparities over the past three decades. Researchers have identified disparities, unpacked their causes, and tracked their trajectories, with only limited progress in narrowing the health gap between whites and racial and ethnic minorities. The implementation of the Affordable Care Act (ACA) and the movement toward value-based payment methods for health care may supply a new avenue for addressing disparities. This Article argues that the ACA’s requirement that tax-exempt …

The Developmental Effect Of State Alcohol Prohibitions At The Turn Of The 20th Century, Mary F. Evans, Eric Helland, Jonathan Klick, Ashwin Patel

All Faculty Scholarship

We examine the quasi-randomization of alcohol consumption created by state-level alcohol prohibition laws passed in the U.S. in the early part of the 20th century. Using a large dataset of World War II enlistees, we exploit the differential timing of these laws to examine their effects on adult educational attainment, obesity, and height. We find statistically significant effects for education and obesity that do not appear to be the result of pre-existing trends. Our findings add to the growing body of economic studies that examines the long-run impacts of in utero and childhood environmental conditions.

Medicare Secondary Payer And Settlement Delay, Eric Helland, Jonathan Klick

All Faculty Scholarship

The Medicare Secondary Payer Act of 1980 and its subsequent amendments require that insurers and self-insured companies report settlements, awards, and judgments that involve a Medicare beneficiary to the Centers for Medicare and Medicaid Services. The parties then may be required to compensate CMS for its conditional payments. In a simple settlement model, this makes settlement less likely. Also, the reporting delays and uncertainty regarding the size of these conditional payments are likely to further frustrate the settlement process. We provide results, using data from a large insurer, showing that, on average, implementation of the MSP reporting amendments led to …

The Effect Of Health Insurance On Workers' Compensation Filing: Evidence From The Affordable Care Act's Age-Based Threshold For Dependent Coverage, Marcus O. Dillender

Upjohn Institute Working Papers

This paper identifies the effect of health insurance on workers' compensation (WC) filing for young adults by implementing a regression discontinuity design using WC medical claims data from Texas. The results suggest health insurance factors into the decision to have WC pay for discretionary care. The implied instrumental variables estimates suggest a 10 percentage point decrease in health insurance coverage increases WC bills by 15.3 percent. Despite the large impact of health insurance on the number of WC bills, the additional cost to WC at age 26 appears to be small as most of the increase comes from small bills.

Health Care Services And Profits: A Conflict Of Interest?, Carolyn Plump Jd, Jennifer Sipe Msn, Rn

Explorer Café

No abstract provided.

Procedural Triage, Matthew B. Lawrence

Faculty Articles

Prior scholarship has assumed that the inherent value of a “day in court” is the same for all claimants, so that when procedural resources (like a jury trial or a hearing) are scarce, they should be rationed the same way for all claimants. That is incorrect. This Article shows that the inherent value of a “day in court” can be far greater for some claimants, such as first-time filers, than for others, such as corporate entities and that it can be both desirable and feasible to take this variation into account in doling out scarce procedural protections. In other words, …

Do Physicians Respond To Liability Standards?, Michael D. Frakes, Matthew Frank, Seth Seabury

Faculty Scholarship

In this paper, we explore the sensitivity in the clinical decisions of physicians to the standards of care expected of them under the law, drawing on the abandonment by states over time of rules holding physicians to standards determined by local customs and the contemporaneous adoption of national-standard rules. Using data on broad rates of surgical interventions at the county-by-year level from the Area Resource File, we find that local surgery rates converge towards national surgery rates upon the adoption of national-standard rules. Moreover, we find that these effects are more pronounced among rural counties.

Why Healthy Behavior Is The Hard Choice, Lawrence O. Gostin

Georgetown Law Faculty Publications and Other Works

Our society is structured to encourage unhealthy diets and physically inactive lifestyles, which are key risk factors for chronic diseases including diabetes, heart diseases, and cancers. We are bombarded with advertisements for hyperprocessed foods laden with saturated fat, salt, sugar, and refined carbohydrates, “low-fat” foods often contain high amounts of sugar and salt, and parks and recreation spaces are often inaccessible or unsafe.

Four simple ideas - taxes on unhealthy products, product reformulation, improving the informational environment, and increasing healthy food accessibility - could make healthy behaviors the “default” choice for most consumers. First, taxes on unhealthy products, such as …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …

Selective Contracting In Prescription Drugs: The Benefits Of Pharmacy Networks, Joanna Shepherd

Faculty Articles

Selective contracting in health care involves contractual arrangements among insurers and health care providers that give covered individuals a financial incentive to obtain health care from a limited panel of providers. Although selective contracting has been an important strategy of health insurance plans for decades, it has only recently expanded to prescription drug coverage. Drug plans now create pharmacy networks that channel customers to in-network pharmacies. Pharmacies compete to be part of the networks by offering discounts on the drugs they sell to covered customers and drug plans. Although networks can lower prescription drug costs for drug plans and consumers, …

Conditional Spending And The Conditional Offer Puzzle, Mitchell N. Berman

All Faculty Scholarship

No abstract provided.

Health Care Spending And Financial Security After The Affordable Care Act, Allison K. Hoffman

All Faculty Scholarship

Health insurance has fallen notoriously short of protecting Americans from financial insecurity caused by health care spending. The Patient Protection and Affordable Care Act (“ACA”) attempted to ameliorate this shortcoming by regulating health insurance. The ACA offers a new policy vision of how health insurance will (and perhaps should) serve to promote financial security in the face of health care spending. Yet, the ACA’s policy vision applies differently among insured, based on the type of insurance they have, resulting in inconsistent types and levels of financial protection among Americans.

To examine this picture of inconsistent financial protection, this Article offers …

The Fate Of Local Food Systems In The Global Industrialization Market: Food And Social Justice In The Rural South, Wylin D. Wilson, Reuben C. Warren, Stephen O. Sodeke, Norbert Wilson

Professional Agricultural Workers Journal

This paper investigates the connection between local food systems, health disparities, and social justice in the rural South. It begins with the relationship between food insecurity and health disparities that disproportionately affect racial and ethnic minority populations, and non-minority women and children. First, we discuss the concept of health disparities within the context of bioethics and public health ethics in order to explore the link between the food system and health as a social justice issue. Second, we define health disparities and discuss how they have historically plagued and disadvantaged racial minority populations. Third, we examine these disparities within the …

Can Consumers Make Affordable Care Affordable? The Value Of Choice Architecture, Eric J. Johnson, Ran Hassin, Tom Baker, Allison T. Bajger, Galen Treuer

All Faculty Scholarship

Starting this October, tens of millions will be choosing health coverage on a state or federal health insurance exchange as part of the Patient Protection and Affordable Care Act. We examine how well people make these choices, how well they think they do, and what can be done to improve these choices. We conducted 6 experiments asking people to choose the most cost-effective policy using websites modeled on current exchanges. Our results suggest there is significant room for improvement. Without interventions, respondents perform at near chance levels and show a significant bias, overweighting out-of-pocket expenses and deductibles. Financial incentives do …

Managing Social Security Disability & Other Public Benefits: Development Of A Guide For Consumers And Providers, Stephanie L. Derochers

Muskie School Capstones and Dissertations

One in five Americans has a disability, making it the largest minority group in the U.S. (Soffer, McDonald, & Blanck, 2010). In 2011, 13.4 million working-aged adults received a disability cash benefit from the Social Security Administration (Kregel, 2012).

The Social Security Administration (SSA) is the federal agency responsible for managing, executing and overseeing retirement, survivor, old-age and disability benefits. There are over 1,500 Social Security offices and over 65,000 employees nationwide (SSA, 2013). SSA manages at least five disability benefit programs: Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), Disabled Widow(er) Benefit (DWB), Childhood Disability Benefit (CDB), though …

Is More Information Always Better? Mandatory Disclosure Regulations In The Prescription Drug Market, Joanna Shepherd

Faculty Articles

This Article proceeds as follows. In Section I, I describe the structure of the PBM industry. I also describe the business model PBMs employ to administer prescription drug coverage and the methods they use to reduce prescription drug spending. In Section II, I discuss mandatory disclosure regulations enacted in several states and at the federal level under the Affordable Care Act. In Section III, I explain why mandatory disclosure regulations are not needed to ensure that health plan sponsors pay a competitive price for PBM services. In Section IV, I discuss the various costs that mandatory disclosure regulations will impose …

An Optimist's Take On The Decline Of Small-Employer Health Insurance, Allison K. Hoffman

All Faculty Scholarship

In their Article, Saving Small-Employer Health Insurance, Amy Monahan and Dan Schwarcz contend that the Patient Protection and Affordable Care Act (“ACA”) could be the death of small-group health insurance by incentivizing many small employers not to offer coverage. While their prediction that the ACA, after implemented, will destabilize the small-group insurance market may prove true, I argue why their prescription that it should be saved is flawed and why we may be better off without small group insurance.

The Likely Impact Of Mandated Paid Sick And Family-Care Leave On The Economy And Economic Development Prospects Of The State Of Ohio, Edward W. Hill, Spence Christopher, Daila Shimek, Ziona Austrian

Ziona Austrian

This report analyzes the potential impact of a proposed paid sick and family care leave legislation on the economy of the state of Ohio, the economic development prospects of the state and on the management of production processes that depend on highly integrate teams. The report also reviews the literature on the effect of mandated paid sick and family care leave on the industrial relations system—workplace performance and worker retention. Our analysis concludes that there would have been a net cost associated with the paid sick leave and family-care initiative proposed in Ohio with a lower bound estimate of $63.84 …

Transparency Through Insurance: Mandates Dominate Discretion, Tom Baker

All Faculty Scholarship

This chapter describes how liability insurance has contributed to the transparency of the civil justice system. The chapter makes three main points. First, much of what we know about the empirics of the civil justice system comes from access to liability insurance data and personnel. Second, as long as access to liability insurance data and personnel depends on the discretion of liability insurance organizations, this knowledge will be incomplete and, most likely, biased in favor of the public policy agenda of the organizations providing discretionary access to the data. Third, although mandatory disclosure of liability insurance data would improve transparency, …

Marketing Pharmaceuticals: A Constitutional Right To Sell Prescriber-Identified Data?, Lawrence O. Gostin

Georgetown Law Faculty Publications and Other Works

Pharmaceutical companies have strong economic interests in influencing physician-prescribing behaviors. They advertise direct-to-the-consumer and to the physician. Beyond general marketing, manufacturers promote their drugs to physicians through “detailing”—sales representatives (“detailers”) visiting medical offices to persuade physicians to prescribe their products.

By law, pharmacies receive specific information with every prescription, including the physician’s name, the drug, and the dose. Pharmacies sell these records to Prescription Drug Intermediaries (data miners), who use advanced computing to analyze prescriber-identified information (which physicians prescribe what drugs, in what dose, and with what prescribing patterns). Data miners, in turn, lease sophisticated reports to pharmaceutical companies to …

The Pragmatist’S Guide To Comparative Effectiveness Research, Amitabh Chandra, Anupam B. Jena, Jonathan Skinner

Dartmouth Scholarship

No abstract provided.

A Cost-Benefit Interpretation Of The "Substantially Similar" Hurdle In The Congressional Review Act: Can Osha Ever Utter The E-Word (Ergonomics) Again?, Adam M. Finkel, Jason W. Sullivan

All Faculty Scholarship

The Congressional Review Act permits Congress to veto proposed regulations via a joint resolution, and prohibits an agency from reissuing a rule “in substantially the same form” as the vetoed rule. Some scholars—and officials within the agencies themselves—have understood the “substantially the same” standard to bar an agency from regulating in the same substantive area covered by a vetoed rule. Courts have not yet provided an authoritative interpretation of the standard.

This Article examines a spectrum of possible understandings of the standard, and relates them to the legislative history (of both the Congressional Review Act itself and the congressional veto …

The Shifting Terrain Of Risk And Uncertainty On The Liability Insurance Field, Tom Baker

All Faculty Scholarship

Recent sociological and historical work suggests that insurance risks often are not reliably calculable, except in hindsight. Insurance is “an uncertain business,” characterized by competition for premiums that pushes insurers into the unknown. This essay takes some preliminary steps that extend this insight into the liability insurance field. The essay first provides a simple quantitative comparison of U.S. property and liability insurance premiums over the last sixty years, setting the stage to make three points: (1) liability insurance premiums have grown at a similar rate as property insurance premiums and GDP over this period, providing yet another piece of evidence …

Health Insurance, Risk, And Responsibility After The Patient Protection And Affordable Care Act, Tom Baker

All Faculty Scholarship

This essay explores the new social contract of healthcare solidarity through private ownership, markets, choice, and individual responsibility embodied in the Patient Protection and Affordable Care Act. This essay first explains the four main health care risk distribution institutions affected by the Act – Medicare, Medicaid, the individual and small employer market, and the large group market – with an emphasis on how the Act changes those institutions and how they are financed. The essay then describes the “fair share” approach to health care financing embodied in the Act. This approach largely rejects the actuarial fairness vision of what constitutes …

A New Deal In A World Of Old Ones, Theodore Ruger

All Faculty Scholarship

No abstract provided.

Counting The Cost, Marc A. Clauson

History and Government Faculty Publications

No abstract provided.

Contingent Valuation Studies And Health Policy, Matthew D. Adler

All Faculty Scholarship

This short comment argues that both cost-benefit analysis (CBA) and cost-effectiveness analysis (CEA) should be seen as imperfect tools for evaluating health policy. This is true, not only for extra-welfarists, but even for welfarists, since both CBA and CEA can deviate from the use of social welfare functions (SWF). A simple model is provided to illustrate the divergence between CBA, CEA, and the SWF approach. With this insight in mind, the comment considers the appropriate role of contingent-valuation studies. For full text, please see: http://www.law.upenn.edu/cf/faculty/madler/workingpapers/578A59B6d01.pdf.

Tontines For The Invincibles: Enticing Low Risks Into The Health-Insurance Pool With An Idea From Insurance History And Behavioral Economics, Tom Baker, Peter Siegelman

All Faculty Scholarship

Over one third of the uninsured adults in the U.S. below retirement age are between 19 and 29 years old. Young adults, especially men, often go without insurance, even when buying it is mandatory and sometimes even when it is a low cost employment benefit. This paper proposes a new form of health insurance targeted at this group—the “Young Invincibles”—those who (wrongly) believe that they don’t need health insurance because they won’t get sick. Our proposal offers a cash bonus to those who turn out to be right in their belief that they did not really need health insurance. The …