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Contributed Papers in Health Economics

Paper Session

Sunday, Jan. 7, 2018 8:00 AM - 10:00 AM

Marriott Philadelphia Downtown, Grand Ballroom Salon J
Hosted By: Health Economics Research Organization
  • Chair: Michael Fitzmaurice, JMF Associates

The Intended and Unintended Consequences of the Hospital Readmission Reduction Program

Engy Ziedan
,
University of Illinois-Chicago

Abstract

Pay for performance (P4P) is increasingly being used as a tool to improve the cost effectiveness of healthcare. However, evidence on the efficacy of P4P remains mixed. The Hospital Readmission Reduction Program (HRRP) is a prominent P4P program of the Centers for Medicare and Medicaid (CMS) intended to reduce hospital readmissions. In this article, I use a regression kink design to obtain estimates of the effect of the HRRP on readmissions and potential mechanisms that hospitals may use to reduce readmissions, such as spending on inpatient care, discharge destination and patient selection. I also examine the effect of the HRRP on mortality. Estimates indicate that hospitals penalized for excess heart attack (AMI) readmissions decreased AMI readmissions by 30% and increased spending on AMI patients by 40%. This additional care had no impact on mortality. Interestingly, I find that hospitals penalized for AMI readmissions increased the quantity of care for patients with diagnoses not targeted by the HRRP. Thus the P4P incentives of the HRRP did not cause hospitals to reallocate resources away from non-targeted conditions. Hospitals penalized for excess readmissions for pneumonia or heart failure did not appear to respond to the HRRP incentives. I demonstrate using a conceptual model of hospital behavior, that as the number of patients in the targeted condition rises, the marginal cost of reducing the penalty increases by relatively more than the marginal benefit. Since HF and PN admit a relatively larger number of patients, this could increase the cost associated with amending the process of care and reducing readmissions for these conditions.

Does E-cigarette Advertising Encourage Adult Smokers to Quit?

Dhaval Dave
,
Bentley University, NBER, and IZA
Daniel Dench
,
City University of New York
Michael Grossman
,
City University of New York, NBER, and IZA
Donald S. Kenkel
,
Cornell University and NBER
Henry Safer
,
NBER

Abstract

Currently, there is extremely contentious policy debate concerning the regulation of e-cigarettes. At the heart of this regulatory debate are fundamental questions regarding whether e-cigarettes will draw cigarette smokers away from a dangerous habit or lure new initiates into tobacco use and lead to a new generation of nicotine addicts. The purpose of this paper is to shed light on one side of the debate just outlined by investigating whether e-cigarette advertising on television and in magazines encourage adult smokers to quit. To preview our results, the answer to this question is a tentative yes for TV advertising but no for magazine advertising. We use extremely detailed information on TV viewing patterns and magazine issues read in the Simmons National Consumer Survey and match this information to all e-cigarette ads aired on national and local broadcast and cable stations and all ads published in magazines from Kantar Media. The match yields estimates of the number of ads seen and read by each survey respondent in the past six months. We find that an additional ad seen on TV increases the number of adults who quit smoking by almost 1 percent relative to a mean quit rate of 9 percent in the past year.

Health Insurance and Mortality

Bernard Black
,
Northwestern University
Alex Hollingsworth
,
Indiana University
Leticia Faria de Carvalho Nunes
,
Getulio Vargas Foundation
Kosali Simon
,
Indiana University

Abstract

Using microdata on all U.S. death certificates from 1999-2015, we examine the relationship between the health insurance expansions under the Affordable Care Act and mortality. We use several identification approaches, the main being a "differences in differences" (DiD) study design that compares trends in mortality in Medicaid expansion states relative to non-expansion states, after versus before Medicaid expansion. We study deaths from a broad set of healthcare amenable causes, as well as specific top causes of mortality (cancer, heart disease, diabetes, and respiratory disease), for persons under age 65; most of our specifications focus on the 55-64 age range. We examine heterogeneity among subgroups particularly affected by Medicaid expansions, through separate specifications by education, gender, and race/ethnicity. We supplement the DiD with a triple-difference specification using mortality among those aged 65-74 (hence already Medicare insured). We also assess effects from the total impact of the ACA rather than just the Medicaid expansion by examining counties that benefited disproportionately in insurance gains. Our results do not indicate detectable effects on healthcare-amenable mortality following ACA expansion; we review the past literature to place our findings in context of studies that do and do not find a relationship between health insurance and mortality. We then use simulation methods to investigate the power of our research design to detect plausible effect sizes. We conclude that despite investigating a variety of specifications in our paper, population-level analyses of ACA mortality effects are underpowered, and the size of effects that could be detectable with reasonable power are implausibly large. Put differently, this also implies the confidence intervals around our estimates do not rule out fairly large effects. Our findings indicate that it would be extremely challenging for a study of mortality relying on death certificate microdata to detect effects of ACA expansion on population
Discussant(s)
Edward Norton
,
University of Michigan
Christopher (Kitt) Carpenter
,
Vanderbilt University
Robert Kaestner
,
University of California-Riverside
JEL Classifications
  • I1 - Health