Title: Reducing Prenatal Smoking: What Role Can State Policies Play?
Grantee Institution: Emory University
Principal Investigator: Kathleen Adams, Ph.D.
Grant Period: June 01, 2009 - May 31, 2010
Email: eadam01@sph.emory.edu
Awarded: $98,500.00

The researchers will use the Pregnancy Risk-Assessment Monitoring System (PRAMS) data from more than 25 states for at least three years, supplemented with data on state regulatory and tobacco control policies to examine the variation in maternal smoking and to identify: (1) what socio-demographic characteristics of women affect variation in maternal smoking across states, (2) what state policies or characteristics affect the variation in maternal smoking across states, (3) how much of the overall variation is explained by state policy versus variation in the socio-demographic differences of maternal populations, and (4) whether the impacts of state policy and individual characteristics on prevalence levels differ from their impacts on changes in behavior (e.g. quits or relapses)? The objective of this project is to identify the impact of state policies on smoking prevalence in maternal populations.

Title: Price Responsiveness in Health Plan Choice: Evidence for Policymaking
Grantee Institution: Stanford University School of Medicine
Principal Investigator: M. Kate Bundorf, Ph.D.
Grant Period: April 01, 2009 - June 30, 2010
Email: bundorf@stanford.edu
Awarded: $136,935.00

The researchers will explore the issue of price responsiveness in selecting health plans. Specifically, they will (1) review and synthesize the literature on consumer price responsiveness in health plan choice; (2) summarize the key features of existing studies that produce an estimate of health plan price responsiveness; (3) express price responsiveness consistently across studies; (4) determine what factors explain differences across studies in estimates of price responsiveness; and (5) develop recommendations for policy analysts choosing parameter estimates for simulations. The purpose of this project is to provide researchers and policy analysts with information that will enable them to easily and effectively apply the results of literature on consumer price responsiveness in health plan choice to policy simulations.

Title: The Effect of Public Insurance Coverage and Provider Reimbursement on Access to Dental Care: Evidence from the SCHIP Expansion
Grantee Institution: University of Michigan
Principal Investigator: Thomas C. Buchmueller, Ph.D.
Grant Period: April 01, 2009 - March 31, 2011
Email: tbuch@umich.edu
Awarded: $260,688.00

The researchers will examine the role that public health insurance plays in improving access to dental care for poor and near-poor children. Specifically, they will study low-income children to assess how Medicaid/SCHIP eligibility generosity affects dental care utilization. They will investigate how changes in program features and market conditions affected the supply of dental care to the publicly insured, addressing the following research questions: 1) What is the effect of public insurance on the probability a child has an annual dental visit? What is the effect on the total number of visits per year? 2) How does the effect of public insurance on dental utilization vary with key program parameters? 3) How do changes in public dental insurance programs affect provider participation? 4) What was the public dental health insurance environment in the states prior to SCHIP, and how did it change as a result of SCHIP implementation? and 5) How did states change dental provider reimbursement rates with the implementation of SCHIP? The purpose of this project is to better understand the effects of public dental coverage in order to inform related Medicaid and SCHIP policymaking.

Title: The Incidence of Financing National Health Spending
Grantee Institution: Georgia State University Research Foundation, Inc.
Principal Investigator: Patricia G. Ketsche, Ph.D.
Grant Period: March 01, 2009 - February 28, 2010
Email: pketsche@gsu.edu
Awarded: $253,800.00

The researchers seek to examine who actually pays for health care expenses and the distribution of costs across the mixed public/private financing system. Specifically, they will: 1) estimate the proportion of national health expenditures paid from all sources (federal, state and local taxes, private insurance premiums, and other out-of-pocket spending) by income, age, and health status at the national level for the 2004 – 2005 period; 2) estimate how the distribution of financing varies across particular state tax systems, for different public programs, and for public versus private systems; 3) compare the incidence of financing estimates across states with different tax structures; and 4) project how the distribution will likely change under alternative assumptions for expanding coverage (e.g. a national approach using payroll taxes, state-based expansions, or expanded employer risk-pooling). The objective of this project is to provide policymakers with a better understanding of the implications of various revenue-generating systems for the equitable distribution of the financing of the health care system.

Title: The Influence of Accreditation on Local Health Department Performance in NC
Grantee Institution: University of North Carolina at Chapel Hill
Principal Investigator: Mary Davis, Dr.P.H.
Grant Period: February 01, 2009 - January 31, 2011
Email: mvdavis@email.unc.edu
Awarded: $156,467.00

The researchers will explore the influence of accreditation among North Carolina’s local health departments (LHDs) on improvements in service delivery and health outcomes measures. Specifically, this study will examine if accredited LHDs in North Carolina demonstrate greater improvements in service delivery outputs and health indicators when compared with non-accredited health departments, and examine other factors that could influence this relationship. It will explore the extent and rate by which LHD accreditation influences service delivery and health indicators as well as factors that affect this influence, and key outcomes which are of interest in implementing an accreditation program. The objective of this project is to inform the development of the national public health accreditation model.

Title: Improvements in State Health Outcomes: State Public Health Systems Performance and State Health Department Responses to America’s Health Rankings
Grantee Institution: University of Tennessee
Principal Investigator: Paul Erwin, M.D.
Grant Period: February 01, 2009 - January 31, 2010
Email: perwin@utk.edu
Awarded: $133,357.00

Researchers will examine the relationships between changes in characteristics, inputs, and activities of state health departments (SHDs) and state public health systems, and changes in state-level health outcomes over the past 15 years. Researchers will also examine how states have responded to America’s Health Ranking (AHR) reports in order to explore whether policy translates into action with positive effects on health outcomes. The overarching questions to be examined are: 1) Why have some states made significant improvements in the AHR rankings, while others have not?; 2) What is the association between these changes in health outcomes and state public health systems performance?; and 3) How have SHDs responded to the AHR reports, and can we identify any specific changes in characteristics, inputs, and activities that might explain changes in health outcomes during the timeframe of the reports (1990-2007)? The objective of this project is to provide a clearer evidence-base for public health practice by effectively showing how state-level changes in inputs, processes, and outputs are connected to health outcomes.

Title: Mapping the Gaps: Enhancing Local Health Departments Capacity to Match Services to Health Needs
Grantee Institution: RAND Corporation
Principal Investigator: Tamara Dubowitz, Sc.D.
Grant Period: February 01, 2009 - January 31, 2011
Email: dubowitz@rand.org
Awarded: $203,155.00

The researchers will assess whether and how geographic information systems (GIS) can be employed by local health departments (LHDs) to inform planning efforts so that they more closely align community health needs with public health services and programs. Specifically they will: 1) examine how LHDs in California and Florida collect and use data to quantify community health needs and distribute LHD services and expenditures; and 2) work with LHD partners to create a gap analysis that identifies spatial congruencies and mismatches between community health needs and the distribution of LHD programs and services. The objective of this project is to help shape decision making by policymakers by providing them with clear illustrations of the need for additional resources or redirection of current services and programs.

Title: Public Health Entrepreneurship
Grantee Institution: University of Michigan
Principal Investigator: Peter D. Jacobson, J.D.
Grant Period: February 01, 2009 - July 31, 2010
Email: pdj@umich.edu
Awarded: $308,968.00

This project will explore the feasibility of characterizing, documenting, and disseminating existing public health entrepreneurial activities. Specifically, researchers will address the question: What are the activities public health entrepreneurs currently pursue to generate new sources of revenue and new service delivery innovations and what organizational adaptations encouraged or resulted from those activities? They will: 1) identify existing entrepreneurial public health activities and assess the public health system’s organizational capacity to engage in such initiatives; 2) identify ways that public health practitioners can use entrepreneurship to enhance the capacity to improve population health; 3) share identified practices across public health practitioners; and 4) stimulate a wide-ranging debate among public health advocates, practitioners, and policymakers about the role of entrepreneurship in how the public health system can best be organized to meet population health challenges. The objective of this project is to provide public health policymakers and practitioners with the first systematic description of innovative strategies to generate new revenues or more efficient and effective practices to improve population health.

Title: The Characteristics of Best Medical Practices
Grantee Institution: University of Minnesota
Principal Investigator: John Kralewski, Ph.D.
Grant Period: December 01, 2008 - September 30, 2010
Email: krale001@umn.edu
Awarded: $448,419.00

The researchers will identify the organizational characteristics of medical group practices that achieve high quality, low cost care. Current research suggests that the cost and quality of care vary across geographic areas and health plans within geographic areas. The causes of this variation at the practice level, however, are not well understood. Using a sample of physician practices from Medical Group Management Association (MGMA) membership, the researchers will examine how financial incentives within the practice, structural, and cultural attributes at the practice-level influence costs and quality of care, and the linkages between cost and quality. They will examine the effects of practice size, physician workload, and collegiality on cost and quality independently and then examine the effects on cost and quality jointly. Finally, they will calculate the configuration that results in the optimal performance of best medical practices. The objective of this project is to provide benchmarks that policymakers and health insurance plan and medical practice administrators can use to promote a cost-effective health care system.

Title: Accountable Care Teams for Disabled Medicaid Beneficiaries
Grantee Institution: University of Minnesota
Principal Investigator: David Knutson
Grant Period: November 01, 2008 - July 31, 2009
Email: dknutson@umn.edu
Awarded: $103,063.00

The researchers will identify health care providers who share a common patient population (accountable care teams), using a technique known as “network methodology.” These teams could serve as a medical home for their patients. If successful, the process of identifying accountable groups of providers could also support value-based purchasing. The researchers will employ the network methodology to identify provider “clusters” – those who are densely interconnected through serving a common patient population, in this case disabled Medicaid patients in Minnesota. They will then (1) assess the “fit” of the clustering with observations about care organization in Minnesota, and (2) develop measures of cluster cohesiveness. The objective of the project is to introduce a new technology for identifying accountable groups of providers that can be the basis of medical homes/care teams and inform efforts to implement value-based purchasing of health care.

Title: Consequences of SCHIP for Household Well-Being
Grantee Institution: University of Michigan
Principal Investigator: Helen Levy, Ph.D.
Grant Period: October 01, 2008 - September 30, 2009
Email: hlevy@umich.edu
Awarded: $124,694.00

The researchers will explore the consequences of State Children's Health Insurance Program (SCHIP) expansions, including "crowd out,"--the term used to describe the phenomenon of individuals dropping private health insurance coverage in response to expanded availability of public coverage. The researchers hypothesize that switching from private to public coverage reduces a family's out-of-pocket medical spending, freeing up more resources for other uses, making crowd-out a "windfall" not a "problem" for low-income families. They will address the following research questions: (1) How have expansions of SCHIP improved the material well-being of the low-income families the program is intended to assist, and (2) What categories of spending increase as a result of gaining eligibility for coverage? The objective of the proposed project is to reconsider the context for crowd-out and reframe the debate over SCHIP expansions with a renewed emphasis on the benefits rather than merely the costs of coverage expansions.

Title: The Costs and Benefits of Health Information Technology: Computerized Physician Order Entry
Grantee Institution: University of Minnesota
Principal Investigator: Jeffrey McCullough, Ph.D.
Grant Period: September 01, 2008 - February 28, 2010
Email: mccu0056@umn.edu
Awarded: $289,221.00

The researchers will measure the quality and cost effects of clinical information technology (IT), specifically computerized physician order entry (CPOE) systems. They will use data from 1997 to 2006 to measure the direct value of CPOE, as well as the value it creates in conjunction with complementary technological and organizational investments. The value of CPOE will be based on its causal effect on medical errors, financial costs of medical errors, financial value of CPOE-driven error reductions, and “charge capture,” which the researchers describe as more effective billing and the ability to extract higher payments from Medicare and other payers. The objective of this study is to provide new insight into how clinical IT creates both financial and clinical value, while enhancing the empirical rigor with which that value is measured.

Title: Getting Tools Used: Lessons Learned from Successful Decision Support Tools Unrelated to Health Care
Grantee Institution: Center for the Advancement of Health
Principal Investigator: Jessie C. Gruman, Ph.D.
Grant Period: July 01, 2008 - June 30, 2009
Email: jgruman@cfah.org
Awarded: $125,979.00

The researchers will develop case studies of four successful decision-support tools from the transportation, education, electronic, and nutrition industries in order to promote greater public demand and use of decision tools for health care. The case studies will focus on the development, marketing and dissemination of the representative tools and consider questions such as: 1) Who initiated development of the tool and why? 2) Who was the audience? 3) How was the benefit of the tool framed? 4) How did this tool become a household name? 5) What were the dissemination strategies? 6) How was it marketed? 7) How were the tool and the dissemination strategies modified over time? 8) What were the barriers to the tool’s acceptance? 9) What was the timeline leading to acceptance? 10) How has the tool influenced consumer choice over time? and 11) Why did similar attempts not succeed? The objective of this project, awarded under a special topic solicitation on consumer activation, is to help health care decision tool developers refine their approaches to development, dissemination, and promotion and to increase public use of these tools to make informed choices about health and health care.

Title: Promoting Readiness and Interest in Self Management
Grantee Institution: Visiting Nurse Service of New York
Principal Investigator: Penny H. Feldman, Ph.D./Linda M. Gerber, Ph.D.
Grant Period: July 01, 2008 - September 30, 2009
Email: pfeldman@vnsny.org; lig2002@med.cornell.edu
Awarded: $136,180.00

The researchers will investigate how patient activation occurs and under what circumstances in a historically under-represented population – Black/African Americans – who suffer disproportionately high rates of chronic illness. Patient activation, or engaging patients in their care, can improve the quality of care and health outcomes for those living with chronic conditions. Specifically, the researchers will: 1) evaluate psycho-social and clinical/functional determinants that influence a change in patients’ activation levels over time; 2) examine patients’ perspectives on their involvement in their care; 3) investigate factors that may help or hinder home care nurses’ promotion of self management and patient engagement; and 4) provide recommendations to improve clinician education and patient interventions. The objective of the proposed project, funded under a special topic solicitation on consumer activation, is to promote patient-centered care by identifying and providing recommendations to overcome patient-related barriers to self-management and to cultivate facilitators of clinician involvement in promoting patient self care.

Title: Extent and Impact of the Use of Observations Stays in the Medicare Program
Grantee Institution: Social and Scientific Systems, Inc.
Principal Investigator: Lan Zhao, Ph.D.
Grant Period: July 01, 2008 - December 31, 2009
Email: LZhao@s-3.com
Awarded: $221,791.00

The researchers will examine the extent of Medicare observation visits, as well as their implications. Observation visits, as distinct from inpatient visits, are covered under Medicare Part B, rather than Medicare Part A. This has implications for hospital payments, beneficiary copayments, and beneficiary eligibility for SNF coverage. The researchers will examine how observation stays are used in the Medicare program, as well as how they affect beneficiary out-of-pocket liability and hospital payments. The objective of this project is to better understand the extent to which observation visits, rather than inpatient visits, are used, as well as the implications for hospitals and beneficiaries.

Title: Resource Use and Efficiency in Episodes of Care
Grantee Institution: Palo Alto Medical Foundation Research Institute
Principal Investigator: Hal S. Luft, Ph.D.
Grant Period: July 01, 2008 - September 30, 2009
Email: lufth@pamfri.org
Awarded: $320,018.00

The researchers seek to examine some of the underlying assumptions of episode-based payments, which are hypothesized to encourage more clinically and economically efficient practices by primary care physicians (PCPs). Specifically, they will assess whether episode-based measures of resource use at the individual PCP level, rather than the physician group or medical staff level, are statistically reliable and appropriate. Using data from the Palo Alto Medical Foundation (PAMF), a large multi-specialty physician group that uses electronic medical records (EMRs), the researchers will examine whether some PCPs have practice patterns significantly more (or less) expensive than the average at either the episode level or with groups of acute or chronic episodes. If there is variation in PCP practice patterns, the researchers will explore the role of components, such as PCP office visits, referrals, imaging, lab tests, and drugs, in these differences. They will also study clinicians’ explanations for differences in practice patterns, such as unmeasured severity, location, or other factors. They will compare PAMF-based patterns of care with overall patterns at an episode level (but not physician level) from a large national data set. The objective of the study is to determine whether consistent styles of practice across PCPs within a large medical group can be detected, which would help inform policymakers about whether physician-oriented incentives are worth pursuing.

Title: Comparing the Cost Effectiveness of Chronic Care between Medicare Advantage and FFS Medicare Beneficiaries
Grantee Institution: University of Minnesota
Principal Investigator: David J. Knutson, M.S.
Grant Period: July 01, 2008 - December 31, 2010
Email: Knutson@umn.edu
Awarded: $399,978.00

Researchers at the University of Minnesota will compare the technical efficiency of care—a measure that links resource inputs with quality outcomes—for chronically ill Medicare Advantage (MA) and fee-for-service (FFS) beneficiaries. MA health plans are viewed by some as providing an opportunity to improve care for beneficiaries with chronic illnesses. Because MA plans do not submit encounter data to CMS, however, it has not been possible to directly address whether MA plans are more efficient than traditional Medicare FFS plans in caring for these beneficiaries. In particular, the researchers will: 1) validate that the new HEDIS Relative Resource Use (RRU) measures can be applied to FFS; and 2) compare RRUs in FFS and MA plans within geographic areas. The objective of the project is to provide policymakers with more information about the factors that contribute to efficiency and to identify the relative strengths of MA and FFS for chronically ill beneficiaries.

Title: Measuring the Costs of Defensive Medicine in the United States: Phase II
Grantee Institution: University of Southern Maine
Principal Investigator: J. William Thomas, Ph.D.
Grant Period: June 01, 2008 - July 31, 2009
Email: jwthomas@usm.maine.edu
Awarded: $288,724.00

In this study, the researchers will conduct the second phase of a two-part project which examines the costs of defensive medicine. In the first phase of the project (Grant #58347), the researchers constructed a database of tort signals and health claims data from CIGNA HealthCare. The tort signals – medical malpractice premiums and the number of malpractice suits filed in a physician’s geographic area – are factors which may be viewed by physicians as indicators of litigation risk. In phase two of the study, the researchers will conduct analyses of the tort signals and claims data in order to: 1) quantify costs associated with positive defensive medicine in the United States for the complete spectrum of medical care; 2) identify specific clinical conditions for which positive defensive medicine exists, and quantify defensive medicine costs for each of these conditions; and 3) identify the specific types of services and resources (e.g. medications) associated with defensive medicine in each identified condition. The objective of the project is to measure the degree to which fears of medical malpractice litigation motivates physicians to practice positive defensive medicine, which includes ordering tests, procedures, and/or medications that offer little or no clinical benefit to patients.

Title: The Impacts of Undocumented Immigrants on the U.S. Health Care System
Grantee Institution: The Urban Institute
Principal Investigator: Stephen Zuckerman, Ph.D.
Grant Period: June 01, 2008 - December 31, 2009
Email: szuckerm@urban.org
Awarded: $287,995.00

The researchers will examine the impact of undocumented immigration on the U.S. health care system. They will also explore how efforts to secure citizenship for undocumented immigrants could increase access to public and private insurance for this population. The researchers will focus on three research questions: 1) How much have undocumented immigrants contributed to the rate of uninsurance and to growth in the numbers of non-elderly uninsured in recent years? 2) How much uncompensated care do U.S. providers deliver to undocumented immigrants who lack health insurance coverage? and 3) To what extent would undocumented children and adults qualify for Medicaid or SCHIP coverage should they become legal residents? The objective of the project is to provide current estimates of the actual burden of undocumented immigrants on the health care system to help inform public discussion on policy options.

Title: Impact of State Medicaid Policy Changes on Nursing Home Hospitalization
Grantee Institution: Brown University
Principal Investigator: Vincent Mor, Ph.D.
Grant Period: June 01, 2008 - May 31, 2010
Email: vincent_mor@brown.edu
Awarded: $307,261.00

The researchers will examine the effect of changes in state nursing home bed hold payment policies. Bed hold policies are designed to prevent facilities from discharging low paying (i.e., Medicaid), costly, or complicated patients and to encourage continuity of residence by continuing to reimburse nursing homes if a resident is transferred to a hospital. The researchers will study the impact of these policies on the rate of hospitalization of nursing home residents, as well as on whether residents return to their originating nursing home following hospital discharge. In particular, they will: 1) describe variation in the rates of hospitalization between 1999 and 2005; 2) describe changes in the pattern of post-hospitalization discharge locations; 3) test the effect of changes in state Medicaid bed-hold payment policies between 1999 and 2005 on the rate of all hospitalizations of long stay nursing home residents; 4) test whether state bed-hold policies differentially affect the occurrence of “potentially avoidable” and “terminal” hospitalizations among nursing home residents; 5) test the effect of changes in state Medicaid bed-hold payment policies between 1999 and 2005 on the discharge location; 6) quantify the financial implications of changes in state bed hold policies; and 7) examine changes in residents’ functional status associated with hospitalization in the periods before and after changes in bed-hold policies. The objective of this study is to inform the debate about how best to address increasing hospitalizations of nursing home residents.

Title: Is Small-Area Variation in Healthcare Utilization Explained by Physician Financial Self-Interest?
Grantee Institution: American College of Radiology
Principal Investigator: Mythreyi Bhargavan, Ph.D.
Grant Period: May 01, 2008 - October 31, 2009
Email: mbhargavan@acr.org
Awarded: $254,109.00

The researchers will explore the extent to which small-area variation (SAV) in health care utilization and expenditure is accounted for by physicians with a financial self-interest (FSI), particularly as it relates to imaging procedures. They will investigate the variation/financial self-interest relationship: 1) for imaging modalities, including CT, MRI, interventional radiology, ultrasound, nuclear medicine, and radiography; 2) by examining total health costs; 3) by exploring the relation of FSI in coronary revascularization to the volume of cardiac-related procedures; and 4) by determining whether having FSI in both imaging and revascularization has a greater effect than each alone. The objective of the study is to determine whether FSI is one of the causes of utilization variation and whether FSI might be addressed to reduce health care costs without sacrificing quality or access.

Title: Local Public Health Capacities to Address the Needs of Culturally and Linguistically Diverse Populations
Grantee Institution: Social and Scientific Systems, Inc.
Principal Investigator: Claudia Schur, Ph.D.
Grant Period: May 01, 2008 - December 31, 2009
Email: cschur@s-3.com
Awarded: $199,824.00

The researchers will examine the public health needs of culturally and linguistically diverse populations. Specifically, they will develop detailed community multicultural profiles describing the cultural and linguistic diversity of populations served by local health departments (LHDs). They will then use these profiles to analyze the relationships between population characteristics and existing public health capacity and to identify and survey select communities for more in-depth information about serving these populations. They will seek answers to the following research questions: 1) How do jurisdictions with LHDs compare in terms of the composition of the population served? To what extent do communities include substantial numbers of racial/ethnic minorities, immigrants, and/or persons who speak a language other than English? 2) Does the structure and capacities of LHDs vary with respect to the multicultural profile of the populations they serve? How do LHD resources and activities correspond to local community characteristics? 3) What are the specific strategies that LHDs engage in to meet the needs of diverse populations? What types of strategies appear to be most successful? Are community partnerships used either for training purposes or for the delivery of culturally appropriate services? 4) What obstacles appear to be most difficult to overcome in serving different types of population subgroups? Which types of services are most difficult to deliver? What characteristics or combinations of characteristics of communities and LHDs create the most substantial obstacles? The objective of this project is to develop policy recommendations for implementation of promising strategies to better serve diverse populations.

Title: Effect of Decreased Emergency Department Access on Patient Outcomes
Grantee Institution: Naval Postgraduate School Graduate School of Business and Public Policy
Principal Investigator: Yu-Chu Shen, Ph.D.
Grant Period: April 01, 2008 - March 31, 2010
Email: yshen@nps.edu
Awarded: $229,918.00

The researchers will examine whether decreased emergency department (ED) access results in adverse patient outcomes or changes in other health indicators. There is a great deal of literature documenting decreased access to EDs. However, there is little empirical evidence linking access to EDs and health outcomes. The researchers will use acute myocardial infarction (AMI) patients to examine health outcomes, since AMI patients are relatively homogeneous and the time sensitivity of treatment should be reflected in differences in outcomes. They will examine two types of ED access between 1995 and 2005: permanent ED closure and temporary ED closure as measured by ambulance diversion time. Specifically, the researchers will focus on how changes in distance to the closed ED affect health outcomes of two types of AMI patients: (1) those who survived the ambulance ride and have an outpatient claim from the ED; and 2) those who survived the ED admission to have an inpatient claim. The objective of this project is to provide improved understanding of the impact of ambulance diversion in the health care system.

Title: Small Area Variation in Medicaid Utilization and Expenditures: Implications for Cost Containment and Quality of Care
Grantee Institution: University of California, San Diego
Principal Investigator: Richard G. Kronick, Ph.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: rkronick@ucsd.edu
Awarded: $336,513.00

The researchers will investigate the variation in Medicaid services and payments and explore the implications of these variations for cost containment options. They will compare the services received and cost of care for Medicaid beneficiaries across state Medicaid programs and across hospital referral regions (HRRs) within states. Specifically, the researchers will determine: (1) how much variation there is across states, across HRRs within states, and in Medicaid expenditures per beneficiary; (2) the extent to which variation in expenditures per beneficiary is due to variation in the rate of use of services, and the extent to which it is a result of variation in the rate of payment per unit of service; and (3) whether variation in the use of services and in expenditures per beneficiary is related to variations in the quality of care or the outcomes of care for Medicaid beneficiaries. The objective of this study is to provide policymakers with an understanding of the impact of policy choices regarding benefit limits and payment rates on costs and utilization, and their implication for quality of care.

Title: Can Disease Management Control Costs?
Grantee Institution: Mathematica Policy Research, Inc.
Principal Investigator: Deborah N. Peikes, Ph.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: dpeikes@mathematica-mpr.com
Awarded: $346,228.00

The researchers will test the ability of disease management (DM) and care coordination (CC) programs to control health care costs, examine which features make certain programs effective, for which target populations, and how they can be replicated. They will build on prior work for CMS' Medicare Coordinated Care Demonstration that estimated program impacts over the first four years of program operations, described the basic features of the 15 programs’ interventions, and linked program features to overall program effectiveness. Five interrelated studies would determine: 1) the effects of DM/CC on costs over a longer follow-up period and the types of beneficiaries for whom DM/CC is most effective; 2) the operational features of DM/CC programs that were able to reduce costs and how they can be replicated; 3) what features of the DM/CC programs did not work and why; 4) whether intensifying contacts at the time of hospital discharge contributes to reducing costs; and 5) whether DM/CC interventions are more effective at reducing costs if the doctor has a greater number of patients receiving the intervention. The objective of this study is to help decision makers determine whether to offer disease management and care coordination to Medicare beneficiaries, as well as chronically ill patients with commercial insurance and Medicaid, and will provide information about how best to implement this intervention.

Title: How Does Fragmentation of Care Contribute to the Costs of Care?
Grantee Institution: Harvard University School of Public Health
Principal Investigator: Eric C. Schneider, M.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: eschneid@hsph.harvard.edu
Awarded: $297,461.00

The researchers will develop new measures of care fragmentation that can be used to assess fragmentation within episodes of care and evaluate the relationship between care fragmentation and the costs of care for Medicare beneficiaries. They hypothesize that a higher degree of fragmentation of care will be associated with higher episode-specific costs of care after controlling for type of clinical episode, severity of clinical episode, clinical comorbidities, and the sociodemographic characteristics of patients. To test this hypothesis, the researchers will modify existing measures of fragmentation and develop new measures based on their relevance for episodes of care, select an approach to measuring costs, and select the clinical episodes for which they will test for the association between fragmentation and costs. The objective of this study is to improve quality and reduce the growth of health care costs in the U.S. by assisting the Medicare program and other insurers to measure and monitor fragmentation and target improvements to episodes with higher fragmentation.

Title: Sources of Health Care Cost Growth
Grantee Institution: Stanford University
Principal Investigator: M. Kate Bundorf, Ph.D./Anne B. Royalty, Ph.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: bundorf@stanford.edu
Awarded: $275,519.00

The researchers will study the sources of cost growth among the privately insured by analyzing the contributions to higher spending of changes in prices and changes in the number and types of services performed. They will also examine how changes in prices and changes in the number and types of services have differentially affected different categories of spending and different demographic groups. These findings for the privately insured will also be compared to trends in cost growth in public programs. The researchers will explore which policies or benefit designs will be more effective in reducing spending, as well as whether costs are driven more by increased utilization of certain types of services or by increases in the prices of particular services. In addition, the researchers suggest that the findings will be useful in developing policies to expand coverage by identifying the sources of cost increases that may affect coverage rates. The objective of this study is to provide information for policymakers to design interventions to reduce health spending in ways that benefit consumers.

Title: Defining Affordability for the Uninsured and People with Chronic Conditions
Grantee Institution: The Urban Institute
Principal Investigator: Lisa H. Clemans-Cope, Ph.D./Cynthia D. Perry, Ph.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: lclemans@ui.urban.org
Awarded: $199,918.00

The researchers will examine affordability of health insurance. In particular, they will study how different measures of affordability affect access to health insurance for: 1) those that are currently uninsured; and 2) those that have chronic health conditions requiring persistently high health care expenditures. The researchers will use alternative measures of affordability (health care spending falling below a given standard of spending as a percent of family income) to: 1) describe the availability of affordable health insurance among the currently insured and uninsured populations; and 2) explain why take-up of health insurance varies, given affordability. The objective of this project is to provide empirical evidence of various measures of affordability to inform policy choices for increasing coverage and ensuring equitable financial burdens for those who acquire coverage.

Title: Medicare Spending, Disparities, and Returns to Healthy Behaviors
Grantee Institution: University of Maryland, Baltimore
Principal Investigator: Bruce C. Stuart, Ph.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: bstuart@rx.umaryland.edu
Awarded: $264,047.00

The researchers will examine persistently low cost Medicare beneficiaries and determine the extent to which health behavior, preventive services, race and socioeconomic status (SES) appear to be related to low spending. Specifically, the researchers will (1) estimate cost savings in traditional Medicare spending associated with persistently good health behavior and preventive measures; (2) identify population characteristics that can be used to optimally target preventive interventions; and (3) develop simulation models to show how selectively reducing beneficiary cost sharing for primary and secondary preventive measures can achieve significant costs offsets in reduced spending on traditional Medicare services – this mechanism is referred to as “value-based insurance design.” The objective of the proposed project is to identify which disease states and beneficiary segments show the greatest promise for improved compliance and persistency in use of preventive therapies.

Title: Cost and Efficiency in Treating High-Cost Medicare Beneficiaries: The Role of Physician Practice and Health System Factors
Grantee Institution: Center for Studying Health System Change
Principal Investigator: James D. Reschovsky, Ph.D.
Grant Period: March 01, 2008 - August 31, 2009
Email: jreschovsky@hschange.org
Awarded: $338,826.00

The researchers will examine key physician practice and market characteristics that may contribute to high costs and inefficient care in the Medicare program. The study is composed of three phases. In phase one, they will analyze the treatment of high-cost Medicare beneficiaries in order to identify key physician, practice, and market characteristics associated with differences between actual and predicted Medicare payments and medical care use. In phase two, they will examine whether the factors associated with greater than predicted resource use affect high-cost beneficiaries’ health outcomes. Finally, the researchers will examine possible sources of geographic cost variations for high-cost beneficiaries and the extent to which these variations reflect differences in patient characteristics or supply-related factors and practice patterns of providers in a particular region. The objective of this project is to identify potential policy levers that can influence cost effectiveness in the delivery of medical care to high-cost Medicare patients.

Title: Variation in Health Care Cost Growth
Grantee Institution: Harvard Medical School
Principal Investigator: Michael Chernew, Ph.D.
Grant Period: March 01, 2008 - July 31, 2009
Email: chernew@hcp.med.harvard.edu
Awarded: $298,040.00

The researchers will investigate the factors related to variation in cost growth in the Medicare and commercial sectors. Specifically, the researchers will determine: (1) whether the factors related to the rate of growth in the Medicare program are the same factors that are related to level of cost; (2) whether the factors associated with cost growth in commercial markets are the same as those related to Medicare cost growth; and (3) the extent to which cost growth varies between employers and health plans and what factors are related to that variation in cost growth. While most research and policy initiatives are aimed at managing the level of costs as opposed to cost growth, the researchers suggest that additional attention must be devoted to understanding and developing initiatives relating to the trajectory of cost growth, since the factors related to high levels of costs may not be the same as factors related to cost growth. The objective of this study is to provide knowledge that will support development of cost containment approaches that address cost growth.

Title: The Impact of Pay for Performance on Hospitals that Care for Minorities and the Poor
Grantee Institution: Harvard University School of Public Health
Principal Investigator: Ashish Jha, M.D., M.P.H.
Grant Period: February 01, 2008 - January 31, 2009
Email: ajha@hsph.harvard.edu
Awarded: $101,656.00

The researchers will examine the impact of financial incentives to improve quality on hospitals that care for minority or other underserved populations. The Centers for Medicare and Medicaid Services have implemented pay for performance (P4P) demonstrations, and are considering implementing P4P nationally. However, the impact of P4P has not been widely evaluated. Hospitals that care for underserved populations may have greater potential for quality improvement; conversely these facilities lack the tools and resources to improve quality and compete for the additional resources. The researchers will examine changes in quality for hospitals in the Medicare Premier P4P Demonstration that serve disadvantaged populations (minority and poor); these changes will be compared with changes in hospitals in the demonstration that do not serve disadvantaged populations and with hospitals not in the demonstration (and not subject to P4P) that serve disadvantaged populations. The objective of the project is to provide more information about the impact of P4P on hospitals that serve disadvantaged populations, and help policymakers to design incentive systems that encourage higher quality care without disproportionately harming hospitals that care for these populations.

Title: Measuring the Costs and Benefits of Medicare Private Fee-for-Service
Grantee Institution: Boston VA Research Institute Inc.
Principal Investigator: Steven D. Pizer, Ph.D.
Grant Period: February 01, 2008 - January 31, 2010
Email: steven.pizer@med.va.gov
Awarded: $299,549.00

The researchers will explore how private fee-for-service (PFFS) plans and beneficiary choices are affected by Medicare payment policy. PFFS plans cover services from any Medicare-qualified provider and pay physicians by fee-for-service. The researchers will measure the effects of payment changes on PFFS plan decisions regarding market entry, benefit design, and premiums and then analyze the effects of changes in benefits and premiums on enrollment. They will address the following research questions: (1) how would plan availability be affected if payment rates were reduced; (2) how would premiums and benefits be affected by changes in payment rates; and (3) how does the value to beneficiaries of the PFFS option compare to its cost to the taxpayers? The objective of the proposed project is to inform policymakers about the costs and benefits of paying private Medicare health insurance plans.

Title: Medicaid Long-Term Care Programs: Simulating Rate Setting and Cross-Payer Effects
Grantee Institution: State of Maryland Department of Health and Mental Hygiene
Principal Investigator: Tricia Roddy, M.H.S.A.
Grant Period: February 01, 2008 - January 31, 2010
Email: roddyt@dhmh.state.md.us
Awarded: $160,086.00

The financing of long-term care has become increasingly more complex as both Medicare and Medicaid seek to serve the dual eligible population. While states are examining ways to support integrated programs of care for duals through capitated payments for Medicaid-covered costs, important questions remain about how Medicare and Medicaid services and costs are related. Using data for 2006 and 2007, researchers from the State of Maryland Department of Health and Mental Hygiene will establish a framework within which to examine the implications of cross-program effects in long-term care including an array of potential factors that would affect the calculation of capitation payment rates. The researchers will accomplish this by: (1) developing a simulation using estimated and actual expenditures to model the full spectrum of public program expenditures for duals; (2) examining how and to what extent providing Medicaid community supports, in particular, may affect the use of Medicare acute care and Medicaid institutional resource use; and (3) exploring how those effects might be applied in setting Medicaid payment rates. The objective of this study is to provide state and federal administrators and policymakers a better understanding of the interactive effects of public programs as efforts in coordinated care evolve.

Title: Characteristics and Determinants of Intragovernmental Activity Within State Public Health Systems
Grantee Institution: University of Massachusetts at Amherst (School of Public Health)
Principal Investigator: William Bartosch, Ph.D.
Grant Period: January 01, 2008 - August 31, 2009
Email: bartosch@schoolph.umass.edu
Awarded: $199,014.00

The researchers will examine intragovernmental activities within four northeastern states to determine their impact on fragmentation in the public health system. They will study the interactions of state administrative agencies in addressing two public health challenges— substance abuse and HIV/AIDS — to better understand how they facilitate or impede efficient and effective implementation of core public health functions. In particular, they will: 1) identify the types of intragovernmental activities within state public health systems that are required by law or regulation; 2) describe the types of intragovernmental activities that occur in states that are intended to address core public health functions; 3) identify factors influencing the type of engagement and barriers to such activity; and 4) identify models of successful intergovernmental collaboration. The objective of this project is to generate lessons for states about how they can more efficiently and effectively identify and respond to public health problems with scarce resources.

Title: Understanding the Resource Allocation Decisions of Public Health Officials in the U.S.
Grantee Institution: The Regents of the University of Michigan (University of Michigan Health System)
Principal Investigator: Susan Dorr Goold, M.D., M.S.H.A., M.A.
Grant Period: January 01, 2008 - December 31, 2009
Email: sgoold@umich.edu
Awarded: $208,902.00

The researchers will examine the nature and scope of resource allocation decisions made by public health officials. They will: 1) describe the nature and scope of resource allocation decisions officials confront; 2) identify the processes officials use when they make allocation decisions; 3) assess the degree of discretion officials report in allocating resources and the factors that influence that discretion; and 4) explore whether discretion affects officials’ abilities to assure that their communities’ most important public health needs are met. The objective of this project is to better inform discussions of public health system function by shedding light on how resource allocation decisions are made and the extent to which variation exists in those processes as a result of varying levels of discretion among public health officials.

Title: Developing and Applying a Descriptive Framework for Analyzing Food Safety Resources
Grantee Institution: The George Washington University School of Public Health and Health Services
Principal Investigator: Michael Taylor, J.D.
Grant Period: January 01, 2008 - March 31, 2010
Email: mike.taylor@gwumc.edu
Awarded: $199,770.00

The researchers will develop a descriptive framework for public health-oriented analysis of food safety resources. The researchers will use the framework to describe and analyze federal food safety expenditures comprehensively and will apply it on a pilot basis to selected states and localities. Development of the framework will necessitate addressing the following research questions: 1) How should government food safety expenditures be organized into functional categories that enable the evaluation of resource allocation from a public health perspective? 2) Can actual food safety expenditure data be translated into these public health-oriented categories in a way that is feasible and useful for policymakers? 3) How are federal food safety resources allocated across these public health-oriented categories? 4) What are the recent trends in federal food safety expenditures across the system and across these public health-oriented categories, including federal allocations to state and local agencies? 5) How does the current federal resource allocation compare with what data and expert judgment suggest about opportunities to reduce risk across the system? 6) Can the framework be feasibly and usefully applied to state and local expenditures, taking into account budget data availability and the large number of individual agencies? 7) For a pilot set of states and localities, how are current food safety resources allocated across public health-oriented categories? and 8) What budgetary practices of government agencies foster or impede understanding and analysis of food safety expenditures from a public health perspective? The objective of this project is to provide policymakers with a tool for describing and analyzing government food safety expenditures on a system-wide basis and in ways that are relevant to reducing food borne illness.

Title: A Systematic Study of Nebraska’s Regional Public Health Agency Model
Grantee Institution: Board of Regents of the University of Nebraska (University of Nebraska Medical Center)
Principal Investigator: Li-Wu Chen, Ph.D.
Grant Period: January 01, 2008 - December 31, 2009
Email: liwuchen@unmc.edu
Awarded: $199,713.00

The researchers will evaluate Nebraska’s change from single-county health departments to multi-county or regional public health systems. The researchers posit that a regional approach could have advantages for states like Nebraska due to the state’s relatively small population base and large geographic area. They will examine the regional public health agency model based on variation and/or effectiveness of the following factors: 1) macro context, i.e., political, social, and economic environment; 2) structural capacity, i.e., human, organizational, fiscal, and informational resources); 3) processes, i.e., community partnerships, resource allocation; and 4) outcomes, i.e., practice and performance of public health services. The objective of this project is to inform federal and state policymakers about the lessons learned through Nebraska’s experience with a regional public health agency model, so that performance of public health practice can be improved.

Title: Informing the Design of Funding Allocation Formulas in Public Health
Grantee Institution: Emory University, Rollins School of Public Health
Principal Investigator: James Buehler, M.D.
Grant Period: January 01, 2008 - December 31, 2009
Email: jbuehle@sph.emory.edu
Awarded: $225,749.00

The researchers will examine formula-based allocation strategies in public health practice. In particular, they will assess the impact on funding allocations of various formula design options, including the use of different indicators of target population need, the cost of providing services, state or local resource availability, and various approaches to combining indicators in formula calculations. The will also study the policy implications associated with using different indicators or strategies, including measures of population health disparities and approaches to assuring equity versus equivalency in funding allocations. The objective of this project is to generate practical guidance for public health program managers seeking to make informed choices when developing allocation formulas to best serve program goals.

Title: Waiting for Outpatient Care and Choice in Financing
Grantee Institution: Boston VA Research Institute Inc.
Principal Investigator: Julia Prentice, Ph.D.
Grant Period: December 01, 2007 - November 30, 2009
Email: julia.prentice@va.gov
Awarded: $99,986.00

The researchers will examine how increasingly long wait times for medical appointments have resulted in individuals exiting healthcare systems with lengthy waits and paying more to access alternative systems with shorter waits. They are exploring whether these time/cost tradeoffs affect how individuals choose among healthcare financing options. Specifically, the researchers will focus on veterans who receive care through the Department of Veterans Affairs (VA) or pay more out-of-pocket to access the Medicare program. The researchers hypothesize that: (1) long waits in local VA facilities will reduce the probability that individuals will use VA healthcare and (2) individuals with greater resources, as compared to individuals with fewer resources, will be more likely to choose more expensive Medicare plans rather than wait for care in the VA. The objective of the study is to inform policymakers, who make decisions on reimbursement rates, how time/cost tradeoffs affect patients’ health care financing choices.

Title: Impact of Profitability on Hospital Responses to Financial Stress
Grantee Institution: University of Pennsylvania School of Medicine
Principal Investigator: Kevin Volpp, M.D., Ph.D.
Grant Period: December 01, 2007 - November 30, 2009
Email: volpp70@mail.med.upenn.edu
Awarded: $455,218.00

The researchers will examine the impact of financial pressure on hospitals on the quality of care provided. They will test whether hospitals' responses to a change in the level of reimbursement is likely to vary by DRG-specific incentives, using the Medicare BBA as an example. They would: 1) calculate the generosity of Medicare payment by diagnoses and service lines for 1995, 2000, and 2005; 2) compare the quality of care received by patients hospitalized with conditions from more vs. less profitable service lines in 1995, 2000, and 2006; 3) test the effects of changes in reimbursement on mortality for more vs. less generously reimbursed diagnoses and service lines; and 4) test the effects of changes in reimbursement on Patient Safety Indicators (PSIs) for more vs. less generously reimbursed diagnoses and service lines. The researchers note that existing studies on the effects of financial stress on hospitals have examined acute myocardial infarctions, one profitable condition that may provide a misleading sense of the overall impacts on quality and cost/quality tradeoffs. The objective of this study is to provide policymakers with better ability to measure profitability and quality for hospital service lines (e.g., neurosurgery, cardiology, etc.), the level at which many important decisions about resource allocation are made.

Title: The Provision and Reporting of Community Benefits by Hospitals: Lessons from Maryland
Grantee Institution: Urban Institute
Principal Investigator: Bradford Gray, Ph.D.
Grant Period: November 01, 2007 - April 30, 2009
Email: bgray@ui.urban.org
Awarded: $184,057.00

The researchers will examine factors at the hospital and community level that underlie variations in the amount of hospitals’ charity care and other community benefit activities. Through a series of interviews and quantitative analysis the researchers will provide a critical account of the practical realities, advantages, and disadvantages of Maryland’s experience providing and reporting on not-for-profit hospitals’ charitable activities. The Maryland approach is a working public model of the acclaimed Catholic Heath Association’s (CHA) guidelines that measure and document the charity care it provides to communities. The researchers will develop benchmarks for the amount and variation of charity care and other community benefit activities. The objective of the study is to provide policymakers evidence-based information as they make decisions about requirements for hospitals’ provision of charity care, as well as the accountability of nonprofit hospitals.

Title: Economic Impact of Adverse Health Events on the Uninsured Near Elderly
Grantee Institution: Northwestern University, Kellogg School of Management
Principal Investigator: David Dranove, Ph.D.
Grant Period: November 01, 2007 - October 31, 2009
Email: d-dranove@northwestern.edu
Awarded: $98,210.00

The researchers will assess how insurance status affects personal wealth and earnings in the population nearing age 65 that have a heightened probability of adverse health but have not yet qualified for Medicare. Specifically, they will analyze: 1) the extent to which measurable dimensions of household wealth (e.g., total net worth, home equity, funds in retirement plans) fall after an adverse health event; 2) the extent to which individuals in the U.S. who lack health insurance suffer disproportionate losses in household wealth; 3) whether the probability of sentinel financial events, including loss of home and loss of estate, increases after an adverse health event; and 4) the extent to which the probability of a sentinel financial event is higher for individuals who lack health insurance. The objective of this study is to better understand the indirect effects of lack of insurance on individuals’ overall financial well-being.

Title: How Do Rising Healthcare Costs Affect Worker Compensation?
Grantee Institution: Johns Hopkins University (Bloomberg School of Public Health)
Principal Investigator: Bradley Herring, Ph.D.
Grant Period: November 01, 2007 - March 31, 2009
Email: bherring@jhsph.edu
Awarded: $54,750.00

The researchers will measure the extent to which increases in health insurance premiums are borne by workers in the form of lower wages relative to the extent to which they are borne by employers in the form of lower profits. They will also examine whether there are significant differences in this relationship between small and large firms and between low and high income workers. Finally, they will examine the extent to which any wage offsets vary by the expected health care costs across groups of workers with different characteristics, such as age, gender, health status, and family size. The objective of the study is to better understand where the burden of rising health care costs falls, so as to develop appropriate policy incentives.

Title: Health Savings Accounts, High Deductible Policies, and the Uninsured: Simulating the Effects of HSA Tax Policy
Grantee Institution: Brigham Young University
Principal Investigator: James Cardon, Ph.D.
Grant Period: November 01, 2007 - March 31, 2009
Email: cardon@byu.edu
Awarded: $116,606.00

The researchers will explore how Health Savings Accounts (HSA) and various tax-based health insurance proposals impact the uninsured population. They also will simulate how tax deduction and credit policies for non-group insurance affect the employment-based group market. Through an innovative approach, the model will consider employer choice and individual preferences in the face of the risk of uncertain medical expenditures. The behavior of three important consumer groups will be examined: (1) the currently uninsured who do not have access to group coverage; (2) the currently uninsured who have access to group coverage but choose to be uninsured; and (3) the currently insured group in group coverage. The researchers will model a variety of policy changes and assess the value to each consumer group and the likelihood of changing from the status quo. The objective of this project is to inform policymakers about the impact of HSAs and various tax-based health insurance proposals on the uninsured and group market.

Title: Identifying Best Practices in the Coordination of Care
Grantee Institution: Center for Studying Health System Change
Principal Investigator: Ann S. O'Malley, M.D., M.P.H.
Grant Period: October 01, 2007 - May 31, 2009
Email: aomalley@hschange.org
Awarded: $99,445.00

The researchers will examine how care is coordinated in ambulatory care settings. Specifically, they will identify and document “best practices” in physician offices that have developed care coordination processes and determine the financial implications of increased coordination. For example, the researchers will assess whether a periodic care coordination fee or itemized billing for coordination activities is more efficient. They will also examine a group of “average practices” to assess how they set priorities for coordination activities and what barriers they encounter. The objective of the proposed project is to better inform the replication of organized care coordination processes in medical practices.

Title: Effects of Prior Authorization of New Medications among Medicaid Beneficiaries with Bipolar Disorder
Grantee Institution: Harvard Pilgrim Health Care Inc.
Principal Investigator: Stephen B. Soumerai, Sc.D.
Grant Period: October 01, 2007 - September 30, 2009
Email: ssoumerai@hms.harvard.edu
Awarded: $231,641.00

The researchers will evaluate the effects of prior authorization of new medications among Medicaid beneficiaries with bipolar disorder in the state of Maine. As part of their study, they will: (1) describe baseline demographic and clinical characteristic and patterns of treatment; (2) examine the impact of prior authorization on utilization and expenditures of preferred versus non-preferred atypical antipsychotic (AA) agents and anticonvulsant (AC) agents among patients continuously enrolled for the entire study period in Maine and New Hampshire (comparison state); and (3) examine the impact of prior authorization on rates of hospital admission and rates of cessation of all medical treatment, two potential adverse outcomes. The objective of the project is to examine the effect of prior authorization, an increasingly popular drug utilization management policy for patients with chronic mental illness, on medication use and associated outcomes.

Title: Paying Physician Group Practices for Quality: A Regional Natural Experiment
Grantee Institution: University of Washington School of Public Health and Community Medicine
Principal Investigator: Douglas A. Conrad, Ph.D.
Grant Period: October 01, 2007 - March 31, 2009
Email: dconrad@u.washington.edu
Awarded: $328,829.00

The researchers will evaluate the impact of a quality-based scorecard and financial incentives developed by Premera Blue Cross in Washington State. They will compare clinics exposed to two waves of a progressive “paying for quality” intervention with a control group of clinics not subject to the intervention. Specifically, the researchers will assess the joint effects of quality-based financial incentives and the quality scorecard on physicians’ clinical quality, patient satisfaction, and efficiency in caring for patients. They will distinguish the effects on quality, patient satisfaction, and efficiency of providing information to medical groups relative to their performance on an array of clinical quality measures from the incremental effect on quality and efficiency of clinical quality-based financial incentives. The objective of the project is to assist organizational leaders and public policymakers to craft more cost-effective quality incentives.

Title: Medical Spending and Health of the Elderly
Grantee Institution: George Mason University
Principal Investigator: Jack Hadley, Ph.D.
Grant Period: October 01, 2007 - June 30, 2009
Email: jhadley1@gmu.edu
Awarded: $416,888.00

The researchers will assess the marginal contribution of increased medical spending on health status. Specifically, they will explore whether: (1) Elderly people who spend more on medical care have better health outcomes than people who spend less; (2) The marginal effect of medical care spending on health varies across subpopulations of the elderly, stratified by demographic characteristics; and (3) whether Medical spending has an effect on health at the margin. The project will build upon prior research, which examined whether Medicare beneficiaries who live in geographic areas with higher average spending have better health outcomes, but did not address the impact on individuals. The objective of this project is to help guide policymakers’ decisions about policy options to reduce health care spending.

Title: Financing American Indian Health Care: Impacts and Options for Improving Access and Quality of Care
Grantee Institution: Sanford Research/University of South Dakota
Principal Investigator: Kathryn Langwell
Grant Period: September 01, 2007 - September 30, 2008
Email: langwelk@sanfordhealth.org
Awarded: $138,427.00

The researchers examined health care access and quality of care for American Indians who receive care through the Indian Health Service (IHS). In particular, they: 1) determined the resources (national and regional per capita spending) available for health care for this population from 2000 to 2005; 2) assessed service priorities and the mechanisms for explicit and implicit rationing of care; 3) analyzed the impact of priorities and rationing mechanisms on access to care, availability of services, quality, and outcomes; and 4) developed options for improving access and quality for American Indian heath care and analyze the feasibility and costs of these options. The objective of the project was to contribute to the understanding of the impact of current financing and organization of the Indian Health Service on access and quality and the contribution of these factors to the health disparities experienced by this population.

Title: Reimbursement Policy and Cancer Chemotherapy Treatment and Outcomes
Grantee Institution: Harvard Medical School
Principal Investigator: Joseph P. Newhouse, Ph.D.
Grant Period: August 01, 2007 - July 31, 2009
Email: newhouse@hcp.med.harvard.edu
Awarded: $398,283.00

The researchers will examine the impact of MMA-mandated changes in Medicare payment rates for chemotherapy drugs. Specifically, they will estimate the effect of the significant payment reduction on incentives to prescribe chemotherapy, the probability of using chemotherapy, and the choice of chemotherapy agents administered to newly diagnosed cancer patients. Some hypothesize that the reduction in payment rates will cause physicians to be reluctant to accept Medicare patients, while others argue that since Medicare is such an important source of physician income, the rate reduction could lead to physician-induced demand. If the researchers find an effect of MMA on either utilization or drug choice, they will conduct a follow-up study of the impact of the MMA on patient health outcomes. The objective of the study is to assess whether the MMA, by altering financial incentives, affects chemotherapy utilization and/or the choice of drugs used.

Title: Examining the Impact of Informational Messages on Seniors' Choice of Medicare Drug Plans
Grantee Institution: Princeton University
Principal Investigator: Eldar Shafir, Ph.D.
Grant Period: August 01, 2007 - July 31, 2008
Email: shafir@princeton.edu
Awarded: $99,961.00

The applicants will examine how well people choose from among the large set of alternatives in the Part D plan and evaluate whether psychologically attuned interventions can help improve those choices. Specifically, they will evaluate people’s actual choice of plan in light of the medications they use and then experimentally increase the availability of or access to cost information. They will encourage clients to explicitly consider their personal preferences (such as their attitude toward the use of generic medications or mail order prescription drug services) to see how the availability of such considerations might influence chosen plan quality and beneficiary satisfaction with the chosen plan. The objective of this study is to inform policies surrounding Part D and other policies relying on consumer choice in complicated environments.

Title: The Impact of Assisted Living Growth on the Market for Nursing Home Care
Grantee Institution: Harvard Medical School
Principal Investigator: David Grabowski, Ph.D.
Grant Period: June 01, 2007 - May 31, 2009
Email: grabowski@med.harvard.edu
Awarded: $281,784.00

How is the growth in assisted living linked with decreased occupancy rates, increased resident acuity, and increased resident reliance on Medicaid in nursing homes? In particular, they will: 1) document the growth of the assisted living sector over time; 2) isolate the effect of assisted living growth on nursing home utilization; 3) examine the relationship between assisted living growth and nursing home payer mix; 4) estimate the effect of assisted living growth on nursing home resident acuity; and 5) assess whether the growth in assisted living has implications for nursing home quality. They will also establish a national assisted living database to facilitate empirical work to isolate the effect of assisted living growth on the nursing home market. The objective of the project is to better inform policymakers as they address the best incentives for meeting the nation’s growing long term care needs, at reasonable cost, in a dynamic market.

Title: Evaluating Cost Efficiency of Specialist Physicians
Grantee Institution: University of Southern Maine
Principal Investigator: J. William Thomas, Ph.D.
Grant Period: April 01, 2007 - January 31, 2010
Email: jwthomas@usm.maine.edu
Awarded: $376,366.00

The researchers will analyze alternative strategies for measuring specialist physician cost efficiency. Accurate measures of physician cost efficiency allow consumers to make more informed decisions, while helping health plans make better choices about which physicians to include in their networks. Specifically, the researchers will explore the: (1) feasibility of using multi-plan claims databases for cost efficiency measurement; (2) need for risk adjusting episode expected costs to account for patients' comorbidities; (3) methodology for dealing with cost outlier episodes; (4) methodology for attributing responsibility for individual episodes to individual physicians; (5) minimum episode sample sizes required for cost efficiency measurement; (6) methodology for case-mix standardization; (7) influence and availability of pharmaceutical claims on cost efficiency measurement; and (8) suitability of ratio of observed to expected cost as a cost efficiency metric. The objective of the study is to develop standard methods for measuring the cost efficiency of specialist physicians, providing a broad range of stakeholders with reliable means for developing physician networks, assigning tiers, and implementing better public reporting.

Title: Physicians' Responses to Variations in Medicare Fees for Specific Services
Grantee Institution: Center for Studying Health System Change
Principal Investigator: James D. Reschovsky, Ph.D.
Grant Period: March 01, 2007 - June 30, 2009
Email: jreschovsky@hschange.org
Awarded: $246,076.00

The researchers will examine how physicians’ provision of specific medical services to Medicare FFS beneficiaries responds to variations in Medicare physician fees for those services, physicians’ characteristics, and to local market factors. The study will test whether the quantities of specific services physicians provide to their Medicare fee-for-services patients are:1) positively related to the Medicare fee for each service; 2) inversely related to the fees paid by private insurance and to the level of demand from non-Medicare patients; and 3)positively related to indicators of physicians’ incentives to “induce demand.” Potential outcomes include: 1) indicating the percentage change in service volume for a particular fee change; 2) estimating how service volumes vary with local market conditions; 3) characterizing physician opportunities and underlying incentives to induce demand; and 4) identifying services for which service-specific fee adjustments might be an effective tool to constrain unnecessary use. This project expands upon a previous study by the applicants that investigated overall provision of total Medicare services by physicians. The objective of the project is to fill a gap in past and current physician payment research by assessing if changing relative prices of specific services will contribute to meeting the broad policy goals of discouraging the provision of services that unnecessarily add to cost growth without improving quality or outcomes.

Title: Examining the Quality of Hospital Care and Simulating the Impact of Several Pay-for-Performance Scoring Methods on Hospital Rankings
Grantee Institution: Massachusetts General Hospital Institute for Health Policy
Principal Investigator: Joel S. Weissman, Ph.D./Lisa I. Iezzoni, M.D.
Grant Period: March 01, 2007 - February 28, 2009
Email: liezzoni@partners.org
Awarded: $175,981.00

The researchers will examine the quality of hospital care. Using patient-level data from a large sample of hospitals collected by the Hospital Quality Alliance (HQA), they will estimate the proportion of patients receiving recommended care, create new measures of patient care quality, and simulate the impact of several pay-for-performance (P4P) scoring methods on hospital rankings. They will also examine the extent to which care varies by race, ethnicity, or insurance status within and across hospitals. The objective of the study is to assist CMS, other public and private payers, and accrediting organizations in developing strategies to improve hospital performance measurement and payment methods, and, ultimately, the quality of patient care.

Title: Study of the Effects of High-Deductible Health Plans on Families with Chronic Conditions
Grantee Institution: Harvard Pilgrim Health Care, Inc.
Principal Investigator: Alison Galbraith, M.D.
Grant Period: February 01, 2007 - July 31, 2009
Email: alison_galbraith@harvardpilgrim.org
Awarded: $403,958.00

This project will analyze the impact of high-deductible health plans on families who do not have a choice in health plans. The researchers will examine the effect of high deductibles on family health care decision making strategies, unmet health care needs, and the financial burden for families relative to that of traditional plans. They will also explore whether one family member’s health or resource use influences that of other family members, particularly when one member has a chronic condition. The objective of the project is to inform policymakers about the potential advantages and disadvantages of high-deductible plans for families dealing with chronic conditions, especially when they have no choice in health plans.

Title: Impact of MMA Part D on Medicare Residents in Nursing Homes
Grantee Institution: University of Massachusetts Medical School
Principal Investigator: Becky Briesacher, Ph.D.
Grant Period: January 01, 2007 - December 31, 2008
Email: becky.briesacher@umassmed.edu
Awarded: $221,483.00

The applicants evaluated the impact of the transfer of prescription drug coverage for dual-eligible’s (Medicare and Medicaid) living in nursing homes from Medicaid to Medicare Part D, as required by the MMA. In particular, they: 1) measured the rates of enrollment into Medicare Part D for nursing home residents from 2005 to 2007; 2) assessed the impact of Medicare Part D on overall prescription drug utilization patterns; 3) identified the major drug classes most affected by the program, including an examination of benzodiazepines and their exclusion from Part D coverage; and 4) determined the impact of Medicare Part D on overall rates of hospitalizations and falls, as indicators of quality care. The objective of the project was to better inform state and federal policymakers about the impact of Medicare Part D on drug utilization, as well as quality (measured by hospitalizations and falls).

Title: Examining Effective Strategies that Local Communities Have Used to Meet Expanded Public Health Workforce Needs
Grantee Institution: Center for Studying Health System Change
Principal Investigator: Robert Hurley, Ph.D.
Grant Period: January 01, 2007 - June 30, 2008
Email: rhurley@hschange.org
Awarded: $56,652.00

The researchers will examine local communities’ effective strategies for meeting expanding public health workforce needs. They plan to study six of the twelve Community Tracking Study (CTS) communities that have faced particularly unique and/or challenging situations. They will also conduct interviews with key public health stakeholders, covering topics such as key local factors that have an impact on the public health workforce, current public health workforce needs and areas of severe shortages, current recruitment and retention challenges and strategies to overcome them, and resource and other needs that might facilitate recruitment and retention. The objective of this project is to better understand how local agencies are dealing with the public health workforce shortages identified in the 2005 CTS site visits.

Title: Incorporating Disparities into State Strategies to Monitor and Improve Health Status
Grantee Institution: Mathematica Policy Research Inc.
Principal Investigator: Marsha Gold, Sc.D.
Grant Period: January 01, 2007 - March 31, 2008
Email: mgold@mathematica-mpr.com
Awarded: $199,135.00

The researchers will examine state capacity to develop the 10 leading indicators defined in Healthy People 2010 overall and by geographic group. In particular, they will study: 1) the strengths and weaknesses of data available within states to adequately assess the health of a population that includes diverse groups; and 2) the organizational, political, and other forces that promote or impede use of such data to intervene in ways that improve the health of the state’s population. The three part study includes: 1) an inventory of state practices with respect to available data on leading indicators; 2) case studies of four states to learn about how the indicators and disparities in the indicators across subgroups are viewed in developing initiatives to improve public health; and 3) a dissemination plan for translating information in ways that would be useful to diverse audiences. The objective of this project is to further the vision articulated in HealthyPeople 2010, setting health goals that explicitly link overall improvements in public health to reduced disparities in health status across diverse subgroups of the population.

Title: Local Community Strategies to Develop their Public Health Surge Capacity to Handle Emergencies Affecting Many People
Grantee Institution: Center for Studying Health System Change
Principal Investigator: Laurie Felland
Grant Period: January 01, 2007 - June 30, 2008
Email: lfelland@hschange.org
Awarded: $67,173.00

The researchers will examine local community strategies to develop their public health surge capacity. They note that following Hurricane Katrina, public health agencies recognize and urgent need to ensure that they can meet increased demand in times of high need. The researchers plan to build on the Community Tracking Study site visits, conducting more focused, in-depth case studies on the surge capacity in six selected communities. The objective of the study is to identify key strategies that selected communities have used to develop surge capacity, pinpointing lessons that can be drawn from each community’s experience.

Title: Comparison of Public Health Organizational Structures Using Dynamic Network Analysis
Grantee Institution: Columbia University
Principal Investigator: Jacqueline Merrill, D.N.Sc.
Grant Period: January 01, 2007 - December 31, 2008
Email: jacqueline.merrill@dbmi.columbia.edu
Awarded: $209,952.00

The researchers will examine how intra-organizational public health networks are linked to process and outcomes. Using dynamic organizational analysis, they would study several agency networks. They will determine baselines for public health organizational networks, identify common elements, and relate common elements identified to performance. The researchers will also compare the public health networks to similar networks in the private sector, allowing their findings to be interpreted in that context and theory. The objective of this project is to provide public health managers with better understanding of the dynamics and impact of intra-organization networks, so that they can better plan for and justify allocating limited resources.

Title: Assessment of Training Needs for Public Health Financial Managers
Grantee Institution: University of Kentucky
Principal Investigator: Julia Costich, Ph.D., J.D.
Grant Period: January 01, 2007 - December 31, 2008
Email: jfcost0@uky.edu
Awarded: $124,970.00

The researchers will examine competencies of financial managers in state and local public health departments. A national sample of public health finance officers, and the senior public health officials to whom they report, will be surveyed. The survey will gather information on their self-assessment of current knowledge and performance in relation to public health finance competencies, as well as their preference for educational formats. Using newly issued competencies in public health financial management as benchmarks, the researchers would identify areas of need, mechanisms for delivering training, and potential funding sources. The objective of this project is to identify professional development needs for financial officers in state and local public health agencies.

Title: Understanding and Assessing Partnership Connections in Public Health Departments
Grantee Institution: RAND Corporation
Principal Investigator: Danielle Vogenbeck, Ph.D.
Grant Period: January 01, 2007 - June 30, 2008
Email: vogen@rand.org
Awarded: $195,991.00

The researchers will examine partnerships, designed to leverage limited resources and fulfill common missions, among state and local public health agencies and other organizations, agencies, and groups. In particular, they intend to: 1) define what good connectivity means in a public health partnership; 2) quantify good connectivity as percentile score measured against a standard; and 3) develop a tool to measure connectivity and document the analytic process through which the tool produces a connectivity score. The objective of this project is to develop a tool to allow public health partners to measure their multi-agency collaborations in order to strengthen them.

Title: Public Health Funding and Population Health
Grantee Institution: University of Washington
Principal Investigator: David E. Grembowski, Ph.D.
Grant Period: January 01, 2007 - June 30, 2008
Email: grem@u.washington.edu
Awarded: $161,789.00

Grant Description: The researchers examined the relationship between local health department expenditures and county-level disparities in mortality and infant mortality rates for Black and White racial/ethnic groups. They estimated whether changes in expenditures are associated with changes in those rates over time. The objective of this project was to inform the debate about the level of resources that should be allocated to public health systems rather than to medical care or other determinants of population health. Policy Summary: Overall, we found little evidence that 1990-1997 increases in local health department (LHD) expenditures or percentage share of public revenue allocated to LHDs are related to 1990-1997 decreases in all-cause Black (African American)-White disparities in mortality and infant mortality rates. The implication of this finding is that policy makers cannot simply increase the budgets of local health departments and expect Black-White disparities in mortality to decline. Black infant mortality rates existed only for LHDs in about 110 metropolitan areas with large numbers of Black births. For those areas, we found that increases in 1990-1997 LHD spending and percentage share of public revenue to LHDs were related consistently to declining 1990-1997 Black and White infant mortality rates, but these associations were not statistically significant, perhaps due to the small number of metropolitan areas. Building on the findings for infant mortality, we examined the relationships between LHD spending, LHD services, and Black-White infant mortality rates. We found that greater LHD spending was correlated consistently with providing a broader mix of Maternal/Child Health Services, Clinical Services, and Communicable Disease (CD) Screening and Treatment. In turn, Maternal/Child Health Services were associated strongly with reductions in White infant mortality rates, while Communicable Disease Screening and Treatment was associated with reductions in Black infant mortality rates. These patterns suggest a pathway connecting greater LHD spending with increased services that benefited women and infants, which in turn reduced Black and White infant mortality rates. The lack of an association between changes in LHD spending and changes in all-cause mortality rates for Black and White populations has different policy implications, depending on the underlying reasons for this finding: • The study’s 7-year time series may be too short to observe the consequences of LHD spending over the lifecourse of adults. The policy implication of this explanation is to conduct studies with longer time series. A related point is that LHD spending may be related to disparities in cause-specific Black-White mortality rates, but Black populations in most counties are too small to obtain cause-specific Black mortality rates from the CDS Wonder database. • Racial/ethnic disparities in mortality may not decline if local health departments place more resources into improving population health rather than reducing health disparities. The policy implication is to re-allocate at least some funds toward effective interventions for reducing Black-White disparities in mortality. • LHDs may have increased spending for interventions to reduce racial/ethnic disparities in mortality rates, but the interventions were not effective. A policy implication is to fund only interventions based on evidence that the interventions reduce mortality in Black and White populations. • Individual-level and community-level socioeconomic characteristics shape population health, and Black-White mortality disparities arise from large differences in Black-White social positions in society. The policy implication is to reduce Black-White mortality disparities by increasing public health interventions that target education, employment security, environmental protection, health behavior and other drivers of health disparities. We also found some evidence that increasing LHD resources was associated unexpectedly with increasing Black and White mortality rates. This pattern suggests that LHD spending may have increased in response to increasing mortality rates, but greater LHD spending did not translate into lower mortality rates within the study’s time series. Further analysis with a longer follow-up might clarify these results. Nonetheless, a possible explanation is that greater LHD spending was for activities that were not powerful enough to reverse the strong socioeconomic disadvantages driving Black-White disparities in mortality. More research is needed to identify the forces that produced this pattern of results, which would provide guidance to policy makers.

Title: Public Health System Organization and Performance in Rural Communities
Grantee Institution: University of Minnesota
Principal Investigator: Douglas R. Wholey, Ph.D.
Grant Period: January 01, 2007 - June 30, 2009
Email: whole001@umn.edu
Awarded: $199,070.00

The researchers will examine public health system organization and public health performance in eight rural communities through a comparative case study. Their focus is particularly on rural communities, since the scarcity of resources there increases the importance of integrating public and private resources optimally. In particular, they will: 1) describe the organization of key essential services networks within each rural community; 2) describe the structures and processes that integrate activities across the essential services networks; and 3) compare public health system performance. The objective of this project is to illuminate the relationship between local public health systems and public health outcomes.

Title: An Academic Health Center and Public Health Practice Collaboration: Disseminating Continuous Quality Improvement Capability to Local and State Public Health Agencies
Grantee Institution: University of Minnesota
Principal Investigator: William J. Riley, Ph.D.
Grant Period: January 01, 2007 - December 31, 2008
Email: riley001@umn.edu
Awarded: $200,002.00

The researchers will develop a pilot program to expand the use of continuous quality improvement (CQI) principles to public health agencies, with a focus on reducing health disparities. They intend to implement CQI through collaboration among the School of Public Health at the University of Minnesota and local and state public health agencies. They will create a coordinated academic curriculum in CQI, preparing personnel to lead CQI efforts, and they would implement CQI capabilities into eight separate public health agency projects. The objective of this project is to demonstrate that CQI can be used in public health organizations to improve performance of core processes.

Title: Changes in Drug Utilization for Seniors without Prior Prescription Drug Insurance
Grantee Institution: Brigham & Women's Hospital, Inc.
Principal Investigator: Sebastian Schneeweiss, M.D., Sc.D.
Grant Period: November 01, 2006 - October 31, 2007
Email: schneeweiss@post.harvard.edu
Awarded: $100,000.00

Grant Description: The researchers assessed changes in prescription drug use among elderly patients who had no prescription drug coverage prior to Medicare Part D. In particular, they examined the following research questions: 1) How fast is the uptake of Medicare Part D among seniors without prior insurance? Is there an increase in preventive drug use (more new users, better adherence)? 2) Is there switching to more effective or more expensive drugs? 3) Is there a reduction in discontinuation of drugs for chronic conditions? 4) To what extent does total drug spending per patient change? 5) What proportion of spending is shifted from patients to Medicare? 6) Are prescribing changes clustered within physicians, pharmacies, or chains? 7) How do prescribing patterns change when some patients exhaust their initial coverage but have not yet reached the catastrophic coverage (in the “doughnut hole”)? The objective of the study was to influence discussion of how to improve Medicare drug coverage after the first year of its existence by providing timely methodologically rigorous evidence. Policy Summary: As of June 2006, 22.5 million seniors had enrolled in a Medicare Part D prescription drug plan (citation omitted). While surveys of Medicare Part D enrollees have been conducted, no study to date has evaluated the effects of enrollment in Medicare Part D on actual drug use and out-of-pocket spending by subjects who were previously without drug insurance (citation omitted). This study sought to assess the effect of Medicare Part D on the utilization of selected essential drugs among seniors previously lacking drug benefits using data from three large pharmacy chains. The researchers’ analysis of this large-scale natural experiment showed that the implementation of the Medicare Part D benefit was associated with a substantial reduction in out-of-pocket spending for prescription drugs, and a meaningful increase in use of selected essential medications, including statins, clopidogrel, and warfarin, in patients who opted to enroll in Medicare Part D plan in 2006. Relative to the projected 2005 trends, warfarin, clopidogrel, and statin use in 2006, measured in daily doses dispensed, increased by 5 percent, 18 percent, and 28 percent. Proton-pump inhibitors (PPIs), a medication class that is frequently overused, experienced the steepest increase in use (58 percent) with the introduction on Medicare Part D which could potentially reflect patients switching from over-the-counter PPIs to prescription PPIs (citation omitted). There was a rapid uptake of newly marketed generic medications by the Part D plans such as generic statins and clopidogrel. The benefit was not evenly distributed throughout the year. Among the 11 percent of patients who reached the coverage gap, utilization of clopidogrel, warfarin, and statins decreased at roughly 5 percentage points per month relative to the baseline trend. Consequently, overall utilization of statins and clopidogrel, drugs with proven effectiveness in reducing severe morbidity, declined to a volume almost as low as without Part D coverage. In conclusion, the first year of Medicare Part D was a mixed blessing for elderly patients without prior drug benefits. To the credit of the benefit, patients who enrolled were more likely to use essential medications, including clopidogrel, statins, and warfarin that are likely to result in better health outcomes. However, a sizable proportion of sicker patients reached the coverage gap in the first year and experienced a sharp drop in the use of the same drugs, which may result in worse health outcomes. Additionally, while the data suggest that private drug plans stimulate greater generic drug use, there is also evidence that coverage within these plans may not adequately distinguish between under-used essential medications and over-used medications. If the goal of the Part D benefit is to provide access to highly effective prescription drugs to seniors most efficiently, efforts to close the coverage gap, coupled with formulary designs that better differentiate between the value and effectiveness of covered medications, may assist in optimizing coverage and the health of our seniors.

Title: Defensive Medicine as a Response to Medical Malpractice Liability in the United States
Grantee Institution: University of Southern Maine
Principal Investigator: J. William Thomas, Ph.D.
Grant Period: September 01, 2006 - February 29, 2008
Email: jwthomas@usm.main.edu
Awarded: $247,111.00

Grant Description: What is the extent and costs of defensive medicine across the entire spectrum of medical care provided in the United States? In this first phase of the project, the researchers built databases supporting analysis of defensive medicine costs. In anticipated follow-on analyses, the researchers will use medical and pharmaceutical claims data from CIGNA Healthcare to identify those clinical conditions in which defensive medicine exists, estimate the frequency and costs of defensive medicine in those conditions, and identify the sources of defensive medicine (e.g., type of tests, procedures, and medications) in those conditions. The researchers will also analyze the relationship between the cost of episodes of care and “tort signals,” which include medical malpractice insurance premiums and frequency of malpractice claims. The objective of this study was to develop a data set permitting more accurate estimation of defensive medicine costs. Policy Summary: In the first of a two phase project, the researchers built a unique analytic database to support an investigation of defensive medicine costs in the United States. The database includes detailed specification of procedures performed and resources utilized during more than 35 million episodes of care, covering the entire spectrum of medical and surgical care. It also includes county-level data for nearly 1,000 counties, and an additional 9 states, on the average number of medical malpractice suits filed per year. And it includes medical malpractice insurance premiums faced by physicians of every specialty practicing in every county of 30 different states. In the second phase of the project, the researchers expect to be able to provide definitive answers to questions about the costs of services and resources associated with defensive medicine in the United States.

Title: Peer Pressure: Hospital Ownership Mix and Medical Service Provision
Grantee Institution: University of Michigan Law School
Principal Investigator: Jill R. Horwitz, Ph.D., J.D., M.P.P
Grant Period: September 01, 2006 - August 31, 2008
Email: jrhorwit@umich.edu
Awarded: $104,442.00

Does medical service provision by nonprofit hospitals vary with the for-profit share of the market? The researchers will examine approximately 40 medical services sorted into three profitability categories (relatively high, relatively low, variable) and address three related questions: (1) Do for-profit and nonprofit hospitals offer different kinds of services in markets with varying for-profit penetration; (2) Do shifts in for-profit market share change the propensity of nonprofit hospitals to offer profitable and unprofitable services; and (3) How does for-profit penetration relate to the overall percentage of hospitals providing different types of medical services? The objective of this project is to inform federal and state policymakers as they consider tax regulation and community benefit standards, as well as decision makers considering availability and access to services in conjunction with the negotiation of hospital conversion terms.

Title: Study on Informed Choice of Drug Coverage for Medicare Beneficiaries
Grantee Institution: University of Minnesota School of Public Health
Principal Investigator: Bryan E. Dowd, Ph.D.
Grant Period: August 01, 2006 - September 30, 2007
Email: dowdx001@umn.edu
Awarded: $106,009.00

Grant Description: Is Medicare Part D drug benefit a cost-effective option for healthy Medicare beneficiaries? The researchers hypothesized that seniors use current expenditures to estimate their need for coverage, which could result in a significant underestimate of the true risk. The objective of the project was to evaluate the cost-effectiveness of Medicare Part D for healthy beneficiaries and provide accurate lifetime drug cost information to help seniors make more informed decisions regarding Medicare Part D coverage. Policy Summary: Beginning in 2006, Medicare’s Part D benefit offered outpatient prescription drug coverage to beneficiaries. Medicare beneficiaries have a choice to enroll in Part D drug coverage as soon as they are eligible for Medicare, or to postpone enrollment in Part D until they contract a drug-intensive condition. Postponed enrollment saves the beneficiary the cost of premiums, but adds the cost of a late enrollment penalty if the beneficiary decides to enroll in Part D at a later date. Immediate enrollment clearly is of interest of beneficiaries who have a drug-intensive condition because premiums are not risk-rated and are subsidized heavily by the government. The enrollment decision for a healthy beneficiary is less clear. In order to make an informed enrollment decision, healthy Medicare beneficiaries must have estimates of (a) the lifetime probability that they will contract a drug-intensive condition; (b) their length of survival with the condition; (c) their expected annual drug expenditures with the condition, with and without coverage; and (d) the amount of the late enrollment penalty. Prior to this study the first three estimates were not readily available to beneficiaries. Lifetime probabilities of contracting drug-intensive conditions were available for only a few conditions. Using MCBS data from the period 1993 to 2002, the researchers combined estimates of these cost components to obtain estimated lifetime out-of-pocket expenditures on outpatient prescription drugs, premiums and late enrollment penalties for healthy 65-year-old Medicare beneficiaries if they purchase Part D as soon as they are eligible versus waiting until they contract a drug-intensive condition. The researchers found that the late enrollment penalty provides an important incentive for early enrollment. Eliminating the late enrollment penalty would create a significant cost advantage for postponed enrollment, particularly for men. We also found that the advantage of coverage for healthy beneficiaries – lower out-of-pocket costs – is offset to a degree by the increased spending that results from having prescription drug coverage (moral hazard). Our analysis provides information on only one input to beneficiaries’ Part D enrollment decisions – out-of-pocket spending. Other important factors include the beneficiary’s aversion to risk and the value they place on the additional expenditure on drug consumption induced by Part D coverage, but these factors also favor immediate purchase. The researchers’ estimates and microsimulation model provide a flexible analytic platform that could be used to simulate a variety of policy options regarding the structure of the Part D benefit.

Title: Medicare Beneficiaries Response to Coverage Gaps Versus Actuarially Equivalent Continuous Coverage for Prescription Drugs
Grantee Institution: University of Maryland at Baltimore
Principal Investigator: Bruce Stuart, Ph.D.
Grant Period: July 01, 2006 - June 30, 2007
Email: bstuart@rx.maryland.edu
Awarded: $157,992.00

Grant Description: Are Medicare beneficiaries likely to react differently when faced with the doughnut-hole “gap” in Medicare Part D than they would with actuarially equivalent continuous coverage? The researchers challenged the hypothesis that actuarially equivalent, but structurally different cost-sharing arrangements have similar impacts on beneficiaries' prescription drug utilization patterns. They examined whether the relationship between use and benefit structure is sensitive to the overall generosity of insurance coverage. This project built on Stuart's previous HCFO grant assessing the effects of gaps in drug coverage for Medicare beneficiaries with common chronic diseases. That study found that gaps in drug coverage lead to reduced utilization rates and that the effects are magnified for those with common chronic diseases such as diabetes, COPD, and mental illness. This project extended the understanding of how Medicare beneficiaries react to benefit structure, but will be useful to private payers as they search for a cost-sharing formula that contains costs while minimizing disruption in medication regimens. The objective of this project was to provide policymakers with a better understanding of how Medicare beneficiaries behave when faced with alternative cost-sharing structures. Policy Summary: Perhaps the most controversial aspect of the Medicare Part D prescription drug benefit is the large gap in coverage known as the “doughnut hole.” There is a near universal belief that the doughnut hole reduces utilization of prescription drugs among those affected by it. But all forms of cost sharing do that. An important unanswered question for policymakers is whether the precipitous increase in out-of-pocket cost due to the gap has a fundamentally different impact on demand compared to continuous coverage of equal generosity. In other words, would it matter if Medicare filled the doughnut hole but increased the coinsurance rate by an actuarially equivalent amount? This study compared medication spending patterns for Medicare beneficiaries who experienced gaps in coverage to those with continuous prescription benefits from various sources over the period 1997 through 2003. Unlike prior published studies, the authors controlled for the annual generosity of prescription benefits for both groups thereby permitting conditional estimates of the impact of coverage gaps net of own-price differentials. Consistent with previous research, the authors found that Medicare beneficiaries who experience coverage gaps spend less on drug purchases compared to beneficiaries with continuous coverage and that the effect is strongly associated with gap duration. They also confirmed that the demand for prescription drugs is sensitive to own-price. However, in models containing plan generosity and gap measures (plus other covariates), they found that generosity of coverage dominates gap effects for every type of drug plan and level of drug spending analyzed. There was evidence that gaps independently reduce drug spending, but the impact is very small and statistically significant only for beneficiaries in employer-sponsored plans. Moreover, the authors found no evidence of an independent gap effect for beneficiaries spending above the equivalent of the Part D cap level of $2,250 in 2006 dollars. Another noteworthy finding from the study is that Medicare beneficiaries with high levels of prescription drug spending are more price sensitive than those with lower spending levels. The estimated price elasticity of demand for individuals spending under $2,250 in 2006 dollars (0.34) is within the range reported in the literature, but the estimate for individuals spending over the 2006 cap amount was substantially higher (0.56). These differential elasticities are important from a policy standpoint because they imply that it would cost Medicare more to fill in the doughnut hole than the program would save by raising the coinsurance rate by an actuarially equivalent amount.

Title: Evaluation of Maine's Dirigo Health Reform
Grantee Institution: Mathematica Policy Research, Inc.
Principal Investigator: James M. Verdier, Ph.D.
Grant Period: July 01, 2006 - February 29, 2008
Email: jverdier@mathematica-mpr.com
Awarded: $234,530.00

Grant Description: What are the program accomplishments and vulnerabilities of DirigoChoice, a subsidized health insurance program which is the centerpiece of Maine’s health care reform legislation, Dirigo Health. While it was too early in the program’s implementation to measure Dirigo’s ultimate impact on coverage, cost, and quality, the researchers evaluated program accomplishments and vulnerabilities. Specifically, the following questions were addressed: 1) Are low wage workers and their families more likely to take up health insurance coverage, and does this affect their ability to get care when needed? 2) Are small employers more aware of and likely to offer health insurance to their employees? What factors of the program are more successful at enrolling small businesses and how satisfied are employers with the program? 3) How is the DirigoChoice “savings offset payment” calculated, and is this revenue stream sustainable? 4) Is this approach to insurance coverage expansions replicable in other states? The objective of this project was to assess the progress of Maine’s approach to coverage expansion and to determine if DirigoChoice is sustainable and replicable. Policy Summary: In 2003, Maine adopted the Dirigo Health Reform Act, which aimed to make affordable health care coverage available to every Maine citizen by 2009, slow the growth of health care costs, and improve the quality of care. This study examined interim indicators of Maine’s progress in providing affordable health insurance coverage after two years of program implementation, midway between the legislation’s adoption and its 2009 goal. The evaluation focused on the state’s progress in implementing Dirigo Health’s two major coverage initiatives: 1) DirigoChoice, a subsidized health insurance program, initiated in January 2005, for eligible small businesses, self-employed workers, and individuals; and 2) an increase in the annual income eligibility level (from 150 percent to 200 percent FPL) in the state’s Medicaid program (called MaineCare) for parents of dependent children under age 19. Since enacting comprehensive health care reform in 2003, Maine’s Dirigo Health program has helped expand coverage for low- and moderate-income individuals. By September 2006, about 11,100 individuals were enrolled in DirigoChoice and another 5,000 in MaineCare’s eligibility expansion for low-income parents of dependent children. While these reform programs are making health coverage more affordable to low-income individuals, small firms, and sole proprietors, with subsidies targeting those most in need, by late 2006, the initiatives had enrolled less than 10 percent of previously uninsured residents. To pay for this expanded coverage, Maine has utilized a “savings offset payment (SOP)”, an approach that captures savings to the overall health care system from lower uncompensated care costs and other cost saving measures, through assessments on insurance claims. However, the funds raised thus far have been insufficient to pay for greater subsidized enrollment in Dirigo programs, leading to a search for other financing sources to sustain the program. The researchers observed a pattern contributing to higher than expected costs for the state’s implementation of the program: more people with very low income enrolled in a fully subsidized health plan (Medicaid) than in one requiring enrollee contributions (DirigoChoice), even when premiums and deductibles are heavily subsidized. In addition, more people with income below 150 percent of the federal poverty level enrolled in DirigoChoice than projected, requiring greater subsidies from the state. The state has found that raising funds to finance such subsidies is politically difficult, regardless of the source. With regard to the state’s effort to encourage small employers to offer health coverage, the researchers found that the 700 small firms which enrolled in DirigoChoice as of September 2006 composed only 2.5 percent of eligible businesses. Among unenrolled employers surveyed, very small firms tended to find the product unaffordable. Accordingly, states that want to increase, rather than simply maintain, employer offer rates must consider stronger incentives to persuade employers to offer and contribute to employee health insurance costs. In states with high health care costs, employer mandates may pose an unaffordable burden on small firms unless overall system costs can be brought under control. Maine’s experience implementing the Dirigo Health program provides important lessons for other states working to expand insurance coverage.

Title: Impact of the Washington State Diabetes Collaborative on Patient Health and Economic Outcomes
Grantee Institution: Washington State Department of Health
Principal Investigator: Amira El-Bastawissi, Ph.D.
Grant Period: July 01, 2006 - February 28, 2009
Email: Amira.El-bastawissi@DOH.WA.GOV
Awarded: $349,927.00

How do the clinics and primary care physicians participating in Collaborative III of the Washington State Diabetes Collaborative affect the health and economic outcomes of diabetic patients? The collaborative combines elements from Collaboratives of the Institute for Healthcare Improvement and the Chronic Care Model developed by Edward Wagner and colleagues. The researchers would capture the later-stage results of the collaborative, “thus offering an impact evaluation of a mature system-change model.” In particular, the researchers would explain how different components of the collaborative approach to diabetes care management directly affect health and economic outcomes (utilization and costs). The objective of the study is to better inform health plans, public payers, health care providers, and employers about the economic impact of the collaborative, to inform their quality improvement, benefit design, and payment decisions for diabetic patients.

Title: Measuring the Value of Public Health Systems
Grantee Institution: The University of Michigan
Principal Investigator: Peter Jacobson, J.D.
Grant Period: March 01, 2006 - May 31, 2007
Email: pdj@umich.edu
Awarded: $125,000.00

Grant Description: How can the value of governmental public health systems (GPHSs) be defined and measured? The GPHS is a state and local governmental apparatus designed to assess and respond to threats to the public’s health through population-based and individual health services. The researchers examined how other public or quasi-public entities define and measure value; the methodologies used to measure value; the criteria for determining and measuring value; and how measuring the value of these services will affect other important dimensions of public health systems, such as accountability. The objective of this study was to develop ways for policymakers to incorporate value measures for governmental public health system activities into resource allocation decisions. Policy Summary: Governmental public health systems (GPHS), the state and local governmental apparatus designed to assess and respond to threats to the public’s health, face budgetary constraints and chronic underfunding. To help GPHS efficiently allocate scarce resources and demonstrate measurable contributions to the population’s health, this study set out to explore measuring the value of public health systems. The methodology for the study consisted of: 1) several literature syntheses focusing on measurement techniques in health economics and public health; 2) economic evaluation analyses of how other public and quasi-public systems define and measure value; and 3) semi-structured interviews with 46 national, state, and local public health practitioners, policymakers, and academics to gather information on participants’ views of defining and measuring the value of GPHS. Results from this study indicate that the methods for measuring value discussed in the public health and health economics literature do not match the real-world practice of measuring value in public health settings. Further, the literature on other sectors lacks definitions or frameworks that can be easily extrapolated to public health. The interviews revealed that, on occasion, public health practitioners have used cost-accounting, performance-based contracting, logic models, performance standards, and output numbers of services provided to measure value. However, respondents discussed concerns with defining and measuring value. The most common challenge mentioned by interview respondents was the lack of core data sets and agreement on outcome measures. Other key concerns were the lack of staff resources and limited knowledge of how to use resources effectively. Overall, attribution was identified as the largest barrier to measuring value, namely the inability to demonstrate that the investment in public health contributes to decreased morbidity and mortality. Based on the results, the investigators designed a new framework for measuring value and determining program priorities for public health agencies. Using the cost-accounting approach, the developed framework considers four component elements to determine program priorities: 1) external factors that must be taken into account; 2) key internal actions that an LHD must take; 3) the appropriate quantitative measures to assess value; and 4) ways to communicate value to politicians and to the public. Interviews from this study reflected that the moral imperative of public health efforts is no longer a compelling rationale for investments in public health services. Tangible evidence and measurable results are vital for funding decisions. It is thus necessary to provide policymakers and the public with a better understanding of the quantitative value of public health services. The proposed framework can help GPHS demonstrate measurable contributions to the population’s health. The framework can act as a guiding mechanism for developing better outcome measures and improved data collection and analysis. It can assist in developing general measures of the value of GPHS, creating guidelines for making tradeoffs at the margin between programs, and identifying ways to incorporate tangibles and intangibles. Overall, the new framework can facilitate communication between policymakers and practitioners, creating the potential for more informed and effective funding decisions in GPHS.

Title: Causes and Consequences of Change in Local Public Health Spending
Grantee Institution: University of Arkansas for Medical Sciences
Principal Investigator: Glenn Mays, Ph.D., M.P.H.
Grant Period: March 01, 2006 - August 31, 2007
Email: gpmays@uams.edu
Awarded: $115,973.00

What are the causes and consequences of changes in local public health agency spending? In particular, researchers addressed the following questions: 1) How have local health spending levels and funding sources changed over the past decade? 2) How have disparities in spending levels changed among communities defined by population size, rural/urban location, socioeconomic and racial/ethnic composition, and structural characteristics of the public health system; 3) To what extent have economic, demographic, and policy-related factors precipitated change in local public health spending levels and funding sources over this period; and 4) To what extent are changes in local public health spending associated with changes in local population health status and disease burden. The objective of this study was to assist policymakers at the federal, state, and local levels in crafting desirable strategies for funding local public health services and to provide insight into the effects of changes in spending on population health, correcting existing gaps and disparities in the allocation of resources.

Title: Involving Consumers in Physician Choice: Making Data into Useable Information for Chronically Ill Patients in Consumer-Directed Health Plans
Grantee Institution: Massachusetts General Hospital
Principal Investigator: David Blumenthal, M.D.
Grant Period: March 01, 2006 - December 31, 2008
Email: dblumenthal@partners.org
Awarded: $215,448.00

What tools will consumers need to help select high performing physicians, within CDHPs? Physician performance data is one of the tools that can be used to help consumers make these decisions. However, there are important opportunities and challenges facing consumer-directed health plans (CDHPs) trying to engage consumers in using physician performance data (PPD). The specific aims of the project were: 1) to develop methods for informing consumers about physician clinical performance; 2) to test the effectiveness of these methods in helping consumers with chronic conditions in CDHPs to make an informed choice of primary care physician (PCP); 3) to explore how consumer characteristics affect their ability to understand PPD and their response to that data. The objective of this study was to understand how and whether PPD can be appropriately and effectively used in CDHPs.

Title: Hospital Pricing and the Uninsured
Grantee Institution: RAND
Principal Investigator: Glenn Melnick, Ph.D.
Grant Period: February 01, 2006 - January 31, 2008
Email: king@rand.org
Awarded: $249,823.00

Are hospital prices to the uninsured systematically different from prices to the insured by examining the trends in charges (list prices), net revenues (net prices)? Is there a relationship between the two, while controlling for other factors that may affect prices at the hospital level? This study addressed the following questions: (1) Is there evidence that uninsured patients are charged more than insured patients for similar services? (2) Is there evidence that uninsured patients pay more than insured patients for similar services? (3) If uninsured patients pay higher prices than insured patients are the differences systematically related to factors such as type of hospital or financial status of the hospital? (4) For hospitals that are collecting higher prices from uninsured patients, what is the order of magnitude of these additional revenues and how important are these higher prices to overall profitability and financial status of the hospital? The objective of this project was to inform policymakers and hospital leaders about the effects and implications of current hospital pricing practices on the uninsured, on the future of high deductible health plans, and on hospital finances.

Title: Regionalization in Local Public Health Systems: Variation in Rationale, Implementation, and Impact on Public Health Preparedness
Grantee Institution: RAND
Principal Investigator: Michael Stoto, Ph.D.
Grant Period: February 01, 2006 - April 30, 2007
Email: mstoto@rand.org
Awarded: $147,325.00

Most states have responded to the increased interest in and funding for public health preparedness by setting up regional structures, but the rationale for these structures, the way they are implemented, and presumably the impact of this organizational change vary considerably. In order to learn from areas that have adopted a regional approach, the researchers used comparative case studies in Massachusetts, Northern Illinois, Nebraska, and the Washington D.C. National Capital Region to (1) document the variation in the rationale for creating regional public health structures; (2) understand how these structures have been organized, implemented, and governed; and (3) assess the current and likely impact of regional structures on public health preparedness and public health systems more generally. The impetus for forming regions was some combination of the following: a crisis or perceived need for a coordinated response, a need to build local public health capacity, or an effort to use federal preparedness funds more efficiently. The relationship between public health regions and geopolitical jurisdictions in which they sit was complex. Some involve combinations of local health departments, and one set up new health departments for groups of counties. The National Capital Region has multiple definitions, including some that crossed state lines. The regions vary in terms of their congruence with regional structures for partner agencies such as emergency management agencies as well as hospital and health services markets and organizational structure. Some of the regions focus on building formal organizational relationships to coordinate and sometimes standardize preparedness and response activities, and sometimes build regional capacity, while others focused on building informal professional networks. It is not clear which approach will have the largest effect on building social capital. Whatever the approach is chosen, however, it is clear that strong leadership and trust are required for effective planning, emergency response, and sustainability. Does regionalization improve emergency preparedness? Logically, regionalization allows for more efficient use of resources and since disease outbreaks do not represent geopolitical boundaries coordination is needed. The case studies demonstrated progress in terms of planning and coordination; memoranda of understanding; regional capacity-building, training, and exercises; and development of professional networks. The case studies also showed effects in terms of the public health response to the flu vaccine shortage in 2004 and anthrax and tularemia alarms in the National Capital Area in 2005. Does regionalization improve public health generally? Logically, the same arguments about sharing resources and coordinated response apply. Also, the case studies identify a number of areas where regional capacities address other needs. It seems likely that preparedness concerns are forcing communities to think about public health structures in a way that has not been done in decades, and that network development may be creating social capital that helps with other concerns. But concerns that preparedness efforts were drawing resources and attention from other areas of public health were also heard.

Title: Structural Capacities, Processes and Performance of Essential Public Health Services by Small Local Public Health Systems
Grantee Institution: University of Wisconsin
Principal Investigator: Susan Zahner, Ph.D.
Grant Period: February 01, 2006 - July 31, 2009
Email: sjzahner@wisc.edu
Awarded: $105,453.00

What factors influence the performance of small local public health agencies (LPHA) in Wisconsin? The researchers will identify key factors by determining the contributions of specific structural capacities and processes in providing three public health services: 1) monitoring health status, 2) mobilizing community partnerships, and 3) developing policies and plans. The objective of the study is to gain insight into specific factors that can improve the quality of small local public health systems in order to assist policymakers and administrators with targeting resources and technical assistance.

Title: The Effects of Health Plan Concentration on Hospital Prices, Costs, Capacity, Charity Care, and Outcomes
Grantee Institution: RAND
Principal Investigator: Glenn Melnick, Ph.D.
Grant Period: February 01, 2006 - January 31, 2009
Email: king@rand.org
Awarded: $374,137.00

Do differences in health plan concentration affect hospital performance in important areas, including prices, costs, staffing, capacity, charity care, and patient outcomes? In particular, they will address the following questions: 1) Do increases in health plan concentration slow hospital price growth? 2) Does increased health plan concentration lead to lower hospital growth? 3) Do increases in health plan concentration lead to reduced capacity in terms of closure or reductions of specialty units in hospitals (such as ER or trauma center) and/or reduced hospital staffing? 4) Do increases in health plan concentration affect patient outcomes? 5) Do hospitals reduce charity care in response to increased health plan concentration? 6) Do any of the above observed effects of health plan concentration differ depending on the level of managed care penetration, differences in dominant form of managed care (HMO vs. PPO), or differences in markets dominated by for-profit compared to not-for-profit health plans? The objective of this project is to inform the policy debate about whether health plan consolidation is welfare decreasing or welfare increasing.

Title: Effect of State Parity Laws on Children with Mental Health Care Needs
Grantee Institution: Yale University
Principal Investigator: Susan Busch, Ph.D.
Grant Period: February 01, 2006 - July 31, 2007
Email: susan.busch@yale.edu
Awarded: $64,871.00

What is the impact of state mental health parity laws on children? While they acknowledge that prior studies have evaluated these laws, they indicate that their study would differ due to its focus on children (rather than adults). In addition, they state prior multi-state studies looked at utilization and access and did not evaluate the impact of state parity laws on the economic burden of seeking mental health treatment. They propose to examine how state parity laws affect out-of-pocket health care spending and other measures of the financial burden of treatment costs on families. The objective of this study is to inform the debate about the impact of mental health parity laws at both the state and federal levels.

Title: Strategies to Reduce Health Care Providers’ Administrative Burden Related to Quality Performance Measurement and Reporting
Grantee Institution: Center for Studying Health Systems Change
Principal Investigator: Paul Ginsburg, Ph.D.
Grant Period: February 01, 2006 - July 31, 2007
Email: pginsburg@hschange.org
Awarded: $99,518.00

How do quality reporting requirements affect hospitals? What strategies do hospitals and quality reporting organizations use to minimize burden? What forces facilitate or impede these efforts? Using a case study approach and building on the HSC’s ongoing tracking of local health care markets across the country, the researchers focused on four communities (Boston, Indianapolis, Seattle, and Orange County, CA) with a high level of reporting and performance measurement activity. In these communities, the researchers: (1) confirmed the programs that hospitals reported participating in during the Round 5 site visits; (2) confirmed what the reporting requirements are for each program based on background work for the project; and (3) indicated the ways in which hospitals believe reporting requirements of the programs differ enough to meaningfully increase burden. The objective of this study was to explore the burden on hospitals of quality reporting in four communities, extrapolate lessons learned for other communities with similar attributes, and draw implications for policymakers and private sector decision makers seeking to reduce administrative burdens associated with this type of reporting.

Title: Single Specialty Hospitals and Competition in the Hospital Industry
Grantee Institution: Boston University
Principal Investigator: Kathleen Carey, Ph.D.
Grant Period: February 01, 2006 - July 31, 2007
Email: kathleen.carey@med.va.gov
Awarded: $91,680.00

Grant Description: Do specialty hospitals enhance the competitive process in the U.S. hospital industry? The researchers addressed the economic foundations underlying the growing specialty hospital phenomenon. In particular, they addressed the following research questions: 1) How do specialty hospitals compare with community hospital competitors on efficiency? 2) Do specialty hospitals capture economies of scale compared with community hospitals (for some services)? Between inpatient and outpatient services? 3) Do specialty hospitals charge higher prices than community hospitals to non-Medicare patients for the same services? And 4) Does the performance and behavior of multi-hospital systems differ from freestanding specialty hospitals? How do specialty hospitals compare with for-profit community hospital competitors? The objective of this study was to provide evidence on the economic logic of organization of hospital services and specialty hospitals to inform the Congressional debate. Policy Summary: This study addresses the question of whether physician-owned hospitals limited to cardiac, orthopedic and surgical services are more cost efficient than full-service hospitals with whom they compete locally. Key results, obtained through a stochastic frontier cost function analysis, are the following: •Overall, greater inefficiency was observed in specialty hospitals than in their full-service hospital competitors •This effect appeared among orthopedic and surgical specialty hospitals, but not cardiac specialty hospitals •In both respects, the results are consistent with earlier conclusions reached by MedPAC •Specialty hospitals averaged a 42.9 percent level of inefficiency (measured as the percentage higher costs observed in specialty hospitals relative to the most cost efficient hospital in the sample) compared to an average of 27.4 percent inefficiency in competitor hospitals •The higher inefficiency measures among specialty hospitals are driven by orthopedic and surgical hospitals, which as a group, averaged 46.8% inefficiency (compared to 28.1 percent for cardiac specialty hospitals) •There was no significant difference between cardiac specialty hospital inefficiency measures and those of competitors (however there were few observations on cardiac specialty hospitals on which to achieve a statistical effect) Considerable policy controversy surrounds the expansion of specialization in the hospital industry through physician ownership of small hospitals specializing in highly profitable service areas. Opponents claim that specialty hospitals engender unfair competition by targeting patient referrals, offering services leading to over-utilization, and limiting the ability of full-service community hospitals to cross-subsidize unprofitable services. Advocates maintain that by focusing on a limited range of services, specialty hospitals offer better care and provide services more efficiently, promoting competition that stimulates higher quality of performance among their local community hospital competitors. This study does not support the notion that specialty hospitals are more cost efficient than their full-service competitors. An additional policy finding of note is that inefficiency measures appear to differ significantly across specialty hospital type. The debate over specialty hospitals has focused on cardiac, orthopedic and surgical hospitals and most of the policy recommendations to date target these three categories of physician-owned specialty hospitals as a group. There is a broad array of differences between cardiac and orthopedic/surgical hospitals in terms of size, extent of physician ownership, and payer mix. The finding of efficiency differences across specialty hospital types complement these structural and operational distinctions, and suggest that policymakers should remain open to the notion that specialty hospitals are not all alike, and should not necessarily be treated in the same way.

Title: Duration Limitations and Adherence to Chronic Medication
Grantee Institution: University of North Carolina at Chapel Hill
Principal Investigator: Marisa Domino, Ph.D.
Grant Period: January 01, 2006 - June 30, 2008
Email: mdomino@email.unc.edu
Awarded: $181,147.00

What is the impact of supply restrictions for pharmacy benefits in the Medicaid program in North Carolina on medication adherence, health services use, and the cost impact of the change on the Medicaid program? (North Carolina Medicaid introduced a 34 days supply limit in July 2001.) Experience in North Carolina will be compared with the experience in Georgia, where there was no change in the days supply requirements. The study will focus on individuals who use medications for chronic conditions in the following categories: anti-hypertensives, anti-diabetic medications, lipid-lowering drugs, anti-psychotics, anti-depressants, and seizure-disorder medications. The objective of this study is to inform state-based and private sector initiatives to constrain pharmaceutical costs, and suggest directions for future research to advance the understanding of how prescription drug policies may affect patient behavior, care processes, and costs in Medicaid beneficiaries and other insured populations.

Title: Uptake and Impact of Health Risk Appraisals
Grantee Institution: Harvard University of Public Health
Principal Investigator: Meredith B. Rosenthal, Ph.D.
Grant Period: December 01, 2005 - May 31, 2007
Email: mrosenth@hsph.harvard.edu
Awarded: $156,296.00

Employers and health plans are increasingly looking to individual health behavior change as a means for improving the quality of health care and reducing its cost. The focus on employees rather than providers as the fulcrum for reform is concordant with the broader trend in health benefits towards enabling informed consumerism in health care. Health Risk Appraisals (HRAs), which ascertain information about health status, behavior, and health history, have been promoted as the entry point for many behavioral interventions and an element of consumer engagement. HRAs are widely used in the United States. One recent national survey found that 48 percent of large employers offered an HRA to employees; 20 percent provided them with a financial incentive to complete the HRA. In this study, the researchers explored the potential role of HRAs as a tool for managing health care quality and costs in employer-sponsored insurance using HRA responses and health care billing data from CIGNA HealthCare, one of the largest national health plans in the United States. They examine patterns of voluntary HRA uptake and then address whether those who complete an HRA (“HRA-takers”) change their health care utilization patterns differentially relative to a comparison cohort. The researchers’ analyses suggest that there are discernable patterns of self-selection among HRA-takers. In particular, women, enrollees of consumer-directed health plans and PPOs, and healthier people are more likely to complete an HRA. Individuals who completed an HRA were less likely however to have received recommended preventive or chronic care in the previous year, despite equal numbers of applicable care recommendations. They also found evidence of changes in health care utilization and quality for HRA-takers, including increases in cervical cancer screening, office visits, and participation in asthma and diabetes disease management. The researchers’ results suggest that HRAs can influence behavior among enrollees of employer-sponsored insurance plans, despite the fact that healthier individuals are more likely to complete them. While increases in office visits may not be unambiguously good from the payer’s perspective, increases in cancer screening and disease management are clearly in line with the goals of the HRA. Further analysis is needed to examine health outcome and productivity gains that might be associated with these behavior changes.

Title: Costs and Benefits of Physician Practices' Interactions with Health Plans
Grantee Institution: University of Chicago
Principal Investigator: Lawrence Casalino, MD, Ph.D.
Grant Period: October 01, 2005 - September 30, 2007
Email: casalino@health.bsd.uchicago.edu
Awarded: $100,160.00

What are costs to physicians of administrative complexity in their interaction with payers? The researchers are examining the administrative burden associated with physician practice interactions with health plans using three approaches: (1) they are developing a national estimate of the administrative “costs” for U.S. private physician practices generated by their interactions with multiple health plans/payers; they will simultaneously develop estimates of the costs for analogous interactions in Canadian physician practices and for Kaiser Permanente practicing physicians; (2) they are also developing order of magnitude estimates of the “benefits” of administrative complexity; and (3) they are surveying U.S. health plan and physician practice leaders to determine if there is common ground on eliminating or simplifying administrative complexity. The objective of this project is to provide the best estimate to date of the costs to physicians of administrative complexity in their interaction with payers and to give a qualitative sense of the extent to which physicians’ costs associated with administrative complexity are balanced with benefits.

Title: Administrative Costs Associated with Third Party Payment
Grantee Institution: University of California, San Francisco
Principal Investigator: Harold Luft, Ph.D.
Grant Period: September 01, 2005 - July 31, 2007
Email: hluft@itsa.ucsf.edu
Awarded: $115,700.00

What are the functional components and attendant costs of payment administration in an outpatient setting, the Palo Alto Medical Foundation (PAMF)? Researchers examined the procedures to obtain payment for delivered services, as well as activities required by insurers, such as credentialing and reporting. The researchers addressed two research questions: (1) what administrative functions are performed, and at what cost, to obtain third-party payment in a large, multi-specialty medical group practice; and (2) how would altering insurance or payment mechanisms affect administrative functions and costs? Because the PAMF has three divisions with notable operating differences, the researchers had a unique opportunity to explore what, if any, advantages may accrue from incorporating health information technologies into billing and insurance related functions within the current insurance system. The objective of this project was to provide policymakers with estimates to assess the cost implications of insurance reform options, ranging from specific changes, such as standard billing, to broad reforms such as expansion of public insurance.

Title: Administrative Simplification Challenges and Opportunities: A Physician Organization's Perspective
Grantee Institution: Massachusetts General Physicians Organization
Principal Investigator: Gregg S. Meyer, MD
Grant Period: August 01, 2005 - July 31, 2007
Email: gmeyer@partners.org
Awarded: $100,315.00

How does administrative complexity affect a large physician organization? The researchers examinined administrative complexity from the perspective of a large physicians organization, the Massachusetts General Physicians Organization (MGPO). They addressed the following research questions: (1) what is the magnitude of the burden and growth trajectory of administrative complexity on physicians; (2) which components account for the greatest proportion of the burden, and which are the most amenable to change; (3) how is administrative burden reflected; (4) who currently bears the burden and how can that burden be made more transparent; (5) what components of complexity do and do not offer value; (6) what is the impact of quality, particularly pay for performance contracting; (7) which components are best addressed by information technology and what has been the impact of HIPAA standards; (8) what are the potential savings through simplification and standardized processes; and (9) what processes will facilitate addressing complexity at the physician services level? The objective of the project was to examine why market forces have increased, rather than mitigated, administrative complexity and examine whether non-market-based solutions may offer opportunities for addressing the problem.

Title: Pilot Study of Variations in Medicare Spending per Beneficiary
Grantee Institution: The Urban Institute
Principal Investigator: Jack Hadley, Ph.D.
Grant Period: May 01, 2005 - April 30, 2006
Email: jhadley@ui.urban.org
Awarded: $135,495.00

Does variation in medical care spending by individual elderly Medicare beneficiaries influence their health? This pilot project will identify policy, patient, and market factors that influence individuals’ Medicare and total health care spending. The researchers will focus primarily on identifying whether there are factors that have a significant impact on medical spending and are arguably independent of health status. Such factors could be used to construct an instrumental variable for medical care spending in a follow-on study. This research will provide a better understanding of the influence of factors that affect individual health care spending so policymakers can develop incentives to reduce “unnecessary” spending without harming beneficiaries’ health.

Title: The Impact of Multiple Consumer Driven Health Plans Beyond Early Adoption: Here to Stay or Market Fad?
Grantee Institution: Regents of the University of Minnesota
Principal Investigator: Stephen M. Parente, Ph.D.
Grant Period: December 01, 2004 - March 31, 2008
Email: sparente@csom.umn.edu
Awarded: $499,103.00

How will consumer-driven health plans (CDHPs) impact quality of care, cost, and utilization of health care in the long-term? Will the impacts vary by CDHP design? Researchers from the University of Minnesota are exploring the long-term impact of consumer-driven health plans (CDHPs), specifically their impact on quality of care, cost, utilization, and variation in these outcomes by different CDHP designs, including Health Savings Accounts (HSAs). Building on their current HCFO grant, the researchers are examining claims and employer data from the six employers included in their ongoing study (offering Definity Health) and six new employers using CDHPs from Destiny Health, Blue Cross Blue Shield and UnitedHealth Group. They are examining four research questions: (1) what is the long-term effect of CDHPs on health care cost and use; (2) are other CDHPs, including newly legislated HSAs, producing different results than Definity Health's CDHP; (3) what is the quality of care for CDHP enrollees with chronic illnesses such as diabetes and heart disease; and (4) how do consumers manage their CDHP spending accounts in the long run, and can this knowledge be used to design an "ideal" CDHP? The objective of this study is to provide objective empirical analyses of the impacts of CDHPs and newly developing HSA products on consumers.

Title: Testing the Value of Patient-reported Physician Quality Information for Quality Improvement and Consumer Choice
Grantee Institution: Pacific Business Group on Health
Principal Investigator: Ted von Glahn
Grant Period: December 01, 2004 - June 30, 2006
Email: tvonglahn@pbgh.org
Awarded: $89,676.00

Grant Description and Policy Summary: Physicians and medical educators have repeatedly acknowledged that the art of effective communication skills with patients is not widely taught in medical schools or continuing medical education courses for physicians. To test the extent to which it is possible to improve a physician’s communication skills, the researchers conducted a controlled intervention designed to improve the quality of physician-patient relationships. The intervention group consisted of 10 Californian physicians who scored at or below the state 25th percentile of performance on a quality of physician-patient interaction measure. The control group included 11 physicians who also scored below the 25th percentile of performance. The intervention group participated in a workshop and two group teleconferences on communicating with patients. Physicians in the intervention group were taught to use an “agenda-setting” technique to initiate the patient encounter and gather information in order to prioritize health issues for visits. To assess the effectiveness of the intervention, the researchers conducted one pre-intervention survey and two post-intervention surveys of patients. Patient experience scores on the survey were compared between the intervention and the control groups. There was statistically significant improvement in intervention physicians’ ability to “explain things in a way that was easy to understand” and marginally significant improvement in the overall quality of physician-patient interactions compared to control group physicians. However, there were no significant differences in scores related to organizational access, care coordination, or office staff interactions. The results indicate that a simple and modest intervention (such as a workshop and two follow-up teleconferences) with physicians on communication techniques can have a positive impact on patients’ experiences with care. Practicing physicians who lack communication skills may end up adding time, cost, and discontent to the overall clinical encounter with patients. There is also evidence suggesting that poor communication by the physician with patients can lead to malpractice claims. As health care in this country is becoming more patient-centered, it is logical to create techniques which support a patient-centered clinical encounter. The study suggests that it is possible to modify physicians’ communication habits. If an effort is made to improve physicians’ ability to communicate with patients, patients may be more likely to have enhanced clinical encounters.

Title: National Security and Child Health: Reexamining the Role of Medicaid and EPSDT
Grantee Institution: George Washington University
Principal Investigator: Sara Rosenbaum, J.D.
Grant Period: December 01, 2004 - September 30, 2005
Email: sarar@gwu.edu
Awarded: $99,996.00

What is the relationship between Medicaid and the young adults (and their families) that serve in the military? The researchers are studying this relationship. They note that this relationship is important since new recruits are likely to come from lower income families and military pay renders many families low income, increasing the likelihood that applicants and enlistees have been "touched by" Medicaid over their childhood and adolescence. In particular, the researchers are synthesizing: 1) what is known about the economic status of members of the military during their pre-enlistment lives; and 2) what is known about the healtth status of applicants and enlistees and their families. Through interviews, they are also identifying common experiences of communities surrounding five to seven of the largest military bases in terms of healthcare needs, Medicaid enrollment, and utilization. The objective of this study is to inform the policy debate regarding the budget and program design for Medicaid.

Title: Improving Access to Improve Quality: Evaluation of an Organizational Innovation
Grantee Institution: University of Washington
Principal Investigator: David Grembowski, Ph.D.
Grant Period: November 01, 2004 - November 01, 2006
Email: grem@u.washington.edu
Awarded: $655,910.00

Can quality be improved by creating patient-centered delivery systems? The researchers evaluated an initiative comprising six patient-centered changes in Group Health Cooperative's (GHC's) delivery system. The six changes, designed to improve quality by increasing enrollee access to physicians and information, were: 1) same-day appointments with primary and specialist physicians; 2) direct patient access to specialist physicians (removal of gatekeeping); 3) patient-physician email messaging (with physician compensation for responding to patient emails); 4) physician compensation with productivity and quality incentives; 5) patient internet access to GHC electronic medical record; and 6) health promotion information on the GHC Web site. The researchers estimated enrollee utilization of same-day appointments, direct access to specialists, email with physicians and nurse practitioners, and electronic medical records. They also examined the percentage of physicians' salaries from incentives. Physician awareness of changes, as well as physician and enrollee satisfaction, was assessed and utilization statistics and continuity of care, before and after the changes, were compared. The objective of the project was to better understand the impact of new IT and payment incentives on patient and provider health care decisions and utilization.

Title: Is the Impact of Managed Care on Hospital Prices Decreasing?
Grantee Institution: Cornell University
Principal Investigator: William White, Ph.D.
Grant Period: October 01, 2004 - September 30, 2006
Email: wdw8@cornell.edu
Awarded: $255,677.00

The researchers examined how demand and supply affect prices for inpatient care for privately insured patients in California and Florida. In particular, they determined whether the underlying assumptions about managed care's ability to control costs have changed. Their research: 1) updated findings on the effects of provider consolidation; 2) tested the relationship between consumer choice and price; and 3) provided a basis for considering the degree to which changes in supply and demand in hospital markets have contributed to price increases. The objective of the project was to better understand the factors affecting managed care's ability to control prices so that appropriate incentives can be implemented.

Title: Use of Tiered Networks by Employer Sponsored Health Plans
Grantee Institution: University of Southern Maine
Principal Investigator: J. William Thomas, Ph.D.
Grant Period: July 01, 2004 - June 30, 2007
Email: jwthomas@usm.maine.edu
Awarded: $367,636.00

Grant Description: What is the current or planned use of tiered hospital and/or physician networks in employer-sponsored health plans? In such networks, an individual's out of pocket cost differs depending on the "tier" to which the provider is assigned. This creates a financial incentive for individuals to select among providers based on the price, maximizing choice for individuals while still promoting cost savings. This study focused on tiered network design and implementation, plan marketing and enrollment, and responses to tiered networks. The objective of the project was to provide important baseline data and early impact analyses to begin tracking the evolution of tiered network products over time, allowing public and private payers to make decisions about how best to design and implement future tiered network reimbursement structures. Policy Summary: The concept underlying tiered networks is that health plans may be able to reduce costs and/or improve quality by providing financial incentives for enrollees to choose certain hospitals and/or physicians and to avoid others. The purpose of the project was to use both quantitative research (surveys of employer-sponsored health plans) and qualitative research (a set of market area case studies) to develop information on tiered networks being implemented in the U.S. For this study, the researchers defined TPNs to involve partitioning one or more categories of in-network providers in a geographic area into two or more subgroups called “tiers,” and providing structured financial incentives to encourage health plan members to utilize providers in more preferred tiers. •In 2007, all of the largest national health plans and many regional plans were offering tiered network products to their employer customers. •The impetus for partitioning provider networks into performance tiers comes primarily from large employer clients and the consulting community that advises these companies. Employer interest in TPNs is usually associated with efforts to control health care expenditures. Although improving quality is often described as a motivating factor – and is the most important motivating factor for a minority of plans and employers – in almost all cases cost reduction or control of cost increases is a primary determinant of tier definitions. Concerns about adequacy of member access to care, especially in rural geographic areas, may trump other criteria when determining tier membership. •In spite of employers’ enthusiasm for the assumed cost saving and quality improvement potential of TPNs, many are unwilling to utilize financial “steerage” to encourage employees to choose higher quality and/or lower cost provider tiers. As a consequence, point-of-care TPNs – those in which employees are free at the time of service to choose any provider, albeit with higher or lower co-pay requirements – are more common than tiered premium plans in which employees must limit themselves at time of enrollment to specific provider tiers. •The term “tiered provider network” is not used with consistency by health plans and employers. It is sometimes used as a synonym for PPOs, narrow provider network, or exclusive provider organization, all of which involve designating one group of “in-network” providers whose service costs are reimbursable by the health plan at a relatively high level, as compared with “out-of-network” providers whose services are either not reimbursed or are reimbursable at a lower rate. •Tiered network plans vary in terms of criteria used in tier definitions, as well as magnitude of deductibles, co-pays, and co-insurance used to motivate health plan members to utilize preferred tier providers. Significant differences also exist among TPNs in the percentage of providers included in the high performance tier. Because of variability among health plans in tier definition criteria, a provider may be included in the high performance tier by one health plan, and excluded from the high performance tier by a second plan. Such inconsistency can exacerbate consumer confusion, add to a plan’s and employers’ communication challenges, and contribute to provider skepticism and resistance. •While there is some evidence that tiered networks actually control health care cost increases, there is no evidence that the quality of care is impacted. Financial incentives may, at some level, be sufficient to motivate providers to improve performance, but it is not clear that the incentives by themselves are sufficient to enable providers to do so. Identification of a provider as substandard in quality performance is, from the provider’s perspective, not actionable information. Perhaps performance improvements will come only if and when plans begin working more closely with providers to identify specific changes in the care processes that can lead to improved effectiveness.

Title: Medicare Health Plan Decisions: Will Regional Competitive Bidding Work?
Grantee Institution: Boston University School of Public Health
Principal Investigator: Steven D. Pizer, Ph.D.
Grant Period: July 01, 2004 - December 31, 2006
Email: pizer@bu.edu
Awarded: $356,373.00

What is the market entry and exit behavior of health plans (HMOs and PPOs)? The project modeled this behavior in order to provide input to policymakers trying to enhance private plan participation in Medicare. The researchers determined whether plans will require higher premiums or more extensive risk sharing to induce them to enter counties or regions with low population densities. They also modeled the enrollment and disenrollment from health plans to determine whether differences in the service area definitions (county versus regional service areas) may exacerbate adverse selection and cause instability in plan premiums and participation. The objective of this study was to help provide information to federal policymakers implementing Medicare Advantage (formerly Medicare+Choice) and planning for private plan competition demonstrations.

Title: Surviving the Perfect Storm: Impacts of Benefit Reductions and Increased Cost Sharing in a Medicaid Program
Grantee Institution: Office of Oregon Health Policy and Research
Principal Investigator: Jeanene Smith, M.D.
Grant Period: June 01, 2004 - August 31, 2006
Email: Jeanene.Smith@state.or.us
Awarded: $262,287.00

How have benefit reductions and increased cost sharing impacted the Oregon Health Plan (OHP)? The researchers are examining: (1) impacts on economic viability, including whether cost savings accrue to Medicaid or whether additional costs will be incurred as beneficiaries shift from one benefit to another; (2) impacts on access, including whether access and continuity of care will be compromised as a result of cost sharing and benefit reduction strategies; and (3) impacts on coverage, including the degree to which Medicaid beneficiaries leave the program due to these changes. The objective of this study is to inform state decision makers who continue to seek efficient cost-saving strategies and consider competing approaches for maintaining and rebuilding benefits following reductions in Medicaid and reshaping publicly financed health care.

Title: Hospital Ownership and Performance: An Integrative Research Review
Grantee Institution: Tufts University
Principal Investigator: Karen Eggleston, Ph.D.
Grant Period: June 01, 2004 - November 30, 2005
Email: karen.eggleston@tufts.edu
Awarded: $105,547.00

How does hospital ownership affect health care providers and health plan performance? The researchers are conducting a quantitative meta-analysis of the main findings of the empirical literature on hospital ownership and performance. They are examining the significance of ownership effect on performance by statistically combining the information in each independent study (1990-2004), while taking in to account differences in quality of the empirical design. They will also note how studies account for market interaction and selection bias, since ownership conversions do not occur randomly among hospitals, and for-profits do not randomly enter markets. The objective of the study is to provide policymakers evidence-based guidance on a wide range of policies regarding hospital ownership, including setting provider payment and evaluating for-profit conversions in health care markets.

Title: Market-Level Effects of Medicaid HMOs on Physician Participation, Enrollee Access, and Program Costs
Grantee Institution: Emory University
Principal Investigator: Bradley Herring, Ph.D.
Grant Period: May 01, 2004 - April 30, 2006
Email: bjherri@sph.emory.edu
Awarded: $172,075.00

How do states benefit from contracting with health maintenance organizations (HMOs) to provide care to the Medicaid population? The enrollment of the Medicaid population into HMOs increased from 14.1 percent in 1995 to 39.5 percent in 2004, as states were motivated to improve enrollee access to care, reduce total state Medicaid expenditures, or perhaps both. Some states have contracted primarily with commercial HMOs enrolling both Medicaid and privately insured populations, while other states have contracted with HMOs which predominately enroll the Medicaid population. Integrating public with private clientele in commercial HMOs may improve access to “mainstream” office-based physicians and help enrollees avoid the “stigma” that may be associated with receiving public assistance, while perhaps the unique needs of the Medicaid population may be better served by the specialization offered by Medicaid-dominant HMOs. The study’s objective was to provide policymakers with a more up-to-date and comprehensive look at what Medicaid HMOs “buy” for states which is especially useful in the current climate of fiscal constraint. They used data from the urban markets within the Community Tracking Study for years 1996 through 2003 to examine the effect of Medicaid HMOs on access to care, the mix of utilization, and health care expense. They constructed market-level measures for commercial and Medicaid-dominant HMO penetration by integrating data for Medicaid HMOs from the Centers for Medicare & Medicaid (CMS) and InterStudy. Researchers used the CTS Physician Survey to test whether changes in the commercial and Medicaid-dominant penetration rate over time cause physicians to change their willingness to see Medicaid patients. They used the CTS Household Survey to test whether changes in these HMO penetration rates over time resulted in changes in enrollee access, utilization, and expense. The measure of expense focused on direct utilization-based expenses rather than administrative costs. Regarding the use of commercial HMOs, researchers found modest increases in physician participation, primarily in the extent to which office-based primary care physicians already participating in Medicaid accept new Medicaid patients into their practice. However, they found that commercial HMOs generally do not have significant effects on enrollee access to care, their mix of utilization, or overall health care expense. Regarding the use of Medicaid-dominant HMOs, researchers found no direct effect on physician participation, but observed negative effects for reporting access to a usual source of care. Researchers also observed increases in medical practitioner visits and emergency department visits and decreases in surgeries. The net effects of these changes in utilization were an increase in total expenses for children but no change in total expenses for adults. The researchers’ results suggest that states may have experienced modest benefits in access for enrollees from contracting with commercial HMOs to provide services to the Medicaid population. While they did find evidence of a small increase in office-based physician participation, they did not find evidence that the use of commercial HMOs altered other measures of access, utilization, or expenses for enrollees. The results also suggest that as commercial plans began to exit from the Medicaid market in the late 1990s and were replaced with Medicaid-dominant HMOs, states on average, experienced worse outcomes with decreased access and increased expenses. Since it appears that states wanting to contract with HMOs can achieve relatively better outcomes for their Medicaid populations by using commercial HMOs rather than Medicaid-dominant HMOs, attracting and retaining commercial plans appears to be a crucial public policy. However, it is possible that states using commercial plans may still experience higher total expenditures than would occur under fee-for-service if increased administrative expenses are considered.

Title: New Approaches to Identifying Market Power in Health Care
Grantee Institution: Northwestern University
Principal Investigator: David Dranove, Ph.D.
Grant Period: May 01, 2004 - October 31, 2006
Email: d-dranove@kellogg.northwestern.edu
Awarded: $240,433.00

Is the willingness-to-pay (WTP) approach valid and should it therefore replace the current analytic method used by courts in health care antitrust analysis? The researchers propose validating and disseminating a new model (WTP approach) to assess market power and potential anticompetitive effect of hospital mergers. They posit that the current analytic method used by courts (referred to as the Elzinga and Hogarty (E/H) approach) is outmoded and theoretically unsound, but remains popular because no alternative exists. The researchers would (1) validate the relationship between WTP and provider prices; and (2) measure the relationship between (a) the increase in WTP that results from mergers, and (b) the increase in prices that results from mergers. The researchers believe that the implementation of a new model is needed to ensure that the competitive approach to health care delivery has a reasonable chance of succeeding.

Title: How Valid are the Assumptions Underlying Consumer-Driven Health Plans?
Grantee Institution: University of Oregon
Principal Investigator: Judith Hibbard, Dr. P.H.
Grant Period: May 01, 2004 - January 31, 2008
Email: jhibbard@uoregon.edu
Awarded: $601,547.00

Grant Description: How valid are the assumptions underlying consumer-driven health plans? The researchers used both qualitative and quantitative methods to examine the key assumption underlying consumer-driven health plans (CDHP). If consumers are given financial incentives, choices and information to support these choices, they will take charge of their health and health care and make prudent choices. Working with Definity Health Plan and Whirlpool (which offers their employees a choice of Definity and a PPO option), the researchers followed one cohort of employees who enrolled in Definity and another cohort who enrolled in a PPO plan. The objective of the study was to compare the knowledge, use of information, satisfaction with care, cost-effective utilization, and costs of care for persons enrolled in Definity and the PPO over time. Policy Summary: The success of the consumer-directed approach rests on a few basic assumptions: if consumers are given financial incentives, choices, and information to support those choices, they will take charge of their health and health care and make prudent choices. In this study the researchers examined the validity of these key assumptions that underlie the consumer driven plan designs. To achieve this goal, they followed CDHP enrollees over time and compared their knowledge, their use of health information, their cost-effective utilization decisions and their activation levels with enrollees in conventional plans over the same time period. The study relied on survey data as well as claims data. The findings indicate that enrollment in a CDHP resulted in a reduction of office visits in the first year of enrollment. These reductions in care appear to be indiscriminant, with patients cutting back in both high and low priority visits (evidence-based visits and non-evidence-based visits). The reductions in high and low priority visits were greater among lower socioeconomic status (SES) employees. These findings were mirrored in analysis that focused on pharmacy claims. Using pharmacy claims data the researchers found that CDHP enrollment did not increase generic substitution relative to preferred provider organization (PPO) enrollees. Nor did it influence drug adherence rates. High deductible CDHP enrollees, however, were approximately twice as likely as those with other pharmacy coverage to discontinue four out of six drug classes studied, including antidiabetics, antihypertensives and lipid lowering drugs. Finally, the researchers examined the assumption that enrollment in a CDHP will stimulate consumers to become activated, informed users of care. They found that those who are more activated are more likely to enroll in a CDHP in the first place and to engage in the behaviors that CDHPs seek to encourage and to newly adopt these behaviors over time. This adoption of behaviors appears to be true regardless of plan type. That is the more activated are more likely to seek out information to inform choices and engage in healthy behaviors than those with lower activation levels both in PPOs and CDHPs The findings suggest that consumers do respond to the financial incentives built into CDHP’s. However, consumers are unable to make cost-effective choices, and instead cut back on care in an indiscriminant fashion. Further, these more general incentives do not increase activation among those who enroll, but attract those who are already more activated. Overall, the findings suggest that a more efficient approach may be to move away from generalized financial incentives toward more targeted approaches that only discourage non-evidence-based care. Even though CDHPs do not appear to foster activation, they may provide a supportive environment for those who are more activated to better manage their health.

Title: The Painful Prescription: Revisited
Grantee Institution: The Brookings Institution
Principal Investigator: Henry J. Aaron, Ph.D.
Grant Period: May 01, 2004 - December 31, 2005
Email: haaron@brook.edu
Awarded: $99,744.00

Grant Description: With the current trend of rising health care costs in the United States, many wonder whether health care rationing is likely to slow the growth of health care spending and what its effects might be. With support from HCFO, the researchers updated their RWJF-funded research of 20 years ago from which they published “The Painful Prescription: Rationing Hospital Care.” This seminal work compared health care in the United States and Great Britain and examined the potential for rationing in this country. The researchers: 1) updated data on most of the technologies examined in the original book; 2) added an extended examination of the political, legal, and other obstacles to the acceptance of rationing, and 3) authored two policy briefs, Health Care Rationing: What it Means and Treatment of Coronary Artery Disease: What Does Rationing Do? The researchers sought to clarify the nature of the painful prescription—that “external constraint” known as rationing that will force patients to forego care when providing all beneficial medical care to everyone is more than the U.S. can afford. Policy Summary: The researchers examined reasons for the differences in treatment and outcomes in the United States and Britain, and they analyzed the difficulty of rationing care in the United States. The British ration because their health care system operates under strict budget limits. On the other hand, the United States has yet to create successful mechanisms to adequately control health care spending. When comparing coronary artery treatment in the United States and the United Kingdom, the researchers found that, in 2002, the combined coronary artery bypass graft (CABG) surgery and angioplasty rate in the United States was over four times greater than the rate in the United Kingdom: the combined CAGB/angioplasty rate was 5,967 per million in the United States while it was only 1,380 per million in the United Kingdom. Both CABG and angioplasty are costly. In the United States in 2002, CABGs cost an estimated $60,853 per patient and angioplasties cost $28,558 per patient. Thus, performing more of these procedures increases health care spending. The researchers identified four possible explanations that might account for the very large difference in treatment rates between the United States and the United Kingdom: 1) U.S. patients might be sicker, ignoring the effects of treatment, than are British patients; 2) By common perception, resource limits and differences in attitudes toward medical care interact; 3) Differences in resource availability may exist; and 4) The differences in the ways in which doctors are paid could affect treatment rates. Along with differences in coronary artery treatment, the researchers also found striking differences in other health care treatments. Other findings include: 1) The U.S. has four times as many computer tomography (CT) scanners as does Britain: 29.4 verses 7.1 per million in 2001; 2) The U.S. performs about four times as many CT scans as does Britain: 128,000 per million versus 30,297 per million; and 3) The U.S. has more than two times as many magnetic resonance imaging (MRI) machines and performs nearly five times as many MRI exams as Britain. The current advancements in medicine and technology are breathtaking. However, while these advances continue to help improve the health, well-being, and quality of life for many, the financial implications of continued advances are significant and my not be sustainable. As health care costs climb, additional rationing efforts, explicitly based on costs rather than medical necessity, may be needed. Rationing may also be necessary in the event of supply shortages, irrespective of cost. If rationing becomes unavoidable, determining the “how” of rationing will not be easy. Possible approaches to rationing include developing public policies to limit demand for care, curbing the advancement of medical technology, or limiting care that is worth less than it costs to people who are well insured.

Title: The Effect of Hospital Mergers on HMO Hospital Costs and Premiums, 1995-2001
Grantee Institution: University of Minnesota
Principal Investigator: Robert Town, Ph.D.
Grant Period: March 01, 2004 - February 28, 2005
Email: rjtown@umn.edu
Awarded: $99,471.00

To what extent is hospital consolidation responsible for the resurgence of health care inflation in the late 1990s? The researchers are identifying the degree to which hospital consolidation has increased HMO hospital prices and HMO premiums, as well as the degree to which hospital consolidation is a function of HMO consolidation. They address the following questions: 1) How much hospital consolidation occurred from 1994 to 2001? Why did it occur? What was the effect of MCO market structure on hospital consolidation? 2) How much of the increase in hospital per diem charges for MCO enrollees from 1994 to 2001 can be attributed to hospital consolidation? and 3) How much of MCO premium increases from 1994 to 2001 can be attributed to hospital consolidation? The objective of the study is to provide increased knowledge about the impact of market consolidation to federal and state agencies responsible for antitrust enforcement.

Title: The Role of Benefit Design in Enrollment, Use and Spending in State Prescription Drug Assistance Programs for Seniors - Lessons for Medicare
Grantee Institution: Brandeis University
Principal Investigator: Cindy Parks Thomas, Ph.D.
Grant Period: March 01, 2004 - August 30, 2006
Email: cthomas@brandeis.edu
Awarded: $421,926.00

How does the design of a prescription drug benefit for seniors – either under Medicare or in individual states – affect drug use and costs? Building on evaluations currently underway for CMS, the researchers compared the SeniorCare prescription drug assistance programs in Illinois and Wisconsin to assess the impact of different key features, including enrollment approach and fees, and the use of a PBM or not. The scope of the CMS evaluations of the Medicaid 1115 waivers in each state does not permit direct comparison of the programs to assess the impact of the different design features. The researchers: 1) compared enrollment selection between the two programs; 2) compared utilization and spending patterns for enrollees; 3) assessed the impact of Illinois’ ‘soft cap’ and Wisconsin’s deductible on drug use and spending; and 4) compared patterns of use for specific diseases (COPD/asthma, congestive heart failure, diabetes, and arthritis) and drug therapeutic classes in each of the states.

Title: Cost, Utilization, and Health Effects of Successive Changes in Cesarean Length of Stay Policy
Grantee Institution: Harvard University
Principal Investigator: Jeanne Madden, Ph.D.
Grant Period: March 01, 2004 - August 31, 2005
Email: jeanne_madden@hphc.org
Awarded: $99,977.00

What is the impact of policy-imposed shifts in length of stay following caesarean delivery on costs, utilization, and patient outcomes? The researchers compared these effects to results from a related study examining vaginal deliveries at Harvard Community Health Plan (HCHP) between 1990 and 1998. More specifically, this project took advantage of a natural experiment created by HCHP’s recent policy change in post-cesarean length of stay requirement on the following outcome areas: 1) hospital length of stay; 2) outpatient utilization (e.g. home and office visits; 3) maternal and infant health outcomes (e.g. breastfeeding, rehospitalizations, etc.); and, 4) HMO expenditures for birth hospitalization and follow-up care. The objective of this project was to inform public and private policymakers and providers about the clinical and cost implications of changes in hospital length of stay policies after caesarean sections.

Title: Monitoring the Early Experience with Federal Health Insurance Tax Credits
Grantee Institution: Georgetown University
Principal Investigator: Karen Pollitz, M.P.P.
Grant Period: February 01, 2004 - July 31, 2005
Email: pollitzk@georgetown.edu
Awarded: $179,779.00

As part of the Trade Adjustment Assistance Act of 2002, Congress created a new, refundable, advance-payable health care tax credit. This tax credit can be viewed as a small-scale demonstration of health insurance tax credits as a way to expand coverage more broadly. This project examined five aspects of the tax credit. It: 1) described the qualified coverage options established in every state; 2) explored the reasons why states decide to establish different coverage arrangements; 3) examined enrollment statistics to determine the impact of state coverage decisions; 4) explored the availability of data on state-based coverage programs for evidence that premium subsidies reduce adverse selection; and 5) reviewed available data on people who claim the tax credit and the premiums they pay. The purpose of this study was to provide policymakers with objective and timely information that will help them monitor and understand the early operations of this program.

Title: Medical Malpractice Reform and Implications for Health Insurance Costs
Grantee Institution: University of Alabama at Birmingham
Principal Investigator: Michael A. Morrisey, Ph.D.
Grant Period: February 01, 2004 - July 31, 2005
Email: morrisey@uab.edu
Awarded: $204,220.00

What effect have recent medical malpractice reforms had on health insurance costs? Specifically, the researchers are 1) evaluating the effect of tort reforms on physician (general practitioners and several specialty practices) malpractice insurance premiums; 2) determining the extent to which malpractice liability contributes to higher total health care costs, both by pass-through of physician malpractice insurance premiums and through “defensive medicine;” and 3) evaluating the effect that economic conditions and changes in the health care environment have exerted on malpractice premiums. The objective of this study is to provide a rigorous analysis of the effects of malpractice reform on the current environment and identify the savings, if any, that consumers can expect to see as a result of reforms.

Title: Establishing the Value of Stable Prescription Coverage for Medicare Beneficiaries
Grantee Institution: University of Maryland at Baltimore
Principal Investigator: Bruce C. Stuart, Ph.D.
Grant Period: February 01, 2004 - December 31, 2005
Email: bstuart@rx.umaryland.edu
Awarded: $291,039.00

How will future beneficiaries fare under the proposed Medicare prescription drug benefit programs? This research used the Medicare Current Beneficiary Survey (MCBS) for 1997 – 2001 to identify gaps in pharmaceutical coverage for Medicare beneficiaries. The researchers (1) characterized beneficiaries who experienced gaps in coverage; (2) identified factors that contribute to lapses in coverage; (3) assessed the impact of coverage gaps on drug utilization patterns and spending; and (4) determined whether coverage gaps adversely affect treatment patterns for beneficiaries with selected chronic cardiovascular conditions.

Title: The Emerging Market for Pharmacogenomics and Health Care Competition
Grantee Institution: College of William and Mary
Principal Investigator: Louis F. Rossiter, Ph.D.
Grant Period: February 01, 2004 - April 30, 2005
Email: lfross@wm.edu
Awarded: $108,455.00

How does pharmacogenomics (PGx) fit or fail to fit within the current systems of financing and organization of health care? The researcher (1) gathered information and summarize the PGx products and services available now or in the near term; (2) conducted open-ended interviews of key informants regarding the way suppliers are bringing these products to market; and (3) studied the implications for financing and the organization of the delivery system, including reimbursement rules, for at least three current health care products and services that are being affected or replaced by PGx in the near future. The objective of this study was to suggest ways in which current payment methods could be changed to accommodate PGx and how a larger study could use patient-level claims data to design changes or a new system to recognize PGx.

Title: An Investigation of the Management Uses of Health-based Risk Adjustment Tools by U.S. Purchasers and Health Plans
Grantee Institution: Park Nicollet Institute
Principal Investigator: David J. Knutson
Grant Period: February 01, 2004 - December 31, 2004
Email: knutsd@parknicollet.com
Awarded: $94,983.00

Does the adoption of health-based risk adjustment tools have uses beyond direct health plan payment? For example, some purchasers, health plans, and consultants are using these tools to identify candidates for case management, for underwriting, and to set premium contribution levels. Others are using them for their covered population for activities such as profiling provider networks, strategic management, and budgeting. Specifically, the researchers answered the following questions: 1) How can health-based risk adjustment be understood as a financial and medical management tool? 2) Who is using this tool nationally? 3) What are the trends in implementation? 4) What impact does this tool have on management and organizational decision making? 5) What additional dissemination efforts are warranted? This study provides public and private decision makers with a better understanding of how risk adjustment applications (other than payment) have diffused throughout the market and affected access, efficiency, and quality.

Title: State Experience with Pharmaceutical Assistance Programs
Grantee Institution: Georgetown University
Principal Investigator: Jack F. Hoadley, Ph.D.
Grant Period: January 01, 2004 - November 30, 2005
Email: jfh7@georgetown.edu
Awarded: $241,176.00

What has been the state experience in implementing pharmaceutical assistance programs serving Medicare beneficiaries? Through a series of case studies the researchers will gather information on issues such as communicating with enrollees, administering eligibility and cost sharing, and managing drug costs. The objective of the project is to reveal best practices and lessons learned that are useful to policymakers considering a Medicare prescription drug benefit and those in states implementing or modifying pharmaceutical assistance programs.

Title: Managed Care and Medicare Expenditures
Grantee Institution: University of Michigan
Principal Investigator: Michael E. Chernew, Ph.D.
Grant Period: January 01, 2004 - December 31, 2004
Email: ggbz@umich.edu
Awarded: $99,999.00

How do Medicare+Choice (M+C) payment rates affect M+C and FFS utilization and expenditures? The researchers: 1) assessed the impact of changes in payment rates to Medicare HMOs on enrollment in HMOs by Medicare beneficiaries; 2) assessed the aggregate impact of Medicare HMO enrollment on FFS Medicare utilization and expenditure; and 3) disaggregated the impact of Medicare HMO enrollment on FFS Medicare utilization and expenditure into a spillover effect and a selection effect. This study revises the assumptions surrounding the impact of managed care on Medicare expenditures in order to assist policymakers in assessing the financial health of the Medicare Trust Funds.

Title: Hospital Capital Financing in the Era of Quality and Safety: Strategies and Priorities for the Future - A Survey of CEOs
Grantee Institution: Health Research and Education Trust
Principal Investigator: Mary A. Pittman, Ph.D.
Grant Period: January 01, 2004 - August 31, 2005
Email: mpittman@aha.org
Awarded: $99,952.00

What are the strategic processes used to make hospital capital investment decisions in an era of patient safety and quality improvement? The investigators hypothesized that current capital investment needs could result in segmentation of the hospital sector. This segmentation could create a group of hospitals that can afford improvements, a group of hospitals that will struggle to make modest improvements and a group of hospitals that will be left behind. The researchers 1) identified current capital positions of hospitals; 2) identified hospital-spending priorities given the competing needs of hospitals; 3) determined how capital investment decisions will be made and considerations/tradeoffs used to make these decisions; 4) identified planning processes being used at hospitals for future quality and safety infrastructure needs; and 5) identified current sources of capital financing and expected sources in the future. The objective of this study was to inform decision-makers of the array of options and best practices in hospital capital strategies; the current sources of capital financing; potential impending problems and worst case scenarios; and various approaches to quality and safety infrastructure development and financing. The researchers conducted an extensive literature review, a nationally representative survey of hospital CEOs, an analysis of combined financial and survey data and targeted interviews.

Title: The Medicaid Undercount: Real or Perceived Bias in Estimates of Coverage in General Population Surveys
Grantee Institution: University of Minnesota
Principal Investigator: Kathleen Thiede Call, Ph.D.
Grant Period: December 15, 2003 - August 31, 2006
Email: callx001@tc.umn.edu
Awarded: $738,409.00

Given that the general population surveys of health insurance coverage may undercount the number of individuals enrolled in Medicaid by 15 to 50%, depending on the estimate, does such an undercount lead to inflated estimates of the uninsured? A recent Minnesota study suggests that, for the most part, Medicaid enrollees know whether or not they have insurance, whether they have public or private coverage, but are less sure which public program they are enrolled in. This has implications for how the Medicaid undercount is used, especially for adjusting the estimates of uninsured. However, it is unclear how well the Minnesota findings generalize to other states. The proposed study will replicate the Minnesota study in three other states with different population characteristics, different state health insurance programs, and different survey designs to determine whether the currently used estimates for undercounts are appropriate or whether other methodological adjustments are necessary. The purpose of this study is to provide a better methodology for adjusting counts of Medicaid recipients and the uninsured in national surveys. Since survey estimates of the uninsured play a central role in setting policy and allocating resources, the results of this study would improve the confidence with which these survey results are used.

Title: Meeting the Future Long-Term Care Needs of the Baby Boomers: How the Changing Structure of Families Will Affect Paid Helpers and Institutions
Grantee Institution: The Urban Institute
Principal Investigator: Richard W. Johnson, Ph.D.
Grant Period: December 01, 2003 - February 28, 2007
Email: rjohnson@ui.urban.org
Awarded: $343,492.00

Population aging signals a likely surge in the use of long-term care services. Much of the care received by frail elders is provided informally by the family, and adult daughters often assume primary responsibility for their parents’ care. The availability of family caregivers may fall over time because of rising divorce rates, increasing childlessness, and declining family sizes. Women’s rising labor force participation may also reduce their ability to provide informal care, and it is unclear whether men will fill the gap. This study projects to 2040 the number and percentage of people aged 65 and older with disabilities and their use of long-term care services. The analysis combines new results from models of current long-term care use with simulations of the size and characteristics of the future population. Population projections were based on DYNASIM3, the Urban Institute’s dynamic microsimulation model of the older population. Models of current long-term care arrangements were estimated based on data from the 2002 Health and Retirement Study, a nationally representative survey of older Americans. Given uncertainty about future disability rates, the report shows outcomes for three different disability projection scenarios. Under the intermediate disability scenario, which provides the “best guess” of the future size of the frail older population, projected rates depend on changing mortality rates, educational attainment, income levels, and age and race distributions. The high disability projections assume that old-age disability rates will increase by 0.6 percent per year from 2000 to 2014 and remain constant thereafter, reflecting recent disability increases at younger ages. The low disability projections assume that overall old-age disability rates will decline by 1 percent per year indefinitely. The results show that the disabled older population will grow faster than the younger population, likely raising the economic burden of long-term care. The intermediate disability scenario projects that in 2040 there will be only about 9 adults aged 25 to 64 to support each disabled older adult, down from about 15 younger adults in 2000. Even under the most optimistic disability scenario, which assumes that disability rates fall by 1 percent per year, the size of the disabled older population will grow by more than 50 percent between 2000 and 2040, and the number of disabled older adults for every adult aged 25 to 64 will increase. Between 2000 and 2040, the share of disabled older adults receiving paid help will increase from about 22 to 26 percent, while the share receiving unpaid help from children will fall from about 28 to 24 percent. These projections reflect declines in average family size and continued improvement in women’s earnings prospects. Over the same period the average number of paid hours of help per frail elder will increase by about 36 percent, from 163 hours per month to 221 hours, and total paid home care hours received by all frail older Americans will more than triple. Under the high disability scenario, total paid home care hours would almost quadruple under the high disability scenario. Today’s long-term care financing challenges will intensify in coming decades as the population ages. Improvements in disability rates alone will not resolve the dilemma. Medicaid pays for much of the long-term care services provided today, but only people with very low income and assets qualify. Private long-term care insurance coverage is rare. Increasing savings to finance future long-term care costs, by boosting private incentives to save or by setting aside public funds, would ease long-term care burdens for future generations of frail older Americans and their families.

Title: Impact of Medicare
Grantee Institution: University of Minnesota
Principal Investigator: Susan Bartlett Foote, J.D.
Grant Period: November 01, 2003 - October 31, 2006
Email: foote003@umn.edu
Awarded: $414,745.00

How do Medicare coverage policies, under national coverage determinations (NCDs) and local medical review policies (LMRPs), affect claims, access and cost? The researchers will examine eight procedures that fall into three policy categories: new technology, extension of existing technology, and utilization management. The study includes an examination of changes in the use of the eight procedures over the period 1999-2001 to answer the following research questions: 1) Do LMPRs or NCDs affect local practice patterns in Medicare? 2) Are there different effects for distinct categories of policies? 3) If an NCD applies to all providers and beneficiaries, can we expect consistency in utilization patterns in Medicare following the implementation of a national policy? 4) If LMRPs are consistent across local contracts, should we see consistency in utilization post-policy implementation? 5) To the extent that LMRPs applicable to the same procedures vary from region to region, should we expect to see variations in practice that reflect these policy differences? and 6) If variations in utilization persist in light of similar policies, how can those variations in practice patterns be explained? The objective of this study is to provide insights to policy makers on the effectiveness of coverage policies, the appropriate balance between national and local decisions, and implications for efforts to enact contractor reform.

Title: Impact of Private Long-term Care Insurance on Demand for Care: Setting and Intensity
Grantee Institution: Brandeis University
Principal Investigator: Christine Bishop, Ph.D.
Grant Period: November 01, 2003 - February 28, 2005
Email: bishop@brandeis.edu
Awarded: $93,096.00

How does long-term care (LTC) insurance affect decisions about the setting of care and the level of service received among elders with disabilities? The researchers will answer the following research questions: 1) How does LTC insurance affect the probability of receiving care in a residential setting compared with the probability of receiving care in a community setting? 2) How does LTC insurance coverage affect the amount of formal and informal care used? Through their analyses, the researchers will estimate the future expenditures for LTC, future service capacity needs, and future burdens on families providing informal care. The objective of the project is to provide policymakers with better information as they consider decisions that would expand the use of LTC insurance and as they think about the future demand for LTC services.

Title: Does Hospice Save Medicare Money?
Grantee Institution: Duke University
Principal Investigator: Donald H. Taylor, Jr., Ph.D.
Grant Period: October 01, 2003 - September 30, 2006
Email: dtaylor@hpolicy.duke.edu
Awarded: $302,981.00

Does hospice save money for the Medicare program and does hospice have any effect on out-of-pocket expenses incurred by families of terminally ill Medicare beneficiaries? The study focused on the Medicare hospice benefit. The researchers conducted a literature review and empirical analyses to answer the above questions. They hypothesized that “hospice can provide effective palliative treatment to terminally ill patients while saving money for the Medicare program, by reducing expensive curative care that must be foregone to obtain hospice benefits.” The objective of this study was to inform policymakers about key issues that affect the ability of hospice to save money, including length of stay, underlying disease, and the propensity of hospice and non-hospice patients to use health care services.

Title: The Kaiser Permanente Medicare Demonstration: Policy Implications of Offering a Dual Option Benefit Package in an HMO
Grantee Institution: Brandeis University
Principal Investigator: Walter N. Leutz, Ph.D.
Grant Period: October 01, 2003 - April 30, 2005
Email: leutz@brandeis.edu
Awarded: $100,305.00

How has the Northwest Region of Kaiser Permanente (KPNW) continued to offer both a standard M+C option with limited prescription drug coverage and a Social HMO (SHMO) after more than 18 years? The researchers will study how KPNW markets the options to beneficiaries, as well as whether there is evidence of adverse selection between the two options based on enrollee characteristics and acute care utilization. The researchers are also analyzing how expanded care has been financed, what it has cost and how services and case management have been used. The objective of the study is to inform the debate about how to serve chronically ill and disabled Medicare beneficiaries within managed care arrangements.

Title: The Dynamics of Health Insurance Coverage: 1996 to 2000
Grantee Institution: The Urban Institute
Principal Investigator: Linda Blumberg, Ph.D.
Grant Period: September 01, 2003 - October 31, 2005
Email: lblumber@ui.urban.org
Awarded: $579,468.00

What are the effects of certain insurance market reforms that were designed to expand coverage? Researchers at the Urban Institute examined the dynamics of health insurance for children and adults under age 65 from 1996 to 2000, a dynamic period characterized by the implementation of national welfare reform, SCHIP, and an economic boom. They documented the patterns of insurance coverage and public program eligibility, estimating the impact of the implementation of SCHIP on insurance coverage for eligible children and previously Medicaid eligible children, and assessing the extent to which the economic expansion affected the insurance coverage of previously uninsured adults. The objective of this project was to inform the design of more effective strategies to maintain or increase insurance coverage and to understand better the determinants of participation and crowd-out that can be useful when considering coverage expansions. The findings will also help to better predict the implications of reductions in coverage resulting from states’ efforts to balance their budgets or in the economic context of a recession.

Title: Impact of the Medicare Home Health Prospective Payment System on Beneficiaries and Program Costs
Grantee Institution: Center for Home Care Policy and Research
Principal Investigator: Christopher M. Murtaugh, Ph.D.
Grant Period: September 01, 2003 - August 31, 2006
Email: cmurtaug@vnsny.org
Awarded: $436,220.00

What are the effects of Medicare’s home health prospective payment system (PPS) on access to and quality of care? The researchers will examine how the new payment system affects home health agency practices (e.g. services provided per episode of care), Medicare expenditures per episode of care, outcomes of beneficiaries receiving home health services, and outcomes of post-acute care overall. The objective of the study is to provide policymakers with information about how third-party payment incentives affect care delivery and patient outcomes.

Title: Using Physician Profiling Software to Evaluate the Practice Efficiency of Physician Specialists
Grantee Institution: University of Southern Maine
Principal Investigator: J. William Thomas, Ph.D.
Grant Period: July 01, 2003 - June 30, 2004
Email: jwthomas@usm.maine.edu
Awarded: $102,829.00

How does examining the feasibility of using episode-based physician profiling systems help to evaluate the practice efficiency of physician specialists? The researchers completed a HCFO-funded study in which they evaluated the accuracy of seven primary care provider profiling methodologies and examined the implications of differences in accuracy for assessments of physician performance. In this project, the researchers focused on two of the seven methodologies which were episode-based, Episode Treatment Groups (ETGs) and the MEDecision Practice Review System (PRS), to examine 15 (10 medical and 5 surgical) specialties. The objective of the project was to determine whether the risk-adjustment methodologies used to generate reliable profiles in a primary care setting can be extended to specialists given the unique factors that arise in profiling specialty physicians.

Title: An Early Portrait of Consumer-Directed Health Benefits: Design, Integration, Penetration, and Effects
Grantee Institution: Mercer Human Resource Consulting
Principal Investigator: Arnold Milstein, M.D.
Grant Period: May 01, 2003 - December 31, 2003
Email: Arnold.Milstein@mercer.com
Awarded: $185,680.00

What is the prevalence of consumer driven health benefits (CDHBs) in the market and what is the early evidence about how the movement toward CDHBs has affected cost and quality? The analyses included three categories of CDHBs: health retirement accounts, tiered or flexible benefit design products, and tiered network or treatment option models. Specifically, the researchers 1) assessed the enrollment in and features of different types of CDHBs, 2) assessed the effects of these newly-introduced products, 3) generated hypotheses about the longer term prospects and impact of CDHBs, and 4) derived policy recommendations aimed at maximizing the value of CDHBs. This study provides purchasers and other private and public decisionmakers with early information about what consumer driven health benefit plans are and how they affect cost and quality.

Title: Private Insurance Markets: The Missing Link-Association Health Plans and Other Pooled Purchasing Arrangements
Grantee Institution: Georgetown University
Principal Investigator: Mila Kofman, J.D.
Grant Period: April 01, 2003 - April 15, 2005
Email: mk262@georgetown.edu
Awarded: $230,547.00

What are the dynamics of pooled purchasing arrangements? In this study, the researchers are: (1) identifying and describing different types of pooled purchasing arrangements, identifying examples of each type, and discussing how such arrangements are regulated by states and the federal government; (2) describing how coverage sold through such arrangements is regulated, focusing on key market reforms and consumer protections as well as applicable federal standards; (3) providing estimates on the prevalence of such arrangements; (4) summarizing how self-insured arrangements are regulated, identifying weaknesses in the law, discussing recent insolvencies, and identifying successful oversight approaches; and (5) discussing market failures focusing on the recent influx in health insurance scams promoted through pooled purchasing arrangements. The objective of this study is to inform state and federal policy discussions on expanding the role of association health plans and other pooled purchasing arrangements. In addition, it will help policymakers address current problems that consumers face such as insolvency and fraud.

Title: Local Funding for Health Services in Rural Counties
Grantee Institution: University of Kansas Medical Center Research Institute, Inc.
Principal Investigator: Mary Zimmerman, Ph.D.
Grant Period: April 01, 2003 - March 31, 2004
Email: N/A
Awarded: $100,000.00

What is the role of local public funding for rural health care? Building on prior work studying this funding stream in the state of Kansas, the researchers replicated their analysis in nine rural states. They tested their hypothesis that local public funding is more extensive than previously recognized by examining (1) the extent to which county tax expenditures are being used to fund local health care services in rural areas of the United States; (2) the factors that explain the extent to which counties will tax themselves to finance local health care services; and (3) which categories of services most commonly receive local public funding and under what conditions. This study informs policymakers about the role of public funding for rural health care systems and its impact on health delivery for vulnerable populations, especially the rural elderly.

Title: The Impact of Performance Reporting on Consumer and Physician Organization Behavior
Grantee Institution: Harvard School of Public Health
Principal Investigator: Meredith B. Rosenthal, Ph.D.
Grant Period: March 01, 2003 - October 31, 2004
Email: mrosenth@hsph.harvard.edu
Awarded: $228,676.00

Recent efforts to improve the quality of health care in the United States and elsewhere have looked to performance reporting to guide consumer choice and provide the impetus for changes in the delivery system. As public and private health benefit purchasers invest in measuring and reporting provider performance to stimulate quality improvement, further research is needed to support and inform these efforts. A review of the current literature yields several important conclusions. First, while there are a growing number of studies of the impact of report cards on consumer choice, most relate to health plans, a few to hospitals, and only one relates to physician groups (citations omitted). Second, while the evidence is mixed, report cards have generally shown little impact (citations omitted). These disappointing results, however, may not be generalizable to report cards that rate an individual’s regular source of care on measures of the quality of preventive care and care for high-prevalence chronic conditions as well as patient experiences. In this study, the researchers examine the impact on consumer behavior of the introduction of public reporting of physician group quality data by PacifiCare of California. They take advantage of a natural experiment in which PacifiCare began publicly releasing performance data to their commercial HMO enrollees several years after they began tracking health care quality and sharing the data confidentially with the physician groups. The researchers’ data set includes information on physician group performance on a set of quality metrics both before and after a subset of these were publicly released as well as a continuous record of enrollee physician group selections. They also examine physician group selections by a cohort of enrollees in the same market that did not receive the report cards as a further source of identification. Prior to public reporting, PacifiCare enrollees were more likely to select a physician group with lower quality scores than one with higher quality scores, suggesting that factors negatively correlated with health care quality were driving consumer choices. Among commercial members, both new enrollees and enrollees that voluntarily switched their physician group after the Quality Index became available increased their likelihood of choosing a physician group by about 1.5 percent for each percentile of clinical quality rating and roughly 0.3 percent for each higher percentile of service quality. The main effect of the Quality Index, therefore, was to make consumer selections more sensitive to clinical quality. Analysis of provider performance trends before and after the Quality Index was released showed no overall change in the rate of quality improvement for reported measures. At the same time, the trends in unreported measures showed no signs of deterioration as might be expected given the incentive for groups to focus on maintaining or improving performance in reported areas of practice. The findings support the notion that public reporting can be an effective tool for increasing the market share of the best performing providers and thus improving the average quality of care in the population. This is really the first study to document any meaningful change in consumer behavior from a provider quality report card. Importantly, however, the report cards and ensuing changes in market share appear to have stimulated only a limited amount of quality improvement by the physician groups, however. This finding might indicate that the profit margins on the additional enrollees that could be gained from improving quality were insufficient to justify the expense of undertaking quality improvement. Alternatively, physician groups might require technical assistance to identify effective quality improvement strategies. Further exploration of the financial and non-financial barriers to quality improvement is needed for payers to leverage fully the increased consumerism initiated by public reporting.

Title: The Impact of Managed Care on the Appropriateness and Outcomes of Carotid Endarterectomy
Grantee Institution: Mount Sinai School of Medicine
Principal Investigator: Mark R. Chassin, M.D.
Grant Period: March 01, 2003 - September 30, 2005
Email: mark.chassin@mssm.edu
Awarded: $209,957.00

What is the impact of managed care versus fee for service on overuse of carotid endarterectomy? The researchers examined the effectiveness of specific managed care interventions in reducing overuse. Specifically, the researchers addressed the following specific research questions: 1) Did Medicare beneficiaries enrolled in Medicare+Choice managed plans undergo carotid endarterectomy less often for inappropriate reasons compared with their counterparts in fee-for-service Medicare? 2) Compared with fee-for-service Medicare, did Medicare managed care enrollees receive carotid endarterectomy more frequently at high-volume hospitals or from high-volume surgeons? 3) Compared with fee-for-service Medicare, did Medicare managed care enrollees have carotid endarterectomy performed more frequently at hospitals or by surgeons with low risk-adjusted perioperative complication rates (i.e., at higher quality hospitals)? 4) What specific mechanisms for assessing appropriateness and quality did these plans use to prevent inappropriate carotid endarterectomies or to select providers with higher quality? What specific plan structural attributes, operational characteristics, or management programs are associated with lower (or higher) rates of inappropriate surgery? Which are associated with better (or worse) risk-adjusted complication rates? 5) Is there evidence of a managed care “spill-over effect” on quality of care such that appropriateness or complication rates are better among fee-for-service Medicare patients in regions with greater managed care market penetration than in regions with less managed care market share? The objective of the project was to inform the policy debate about what cost containment mechanisms may be effective in the current environment.

Title: Liability Problems and Transparent Disclosure to Patients as a Solution
Grantee Institution: The Urban Institute
Principal Investigator: Randall Bovbjerg, JD
Grant Period: March 01, 2003 - August 31, 2004
Email: randyb@ui.urban.org
Awarded: $100,000.00

How can the understanding of the liability climate for safety reform and of differing theories and implementation of transparency be improved? The researchers are addressing the following three questions: 1) How widespread are liability insurance problems that may threaten access to care and can heighten practitioner concerns about disclosure of problems? What evidence exists on the root causes of problems? 2) What are the shortcomings of even strong liability incentives in preventing avoidable injuries and in promoting patient safety? 3) What models of increased transparency exist, with what theoretical advantages and disadvantages? What are the opportunities and obstacles to their implementation? Has enough innovation occurred in disclosure and safety methods that an assessment is feasible and pre-testable? The objective is to assess two problems and one emerging solution: The problems are that malpractice insurance is perceived to be in crisis and that liability fears have not curbed high rates of medical injury but have undercut cooperation with patient safety initiatives. The solution is more “transparent” disclosure to patients of their injuries, to ease malpractice fears, increase fairness, and facilitate systemic improvements.

Title: The Effect of the State Children’s Health Insurance Program on Immunization Rates: Evidence from the National Immunization Survey
Grantee Institution: Research Foundation of CUNY
Principal Investigator: Ted Joyce, Ph.D.
Grant Period: January 01, 2003 - June 30, 2004
Email: Ted_Joyce@baruch.cuny.edu
Awarded: $73,209.00

By age two a child who is up to date for immunizations will have received up to 19 shots delivered over eight visits at a market cost of $525 dollars for the vaccines alone, a far more expensive and demanding regimen than the 8 shots received in 1987. In recognition of the potential importance of health insurance to immunization coverage rates, the State Children’s Health Insurance Program (SCHIP) mandated that all plans cover the cost and administration of childhood vaccines. We use data from the recently released National Immunization Survey for the years 1995 to 2002 to address two questions: First, is SCHIP associated with differential gains in age-appropriate immunization rates among poor and near-poor children relative to their non-poor counterparts? And second, is the uptake of new vaccines among poor and near-poor children faster than would have been observed in the absence of SCHIP? We show that the probability that a poor or near-poor child is up to date for the 4:3:1:3:3 vaccine series increased approximately 10 percentage points before and after SCHIP. However, we observed a similar increase for non-poor children. As to new vaccines, we demonstrate that uptake of the varicella vaccine increased between 8 and 19 percentage points more among poor and near-poor relative to non-poor children after implementation of SCHIP. However, we present evidence that the differential gains by poor and near-poor children are more likely related to the diffusion of new vaccines and not specifically SCHIP. Our results suggest that the availability of publicly provided health insurance for poor and near-poor children may be a necessary but not a sufficient condition to narrow the income gradient for immunizations. The infrastructure of vaccine delivery such as the availability of public clinics, outreach campaigns, as well as mandatory vaccination for pre-school may be more important than health insurance coverage.

Title: Medicare Policy and Aging in the US and Canada
Grantee Institution: International Longevity Center-USA Ltd.
Principal Investigator: Sandra L. Decker, Ph.D.
Grant Period: January 01, 2003 - December 31, 2003
Email: SandraD@ILCUSA.ORG
Awarded: $99,169.00

How does becoming eligible for Medicare affect utilization and health outcomes? Researchers at the International Longevity Center estimated the effect of gaining Medicare coverage on health care utilization and outcomes. They suggested that examining the impact of this change in coverage for the near elderly (55-64) will shed light on the relationship between insurance coverage and use of services in health status more generally. The researchers included in their sample people who were insured and uninsured before becoming eligible for Medicare. This study provides policymakers with information about the effects of coverage, generally, and about expanding coverage to the near-elderly, specifically.

Title: Measuring Selection Incentives in Managed Care: Evidence from the Massachusetts State Employee Health Insurance Program
Grantee Institution: Research Triangle Institute
Principal Investigator: Anupa Bir, Sc.D.
Grant Period: December 01, 2002 - November 30, 2003
Email: abir@her-cher.org
Awarded: $99,946.00

This grant explored tools purchasers can use to identify health plan incentives to compete to avoid the sick rather than provide quality care. The researchers used three different metrics of selection incentives to estimate how an insurer would want to distort service offerings to attract profitable enrollees (“risk selection,” “cream skimming,” or “cherry picking”). They applied these metrics to indemnity claims and managed care encounter data on both medical and pharmacy spending for 2001 and 2002 from the Group Insurance Commission (GIC) of the Commonwealth of Massachusetts—one of the largest purchasers in New England. The results revealed strong financial returns to risk selection, as indicated by all three selection indices as well as by the double-digit profits an insurer could earn if it could exclude unprofitable patients. For this population, services most vulnerable to stinting were cardiac care, diabetes care and mental health and substance abuse services. In other words, insurers had incentive to ‘dump’ enrollees with expensive heart conditions, diabetes or mental health and substance abuse problems (and to ‘cream’ enrollees with skin problems or conditions of the eyes, ears, nose and throat). Risk adjustment and mixed payment considerably mitigated these selection incentives. The advantages of mixed payment were evident when the researchers calculated returns to risk selection over a full range of supply-side cost sharing. Doubling the fraction of costs borne by plans or providers more than doubled the rewards to risk selection. This confirmed that employers and other payers can use mixed payment—with even a small amount of risk sharing—to significantly reduce insurers’ strong financial temptation to invest in risk selection. As a tool for measuring selection incentives, these three metrics—two developed previously by researchers Ellis, Frank, Glazer and McGuire, and one that the researchers proposed—have at least four advantages. First, they are more evidence-based than case-by-case analysis or deductive reasoning regarding all-encompassing categories (e.g., overuse with fee-for-service, underuse with capitation). Second, analysts can tailor the measurement to specific patient populations (e.g., by using the expenditure and diagnosis patterns of that population). Third, purchasers can analyze various alternative payment methods prior to implementation to examine alignment of payment incentives with quality improvement. This may contribute to better contracting and clearer targeting of quality assurance programs or pay-for-performance initiatives. Fourth, since the metrics measure incentives, not actual behavior, they do not raise issues of legal liability. They should be complemented by analysis of actual selection behavior, to document the extent to which plans respond to the financial temptation to risk select.

Title: Evaluation of the Effects of Utilization Review on Patterns of Care and Medical Expenses
Grantee Institution: University of Washington
Principal Investigator: Thomas M. Wickizer, Ph.D.
Grant Period: November 01, 2002 - March 31, 2005
Email: tomwick@u.washington.edu
Awarded: $99,979.00

What are the effects of the Washington State Department of Labor and Industries (L&I) utilization review (UR) program on patterns of care, medical costs, and lost work time? What is the efficiency of UR as a screening tool to identify inappropriate or unnecessary medical care? The project focuses on several questions: 1) What is the pattern of UR denials within and across treatment guidelines and types of procedures? 2) What factors are predictive of UR denial? 3) Did the program generate net cost savings? 4) How do these savings differ by treatment guideline, procedure or physician specialty? 5) Can the efficiency of UR be improved by using a targeted approach for case selection as opposed to the common practice of reviewing all requests for care? 6) Does UR reduce lost work time and disability by decreasing the occurrence of invasive procedures that have poor outcomes? The objective of the study is to provide policymakers with a better understanding of the efficiency, effectiveness, and clinical and economic value of UR programs.

Title: Evaluation of Defined Contribution Plans on Health Insurance Choice and Medical Care Use
Grantee Institution: University of Minnesota
Principal Investigator: Stephen T. Parente, Ph.D.
Grant Period: November 01, 2002 - April 01, 2005
Email: sparente@csom.umn.edu
Awarded: $319,273.00

Consumer-drive health plans (CDHPs) have emerged as a genuine new form of health insurance in the United States. The goal of this research was to provide early evidence of the factors affecting the choice of individuals into a defined contribution or consumer-driven health plan as well as the impact of the plans on employee cost and utilization for a set of regional and national employers. As part of this research, the researchers developed, fielded and analyzed (in 2003 and in 2004) an approximately 1,000 person survey of University of Minnesota employees on factors affecting their health plan choice as well as their overall satisfaction with their health plans where a consumer-directed health plan was one of the choices. They also integrated claims and survey data using a new trusted third party process to conform to HIPAA standards to collect identifiable data from health plans and employers. They obtained claims data for 5 of the 6 employers in our study population representing nearly 140,000 covered lives. The researchers completed a series of qualitative interviews with all six employers and their health plans. The results from this research were published in a series of journal articles. An article on plan choice published in Health Services Research in 2004 showed that CDHPs did not attract a significantly healthier risk pool. Another article, using just claims data, showed somewhat favorable selection associated with the CDHP, but the CDHP population quickly proved to be higher utilizers, despite their initial behavior before selecting the CDHP. A second article on the cost and utilization published in the same 2004 Health Services Research volume showed that CDHPs were less resource intensive than preferred provider organizations (PPO) and point-of-service (POS) plan designs, but hospital costs were shown, after risk adjustment, to rapidly increase. Subsequent analysis found the CDHP more expensive than the POS plan design, but less expensive than the PPO design in overall expenditure. A third article based on the first year of survey information from the University of Minnesota employee respondents was published in Health Services Research (2004) and found CDHP plan choosers were just as satisfied as other health plan enrollees and had little difference in satisfaction from other populations. Subsequent cost and utilization work with all six employers who participated in this study is expected to be completed by the end of the 2005 calendar year.

Title: The Treatment of Dying Medicare Managed Care Patients: The Role of Social and Economic Factors
Grantee Institution: Health Research and Educational Trust
Principal Investigator: Jon R. Gabel
Grant Period: November 01, 2002 - June 30, 2005
Email: jgabel@aha.org
Awarded: $449,695.00

What is the cost and utilization of services during the last two years of life for Medicare managed care patients and fee-for-service Medicare patients? The researchers are analyzing data from provider, beneficiary, plan benefit, prescription drug, clinic and office encounters, and laboratory and x-ray services database files for the managed care and fee-for-service populations. Patients who disenrolled from United HealthCare's Medicare managed care and returned to fee-for-service are also being studied. Major causes of death such as cancer, chronic obstructive pulmonary disease [COPD], chronic heart failure, stroke, and dementia are being analyzed for utilization and costs. The researchers are addressing the following questions: 1) What are the costs and use of services associated with end-of-life care for major causes of death? 2) For the major causes of death being studied, how do cost and treatment patterns in end-of-life care vary according to area resources and financial arrangements? 3) What are differences in the site of death of Medicare managed care patients for these three major causes of death? 4) How does continuity of care vary among managed care settings? 5) What are the economic and other factors that determine continuity of care? 6) What is the cost of prescription drug coverage for end-of-life patients? 7) What is the appropriate of prescribing and dispensing for the five study conditions? 8) What economic and socio-demographic factors explain differences across areas in end-of-life prescribing? The objective of the project is to guide administrators, legislators, and providers as they make decisions about end-of-life care.

Title: Competition, Volume, and Outcome in Cardiovascular Care in California
Grantee Institution: The University of Chicago
Principal Investigator: Min Woong Sohn, Ph.D.
Grant Period: November 01, 2002 - August 31, 2006
Email: m-sohn@uchicago.edu
Awarded: $275,341.00

What is the effect of competition on quality of cardiovascular care in California between 1992-1998? The researchers are using 3M’s All Patient Refined-Diagnosis Related Groups (APR-DRG) severity index as the main risk adjuster. They are measuring competition using an index based on the idea that hospitals compete with each other to the extent their patient pools overlap. They are using three-level (patient, hospital, county) hierarchical generalized linear models to test the hypotheses for each outcome variable. Additionally, they are conducting a series of in-depth case studies of patient flow in local markets to examine how selective referral to high volume hospitals can affect the accessibility, cost, and outcomes in markets with different numbers of hospitals. The objective of the study is to test three pairs of theory- and policy- relevant hypotheses: 1) Interaction between competition and volume; 2) Two different effects of competition on quality of care; 3) Competition has a stronger effect in more mature managed care markets. The goal of the study is to provide public and private decision makers with information about how competition affects the quality of care.

Title: Factors Affecting End-of-Life Care for Beneficiaries Who Are Dually Eligible for Medicare and Medicaid
Grantee Institution: The Urban Institute
Principal Investigator: Korbin Liu, Ph.D.
Grant Period: October 01, 2002 - June 30, 2005
Email: kliu@ui.urban.org
Awarded: $305,468.00

What are the factors affecting end-of-life care for the dually eligible? Using the “Multi-State Dual Eligible Data Files” developed by Mathematica under contract with CMS, researchers at the Urban Institute are examining (1) services provided by the Medicare and Medicaid programs, as well as variations among states; (2) the composition of and proportion of expenditures on end-of-life care (e.g., hospital, physician, prescription drug, long-term care); (3) variation in use and expenditures over time between health and long-term care services; and (4) variation by race and age in utilization, expenditures and source of financing end-of-life care. The objective of this study is to inform policymakers and providers about the patterns of use of care at the end-of-life by dual eligibles in order that they might re-examine and improve current policies addressing such care.

Title: The Effects of Managed Care Organizations on Government Spending and Health Care Quality: Evidence from California’s Medicaid Mandates
Grantee Institution: University of Maryland
Principal Investigator: Mark Duggan, Ph.D.
Grant Period: October 01, 2002 - March 31, 2004
Email: duggan@econ.bsos.umd.edu
Awarded: $69,782.00

From 1991 to 2000 the fraction of Medicaid recipients in the U.S. enrolled in a managed care plan increased from 11 percent to more than 55 percent. In many states, the main motivation for the shift was a desire to reduce both the level and growth of Medicaid spending, with the conventional wisdom suggesting that state governments would save money by contracting with HMOs and other managed care organizations. Despite the common acceptance of this view, there was surprisingly little empirical evidence to support it. Some studies had been done that looked at individual plans for a short time but few investigated this issue for an entire state over a long time period. The researcher therefore set out in this project to investigate the effect of shifting Medicaid recipients into managed care plans by focusing on California, the nation’s most populous state. During the 1990s, approximately 20 counties in this state required welfare recipients and certain other Medicaid beneficiaries to enroll in a managed care plan. These county mandates were the driving force between the more than fivefold increase in managed care penetration there, and by 2000 more than half of all Medicaid recipients in California and were enrolled in a managed care plan. The researcher purchased and processed Medicaid claims and eligibility data for a random 20 percent sample of program participants for the 1993 to 1999 period. The advantage of this data is that the researcher can accurately calculate spending for each individual by month, quarter, half-year, or year and is therefore able to explore whether spending for the same person increased or declined following their shift from fee-for-service to managed care. The final analysis for the expenditure analyses consisted of 1.2 million welfare recipients who were eligible for Medicaid at some point during the seven-year study period. The findings indicate that Medicaid spending increased by an average of 17 percent following the shift from fee-for-service to managed care, thus undermining the view that HMO contracting saved the state of California (and the federal government given the federal-state financing of Medicaid) money. This finding is especially important given that California, like many other states and like the federal government with Medicare, is considering an expansion of Medicaid managed care. The short- and long-term effects of the shift to managed care appear to be similar—thus the results are not driven by a one-time increase in funds resulting from a reorganization of Medicaid. Interestingly, counties that contracted with just one HMO witnessed a significantly larger increase in spending (25 percent) than did those counties that contracted with two or more plans (10 percent). The researcher then estimated the effect of Medicaid managed care on health care quality. He first investigated whether the shift from fee-for-service to managed care was associated with a significant change in infant health outcomes. The findings suggest that Medicaid managed care had little effect on this important set of outcome variables. He also explored whether Medicaid managed care affected the avoidable hospitalization rate. The findings demonstrated that Medicaid managed care was associated with a significant decline in avoidable hospitalizations but that a similar decline was observed for unavoidable conditions as well. This suggests that managed care organizations hospitalized fewer patients with a given condition but did not improve health. Taken together, the findings suggest that California’s shift of millions of Medicaid recipients into managed care plans increased government spending but did not improve health care quality.

Title: Corporate Finance and Consolidation in Health Care
Grantee Institution: University of California, Berkeley
Principal Investigator: James C. Robinson, Ph.D.
Grant Period: September 01, 2002 - August 31, 2005
Email: jamie@socrates.berkeley.edu
Awarded: $152,445.00

What influence has access to capital had, during the period 2000-2005, on corporate consolidation in two health care sectors: insurance and hospitals? Specifically, researchers at UC Berkeley examined the financial capital/consolidation relationship by developing quantitative data on capital flows, conducting case studies of leading firms, interviewing capital market participants and analyzing finance literature on agency relationships. The objectives of the project were to use capital market analysis to inform public policy relative to (1) the development of regulations governing financial information disclosure; (2) the development of regulations (e.g. patent, antitrust) governing the influence of financial capital on health care organization and consolidation; and (3) the pros and cons associated with conversions by health plans from nonprofit to for-profit status, including how best to value underlying assets.

Title: Cost Effectiveness, Quality and the Future of Medical Technology Assessment
Grantee Institution: Harvard School of Public Health
Principal Investigator: Peter Neumann
Grant Period: July 01, 2002 - June 30, 2004
Email: pneumann@hsph.harvard.edu
Awarded: $286,481.00

How does Medicare assess and make coverage decisions for new medical technologies? First, the researchers will conduct an in-depth descriptive and multi-variate explanatory analysis of 100 CMS coverage decisions over the past 12 years. They then will compare Medicare's processes and decisions with those of other health technology assessment (HTA) organizations. Specifically, the researchers will examine 6 key questions: 1) What technologies has Medicare formally assessed in the past decade? 2) What are the key determinants of Medicare coverage decisions? 3) Have coverage decisions been consistent with evidence of societal cost-effectiveness? 4) Have the same technologies been assessed by other HTA organizations? 5) What "best practices" for technology assessment surface from an investigation of key technology assessment organizations in the U.S. and abroad? and, 6) What role can cost-effectiveness play in future assessments in the U.S. (given data limitations, multiple societal objectives, and likely political opposition)? The objective of the study is to inform decision makers about HTA processes and to reveal "best practices" about technology assessment as they consider whether to cover new medical technologies.

Title: Medicaid Managed Care and Health Care Access, Use, and Quality
Grantee Institution: Stanford University School of Medicine
Principal Investigator: Laurence Baker, Ph.D.
Grant Period: May 01, 2002 - August 31, 2003
Email: laurence.baker@stanford.edu
Awarded: $86,774.00

What are the effects of recent expansions in Medicaid managed care on children’s ability to access and use care? Using longitudinal data from the National Survey of America’s Families and the Community Tracking Study, the researchers identified effects of managed care by looking at the changes in health care access and utilization over time. They examined the relationship between these changes and changes of the size of the Medicaid population covered by managed care. The objective of the project was to inform policymakers about how Medicaid managed care might affect health care access and use among children.

Title: Sustaining Individual Health Insurance Markets Under Community Rating and Open Enrollment
Grantee Institution: Rutgers, The State University of New Jersey
Principal Investigator: Joel Cantor, Sc.D.
Grant Period: April 01, 2002 - September 30, 2003
Email: jcantor@cshp.rutgers.edu
Awarded: $96,213.00

What is the extent of risk selection in New Jersey 's Individual Health Coverage Program (IHCP), which was implemented in 1992 as part of the state's individual market reforms? What are the policy options for sustaining access to individual health plans and describing the role of the non-group coverage in New Jersey's health care insurance market? Using data from the Robert Wood Johnson Foundation-funded New Jersey Family Health Survey (NJFHS), the researchers aimed to answer the following questions: 1) How has the distribution of risk changed in the IHCP since 1995-1996 and what are the implications of those changes for the viability of community rating and related reforms? 2) What is the potential impact on current or potential IHCP enrollees of adopting modified community rating? and 3) What role does the IHCP play in the continuum of coverage in New Jersey? The objective of this study was to analyze changes in New Jersey’s individual insurance market to inform state policymakers considering reforms to make non-group markets accessible and viable. The researchers supplemented the NJFHS data with a sample of 600 non-group subscribers (subscriber lists provided by top 4 or 5 carriers in state who covered 95 percent of lives in the individual market). Using the same methodological approach utilized by Katherine Swartz, Ph.D., and Deborah Garnick, Sc.D., in the early years of the IHCP, they assessed the risk of medical expenditures of adult IHCP enrollees compared to that of a contrast population composed of individuals with non-small-group employment-based insurance. They also compared the IHCP enrollees with the entire employer-group market and the uninsured.

Title: Are Highly Concentrated Health Care Markets Bad for Health Care?
Grantee Institution: University of Washington
Principal Investigator: George Wright, Ph.D.
Grant Period: April 01, 2002 - December 31, 2003
Email: gwright@fammed.washington.edu
Awarded: $100,000.00

What is the relationship between the market power of health plans, relative to providers, and the quality, intensity, and accessibility of health care? Using the household and physician surveys from the Community Tracking Study, the researchers will study the following questions: 1) Across markets, are concentrations of market share among a few health plans correlated with the clustering of providers into a few dominant organizations? 2) Do physicians in markets with a few dominant provider organizations report lower work hours and changes in compensation? 3) What are the relative effects of provider and health plan concentration on the intensity and specialty-orientation of health care? 4) What are the relative effects of provider and health plan concentration on the perceived quality and convenience of care? 5) How closely correlated across markets are the perspectives of physicians and patients? The objective of the study is to inform the policy and regulatory debate about the advantages and disadvantages of concentrated market power.

Title: Health Plan Selection for Medicare Eligible Enrollees in the Federal Employees Health Benefits Program
Grantee Institution: Emory University
Principal Investigator: Curtis Florence, Ph.D.
Grant Period: April 01, 2002 - February 29, 2004
Email: cfloren@sph.emory.edu
Awarded: $208,604.00

How do variations in out-of-pocket premiums and benefits influence plan choice among Medicare-eligible enrollees in the Federal Employees Health Benefits (FEHB) program? Researchers at Emory University examined the following questions: (1) How sensitive is the health plan choice of Medicare eligible persons to variation in premiums? (2) How sensitive is the health plan choice of Medicare eligible persons to variation in plan benefits? (3) Do the plan choice of Medicare eligible enrollees reflect adverse selection for plans with greater benefits? (4) How strong is the preference for fee-for-service plans among Medicare eligible enrollees? How much must fee-for-service premiums increase to induce them to pick managed care plans? (5) How would different subsidy schemes affect health plan enrollment for Medicare eligible enrollees? The researchers generated policy-relevant findings concerning two approaches to Medicare reform: (1) a defined contribution subsidy and an “a la cart” plan that competes on the basis of price; or (2) a “bundled service” plan that competes on the basis of price and benefits. This study simulates the effect of various Medicare reform proposals by providing estimates of how enrollees react to changes in premiums and benefits offered and local health care costs. The researchers believe that the study substantially contributes to an understanding of health plan choice for the Medicare population.

Title: Geographic Variation in Alcohol, Drug Abuse, and Mental Health Services Utilization: What is the Role of Physician Practice Patterns?
Grantee Institution: UCLA
Principal Investigator: Tom Belin
Grant Period: March 15, 2002 - March 14, 2003
Email: tbelin@mednet.ucla.edu
Awarded: $101,012.00

How do physician practice patterns affect the evaluation, treatment, and quality of treatment for alcohol, drug and mental disorders (ADM)? Specifically, the researchers will test the effects on treatment of seven markers of physician practice patterns (1) ease of referral; (2) propensity to refer; (3) physician perceived autonomy; (4) intensity of clinical care; (5) physician self-reported use of clinical guidelines and/or patient satisfaction surveys; (6) time available to spend with patient; and (7) continuity of care. In addition, the researchers will analyze how organizational structure and financial mechanisms affect two key markers of psychiatric practice patterns, the psychiatrist’s ability to provide appropriate continuity of care and the psychiatrist’s propensity to utilize clinical guidelines. The researchers will build on current work in which they used individual level HealthCare for Communities data to investigate the patterns and predictors of ADM evaluation and treatment in outpatient primary care settings. The objective of this study is to better understand the relationship between physician practice patterns and the likelihood of evaluation, treatment and guideline-concordant care for alcohol, drug, and mental disorders, with the ultimate goal of implementing policies that meet the treatment needs of individuals with these disorders.

Title: Quality Assessment of South Carolina Medicaid Managed Care
Grantee Institution: Medical University of South Carolina
Principal Investigator: William B. Pittard, M.D.
Grant Period: March 01, 2002 - February 28, 2003
Email: pittardw@musc.edu
Awarded: $43,277.00

What amount of preventive care is provided to urban and rural South Carolina preschool Medicaid children in two voluntary primary case management (PCCM) managed care programs? The hypothesis tested was that there are significant differences between the proportion of one year old Medicaid children who receive the American Academy of Pediatrics recommended number of Early and Periodic Screening Diagnosis and Treatment (EPSDT) evaluations enrolled in the state's two PCCM programs and that these differences vary based on rural versus urban residence. The objective of this work was to produce results that will suggest future alterations in public health-care financing to facilitate further improvement in cost, access and quality of care for children.

Title: The Effect of Price on Health Plan Choices of Retirees
Grantee Institution: University of California Irvine Graduate School of Management
Principal Investigator: Thomas C. Buchmueller, Ph.D.
Grant Period: March 01, 2002 - February 28, 2003
Email: tcbuchmu@uci.edu
Awarded: $88,672.00

What is the price sensitivity and related health plan choices of Medicare-eligible retirees? Building on previous HCFO-funded research and analyzing data from a large western employer, the researcher analyzed the following: 1) What is the effect of out-of-pocket premiums on the health plan choices of Medicare-eligible retirees? 2) How price-sensitive are early retirees (under 65)? and 3) How responsive are retirees to financial incentives for declining coverage? The objective of this study was to educate decision makers who develop Medicare reforms by providing credible estimates of the price sensitivity of Medicare beneficiaries. In addition, the researcher sought to inform policymakers about how retirees respond to financial incentives and the impact this response might have on how insurance costs are allocated.

Title: Health Plan Choices and Adverse Selection in Employer Sponsored Insurance Health Plan Choices and Adverse Selection in Employer-Sponsored Health Insurance
Grantee Institution: University of Pennsylvania
Principal Investigator: Daniel E. Polsky, Ph.D.
Grant Period: February 01, 2002 - June 30, 2003
Email: polsky@mail.med.upenn.edu
Awarded: $124,963.00

Are HMOs able to offer lower premiums because of favorable risk selection or utilization savings? What is the relationship between health plan choices and risk selection? Using Round I CTS Household Survey (CTSHS) data to study the effect of risk selection in employer-sponsored health plans, researchers at the University of Pennsylvania found that lower HMO premiums could not be explained by favorable selection, nor was utilization lower for HMOs. The researchers applied their methodology from the earlier study and analyzed Round II CTSHS data. The researchers examined the influence an individual’s health risk has on his/her selection of an employer and whether employers choose their type of insurance based on the unmeasured health or health care utilization of their employees. As both the public and the private sector combat risk selection, this study sheds light on how risk selection affects health plan choice.

Title: The Impact of Managed Behavioral Health Market Share, Public Sector Carve-Outs, and Parity Legislation on Service Utilization for Children and Adolescents: Results from NSAF and CTS
Grantee Institution: RAND
Principal Investigator: Roland Sturm, Ph.D.
Grant Period: January 01, 2002 - December 31, 2002
Email: roland_sturm@rand.org
Awarded: $100,183.00

How do variations in the organization of mental health services across states and communities affect service utilization for children and adolescents? Roland Sturm, Ph.D., and colleagues at RAND are using the NSAF and the CTS’ household surveys to study three variables in assessing the effect of mental health services organization on service utilization. They will examine: 1) the market penetration of commercial carve-outs; 2) how insurance mandates for behavioral health services, especially parity legislation, affect private insurance; and 3) the organization of behavioral health services in the public sector. Looking beyond individual health and socioeconomic factors and community factors, which likely predict need for mental health services, the findings will inform public and private decision makers about the effects of various policy tools in influencing behavioral health care.

Title: Managed Care’s Spillover Effects on the Quality of Diabetes Care for Medicare Patients
Grantee Institution: Mount Sinai School of Medicine
Principal Investigator: Paul L. Hebert, Ph.D.
Grant Period: January 01, 2002 - July 31, 2003
Email: paul.hebert@mountsinai.org
Awarded: $83,890.00

How does increased managed care penetration affect quality of care in the non-managed care sector? Paul L. Herbert, Ph.D., at Mount Sinai School of Medicine used data from the Physician Survey of the CTS and the National Diabetes Cohort to examine whether efforts to monitor the quality of care in managed care organizations (MCOs) have had similar spillover effects on the non-managed care market – particularly for chronic conditions such as diabetes. Specifically, the researchers examined whether: 1) increased managed care market penetration affects the provision of diabetes-specific preventive care to Medicare beneficiaries in the non-managed care sector; and 2) increased managed care market penetration affects the provision of high-cost medical services to Medicare beneficiaries with diabetes in the non-managed care sector. The study also examined whether managed-care-induced changes in health care use have implications for “avoidable” hospitalizations for persons with diabetes. This study better informs policymakers of the system-wide consequences of health care cost-containment policies that encourage expanded use of managed care.

Title: Health Care Services for Children Placed in Foster or Kinship Care
Grantee Institution: University of Colorado
Principal Investigator: Stephen Berman, M.D.
Grant Period: January 01, 2002 - June 30, 2003
Email: berman.stephen@tchden.org
Awarded: $101,006.00

This project evaluated physical and mental health services among children in out-of-home placement. The data were from the National Survey of America’s Families. There are several distinct forms of out-of-home placement that include: Traditional foster care in which a child welfare system removes a child from their home and places him/her with a non-relative foster parent; Formal kinship care which is similar to the latter except that the child is placed with a relative; and Informal Kinship care, in which a child goes to live with a relative but no child welfare agency is ever involved in that change of living situation. It is important to identify these placement types as distinct groups. Changes in the child welfare system now preferentially channel children into formal kinship care. Children in informal kinship care often have no help or monitoring from a social work agency. It is estimated that approximately 2.2 million children live in some form of kinship care, the majority of whom are in informal arrangements. There is very little known about the health care utilization of this population. The analyses focused on three primary comparisons: informal kinship care versus the control group of children living with a biological parent; formal kinship care versus foster care, and informal and formal kinship care versus foster care specifically on the use of mental health services. The findings are summarized below: -Informal kinship care versus the control group: In comparison to the control group, children in informal kinship care were more likely to be older, African American, living in poverty and to experience household food insecurity (food running out) in univariate analyses. Children in informal kinship care were more likely to be uninsured and to either lack well-child care, or have a caregiver who is unaware of what well-child care has been received in both univariate and multivariate analyses. Children in informal kinship care were more likely to lack a regular source of care and to be in poor health in univariate analyses but not in multivariate analyses. However, lacking health insurance was the most significant predictor for lacking a regular source of care and likely contributes substantially in the informal kinship population. Caregivers in informal kinship care were more likely to be older, unmarried, less educated, in poor health, and to have a disability univariate analyses. -Formal kinship care versus foster care: In comparison foster care group, children in formal kinship care were more likely to be older, African American, living in poverty and to experience household food insecurity in univariate analyses. In multivariate analyses children in formal kinship care are at twice the odds of living in poverty and of experiencing household food insecurity. Children in formal kinship care are equally likely in univariate and multivariate analyses to experience poor health status and a limitation in their activity. Children in formal kinship care are more likely to lack health insurance, and have a five-fold increase in the odds of lacking health insurance in multivariate analyses. Power limitations prevent multivariate analysis of this variable. Caregivers in formal kinship care are more likely in univariate analyses to be older, unmarried, less educated, in poor health and to have a disability. -Informal and formal kinship care versus foster care on mental health need: In comparing all three out-of-home placements to each other, children in both kinship groups were more likely than foster group to be African American and to be living in poverty in univariate analyses. Mental health need was lowest in the informal kinship group in univariate analyses. Mental health service use was significantly lower in both kinship groups, even among children with mental health need. In multivariate analyses, children in informal kinship care were almost five times more likely, and children in formal kinship care were more than twice as likely to lack mental health services when compared to the foster care group. These findings are relevant to several different areas of public policy. First, it is clear that obtaining health insurance is a problem for both formal and informal kinship groups. Most of these children would likely be eligible for Medicaid based on household income. Outreach and enrollment policies for public insurance programs need to recognize children living in kinship arrangements as a unique and high risk population. Secondly, child welfare agencies and policymakers may need to re-evaluate the current practice of preferentially placing children in kinship homes. These placements may require a substantially greater amount of financial and social services support to address the fact that formal kinship children have high rates of health problems, while their caregivers are often elderly, poor and in ill health. Lastly, while children in formal kinship care received fewer mental health services than those in foster care, almost one quarter of children in foster care with mental health need did not receive services. Policies for obtaining mental health evaluations for these high risk groups of children urgently need to address this unmet need.

Title: How Managed Care Growth Has Affected Health Departments’ and Physicians’ Ability to Provide Indigent Care
Grantee Institution: University of Pittsburgh
Principal Investigator: Christopher Keane, Sc.D.
Grant Period: January 01, 2002 - March 31, 2003
Email: crkcity@pitt.edu
Awarded: $91,081.00

To what extent have increases in managed care affected the provision of care for the uninsured by local health departments (LHDs) and physicians? Researchers at the University of Pittsburgh are analyzing whether managed care has: 1) diverted Medicaid revenues away from LHDs, reducing their cross-subsidization and provision of care for the uninsured; 2) decreased the Medicaid revenue of doctors employed by organizations with a mission to serve the uninsured, and decreased these physicians’ charity care; 3) decreased physicians’ autonomy, leading to decreased charity care; 4) decreased LHDs’ ability to ensure access; and 5) reduced trust in medical providers among the uninsured, leading to lower utilization. They are using two rounds of the CTS Household and Physician Surveys, InterStudy data, American Hospital Association data, the Area Resource File, and a representative survey of 240 LHDs in his analyses. The project is exploring why high levels of managed care penetration are associated with reduced access among the uninsured, and is developing policy implications from the study’s findings, describing unforeseen consequences of recent policies, and assessing implications for future policy.

Title: Assessing the Impact of Medicaid Equalization Policies on Access to Nursing Home Care
Grantee Institution: Syracuse University
Principal Investigator: Madonna Harrington Meyer, Ph.D.
Grant Period: January 01, 2002 - July 31, 2003
Email: mhm@maxwell.syr.edu
Awarded: $99,533.00

What is the impact of Medicaid equalization policies for nursing home admissions on older persons and their families, the nursing home industry, and state Medicaid programs? The researchers had three objectives: (1) identify which states have passed provisions that limit the discrepancy between private and Medicaid rates; (2) assess the impact of that legislation on nursing home profits, closures, waiting lists, occupancy rates and state Medicaid budgets; and (3) trace the passage of each state-specific policy to assess the feasibility of developing a model for a national Medicaid equalization law. The objective of the study was to inform policymakers about the implications of revising the Medicaid and long term care systems through a national Medicaid equalization policy.

Title: Health Plan Choice and Utilization: The Role of Plan Attributes
Grantee Institution: Indiana University
Principal Investigator: Pravin K. Trivedi, Ph.D.
Grant Period: January 01, 2002 - December 31, 2003
Email: trivedi@indiana.edu
Awarded: $100,698.00

How does managed care, through restrictions on access, affect utilization? What specific plan attributes influence access and utilization? While previous work has examined utilization relative to broad categories of plans (e.g., HMOs, PPOs, POSs), Pravin Trivedi, Ph.D., of Indiana University is looking at specific plan characteristics, such as whether members are required to sign up with a certain provider to whom they must go for all routine care, whether they need approval or a referral to see a specialist, whether the plan has a list of preferred providers, and whether the plan pays for any of the costs of visits to doctors not associated with the plan. Using data from the CTS’ Household and followback surveys, the researchers will study the determinants of an individual’s selection of plans with particular attributes. The researchers will also examine how restrictions on access affect utilization while allowing for self-selection and explore differences in what the members reported and what insurers reported.

Title: Utilization Review: Cost Savings and Quality of Care
Grantee Institution: The University of Chicago
Principal Investigator: Willard G. Manning, Ph.D
Grant Period: January 01, 2002 - June 30, 2004
Email: w-manning@uchicago.edu
Awarded: $468,489.00

How does utilization review affects costs, outcomes, and quality of care? Researchers conducted a natural experiment created by UnitedHealthCare's (UHC) decision to drop utilization review in November 1999. They examined claims and administrative data from the nine UHC regions before and after they terminated the utilization review program. The study included individuals enrolled in the UHC's HMO and PPO plans between October 1997 and February 2001, and will include commercial, Medicare, and Medicaid beneficiaries. Two groups were examined: those with ambulatory care sensitive conditions and patients with diabetes. This study informs decision makers about the extent to which utilization review programs generate savings and affect health outcomes and health care quality.

Title: Autologous Bone Marrow Transplantation (ABMT) and the Treatment of Breast Cancer: The U.S. Experience
Grantee Institution: RAND Corporation
Principal Investigator: Richard A. Rettig, Ph.D.
Grant Period: December 15, 2001 - December 31, 2004
Email: Richard_Rettig@rand.org
Awarded: $410,026.00

What is the U.S. experience with autologous bone marrow transplantation (ABMT) and high dose chemotherapy in breast cancer treatment? The researchers examined how treatment decisions were made and lessons that can be applied to the use of emerging technologies in the future. The study consisted of several projects, including 1) development of a chronology of the diffusion of ABMT; 2) examination of the development of clinical effectiveness evidence; 3) analysis of the decision to cover the therapy by third-party insurers and how those decisions were influenced by several external environmental factors; 4) review of the economics of ABMT utilization; and 5) analysis of the advocacy politics surrounding the use of ABMT. Through a series of descriptive and normative questions, the research team conducted an in-depth case study about the controversial treatment. This project provides policymakers with a useful framework for thinking about technology assessment in the future.

Title: Changes in Physicians’ Decisions to Treat Medicaid Patients and the Uninsured
Grantee Institution: Health Research and Educational Trust
Principal Investigator: Phillip R. Kletke, Ph.D.
Grant Period: December 01, 2001 - June 30, 2005
Email: pkletke@aha.org
Awarded: $212,604.00

What are the factors in physicians’ decisions to treat Medicaid and uninsured patients and how have those factors and decisions have changed over time? Specifically, the researchers addressed four questions: 1) Have the determinants of physician participation in Medicaid changed since the mid-1980s? 2) Have the factors influencing physicians’ decisions to treat uninsured patients changed in recent years? 3) Which physicians have discretion about whether they accepted underserved patients and how does that affect the number of patients they treat? 4) To what extent are Medicaid patients and uninsured patients concentrated into the practices of a few physicians? As part of these analyses, the research team examined the proportion of physicians treating Medicaid and uninsured patients, including how that number has changed over time. They also looked at the effects of the changing health care market (i.e., growth of managed care and changes in physician organization) on physicians’ decisions. The objective of the project was to provide policymakers with more information about the factors that influence physicians’ decisions to treat underserved populations.

Title: State Health Care Purchasing Practices
Grantee Institution: JSI Research and Training Institute
Principal Investigator: James H. Maxwell, Ph.D.
Grant Period: December 01, 2001 - February 25, 2004
Email: maxwell@jsi.com
Awarded: $101,184.00

State employers are in the midst of the worst budgetary and health care cost crisis since the Depression. This budget crisis may force states to align their health care purchasing practices with the private sector and consider radical changes in health benefits offered to their employees. Since states purchase health care for more than four million employees and retirees and millions more dependents, the effects of this crisis are far reaching. In a recent survey of senior benefits managers, we found that states have adopted a standard approach to health care purchasing used in the private sector. However, while private employers have used tough negotiating tactics such as competitive bidding to discipline their carriers on price, states have been unable to execute the same leverage in their relationship with carriers. Unlike the private sector, the majority of states continue to offer a wide choice of health carriers to their employees, which diminishes their purchasing leverage. Large private employers have adjusted premium contribution levels in order to steer their employees into the most cost-effective carriers. States have been unable to pursue this strategy as aggressively as the private sector due to constraints imposed by strong unions, regulations and politics. They have traditionally maintained higher contribution levels for individual coverage than large private employers, but this strategy is unlikely to be sustained. The current budget crisis has forced a reevaluation of health care purchasing practices among state employers. Some state employers are considering private sector practices that would not have been considered before. These practices include increasing employee cost-sharing through lower employers contribution levels, and higher co-payments for drugs. However, these cost-sharing strategies, in the context of rising health care costs and declining state budgets, have resulted in a loss of real wages for state employees. This has a particularly strong impact on low wage state employees. The size and influence of states employers places them in a unique position to not only be more innovative in their health care purchasing, but also play a leadership role in market reform. Yet, health care purchasing remains a relatively undeveloped area of research despite the importance of large employers in health system reform. Research to date has largely focused on rates of coverage and benefits offered, rather than purchasing practices and organizational arrangements. Studies of the public sector typically examine the purchasing practices of a few innovative states rather than focusing on state employers as a group. Our previous work on corporate health care purchasing, as well as this study of state employers groups aim to fill this gap in knowledge, and contribute to the development of a new area of research on the health care purchasing of large employers in the public and private sectors. Such research is important not only because large employers’ purchasing practices determine the type and intensity of pressures exerted on the health care system, but also for state employers that seek to play an influential role in the larger public policy debate about the future of health care in this country.

Title: Guaranteed Renewability in Individual and Group Health Insurance: Functioning and Future Prospects
Grantee Institution: University of Pennsylvania, The Wharton School
Principal Investigator: Mark V. Pauly, Ph.D
Grant Period: November 01, 2001 - October 31, 2002
Email: pauly@wharton.upenn.edu
Awarded: $99,972.00

If private insurers can be encouraged to improve the protection offered by their products, is it possible that those improvements can benefit consumers and obviate the need for regulation with undesirable side effects? This project focused on the individual and small group insurance markets; namely, the sharp increases in premiums which occur when an individual incurs large medical expenses. The researchers carried out three research tasks, summarized as follows: 1) Estimated the age profile of premiums for an “optimal,” benchmark guaranteed renewability (GR) policy that would cover claims (including the expenses of high-risk insureds) but not be priced so high that low-risks would leave for a cheaper policy. 2) Used data from MEPS, longitudinal claims data bases, and the Health and Retirement Survey to calibrate an empirically based, “exploratory” model derived from the optimal policy described in (1) that they can use in task #3. 3) Simulated hypothetical case studies that members of the Society of Financial Service Professionals, participating in “virtual focus groups,” evaluated on the basis of degree of realism. This study determines the effects of guaranteed risk on public policy, (particularly if GR could provide protection to high risks in a population) and informs insurance firms and insurance regulators on how to make GR work better.

Title: The Safety Net and Employer-Provided Health Insurance
Grantee Institution: Northwestern University
Principal Investigator: Anthony T. LoSasso, Ph.D.
Grant Period: October 01, 2001 - March 31, 2004
Email: a-losasso@northwestern.edu
Awarded: $310,511.00

There is extensive literature on the extent to which public health insurance coverage through Medicaid induces less private health insurance coverage. However, little is known about the effect of other components of the health care safety net in crowding out private coverage. The researchers’ goal was to examine the impact of the health care safety net on the health insurance coverage of children. They conducted an individual-level analysis of health insurance coverage using data from the Current Population Survey for the years 1990-2000 combined with a long panel of state level data on hospital uncompensated care and free and reduced price care offered by Federally Qualified Health Centers (FQHCs). They focused on two distinct groups for the analyses: children aged 14 and under and single, childless adults aged 18 to 64. Because measures of the safety net are likely to be confounded with insurance coverage, the researchers used an instrumental variables approach in estimating the impact of the safety net on health insurance coverage. The instruments for the measures of the safety net included measures of tax appropriations and state and local support received by hospitals and FQHCs, state Disproportionate Share payments, state uncompensated care pool dollars, and the amount of state budget surplus or deficit. They also controlled for Medicaid eligibility of sample members with standard techniques. By additionally including state fixed effects the researchers avoided the bias that occurred in previous cross-sectional designs because of unobserved differences across states that resulted in, for example, high levels of both uninsurance and safety net dollars. Including state fixed effects let them restrict the analysis to the within-state variation in health insurance coverage and the health care safety net measures. When the researchers omitted state fixed effects, they observed that high levels of hospital uncompensated care were associated with statistically significantly higher levels of uninsurance and lower levels of both public insurance and private insurance. Their results implied that a one standard deviation increase in hospital uncompensated care per population (a 46 percent increase) would be associated with a 3 percentage point increase in the uninsurance rate among children. However this result, which generally conforms to prior findings, did not control for unobserved state heterogeneity. When the researchers included state fixed effects, their results provided mixed evidence on the extent of crowding-out. Hospital uncompensated care does not appear to crowd-out health insurance coverage and health center uncompensated care appears to crowd-out private coverage for adults and, in some specifications, children. Less crowd-out for hospital uncompensated care may be plausible given that most hospital uncompensated care pays for big ticket items rather than more routine care that individuals may think of when making coverage decisions. Most of the arguments about the exogeneity of their uncompensated care measures suggest that their estimates should overstate the extent of crowd-out. Similarly, the likely potential endogeneity concerns about their instruments would also suggest that they should overstate the extent of crowd-out. That the researchers did not find strong evidence of crowd-out suggests that the effects may be small if present. Further study of the determinants of uncompensated care provision is called for, and would shed light on the validity of potential instruments for uncompensated care.

Title: Creating and Sharing Improved Tools for Policymakers to Assess Risk Adjustment Approaches
Grantee Institution: University of California, San Francisco
Principal Investigator: R. Adams Dudley, M.D.
Grant Period: October 01, 2001 - September 30, 2002
Email: adudley@itsa.ucsf.edu
Awarded: $100,000.00

How can policymakers best learn about and assess risk adjustment methods? The researchers will create an on-line, interactive tool for policymakers to learn about their risk adjustment options. The website will provide explanations of summary statistics and definitions of risk selection behaviors. In addition, policymakers will be able to create scenarios in which they vary the health plan data required, the risk adjustment model, whether the risk adjustment is prospective or concurrent, whether reinsurance is part of the strategy, and whether risk adjustment is passed through to medical groups. By simulating real world selection behavior under a variety of assumptions about incentives to adopt different selection strategies, policymakers can better understand the likely behavioral responses to choosing one risk adjustment approach versus another. The objective of the project is to provide readily accessible information, in a policy context, that will permit policymakers to develop a better understanding of risk selection and the need for risk adjustment.

Title: The Anatomy of ERISA Health Plans: Describing their Basic Structure and Key Areas of Variation
Grantee Institution: George Washington University, Center for Health Services Research and Policy
Principal Investigator: Karl Polzer, Ph.D
Grant Period: October 01, 2001 - August 31, 2002
Email: karlp@gwu.edu
Awarded: $77,608.00

How do variations in ERISA health plans affect the formation of policy? The researchers examined the anatomy of key types of ERISA health plans (i.e. identifying the fundamental characteristics, features, and structures that distinguish the plans), focusing on those distinctions that are relevant to the current “patients’ rights” and “defined contribution” debates. In addition, they attempted to correct “prevalent public misconceptions” that may impede legislative development (i.e. the misconception that HMO’s are making health plan decisions, when, in fact, decisions may be made by the administrators or fiduciaries of an ERISA plan.) The researchers hypothesized that “there exist important areas of variation among different types of ERISA health plans that might present policymakers with cause to consider crafting flexible laws and regulations that take into account this variation.” The objective of the project was to provide policymakers with information on variations in ERISA health plans that are relevant to current debates on health plan regulation.

Title: Patterns of Individual Coverage
Grantee Institution: University of Southern Maine, Muskie School of Public Service
Principal Investigator: Andrew F. Coburn, Ph.D
Grant Period: October 01, 2001 - June 30, 2003
Email: andyc@usm.maine.edu
Awarded: $100,795.00

Grant Description: How do the dynamics of the individual insurance market inform how long participants remain covered? What factors affect the length of participation and subsequent insurance status? Researchers at the University of Maine examined three specific questions: 1) Who uses the individual insurance market? 2) What role does individual insurance play in providing longer-term versus bridge coverage; and 3) What are the patterns of entry into and exit from the individual insurance market? The objective of the study was to better inform the policy debate, at both the federal and state levels, about the best options for sustaining affordable individual insurance coverage. Policy Summary: •Participants in the individual insurance market are a heterogeneous group. Most individual spell periods begin when people enter from and exit to employer-based coverage. This implies that a primary function of individual insurance is to bridge gaps in employer-based coverage. However, an important minority of the individually insured maintains coverage for more than two years, with small business employees and the self-employed having the longest spells. •Spells of individual insurance coverage are generally brief, with a median spell length of eight months. This lends support to insurance industry claims that marketing and administrative costs are higher than for group coverage. Given that most of this volatility involves moving from and to employer-based coverage, it is unclear what policymakers can or should do to stabilize individual coverage for this group. •Health status does not affect the likelihood that someone will be individually insured at a point-in-time, versus being uninsured or having employer-based or public coverage. Given that those in poorer health are likely to have a higher demand for insurance, this suggests insurance companies’ techniques for avoiding adverse selection may be effective at limiting enrollment among sicker adults. Also, many of the sickest individuals may have public coverage. •Health status relates to duration of individual coverage, with those in fair or poor health having the shortest spells. •About 40 percent of consumers in fair/poor health leave individual coverage for public insurance, perhaps as they become eligible for Medicare by virtue of age or disability, or financially eligible for Medicaid. •Nearly one-sixth of those exiting an individual insurance plan do so without another source of health insurance to take its place. •Healthier and younger individuals are much more likely than their sicker or older counterparts to end up uninsured, supporting prior theory and research on adverse selection spirals in the individual market. Although younger persons generally face lower premiums, costs appear to be high enough (and self-perceived health risks low enough) to make them unable or unwilling to continue buying individual coverage. While it is unclear what effect tax credits will have on covering the uninsured generally, if sufficiently generous, they may help keep younger and healthier participants in the market. •Individuals with family incomes between 100 percent and 200 percent of the federal poverty level have a slightly elevated rate of individual coverage (37 percent of the individually insured have incomes below 200 percent of poverty). Given the financial constraints of this income group and the high cost of many individual plans, many may be purchasing plans with high deductibles and/or limited benefits (although identifying benefit structure is beyond the scope of this study). Future research on individual coverage should investigate access to health care services for those in lower income brackets. •While the bulk of those who exit an employer-based plan may be covered by HIPAA reforms, the nearly one-third that obtain individual coverage after being uninsured or covered by a public program would not be protected by HIPAA provisions. •The patterns of individual insurance coverage are complex and vary for different subgroups that hold individual plans. For most, individual health insurance bridges periods of employer-based coverage, meaning that targeting policy interventions to this group (as HIPAA does) may be appropriate. However, there are significant minority subgroups in the individual market that are overlooked by this type of reform. Thus, policymakers should be mindful of the variability of individual insurance spells as they consider reforming or expanding access to individual health insurance coverage.

Title: Second-Generation Evaluation of Buyers Health Care Action Group (BHCAG)
Grantee Institution: University of Minnesota
Principal Investigator: Roger F. Feldman, Ph.D.
Grant Period: October 01, 2001 - January 31, 2004
Email: feldm002@tc.umn.edu
Awarded: $411,485.00

How has BHCAG affected consumers’ awareness of quality and switching behavior? Can the BHCAG model be used elsewhere? Researchers at the University of Minnesota assessed the effectiveness of the Buyers Health Care Action Group's (BHCAG) efforts to promote employee consciousness of quality differences among care systems and considered whether the BHCAG model can be exported to other communities. As part of this evaluation, they studied the effectiveness of BHCAG’s annual “quality award” in raising consumer awareness of quality and increasing their use of quality information when selecting a care system. They also investigated the reasons that employees switch care systems and the role of perceived quality differences in that decision. The researchers assessed whether the BHCAG model is uniquely suited to the Twin Cities or if it is flexible and attractive enough to purchasers and providers to be successful in other market areas and in other market conditions. The researchers extended the work done under their recently-completed HCFO evaluation of BHCAG. This study further informs policymakers and purchasers about direct-contracting and its ability to be transferred to markets beyond the twin cities.

Title: Effects of the Balanced Budget Act and Market Forces on the Health Safety Net
Grantee Institution: Virginia Commonwealth University
Principal Investigator: Gloria J. Bazzoli, Ph.D.
Grant Period: September 01, 2001 - August 31, 2004
Email: gbazzoli@vcu.edu
Awarded: $588,935.00

Grant Description: How has the Balanced Budget Act of 1997 (BBA) and other major trends (i.e., growth in the number of uninsured, growth in private managed care, and Medicaid managed care) affected the US hospital safety net? Researchers at Virginia Commonwealth University examined the structural, operational, and outcome-related impacts of the changing environment. Specifically, they studied four research questions: 1) How are recent changes in hospital reimbursement through the BBA and the 1999 Balance Budget Refinement Act (BBRA) interacting with other market and policy forces to affect the role and involvement of hospitals in local health safety nets? 2) How are current financial pressures affecting the operational decisions of safety net hospitals related to patient care staffing and the intensity of services provided? 3) How are current financial pressures and operational decisions in response to these pressures affecting the quality of patient care within safety net hospitals? 4) As BBA and BBRA provisions are reassessed and revised over the next two years, what potential effects would these revisions have on hospital involvement in safety net care, their operational decisions, and ultimately the quality of care that patients receive? This proposal provides information to policymakers and hospital administrators about the effects on the safety net of changes in reimbursement to help them formulate policy that addresses potential unintentional consequences of the BBA. Policy Summary: The project assessed the effects of the BBA and other important market factors on the U.S. hospital safety net. Specifically, the researchers examined: the local structure of the hospital safety net by examining the changing roles and involvement of hospitals in safety net care, the operation of safety net hospitals by studying staffing intensity, and the outcomes of care for indigent patients as measured by selected quality of care indicators. The discussion below summarizes policy relevant findings in each of these areas. Structure of the Hospital Safety Net The results demonstrate that certain hospitals reduced their indigent care involvement during the late 1990s and will likely continue to do so in the future. Specifically, the researchers found that uncompensated care was declining in hospitals that are not core safety net institutions to the market. Although not part of the core, the contributions of these hospitals add up, and thus, their cutbacks have a meaningful impact on core safety net institutions. They also found that non-safety net hospitals were cutting back on public health and specialty services commonly used by uninsured and poor patients, which may signal that they intend to reduce their future involvement in charity care activities. Finally, they found that voluntary safety net hospitals that felt greater fiscal pressures from Medicare BBA experienced particularly sharp declines in their provision of uncompensated care and that this effect varied by hospital market conditions. Overall, the findings of the study in conjunction with those of other recent studies suggest that the hospital safety net continues to be intact but is increasingly strained as indigent care becomes concentrated in a small set of core facilities. The policy implications from this analysis are that continued targeting of public support to hospitals that demonstrate a commitment to indigent care provision is justified as is continued scrutiny of non-profit hospital participation in local health safety nets. Operation of Safety Net Hospitals The researchers’ analysis in this area suggests that non-safety net hospitals most susceptible to the provisions of the BBA experienced a decline in staffing ratios about twice the rate of non-safety net hospitals that were least susceptible to the BBA. The researchers were unable to detect an effect of the BBA on staffing at safety net hospitals. Thus, the BBA may have exasperated the nursing shortage at non-safety net hospitals that are heavily reliant on Medicare patients because the financial effects of BBA resulted in lower wages, which in turn affects the supply of nurses. Safety net hospitals did not respond to the provisions of the BBA by cutting staffing, and this is likely due to the fact that about one-third of safety net hospitals are public. Quality of Care in Safety Net Hospitals A final area of inquiry relates to changing hospital quality of care for patients of safety net and non-safety net hospitals. Preliminary analysis found some evidence that core safety net hospitals had lower quality than non-safety net hospitals. They found no evidence that hospitals subject to greater financial pressure from Medicare had lower quality before or after the implementation of BBA. Nor did they find evidence that the relative quality of care at core safety net hospitals relative to non-safety net hospitals changed after BBA. The implications of these findings are that BBA did not adversely affect quality of care at safety net hospitals or hospitals most vulnerable to BBA financial pressure. The lower quality observed in core safety net hospitals may require more study, though, and potential intervention to assure the population served by these hospitals receives high quality care.

Title: Assessing the Impact of a Public Report on Hospital Quality: A Controlled Experiment in the State of Wisconsin
Grantee Institution: University of Oregon
Principal Investigator: Judith H. Hibbard, Dr. P.H.
Grant Period: September 01, 2001 - May 31, 2005
Email: jhibbard@oregon.uoregon.edu
Awarded: $530,126.00

Grant Description: How do hospitals react to public reports of their quality and how do such reports influence consumers’ perceptions of hospital quality? This study, conducted by researchers at the University of Oregon, assessed whether public reports of quality lead to improvement efforts within hospitals. The researchers also studied whether the public reports created a general impression among consumers about the quality and safety of hospitals in the community. The researchers worked with The Alliance, a large purchasing group based in Madison, Wisconsin, that disseminated the public report. The researchers conducted a controlled experiment in which hospitals were assigned to one of the following three groups. Hospitals in The Alliance, 25 in the region surrounding Madison, were included in the public report. The remaining 100 hospitals in Wisconsin were separated by size (large and small) and randomly assigned to either the other treatment group or the control group. The second treatment group received a report of their own performance compared with other hospitals that was not made public. The control group did not receive any reports. The objective of the study was to assess whether public reporting of hospital quality motivated improved behavior and performance and how public reporting affects consumer perceptions of hospital quality. Policy Summary: In this study the researchers assessed the short and long-term impact of a public hospital performance report on both consumers and hospitals. Hospitals featured in a public performance report were compared with other hospitals that were randomly assigned to receive a private confidential performance report or no report. The findings indicate that making performance public results in improvements in the clinical area reported upon. These improvements were substantially greater than those observed in the private report group of hospitals or among the hospital who received no report. Hospitals included in the public report appeared to be motivated by the belief that the report would affect their public image. And indeed, the evidence from the consumer surveys suggests that the report did affect hospital reputations. The findings provide substantial evidence that making performance public stimulates long-term improvements beyond the improvements stimulated by private reports. The hospitals that improved their performance were much more likely to engage in a wide range of increased improvement efforts immediately after the report. In other words, the actual improvement gains appear to be linked to quality improvement efforts that began in the immediate post-report period. To maximize the value of public performance reporting strategies, it is critical that they effectively address the factors that actually motivate hospital quality improvement. Hospitals appear to be motivated primarily by concerns about protecting or enhancing their public images and less so by immediate market share concerns. Reports that are difficult for consumers to understand or use are not going to enhance or threaten any hospital’s reputation. Only reports, like the QualityCounts report, that make it very explicit for consumers which hospitals are top performers and which ones are not are likely to achieve the results observed in this study. Even though the most common approach to motivating improvement is the provision of private reports and the reliance on professional norms, it appears to be a less effective stratagem than making performance public. The findings indicate that if public reports were designed and disseminated in the same way that the QualityCounts was, it would yield a significant positive impact on quality improvements in hospitals.

Title: The Impact of Quality Information on Consumer Plan Choices: Does Health Status Matter?
Grantee Institution: RAND Coorporation
Principal Investigator: Katherine M. Harris, Ph.D.
Grant Period: July 01, 2001 - June 30, 2003
Email: kharris1@mail.nih.gov
Awarded: $99,617.00

What is the impact of health status on consumers' use of quality information in making health plan choices? Using an Internet-based survey, researchers at RAND will build on a dataset collected as part of an AHRQ-funded small grant to include a series of health status and service use measures. They are addressing the following research questions: What is the effect of health status and experience with the health care delivery system on (1) the overall impact of quality information on plan choices, (2) the relative impact of various forms of information on plan choices, and (3) the trade-offs between provider access and quality that consumers make in choosing health plans? The objective of the study is to inform policy makers and employers whether the substantial investment in the collection and dissemination of plan performance measures which is designed to support consumers’ plan choices also meets the needs and concerns of those in poor health status for whom the consequences of plan choice are the greatest.

Title: Market-Based Reforms and the Quality of Hospital Care in New Jersey
Grantee Institution: University of Pennsylvania
Principal Investigator: Kevin Volpp, M.D., Ph.D.
Grant Period: July 01, 2001 - December 31, 2002
Email: volpp70@wharton.upenn.edu
Awarded: $99,965.00

How has the elimination of New Jersey's rate setting system in 1992, and the accompanying reduction in subsidies for hospital care for the uninsured, affected patient outcomes? The researcher expanded earlier work comparing New York and New Jersey MRI patients in 1994. In particular, he 1) studied the effects of the movement to price competition in NJ on quality and outcomes for patients with shock, acute gastrointestinal bleeding, pulmonary embolus, and AMI; and 2) examined whether hospital market concentration, managed-care penetration in different hospital markets, or a combination of the two are related to changes in quality and outcomes in a price competitive market. The objective of this project was to provide state and federal policymakers with better information about how cost-cutting reforms at the state level have affected quality of care.

Title: The Effect of Local Hospital Networks on the Cost and Accessibility of Hospital Services
Grantee Institution: Boston University
Principal Investigator: Gary J. Young, J.D., Ph.D.
Grant Period: May 01, 2001 - April 30, 2002
Email: health@bu.edu
Awarded: $100,556.00

Do hospital networks enhance the market power of hospitals in ways that lead to higher prices? Do networks produce pro-competitive benefits in the form of new services? Researchers at Boston University's School of Public Health assessed the degree to which networks decrease competition for hospital services and the implications for their costs. The research focused on four questions: 1) What do local hospital networks look like in terms of attributes that are potentially relevant to their effect on the cost and accessibility of hospital services? 2) Do hospitals appear to use networks to enhance their market power for purposes of charging higher prices for their services? 3) Do hospital networks appear to produce pro-competitive benefits such as new services, that expand access to care? 4) Does the structure of hospital networks have implications for their effect on the cost of hospital services? These research questions related to the larger issue of whether antitrust laws should be relaxed in the case of hospital collaborative arrangements. The objective of the project was to inform policymakers about the appropriate level of scrutiny for hospital networks that may reduce competition for hospital services, as well as to assist antitrust enforcement officials and researchers about how to properly conceptualize and measure the degree of competitive rivalry within hospital markets.

Title: Evaluation of Medicare's Local Medical Review Policies for New Medical Technologies
Grantee Institution: University of Minnesota
Principal Investigator: Susan Bartlett Foote, J.D.
Grant Period: May 01, 2001 - December 31, 2003
Email: foote003@tc.umn.edu
Awarded: $555,964.00

How does variation in coverage decisions affect access to new technologies and equity for beneficiaries in the Medicare program? Are Medicare’s Local Medical Review Policies (LMRPs) in need of reform? LMRPs are one of two ways that HCFA evaluates new technologies and procedures in order to make coverage determinations. According to the researchers, a small number of technologies are reviewed through HCFA’s national process, where decisions are made uniformly across the country. However, the majority of such coverage decisions are made by local carriers and intermediaries under contract to HCFA, with the LMRPs binding only in the local jurisdiction. The researchers evaluated variations in LMRPs by analyzing: 1) the players - who participates in and influence decisions; 2) the process - how decision-making procedures differ; 3) the evidence - how evidence of value is solicited and measured; and 4) the outcomes - measuring and mapping timing and content patterns. The objective of the study was to provide policymakers considering the virtues of a more uniform national coverage policy, relative to a more flexible local policy, with better information about the extent of LMRP variation, the sources of variation, and the implications for flexible decision making, beneficiary access, and Medicare equity.

Title: The Impact of Pharmaceutical Formularies on Prescription Drug and Health Care Costs and Utilization
Grantee Institution: Harvard University
Principal Investigator: Richard G. Frank, Ph.D.
Grant Period: May 01, 2001 - April 30, 2004
Email: frank@hcp.med.harvard.edu
Awarded: $642,482.00

What are the effects of a health plan instituting a three-tiered co-payment (TTCP) financing mechanism on prescription drug spending, total health care spending, and patients' compliance with treatment protocols and quality of care? The study, conducted by researchers at Harvard University in conjunction with Merck-Medco, involved an analysis of Merck-Medco administrative, medical and pharmaceutical claims, and encounter data. The researchers investigated the effects of the three-tier co-payments on drug use and costs for both drugs and other health care services as well as the effects of the three-tier formulary on patterns of care for patients diagnosed with depression, congestive heart failure, and hypercholesterolemia. This study informs public and private policymakers - particularly those involved in designing proposals for adding a prescription drug benefit to Medicare - on the range of implications a three-tier copay strategy for prescription drug cost containment may have for patients, plans, and the market.

Title: Medicare Risk-Contracting: Impact on Access and Quality for Medicare HMO Enrollees and Vulnerable Populations
Grantee Institution: University of Southern California
Principal Investigator: Glenn A. Melnick, Ph.D.
Grant Period: February 01, 2001 - January 31, 2005
Email: gmelnick@usc.edu
Awarded: $652,866.00

What are the effects of Medicare managed care on access and quality (compared to Medicare fee-for-service) for the general population of managed care beneficiaries and vulnerable populations, in particular? Based on previous studies finding that managed care works best for those who know how to work the system, the researchers at the University of Southern California hypothesize that vulnerable populations are more likely to plan than their non-vulnerable equivalents. They will test this hypothesis at both the patient and plan levels, examining the following questions: 1) Do vulnerable populations enrolled in Medicare managed care receive different levels or quality of care than their less vulnerable counterparts? and 2) Do health plan characteristics (e.g. type of ownership, organizational structure, or experience with Medicare risk contracting) influence the level of care vulnerable populations receive? The goal of this study is to provide policymakers with a deep and broad analysis of the experiences of Medicare managed care enrollees. They will also conduct a series of case studies to assess the technical feasibility of adding outpatient, pharmacy, and long-term care data from health plans to the OSPHD database.

Title: Evaluating Managed Care Patient Protection Laws
Grantee Institution: Wake Forest University
Principal Investigator: Mark A. Hall, J.D.
Grant Period: February 01, 2001 - August 31, 2004
Email: mhall@wfubmc.edu
Awarded: $583,964.00

What are the effects of state managed care patient protection laws on patients, providers, plans, and network, corporate, and market structures? The researchers at Wake Forest University 1) developed an index of regulatory intensity of patient protection laws (among states and over time); 2) learned more about the complexities surrounding the implementation and enforcement of states’ patient protection laws; and 3) determined whether patient protection laws have achieved their intended effects and have avoided unintended or potential harm by assessing the impact of such laws on patients, providers, plans and on network, corporate, and market structures. The first two major tasks were achieved by studying primary legal sources and conducting a systematic national survey of state regulators and health care lawyers. The third major task was achieved through a combination of quantitative and qualitative studies: at least two rounds of the Community Tracking Survey of patients and physicians (1996-7 and 1999) was analyzed, and in-depth case studies in 6 selected states was conducted. Given that policy makers at the federal and state levels have been encumbered by a lack of empirical evidence, the objective of the study was to inform the national debate on the need for laws to protect patients enrolled in managed care organizations.

Title: Insurance Coverage, Use of Prenatal Care, and the Financing of Birth Outcomes in Nine States Pre and Post Welfare Reform
Grantee Institution: Emory University
Principal Investigator: E. Kathleen Adams, Ph.D.
Grant Period: January 01, 2001 - January 31, 2002
Email: eadam01@sph.emory.edu
Awarded: $258,257.00

How does the Personal Responsibility and Work Opportunity Reconciliation Act 's (PRWORA) de-coupling of cash assistance from Medicaid affect insurance status and access to and utilization of prenatal care for low-income pregnant and childbearing women? Researchers at Emory University tested two hypotheses: 1) low-income women are less likely to be insured prior to and during pregnancy as a result of PRWORA; and, 2) decreased enrollment in Medicaid due to PRWORA will make it more likely that low-income women delay prenatal care, resulting in poor birth outcomes and increased need for financial resources following birth. They speculated that even if the rate of Medicaid-funded births remains steady, the costs of caring for high-risk infants rises because of the increase in uninsurance prior to delivery. The objective of this project was to inform state and federal policymakers about the effects of welfare reform on having insurance, accessing care, and costs of care for both women and infants.

Title: Trends in Medigap Insurance and the Impact of Recent Market and Regulatory Changes
Grantee Institution: PDF, LLC
Principal Investigator: Peter D. Fox, Ph.D.
Grant Period: January 01, 2001 - December 31, 2003
Email: peterfox8@earthlink.net
Awarded: $231,000.00

-Consumers like the standardized benefits as do state regulatory agencies. -The federal legislation reduced the incidence of complaints and fraud sufficiently that states are able to assign minimal staff to regulating the Medigap market. -Contrary to the expectations of the research team, no evidence was found that the Medigap market became more competitive as a result of standardizing the benefit packages. -Federal law has not standardized the manner in which the age of the enrollee is reflected in setting premiums, although some states have done so. The project team recommends that the federal government do so on a national basis. -The three plans that cover prescription drugs are problematic. The benefits are both meager and expensive. The high costs reflect, in part, adverse selection, i.e., sick people disproportionately enrolling in the plans that cover prescription drugs. Another problem is that the carriers are precluded from adopting many of the cost management techniques that have become the norm in employment-based drug coverage. -Some of the benefits, notably coverage of the Part B deductible, preventive care, and at-home recovery are of questionable merit and should be rethought. -The open enrollment provision enacted in Missouri, which mandates that carriers accept enrollees without regard to health status, annually on their anniversary date, who want to switch Medigap carriers, had only a small (although measureable) effect on carrier pricing practices, although it did expand consumer choice and merits being emulated.

Title: Prescription Benefit Comprehensiveness and Costs of Care in Elderly Persons with Chronic Illness: The Medicare Enrollee Drug Study (MEDS)
Grantee Institution: University of Washington
Principal Investigator: Mark P. Doescher, M.D., MSPH
Grant Period: November 01, 2000 - April 30, 2003
Email: mdoesche@u.washington.edu
Awarded: $100,000.00

The Medicare Enrollee Drug Study (MEDS) explored the relationship between prescription drug coverage and health care costs in a sample of elderly Medicare+Choice enrollees. In particular, MEDS had the goal of assessing for any cost offsets (i.e., the drug costs of persons with a benefit might be partially or fully offset by a reduction in other health care costs)—a key issue in the current debate over how to add prescription drug coverage to Medicare. The sample included elderly Medicare recipients who were enrolled in Group Health Cooperative (GHC), a large, established HMO that offers a comprehensive, coordinated-care Medicare+Choice plan. The sample included persons with one or more of hypertension, diabetes, congestive heart failure, or coronary artery disease—all conditions for which medications are known to reduce morbidity and mortality. Because 85 percent of GHC enrollees are served by owned clinics with on-site pharmacies, MEDS was able to capture most enrollees’ pharmacy utilization patterns, regardless of their prescription benefit status. The key observations from MEDS are that seniors who lacked prescription drug coverage faced significantly greater non-pharmaceutical-related costs of care than seniors who had drug coverage and that the savings in inpatient (hospital) costs more than offset the cost to the plan of medications for those with a benefit. These cost assessments were complemented by a companion study, “Prescription Benefits as a Quality Measure,” funded by a grant from the Agency for Healthcare Research and Quality (AHRQ). The AHRQ study explored the relationships between prescription drug benefit status and several aspects of health care, including medication adherence and risk of hospitalization. Key findings from the ARHQ-funded project were that seniors who lacked prescription drug coverage were more likely to report problems affording medicines, had worse adherence to medication regimens, and, most importantly, faced a greater risk of hospitalization over the two-year period studied. Taken together, these observations suggest that using GHCs’ approach to designing a prescription drug benefit may reduce overall health care costs among persons with selected, common, chronic health conditions. Key elements of the GHC approach include limited cost sharing with low co-payments and no annual or lifetime caps, reliance on a closed formulary emphasizing generic medications and selected proprietary drugs (often purchased with significant price discounts) and use of convenient, on-site pharmacies. This strategy of providing generous coverage for evidence-based medications is a radically different approach than anything being considered by Congress or the Bush Administration. All current proposals feature large premiums, co-payments, and even gaps in coverage, yet findings from MEDS suggest an alternative may exist. Medicare+Choice insurers who emulate the GHC approach may be able to offer a substantially better benefit for a much lower cost.

Title: Early Implementation Experience of Companies Offering internet-based Models for Employer Health Benefits
Grantee Institution: University of Minnesota
Principal Investigator: Jon B. Christianson, Ph.D.
Grant Period: October 01, 2000 - November 30, 2001
Email: chris001@tc.umn.edu
Awarded: $53,136.00

What is the impact of internet direct contracting (IDC) systems? In this first phase of the project, the researchers at the University of Minnesota contrasted the approach used by Vivius, Inc. with other internet-enabled models directed at the employer/employee health insurance market and tracked the implementation over the first eight months. A second evaluation phase followed. The researchers also endeavored to answer a number of practical questions that arose with the introduction of IDC models in response to a defined contribution model of health care delivery and financing. Their objective was to inform private and public policymakers on the implications of implementing an IDC model and the interactions between such a model and the market as a whole.

Title: Evolution of Self-Insurance in an Era of Managed Care
Grantee Institution: Wayne State University
Principal Investigator: Gail A. Jensen, Ph.D.
Grant Period: August 01, 2000 - February 28, 2003
Email: gail.jensen@wayne.edu
Awarded: $298,126.00

What is the relationship between increased state and federal managed care insurance regulations and employers’ decisions to self-insure their managed care offerings? The researchers at Wayne State University will test the degree to which the decline in the percentage of employees who were offered self-insured managed care plans may be related to the passage of HIPAA and other federal mandates that could be applied to self-insured plans despite ERISA. In order to better understand the effects of federal and state policies on self-insured market between 1993 and 1999, the researchers will: 1) describe the evolution of self-insurance among large (over 200 workers) and smaller firms, including trends related to type of firm and type of health plan; 2) assess whether there is a causal relationship between federal and state-level insurance regulations on employers’ self-insurance decisions, and on the type of self-insured plan chosen; and 3) compare effects of state regulations pre- and post-1996 on self-insured and purchased plans, within the context of the 1996 federal reforms. Their objective is to inform policymakers on the interrelationships between self-insured employer plans, state and federal regulations, ERISA, and the market.

Title: The Fishing Partnership Health Plan: A Model for Reducing the Numbers of the Working Uninsured
Grantee Institution: Boston University
Principal Investigator: Stephen M. Davidson, Ph.D.
Grant Period: July 01, 2000 - June 30, 2002
Email: sdavidso@bu.edu
Awarded: $400,000.00

What effect has the establishment of the Fishing Partnership Health Plan (FPHP), a health plan developed in Massachusetts to provide subsidized coverage to uninsured commercial fisherman, many of whom operate as small business owners or employees, had on this community? The plan - developed and implemented by Caritas Christi Health Care System, the Massachusetts Fisherman’s Partnership, and Tufts Health Plan - began offering services in December 1997. As of September 30, 1999, it had 683 subscribers with 1437 covered lives. Coverage was subsidized by state and federal sources, and the largest premium subsidy available is 46%. The researchers: 1) determined the utilization and costs of FPHP as compared to a control group of insured persons matched on several characteristics; 2) identified factors associated with enrolling or deciding not to enroll; and 3) examined the process of developing the FPHP in order to identify critical steps, issues, and roles of key players to determine the feasibility of implementing a similar model with other uninsured working populations. This study provides policymakers with a better understanding of whether the FPHP model should be considered as a model for other uninsured groups.

Title: Studies of the Working Uninsured, Their Dependents and Insurance Reform on Their Behalf
Grantee Institution: The Urban Institute
Principal Investigator: Linda J. Blumberg, Ph.D.
Grant Period: June 01, 2000 - July 31, 2002
Email: lblumber@ui.urban.org
Awarded: $825,883.00

What are the effects of certain insurance market reforms that were designed to expand coverage? Researchers at the Urban Institute conducted several analyses looking at the working uninsured and these effects using the Current Population Survey (CPS), the National Survey of America’s Families (NSAF), and the National Health Interview Survey. In particular, they aimed to answer the following five questions: 1) Who are the working uninsured? 2) Why do employer-sponsored coverage rates vary across the 50 states? 3) Have health insurance market reforms affected the composition of insured risk pools? 4) Did HIPAA have any effect in the small group market? and 5) Why do so many workers in large firms lack health insurance? The objective of this series of studies was to provide a better understanding of the working uninsured in order to better inform the policy debate about coverage expansions and identify those interventions most likely to work.

Title: The Impact of the Prospective Payment System on Nursing Home Care
Grantee Institution: Brown University
Principal Investigator: David Gifford, M.D.
Grant Period: June 01, 2000 - May 31, 2002
Email: david_gifford@brown.edu
Awarded: $359,732.00

What are the effects of the Medicare Prospective Payment System (PPS) for skilled nursing facilities (SNFs) on access to, and case-mix changes in, SNFs, and on outcomes for SNF patients in Ohio? The SNF PPS creates a fixed, all-inclusive, per diem reimbursement rate per patient, based on where that patient fits within a resource utilization group (RUGs) classification system. For some high-need RUGs, the cost of care may be higher than the per diem rate set by the SNF PPS due to increased pharmaceutical use, the costs of which may not have been fully assessed when calculating the per diem. The researchers hypothesized that instituting a prospective payment system may give SNFs the incentive to block access to care for patients who fall into more severe RUGs classifications, potentially reducing care options and increasing the risk of negative outcomes for frail elderly. The researchers 1) examined the effect of the SNF PPS on patient-level indicators, including access to SNFs, utilization of costly care (including pharmaceutical therapies whose costs go above the per diem cap) and re-hospitalization during high acuity episodes; and 2) examinedg the effect of the SNF PPS on facility-level indicators, such as case-mix, changes in SNF staffing and bed availability. The objective of this project was to better inform policymakers about the implications of prospective payment cost-reduction strategies on access to and quality of care through skilled nursing facilities.

Title: Health and Economic Consequences of Medicaid Disenrollment in New York City
Grantee Institution: Montefiore Medical Center, Albert Einstein College of Medicine
Principal Investigator: Peter Arno, Ph.D.
Grant Period: June 01, 2000 - May 31, 2001
Email: parno@montefiore.org
Awarded: $99,115.00

What is the relationship between Medicaid disenrollment due to welfare reform and the increase in hospitalizations for ambulatory case sensitive (ACS) conditions in New York City? The researchers at Montefiore Medical Center posited that access to primary care could decrease the need for in-patient hospitalizations for certain ACS conditions, and that the increase in these hospitalizations is correlated with lack of primary care access due to welfare reform-induced Medicaid disenrollment. The researchers 1) measured the rate of ACS discharges for selected conditions; and 2) quantified the cost of ACS hospitalizations that can be linked to Medicaid disenrollment, to estimate the cost of welfare reform to the city. Their goal was to inform policymakers on the health and economic consequences of Medicaid disenrollment.

Title: Understanding Medical Necessity Decision Making
Grantee Institution: Stanford University
Principal Investigator: Linda Bergthold, Ph.D.
Grant Period: June 01, 2000 - October 31, 2001
Email: Linda.bergthold@watsonwyatt.com
Awarded: $297,226.00

How do policies regulating medical necessity decision-making influence national health plans? Researchers from Stanford University attempted to answer the following questions: 1) Who are the medical necessity decision makers? 2) How are the terms defined and what information do decision makers use in making their decisions, including what type of evidence and cost effectiveness information is considered? 3) What procedures do health plans use to communicate with physicians and patients throughout the decision making process and to track and use coverage decisions for quality improvement? 4) How can variation in terminology and application of guidelines be reduced? 5) What is the role of accreditation, regulation, legislation, and organizational policies and procedures in promoting clearer definitions and more consistent decision making? and 6) How do the answers to the first five questions vary by the size of the health plan, its tax status, degree of management of care, or geographic region? The objective of this project was to test the findings of a similar project recently completed in California and provide a better understanding of medical necessity decision-making to state and national policymakers.

Title: Causes and Consequences of the HMO Underwriting Cycle
Grantee Institution: University of Minnesota
Principal Investigator: Douglas R. Wholey, Ph.D.
Grant Period: June 01, 2000 - May 31, 2001
Email: whole001@tc.umn.edu
Awarded: $99,996.00

What are the potential policy impacts of the HMO underwriting cycle? Researchers at the University of Minnesota analyzed the HMO underwriting cycle. They 1) analyzed the determinants of the underwriting cycle for HMOs; 2) analyzed the effect of entry, competition, and state regulation on cycle severity; 3) determined to what degree state regulations exacerbate or mitigate the underwriting cycle; and 4) examined the effect of the cycle severity on HMO financial reserves, provider payments, and enrollment. The objective of this study was to better understand the HMO underwriting cycle in order to predict and estimate the potential policy impacts of the underwriting cycle, including decreased formation of managed care organizations, survival of the most affluent organizations, and the "lumpiness" of premium increases that make planning by providers and purchasers difficult.

Title: Implementation and Impact of Health Based Risk Adjustment
Grantee Institution: Institute for Research and Education, HealthSystem Minnesota
Principal Investigator: David Knutson
Grant Period: June 01, 2000 - May 31, 2003
Email: knutsd@parknicollet.com
Awarded: $747,900.00

Now that various risk-adjustment tools have been developed, what impact is risk-adjusted payment having in the health care marketplace? Researchers at the Institute for Research and Education, HealthSystem Minnesota, will evaluate the implementation of risk-adjustment mechanisms in the following eight markets: Minneapolis-St. Paul; Sacramento, CA; Seattle; Denver; Portland, OR; Baltimore; Phoenix; and Miami. They will survey managed care organizations, assessing in particular the purchaser-health plan relationship as it relates to risk-adjusted payment. Their goal is to inform state and private policymakers on the impact of risk adjustment on the mix of enrollees, costs, and satisfaction of payers and plans.

Title: Evaluating Florida's Medicaid Provider Service Network Demonstration Project
Grantee Institution: Florida Agency for Health Care Administration
Principal Investigator: Bob Sharpe, Ph.D.
Grant Period: April 01, 2000 - June 30, 2004
Email: sharpeb@fdhc.state.fl.us
Awarded: $307,129.00

What effect will enrollment in Provider Service Networks (PSNs) have on Medicaid providers, costs to the program, and care quality and outcomes for beneficiaries? Researchers at the University of Florida (with support from Florida’s Agency for Health Care Administration (AHCA)) evaluated a demonstration project in Florida whereby Medicaid beneficiaries had the opportunity to enroll in PSNs for their health care. Currently, these beneficiaries have the choice of two other products: a Medicaid HMO or a fee-for-service model with primary care case-management. The demonstration was mandated via a state legislative order and was designed and implemented through a Medicaid 1915 waiver. The goals of the PSN demonstration were to slow the growth in healthcare costs by reducing the role of the insurance middle-man; to offer incentives to providers to share risk (unlike in Medicaid managed care models where providers may share risk but would not have incentive for doing so); and to improve coordination and collaboration between Medicaid administrators and providers to improve client outcomes. The evaluation included three distinct, yet overlapping phases: a qualitative study of how the demonstration affected organizations that applied for PSN status; a utilization and reimbursement analysis to assess the PSNs’ cost-effectiveness; and a quality and outcomes analysis, examining quality of care, patient satisfaction, and patient health outcomes of beneficiaries in PSNs. The objective of this evaluation was to understand in what ways the design and implementation of this unique financing/delivery model affects patients and providers, so that policymakers in and outside of Florida may weigh its merits for adoption.

Title: Impact of Medicaid Managed Care on Access to Care and Service Use
Grantee Institution: The Urban Institute
Principal Investigator: Stephen Zuckerman, Ph.D.
Grant Period: April 01, 2000 - December 31, 2002
Email: szuckerm@ui.urban.org
Awarded: $374,284.00

What impact do the different types of Medicaid managed care (MMC) configurations have on access to care and use of health care services by Medicaid beneficiaries? Researchers at the Urban Institute have analyzed data from the nationally representative National Survey of America’s Families Round 1 (data for 1997). They have also conducted a special follow-up survey of states that collected detailed information on their approaches to Medicaid managed care and the capitation rates they pay at the state and county levels. The investigators compared the characteristics of nonelderly Medicaid beneficiaries enrolled in MMC programs relative to those in fee-for-service Medicaid, and examine outcomes related to access and utilization of services, controlling for other factors. They also developed a model that attempts to correct for selection bias into managed care programs. Finally, they used National Survey of America’s Families Round 2 (data for 1999) data to examine changes in access and utilization for Medicaid beneficiaries between 1997 and 1999. The study examined whether Medicaid managed care programs have improved, or impeded, access to care for a national sample of Medicaid beneficiaries.

Title: Business Views of Strengths and Weaknesses of the Employer-Based System for Providing Health Insurance Coverage
Grantee Institution: Economic and Social Research Institute (ESRI)
Principal Investigator: Jack A. Meyer, Ph.D.
Grant Period: April 01, 2000 - June 30, 2001
Email: jmeyer@capu.net
Awarded: $234,568.00

What role do employers play in financing health care coverage? Researchers at the Economic and Social Research Institute first conducted a literature review of writings and research on the employer-based system, which included a review of new designs for the U.S. health care system made by scholars across a broad array of organizations, as well as a review of major national surveys conducted by RAND, the federal government, and others. The literature (and proposals for redesign) on employer financing and contribution policies were also reviewed. The results of the literature review was then used to outline the kinds of issues to address in the employer interview component of the study. The researchers conducted in-depth interviews with 50 to 60 employers to elicit information on what business leaders see as the essential ingredients for reforming the employer based system. They examined questions aimed at understanding how employers view the employer-based system, what problems it creates for them, and how they would respond to a variety of proposals to reform the system, including some that would eliminate the employer’s role. The objectives of the project were to provide policymakers with better information about the strengths and weaknesses of the employer-based system, as well as the implications for the future direction of reform, focusing on whether to repair the current system or replace it with an alternative design.

Title: Exit, Voice and Frailty: Consumer Behavior Under Managed Competition
Grantee Institution: Yale University
Principal Investigator: Mark Schlesinger, Ph.D.
Grant Period: February 01, 2000 - December 31, 2002
Email: mark.schlesinger@yale.edu
Awarded: $294,303.00

What is the relationship between health care consumers’ willingness and ability to exit health plan enrollment, and their voice or willingness to complain in order to improve their care and satisfaction? According to researchers at Yale University and Harris Allen Associates, managed competition models rely on exit as the primary safeguard for quality. Consumers can exit if they are dissatisfied with care. Yet we know little about consumers’ real ability to exit plans (Are there other plans available? What are the ramifications of exiting?). Nor is there much literature on voice and consumers’ willingness to complain or make their feelings known to plans. This project analyzed data from the Employee Health Care Value Survey, a two-stage employee survey fielded by three large corporations in 1993 and 1995. The survey has a range of managed care models, a relatively large sample, and data on health status, sociodemographic factors, and satisfaction with plan measures. The objective of the study was to identify enrollee characteristics that facilitate (or are associated with) health plan exit (disenrollment) and voice (complaints) to help assess the true feasibility of the managed competition model.

Title: Physician Compensation & Risk Bearing Arrangements in Medical Groups: Market Level Effects and Impacts on Physician Productivity and Risk Contracting
Grantee Institution: University of Washington
Principal Investigator: Douglas Conrad, Ph.D.
Grant Period: February 01, 2000 - July 31, 2001
Email: dconrad@u.washington.edu
Awarded: $49,994.00

What is the effect of physician compensation and risk-bearing arrangements on physician productivity and risk contracting? Researchers at the University of Washington conducted this study as a tie-in to related and recently completed HCFO project. The goal of the new study was to increase understanding of the impact of these differing compensation and risk bearing arrangements on physician productivity. Using data from the Medical Group Management Association's (MGMA) 1998 Compensation and Production Survey and their 1998 Practice Cost Survey (data for 1997), the researchers 1) added an additional year of MGMA data (for 1998) and used the models created for the ongoing study to analyze the effects of physician compensation on productivity; and 2) used InterStudy (or possibly other) data, to conduct a longitudinal analysis of the effects of changes in managed care penetration and other market factors on risk bearing by medical groups, group productivity, and approaches to physician compensation at the market level for 1995 through 1998. The objective of the study was to augment the ongoing study of the effects of physician compensation on physician productivity and to examine the effects of market-level variables on physicians’ productivity.

Title: Factors Associated with the Distribution of Physician Income: A Quantile Regression Approach
Grantee Institution: University of North Carolina at Chapel Hill
Principal Investigator: Thomas Konrad, Ph.D.
Grant Period: January 01, 2000 - July 31, 2001
Email: bob_konrad@unc.edu
Awarded: $99,992.00

Quantile regression analysis has been used extensively in the field of labor economics but is less familiar to health services researchers. To our knowledge, this project used this methodology for the first time to examine physician income distribution, and to assess how managed care market penetration has affected income distribution within the US physician workforce. This methodology, when applied it to a national physician sample--the CTS physician survey--enables a more fine-grained analysis of issues by going beyond a 'mean' or 'typical' level of inquiry normally found in physician income studies. It also sets the stage for future empirical examinations of how health policies and market changes over the last decade have actually affected the incomes of different types of physicians, and how future changes might have measurable effects on physician income distribution. Physicians' incomes are generally high, but can vary substantially due to many different factors some of which are subject to change through health policy initiatives and market reforms. It is likely that different segments of the physician workforce might have quite divergent perspectives depending on how such policy changes might affect their incomes. This study, using data from the mid-1990s, found that at all levels of income, the effects of managed care penetration are demonstrable but are more pronounced at higher levels of physician income. Further, physicians whose dominant patient revenue source is Medicaid have incomes 5 to 10 percent lower than their peers who accept fewer Medicaid patients. Gender disparities in physician income were found to persist at all income levels. Income distribution information can assist policy formulation by projecting how proposed regulatory and/or market-based policy initiatives will affect physicians' incomes and, consequently, influence the career choices and political and advocacy behavior of different segments of the medical workforce. Knowing these parameters can inform policy initiatives developing workforce policies aimed at reducing inappropriate income disparities between segments of the physician workforce (e.g., gender gaps), improving the geographic distribution of physicians (e.g., incentives for rural and inner city practice, Medicaid payment levels), and influencing the relative proportion of specialists and generalists in the overall physician workforce (e.g., promoting more efficient use of resources). These findings are pertinent for policymakers attempting to more fully understand and respond to the systematic changes produced by the explosive growth in managed care. More recent data has suggested a backlash of managed care, so the same approach can be applied to newer waves of the CTS Physician Survey data to examine how physicians' income was affected by the ups and downs of managed care. Data on local variations across health care markets that affect how much income is received by physicians and which types of physicians will receive more or less income can help policy analysts in assessing the political and economic feasibility of alternative policies intended to encourage a more rational allocation of health care resources.

Title: When Doctors Believe They Are Not Providing Good Care: The Sources of Professional Distress in the American Health Care System
Grantee Institution: New York Academy of Medicine
Principal Investigator: Bradford Gray, Ph.D.
Grant Period: January 01, 2000 - June 30, 2001
Email: bgray@nyam.org
Awarded: $100,000.00

What is the relationship between a physician’s practice setting and his or her level of professional distress? Using the Community Tracking Study survey, researchers at the New York Academy of Medicine constructed four broad measures of professionalism: autonomy, conflict of interest, competence, and ability to act effectively in serving patients’ interests. Measures of practice setting include physicians’ practice size, the type of organization in which they practice, exposure to managed care, and compensation arrangements. They hypothesized that managed care alone influences this sense of professionalism both directly and indirectly, directly through cost containment and management, and indirectly through its influence on physician practice groups and the health delivery system in general. In addition to the CTS Physician Survey (including the Restricted Use data set), the researchers used the Area Resource File and InterStudy data. The study’s objective was to obtain a profile of how practice environment effects physician morale, in order to inform policymakers and other stakeholders on how they might resolve the tension between physician autonomy and accountability with that of managed care organizations.

Title: Racial and Socioeconomic Disparities in Health Care Among the Insured
Grantee Institution: University of Rochester
Principal Investigator: Kevin Fiscella, M.D.
Grant Period: January 01, 2000 - December 31, 2000
Email: kevin_fiscella@urmc.rochester.edu
Awarded: $100,000.00

Grant Description: What is the effect of managed care market penetration on socioeconomic and racial/ethnic disparities in health care? Researchers at the University of Rochester hypothesized that, given managed care’s assumption of responsibility for the health care of populations (rather than specific individuals), managed care penetration may help alleviate disparities in health care access and quality between different socioeconomic and racial/ethnic populations. Among their hypotheses was that enrollment in an HMO will result in lower access, utilization and satisfaction, but higher overall disease prevention compliance. In addition to the CTS Household Survey, the researchers used market data from the Area Resource File in their analyses. The study had three specific objectives: 1) to examine racial/ethnic and socioeconomic disparities in health care access, utilization, preventative care, and satisfaction among insured populations; 2) to compare disparities in health care by socioeconomic and racial/ethnic status among persons enrolled in HMOs with similar individuals covered through indemnity insurance; and 3) to examine disparities in health care access, quality, and satisfaction among HMO enrollees of different racial/ethnic groups based on HMO market penetration, patient choice, and duration of enrollment. Policy Summary: Among insured non-elderly adults, there are appreciable disparities in health care utilization by race, ethnicity, and language that are not fully explained by differences in household income, education, or conventional access measures (usual source of care, telephone access, lag time to appointment, travel time, office waiting time, delayed seeking needed care because of various access barriers). The finding that these disparities differ by race/ethnicity suggests that beliefs, attitudes and norms related to culture may contribute to disparities. For example, African Americans, but not members of other minority groups had lower rates of influenza vaccination and members of “other” (presumably comprised primarily of Asian Americans) racial/ethnic minority had lower rates of mammography. African Americans, Spanish speaking Hispanics, and members of other racial/ethnic minority groups were less likely to have had a mental health visit in the past year. These findings suggest the possibility that culturally appropriate educational campaigns might reduce these disparities. Among insured non-elderly adults, patient education is a powerful independent predictor of lower health care utilization. Persons with less than a high school education had fewer physician visits, and lower likelihood of having seen a specialist at their last visit, of having had a mental health visit in the past year, of having had surgery in the past year, of having had a mammogram in the past 2 years (women greater than or equal to the age 40), or of having had an influenza vaccination in the past year. These effects are not explained by differences in age, sex, race/ethnicity, family size, income, education, insurance type, rural residence, HMO status, smoking, health status, or access barriers. These results highlight the salience of patient-level factors in health care utilization and underscore the need for interventions specifically targeted toward a low literacy group. Compared to fee-for-service (FFS), HMO membership was associated with reduced disparities in health care utilization by education, but not race/ethnicity. Educational disparities were narrowed by boosting utilization among the less educated for some services while reducing utilization for other services among the more educated. Thus, HMOs appear to be a more equitable provider according to education, but not race/ethnicity. However, compared to FFS, HMOs are better equipped, i.e. using HEDIS measures and quality improvement, to monitor and improve the quality of care provided to members of racial and ethnic minority groups.

Title: Conditions of Practice and Quality of Care: Physicians' Perceptions
Grantee Institution: University of California at Davis
Principal Investigator: Richard Kravitz, M.D.
Grant Period: January 01, 2000 - January 31, 2002
Email: rlkravitz@ucdavis.edu
Awarded: $98,155.00

Physicians’ satisfaction with their careers in general is relatively high (80 percent satisfied). However, they have two substantial concerns. First, more than one-third cannot maintain the kinds of continuing relationships with patients to promote high quality care. Second, more than two-thirds cannot obtain needed mental health services for their patients. Explaining these difficulties is much easier than solving them. Physicians perceive problems with continuity of care because insurance arrangements cause patients to switch physicians more than they once did. They perceive problems with mental health care because access to psychiatric specialty services is nearly non-existent for the uninsured and may be severely constrained (through mental-health carve-outs and/or benefit limits) even for the insured. Policies to facilitate continuity of care and to increase access to mental health specialty services are needed. Physician satisfaction varies by specialty. The surprise is that physicians at greatest risk for dissatisfaction are not generalists (such as family physicians) or low paid cognitive specialists (such as pediatricians), but rather procedurally-oriented specialists such as otolaryngologists, obstetricians, ophthalmologists, and orthopedic surgeons. These results are adjusted for income; without this adjustment, the satisfaction of proceduralists would move much closer to the mean. Among cognitive specialists, general internists stand out as the least satisfied. Pediatricians are among the most satisfied of all. If there is a crisis in physician morale and if this crisis needs solving, the place to begin is with procedural specialists and general internists. Obstetrician-gynecologists represent a special case where the trouble is particularly acute. Physicians’ career satisfaction is strongly related to perceptions of being able to deliver quality care and obtain needed services for patients. System change designed to improve the delivery of care will likely influence physician satisfaction as well.

Title: State Health Policy and the State of American Medicine
Grantee Institution: Yale University
Principal Investigator: Karl Kronebusch, Ph.D.
Grant Period: January 01, 2000 - September 30, 2001
Email: karl.kronebusch@yale.edu
Awarded: $105,473.00

How have past changes in state health regulations and policy affected primary care physicians’ behavior and attitudes? Using the CTS data, researchers at Yale University established four broad measures of physician practice: 1) professional autonomy; 2) primary care physicians’ sphere of responsibility; 3) level of community services provided in the form of charity care and acceptance of Medicaid patients; and 4) differences in autonomy/responsibility between providers who primarily treat Medicare and/or charity patients and those who treat the privately insured. Using these measures, the research team evaluated the impact of three types of state policy on physician behavior: 1) regulation of managed care; 2) attributes of the state’s Medicaid system; and 3) state policies related to the infrastructure or capacity of the health care system. In addition to the CTS Physician Survey, the study utilized the Area Resource File and publications on state legislation. The goal of this project was to explore how state policies directly and indirectly affect physicians’ perceptions and behaviors.

Title: The Influence of Managed Care on Physician Scope of Practice
Grantee Institution: Boston University
Principal Investigator: Carol Simon, Ph.D.
Grant Period: January 01, 2000 - March 31, 2001
Email: cjsimon@bu.edu
Awarded: $56,966.00

Is there a correlation between the contractual mechanisms used by managed care delivery systems and physicians' practice styles and referral patterns? Researchers at Boston University hypothesized that managed care financial incentives influence physician practice behavior beyond what could be expected from physician selection of managed care environments. Using data from the CTS Physician and Household Surveys, AMA Socioeconomic Monitoring System (SMS) physician survey data, and the managed care industry, the study examined whether physician practice patterns, such as referral patterns, scope of practice, and case mix differ in a managed care environment, or whether managed care simply attracts physicians with more conservative practice styles. The goal of the study was to inform the field on how managed care influences physician practice styles.

Title: Gender and Managed Care
Grantee Institution: University of Pennsylvania
Principal Investigator: Jerry Jacobs, Ph.D.
Grant Period: January 01, 2000 - September 30, 2001
Email: jjacobs@sas.upenn.edu
Awarded: $96,327.00

Are there significant differences in how male and female physicians practice medicine through a managed care delivery system? Researchers at the University of Pennsylvania hypothesized that there will be significant differences between the behavior of male and female physicians. The study sought to address the effect of market penetration by managed care organizations on the average practice patterns of female physicians. To test these hypotheses, the researchers examined six categories of questions found in the Community Tracking Study Physician Survey: 1) time spent with patients; 2) clinical freedom and perceptions of the quality of care provided; 3) treatment and referral patterns for specific medical conditions; 4) use of advanced diagnostic technology; 5) hours worked in direct patient care; and 6) location of practice. In addition to the physician survey data, this study will use data from the CTS Household Survey and the Area Resource File (ARF). The objective of the study was to examine how the increase in the percentage of women practicing medicine has affected practice styles and patterns.

Title: A Methodological Evaluation of Non-Response on the Physician Component of the Community
Grantee Institution: Project HOPE, People to People Health Foundation
Principal Investigator: Julie A. Schoenman, Ph.D.
Grant Period: January 01, 2000 - October 31, 2001
Email: jschoenman@projecthope.org
Awarded: $74,268.00

Survey administrators must make a tradeoff between expending additional data collection resources to increase the response rate and accepting a lower response rate in exchange for lower data collection costs. Typically, a disproportionate share of data collection resources are spent in efforts to make marginal improvements to the response rate. This study uses data from the CTS physician survey to determine how increases in the response rate affect survey estimates and data quality. Findings from this study should help research organizations to make more cost-effective decisions regarding the field of work for the CTS physician survey. The results may also be relevant for others responsible for conducting similar surveys of physicians. The researchers examined variation in survey estimates and data quality for three respondent groupings, each designed to reflect the timing of response or the ease of obtaining the response. Our bivariate analyses showed very few significant differences by respondent group in the pattern of survey estimates, in the incidence of item non-response, or in the precision of survey estimates for various analytic subgroups. When statistically significant differences were observed in the survey estimates for mutually-exclusive respondent groups, these differences were typically small in magnitude. Furthermore, even large differences between mutually-exclusive groups did not change the cumulative estimates appreciably because relatively few new respondents were being added to the respondent pool at each point. We also estimated a multivariate logit model to explain the physician’s provision of charity care, using different groups of respondents. We found great stability in the parameter estimates across respondent groups, indicating that the addition of new respondents did not change the estimated model significantly. Thus, expanding additional data collection resources to increase the survey response rate had little impact on the survey estimates or data quality. In light of these findings, it does not appear that making marginal improvements in response rates (e.g., from the high 50s to the low-to-mid 60 percent range) will change the CTS survey estimates appreciably or affect the quality of the data obtained. Although we also found that the data resulting from a very low response rate (approximately 33 percent) were not significantly different from data obtained from all respondents, it is very important to note that these much lower response rates are never likely to be acceptable for peer-reviewed publication. Surveys will still have to meet a “face validity” test by achieving a credible response rate. However, as long as the study results are not overstated to imply that extremely low response rates are credible, this study may permit researchers to make a better case for dissemination and publication of interesting results in peer-reviewed journals even when the response rate falls slightly short of current goals. Two additional points are worth noting. First, the implications of moving significantly beyond a 65 percent response rate could not be assessed through this study. It is possible that data quality could be significantly improved by achieving a much higher response rate. We have outlined a small experiment that could be conducted on a future round of the CTS physician survey to answer this question. Second, these results may not be generalizable to other physician surveys that use different data collection methods or that include a markedly different set of questions.

Title: Changes in Drug Payment and Management Strategies in Physician Organization
Grantee Institution: University of California, San Francisco
Principal Investigator: Helene Levens Lipton, Ph.D.
Grant Period: September 01, 1999 - December 31, 2001
Email: lipton@itsa.ucsf.edu
Awarded: $290,507.00

How do changes in payment methods for drug costs affect drug use management, and what are the potential effects of these changes on quality and costs of care? Researchers at the University of California, San Francisco conducted a series of case studies examining changes in payment methods for prescription drugs. They 1) described drug risk-sharing arrangements between HMOs and physician organizations; and 2) developed and refined hypotheses and generated preliminary findings about the relationships between physician organization risk bearing for drug costs, adoption of innovations in managing drug utilization, and the potential effects of these on quality and costs of care. The investigators analyzed whether HMOs retain control of some core pharmacy functions, including rebate contracting with drug manufacturers and formulary management, and if so, whether retention of such functions serves as an impediment to drug management innovation or as a barrier to changing physicians’ prescribing practices. They also examined whether physician organization risk bearing for drug costs leads to a preoccupation with interventions designed primarily to decrease drug budgets. The objective of this study was to better inform private and public policymakers as they strive to set appropriate standards for and monitor the effects of various strategies to pay for and manage drug costs.

Title: Capped Prescription Benefits and Medicare Managed Care
Grantee Institution: University of Arizona Health Services Center
Principal Investigator: Brenda Motheral, Ph.D.
Grant Period: August 01, 1999 - July 31, 2000
Email: bmotheral@express-scripts.com
Awarded: $57,534.00

What is the impact of capped prescription drug benefits on the drug-taking behavior of beneficiaries ages 65 or older enrolled in Medicare HMO plans? The elderly represent only 12 percent of the population, yet they incur 35 to 40 percent of all prescription costs. The dichotomy between the high utilization of prescription drugs by the elderly and the absence of a prescription benefit under traditional Medicare has motivated enrollment in Medicare risk plans that offer a prescription benefit. However, a high percentage of these HMOs that offer prescription drug benefits cap them in order to protect against financial risk. Hypothesizing that individuals reaching the limit on their cap may opt not to purchase or take the prescribed amounts of medications, leading to increased health costs for preventable conditions, the researchers evaluated changes in the amount of the cap on compliance with and utilization of prescribed medications among Medicare risk HMO enrollees. They also examined the effect of reaching the cap on disenrollment from the plan. The objective of this study was to provide public policymakers and plan administrators with better information about the impact of limiting prescription drug benefits as they seek to contain costs without negatively affecting the quality of care.