• Menu
  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Before Header

  • About Us
  • Lexicon
  • Contact Us
  • Our Store
  • ↑
  • ↓
  • ←
  • →

Balloon Juice

Come for the politics, stay for the snark.

You can’t attract Republican voters. You can only out organize them.

Whatever happens next week, the fight doesn’t end.

Let’s delete this post and never speak of this again.

Is it irresponsible to speculate? It is irresponsible not to.

I really should read my own blog.

The party of Reagan has become the party of Putin.

Sadly, there is no cure for stupid.

Speaking of republicans, is there a way for a political party to declare intellectual bankruptcy?

They love authoritarianism, but only when they get to be the authoritarians.

A thin legal pretext to veneer over their personal religious and political desires

Prediction: the GOP will rethink its strategy of boycotting future committees.

I’d like to think you all would remain faithful to me if i ever tried to have some of you killed.

Come on, man.

Just because you believe it, that doesn’t make it true.

“What are Republicans afraid of?” Everything.

Balloon Juice has never been a refuge for the linguistically delicate.

Shallow, uninformed, and lacking identity

You don’t get to peddle hatred on saturday and offer condolences on sunday.

Second rate reporter says what?

Something needs to be done about our bogus SCOTUS.

Too often we confuse noise with substance. too often we confuse setbacks with defeat.

… pundit janitors mopping up after the GOP

Historically it was a little unusual for the president to be an incoherent babbling moron.

Putin must be throwing ketchup at the walls.

Mobile Menu

  • Winnable House Races
  • Donate with Venmo, Zelle & PayPal
  • Site Feedback
  • War in Ukraine
  • Submit Photos to On the Road
  • Politics
  • On The Road
  • Open Threads
  • Topics
  • Balloon Juice 2023 Pet Calendar (coming soon)
  • COVID-19 Coronavirus
  • Authors
  • About Us
  • Contact Us
  • Lexicon
  • Our Store
  • Politics
  • Open Threads
  • War in Ukraine
  • Garden Chats
  • On The Road
  • 2021-22 Fundraising!
You are here: Home / Anderson On Health Insurance / Two important papers

Two important papers

by David Anderson|  November 28, 20168:34 am| 22 Comments

This post is in: Anderson On Health Insurance

FacebookTweetEmail

I’ve had two NBER papers that I am struggling to make sense with.  These papers are critical health policy papers as they relate to high deductible health plans (HDHP).  We’re going in that direction for a lot of health policy.  My prior assumption is that high deductible health plans paired with a health savings account is appropriate for people with the means to save significant money and a reasonable expectation that they are insuring and saving against one time risk.  As soon as those conditions are not met due to either low ability to save due to low income or known chronic conditions that would routinely incur costs at or above annual cost sharing limitations, high deductible health plans are massively inadequate.  That is my prior.

So I just want to flag two papers that I’m struggling to make sense with together.  They each make perfect sense on their own.  I am struggling to put them together.

Haviland et al 2015 NBER 21031

Relative to control firms and the pre-offer years, firms offering a CDHP had an estimated 6.6, 4.3, 3.4 percent lower annual spending in the first three years respectively (p < 0.05 for each difference) (Table 3, column 1). In addition, the CDHP second pre-year trend coefficient is insignificant, supporting the assumption of a parallel trend in the absence of CDHP offer. In section 6.4 below, we discuss whether the post CDHP offer impact is changing over time controlling for differential composition of treatment firms over time.

Her team does a nifty piece of machine learning to balance covariates to address the possibility that the savings are merely an illusion of the covered population effect.  I don’t have the statistical chops to say if their treatment makes sense but I’m glad that they are attempting to look at the case mixture.  One of my big worries as we generalize HDHP learning from employer sponsored coverage is that ESI is a unique pool compared to public pools.  ESI is younger than Medicare, wealthier than Medicaid and healthier than both.  More importantly, ESI offers people with known high disease burden a lot of outs if the richness of their benefit package declines.  They can get a new job.  They can go on their spouse/domestic partner’s coverage.  They can apply for Medicare and disability if sick enough.  There are outs in ESI that are not present in other systems.  This is my big worry about generalizing research.

And then the other paper:

Zarek et al 2015 NBER 21632

Employees at the firm are relatively high income (median income $125,000-$150,000), an important fact to keep in mind when interpreting our analysis. In addition, post-switch there is no meaningful change in the relatively small rates of employee entry or exit from the firm. The required firm-wide change from free health care to high-deductible insurance constituted both a substantial increase in average employee cost-sharing and a meaningful change in the structure and complexity of that cost-sharing. We use this natural experiment, together with the detailed data described to assess several aspects of how consumers respond to this increased cost-sharing. First, we develop a causal framework to understand how spending changed, in aggregate and for heterogeneous groups and services. In doing so, we account for both medical spending trends and consumer spending in anticipation of the required plan switch.5 We find that the required switch to high-deductible care caused a spending reduction of between 11.09-15.42% for t0, with the bounds reflecting a range of assumptions on how much anticipatory spending at the end of t−1 would have been spent under higher marginal prices in t0. Spending was causally reduced by 12.48% for t1 relative to t−1, implying that this reduction persists in the second year post-switch….

We find no evidence of price shopping in the first year post switch. The effect is near zero and looks similar for the t−1 − t0 year pair (moving from pre- to post-change) as it does for earlier year pairs from t−4 to t−1. Second, we find no evidence of an increase in price shopping in the second year post-switch; consumers are not learning to shop based on price. Third, we find that essentially all spending reductions between t−1 and t0 are achieved through outright quantity reductions whereby consumer receive less medical care. From t−1 to t0 consumers reduce service quantities by 17.9%. Fourth, there is limited evidence that consumers substitute across types of procedures (substitution leads to a 2.2% spending reduction from t−1 − t0). Finally, fifth, we find that these quantity reductions persist in the second-year post switch, as the increase in quantities between t0 and t1 is only 0.7%, much lower than the pre-period trend in quantity growth. These results occur in the context of consistent (and low) provider price changes over the whole sample period.

The decline in expenditure is directly related to decline in utilization and not shopping.  This applies to the sickest group of people who routinely would go over their deductible.

My brain crash on these two papers is the first paper is not seeing any catastrophic care costs  bounce back in the out years while the second paper finds extremely inefficient and irrational consumption behaviors.

These are two papers I need to chew on.

 

FacebookTweetEmail
Previous Post: « Monday Morning Open Thread: Cold Comforts
Next Post: She Seems Nice »

Reader Interactions

22Comments

  1. 1.

    SP

    November 28, 2016 at 8:56 am

    We’re living abroad this year, and have to buy our own private insurance in our country. Monthly family premium just under 20% of my family ESI cost (which is just about the employee share, employer pays 80% of premium.)
    Yesterday one kid broke his wrist. In and out of the ER in an hour including intake, X-ray, cast. No copay no deductible. We did have to buy a more permanent sling at the pharmacy for $13. In the US our ER copay is $200, and our ESI is platinum equivalent (no deductible.)
    I think one reason for huge difference in cost is doctors are paid a lot less, although still high relative to others, because med school costs about $1k/yr so no doctors have education debt.

  2. 2.

    MomSense

    November 28, 2016 at 9:07 am

    Price shopping? What exactly does the author mean by that? If the author means that a patient is going to first call the providers and find out how much they charge- well hahahahahaha. Good luck with that.

  3. 3.

    germy

    November 28, 2016 at 9:13 am

    Relative to control firms and the pre-offer years, firms offering a CDHP had an estimated 6.6, 4.3, 3.4 percent lower annual spending in the first three years respectively (p < 0.05 for each difference) (Table 3, column 1). In addition, the CDHP second pre-year trend coefficient is insignificant, supporting the assumption of a parallel trend in the absence of CDHP offer. In section 6.4 below, we discuss whether the post CDHP offer impact is changing over time controlling for differential composition of treatment firms over time.

    An elderly woman who just learned her husband has cancer is supposed to read up on all this, understand it, and make the correct decision. Of course, good luck to her getting info from the front desks of all the healthcare providers, as well as the folks answering the phones at the ins. companies.

  4. 4.

    beth

    November 28, 2016 at 9:18 am

    @germy: As someone in this exact position, that’s a big assumption that you even have a choice of providers. Our policy network covers one hospital/cancer treatment center. Take it or leave it.

  5. 5.

    germy

    November 28, 2016 at 9:24 am

    @beth:

    As someone in this exact position

    I wish you well and hope you successfully navigate all the nonsense they throw at you.

  6. 6.

    Glidwrith

    November 28, 2016 at 9:31 am

    OT, but Richard, someone very far downthread had the idea that Democrats provide insurance to Party members. I have read enough from you to know insurance is insanely complex and this is probably ridiculous. However, it is very seductive to let the shitgibbons that will not accept help twist in the wind while we insure ourselves.

    What do you think?

  7. 7.

    Gin & Tonic

    November 28, 2016 at 9:50 am

    @Glidwrith: One problem is that there is no way of determining who is a “Party member”. It’s not even as “rigorous” as AARP, where you have to pay dues to get a membership card – anyone can call him/herself a Democrat if he/she wants, without any cost or obligation, or even associate just for convenience. We saw this earlier this year, when a non-Democrat even ran for the Democratic nomination for President.

  8. 8.

    fuckwit

    November 28, 2016 at 10:04 am

    @SP: michael moore made an entire movie out of this.

    basically that’s the key. reduce student debt and the whole problem goes away.

  9. 9.

    fuckwit

    November 28, 2016 at 10:06 am

    @Gin & Tonic: have dues then. and the dues go to a fund to pay a salary to candidates while they run for office to contest rethug seats.

    i love this idea so much, i want to marry it.

  10. 10.

    piratedan

    November 28, 2016 at 10:06 am

    Richard, is it possible that there is an unspoken collusion taking place here? Or is this a case where it would takes years of data to actually allow a better understanding of the numbers and trends. I kind of look at health care like a giant drug test trail on America… it may address the major issue its trying to treat, but the unexpected consequences of symptoms or interactions with the reality of behavior (other drugs being taken and lifestyle choices) are leading to some pretty crappy outliers on the fringes which can only be sussed out after years of use.

  11. 11.

    Eric U.

    November 28, 2016 at 11:00 am

    you can’t price shop as a consumer. Our insurance company made a deal with a lab, that’s the closest thing I can thing of as far as price shopping. I can choose to go to the ER, like we used to be forced to do in this area, or I can go to one of the providers that uses the Ins. Co. lab. I assume the ER is considerably more expensive.

    I have confronted my doc about things like x-rays. He was going to have me x-ray my finger until I asked him if he would do anything other than immobilize it. He agreed that he wouldn’t and that I didn’t need an x-ray.

  12. 12.

    Pogonip

    November 28, 2016 at 11:38 am

    I am reliably informed that there has been a shooting at THE Ohio State University this morning: 9 people injured, shooter dead.

  13. 13.

    Sister Rail Gun of Warm Humanitarianism

    November 28, 2016 at 11:39 am

    @Pogonip: Two additional people arrested, classes cancelled, parts of campus still on lockdown.

  14. 14.

    Pogonip

    November 28, 2016 at 11:43 am

    @Sister Rail Gun of Warm Humanitarianism: I knew that stupid Michigan rivalry would not end well.

  15. 15.

    Hafabee

    November 28, 2016 at 11:53 am

    @Eric U.: Yes, good points, Eric.

    Health care price-shopping is impossible. Here in WV, for 2017 our only provider just cut the number of plans from 12 to 6, and they all sliced the in-network providers into Standard/Enhanced/Preferred tiers with different coinsurance rates among the various plans. I like my current doc and will keep going to see him regardless of what tier he is in, but choosing a plan is difficult at best.

    I have been trying for years to make sure my docs understand the cost vs. benefit of what they are suggesting. The good ones will listen and work with you, like yours did. The bad ones just get affronted that you dare to question their god-like judgment.

  16. 16.

    Steeplejack (phone)

    November 28, 2016 at 12:25 pm

    @SP:

    What country, unless it’s a state secret?

  17. 17.

    dlb

    November 28, 2016 at 12:26 pm

    I think that there may be other things going on with HDHP–especially with institutions with higher income employees. My employer got rid of it’s high end PPO (which had great network and pretty open access to specialists) and replaced it with a HDHP with similar network at lower cost. Choice was either keep the broad network as a HDHP or switch to a HMO with more limited options. Most people kept the larger network and went to a HDHP, especially if they had preexisting conditions and doctors networks that they wanted to use. So the older/sicker employees who had been in the PPO moved to the HDHP account rather than the HMO. Younger healthier employees were already in the HMO. It turned out that even with the higher deductables there was a really big savings in total amount of premiums paid. So even though I’m liable for more out of pocket costs from my HCSA, the total going out of my paycheck each month (HDHP+max monthly to HCSA) is less than I was paying for the PPO.

  18. 18.

    WereBear

    November 28, 2016 at 12:29 pm

    @Eric U.: you can’t price shop as a consumer

    This line of thought is so ridiculous I can’t believe people push it with a straight face. And yet I have heard it parroted back at me by people who only seem to realize how stupid it is the moment I start asking them questions.

    We don’t know how much it will be, when we will need it, or how to evaluate the possible different approaches, but we can totally “shop” for it!

  19. 19.

    Glidwrith

    November 28, 2016 at 12:44 pm

    @Gin & Tonic: At the moment this is sort of true. I don’t have time to look right now, but I read there was a court case which determined a Party can say who and who isn’t a member. I think it was actually Republicans that had the case and won. They are private entities, so why not?

  20. 20.

    MadeOutOfPeople

    November 28, 2016 at 1:59 pm

    I don’t have a good guess of why one place saw 3% lower and the other saw 15% lower. Anecdotally speaking, when my (high-paying tech sector) employer changed from a no-deductible PPO to HDHP, I saw a lot of people start rethinking their spending in minor ways. I don’t see big changes–there’s no “I’ll just nurse this broken leg along.” But: I’ll skip the doctor’s visit for this flu and spend an extra day at home drinking soup.

    I see people optimizing around deductibles: wait for a year that has a real health crisis before you get that bump removed. Get Lasik the same year you get pregnant.

    In most cases, this won’t increase catastrophic care needs. In most cases, the effects will be slow, or minor. An analysis of sick days might see a slight increase; the distribution of health use probably shifts around some.

    And while we’re given tools to ‘shop’, the number of times that people DO is really low. (And when you do, half the time you get screwed anyway: the ‘low priced’ hospital turns out to bill separately for the — oops, out of network! — anesthesiologist.)

  21. 21.

    BillCinSD

    November 28, 2016 at 3:55 pm

    while the second paper finds extremely inefficient and irrational consumption behaviors.

    huh, people don’t act like bad economics models think they should. That is unlikely to make the evening news.

  22. 22.

    HelloRochester

    November 29, 2016 at 6:01 am

    Lady’s living in the wrong neighborhood to be both racist and homophobic. http://chicagoist.com/2016/11/28/video_woman_who_berated_staff_at_mi.php

Comments are closed.

Primary Sidebar

Fundraising 2023-24

Wis*Dems Supreme Court + SD-8

Recent Comments

  • Carlo Graziani on War for Ukraine Day 396: The War Grinds On (Mar 27, 2023 @ 12:58am)
  • YY_Sima Qian on War for Ukraine Day 396: The War Grinds On (Mar 27, 2023 @ 12:43am)
  • YY_Sima Qian on War for Ukraine Day 396: The War Grinds On (Mar 27, 2023 @ 12:41am)
  • Jay on War for Ukraine Day 396: The War Grinds On (Mar 27, 2023 @ 12:39am)
  • Jay on War for Ukraine Day 396: The War Grinds On (Mar 27, 2023 @ 12:29am)

🎈Keep Balloon Juice Ad Free

Become a Balloon Juice Patreon
Donate with Venmo, Zelle or PayPal

Balloon Juice Posts

View by Topic
View by Author
View by Month & Year
View by Past Author

Featuring

Medium Cool
Artists in Our Midst
Authors in Our Midst
We All Need A Little Kindness
Classified Documents: A Primer
State & Local Elections Discussion

Calling All Jackals

Site Feedback
Nominate a Rotating Tag
Submit Photos to On the Road
Balloon Juice Mailing List Signup
Balloon Juice Anniversary (All Links)
Balloon Juice Anniversary (All Posts)

Twitter / Spoutible

Balloon Juice (Spoutible)
WaterGirl (Spoutible)
TaMara (Spoutible)
John Cole
DougJ (aka NYT Pitchbot)
Betty Cracker
Tom Levenson
TaMara
David Anderson
Major Major Major Major
ActualCitizensUnited

Join the Fight!

Join the Fight Signup Form
All Join the Fight Posts

Balloon Juice Events

5/14  The Apocalypse
5/20  Home Away from Home
5/29  We’re Back, Baby
7/21  Merging!

Balloon Juice for Ukraine

Donate

Site Footer

Come for the politics, stay for the snark.

  • Facebook
  • RSS
  • Twitter
  • YouTube
  • Comment Policy
  • Our Authors
  • Blogroll
  • Our Artists
  • Privacy Policy

Copyright © 2023 Dev Balloon Juice · All Rights Reserved · Powered by BizBudding Inc

Share this ArticleLike this article? Email it to a friend!

Email sent!