Come for the politics, stay for the snark.

Republican obstruction dressed up as bipartisanship. Again.

Their freedom requires your slavery.

Optimism opens the door to great things.

This has so much WTF written all over it that it is hard to comprehend.

“woke” is the new caravan.

Russian mouthpiece, go fuck yourself.

No offense, but this thread hasn’t been about you for quite a while.

Seems like a complicated subject, have you tried yelling at it?

Sadly, there is no cure for stupid.

I’m sure you banged some questionable people yourself.

And we’re all out of bubblegum.

Today’s GOP: why go just far enough when too far is right there?

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

I didn’t have alien invasion on my 2023 BINGO card.

Conservatism: there are some people the law protects but does not bind and others who the law binds but does not protect.

Schmidt just says fuck it, opens a tea shop.

The truth is, these are not very bright guys, and things got out of hand.

Red lights blinking on democracy’s dashboard

… pundit janitors mopping up after the GOP

“I never thought they’d lock HIM up,” sobbed a distraught member of the Lock Her Up Party.

If you tweet it in all caps, that makes it true!

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

Imperialist aggressors must be defeated, or the whole world loses.

Not so fun when the rabbit gets the gun, is it?

You are here: Home / Anderson On Health Insurance / Managed competition and spill-over effects

Managed competition and spill-over effects

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I want to know if an awesome paper has been written and I just have not seen it.

What is the integrated spill-over effects of all managed competition health systems on the general practice and cost of medicine?

We have a rich literature that shows more Medicare Advantage marketshare leads to lower risk adjusted spending for traditional Medicare.

There is a decent literature that Medicaid managed care saves money compared to fee for service Medicaid.

The Affordable Care Act has encouraged the formation of Accountable Care Organizations. The early data suggests small but real savings for ACO participants compared to fee for service Medicare.

And then we have the private sphere with employer and individual plans offering a wide variety of managed products ranging from the traditional gatekeeper HMO model to centers of excellence and reference pricing.

All of these systems are designed to either nudge or hip check providers and patients to select more efficient care. The Medicare Advantage literature suggests that once a threshold of patients under an MA contract is achieved, regions will redesign the care flow to accomodate the demands of Medicare Advantage payers. And once the care flow is redesigned, providers are not checking to see if Mrs. Jones is a Medicare Advantage or just a traditional Medicare patient when they build their discharge plan or the congestive heart failure monitoring plan. This is where the spill-over occurs that leads to lower costs for traditional Medicare in high Medicare Advantage regions.

So my question is if we were to quantify how much of a region’s total healthcare spending was routed through some type of managed competition vehicle, would there be regional spillover effects?

I want to read that paper. I know I don’t have the data nor the technical chops to write that paper, but I so want to read it.

Reader Interactions

8Comments

  1. 1.

    Argiope

    Anecdata: When I’ve practiced in a system that was primarily reimbursed by Medicaid, we used that medication formulary for everyone—at least as a starting point. You get used to a certain toolkit being available, and quickly figure out that cheaper drugs do, in fact, work for almost everyone most of the time. Maybe that’s a place to start looking for the data.

  4. 4.

    sj

    I’m convinced this is a huge issue in health policy evaluation. The benefits of ACOs, MCOs, performance measures, etc, could be wildly under-counted if they do nudge people, but the nudge is spread among all practitioners. Diff-in-diff, etc, would recognize small effects but a systematic decline would be explained away.

    In the 1990s, capitated MCOs invented & clearly drove the change towards super-quick hospitalizations, but all hospitals followed quickly. When the MCOs failed, changes like that stopped. At any given time the MCOs were the same small amount cheaper, but their waxing and waning influence was the real story.

  6. 6.

    Steve LaBonne

    Forcing down utilization as a way to reduce costs will backfire (see WereBear’s comment about prevention). US costs are not high because our utilization rate is higher than that in other countries; it isn’t. It’s because all medical services are hellaciously expensive compared to every other country.

  7. 7.

    David Anderson

    @sj: There should be enough variation between either introduction or uptake within/between regions to allow a strong enough signal for a Diff-Diff to pick-up. The Medicare Advantage literature suggests that there is a threshold for a region to see significant diffusion effects. If Medicare Advantage penetration is under ~17% IIRC, the diffusion is local and limited but as it nudges above the threshold, cost savings are significant as the hurdle to change operational procedures in order to keep the Medicare Advantage insurers happy/quiet generates systemic changes and savings.

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