Medicare Managed Care Spillovers and Treatment Intensity

Abstract

Evidence suggests that the share of Medicare managed care enrollees in a region affects the costs of treating traditional fee-for-service (FFS) Medicare beneficiaries; however, little is known about the mechanisms through which these 'spillover effects' operate. This paper examines the relationship between Medicare managed care penetration and treatment intensity for FFS enrollees hospitalized with a primary diagnosis of AMI. I find that increased Medicare managed care penetration is associated with a reduction in both the costs and the treatment intensity of FFS AMI patients. Specifically, as Medicare managed care penetration increases, FFS AMI patients are less likely to receive surgical reperfusion and mechanical ventilation and to experience an overall reduction in the number of inpatient procedures. Copyright © 2015 John Wiley & Sons, Ltd.

Home Dialysis in the Prospective Payment System Era

“…Additionally, dialysis providers may find it financially advantageous to enroll incident, non-Medicare patients into home dialysis, particularly if prevalent patients are reluctant to switch into home modalities once they transition to Medicare. Similar spill-over effects have been described in other disease states including hepatitis C, 31 venous thromboembolic disease, 32 acute myocardial infarction, 33 and psychiatric illness, 34 as well as in the Medicare Managed Care population. 33,35,36 On the other hand, the payment for home dialysis training was not associated with an increase in home dialysis use.…”

“…Similar spill-over effects have been described in other disease states including hepatitis C, 31 venous thromboembolic disease, 32 acute myocardial infarction, 33 and psychiatric illness, 34 as well as in the Medicare Managed Care population. 33,35,36 On the other hand, the payment for home dialysis training was not associated with an increase in home dialysis use. One possibility for the observed null effect is that the add-on payment was not sufficient, and that a larger payment would have yielded the desired change.…”

The persistence of medicare advantage spillovers in the post‐Affordable Care Act era

“…Indeed, it may also lead to reverse spillovers from TM to MA. Because of these confounders, prior spillover studies summarized below (Afendulis, Chernew, & Kessler, 2017;Baicker et al, 2013;Baicker & Robbins, 2015;Callison, 2016;Chernew et al, 2008) have relied on idiosyncratic differences in payment rates unrelated to TM spending or health status as an instrument for MA penetration. But, without modification, recent policy changes to MA payments under the ACA have made even this now-standard instrumental variables approach invalid for analyzing spillovers after ACA implementation, as we explain in the next section.…”

“…The most recent study in the spirit of ours used MA benchmarks as a plausibly exogenous instrument to investigate MA spillovers to treatment intensity for TM patients admitted to the hospital with acute myocardial infarction (Callison, 2016). Using inpatient data for five states from 2003 to 2009, Callison estimated the effect of instrumented MA penetration (using MA benchmarks) on costs and several measures of treatment intensity including the number of inpatient procedures, the probability of receiving percutaneous transluminal coronary intervention (PTCI), and the probability of ventilator utilization.…”

“…The program accounted for 28% of Medicare spending in 2016 (excluding drug benefits). Though prior work has documented MA‐to‐TM spillovers (Baicker, Chernew, & Robbins, 2013; Baicker & Robbins, 2015; Callison, 2016; Chernew, DeCicca, & Town, 2008), only two studies have examined whether spillovers have continued in the Affordable Care Act (ACA) era (Henke et al, 2018; Johnson, Figueroa, Zhou, Orav, & Jha, 2016). These studies are limited in that the methods used almost certainly underestimate the extent of the spillover and do not offer causal estimates, as further explained below.…”