Institutional Affiliation: Harvard University
|Simplifying and Improving the Performance of Risk Adjustment Systems|
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Risk-adjustment systems used to pay health plans in individual health insurance markets have evolved towards better “fit” of payments to plan spending, at the individual and group levels, generally achieved by adding variables used for risk adjustment. Adding variables demands further plan and provider-supplied data. Some data called for in the more complex systems may be easily manipulated by providers, leading to unintended “upcoding” or to unnecessary service utilization. While these drawbacks are recognized, they are hard to quantify and are difficult to balance against the concrete, measurable improvements in fit that may be attained by adding variables to the formula. This paper takes a different approach to improving the performance of health plan payment systems. Using the HHS...
|Intervening on the Data to Improve the Performance of Health Plan Payment Methods|
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The conventional method for developing health care plan payment systems uses existing data to study alternative algorithms with the purpose of creating incentives for an efficient and fair health care system. In this paper, we take a different approach and modify the input data rather than the algorithm, so that the data used for calibration reflect the desired levels of spending rather than the observed spending levels typically used for setting health plan payments. We refer to our proposed method as “intervening on the data.” We first present a general economic model that incorporates the previously overlooked two-way relationship between health plan payment and insurer actions. We then demonstrate our approach in two applications in Medicare: an inefficiency example focused on underpro...
|Effects of Episode-Based Payment on Health Care Spending and Utilization: Evidence from Perinatal Care in Arkansas|
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We study how physicians respond to financial incentives imposed by episode-based bundled payment (EBP), which encourages lower spending and improved quality for an entire episode of care. Specifically, we study the impact of the Arkansas Health Care Payment Improvement Initiative, a multi-payer program that requires providers in the state to enter into EBP arrangements for perinatal care. Because of its multi-payer nature and the requirement that providers participate, the program covers the vast majority of births in the state. Unlike fee-for-service reimbursement, EBP holds physicians responsible for all care within a discrete clinical episode, rewarding physicians not only for efficient use of their own services but also for efficient management of other health care inputs. In a differ...
Published: Caitlin Carroll & Michael Chernew & A. Mark Fendrick & Joe Thompson & Sherri Rose, 2018. "Effects of episode-based payment on health care spending and utilization: Evidence from perinatal care in Arkansas," Journal of Health Economics, .