Inquiry Journal Winter 2009/2010 Issue Released

ROCHESTER, NY (02/19/2010)(readMedia)-- INQUIRY's latest issue addresses some timely health care concerns: Medicare physician fees, high Medicaid costs, obesity, expanding Medicare Savings Programs, and effects of mandated benefit laws. Health reform's "public option" is the focus of the winter editorial and experts debate nonprofits' community benefit roles in the "Dialogue" feature.

Research highlights include:

"Medicare Fees and the Volume of Physicians' Services," by Jack Hadley, James Reschovsky, Catherine Corey, and Stephen Zuckerman – While Medicare physician fees have remained relatively flat in recent years---and actually have declined when considering inflation---the volume of services to Medicare beneficiaries has grown. To many, this implies a "volume offset"---that physicians respond to fee cuts by increasing services. Examining eight services provided to Medicare beneficiaries (different types of visits and two cardiac diagnostic tests), this study found no evidence of volume-offset behavior by physicians. Rather, lower Medicare fees were associated with lower volumes for all eight services, although the magnitude of the relationship varied across services. While the researchers caution that responses could differ for other services, the results suggest that uniform Medicare fee updates for all services distort physician treatment patterns. The authors argue that instead, Medicare might vary fee changes to influence volume for certain services---for instance, pay higher fees for services considered beneficial and undersupplied (such as primary care visits) and lower fees for less effective and oversupplied services (such as X-rays for uncomplicated lower back pain).

"Medicare Savings Programs: Analyzing Options for Expanding Eligibility," by Stephen Zuckerman, Baoping Shang, and Timothy Waidmann – Medicare Savings Programs (MSPs) offer financial assistance to Medicare beneficiaries with incomes and assets too high to allow them to qualify for full Medicaid coverage. However, participation in MSPs is low. To expand eligibility and potentially boost participation, this study considered policies that would better align program rules with those used to obtain low-income subsidies for the Medicare Part D drug benefit, relax assets tests and expand eligibility to incomes as high as 200% of the federal poverty level. Results showed that changes that simply align eligibility rules for the MSPs with those for Part D low-income subsidies would have little impact on overall eligibility for MSPs, but would increase the proportion of people eligible for the Qualified Medicare Beneficiary (QMB) program, which pays an enrollee's premium and cost-sharing expenses. The researchers note that any MSP expansions involve a trade-off between making larger numbers of beneficiaries eligible by eliminating resource requirements and better targeting those with greater health care needs by expanding income standards.

"Health Care Spending and Service Use among High-Cost Medicaid Beneficiaries, 2002-2004," by Teresa A. Coughlin and Sharon K. Long -- This analysis found that Medicaid spending is concentrated among a relatively small number of beneficiaries with complex needs: the top 10% of Medicaid spenders between 2002 and 2004 accounted for 64.3% of overall program expenditures. Results showed a high degree of spending persistence; 58% of those among the top 5% of spenders in 2002 remained in this category over the next two years. The researchers identified two distinct subgroups of high spenders---those with persistently high costs and those with episodically high costs. Compared to low-cost or episodically high-cost beneficiaries, the persistently high-cost spenders were more likely to be aged or disabled, female, and white; more than 60% had a mental illness or dementia and nearly a quarter had diabetes. With different services driving the two high-cost groups, different strategies are needed to contain costs for these populations, the authors note.

"Incentives in Obesity and Health Insurance," by Inas Rashad Kelly and Sara Markowitz -- This study explored whether having health insurance creates a "moral hazard" in relation to body weight---that is, whether it leads people to engage in riskier behavior knowing they have access to physician care. Although effects were small in magnitude, findings indicated that having health insurance is associated with a higher body mass index (BMI) and also an increased probability of being overweight; results showed no effect on the probability of being obese."

"Spillover Effects of State Mandated Benefit Laws: The Case of Outpatient Breast Cancer Surgery," by John Bian, Joseph Lipscomb, Michelle M. Mello -- Looking at the period 1993-2002, this study found that state laws mandating inpatient insurance coverage for breast cancer surgery significantly decreased by more than one-third the likelihood that Medicare fee-for-service beneficiaries---who are not formally subject to state laws---would receive an outpatient mastectomy. Findings that state laws have had "spillover effects" on Medicare FFS patients partially undercut the case for federal regulation and suggests that existing state laws already are accomplishing much of what a federal mandate would be expected to do.

Other features in INQUIRY's winter issue:

"Dialogue: Health Care Reform through Community Benefit Leadership," In this candid discussion, several nonprofit health care executives sound off on community benefit endeavors that their organizations are undertaking and how these initiatives relate to health reform. (open access article available at http://www.inquiryjournalonline.org/inqronline/?request=get-document&issn=0046-9580&volume=046&issue=04&page=0364 )

"The View from Here: Demise of the Public Option: Down for the Count, But Not Out?" by Alan C. Monheit – In this column, INQUIRY's editor explains why efforts to kill the "public option" and keep it out of health reform might have been short-sighted---and why, at some point in the future, Americans may see it resurrected. (open access article available at http://www.inquiryjournalonline.org/inqronline/?request=get-document&issn=0046-9580&volume=046&issue=04&page=0359 )

- 30 -

INQUIRY, the journal of health care organization, provision, and financing, is a peer-reviewed scholarly publication. Now entering its 47th year, it is published quarterly by Excellus Health Plan, Inc. Press releases and article abstracts are available on the Inquiry Web site at www.inquiryjournal.org under "Current Issue Table of Contents."