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This study assessed the relationship between hospital ownership of physician organizations (known as hospital-physician vertical integration) and facility fees billed to commercial insurers and physician service prices. Healthcare claims came from the IBM® MarketScan® Commercial Database (2012-2016, N = 30,716,800 office visit claims [CPT codes 99211-99215]), and hospital-physician vertical integration measures were from SK&A Office Based Physicians Database provided by IQVIA. Multi-variate, fixed-effect models were used to regress prices on market-level hospital-physician vertical integration; models included geographic market and year fixed effects, claim-level variables, and time-varying market-level variables. Analyses did not find that market-level hospital-physician vertical integration was associated with the billing of facility fees for office visits. However, vertical integration was associated with office visit physician prices for some specialties. A 10-percentage-point increase in vertical integration was associated with a 1.0% price increase for primary care, a 0.6% increase for orthopedics, and a 0.5% increase for cardiology; no such association was found for obstetrics/gynecology or oncology. When comparing metropolitan statistical areas (MSAs) in the bottom quartile of changes in vertical integration from 2012 to 2016 to MSAs in the top quartile, we found the following relative price increases based on predicted values for claims in the top quartile: $1.64 (1.9% of mean 2012 predicted price) for primary care to $2.30 (3.1%) for orthopedics to $3.13 (3.4%) for cardiology. Differences in predicted price accounted for an estimated $45.8 million in additional expenditure on primary care office visits in the top quartile of MSAs in 2016. In summary, market-level hospital-physician vertical integration was positively associated with physician prices for select specialties, but was not associated with changes in the use of facility-fee billing. More evidence on the quality effects of hospital-physician vertical integration is needed, as price increases that are not accompanied by measurable quality improvements should be part of any regulatory review.

The Affordable Care Act (ACA) included financial and regulatory incentives and goals for states to bolster their health insurance rate review programs, increase their anticipated loss ratio requirements, expand Medicaid, and establish state-based exchanges. We grouped states by political party control and compared their reactions across these policy goals. To identify changes in states' rate review programs and anticipated loss ratio requirements in the individual and small group markets since the ACA's enactment, we conducted legal research and contacted each state's insurance regulator. We linked rate review program changes to the Centers for Medicare and Medicaid Services' (CMS) criteria for an effective rate review program. We found, of states that did not meet CMS's criteria when the ACA was enacted, most made changes to meet those criteria, including Republican-controlled states, which generally oppose the ACA. This finding is likely the result of the relatively low administrative burden associated with reviewing health insurance rates and the fact that doing so prevents federal intervention in rate review. However, Republican-controlled states were less likely than non-Republican-controlled states to increase their anticipated loss ratio requirements to align with the federal retrospective medical loss ratio requirement, expand Medicaid, and establish state-based exchanges, because of their general opposition to the ACA. We conclude that federal incentives for states to strengthen their health insurance rate review programs were more effective than the incentives for states to adopt other insurance-related policy goals of the ACA., (© The Author(s) 2015.)

This paper identifies the impact of "program realignment," a 1991 California state policy that significantly enhanced local governments' financial risk and programmatic authority for public mental health services, on treatment costs per user, and on the mix of inpatient and outpatient service costs. The study employs a natural pre-realignment and post-realignment design using the 59 California local mental health authorities (LMHAs) as the unit of analysis over a seven-year period spanning policy implementation. Total treatment and inpatient cost per user decreases and outpatient cost per user increases after program realignment. Higher levels of contracting with private providers tend to enhance this trend, while risk for institutional services reduces user costs uniformly. Financial and programmatic decentralization can enhance cost efficiency in treatment, while promoting substitution of outpatient services for inpatient services. Local conditions such as risk and contracting determine the extent of the policy response.

Birth defects now are the leading cause of infant mortality and a major contributor to heightened morbidity in the United States. Considerable medical and nonmedical resources are devoted to treating persons with birth defects. Yet, little is known about birth defects' economic burden to society and the profile of component direct and indirect costs over the lifespan of those born with specific birth defects. Using an incidence approach, we made the most comprehensive estimates to date of the cost of 18 of the most clinically significant birth defects in the United States. Our analysis provides the basis for assessing competing strategies for research and prevention.

This study evaluates the aggregate and temporal impact seven Blue Cross and Blue Shield Plan utilization management (UM) programs have on hospital utilization and payments over a nine-year period, 1980 through 1988. The impact of these programs is determined using a statistical model that controls for variations in organizational characteristics of 56 Blue Cross and Blue Shield Plans, the health care market of the individual Plan, and several state and federal health care regulations. The statistical results indicate that over the entire period 1980 to 1988, preadmission certification, concurrent review, and denial of payment (as a part of the retrospective review program) programs were associated with lower hospital admissions, and fewer inpatient days and payments per 1,000 members. Mandatory second surgical opinion did not have a statistical impact on hospital utilization and payments. The aggregate reduction in hospital payments for all Blue Cross and Blue Shield Plans with both a preadmission certification and concurrent review program was estimated at $2.55 billion in 1988 dollars. For those Plans conducting preadmission certification, concurrent review, denial of payment, and case management programs in 1988, the total per enrollee reduction of inpatient payments was $52.94.

This paper estimates demand for mental health services by blacks, Hispanics, and whites, as well as males and females, using a three-part regression model. It examines the probability of mental health use and the level of outpatient and inpatient use. The data base is the high option Blue Cross/Blue Shield Federal Employee Health Benefits Plan for the 1979 to 1981 period. All user subpopulations sharing this plan have the same coverage, so differences in demand and utilization are related to ethnic and racial background, age, salary, outpatient visit copayment and market area characteristics, including the supply of psychiatrists. Results show vast differences in demand for care by ethnic, racial, and gender groups with identical insurance coverage. Alternative explanations for the differences are suggested.