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Objective: To determine if recent growth in hospital and physician electronic health record (EHR) adoption and use is correlated with decreases in expenditures for elderly Medicare beneficiaries., Data Sources: American Hospital Association (AHA) General Survey and Information Technology Supplement, Health Information Management Systems Society (HIMSS) Analytics survey, SK&A Information Services, and the Centers for Medicare & Medicaid Services (CMS) Chronic Conditions Data Warehouse Geographic Variation Database for 2010 through 2013., Study Design: Fixed effects model comparing associations between hospital referral region (HRR) level measures of hospital and physician EHR penetration and annual Medicare expenditures for beneficiaries with one of four chronic conditions. Calculated hospital penetration rates as the percentage of Medicare discharges from hospitals that satisfied criteria analogous to Meaningful Use (MU) Stage 1 requirements and physician rates as the percentage of physicians using ambulatory care EHRs., Principal Findings: An increase in the hospital penetration rate was associated with a small but statistically significant decrease in total Medicare and Medicare Part A acute care expenditures per beneficiary. An increase in physician EHR penetration was also associated with a significant decrease in total Medicare and Medicare Part A acute care expenditures per beneficiary as well as a decrease in Medicare Part B expenditures per beneficiary. For the study population, we estimate approximately $3.8 billion in savings related to hospital and physician EHR adoption during 2010-2013. We also found that an increase in physician EHR penetration was associated with an increase in lab test expenses., Conclusions: Health care markets that had steeper increases in EHR penetration during 2010-2013 also had steeper decreases in total Medicare and acute care expenditures per beneficiary. Markets with greater increases in physician EHR had greater declines in Medicare Part B expenditures per beneficiary., (© Health Research and Educational Trust.)

Objective: To test for correlation between the growth in adoption of ambulatory electronic health records (EHRs) in the United States during 2010-2013 and hospital admissions and readmissions for elderly Medicare beneficiaries with at least one of four common ambulatory care-sensitive conditions (ACSCs)., Data Sources: SK&A Information Services Survey of Physicians, American Hospital Association General Survey and Information Technology Supplement; and the Centers for Medicare & Medicaid Services Chronic Conditions Data Warehouse Geographic Variation Database for 2010 through 2013., Study Design: Fixed effects model estimated the relationship between hospital referral region (HRR) level measures of physician EHR adoption and ACSC admissions and readmissions. Analyzed rates of admissions and 30-day readmissions per beneficiary at the HRR level (restricting the denominator to beneficiaries in our sample), adjusted for differences across HRRs in Medicare beneficiary age, gender, and race. Calculated physician EHR adoption rates as the percentage of physicians in each HRR who report using EHR in ambulatory care settings., Principal Findings: Each percentage point increase in market-level EHR adoption by physicians is correlated with a statistically significant decline of 1.06 ACSC admissions per 10,000 beneficiaries over the study period, controlling for the overall time trend as well as market fixed effects and characteristics that changed over time. This finding implies 26,689 fewer ACSC admissions in our study population during 2010 to 2013 that were related to physician ambulatory EHR adoption. This represents 3.2 percent fewer ACSC admissions relative to the total number of such admissions in our study population in 2010. We found no evidence of a correlation between EHR use, by either physicians or hospitals, and hospital readmissions at either the market level or hospital level., Conclusions: This study extends knowledge about EHRs' relationship with quality of care and utilization. The results suggest a significant association between EHR use in ambulatory care settings and ACSC admissions that is consistent with policy goals to improve the quality of ambulatory care for patients with chronic conditions. The null findings for readmissions support the need for improved interoperability between ambulatory care EHRs and hospital EHRs to realize improvements in readmissions., (© Health Research and Educational Trust.)

Objective: To identify prevalences and predictors of nonfinancial barriers that lead to unmet need or delayed care among U.S. adults., Data Source: 2007 Health Tracking Household Survey., Study Design: Reasons for unmet need or delayed care in the previous 12 months were assigned to one of five dimensions in the Penchansky and Thomas model of access to care. Prevalences of barriers in each nonfinancial dimension were estimated for all adults and for adults with affordability barriers. Multivariable logistic regression models were used to estimate associations between individual, household, and insurance characteristics and barriers in each access dimension., Principal Findings: Eighteen percent of U.S. adults experienced affordability barriers and 21 percent experienced nonfinancial barriers that led to unmet need or delayed care. Two-thirds of adults with affordability barriers also reported nonfinancial barriers. Young adults, women, individuals with lower incomes, parents, and persons with at least one chronic illness had higher adjusted prevalences of nonfinancial barriers., Conclusions: Nonfinancial barriers are common reasons for unmet need or delayed care among U.S. adults and frequently coincide with affordability barriers. Failure to address nonfinancial barriers may limit the impact of policies that seek to expand access by improving the affordability of health care., (© Health Research and Educational Trust.)

Objective: To examine the extent to which health plan quality measures capture physician practice patterns rather than plan characteristics., Data Source: We gathered and merged secondary data from the following four sources: a private firm that collected information on individual physicians and their health plan affiliations, The National Committee for Quality Assurance, InterStudy, and the Dartmouth Atlas., Study Design: We constructed two measures of physician network overlap for all health plans in our sample and linked them to selected measures of plan performance. Two linear regression models were estimated to assess the relationship between the measures of physician network overlap and the plan performance measures., Principal Findings: The results indicate that in the presence of a higher degree of provider network overlap, plan performance measures tend to converge to a lower level of quality., Conclusions: Standard health plan performance measures reflect physician practice patterns rather than plans' effort to improve quality. This implies that more provider-oriented measurement, such as would be possible with accountable care organizations or medical homes, may facilitate patient decision making and provide further incentives to improve performance.

This study estimates the effects of an increase in an outpatient prescription drug copayment using a natural experiment based upon a large firm that implemented such an increase. The findings suggest that the primary effect of a copayment increase is attenuation of the trend in prescription drug utilization. We also find an initial reduction in expenditures, with the effects on spending diminishing. Employees with an existing chronic illness and those without a chronic illness show a similar, inelastic response to a copayment increase; employees with a newly diagnosed chronic illness have a more inelastic response.

Objective: Markets for Medicare HMOs (health maintenance organizations) and supplemental Medicare coverage are often treated separately in existing literature. Yet because managed care plans and Medigap plans both cover services not covered by basic Medicare, these markets are clearly interrelated. We examine the extent to which Medigap premiums affect the likelihood of the elderly joining managed care plans., Data Sources: The analysis is based on a sample of Medicare beneficiaries drawn from the 1996-1997 Community Tracking Study (CTS) Household Survey by the Center for Studying Health System Change. Respondents span 56 different CTS sites from 30 different states. Measures of premiums for privately-purchased Medigap policies were collected from a survey of large insurers serving this market. Data for individual, market, and HMO characteristics were collected from the CTS, InterStudy, and HCFA (Health Care Financing Administration)., Study Design: Our analysis uses a reduced-form logit model to estimate the probability of Medicare HMO participation as a function of Medigap premiums controlling for other market- and individual-level characteristics. The logit coefficients were then used to simulate changes in Medicare participation in response to changes in Medigap premiums., Principal Findings: We found that Medigap premiums vary considerably among the geographic markets included in our sample. Measures of premiums from different insurers and for different types of Medigap policies were generally highly correlated across markets. Our models consistently indicate a strong positive relationship between Medigap premiums and HMO participation. This result is robust across several specifications. Simulations suggest that a one standard deviation increase in Medigap premiums would increase HMO participation by more than 8 percentage points., Conclusions: This research provides strong evidence that Medigap premiums have a significant effect on seniors' participation in Medicare HMOs. Policy initiatives aimed at lowering Medigap premiums will likely discourage enrollment in Medicare HMOs, holding other factors constant. Although the Medigap premiums are just one factor affecting the future penetration rate of Medicare HMOs, they are an important driver of HMO enrollment and should be considered carefully when creating policy related to seniors' supplemental coverage. Similarly, our results imply that reforms to the Medicare HMO market would influence the demand for Medigap policies.

Objective: To assess the degree to which premium reductions will increase the participation in employer-sponsored health plans by low-income workers who are employed in small businesses., Data Sources/study Setting: Sample of workers in small business (25 or fewer employees) in seven metropolitan areas. The data were gathered as part of the Small Business Benefits Survey, a telephone survey of small business conducted between October 1992 and February 1993., Study Design: Probit regressions were used to estimate the demand for health insurance coverage by low-income workers. Predictions based on these findings were made to assess the extent to which premium reductions might increase coverage rates., Data Collection/extraction Methods: Workers included in the sample were selected, at random, from a randomly generated set of firms drawn from Dun and Bradstreet's DMI (Dun's Market Inclusion). The response rate was 81 percent., Findings: Participation in employer-sponsored plans is high when coverage is offered. However, even when coverage is offered to employees who have no other source of insurance, participation is not universal. Although premium reductions will increase participation in employer-sponsored plans, even large subsidies will not induce all workers to participate in employer-sponsored plans. For workers eligible to participate, subsidies as high as 75 percent of premiums are estimated to increase participation rates from 89.0 percent to 92.6 percent. For workers in firms that do not sponsor plans, similar subsidies are projected to achieve only modest increases in coverage above that which would be observed if the workers had access to plans at unsubsidized, group market rates., Conclusions: Policies that rely on voluntary purchase of coverage to reduce the number of uninsured will have only modest success.

Hospital discharge rates vary substantially among 60 communities in Michigan. (R2 = 90 percent and R2 = 85 percent of the systematic variance is explained by community effects for nonsurgical and surgical discharges, respectively.) The ranking of communities by discharge rates is stable over a five-year period (Spearman rho = 0.78 for nonsurgical discharges and 0.72 for surgical discharges). Surgical discharge rates decreased substantially (4 percent per year) over this time period, while nonsurgical rates showed no consistent pattern. Communities with exceptional discharge rates showed no substantial or significant regression toward the mean through the five-year study.

A principal problem with previous studies that have estimated the effects of prepaid group practices (PGPs) on hospital costs and use is the treatment of PGP growth rates as an exogenous variable. To the extent that the entry and subsequent growth of PGPs may be affected by high hospital costs and low use, the observed association between hospital costs and use and PGP market shares is confounded. To separate the effects of PGP growth on hospital expenses and use from the effects of hospital expenses and use on PGP growth, a simultaneous-equation model is estimated using data for 25 standard metropolitan statistical areas (SMSAs) from 1972 to 1982. The results indicate that PGP growth has a significant positive effect on average hospital expenses per day and per admission in an SMSA, but no statistically significant effect on average hospital expenses per capita. PGP growth also has a significant negative effect on both admission rates and average length of stay. In contrast to results from single-equation specifications, neither higher hospital expenses per day nor per admission are found to result in higher levels of PGP market shares in an SMSA and, in fact, both lower hospital expenses per capita and lower admission rates lead to significantly higher PGP market share levels.

Although numerous studies have been made of the determinants of small-area variation in hospital discharge rates, there is still disagreement about the role of socioeconomic factors. The lack of consensus stems, in part, from the difficulty in comparing results across studies that use different units and methods of analysis. Many of the studies using well-defined hospital service areas did not have the data needed to conduct a controlled analysis of the determinants of hospital utilization. Most of the studies that have performed controlled analyses have relied on larger geopolitical areas, which are not believed to capture self-contained health care systems. The study described here used a consistent set of data, three methods of analysis, and two units of analysis to test the importance of socioeconomic characteristics in explaining the variation in medical and surgical discharge rates in Michigan. Socioeconomic factors are found to be statistically significant determinants of the variation in both medical and surgical discharge rates, whether the method of analysis is simple correlations or multiple regressions, and whether the unit of analysis is the county or a well-designed hospital service area. These results suggest that previous small-area variation studies may have incorrectly concluded that socioeconomic characteristics do not explain differences in utilization rates.

Health care coalitions are an important element in the 1980s' emphasis on private sector cost-containment initiatives. The peak years for the formation of these coalitions were 1982 and 1983. Based on a 1986 telephone survey of 215 health care coalitions, we provide an analysis of the maturing health care coalition movement, focusing on who is in them, what they do, how they are doing, and what they have accomplished. We also propose two life-cycle models that describe most coalitions. One model fits the temporary, outcome-oriented employer-only coalitions, while the second fits the more process-oriented broad-based coalitions. Our data, along with more recent information, suggest that at present the coalition movement is in decline.

Policymakers are interested in the effect health maintenance organizations (HMOs) have had not only on the hospital expenditures of their enrollees, but also on the expenditures of non-HMO consumers. Previous studies of the "HMO effect" have focused on the comparison between hospital expenditures of HMO enrollees and those of non-HMO groups within the same market area. To the extent that the expenditures of non-HMO groups are affected by the presence of HMOs, this comparison will not give an accurate measure of the change in expenditures due to HMOs for either group. Using SMSAs without any HMOs as the comparison group can provide an accurate measure of the HMO effect on overall hospital expenses, if any nonrandom selection process of HMOs into SMSAs is controlled. In this article, the effect of prepaid group practices (PGPs) on overall hospital expenses is estimated using a simultaneous-equation model and all 283 standard metropolitan statistical areas (SMSAs) in 1980, controlling for any nonrandom selection process. The results indicate that while a significant selectivity bias exists that must be corrected, there is no significant PGP effect on hospital expenses. Controlling for other factors, hospital expenses per capita, per admission, and per day do not change as the PGP market share increases. While hospital expenses per capita for PGP enrollees may be falling, those of non-PGP groups in those SMSAs must be increasing by offsetting amounts.

Although competition for consumers is increasing in the health care sector, there is disagreement about whether it is resulting in cost containment, as its supporters have argued it would. In part this stems from a confusion between price competition, which under ideal circumstances leads to the production of services at the lowest possible cost, and nonprice competition--or rivalry--which under many circumstances will lead to increased costs. In this paper, I examine the evidence about the competitive response to the growing presence of health maintenance organizations in the health care marketplace. The available evidence suggests that providers are responding not with classical cost-containing price competition but, instead, with cost-increasing rivalry, characterized by increased expenditures to promote actual or perceived product differentiation.

In 1917, the Bureau of Labor Statistics surveyed 11,946 white households nationwide, recording demographic variables and yearly expenses on physicians, medicines, nurses, and hospitals. There was significant variation in these medical expenses among the nine census bureau regions. Using a multivariate analysis, we demonstrated that some of the variation could be explained by household variables, such as household income and size, some of the variability could be explained by the availability of physicians and hospital beds, and some could be explained by interactions between the different types of health care. However, after accounting for these possible explanatory variables, significant regional variation remained. We conclude that regional variation in health care expenditures is not new, and that studying how regional variation has changed during the twentieth century is likely to help explain why that variation exists today.