Health Care Policy


Testing Transparency

Giving patients a tool to search for health care prices did not result in lower spending

If patients knew the price of different health care options, they could make better decisions about their medical care and help cut health care costs by shopping for lower-priced care—at least that’s the hope.

With that in mind, more than half of U.S. states have passed laws establishing price transparency websites, and many employers have offered price transparency tools to their employees.

But does it work?

Limited research has been conducted on whether price transparency tools actually help control spending.  In one of the first studies of its kind, appearing today in JAMA, a team of researchers from Harvard Medical School found that access to a price transparency tool was not associated with lower health care spending.

Get more HMS news here

The researchers studied the Truven Health Analytics Treatment Cost Calculator, an online price transparency tool, which tells users how much they would pay out of pocket for services such as X-rays, lab tests, outpatient surgeries or physician office visits. The out-of-pocket cost estimates are based on the user’s health plan benefits and on how much they have already spent on health care during the year.

Two large national companies offered this tool to their employees in 2011 and 2012. The researchers compared the care of the almost 149,000 employees who were offered the price transparency tool to 296,000 employees from other companies who were not offered the tool.

Overall, having access to the tool was not associated with reduction in outpatient spending, and patients did not switch from more expensive outpatient hospital-based care to lower-cost settings. When the researchers looked at only those with higher deductibles—who would be expected to have greater price shopping incentives—they also found no evidence of reduction in spending.

“Despite large variation in health care prices, prevalence of high-deductible health plans and widespread interest in price transparency, we did not find evidence that offering price transparency to employees generated savings,” said Sunita Desai, a research fellow in health care policy at Harvard Medical School and lead author on the study.

There were several potential reasons.  Despite aggressive promotion, only 10 percent of the employees who were offered the tool used it. Further, when they did they use the tool, more than half the searches were for relatively expensive services of over $1,000.

“For expensive care that exceeds their deductible, patients may not see any reason to switch. They do not save by choosing a lower-cost provider, even if the health plan does,” said Ateev Mehrotra, associate professor of health care policy at Harvard Medical School and senior author on the study.

The tools can still provide patients with valuable information, including their expected out-of-pocket costs, their deductible, and their health plan’s provider network, the researchers noted.

“People might use the tools more—and focus more on choosing lower-priced care options— if they are combined with additional health plan benefit features that give greater incentive to price shop,” said Desai.

This work was supported by a grant from the Laura and John Arnold Foundation and the Marshall J. Seidman Program for Studies in Health Economics and Health Care Policy at Harvard Medical School.


Sparing Livers

Curing hepatitis C will create transplant opportunities for patients with other illnesses

Recently developed treatments that cure hepatitis C virus (HCV) will create new opportunities for people with other liver diseases to receive transplanted livers.

Only one-third of Americans who need liver transplants receive them and shortages are expected to rise as the transplant waiting list continues to grow even as the supply of organs remains flat.

New research suggests that the benefits of new HCV treatments could spill over to many other diseases that cause end-stage liver failure.

Get more HMS news here

The findings, from a study led by researchers at Harvard Medical School, are published May 3 in the American Journal of Managed Care.

In the United States, the most common reason for needing a liver transplant is cirrhosis caused by HCV, followed by cirrhosis from long-term alcohol use.

Other reasons include nonalcoholic fatty liver disease, other forms of chronic hepatitis, genetic forms of liver disease and acute liver failure from drugs such as acetaminophen (Tylenol).

“The inadequate supply of liver donors in the United States is a real problem,” said Anupam B. Jena, associate professor of health care policy at Harvard Medical School and an internist at Massachusetts General Hospital, who led the research.

“People die every day of liver disease because a suitable organ never materializes. By curing patients of HCV before they become sick enough to need a new liver, new HCV drugs shorten the waiting lists and make more livers available to patients with other illnesses,” he said. 

Get more HMS news here

Jena and his colleagues at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California, Precision Health Economics and the University of Chicago developed an epidemiologic-economic model that combined data on trends in chronic liver disease with liver transplant allocation models to estimate the potential effects of systematic HCV screening and treatment on the demand for liver transplants in the United States.

The researchers found that systematic HCV screening and treatment would not only reduce rates of end-stage liver disease due to HCV infection but would also spare approximately 10,500 livers from being transplanted into HCV-infected patients over a twenty-year period (2015-2035).

An estimated 7,300 of these livers would be transplanted into liver disease patients without HCV. The remaining 3,200 livers would be transplanted into people who were not screened for HCV or who have HCV but did not respond to existing therapies.

The study has implications for a broad range of diseases aside from liver disease, said study co-author Darius Lakdawalla, Quintiles Chair in Pharmaceutical Development and Regulatory Innovation at the University of Southern California. 

“For any disease in which organ transplants are in short supply, our study suggests a novel pathway by which treatment of a single disease may save lives of those with other diseases by sparing organs for transplant,” Lakdawalla said.

For example, he said, improvements in coronary artery disease management will mean that people with heart failure arising from this condition will require fewer heart transplants in the future; those hearts will be spared and can be transplanted into people with other forms of heart failure. 

But not all spillovers are benefits.

The study also highlighted how increasing rates of diseases such as diabetes and hypertension may have unintended consequences for patients with other diseases. By raising the demand for kidney transplants due to end-stage kidney disease, for example, both diabetes and hypertension crowd out transplant opportunities for patients with other forms of end-stage kidney disease.

Study co-authors included Tomas J. Philipson from the University of Chicago; Warren Stevens from Precision Health Economics, a healthcare consultancy to life science firms  (Jena and Philipson are consultants for PHE); Yuri and Gonzalez, Steven E. Mark and Timothy Juday from AbbVie, Inc., which develops and markets HCV treatments. 

Funding for this study came from AbbVie, Inc.


Quality Concerns

A new study shows corporate chains tend to buy and sell lower-quality nursing homes.  Does care improve? 

Over the last two decades, thousands of nursing homes have been bought and sold by corporate chains. A new study has found that these transactions are related to lower quality of care.

The results of this study suggest that chains bought and sold nursing homes that were already having quality problems and these quality issues persisted after the transaction.

Get more HMS news here

In nursing homes that underwent a transaction, quality problems were present both before and after the transaction occurred.

The research, led by David Grabowski, professor of health care policy at Harvard Medical School, measures the implications of corporate ownership changes, which policymakers have long worried negatively impacts nursing home quality of care. The findings are published in the May issue of the journal Health Affairs.

“A large number of mergers, sales and acquisitions have occurred over the past two decades among nursing home chains, and we wanted to see how residents living in these nursing homes were affected by these transactions,” Grabowski said.

According to the study, around 1,200 to 2,000 nursing homes in the U.S. (7 to 13 percent) reported a transaction annually. The most commonly reported were mergers across chains. For the 10 largest chains, which contain 12 percent of all nursing homes, tremendous “churn” occurred in the study period; only two of the 10 chains did not experience any change in corporate ownership.

In spite of all these transactions, the researchers found that the organizational structure of the nursing home industry has remained relatively constant. For example, the proportion of nursing homes owned by a chain is the same today as it was in the late 1990s.

Grabowski and colleagues at the University of Michigan, the University of Rochester and Vanderbilt University studied the quality implications of these transactions.

“By comparing the quality of care in facilities that undergo a transaction with those that do not, we were able to calculate the quality implications of these transactions,” said senior author Jane Banaszak-Holl, associate professor of health management and policy at the University of Michigan.

The authors found that nursing homes that underwent a chain-related transaction had more government deficiency citations than nursing homes that did not experience a transaction. Given the presence of low quality prior to these transactions, the authors could not conclude that the chain transactions led to declines in quality. Rather, the results suggested that these transactions are indicators of low quality nursing homes.

This result raises important issues for nursing home policy regarding ownership accountability, oversight and transparency. Going forward, the number of chain-related transactions could be a useful indicator of potential quality to consumers and their advocates, and best practices should include requiring nursing homes to make the notification of an impending sale publicly available.

The authors also suggest that more detailed data on chain ownership and quality is needed for both consumers and regulators. Policymakers should consider legislation that requires more detailed and comprehensive reporting of ownership for nursing home chains.

This study was funded by the National Institute on Aging (R01 AG042418).


ACA Payment Reform Achieves Early Gains

Early Medicare Shared Savings Program results are promising

Accountable care organizations that joined the Medicare Shared Savings Program (MSSP) when it launched in 2012 achieved modest savings while maintaining or improving performance on measures of quality of patient care in 2013, the first full year of the program, researchers at Harvard Medical School found in the first rigorous examination of this key health care payment reform program.

These early adopters lowered spending by 1.4 percent in 2013 relative to a control group of non-ACO providers in the same areas, which represents a $238 million reduction in spending.

Get more HMS news here

These savings provide more evidence of early promising results from accountable care organization initiatives in Medicare, of which the MSSP is the largest, but the results also tell a more complex story about the pattern of savings across different types and cohorts of ACOs.

The findings were published in the New England Journal of Medicine

ACOs are groups of health care providers who agree to provide care to a population of patients under a global budget known as a benchmark. ACOs that hold spending below the benchmark and perform well on measures of quality of care share in the savings.

In contrast with other ACO programs such as the Pioneer model, MSSP participants are not required to reimburse Medicare if spending exceeds the benchmark.

The first two cohorts of provider groups (220 in total) entered the MSSP in mid-2012 or at the beginning of 2013. Since then, the program has expanded and currently includes over 430 participants.

While the ACOs that joined in 2012 cut spending by $238 million, the next cohort of ACOs that joined in 2013 achieved no savings in their first full year in the program, suggesting that the early success of the first participants may not be replicated by the subsequent waves of ACOs that have joined the MSSP.

In addition, because Medicare paid out $244 million in shared-savings bonuses to ACOs in the 2012 cohorts, the lower spending in that cohort did not constitute net savings to Medicare.

 “These results suggest that ACOs with no downside risk can achieve savings, but that savings to Medicare and society may be slow to develop,” said J. Michael McWilliams, the Warren Alpert Associate Professor of Health Care Policy at HMS and lead author of the study.

“But the incentives for ACOs to lower spending are currently very weak, so savings may accelerate if the incentives are strengthened.”

In particular, the current method for setting an ACO’s benchmark diminishes its incentives to save. Specifically, if an ACO lowers spending now, it is penalized with a lower benchmark later.

According to the authors, severing the link between an ACO’s benchmark and its previous savings could go a long way toward rewarding ACOs adequately for curbing wasteful practices and allowing the returns necessary for ACOs to invest in more efficient systems of care.

The investigators also found that independent primary care groups participating in the MSSP achieved significantly greater savings than hospital-integrated groups.

“Some have presumed that forming a large hospital system that owns a lot of outpatient practices is a prerequisite for ACO success,” McWilliams said. “We do not find this to be the case.”

One reason for this finding, the authors note, is that independent physician groups have stronger incentives to prevent hospitalizations than hospital-owned groups, since their shared-savings bonuses from doing so are not offset by foregone organizational profits from the reduction in hospital care.

Finally, the authors found that ACOs in the MSSP with high spending for their region achieved greater savings than ACOs with spending below the regional average. This suggests that ACOs with more opportunities to cut spending had an easier time doing so.

Recently, the Centers for Medicare and Medicaid Services proposed transitioning to a system in which an ACO’s benchmark would be primarily based on average spending in its region.

Because the participation of high-spending ACOs in the voluntary MSSP is particularly valuable for lowering overall spending in Medicare, the authors caution against moving to such regional benchmarks too quickly. Doing so could prompt ACOs with high spending for their region to leave the program, thereby diminishing program-wide savings.

“These early results are encouraging overall,” said McWilliams, who is also a practicing general internist and HMS associate professor of medicine at Brigham and Women’s Hospital. “But building on the initial success of ACO models in Medicare will require stronger incentives and rigorous evaluations to identify groups of systematically successful ACOs whose organizational models and strategies can be disseminated.”

This research was supported by grants from the National Institute on Aging of the National Institutes of Health (P01 AG032952 and F30 AG044106-01A1) and from the Laura and John Arnold Foundation.


Lower Prices, Higher Spending

Retail clinics may increase medical spending, rather than trim costs

Retail clinics, seen as a convenient and cost-saving alternative to physician offices and hospital emergency departments, may actually drive up medical spending by creating demand for new medical services, according to a new study.

Examining data about people who visited retail clinics for low-severity illnesses such as urinary tract infections and sinusitis, researchers found that in most cases people would have stayed home and not sought medical care if the retail clinic had not been available. The convenience of retail clinics, both in terms of location and expanded hours of operation, probably makes them an attractive alternative to staying home and suffering through a minor illness, researchers said.

Prior studies have shown that spending on retail clinic visits is lower than spending on office visits and especially emergency department visits, and the new study found that some people did trim spending by visiting retail clinics instead of costlier physician offices. However, such savings were overshadowed by the increased spending on new medical care.

The study, the first to examine whether retail clinics increase use of medical services, was published in the March edition of Health Affairs.

“These findings suggest retail clinics do not trim medical spending but instead may drive it up modestly because they encourage people to use more medical services,” said senior author Ateev Mehrotra, associate professor of health care policy at Harvard Medical School and an adjunct researcher at the RAND Corporation. “Retail clinics do offer benefits such as easier access to medical care, but the widely expected cost savings may not be realized.”

Retail clinics are walk-up medical providers typically located in drug stores and in retail chain stores such as Target and Wal-Mart. Care most often is provided by nurse practitioners rather than by physicians.

First appearing in 2000, there are now nearly 2,000 retail clinics across the United States, and they receive more than 6 million patient visits annually. Visits to retail clinics are less expensive than visits to physician offices or emergency departments, both because charges are lower for the visit and fewer tests are performed.

Researchers from HMS, RAND and other institutions assessed whether visits to retail clinics for low-intensity conditions represented substitution for higher-cost care or new use of medical services by examining information about a large group of people enrolled in health plans offered by a private health insurer in 22 U.S. cities in 2010 to 2012.

The analysis focused on visits for 11 low-acuity conditions that account for more than 60 percent of all visits to retail clinics. The health insurer covered retail clinic visits during the study period, with copayments for retail clinics that were similar to copays for visits to physician offices.

Researchers compared the experiences of 519,542 enrollees with at least one retail clinic visit with a random sample of 861,557 other enrollees who did not receive care at a retail clinic. Analyzing patterns of medical service use between the two groups allowed the study to determine whether retail clinic visits for low-acuity conditions represented substitutions or a new use of medical care.

Researchers estimated that 42 percent of the visits to retail clinics for low-acuity ailments represented substitution for a visit to a physician office or emergency department, with 58 percent representing new use of medical services.

Each use of retail clinics for new medical services increased per person spending by an average of $35 per year. That was partly offset by $21 in savings among those people whose visit to a retail clinic substituted for higher-priced medical care. So the overall spending increase prompted by retail clinics was $14 per enrollee annually, according to the study.

While the overall increase was modest, it did represent a 21 percent increase in spending for low-acuity conditions.

“While retail clinics do allow some users to lower their medical spending, the new use of medical services outweighed the savings from the substitution we observed among the large group of people we studied,” said Scott Ashwood, the study’s lead author and associate policy researcher at RAND, a nonprofit research organization.

Most health insurers now cover care at retail clinics and many have created financial incentives to encourage use of the clinics, such as waiving copays for such care.

“Our findings may impact the decisions of health plans as they decide whether and how to cover care at retail clinics,” said Mehrotra, who is also HMS associate professor of medicine and a hospitalist at Beth Israel Deaconess Medical Center. “If the goal is to lower costs, then encouraging use of retail clinics may not be a successful strategy.”

While the study challenges notions that retail clinics may help cut health costs, researchers said clinics do likely provide value by offering a source of health care for people who cannot obtain timely care from a primary care provider.

Future studies should further explore the influence of retail clinics on overall health spending, as well as how retail clinics affect the coordination of medical care and what quality of care retail clinics provide for chronic illnesses.

Support for the study was provided by the Robert Wood Johnson Foundation.


Election Risk

Elected heads of government win greater risk of early death

We see it happen all too often: The youthful visage of a candidate becomes, in a few short years, the grizzled countenance of a head of state. But is this oft-observed rapid aging evidence of a statistically significant health impact of simply being an elected head of state?

A team of researchers led by senior author Anupam Jena, associate professor of health care policy at Harvard Medical School, set out to test the theory that politicians elected to lead a country’s government may experience premature death.

After adjusting for life expectancy at time of last election, the team found that elected leaders lived 2.7 fewer years and experienced a 23 percent greater risk of death compared to runners-up.

“This suggests that the stress of governing may substantially accelerate mortality for our elected leaders,” said Anupam Jena, who is also a physician at Massachusetts General Hospital.

The results are published in the Christmas issue of The BMJ.

“By comparing the lifespans of elected leaders with runners-up, we were able to calculate the mortality cost of winning elections and serving as head of state,” said co-author Andrew Olenski, HMS research assistant in health care policy.

The researchers compared 279 nationally elected leaders from 17 countries to 261 unelected candidates who never served in office. The study group was made up of candidates in elections that took place from 1722 to 2015.

The researchers determined the number of years each competitor lived after the last election that they ran in, and compared the results to the average life span for an individual of the same age and sex as the candidate during the year of the election.

The researchers designed their study to overcome the limitations of similar studies of elected officials and other successful individuals.

The researchers said that earlier research by others found no significant effect on the life expectancies of U.S. presidents, perhaps because the sample size was too small.  In addition, presidents would be expected to live longer than the general population due to higher socioeconomic status alone. The failure of prior studies to detect a difference suggests that mortality costs of being president may have been masked. Similar studies of life expectancies for winners of prestigious prizes such as the Academy Awards and the Nobel Prize have also been conducted.

This research was supported by the Office of the Director of the National Institutes of Health (NIH early independence award, grant 1DP5OD017897-01).


Reform Model Not Yet Helping

Coordinated care gains not reaching patients with mental health diagnoses

People diagnosed with mental health conditions did not see improvements in coordination and quality of  their care, as some had hoped, but they also did not experience large cuts in access, as some had feared. Those were some of the findings of a team of researchers from Harvard Medical School and Johns Hopkins Bloomberg School of Public Health who studied an early alternative payment model designed to encourage coordinated health care.

The research team looked at claims data from 2006-2011 to examine whether the implementation of the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract affected mental health service use, mental health care spending, total spending and quality of care.

They also interviewed providers and managers about the process of implementing the AQC and the potential for developing systems to improve coordination of care for people with mental health diagnoses.

Get more HMS news here

The researchers said the interviews suggest that these organizations were not focused on mental health integration when the contract was first implemented but are now thinking creatively and innovatively about developing new programs. Some involve integrating social workers into treatment teams focused on non-mental health conditions, like diabetes, to better identify and support patients with mental health conditions who would benefit from more integration of mental health and medical care.  They said it is too early to have seen results from these new programs.

“The initial effort didn't solve the problem of fragmented care for people with mental health conditions,” Huskamp said. “We still need to do more to integrate the care that they get.”

The study was led by Haiden Huskamp, professor of health care policy in the Department of Health Care Policy at Harvard Medical School, and Colleen Barry, professor and associate chair for research and practice in the Department of Health Policy and Management at the Johns Hopkins Bloomberg School of Public Health. The findings are published in the December issue of Health Affairs.

“The initial effort didn't solve the problem of fragmented care for people with mental health conditions,” Huskamp said. “We still need to do more to integrate the care that they get.”

Payment reform experiments

While the traditional fee-for-service model provides a financial incentive for providers to perform more procedures, new payment models that provide a lump sum to cover all the costs of a person’s care can motivate physicians and hospital administrators to focus on providing the highest value care and improving care coordination, although the new models could also result in reduced access to care.

Various organizational approaches to this goal—accountable care organizations, bundled payments, global budgets—are part of many public and private health care reform efforts. One early example is the Blue Cross Blue Shield of Massachusetts Alternative Quality Contract, which began in 2009.

An earlier study of the AQC found that for the general population, the growth of overall health care spending slowed and some measures of quality of care improved.

Huskamp, Barry and colleagues at HMS, Johns Hopkins and McLean Hospital wanted to know whether the model had the same effects on people who receive mental health care.

This is a crucial population for health care reform. Mental health disorders affect tens of millions of people in the United States each year, and the total direct and indirect costs of the most serious mental health illness are more than $300 billion per year, according to the National Institute of Mental Health.

Integrating fragmented care

Since care for mental health is even more fragmented than care in the rest of the health care system—with distinct insurance benefits for mental and behavioral health, and a separate mental health care system that is often not directly linked to primary or secondary medical care services—the researchers noted that it is an area that could benefit greatly from efforts to improve the quality and coordination of care.

Instead, they found that some AQC patients with a mental health diagnosis were slightly less likely to receive mental health services than a comparable group covered by the same insurer. They also found that for people who did use mental health services, spending did not change.

In addition, people with mental health diagnoses were less likely to benefit from improvements in quality of care.

For example, to help prevent and treat chronic illnesses, the AQC offers incentives for clinicians to increase the use of diabetes management approaches. Providers working under the AQC were more likely to adopt certain diabetes management approaches for patients in the AQC than for a comparison group of Blue Cross Blue Shield enrollees not in the AQC, but these improvements were not found among the subgroup of AQC enrollees with both diabetes and a co-occurring mental health diagnosis.

According to the researchers, as accountable care evolves, policymakers, insurance companies and providers will need to understand how these reforms affect care for often high-cost individuals with mental health treatment needs.

“In order to take advantage of the transformative power of coordinated care,” Barry said, “we need to make sure that the incentives and quality measures we use address the needs of this crucial population.”

Evolution Ongoing

In addition to their quantitative analysis, the researchers also conducted interviews with providers and managers in a variety of organizations to understand the context for the complex transformations taking place.

Interview participants said that many organizations spent the first years of the contract building the basic infrastructure for collecting the data necessary to coordinate care and measure progress, and that their organizations have only recently begun to address some of the more challenging changes needed to manage mental health care delivery.

“They now have to think about the whole person, and that's changing how they do business,” Huskamp said.

The study was funded by Commonwealth Fund grant number 20130499.

Co-author Robert Mechanic is a trustee at Atrius Health, one of the provider organizations that signed the Alternative Quality Contract with Blue Cross Blue Shield of Massachusetts (BCBSMA). 


Next Steps for Federal Health Reform

Incoming Harvard Kennedy School dean shares recommendations at Seidman lecture


Unless those who object to the Affordable Care Act are willing to put forth an alternative with comparable information about its effects on spending and access to care, then the huge amount of time that has been devoted to the ACA debate should be used for more constructive policymaking.

This was the theme at the 15th annual Seidman Lecture at Harvard Medical School on Nov. 2, delivered by the next dean of the Harvard John F. Kennedy School of Government, Douglas Elmendorf.

“We have a lot to do, and we should get going,” Elmendorf said.

Get more Harvard Medicine News here

Elmendorf drew upon his vast experience to share his analysis of the Affordable Care Act and his recommendations for next steps for federal health care policy. In addition to heading the Congressional Budget Office from January 2009 until March of this year, Elmendorf spent much of his prior professional career at the Federal Reserve Board, the Council of Economic Advisers and the Treasury Department

Elmendorf is currently serving as a visiting fellow at the Brookings Institution. He was named to head the Harvard Kennedy School in June and will assume that role in January 2016.

The audience for the Seidman Lecture included leading scholars in health policy from HMS, the Harvard T.H. Chan School of Public Health, the Harvard Kennedy School and the Harvard Faculty of Arts and Sciences, as well as physicians and leaders from Harvard-affiliated and other Boston area hospitals.

“The incoming dean was able to weave together judgments related to value and critical analysis in his review of the ACA,” said Barbara McNeil, Ridley Watts Professor of Health Care Policy and head of the HMS Department of Health Care Policy, in an interview after the event.  “HMS was pleased to be the first school at Harvard to introduce him to this distinguished community.”

Assessing the state of federal policy

“In my view, the system of rules and subsidies established by the ACA is the right system in its fundamental elements, although we could discuss the pros and cons of specific changes within that system,” Elmendorf said.

His view was based on two judgments. “The first is a value judgment—I think we should bear the cost of achieving nearly universal health insurance in this country,” he said, “and the second is an analytic judgment—there are no alternatives to the ACA framework that would achieve that goal at significantly lower cost.”

Elmendorf made recommendations for changes to federal health care policy that he said could potentially further reduce spending and improve the value of care, including incentives to limit the use of unduly expansive health insurance, payment reforms for Medicare, and efforts to make markets for health care and health insurance more competitive. 

“This was a remarkably clear, comprehensive assessment of where the American health care system is—the challenges it faces and how it might address those challenges,” said Michael Chernew, Leonard D. Schaeffer Professor of Health Care Policy at HMS, in an interview after the event.

In 2000, on the occasion of his 50th reunion from Harvard Law School, Marshall J. Seidman provided endowment support to the Harvard Medical School Department of Health Care Policy to support research related to health care costs and quality and to host an annual meeting by a leading policy maker on issues related to costs and quality of health care with a particular emphasis on activities that are most likely to impact on federal and state approaches to these problems. The department has sponsored the lectures yearly since 2001.


Does Defensive Medicine ‘Work’?

Higher-spending doctors face fewer lawsuits

Higher-spending physicians face fewer malpractice claims, a study led by researchers at Harvard Medical School has found.

Nearly three-quarters of physicians report practicing defensive medicine, which is broadly defined as the ordering of tests, procedures, physician consultations and other medical services solely to reduce risk of malpractice claims. Defensive medicine is estimated to cost the U.S. as much as $50 billion annually.

Get more Harvard Medicine News here

Despite its ubiquity among physicians, whether or not higher spending by physicians actually reduces malpractice claims is unknown. One view is that better communication and early apologies for errors can reduce a physician’s liability. However, greater spending by physicians could also either reduce errors or signal to patients, attorneys and courts that despite an error, a physician was exhaustive in his or her care.

The research was led by Anupam Jena, associate professor of health care policy at Harvard Medical School and an internist at Massachusetts General Hospital. The findings, published in the BMJ, combined data on 18,352,391 hospital admissions in Florida during 2000-2009 with data on the malpractice histories of the 24,637 physicians who treated patients during those hospitalizations. Overall, 4,342 malpractice claims were filed against physicians (2.8 percent per physician-year), with malpractice claims rates ranging from 1.6 percent per physician-year in pediatrics to 4.1 percent per physician-year in general surgery and obstetrics and gynecology.

Jena and colleagues at the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California and at Stanford University found that in six out of seven specialties, higher-spending physicians faced fewer malpractice claims, accounting for differences in patient case-mix across physicians. 

For example, among internal medicine physicians, those in the bottom 20 percent of hospital spending (approximately $19,000 per hospitalization) faced a 1.5 percent probability of being involved in an alleged malpractice incident the following year, compared to 0.3 percent in the top spending quintile (approximately $39,000 per hospital admission).

Similar findings were seen in C-section rates among obstetricians. High C-section rates are commonly considered a signal of defensive practice, and obstetricians who performed relatively more C-sections were less likely to face a malpractice claim.

“It has remarkably been unknown whether defensive medicine ‘works’ or whether the majority of U.S. physicians could be incorrect in believing that greater spending is associated with reducing malpractice liability,” said Jena.

Prior work by Jena and co-author Seth Seabury, a Fellow at the Schaeffer Center and associate professor of clinical emergency medicine at the Keck School of Medicine at USC, has found that the typical physician spends nearly 11 percent of their career with an open malpractice claim and that in high-risk specialties, the lifetime risk of being sued is nearly 100 percent.

“The threat of malpractice is a very salient risk for most practicing physicians, particularly in high-risk specialties,” Seabury said. “If physicians perceive that higher spending can protect them from malpractice claims, then they are likely to practice defensively even if they feel that the additional spending is unnecessary or offers no clinical benefits to patients.”

An important limitation of the study is that it could not conclude exactly why greater spending by physicians was associated with fewer malpractice claims. Moreover, whether higher levels of spending were defensively motivated by malpractice concerns is still unknown.

“Although not conclusive, our study provides initial evidence on why efforts to reduce health care spending among physicians may meet sluggish opposition. Physicians may perceive a potential tradeoff between lowering spending and increasing risk of malpractice,” Jena said. “Broader health care reform efforts should recognize the role that physician perceptions about malpractice play in resource utilization decisions.”

The study was funded by an Early Independence Award 1DP50D017897-01 from the National Institutes of Health.



Paying for Health Care with Time

Hidden aspect of health care falls disproportionately on the disadvantaged

In 2010, people in America spent 1.1 billion hours seeking health care for themselves or for loved ones. That time was worth $52 billion.

“That’s about the same as all of the time worked in a year by the entire working population of the city of Dallas,” said Ateev Mehrotra, associate professor of health care policy and medicine at Harvard Medical School.

Mehrotra is a lead author of two studies published this fall that measure the amount of time patients spend seeking care; calculate the total time costs to society; and analyze the difference in time burden by race, ethnicity and socioeconomic status.

How much is the time spent obtaining health care worth, and who pays the most? Video: Hannah Semigran.

Writing in the American Journal of Managed Care, the researchers reported that the average total visit time for a person seeking care for themselves, a child or another adult was 121 minutes. That total includes 37 minutes of travel time and 84 minutes in the clinic. Of those 84 minutes, people spent only 20 minutes with physicians; they spent the rest of the time waiting, interacting with nonphysician staff, or completing paperwork or billing.

Economists calculate the value of time spent doing an activity—known as opportunity cost—based on the income that an individual would earn working the same amount of time. The researchers calculated that the average opportunity cost per visit was $43, compared to an average out-of-pocket cost per visit of $32.

“We also found that this time burden fell disproportionately on the disadvantaged,” said Kristin Ray, assistant professor of pediatrics at University of Pittsburgh School of Medicine.

Writing in JAMA Internal Medicine, the researchers reported that, while all groups spent the same 20 minutes face-to-face with physicians, blacks and Hispanics spent approximately 25 percent longer when seeking health care than whites, due to increased travel, wait and administrative times. Lower-income groups and the unemployed also spent more time seeking care than their better-off counterparts.

“Typically, when we talk about how much we spend on health care, we focus on what is paid to doctors and hospitals through co-pays and insurance payments,” said Mehrotra, who is also a physician and HMS professor medicine at Beth Israel Deaconess Medical Center. “This work helps us put a dollar amount on the significant time it costs people to seek health care.”

The researchers said that it is important to consider time costs when evaluating innovative treatment and care delivery models designed to create higher value, more patient-centered care and to reduce health care disparities. They noted that many initiatives currently underway might offer considerable benefits in reducing the time-cost burden of health care. These initiatives include streamlining office visits; incorporating clinics into schools, community centers, and places of work; and using new models of care delivery, such as telemedicine visits, e-visits and other Internet-powered medicine.

The researchers combined data from several sources to calculate time spent in transit, at the clinic and with clinicians face-to-face. One key resource was the American Time Use Survey, which ties detailed reporting about how respondents spend their day in a given 24-hour period with demographic and income information.

These studies were supported in part by grants from the California HealthCare Foundation, the Health Resources and Services Administration National Research Service Award for Primary Medical Care, the Agency for Healthcare Research and Quality, and the National Institutes of Health.