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Purpose. Mathematical and simulation models are increasingly used to plan for and evaluate health sector responses to disasters, yet no clear consensus exists regarding best practices for the design, conduct, and reporting of such models. The authors examined a large selection of published health sector disaster response models to generate a set of best practice guidelines for such models.

Methods. The authors reviewed a spectrum of published disaster response models addressing public health or health care delivery, focusing in particular on the type of disaster and response decisions considered, decision makers targeted, choice of outcomes evaluated, modeling methodology, and reporting format. They developed initial recommendations for best practices for creating and reporting such models and refined these guidelines after soliciting feedback from response modeling experts and from members of the Society for Medical Decision Making.

Results. The authors propose 6 recommendations for model construction and reporting, inspired by the most exemplary models: health sector disaster response models should address real-world problems, be designed for maximum usability by response planners, strike the appropriate balance between simplicity and complexity, include appropriate outcomes that extend beyond those considered in traditional cost-effectiveness analyses, and be designed to evaluate the many uncertainties inherent in disaster response. Finally, good model reporting is particularly critical for disaster response models.

Conclusions. Quantitative models are critical tools for planning effective health sector responses to disasters. The proposed recommendations can increase the applicability and interpretability of future models, thereby improving strategic, tactical, and operational aspects of preparedness planning and response.

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Medical Decision Making
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The current focus of the health reform debate is rightfully beginning to shift to the need to transform the delivery system to contain the long run growth in costs. Although much of the debate still focuses on the role of a public plan, this ignores the need for fundamental change. None of the options on the table will transform the delivery system. If passed, the best the current proposals could do is to expand enrollment and perhaps contain federal costs, but on its own the public plan will be unable to make the delivery system more efficient.

To control health care costs, I propose a publicly chartered major risk pool, or MRP, that
will allow plans to pool risk, thereby eliminating the need for wasteful underwriting and
selective marketing costs. Participation in the MRP by both providers and insurers is
voluntary. It can be combined with any public option in an exchange implemented at the
federal or state level; it can even work without a public option. After a brief transition
period, the MRP requires no federal funds and will not be “on budget.” By allowing private plans to play a role in a transformed insurance and delivery system, the MRP can be politically attractive to a broader constituency than any of the current proposals.

The MRP addresses a key component of comprehensive health reform: restructuring the
delivery system. It is not a simple reinsurance pool that reimburses health plans for high costclaims. Instead, it creates a reformed payment system for both inpatient care and outpatient chronic care that will encourage efficiency and quality. The MRP will cover inpatient and similar short but expensive episodes, as well as chronic illness management. Its new payment approaches will achieve the efficiency goals promised by proposals for hospital medical staff-focused Accountable Care Organizations, but in an organizationally more plausible manner. Hospitals and physicians who focus on inpatient care and voluntarily form Care Delivery Teams will receive bundled episode-based payments, but the MRP will pay providers regardless of whether they belong to a Care Delivery Team, although at less attractive rates. Providers in these teams can use their bargaining power to charge the primary insurers more than the MRP pays. The MRP’s payments for monthly chronic illness management will give health plans and primary care physicians the incentives, flexibility, and information to more effectively compensate clinicians for the care they deliver and coordinate. By being publicly chartered, but independent of Congress, and by allowing options for all players, the MRP will be able to sidestep the ability of special interests to block change.

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Berkeley Center on Health, Economic & Family Security
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Harold S. Luft
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The prevalence of obesity has been rising dramatically in the U.S., leading to poor health and rising health care expenditures. The role of policy in addressing rising rates of obesity, however, is controversial. Policy recommendations for interventions intended to influence body weight decisions often assume the obesity creates negative externalities for the non-obese. We build on earlier work demonstrating that this argument depends on two important assumptions:

  1. that the obese do not pay for their higher medical expenditures through differential payments for health care and health insurance, and
  2. that body weight decisions are responsive to the incidence of medical care costs associated with obesity.

In this paper, we test the latter proposition – that body weight is influenced by insurance coverage - using two approaches. First, we use data from the Rand Health Insurance Experiment, in which people were randomly assigned to varying levels of health insurance, to examine the effect of generosity of insurance coverage on body weight along the intensive coverage margin. Second, we use instrumental variables methods to estimate the effect of type of insurance coverage (private, public and none) on body weight along the extensive margin. We explicitly address the discrete nature of the endogenous indicator of health insurance coverage by estimating a nonlinear instrumental variables model. We find weak evidence that more generous insurance coverage increases body mass index. We find stronger evidence that being insured increases body mass index and obesity.

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National Bureau of Economic Research working paper series
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Clinical research presents health care providers with information on the natural history and clinical presentations of disease as well as diagnostic and treatment options. Consumers, patients, and caregivers also require this information to decide how to evaluate and treat their conditions. All too often, the information necessary to inform these medical decisions is incomplete or unavailable, resulting in more than half of the treatments delivered today lacking clear evidence of effectiveness.

Comparative effectiveness research (CER) identifies what works best for which patients under what circumstances. Congress, in the American Recovery and Reinvestment Act (ARRA) of 2009, tasked the Institute of Medicine (IOM) to recommend national priorities for research questions to be addressed by CER and supported by ARRA funds. In its 2009 report, Initial National Priorities for Comparative Effectiveness Research, the authoring committee establishes a working definition of CER, develops a priority list of research topics to be undertaken with ARRA funding using broad stakeholder input, and identifies the necessary requirements to support a robust and sustainable CER enterprise. The full list of priorities and recommendations can be found in the below report brief.

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Institute of Medicine's Committee on Comparative Effectiveness Research Prioritization
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To compare health care access, utilization, and perceived health status for children with SHCN in immigrant and nonimmigrant families. This cross-sectional study used data from the 2003 California Health Interview Survey to identify 1404 children (ages 0-11) with a special health care need. Chi-square and logistic regression analyses were used to examine relations between immigrant status and health access, utilization, and health status variables. Compared to children with special health care needs (CSHCN) in nonimmigrant families, CSHCN in immigrant families are more likely to be uninsured (10.4 vs. 4.8%), lack a usual source of care (5.9 vs. 1.9%), report a delay in medical care (13.0 vs. 8.1%), and report no visit to the doctor in the past year (6.8 vs. 2.6%). They are less likely to report an emergency room visit in the past year (30.0 vs. 44.0%), yet more likely to report fair or poor perceived health status (33.0 vs. 16.0%). Multivariate analyses suggested that the bivariate findings for children with SHCN in immigrant families largely reflected differences in family socioeconomic status, parent's language, parental education, ethnicity, and children's insurance status. Limited resources, non-English language, and limited health-care use are some of the barriers to staying healthy for CSHCN in immigrant families. Public policies that improve access to existing insurance programs and provide culturally and linguistically appropriate care will likely decrease health and health care disparities for this population.

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Maternal and Child Health Journal
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Lynne C. Huffman
Paul H. Wise
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As pressure builds on the White House and Congress to deliver on their promise of health care reform, the idea of a government health insurance company to compete with for-profit and not-for-profit private companies is gaining political momentum. Advocates claim that this new company would be more efficient, honest, and successful in forcing lower reimbursement rates on physicians and hospitals. However, a close look at how the present health care system functions, what its major problems are, and what reforms are needed to solve them suggests that this new idea is not the answer. The three major problems of the current U.S. system are that 45 million to 50 million people have no health insurance, the cost of care is high and rapidly increasing, and there are gross lapses in the quality of care. There is no reason to think that a government insurance company would make a significant dent in any one of these problems, let alone all three. To do that would require real reform in the financing, organization, and delivery of care.

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New England Journal of Medicine
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Background

Although the Accreditation Council for Graduate Medical Education (ACGME) limits the work hours of residents, concerns about fatigue persist. A new Institute of Medicine (IOM) report recommends, among other changes, improved adherence to the 2003 ACGME limits, naps during extended shifts, a 16-hour limit for shifts without naps, and reduced workloads.

Methods

We used published data to estimate labor costs associated with transferring excess work from residents to substitute providers, and we examined the effects of our assumptions in sensitivity analyses. Next, using a probability model to represent labor costs as well as mortality and costs associated with preventable adverse events, we determined the net costs to major teaching hospitals and cost-effectiveness across a range of hypothetical changes in the rate of preventable adverse events.

Results

Annual labor costs from implementing the IOM recommendations were estimated to be $1.6 billion (in 2006 U.S. dollars) across all ACGME-accredited programs ($1.1 billion to $2.5 billion in sensitivity analyses). From a 10% decrease to a 10% increase in preventable adverse events, net costs per admission ranged from $99 to $183 for major teaching hospitals and from $17 to $266 for society. With 2.5% to 11.3% decreases in preventable adverse events, costs to society per averted death ranged from $3.4 million to $0.

Conclusions

Implementing the four IOM recommendations would be costly, and their effectiveness is unknown. If highly effective, they could prevent patient harm at reduced or no cost from the societal perspective. However, net costs to teaching hospitals would remain high.

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New England Journal of Medicine
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AHPP sponsors special journal issue on health service provider incentives

The Director of the Asia Health Policy Program, Karen Eggleston, served as guest editor of the International Journal of Healthcare Finance and Economics for the June 2009 issue. The eight papers of that issue evaluate different provider payment methods in comparative international perspective, with authors from Hungary, China, Thailand, the US, Switzerland, and Canada. These contributions illustrate how the array of incentives facing providers shapes their interpersonal, clinical, administrative, and investment decisions in ways that profoundly impact the performance of health care systems.

The collection leads off with a study by János Kornai, one of the most prominent scholars of socialism and post-socialist transition, and the originator of the concept of the soft budget constraint. Kornai’s paper examines the political economy of why soft budget constraints appear to be especially prevalent among health care providers, compared to other sectors of the economy.

Two other papers in the issue take up the challenge of empirically identifying the extent of soft budget constraints among hospitals and their impact on safety net services, quality of care, and efficiency, in the United States (Shen and Eggleston) and – even more preliminarily – in China (Eggleston and colleagues, AHPP working paper #8).

The impact of adopting National Health Insurance (NHI) and policies separating prescribing from dispensing are the subject of Kang-Hung Chang’s article entitled “The healer or the druggist: Effects of two health care policies in Taiwan on elderly patients’ choice between physician and pharmacist services” (AHPP working paper #5).

In “Does your health care depend on how your insurer pays providers? Variation in utilization and outcomes in Thailand” (AHPP working paper #4), Sanita Hirunrassamee of Chulalongkorn University and Sauwakon Ratanawijitrasin of Mahidol University study the impact of multiple provider payment methods in Thailand, providing striking evidence consistent with standard predictions of how payment incentives shape provider behavior. For example, patients whose insurers paid on a capitated or case basis (the 30 Baht and social security schemes) were less likely to receive new drugs than those for whom the insurer paid on a fee-for-service basis (civil servants). Patients with lung cancer were less likely to receive an MRI or a CT scan if payment involved supply-side cost sharing, compared to otherwise similar patients under fee-for-service. (This article is open access.)

The fourth paper in this special issue is entitled “Allocation of control rights and cooperation efficiency in public-private partnerships: Theory and evidence from the Chinese pharmaceutical industry” (AHPP working paper #6). Zhe Zhang and her colleagues use a survey of 140 pharmaceutical firms in China to explore the relationships between firms’ control rights within public-private partnerships and the firms’ investments.

Hai Fang, Hong Liu, and John A. Rizzo delve into another question of health service delivery design and accompanying supply-side incentives: requiring primary physician gatekeepers to monitor patient access to specialty care (AHPP working paper #2).

Direct comparisons of payment incentives in two or more countries are rare. In “An economic analysis of payment for health care services: The United States and Switzerland compared,” Peter Zweifel and Ming Tai-Seale compare the nationwide uniform fee schedule for ambulatory medical services in Switzerland with the resource-based relative value scale in the United States.

Several of the papers featured in this special issue were presented at the conference “Provider Payment Incentives in the Asia-Pacific” convened November 7-8, 2008 at the China Center for Economic Research (CCER) at Peking University in Beijing. That conference was sponsored by the Asia Health Policy Program of the Shorenstein Asia-Pacific Research Center at Stanford University and CCER, with organizing team members from Stanford University, Peking University, and Seoul National University.

As Eggleston notes in the guest editorial to the special issue, AHPP and the other scholars associated with the issue “hope that these papers will contribute to more intellectual effort on how provider payment reforms, carefully designed and rigorously evaluated, can improve ‘value for money’ in health care.”

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