Date of Degree

9-2019

Document Type

Dissertation

Degree Name

Ph.D.

Program

Economics

Advisor

Partha Deb

Committee Members

Jessica Van Parys

David Jaeger

Subject Categories

Econometrics | Economics | Health Economics

Keywords

Medicare, Affordable Care Act, Bundled Payment, Healthcare Innovation, Medicare Payment

Abstract

This dissertation consists of four chapters that study the impacts of innovations in health care provision and financing. The relentless rise in US health care costs has led the Centers for Medicare and Medicaid Services to launch various pilot programs to create financial incentives for health care providers, suppliers, and local communities to improve the efficiency of the health care system. The fist chapter of this manuscript reviews the main pilot programs implemented and/or funded by the Centers for Medicare and Medicaid Services since the 111th United States Congress passed the Patient Protection and Affordable Care Act, also known as the Affordable Care Act, into law in 2010.

The second chapter focuses on the effects of a bundled payment method implemented by the Centers for Medicare and Medicaid Services since 2013. This chapter studies how the Bundled Payments for Care Improvement (BPCI) initiative changed hospital behavior, the spillover effects of the BPCI initiative on non-Medicare patients, and non-participating hospitals that are located in the same health care markets as participating hospitals. I find no significant evidence that the BPCI hospitals change their admission patterns as a result of the BPCI initiative. The average length of stay decreased significantly by 0.3 day. There were no changes in the index hospital total charges nor number of procedures. The BPCI initiative significantly decreased the likelihood of discharge to inpatient post-acute care facilities. These results suggest that the BPCI initiative curtails Medicare expenditures by reducing the post-acute care utilization. There is significant evidence that hospitals treat Medicare and non-Medicare patients similarly so that the savings to society are greater than savings to Medicare. However, I find no supporting evidence to suggest that there are spillover effects on non-participating hospitals that are located in the same county as the BPCI-participating entities. This suggests that a bundled payment implemented at hospital level mainly impacts hospitals' protocols than physicians' practice styles.

The third chapter investigates how episode-based payment methods like the Bundled Payments for Care Improvement initiative may impact the quality of care. I use all-cause 30-day and 90-day re-hospitalization as measures of quality of care. The findings of Chapters 2 and 3 suggest despite a significant reduction in hospital length of stay, and decrease in probability of discharging total joint replacement patients to skilled nursing or other inpatient rehabilitation facilities, the quality of care is not inversely affected.

The final chapter of this dissertation is a joint work with Professor Partha Deb, and Anjelica Gangaram. In this chapter, we study whether providing grants to states to design and test alternative health care delivery and payment systems impacts the health status of their residents. We use a generalized interrupted time series design using a Latent Class Model for multiple measures of health status to study the effect of the State Innovation Models (SIM) initiative. We find robust and substantial improvements in health status among the populations in states that implemented their SIM initiatives. Our findings suggest the investments in health care delivery innovations appear to be working substantially through Medicare and Medicaid related channels.

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