Panel:
Use, Cost, and Quality of Care in Medicaid and Medicare
(Health)
*Names in bold indicate Presenter
US healthcare spending as a percent of GDP continues to increase, and in 2018, healthcare spending totaled to $3.8 trillion. In light of the large and growing share of resources spent on healthcare, it is critically important to assess the returns to healthcare spending. The three papers in this session focus on understanding the use, cost, and quality of care in the Medicaid and Medicare markets.
The first paper examines the use and cost of care among children in Medicaid. The literature has suggested that physicians are less willing to treat the Medicaid insured population due to its lower reimbursement rates. The author considers how the use of Medicaid services change as a result of a plausibly exogenous shock: the Great Recession. Relying on administrative Medicaid claims data, the author finds that higher levels of unemployment leads to increases in Medicaid service utilization. Of note, increases in service utilization were not uniform across provider visits, places of services, and types of provider. While office based visits increased, visits to clinics and other settings decreased. This finding highlights the substitutability in primary care services between private practices and public providers, though higher reimbursements in office (i.e., non-facility) versus outpatient (i.e., facility) settings caution against increased costs without improved access to care.
The second paper considers the use, cost, and quality of care delivered in federally qualified health centers (FQHCs). Heavily subsidized by federal grant funding, FQHCs provide comprehensive primary and preventive health care to individuals with low incomes who are uninsured or underinsured. The authors find that over the last 15 years, the availability and use of FQHC has increased substantially. While Medicaid payments were initially more generous than Medicare payments for FQHCs compared to physician offices, their payment generosity now appears to be similar, due in part to state-specific prospective payment reforms at FQHCs. Once adjusted for observed patient characteristics, FQHC quality measures were indistinguishable from those at other primary care centers.
Finally, the third paper focuses the use, cost, and quality of care when fraudulent physicians are excluded from the Medicaid and Medicare program. The authors find that Medicaid and Medicare exclusions have a significant deterrence effect on potentially fraudulent providers. Claims and charges fall by approximately 12% and 7%, and they are driven by declines in both claims and charges per patient and the number per patients seen. They also find evidence that charges per service falls by 6%, suggesting that potentially fraudulent physicians are reducing billing for specifically more expensive procedures. Deterrence effects account to approximately $2 billion in savings.
Together, the findings of these three papers shed light on the relationship between use, cost, and quality in Medicaid and Medicare. The research from these three papers highlight mechanisms to improve quality at lower costs, whether it is through improved access to care for Medicaid patients, increased reliance on FQHCs, or the removal of physicians who are engaging in billing fraud.
