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Consumers need information to compare alternatives for markets to function efficiently. Recognizing this, public policies often pair competition with easy access to comparative information. The implicit assumption is that comparison friction—the wedge between the availability of comparative information and consumers' use of it—is inconsequential because when information is readily available, consumers will access this information and make effective choices. We examine the extent of comparison friction in the market for Medicare Part D prescription drug plans in the United States. In a randomized field experiment, an intervention group received a letter with personalized cost information. That information was readily available for free and widely advertised. However, this additional step—providing the information rather than having consumers actively access it—had an impact. Plan switching was 28% in the intervention group, versus 17% in the comparison group, and the intervention caused an average decline in predicted consumer cost of about $100 a year among letter recipients—roughly 5% of the cost in the comparison group. Our results suggest that comparison friction can be large even when the cost of acquiring information is small and may be relevant for a wide range of public policies that incorporate consumer choice.

Among hospital staff, little is known concerning barriers to recycling and perception of waste in the operating room (OR), despite continued improvement in recycling programs. This study sought to identify barriers to OR recycling and implement a recycling improvement educational program. A survey was administered within Mayo Clinic at four campuses. Based on survey results, a recycling improvement program was devised and implemented at a surgery center in Paradise Valley, Arizona. A cost-savings analysis was performed thereafter. Of 524 participants, 56.7% reported being unclear which OR items are recyclable, and 47.7% thought the greatest barrier to recycling was lack of knowledge. After implementation of the recycling educational program, cost savings of 10.3% (p = 0.004) were achieved in sharps waste disposal when compared to the previous year at the surgery center. Addressing barriers to recycling in the OR can significantly reduce waste and save valuable healthcare dollars. •57% reported being unclear which OR items are recyclable.•39% reported they ‘only sometimes’ or ‘never’ recycle in the OR.•48% reported greatest barrier was lack of knowledge of recyclable items.•17% reported greatest barrier was having to handle contaminated materials.•Cost savings of 10% were achieved in sharps waste disposal after education program.

Policy Points Concerns have been raised about risk selection in the Medicare Shared Savings Program (MSSP). Specifically, turnover in accountable care organization (ACO) physicians and patient panels has led to concerns that ACOs may be earning shared‐savings bonuses by selecting lower‐risk patients or providers with lower‐risk panels. We find no evidence that changes in ACO patient populations explain savings estimates from previous evaluations through 2015. We also find no evidence that ACOs systematically manipulated provider composition or billing to earn bonuses. The modest savings and lack of risk selection in the original MSSP design suggest opportunities to build on early progress. Recent program changes provide ACOs with more opportunity to select providers with lower‐risk patients. Understanding the effect of these changes will be important for guiding future payment policy. Context The Medicare Shared Savings Program (MSSP) establishes incentives for participating accountable care organizations (ACOs) to lower spending for their attributed fee‐for‐service Medicare patients. Turnover in ACO physicians and patient panels has raised concerns that ACOs may be earning shared‐savings bonuses by selecting lower‐risk patients or providers with lower‐risk panels. Methods We conducted three sets of analyses of Medicare claims data. First, we estimated overall MSSP savings through 2015 using a difference‐in‐differences approach and methods that eliminated selection bias from ACO program exit or changes in the practices or physicians included in ACO contracts. We then checked for residual risk selection at the patient level. Second, we reestimated savings with methods that address undetected risk selection but could introduce bias from other sources. These included patient fixed effects, baseline or prospective assignment, and area‐level MSSP exposure to hold patient populations constant. Third, we tested for changes in provider composition or provider billing that may have contributed to bonuses, even if they were eliminated as sources of bias in the evaluation analyses. Findings MSSP participation was associated with modest and increasing annual gross savings in the 2012‐2013 entry cohorts of ACOs that reached$139 to $ 302 per patient by 2015. Savings in the 2014 entry cohort were small and not statistically significant. Robustness checks revealed no evidence of residual risk selection. Alternative methods to address risk selection produced results that were substantively consistent with our primary analysis but varied somewhat and were more sensitive to adjustment for patient characteristics, suggesting the introduction of bias from within‐patient changes in time‐varying characteristics. We found no evidence of ACO manipulation of provider composition or billing to inflate savings. Finally, larger savings for physician group ACOs were robust to consideration of differential changes in organizational structure among non‐ACO providers (eg, from consolidation). Conclusions Participation in the original MSSP program was associated with modest savings and not with favorable risk selection. These findings suggest an opportunity to build on early progress. Understanding the effect of new opportunities and incentives for risk selection in the revamped MSSP will be important for guiding future program reforms.

Hospitals are the standard acute care venues in the United States, but hospital care is expensive and can pose health threats for older people. Albuquerque, New Mexico-based Presbyterian Healthcare Services adapted the Hospital at Home® model developed by the Johns Hopkins University Schools of Medicine and Public Health to provide acute hospital-level care within patients' homes. Patients show comparable or better clinical outcomes compared with similar inpatients, and they show higher satisfaction levels. Available to Medicare Advantage and Medicaid patients with common acute care diagnoses, this program achieved savings of 19 percent over costs for similar inpatients. These savings were predominantly derived from lower average length-of-stay and use of fewer lab and diagnostic tests compared with similar patients in hospital acute care. Hospital at Home advances the Triple Aim of clinical quality, affordability, and exceptional patient experience.Hospitals are the standard acute care venues in the United States, but hospital care is expensive and can pose health threats for older people. Albuquerque, New Mexico-based Presbyterian Healthcare Services adapted the Hospital at Home® model developed by the Johns Hopkins University Schools of Medicine and Public Health to provide acute hospital-level care within patients' homes. Patients show comparable or better clinical outcomes compared with similar inpatients, and they show higher satisfaction levels. Available to Medicare Advantage and Medicaid patients with common acute care diagnoses, this program achieved savings of 19 percent over costs for similar inpatients. These savings were predominantly derived from lower average length-of-stay and use of fewer lab and diagnostic tests compared with similar patients in hospital acute care. Hospital at Home advances the Triple Aim of clinical quality, affordability, and exceptional patient experience.

Context: Each year the United States' publicly supported family planning program serves millions of low-income women. Although the health impact and public-sector savings associated with this program's services extend well beyond preventing unintended pregnancy, they never have been fully quantified. Methods: Drawing on an array of survey data and published parameters, we estimated the direct national-level and state-level health benefits that accrued from providing contraceptives, tests for the human immunodeficiency virus (HIV) and other sexually transmitted infections (STIs), Pap tests and tests for human papillomavirus (HPV), and HPV vaccinations at publicly supported family planning settings in 2010. We estimated the public cost savings attributable to these services and compared those with the cost of publicly funded family planning services in 2010 to find the net public-sector savings. We adjusted our estimates of the cost savings for unplanned births to exclude some mistimed births that would remain publicly funded if they had occurred later and to include the medical costs for births through age 5 of the child. Findings: In 2010, care provided during publicly supported family planning visits averted an estimated 2.2 million unintended pregnancies, including 287,500 closely spaced and 164,190 preterm or low birth weight (LBW) births, 99,100 cases of chlamydia, 16,240 cases of gonorrhea, 410 cases of HIV, and 13,170 cases of pelvic inflammatory disease that would have led to 1,130 ectopic pregnancies and 2,210 cases of infertility. Pap and HPV tests and HPV vaccinations prevented an estimated 3,680 cases of cervical cancer and 2,110 cervical cancer deaths; HPV vaccination also prevented 9,000 cases of abnormal sequelae and precancerous lesions. Services provided at health centers supported by the Title X national family planning program accounted for more than half of these benefits. The gross public savings attributed to these services totaled approximately $15.8 billion—$15.7 billion from preventing unplanned births, $123 million from STI/HIV testing, and $23 million from Pap and HPV testing and vaccines. Subtracting $2.2 billion in program costs from gross savings resulted in net public-sector savings of $13.6 billion. Conclusions: Public expenditures for the US family planning program not only prevented unintended pregnancies but also reduced the incidence and impact of preterm and LBW births, STIs, infertility, and cervical cancer. This investment saved the government billions of public dollars, equivalent to an estimated taxpayer savings of $7.09 for every public dollar spent.

Background Among the most studied evidence-based programs, the Chronic Disease Self-Management Program (CDSMP) has been shown to help participants improve their health behaviors, health outcomes, and reduce healthcare utilization. However, there is a lack of information on how CDSMP, when nationally disseminated, impacts healthcare utilization and averts healthcare costs. The purposes of this study were to: 1) document reductions in healthcare utilization among national CDSMP participants; 2) calculate potential cost savings associated with emergency room (ER) visits and hospitalizations; and 3) extrapolate the cost savings estimation to the American adults. Methods The national study of CDSMP surveyed 1,170 community-dwelling CDSMP participants at baseline, 6 months, and 12 months from 22 organizations in 17 states. The procedure used to estimate potential cost savings included: 1) examining the pattern of healthcare utilization among CDSMP participants from self-reported healthcare utilization assessed at baseline, 6 months, and 12 months; 2) calculating age-adjusted average costs for persons using the 2010 Medical Expenditure Panel Survey; 3) calculating costs saved from reductions in healthcare utilization; 4) estimating per participant program costs; 5) computing potential cost savings by deducting program costs from estimated healthcare savings; and 6) extrapolating savings to national populations using Census data combined with national health statistics. Results Findings from analyses showed significant reductions in ER visits (5%) at both the 6-month and 12-month assessments as well as hospitalizations (3%) at 6 months among national CDSMP participants. This equates to potential net savings of $364 per participant and a national savings of $3.3 billion if 5% of adults with one or more chronic conditions were reached. Conclusions Findings emphasize the value of public health tertiary prevention interventions and the need for policies to support widespread adoption of CDSMP.

Context: Rising drug prices are putting pressure on health care budgets. Policymakers are assessing how they can save money through generic drugs. Methods: We compared generic drug prices and market shares in 13 European countries, using data from 2013, to assess the amount of variation that exists between countries. To place these results in context, we reviewed evidence from recent studies on the prices and use of generics in Europe and the United States. We also surveyed peer-reviewed studies, gray literature, and books published since 2000 to (1) outline existing generic drug policies in European countries and the United States; (2) identify ways to increase generic drug use and to promote price competition among generic drug companies; and (3) explore barriers to implementing reform of generic drug policies, using a historical example from the United States as a case study. Findings: The prices and market shares of generics vary widely across Europe. For example, prices charged by manufacturers in Switzerland are, on average, more than 2.5 times those in Germany and more than 6 times those in the United Kingdom, based on the results of a commonly used price index. The proportion of prescriptions filled with generics ranges from 17% in Switzerland to 83% in the United Kingdom. By comparison, the United States has historically had low generic drug prices and high rates of generic drug use (84% in 2013), but has in recent years experienced sharp price increases for some off-patent products. There are policy solutions to address issues in Europe and the United States, such as streamlining the generic drug approval process and requiring generic prescribing and substitution where such policies are not yet in place. The history of substitution laws in the United States provides insights into the economic, political, and cultural issues influencing the adoption of generic drug policies. Conclusions: Governments should apply coherent supply- and demand-side policies in generic drug markets. An immediate priority is to convince more physicians, pharmacists, and patients that generic drugs are bioequivalent to branded products. Special-interest groups continue to obstruct reform in Europe and the United States.

We evaluate the choices of elders across their insurance options under the Medicare Part D Prescription Drug plan, using a unique dataset of prescription drug claims matched to information on the characteristics of choice sets. We document that elders place much more weight on plan premiums than on expected out-of-pocket costs; value plan financial characteristics beyond any impacts on their own financial expenses or risk; and place almost no value on variance-reducing aspects of plans. Partial equilibrium welfare analysis implies that welfare would have been 27 percent higher if patients had all chosen rationally.

In March 2010 Congress established an abbreviated Food and Drug Administration approval pathway for biosimilars-drugs that are very similar but not identical to a reference biological product and cost less. Because bringing biosimilars to the market currently requires large investments of money, fewer biosimilars are expected to enter the biologics market than has been the case with generic drugs entering the small-molecule drug market. Additionally, given the high regulatory hurdles to obtaining interchangeability-which would allow pharmacists to substitute a biosimilar for its reference product, subject to evolving state substitution laws-most biosimilars will likely compete as therapeutic alternatives instead of as therapeutic equivalents. In other words, biosimilars will need to compete with their reference product on the basis of quality; price; and manufacturer's reputation with physicians, insurers, and patient groups. Biosimilars also will face dynamic competition from new biologics in the same therapeutic class-including \"biobetters,\" which offer incremental improvements on reference products, such as extended duration of action. The prospects for significant cost savings from the use of biosimilars appear to be limited for the next several years, but their use should increase over time because of both demand- and supply-side factors.

There is broad debate over whether preventive health services save money or represent a good investment. This paper analyzes the estimated cost of adopting a package of twenty proven preventive services-including tobacco cessation screening, alcohol abuse screening, and daily aspirin use-against the estimated savings that could be generated. We find that greater use of proven clinical preventive services in the United States could avert the loss of more than two million life-years annually. What's more, increasing the use of these services from current levels to 90 percent in 2006 would result in total savings of $3.7 billion, or 0.2 percent of U.S. personal health care spending. These findings suggest that policy makers should pursue options that move the nation toward greater use of proven preventive services. [PUBLICATION ABSTRACT]