PLEASE READ the instructions well. I need to make these assignments be very perfect.
Please write in order as below.
1. Final Essay – 6 questions – each question requires one page, single spaced
2. Writing assignments – 3 assignments – each assignment requires one page, single spaced
3. Discussions – 9 discussions – each discussion requires 250 – 300 words
The exam consists of six short-answer, essay questions. The exam is open to all resources that are properly cited. For each question, answer concisely in up to one page, single-spaced. The page limit does not include any references that are cited. You will be graded on your ability to reason logically using the skills, theory, and evidence developed throughout the course.
1. Suppose that upon graduating from Johns Hopkins, you accept a position in hospital administration at a large urban hospital. Specifically, your initial job is to allocate resources across two disparate divisions within the hospital: the OB/GYN service and the Psychology Clinic. These two divisions have very little overlap, so $1 invested in the Psychology Clinic has no direct effect on the OB/GYN service. Suppose you are given a fixed amount of money to hire new physician assistants.
a. Draw a production function for each division (two graphs) of output (number of patients seen) as a function of physician assistants. Assume that capital (i.e., the facility size) is fixed and that both divisions are operating in a productively efficient manner.
b. Referring to your graphs, describe the opportunity cost of devoting $1 to the Psychology Clinic.
c. Demonstrate on your graphs a set of points (one for each division) that would be allocatively efficient. Explain why you chose these points.
d. Suppose a new technology arises that complements physician assistants in the production of OB/GYN cases. Redraw both production functions. How does the opportunity cost of $1 of investment in the Psychology Clinic change? Explain. If the answer is ambiguous, describe the factors that would be important in the answer.
2. Physician assistants have long argued that they have the ability to provide as much as 70% of the medical services provided by primary care physicians at a much lower cost. Yet government regulations, which are called scope of practice laws, limit their ability to work independently of physicians. As we have discussed, these laws vary significantly by state. Consider a potential reform by the federal government in which all statutes limiting the activities of physician assistants were eliminated. Explain in words how such a reform would affect physician wages, physician assistant wages, and quality of care. Prior to the reform, you are asked to study its potential effects. How might you go about forecasting the effects? What are some limitations to your forecasts?
3. A popular topic in health policy is the issue of price transparency—requirements that physicians, hospitals, and other providers make public the level of charge for various services.
a. Summarize the evidence that exists on the extent to which price transparency measures actually get patients to resort to providers that charge less.
b. As we’ve discussed, charges are not the same as actual payments. What are some practical problems with a price transparency measure that requires the public revelation of payments?
c. Suppose a payment transparency measure were enacted, such that the payment for every claim were made public. What are some ways in which this may change future negotiations between providers and payers over payment levels?
4. A recent study by the U.S. Department of Health and Human Services (2006) projects a sufficient supply of physicians to meet demand for the coming decade. This result contradicts earlier research on the subject. The study also points out the difficulty researchers face when forecasting the demand and supply of physician services. If you were developing a model to forecast the demand for physician services over the coming decade, what demographic and economic factors would you include in your analysis and why?
5. Health Maintenance Organizations’ (HMOs) health insurance plans tend to spend considerably less per patient than fee-for-service health insurance plans. Discuss some reasons that this is the case.
6. Suppose the relevant market definition for a nursing home is the zip code. Consult the Nursing Home Compare (https://www.medicare.gov/nursinghomecompare/search.html?) website developed by Medicare. Choose two geographically adjacent nursing home markets that have both for-profit and not-for-profit nursing homes and compute the Herfindahl-Hirschman Index (HHI) for each market based on the number of licensed beds. In each market, what percentage of the nursing homes are for-profit? In writing, explain what your results tell you about the degree of market concentration in each market. What do the HHI figures tell you about any potential price differences that may exist across the two markets? Now recalculate the HHI assuming that the two zip codes constitute one market. Has HHI changed? Why?
The Affordable Care Act (ACA) contained five major cost-containment measures designed to “bend the cost curve,” the first of which focuses on administrative costs. Administrative costs are costs incurred by both providers and payers that are not directly related to patient care. Writing in the New England Journal of Medicine, Woolhandler et al. (1999) found that roughly 31% of total health care expenditures in the United States are administrative costs, compared to 16.7% in Canada.
Complete a preliminary investigation of administrative costs in the United States. After conducting your investigation, address the following questions:
• What are some reasons administrative costs are so high?
• How have they changed since the Woolhandler et al. article?
• Is there any evidence that the ACA has reduced administrative costs?
• Are administrative costs necessarily a bad thing?
The goal of this assignment is to answer these questions concisely. Please write no more than one page, single-spaced.
Broadly defined, managed care plans reimburse providers a fixed (capitated) fee per patient, reducing the marginal incentive to provide services. As opposed to fee-for-service plans, in which each service is reimbursed, managed care removes incentives for overutilization.
The Big Picture Question: Does Managed Care Lower Overall Health Care Expenditures?
For this assignment, you will investigate the evidence for managed care plans reducing expenditures.
Why might a simple comparison of expenditures between fee-for-service and managed care plans be misleading? You may draw evidence from the private insurance industry of Medicare Advantage (relative to traditional Medicare) or both.
Limit your response to one page, single-spaced.
Announced Hospital Mergers, 1998-2015.PDF
Retrieved from The American Hospital Association
In recent testimony before the House, noted health economist Martin Gaynor stated:
“The American Hospital Association documents 1,412 hospital mergers from 1998 to 2015, with 561 occurring from 2010 to 2015. Chartbook Chart 2.9 (above) illustrates the number of mergers and the number of hospitals involved in these transactions from 1998 to 2015. A trade publication documents an additional 115 hospital mergers in 2017 and 102 in 2016 and 2017 (Kaufman Hall, 2018). While some of these mergers may have little or no impact on competition, many include mergers between close competitors, especially given that hospital markets are already highly concentrated . . . Almost half of the hospital mergers occurring from 2010 to 2012 were between hospitals in the same area.
“Further, as indicated below, recent evidence indicates that even mergers between hospitals in different regions may lead to higher prices. As a result of this consolidation, the majority of hospital markets are highly concentrated, and many areas of the country are dominated by one or two large hospital systems with no close competitors . . . This includes places like Boston (Partners), Cleveland (Cleveland Clinic and University Hospital), Pittsburgh (UPMC), and San Francisco (Sutter). Mergers that eliminate close competitors cause direct harm to competition. In addition, once a firm has obtained a dominant position it often engages in anticompetitive practices in order to maintain it.”
Consider Martin Gaynor’s testimony above and do some investigation on hospital mergers, then address the following questions:
• If hospital mergers are such a problem, and if the Federal Trade Commission and the Department of Justice are tasked with blocking anticompetitive mergers and acquisitions, why have so many hospitals been allowed to merge?
• What are the benefits of hospital mergers from the perspective of the hospitals themselves, the patients, and society?
• Is there any evidence that hospital mergers benefit the hospitals, their patients, or society?
The goal of this assignment is to critically analyze mergers and summarize the evidence for your analysis by answering the questions above. Please write no more than one page, single spaced.
All discussion length – 250 – 300 words
1. What is the primary product or service offered by CCA?
2. What degree of competition does CCA face in their market?
3. Why do you think that CCA has slightly higher administrative costs than fee-for-service Medicare enrollees?
4. What are some challenges faced by CCA in growing their business?
5. Do you think the success of CCA is externally valid beyond Boston? That is, how scalable is CCA?
6. What is the major obstacle to growth for CCA?
7. How do you think the ACA would affect the operations of CCA?
Review the questions below. Select one to discuss in the forum.
• Most advanced economies spend a considerable amount on health care, and in most countries, public expenditures constitute a larger portion of national health expenditures than in the United States. Recently, policy proposals for more public involvement in United States health care have been gaining steam (e.g., Medicare for All). Can you find any information on public opinion polling on such proposals? Where is the country on proposals such as Medicare for All? Be sure to provide a citation for your evidence.
• One alternative to Medicare for All is what is known as a public option, where an individual who is not eligible for Medicare could “purchase” eligibility. Do you think that such a policy may lead to Medicare for All?
• An important issue with Medicare for All is how providers would respond (clearly such a policy would be devastating to the private insurance industry). In what ways do you think providers will respond?
• In the age of Covid-19, telemedicine will play an important role in the delivery of non-emergent care. How should Medicare reimburse telemedicine care? How can Medicare structure incentives to generate the right balance between risk and quality with respect to whether a patient is seen virtually vs. in-person?
Access the group discussion area using the M3 Group Discussion: RAND Health Insurance Experiment link.
Before participating in the M3 Discussion, read the RAND Health Insurance Experiment.
The price elasticity of demand for health care is often thought of as a measure of ex post moral hazard, which roughly captures the extent of overuse of medical care. Health insurance causes the spot price of health care—that which the person actually must pay—to fall, which leads to an increase in health care usage. This type of moral hazard creates a type of inefficiency—more health care is used than is valued by individuals. Based on the results from the RAND Health Insurance Experiment, discuss the following questions with your classmates:
1. How does the magnitude of moral hazard vary by inpatient vs. outpatient care?
2. Do you think that the results from RAND, which are from the 1970s, would hold true today? Why or why not?
3. The lack of any finding with respect to actual health in the RAND study is surprising. Can you offer any theories that may explain this lack?
4. How do you think the price elasticity of demand for basic physician care has changed as a result of COVID-19? What about specialist care?
Access the group discussion area using the M4 Group Discussion: Medicare Plan Finder link.
This discussion includes an individual component and a group component. For the individual component, follow the instructions below and evaluate the Medicare Advantage options in your local market. If you were a senior newly eligible for Medicare, which plan would you choose and why? Next, discuss your local market with your group. Explain why you chose the plan you did and compare and contrast your local market to the local markets of your group members. Note: your justification does not need to include any personal health information. Simply explain which looks the most appealing.
1. Go to the Medicare Plan Finder (https://www.medicare.gov/plan-compare/#/?lang=en&year=2020) website.
2. Do a basic search by entering your zip code.
3. In the brief survey, select
1. I don’t have any Medicare coverage yet.
2. I don’t get any extra help.
3. I don’t want to add drugs now.
4. Browse your options and summarize what is available to you. How many of each type of plan are available to you?
1. Original Medicare is Parts A and B
2. Medicare Health Plans means Medicare Advantage (Part C); these are available with and without drug coverage.
5. Click on Medicare Health Plans with Drug Coverage (these are Medicare Advantage plans that include drug coverage). If there are none available, click on PDP plans with Original Medicare.
6. Evaluate the options. Which would you choose? Justify your description.
Group Component and Discussion Questions:
By Wednesday, present to your group your choice of plan. In answering which plan you would choose, highlight why the combination of the following was optimal for you:
a. Monthly premium: The monthly price of the insurance policy
b. Drug deductible: The amount that the individual is responsible for before the insurance policy begins to pay for prescription drugs
c. Comprehensiveness of the available network: How much choice the individual has in selecting providers
d. Out-of-pocket spending limit: The maximum for which a person is responsible (typically in one year).
e. Dental/vision/hearing coverage
f. Star rating in your market
Discussion#5 – http://files.kff.org/attachment/Data-Note-A-Dozen-Facts-About-Medicare-Advantage
Note: For more information about the Distribution of Medicare Advantage Enrollees, by Plan Premium, 2018 pie chart above, please refer to p. 2 in the The Kaiser Family Foundation document, titled A Dozen Facts About Medicare Advantage.
Respond to the both of the following prompts:
• Most health insurance premiums in the United States have been increasing, and yet, the prevalence and levels of additional premiums for Medicare Advantage haven fallen. This is especially surprising because enrollment in MA plans has been growing (i.e., increase in demand, which would suggest higher premiums). Can you think of an explanation(s) that is consistent with these facts?
• Given the effects of COVID-19 on the private health insurance industry, how do you think COVID-19 will affect Medicare Advantage in terms of enrollment, quality, and cost?
Access the group discussion area using the M5 Group Discussion: Cost-Shifting link.
Formally, cost-shifting is the notion that, when a hospital experiences cuts in public sector reimbursement (e.g., a reduction in the Medicare reimbursement rate for a particular procedure), it responds by raising prices to patients who pay with private insurance. Hospital administrators and policy people argue that this practice is rampant, yet evidence is thin and many economists argue that it makes no sense.
Here are two perspectives on cost-shifting:
Accessibility PDF: Cost-Shifting Graphic
Address and discuss the questions below with your group:
1. Which argument makes more sense to you?
2. Evidence suggests that the private payer payment-to-cost ratio for hospitals is roughly 140% whereas the public reimbursement-to-cost ratio is roughly 95%. This suggests that private payer patients are very lucrative for hospitals relative to public payer patients. Is this evidence of cost-shifting?
3. Does it matter why public reimbursements are cut? For example, suppose the hospital loses some public funding because of low quality. How might this change the hospital’s ability to change private payer prices?
4. Does COVID-19 make cost-shifting more or less likely, in your opinion?
Retrieved from The Dartmouth Atlas Of Healthcare
1. Looking at the maps, identify and describe any correlation between the supply of physicians per capita and the reimbursement per enrollee.
2. Aside from your explanation in Question 1, what other explanations can you formulate for the wide degree of variation in costs across the country. Recall that the explanation cannot be due to differences in Medicare prices nor the age, sex, or racial make-up of the local area.
3. Utilization rates follow a similar pattern. Do high utilization rates necessarily indicate the provision of unnecessary care? If not, why not?
4. As new technologies become available more rapidly for given procedures, would you expect an increased or decreased amount of small-area variation in utilization, costs, and supply?
Coronavirus disease 2019 (Covid-19) represents a perfect storm for end-stage renal disease patients on dialysis. These patients are typically older and in poor health, often carrying multiple comorbidities and compromised immune systems. Existing guidelines suggest that dialysis facilities screen and isolate patients showing symptoms of Covid-19. However, these symptoms are common among dialysis patients, and transferring such patients to hospitals is impractical given the dramatic incidence of Covid-19, especially in urban areas. Furthermore, dialysis is essential – patients must undergo treatment about three times per week. This study used unique cell-phone record data to document changes in dialysis facility visits in the first half of 2019 and 2020.
Investigate the ways in which dialysis facilities are attempting to keep patients safe. How are they doing? What tradeoffs exist for facilities?
Access the group discussion area using the M7 Group Discussion: DaVita Case link.
Review and address the questions below:
1. To what one factor do you most attribute the dramatic turnaround in the profitability and viability of DaVita as an organization?
2. Describe the incentives that DaVita faces for providing high quality care.
3. One of the many problems facing DaVita was cash flow. What does the case say was the likely cause of the cash flow problems? Can you think of other providers or payers who might face similar cash flow problems? Is there any evidence on how these problems are dealt with by other providers or payers?
4. On page 7, the case says, “Thiry himself believed that the reimbursement situation facing the industry was not in long-run equilibrium.” In your own words, what does this statement mean?
5. Economic theory says that, in a competitive market, workers should be paid the value of their productivity, and yet a consistent theme through the case is the tension between worker productivity and wages. What were the constraints on DaVita for raising wages? How did the company increase productivity?