Thesis Thursday: Feng-An Yang

On the third Thursday of every month, we speak to a recent graduate about their thesis and their studies. This month’s guest is Dr Feng-An Yang who has a PhD from Ohio State University. If you would like to suggest a candidate for an upcoming Thesis Thursday, get in touch.

Title
Three essays on access to health care in rural areas
Supervisors
Daeho Kim, Joyce Chen
Repository link
http://rave.ohiolink.edu/etdc/view?acc_num=osu152353045188255

What are the policy challenges for rural hospitals in the US?

Rural hospitals have been financially vulnerable, especially after the implementation of Medicare Prospective Payment System (PPS) in 1983, under which hospitals receive a predetermined, fixed reimbursement for their inpatient services. Under the PPS, they suffer from financial losses as their costs tend to exceed the reimbursement rate due to their smaller size and lower patient volume than their urban counterparts (Medicare Payment Advisory Commission, 2001 [PDF]). As a result, a noticeable number of rural hospitals have closed since the implementation of PPS (Congressional Budget Office, 1991 [PDF]).

This closure trend has slowed down thanks to public payment policies such as the Critical Access Hospitals (CAH) program, but rural hospitals are continuing to close their doors and a total of 107 rural hospitals have closed from 2010 to present according to the North Carolina Rural Health Research Program. This issue has raised public concern for rural residents’ access to health services and health status, and how to keep rural hospitals open has become an important policy priority.

Which data sources and models did you use to identify key events?

My dissertation investigated the impact of the CAH program and hospital closure by compiling data from various sources. The primary data come from the Medicare cost report, which contains detailed financial statements for nearly every U.S. hospital. Historical data on health care utilization at the county-level are obtained from the Area Health Resource File. County-level mortality rates are calculated from the national mortality files. Lastly, the list of CAHs and closed hospitals is obtained from the Flex Monitoring Team and American Hospital Association Annual Survey, respectively. This list contains information on the hospital identifier and year of event which is key to my empirical strategy.

To identify the impact of key events (i.e., CAH conversion and hospital closure), I use an event-study approach exploiting the variation in the timing of events. This approach estimates the changes in outcome for the time relative to the ‘event time’. A primary advantage of this approach is that it allows a visual examination of the evolution of changes in outcome before and after the event.

How can policies relating to rural hospitals benefit patients?

This question is not trivial because public payment policies are not directly linked to patients. The primary objective of these policies is to strengthen rural hospitals’ financial viability by providing them with enhanced reimbursement. As a result, it has been expected that, under these policies, rural hospitals will improve their financial conditions and stay open, thereby maintaining the access to health services for rural residents. Broadly speaking, public payment policies can lead to an increase in accessibility if we compare patient access to health services between counties with at least one hospital receiving financial support and counties without any hospitals receiving financial support.

I look at patient benefits from three aspects: accessibility, health care utilization, and mortality. My research shows that the CAH program has substantially improved CAHs’ financial conditions and as a result, some CAHs that otherwise would have been closed have stayed open. This in turn leads to an increase in rural residents’ access to and use of health services. We then provide suggestive evidence that the increased access to and use of health care services have improved patient health in rural areas.

Did you find any evidence that policies could have negative or unexpected consequences?

Certainly. The second chapter of my dissertation focused on skilled nursing care which can be provided in either swing beds (inpatient beds that can be used interchangeably for inpatient care or skilled nursing care) or hospital-based skilled nursing facilities (SNFs). Since the services provided in swing beds and SNFs are equivalent, differential payments, if present, may encourage hospitals to use one over the other.

While the CAH program provides enhanced reimbursement to rural hospitals, it also changes the swing bed reimbursement method such that swing bed payments are more favorable than SNF payments. As a result, CAHs may have a financial incentive to increase the use of swing beds over SNFs. By focusing on CAHs with a SNF, my research shows a remarkable increase in swing bed utilization and this increase is fully offset by the decrease in SNF utilization. These results suggest that CAHs substitute swing beds for SNFs in response to the change in swing bed reimbursement method.

Based on your research, what would be your key recommendations for policymakers?

Based on my research findings, I would make two recommendations for policymakers.

First, my research speaks to the ongoing debate over the elimination of CAH designation for certain hospitals. Loss of CAH designation could have serious financial consequences and subsequently have potentially adverse impacts on patient access to and use of health care. Therefore, I would recommend policymakers to maintain the CAH designation.

Second, while the CAH program has improved rural hospitals’ financial conditions, it has also created a financial incentive for hospitals to use the service with a higher reimbursement rate. Thus, my recommendation to policymakers would be to consider potentially substitutable health care services when designing reimbursement rates.

Brendan Collins’s journal round-up for 14th January 2019

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

Income distribution and health: can polarization explain health outcomes better than inequality? The European Journal of Health Economics [PubMed] Published 4th December 2018

One of my main interests is health inequalities. I thought polarisation was intuitive; I had seen it in the context of the UK and the US employment market; an increase in poorly-paid ‘McJobs’ and an increase in well-paid ‘MacJobs’, with fewer jobs in the middle. But I hadn’t seen polarisation measured in a statistical way.

Traditional measures of population inequalities like Gini or Atkinson index measure the share of income or the ratio of richest to poorest. But polarisation goes a step further and looks whether there are discrete clusters or groups who have similar incomes. The theory goes that having discrete groups increases social alienation, conflict and socioeconomic comparison and increases health inequalities. Now, I get how you can test statistically for discrete income clusters, and there is an evidence base for the relationship between polarisation and social tension. But groups will cluster based on other factors besides income. I feel like it may be taking a leap to assume a statistical finding (income polarisation) will always represent a sociological construct (alienation) but I confess I don’t know the literature behind this.

China is a country with an increasing degree of polarisation as measured by the Duclos, Esteban and Ray (DER) polarisation indices, and this study suggests that it is related to health status. This study looked at trends in BMI and systolic blood pressure from 1991 to 2011 and found both to increase with increased polarisation. I imagine a lot of other social change went on in this time period in China. I think BMI might not be a good candidate for measuring the effect of polarisation, as being poor is associated with malnourishment and low weight as well as obesity. The authors found that social capital (based on increasing family size, community size, and living in the same community for a long time) had a protective effect against the effects of polarisation on health. Whether this study provides more evidence for the socioeconomic comparison or status anxiety theories of health inequalities, I am not sure; it could equally provide evidence for the neo-materialist (i.e. simply not having enough resources for a healthy life) theories – the relative importance will likely differ by country anyway.

Maybe we don’t need to add more measures of inequality to the mix but I am intrigued. I am just starting my journey with polarisation but I think it has promise.

Two-year evaluation of mandatory bundled payments for joint replacement. The New England Journal of Medicine [PubMed] Published 2nd January 2019

Joint replacements are a big cost to western healthcare systems and often delayed or rationed (partly because replacement joints may only have a 10-20 year lifespan on average). In the UK, for instance, joint replacements have been rationed based on factors like BMI or pain levels (in my opinion, often in an arbitrary way to save money).

This paper found that having a bundled payments and penalties model (Comprehensive Care for Joint Replacement; CJR) for optimal care around hip and knee replacements reduced Medicare spending per episode compared to areas that did not pilot the programme. The overall difference was small in absolute terms at $812 against a total cost of around $24,000 per episode. The programme involves the hospital meeting a set of performance measures, and if they can do so at a lower cost, any savings are shared between the hospital and the payer. Cost savings were mainly driven by a reduction in patients being discharged to post-acute care facilities. Rates of complex patients were similar between pilot and control areas – this is important because a lower rate of complex cases in the CJR trial areas might indicate hospitals ‘cherry picking’ easier to treat, less expensive cases. Also, rates of complications were not significantly different between the CJR pilot areas and controls.
This paper suggests that having this kind of bundled payment programme can save money while maintaining quality.

Association of the Hospital Readmissions Reduction Program with mortality among Medicare beneficiaries hospitalized for heart failure, acute myocardial infarction, and pneumonia. JAMA [PubMed] Published 25th December 2018

Nobody likes being in hospital. But sometimes hospitals are the best places for people. This paper looks at possible unintended consequences of a US programme; the Hospital Readmissions Reduction Program (HRRP) where the Centers for Medicare & Medicaid Services (CMS) impose financial penalties (almost $2billion dollars’ worth since 2012) on hospitals with elevated 30-day readmission rates for patients with heart failure, acute myocardial infarction, and pneumonia. This study compared four time periods (no control group) and found that, after the programme was implemented, death rates for people who had been admitted with pneumonia and heart failure increased, with these increased deaths occurring more in people who had not been readmitted to hospital. The analysis controlled for differences in demographics, comorbidities, and calendar month using propensity scores and inverse probability weighting.

The authors are clear that their results do not establish cause and effect but are concerning nonetheless and worthy of more analysis. Incidentally, there is another paper this week in Health Affairs which suggests that the benefits of the programme in reducing readmissions was overstated.

There has been a similar financial incentive in the English NHS where hospitals are subject to the 30-day readmission rule, meaning they are not paid for people who are readmitted as an emergency within 30 days of being discharged. This is shortly to be abolished for 2019/20. I wonder if there has been similar research on whether this also led to unintended consequences in the NHS. Maybe there is a general lesson here about thinking a bit deeper about the potential outcomes of incentives in healthcare markets?

In these last two papers, we have had two examples of financial incentive programmes from Medicare. The CJR, which seems to have worked, has been dampened down from a mandatory to a voluntary programme, while the HRRP, which may not have worked, has been extended.

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Harold Hastings’s journal round-up for 24th December 2018

Every Monday our authors provide a round-up of some of the most recently published peer reviewed articles from the field. We don’t cover everything, or even what’s most important – just a few papers that have interested the author. Visit our Resources page for links to more journals or follow the HealthEconBot. If you’d like to write one of our weekly journal round-ups, get in touch.

Mandatory Medicare bundled payment program for lower extremity joint replacement and discharge to institutional postacute care: interim analysis of the first year of a 5-year randomized trial. JAMA [PubMed] Published 4th September 2018

I will focus on two themes: one local to the United States – bundled payments for Medicare, and one global – the economic burden of sepsis. Finkelstein, Ji, Mahoney, and Skinner described the results of a study aimed at assessing the effects of bundled Medicare payments (as opposed to payments for each component of treatment) upon care and costs of lower extremity joint replacement. Finkelstein et al. found only one significant difference between the bundled carte group and a control group: the percentage discharged to institutional care decreased from 33.7% in the control group to 30.8% in the bundled care group, that is, one fewer patient per 33 treated. There was no significant difference in costs or quality of care. In this sense I must differ from the optimism of an associated editorial; to me, a true success would include a significant reduction in cost together with an improvement in outcome. Thus, in terms of bundled Medicare payments, we are not at the end, not even the beginning of the end, but perhaps near the end of the beginning (my apologies to Winston Churchill).

Epidemiology and costs of sepsis in the United States—an analysis based on timing of diagnosis and severity level. Critical Care Medicine [PubMed] Published 1st December 2018

Epidemiology of sepsis in Brazil: incidence, lethality, costs, and other indicators for Brazilian Unified Health System hospitalizations from 2006 to 2015. PLoS One [PubMed] Published 13th April 2018

Sepsis care continues to pose among the most significant health challenges world-wide, both in terms of economics and mortality, with mortality ranging from 10% to almost 80% depending upon severity. In terms of cost, sepsis treatment in the US averages over $18,000 per hospitalization with almost 1 million cases admitted annually, while Brazil spends 1/30 of this amount (~$600 per hospitalization), and 1/10 of this amount for sepsis treatment in the ICU ($1,700 per hospitalization). Mortality in Brazil is higher than that in the US and higher in public hospitals than in private hospitals. The studies offer complementary suggestions for improvement: in the US study, Paoli et al. call for early detection of sepsis as a way to reduce its severity and thus its cost. In the Brazilian study, Neira et al. conclude that limited economic resources may contribute significantly to high mortality, an observation that should concern all of us interested in world-wide health. Clearly both improved detection and more effective, lower cost treatments are essential to address the health and economic burdens of sepsis. The following paper reviews a potential answer to the latter question – that of more effective, lower cost treatments.

Ascorbic acid, corticosteroids, and thiamine in sepsis: a review of the biologic rationale and the present state of clinical evaluation. Critical Care [PubMed] Published 29th October 2018

In terms of the cost of sepsis treatment, it is interesting to note that an intervention successful in a single-site, retrospective review involved a combination of three “cheap and readily available agents with a long safety record in clinical use since 1949.” Mortality decreased from 40% to 8.5%. The 2018 review describes mixed reaction based on informal cost/benefit/risk analysis while nine trials are underway. If these trials prove successful, it might be hoped that the low cost would spur world-wide incorporation of ascorbate-corticosteroid-thiamine therapy for sepsis – addressing world-wide incidence of 15 million cases annually and mortality approaching 60% in less developed countries. An optimist might even hope for reduced mortality at significantly reduced costs, reminiscent of oral rehydration therapy for diarrhoea developed in Bangladesh 50 years ago and responsible for a 90% relative reduction in mortality.

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