Research roundup: Insurance crisis tough on middle class; Hospitals' profit margins on private patients up

Mar 20 2010

Health Affairs: Private-Payer Profits Can Induce Negative Medicare Margins - "Hospitals' profit margins on privately insured patients have risen dramatically in recent years, while profit margins on Medicare patients have fallen," write the authors, who all work for MedPAC. 

"A common assumption is that hospitals have little control over their costs and must charge high rates to private health insurers when Medicare rates are lower than hospital costs. We present evidence that contradicts that common assumption. Hospitals with strong market power and higher private-payer and other revenues appear to have less pressure to constrain their costs. Thus, these hospitals have higher costs per unit of service, which can lead to losses on Medicare patients. Hospitals under more financial pressure—with less market share and less ability to charge higher private rates—often constrain costs and can generate profits on Medicare patients"  (Stensland, Gaumer and Miller, 3/18).

George Washington University/Robert Wood Johnson Foundation: Releasing Medicare Claims Data To Support Quality Improvement Initiatives: Legal Barriers And Opportunities - This brief examines the laws and regulations governing the release of Medicare claims data, for the purposes of providing more accurate reports of physician and hospital performance measurements. The authors also explore how policies that are part of the House and Senate health bills could affect the release of such data. Noting that "the law in this area is complex," the authors write, "In our view, CMS has the power to broaden data access for purposes of research and demonstrations related to innovation in program performance at the community level" (Thorpe, Pereira, Rosenbaum, March 2010).

Kaiser Family Foundation: Assessing The Risk Of Becoming Uninsured After Leaving A Job: A Look At The Data - "This fact sheet (.pdf) examines the impact of unemployment on health insurance coverage by using data from 2004 to 2007 (before the current recession) ... It finds that more than one-third of individuals who stopped working and left a job that previously provided them with employer-sponsored health insurance became uninsured for six consecutive months or more after leaving their job. By comparison, just 5 percent of those who were still working at the end of the survey period had been uninsured for six months or more. ... Few who lost insurance were able to turn to Medicaid or other public coverage to remain insured due to limits on Medicaid coverage of childless adults as well as low income eligibility levels for parents" (Schwartz and Damico, 3/17).

Robert Wood Johnson Foundation/University of Minnesota: America's Middle Class Shouldering the Brunt of Health Insurance Crisis - This report provides a state-by-state analysis of changes in the numbers of individuals who were insured by any means as well as changes in numbers of uninsured for all income levels between 2000 and 2008. The study draws upon data from the U.S. Census Bureau and the Medical Expenditure Panel Survey and concludes that "the number of middle-income earners who obtained health insurance from their employers dropped by 3 million people from 2000 to 2008. Just 66 percent of people in families earning roughly $45,000 to $85,000 are now insured through their employer—a drop of seven percentage points from 2000 to 2008" (March 2010).

Georgetown University Health Policy Institute: Holding Steady: Medicaid Fiscal Relief And Its Implications For America's Children and Families - "In light of persistently high unemployment and state fiscal problems, Congress appears poised to extend the Medicaid fiscal relief [that was part of the American Recovery and Reinvestment Act (ARRA)] for an additional six months from its current December 31, 2010 expiration date to June 30, 2011," write the authors of this issue brief that explores the role that such relief has provided to children and their families during the current recession, and addresses the "risks" to efforts to cover children if such relief is not extended (3/12).

Archives of Internal Medicine: The Value of New Chemotherapeutic Agents For Metastatic Colorectal Cancer - Using the Surveillance, Epidemiology, and End Results (SEER)-Medicare database, the researchers analyzed a sample of patients 66 and older diagnosed with stage IV colorectal cancer between 1995 and 2005, and found that among patients getting chemotherapy, "life expectancy increased by 6.8 months" and lifetime medical costs rose by $37,100. "The implied cost-effectiveness ratio is $66,200 ... per life-year gained."

The authors conclude: "New chemotherapeutic agents are associated with improvements in survival time but also with substantial costs. The cost-effectiveness ratio for these drugs as a group is below commonly cited estimates of the willingness-to-pay for a life-year. However, open-ended coverage policies for new chemotherapeutic agents may prove difficult to sustain as costs continue to rise" (Howard, Kauh and Lipscomb, 3/16).