In Press
Dugan J.

Trends in managed care cost containment: An analysis of the managed care backlash.

Health Economics. In Press.Abstract
Consumer dissatisfaction with the quality and limitations of managed health care led to rapid disenrollment from managed care plans and demands for regulation between 1998 and 2003. Managed care organizations, particularly health maintenance organizations (HMOs), now face quality and coverage mandates that restrict them from using their most aggressive strategies for managing costs. This paper examines the effect of this backlash on managed care's ability to contain costs among short-term, non-federal hospitals between 1998 and 2008. The results show that the impact of increased HMO penetration on inpatient costs reversed over the study period, but HMOs were still effective at containing outpatient costs. These findings have important policy implications for understanding the continuing role that HMOs should play in cost containment policy and for understanding how effective the latest wave of cost containment institutions may perform in heavily regulated markets.
Ho V, J D, M K-G.

Why are hospital prices rising?

. Health Management, Policy and Innovation. 2013;1(4):1-16.Abstract
The substantial rise in health care expenditures that has occurred in the U.S. has been accompanied by rapid increases in the prices that hospitals receive for treating privately insured patients. We use data on revenues by payer type to identify the determinants of rising hospital prices in Texas between 2000 and 2007. Approximately two-thirds of the increase in prices can be explained by increases in the costs of care, which may reflect technology growth. Part of this cost increase could also be attributable to sicker patient populations, as patients with less severe conditions are increasingly treated in freestanding facilities. We find little evidence that rising hospital prices are attributable to increased hospital market competition, and no firm evidence that hospitals are raising prices in response to lower reimbursement from Medicare, Medicaid, or uninsured/self-pay patients. We can explain more than half of the observed price increase with hospital, patient, and market characteristics, but a sizable portion remains unexplained. Finding the optimal policies for controlling hospital price increases will require additional research to identify all of the underlying factors determining prices in this market.
Dugan J, SS V, V H.

Medicare eligibility and physician utilization among adults with coronary heart disease and stroke.

Medical Care. 2012;50:547-553.Abstract
Background: Although Medicare eligibility has been shown to generally increase health care access and utilization, few studies have investigated the association between Medicare eligibility and health care utilization among the chronically ill. Objective: This study examines changes in health care access and utilization associated with Medicare eligibility among adults with coronary heart disease and stroke (CHDS). Methods: Descriptive statistics and regression discontinuity analysis were used to examine health care access and utilization at age 65 when Medicare eligibility begins for 176,611 National Health Interview Survey respondents aged 55–74 surveyed between 1997 and 2010. Results: We found that adults with CHDS reported a higher propensity to make 1+ office-based physician visits at age 65 (1.7%, P=0.03) than adults with no major chronic disease (0.5%, P=0.07). Adults with CHDS also reported greater reductions in cost as a barrier to care at age 65 (−3.6%, P < 0.01) than adults with no major chronic disease (−2.0%, P=0.01). The subgroup analysis revealed that Hispanics and highly educated adults with CHDS reported the highest propensity to make 2+ office visits at age 65 (9.5%, P=0.04 and 2.4%, P < 0.01). However, blacks with CHDS reported a decline in their propensity to make 2+ office visits at age 65 (−2.1%, P=0.05). Conclusions: Medicare eligibility improves health care access and utilization for many adults with CHDS, but it may not promote appropriate levels of physician use among some groups.