/
Politics, Hospital Behavior, and Politics, Hospital Behavior, and

Politics, Hospital Behavior, and - PowerPoint Presentation

mitsue-stanley
mitsue-stanley . @mitsue-stanley
Follow
372 views
Uploaded On 2018-03-20

Politics, Hospital Behavior, and - PPT Presentation

Health Care Spending Zack Cooper Yale University Amanda Kowalski Yale University and NBER Eleanor Neff Powell University of Wisconsin Jennifer Wu Yale University Princeton University Center for Health and Wellbeing Seminar ID: 657738

hospital increased hospitals 508 increased hospital 508 hospitals behavior health section 2004 ceo district year 2005 waiver fte high

Share:

Link:

Embed:

Download Presentation from below link

Download Presentation The PPT/PDF document "Politics, Hospital Behavior, and" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.


Presentation Transcript

Slide1

Politics, Hospital Behavior, and Health Care Spending

Zack Cooper, Yale UniversityAmanda Kowalski, Yale University and NBEREleanor Neff Powell, University of WisconsinJennifer Wu, Yale UniversityPrinceton UniversityCenter for Health and Wellbeing SeminarSeptember 18, 2017Slide2

US Congress Can Influence US Health SpendingFederal government share: 29%1

Source: CMS National Health Expenditure Data, 2017National Health Expenditure by Source of Payment, 2015Total: $3.2 trillionSlide3

Health Care is the Most Heavily Lobbied Industry in the US2Source: opensecrets.org, 2017

Lobbying Dollars by Industry, 2016Slide4

Our Focus: Medicare Modernization Act of 2003Strong political priority for President George Bush:“George W. Bush strongly supported this effort [to pass Part D]. Looking ahead to a close re-election in 2004, he thought a new government giveaway to the elderly would increase his vote share among this group. According to exit polls, those over age 65 gave Mr. Bush only 47 percent of their vote in 2000, with 51 percent going to Al Gore

.”- Bruce Bartlett, The New York Times, 11/19/20133Slide5

Passing the MMA was Difficult“I've been in politics for 22 years and it was the ugliest night I have ever seen in 22 years.”

- Walter Jones, R-N.C.4Slide6

“… narrower provisions tailored to benefit special interests. Such measures, dubbed ‘rifle shots’ for their narrowly targeted effects, are commonly attached to complex, high-profile legislation in the crunch as a way to both build support for the larger bill.”- Lee, The Washington Post, 2003

5Leadership introduced “sweeteners” to help passageSlide7

Section 508

Section 508. One-Time Appeals Process for Hospital Wage Index Classification(a) ESTABLISHMENT OF PROCESS. - (1) In General. – The Secretary shall establish not later than January 1, 2004, by instruction or otherwise a process under which a hospital may appeal the wage index classification otherwise applicable to the hospital and select another area within the State (or, at the discretion of the Secretary, within a contiguous State) to which to be reclassified. (c) QUALIFYING HOSPITAL DEFINED.- For purposes of this section, the term “qualifying hospital” means a subsection (d) hospital (as defined in section 1886(d)(1)(B) of the Social Security Act, 42 U.S.C. 1395ww(d)(1)(B)) that- (1) does not qualify for a change in wage index classification under paragraph (8) or (10) of section 1886(d) of the Social Security Act on the basis of requirements relating to distance or commuting; and (2) meets other criteria, such as quality, as the Secretary may specify by instruction or otherwise. (e) LIMITATION OF EXPENDITURES.- The aggregate amount of additional expenditures resulting from the application of this section shall not exceed $900,000,000. - Section 508 of P.L. 108 – 173: Medicare Prescription Drug Improvement, and Modernization Act of 2003 6Slide8

Hospitals Reclassified over Long Distances7

United Regional Health Care System in Wichita Falls, TX received at 508 Waiver. It was reclassified into the same area as McAllen Medical CenterSlide9

ContributionsPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District [Evans, 2004

]8Slide10

ContributionsPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District [Evans, 2004]

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New Technology [Duggan, 2000; Dafny, 2005; Kaestner and Guardado, 2008; Baicker and Staiger, 2005; Wu and Shen, 2014]9

Activity and Prices

Staffing

Equipment and Quality

Total Discharges

(+)

Payroll

(+)

Saidin

Technology Index

(+)

Medicare Discharges

(+)

Total FTE

AMI Mortality

Rate

Medicaid Discharges

(+)

FTE Doctors

Length of Stay for AMI

Hospital Private Price

FTE Registered Nurses

(+)

County Hires in Health Sector

(+)

Hospital CEO Salary

(+)Slide11

ContributionsPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District [Evans, 2004]

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New Technology [Duggan, 2000; Dafny, 2005; Kaestner and Guardado, 2008; Baicker and Staiger, 2005; Wu and Shen, 2014

]

Health Care Spending

-

Increased Spending

10Slide12

ContributionsPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District [Evans, 2004]

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New Technology [Duggan, 2000; Dafny, 2005; Kaestner and Guardado, 2008; Baicker and Staiger, 2005; Wu and Shen, 2014

]

Health Care Spending

-

Increased Spending

More Politics

- Increased Donations

[

Levitt and Snyder, 1997;

Rocca

and Gordon, 2013]

11Slide13

The PlanPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

[Evans, 2004]Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New Technology [Duggan, 2000; Dafny, 2005; Kaestner and Guardado, 2008; Baicker and Staiger, 2005; Wu and Shen, 2014]Health Care Spending

- Increased Spending

More Politics

- Increased Donations

[Levitt and Snyder, 1997; Rocca and Gordon, 2013]

12Slide14

Roll Call Vote 332The key vote that moved the bill from the House to the Senate

Section 508 added immediately after this vote13Yea (For)Nay (Against)Number of Votes

216

215

Democrats

9

195

Republicans

207

19

Roll call vote 332 resultsSlide15

Roll Call Vote 33214Source: Smith, Roberts, and

Wielen, 2011HouseSenateRoll call vote 332508 Language InsertedSlide16

Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Voted Yea(1)Voted Nay(2)Yea – Nay(3)All Hospitals0.035

0.025

0.010+

Eligible Hospitals

0.059

0.042

0.017+

15

+

p<0.1, *p<0.5, **p<0.01. Votes are based on roll call vote 332. Eligible

hospitals were those that did not have an existing wage index adjustment

Probability of Receiving a Section 508 Waiver by Congressional Votes for MMASlide17

Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Voted Yea(1)Voted Nay(2)Yea – Nay(3)All Hospitals0.035

0.025

0.010+

Eligible Hospitals

0.059

0.042

0.017+

All Hospitals,

Represented by Republicans

0.033

0.005

0.028**

Eligible Hospitals,

Represented by Republicans

0.056

0.008

0.048**

All Hospitals,

Represented by Democrats

0.070

0.027

0.042+

Eligible Hospitals,

Represented by Democrats

0.110

0.046

0.064+

16

+

p<0.1, *p<0.5, **p<0.01. Votes are based on roll call vote 332.

Eligible hospitals were those that did not have an existing wage index adjustment

Probability of Receiving a Section 508 Waiver by Congressional Votes for MMASlide18

Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Voted Yea(1)Voted Nay(2)Yea – Nay(3)Hospitals Receiving 508 Waiver396.89

361.03

35.86

Hospitals Receiving 508 Waiver,

Represented

by Republicans

392.41

0.00

392.41**

Hospitals Receiving 508 Waiver,

Represented

by Democrats

511.14

354.47

156.67**

17

+

p<0.1, *p<0.5, **p<0.01. Votes are based on roll call vote 332. Values in Dollars.

Size of PPS Payment by Congressional Votes for MMASlide19

The PlanPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New TechnologyHealth Care Spending - Increased SpendingMore Politics - Increased Donations

18Slide20

Section 508 Increased Payments to Hospitals19

The Effect of a 508 Waiver on Hospital PPS Payment RatesWe plot the annual hospital base payment rate for hospitals receiving 508 waivers with and without the wage index change. The base payment rate reflects the amount a hospital is paid by CMS for delivering a case of average complexity.Hospital Base Payment Rate ($)Slide21

Section 508 Increased Payments to Hospitals20Quantity-Fixed 2005 Revenue Gains from the Section 508 ProgramGains are calculated by taking the difference in revenue using the 2005 PPS payment rates with and without the Section 508 Waiver at each hospital. We fix the quantity of cases delivered at each hospital.

Revenue Gains($ Millions)Revenue Gains(% Revenue)(1)

Mean

(2)

Min

(3)

Max

(4)

Mean

(5)

Min

(6)

Max

High

508 Recipients

(29 Hospitals)

7.66

3.42

26.61

10.06

7.97

15.44

Med 508 Recipients

(29 Hospitals)

2.37

1.34

3.41

6.44

5.74

7.96

Low 508 Recipients

(30 Hospitals)

0.59

0.04

1.27

3.5

0.47

5.41

Total Number

of 508 Hospitals

88

88Slide22

The PlanPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New TechnologyHealth Care Spending - Increased SpendingMore Politics - Increased Donations [Levitt and Snyder, 1997; Rocca and Gordon, 2013]21Slide23

Hospitals in Our AnalysisHigh 508 Recipient

Hospitals with largest potential exposure to 508 program29 HospitalsControl (1)Hospitals eligible for a 508

but that did not apply

1,278 Hospitals

Control (2)

Hospitals ineligible

for a 508

1,125 Hospitals

Control (3)

Hospitals that applied for a 508

but were rejected

284 Hospitals

Total Hospitals

2,275 Hospitals

22

Eligible hospitals were those that did not have an existing wage index adjustment. Ineligible hospitals were those that

had

a wage index adjustment. Slide24

Hospital Behavior: Increased ActivityActivity and Prices

StaffingEquipment and QualityTotal DischargesPayrollSaidin Technology IndexMedicare DischargesTotal FTE

AMI Mortality

Rate

Medicaid Discharges

FTE Doctors

Length of Stay for AMI

Hospital Private Price

FTE Registered Nurses

County Hires in Health Sector

Hospital CEO Salary

23

Dependent

VariablesSlide25

Hospital Behavior: Increased Activity24Activity and Prices

StaffingEquipment and QualityTotal DischargesPayrollSaidin Technology IndexMedicare Discharges

Total FTE

AMI Mortality

Rate

Medicaid Discharges

FTE Doctors

Length of Stay for AMI

Hospital Private Price

FTE Registered Nurses

County Hires in Health Sector

Hospital CEO Salary

Dependent

VariablesSlide26

25

Hospital Behavior: Increased ActivityA 508 waiver led to an increase in total discharges of 978 in 2005 and 1,577* per year from 2006-2010, on a base of 19,519 total 2004 discharges for hospitals that would receive a waiver.

+p<0.10, *p<0.05, **p<0.01

Adjusted by hospital and year fixed effects normalized to 2004

. Standard errors clustered by

hospital.Slide27

26

Hospital Behavior: Increased ActivityAdjusted by hospital and year fixed effects normalized to 2004.Slide28

Hospital Behavior: Increased Activity

Total Discharges(1)Medicare Discharges(2)Medicaid Discharges(3)Private Price(4)High 508 Recipient * 2005978

500+

264*

91.28

High 508 Recipient

* 2006-10

1577*

953*

457*

322.50

Mean Dependent Variable in 2004

High

508 Recipient Hospitals

19,519

8,728

2,790

8,089.67

Control Hospitals

10,586

4,258

1,937

6,842.24

27

+p<0.10, *p<0.05, **p<0.01. Adjusted by hospital and year fixed

effects.

Standard errors clustered by

hospital.Slide29

Hospital Behavior: Increased Hiring and CEO Pay28Activity and Prices

StaffingEquipment and QualityTotal DischargesPayrollSaidin Technology IndexMedicare Discharges

Total FTE

AMI Mortality

Rate

Medicaid Discharges

FTE Doctors

Length of Stay for AMI

Hospital Private Price

FTE Registered Nurses

County Hires in Health Sector

Hospital CEO Salary

Dependent

VariablesSlide30

29Hospital Behavior: Increased Hiring and CEO PayAdjusted by hospital and year fixed effects normalized to 2004.Slide31

30Hospital Behavior: Increased Hiring and CEO PayA 508 waiver led to an increase in health sector county hires of 378+ in 2005

and 20 per year from 2006-2010, on a base of 2,013 hires in 2004 for hospitals that would receive a waiver.+p<0.10, *p<0.05, **p<0.01Adjusted by county and year fixed effects normalized to 2004. Standard errors clustered by countySlide32

31Hospital Behavior: Increased Hiring and CEO PayA 508 waiver led to an increase in health sector county hires of

378+ in 2005 and 20 per year from 2006-2010, on a base of 2,013 hires in 2004 for hospitals that would receive a waiver.+p<0.10, *p<0.05, **p<0.01Adjusted by county and year fixed effects normalized to 2004. Standard errors clustered by county.378 x $50,000 = $18.9 million≈ $16 million increase in PayrollSlide33

32Hospital Behavior: Increased Hiring and CEO PayAdjusted by hospital and year fixed effects normalized to 2004. Standard errors clustered by hospital.

A 508 waiver led to an increase in CEO salary of $45.51k in 2005 and $427.56k+ per year from 2006-2010, on a base of $528.42k in 2004 for hospitals that would receive a waiver.+p<0.10, *p<0.05, **p<0.01Slide34

Hospital Behavior: Increased Hiring and CEO Pay

Payroll($ Mil.)(1)Total FTE(2)FTE MD(3)FTENurses(4)

CountyHires

(5)

CEO

Salary

($

Thous

.)

(6)

High 508 Recipient

* 2005

15.98+

27

5

66*

378+

45.51

High 508 Recipient

*2006-10

48.91*

233

59

110+

20

427.56+

Mean Dependent Variable in 2004

High 508 Recipient

Hospitals

134.60

2,589

197

707

2,013

528.42

Control Hospitals

58.45

1,199

47

345

1,072

312.48

33

+p<0.10, *p<0.05, **p<0.01

.

Adjusted by hospital and year fixed

effects.

Standard errors clustered

by hospital. Column (5) is adjusted by county and year fixed effects, with standard errors clustered by county.Slide35

Hospital Behavior: Increased Investment in Technology34Activity and Prices

StaffingEquipment and QualityTotal DischargesPayrollSaidin Technology IndexMedicare Discharges

Total FTE

AMI Mortality

Rate

Medicaid Discharges

FTE Doctors

Length of Stay for AMI

Hospital Private Price

FTE Registered Nurses

County Hires in Health Sector

Hospital CEO Salary

Dependent

VariablesSlide36

35Hospital Behavior: Increased Investment in TechnologyThe Saidin Index captures the number of rare technologies available at each hospital. 1-unit increase = add 1 unique technology

= add 2 technologies possessed by half of hospitalsAdjusted by hospital and year fixed effects normalized to 2004. Standard errors clustered by hospital.95% Confidence IntervalsShort run: (-0.008, 0.020)Long run: (-0.011, 0.007)95% Confidence IntervalsShort run: (-0.185 to 0.211)Long run: (-0.181 to 0.248)Slide37

Hospital Behavior: Increased Investment in Technology

Saidin Tech. Index(1)30-Day AMI Mortality(2)AMI Length of Stay(3)High 508 Recipient * 2005

2.1248**

0.0062

0.0133

High 508 Recipient

*2006-10

4.1584**

-0.0020

0.0338

Mean Dependent Variable

in 2004

High 508

Recipient Hospitals

7.41

0.11

5.74

Control Hospitals

4.11

0.13

5.28

36

+p<0.10, *p<0.05, **p<0.01. Adjusted by hospital and year fixed

effects.

Standard errors clustered by

hospital.Slide38

The PlanPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New TechnologyHealth Care Spending - Increased SpendingMore Politics - Increased Donations37Slide39

38Increased Health Care SpendingA 508 waiver led to an increase in hospital spending of $103.40m** in 2005 and $228.60m**

per year from 2006-2010, on a base of $795.95m in 2004 for hospitals that would receive a waiver. This amounts to more than a $1.25 billion increase overall. +p<0.10, *p<0.05, **p<0.01. + Payments → + Investment in Technology → + Activity → + Investment → + SpendingAdjusted by hospital and year fixed effects normalized to 2004. Standard errors clustered by hospital.Slide40

The PlanPolitics - Section 508 Increased Payments to Hospitals - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Hospital Behavior - Increased Activity, Staffing, CEO Pay, and Investment in New TechnologyHealth Care Spending - Increased SpendingMore Politics - Increased Donations39Slide41

Extending the 508 Program was a political opportunity“In light of todays [sic] announcement that Senate leaders will pursue an extension of Section 508 of the Medicare Modernization Act, US Senator Charles E. Schumer, a member of the Senate Finance Committee, pledged today to work to include all New York Section 508 hospitals…”

- Office of Senator Charles Schumer, 200640Slide42

41Source: opensecrets.orgHospitals Organized Coalition to Extend the 508 ProgramSlide43

42Politicians were Rewarded for Bringing Benefits Home

Adjusted by district and year fixed effects normalized to 2003/4 election cycle.Slide44

Politicians were Rewarded for Bringing Benefits Home

All DonorsAll Donors,Health SectorAll Donors,Same StateAll Donors,

Health Sector and Same State

(1)

(2)

(3)

(4)

High 508 Recipient District *

2001/2 Election Cycle

0.00

-0.15

-0.04

0.25

High 508 Recipient District *

2005/6 Election Cycle

0.22*

0.13

0.19

0.14

High 508 Recipient District *

2007/8 Election Cycle

0.08

0.48**

-0.05

0.65**

High 508 Recipient District *

2009/10 Election Cycle

0.16

0.03

-0.16

0.58

Mean Dependent Variable in 2003/4

Election Cycle

High 508 Recipient

Hospitals

1,173.64

64.70

472.30

25.00

Control Hospitals

1,084.10

74.90

430.70

34.70

43

+p<0.10, *p<0.05, **p<0.01

. Adjusted by district and year fixed effects normalized to 2003/4 election cycle.

Standard errors clustered by district. All values are logged, excluding 0-valued donations. Slide45

Key Take Away PointsPolitics - Voting ‘Yea’ Increased the Probability of Bringing Benefits to the District

Hospital Behavior - Section 508 Increased Payments to Hospitals - Increased Activity, Staffing, CEO Pay, and Investment in New TechnologyHealth Care Spending - Increased SpendingMore Politics - Increased Donations44Slide46

The Big Picture: Politics, Hospital Behavior, Health Care SpendingEveryone Wins (Almost!)Seniors get prescription drug coverageHospitals receive higher payments

Increased ActivityMore jobsHigher Pay for CEO’sBetter technologyPoliticians see more in donationsTaxpayers pay the billWhat Drives Health Spending?TechnologyProvider PreferencesPatient HealthPolitics45Slide47

The Big Picture: Politics, Hospital Behavior, Health Care Spending“In the past, decisions on health care delivery were largely professional ones. Now the decisions will be largely political

.”- John G. Veneman, undersecretary of the Department of Health, Education and Welfare (HEW) in the Nixon administration, quoted in Inglehart (1971) as cited in Starr (1983) 46