Dissertation/Thesis Abstract

Impact of Price, Income, and Externalities on Incentives for Health Care Providers and Patient Behaviors
by Eremionkhale, Amy, Ph.D., Lehigh University, 2019, 108; 13899858
Abstract (Summary)

First Chapter Title: Impact of the Change in Payments on the Actual and Perceived Behaviors of Medical Care Providers:

Research Question: This paper asks if and how medical care providers change their treatment plans when there is a change in the income they receive from their patients. Taking this question further, this paper asks if there are any changes in the

patients' perception of the behaviors of their medical care providers, as the income received by the medical providers change. This paper investigates how a change in the payments received by medical care providers affects their treatment decisions and their behavior as perceived by their patients.

Motivation: This paper is motivated by the current political discourse to remove the individual mandate instituted by the Patient Protection Affordable Care Act (PPACA). Before the Patient Protection and Affordable Care Act (PPACA) was enacted into law in 2010, young adults who were not full-time students aged out of their parents' insurance plans when they turned 19 years old. This age-out policy was true for both private insurance coverage and Medicaid coverage. Existing literature shows that there exists a sharp drop in insurance coverage rates that results from young adults \aging out" of their parents' insurance plans (Andrews, 2013) (Palmieri,

2017). There is also a significant decrease in the per-visit income received by medical care providers when a patient is uninsured versus insured (Anderson et al., 2012). Therefore, as the push to repeal the individual mandate has been successful, it follows that the proportion of uninsured individuals in the population will increase, and thus the need to understand the potential impact of this policy change on both the supply-side and demand-side of medical care becomes a matter of utmost concern.

Data: This research uses office-based visit level Medical Expenditure Panel Survey (MEPS) data for the analysis. It spans the years 1996 through 2009, where 1996 is as far back as the available MEPS data goes, and the effects of the PPACA that affect the aging-out policy began in 2010. The sample excludes full-time students, married individuals, and office-based visits with total payments to the provider that exceed the 95th percentile.

Empirical Methodology: This paper uses the regression discontinuity (RD) design to exploit the sharp discontinuity in insurance coverage that occurs at the age of 19, induced by the aging-out policy-induced, to investigate the impact of the significant decrease in the total income on the behavior of medical care providers. In the model, age is measured in months, where a 19-year-old is 228 months old. The bandwidth used in the model is 12 months around the threshold of 228 months. The change in insurance coverage is measured directly through the change in per visit income sourced from either private insurance or from Medicaid payments for services. The demographic variables are smooth across the threshold of 228 months which allows for the proper identification of the causal effects of interest in the RD model. The model also controls for year and region indicator variables.

Results: There exists a statistically significant reduction in the income received by the medical care providers from private and Medicaid source, across the threshold of 228 months of age. The decrease in the per-visit income from those sources is 16.4%. There does not appear to be a significant shift in the treatment plan of the providers from the relatively more time consuming diagnostic test and methods, to a time-saving method of relying more heavily on lab tests as a diagnostic tool. Patient's do perceive a change in the behaviors of their medical care providers, across this threshold of 228 months of age. A combination of the results from the income change of medical care providers, perceived changes, and actual changes in the behavior of medical care providers suggests that the decrease in income resulting from the loss of insurance coverage of the patients of the medical care providers does not lead to a

statically significant shift in the actual behavior of medical care providers. However, the patients do perceive a statistically significant difference in the behavior of their medical care providers.

Second Chapter Title: The Impact of Regional Antimicrobial Use on Individual Antimicrobial Use, on Individual Health Outcomes, and on Regional Antimicrobial Resistance:

Research Question: This paper investigates the impact of the regional use of antimicrobials on three main areas, namely; the likelihood an individual uses antimicrobials; an individual's interaction with the health care industry; and the level of antimicrobial resistance in the four regions as dened as Midwest, Northeast, South, and West, by the United States Census Bureau defines the four statistical regions.

Data: The primary source of data in this the Medical Expenditure Panel Survey (MEPS) dataset, over the years 2002 through 2012. MEPS provides data on antimicrobial use, health outcomes, health expenditures, and individual demographic information. The secondary sources of data include the National Antimicrobial Resistance Monitoring System (NARMS). NARMS provides data on regional antimicrobial resistance levels over the years.

Empirical Methodology: The econometric framework of this analysis is a two-stage least squares (2SLS) model, where the instrumental variable is the one period lagged yearly regional average of antimicrobial use for any given condition. This instrument is for the yearly regional average of antimicrobial use for any given condition, the key dependent variable in the model.

Results: The results of the investigation show that firstly, there is a direct and significant relationship between the regional level of antimicrobial use and a person's likelihood to use antimicrobials to treat any given condition. This implies the presence of a negative externality on any particular individual in the various regions, especially in the regions with relatively high antimicrobial use. Secondly,

the regional use of antimicrobials does not lead to a positive improvement of the individual's interaction with the health care industry. This indicates that the extent of antimicrobial use in the various regions is improper. Lastly, the results of the investigation show that the use of antimicrobials in various regions leads to a significant increase in resistance levels in those regions. The magnitude at which the

increase occurs differs across the various regions.

Third Chapter Title: Impact of the Price of Physician Visit on the Use of Prescribed Medicine: A Focus on Antibiotics and the Common Cold:

Research Question: This paper determines the impact that the additional cost of visiting a doctor in order to obtain a prescription, has on the demand for antibiotics. This paper also investigates the behavioral responses of medical professionals

to potential negative income pressure.

Motivation: The analysis of Cantrell et al. suggests that around 11 million prescriptions in the USA are inappropriate and estimates a waste of health care resources up to US$ 281 million. Filippinia et al. (2003) With the recently enacted Patient Protection Affordable Care Act (PPACA), there is increased potential for moral hazard, and access to care and prescribed medications for a large number of

the population, where the cost of medical care has decreased for these individuals. As a result of this increased moral hazard, it is reasonable to question the impact of the increased medical access on the problem of Antimicrobial Resistance. To address one element of that question, this paper estimates the impact of the price of doctors visits on the demand for antibiotics.

Data: The analysis of the derived demand model in this paper will be done using the Medical Expenditure Panel Survey (MEPS). This data set is a nationally representative survey of the US civilian, non-institutionalized population. The data used spans the years 2004 through 2010, however, it is pooled, and thus no special econometric treatment was used to take advantage of the length and panel structure of the data.

Empirical Methodology: The analysis done in this paper uses a demand equation for the prescription medication, antimicrobials, using a Probit model. The dependent variable in this equation is a dichotomous variable that equals one for individuals who used the antibiotics as a course of treatment for the common cold. Among other independent variables included in this analysis, the key independent variable here is the average total price of the office-based visit made to the doctor.

Results: The results of this paper show that the individuals who use antibiotics to treat specifically the common cold are not sensitive to the price of the office-based doctor visits, and are not sensitive to the price of the antibiotics. The probability of receiving antibiotics for the treatment of the common cold responds to the change in neither the price of the medication itself nor the price of the office-based doctor visit. It also suggests that the impact of gaining insurance on the demand for antibiotics is neither large nor statistically significant.

Indexing (document details)
Advisor: Chou, Shin-Yi
Commitee: Watkins, Todd, Deily, Mary E., Li, Suhui
School: Lehigh University
Department: Economics
School Location: United States -- Pennsylvania
Source: DAI-A 81/3(E), Dissertation Abstracts International
Source Type: DISSERTATION
Subjects: Economics
Keywords: Antimicrobial resistance, Antimicrobial use, Applied econometrics, Health care provider behavior, Health economics, Patient perception
Publication Number: 13899858
ISBN: 9781085799324
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