Featured Research

from universities, journals, and other organizations

In Massachusetts, 'individual mandate' led to decreased hospital productivity

Date:
July 30, 2012
Source:
Wolters Kluwer Health: Lippincott Williams & Wilkins
Summary:
As the "individual mandate" of the Affordable Care Act moves forward, debate and speculation continue as to whether universal health insurance coverage will lead to significant cost savings for hospitals. The assumption is that providing appropriate primary care will improve the overall health of the population, resulting in less need for hospital services and less severe illness among hospitalized patients. Findings from a recent study challenge that assumption.

As the "individual mandate" of the Affordable Care Act moves forward, debate and speculation continue as to whether universal health insurance coverage will lead to significant cost savings for hospitals. The assumption is that providing appropriate primary care will improve the overall health of the population, resulting in less need for hospital services and less severe illness among hospitalized patients. Findings from a recent study published in Health Care Management Review challenge that assumption.

The new study reports that mandatory individual insurance coverage in Massachusetts was followed by a significant near-term drop in hospital productivity. The results raise the possibility of similar decrease in U.S. hospital productivity once the individual mandate is implemented as part of national health care reform. "As such, current cost estimates of the Affordable Care Act's impact on overall health spending are potentially understated," write Mark A. Thompson, PhD, of Texas Tech University and colleagues.

Hospital Productivity Drops after Mandatory Insurance The researchers used economic models to evaluate the effects of mandatory insurance coverage on hospital productivity. The analysis focused on the impact of the universal insurance coverage mandate implemented in Massachusetts in July, 2007.

Data from 2005 to 2008 was used to compare trends in productivity at 51 Massachusetts hospitals, 197 matched hospitals and other 2,916 hospitals across the United States. The analysis first used "propensity score matching" techniques to match hospitals in Massachusetts with the hospitals with comparable characteristics.

From 2005 to 2006 -- before passage of the Massachusetts health care reform legislation -- productivity decreased slightly for all hospitals. However, the largest and only significant decrease (2.4 percent) was seen among hospitals in Massachusetts. During the transition period, all hospitals again saw a slight decrease in productivity in 2007 compared to 2006, but Massachusetts hospitals had a significant decrease which was more than twice that of their matched hospitals.

In 2008 -- immediately after the mandatory insurance law took effect -- Massachusetts hospitals had a significant 2.5 percent increase in productivity over the previous year. This increase was more than for the comparison hospitals, but less than for hospitals across the United States.

From 2005 through 2008, the Massachusetts hospitals had an overall productivity loss of 3.5 percent, compared to a 1.6 percent loss among the comparison hospitals and a 4.1 percent gain in productivity among all hospitals.

Unexpected Effect on Productivity May Reflect 'Pent-Up Demand'

In Massachusetts, it was expected that mandatory insurance coverage would "bend the health cost inflation curve" -- making hospitals more productive and lowering the overall cost of public programs. However, the costs of providing universal insurance in Massachusetts have been higher than expected, raising questions about whether the "individual mandate" actually led to the predicted increase in hospital productivity.

"Based on the Massachusetts experience," Dr Thompson and coauthors write, "legislating mandatory health insurance coverage at the national level is likely to be accompanied by a near-term decrease in overall hospital productivity and a concomitant increase in overall health care costs." They speculate that increased access to health care may lead to "release of pent-up demand" for costly discretionary hospital services. The researchers add, "In the long-term, universal coverage should lead to significant savings for hospitals if they can shift non-emergent care away from their emergency departments."

In the meantime, Dr Thompson and coauthors urge realistic expectations about how increases in demand associated with universal coverage are likely to affect hospital productivity. They write, "In the face of policy change at the national level, the healthcare industry will undergo process and outcome transformation that may mimic Massachusetts."


Story Source:

The above story is based on materials provided by Wolters Kluwer Health: Lippincott Williams & Wilkins. Note: Materials may be edited for content and length.


Cite This Page:

Wolters Kluwer Health: Lippincott Williams & Wilkins. "In Massachusetts, 'individual mandate' led to decreased hospital productivity." ScienceDaily. ScienceDaily, 30 July 2012. <www.sciencedaily.com/releases/2012/07/120730134446.htm>.
Wolters Kluwer Health: Lippincott Williams & Wilkins. (2012, July 30). In Massachusetts, 'individual mandate' led to decreased hospital productivity. ScienceDaily. Retrieved August 29, 2014 from www.sciencedaily.com/releases/2012/07/120730134446.htm
Wolters Kluwer Health: Lippincott Williams & Wilkins. "In Massachusetts, 'individual mandate' led to decreased hospital productivity." ScienceDaily. www.sciencedaily.com/releases/2012/07/120730134446.htm (accessed August 29, 2014).

Share This




More Health & Medicine News

Friday, August 29, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Killer Amoeba Found in Louisiana Water System

Killer Amoeba Found in Louisiana Water System

AP (Aug. 28, 2014) State health officials say testing has confirmed the presence of a killer amoeba in a water system serving three St. John the Baptist Parish towns. (Aug. 28) Video provided by AP
Powered by NewsLook.com
Who Could Be Burnt by WHO's E-Cigs Move?

Who Could Be Burnt by WHO's E-Cigs Move?

Reuters - Business Video Online (Aug. 28, 2014) The World Health Organisation has called for the regulation of electronic cigarettes as both tobacco and medical products. Ciara Lee looks at the impact of the move on the tobacco industry. Video provided by Reuters
Powered by NewsLook.com
CDC Director On Ebola Outbreak: 'It's Worse Than I Feared'

CDC Director On Ebola Outbreak: 'It's Worse Than I Feared'

Newsy (Aug. 28, 2014) CDC director Tom Frieden says the Ebola outbreak is even worse than he feared. But he also said there's still hope to contain it. Video provided by Newsy
Powered by NewsLook.com
How A 'Rule Of Thumb' Could Slow Down Drinking

How A 'Rule Of Thumb' Could Slow Down Drinking

Newsy (Aug. 28, 2014) A study suggests people who follow a "rule of thumb" when pouring wine dispense less than those who don't have a particular amount in mind. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins