Home » Health Policy » The Essential Scan: Top Findings in Health Policy Research | Edition 3

The Essential Scan: Top Findings in Health Policy Research | Edition 3

What’s the latest in health policy research? The Essential Scan, produced by the Schaeffer Initiative for Innovation in Health Policy, aims to help keep you informed on the latest research and what it means for policymakers.


By: Margaret Darling, Loren Adler, Stephanie Hedt, and Paul Ginsburg

Comprehensive federal solution needed to address surprise medical billing that holds patients harmless while not unduly altering market dynamics

Mark A. Hall, Paul B. Ginsburg, Steven M. Lieberman, and co-authors detail a comprehensive, six-pronged solution to eliminate surprise medical billing, both in emergency situations and for out-of-network care at in-network facilities while also avoiding unduly impacting market forces. In their report, the authors compile evidence on the source, severity, and prevalence of surprise medical bills, evaluate the likely impact of emergent policy solutions, and lay out the need for federal action given federal legislation that currently prevent states from regulating provider payment rates by self-funded employer health plans, through which 98 million Americans get their coverage. A comprehensive solution will require both state and federal action to cover all health plan types and all care settings where surprise medical billing can arise.  Full report here. Event on surprise medical billing here.

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“States have been very active in addressing this issue, but half of the privately-insured have no protection because of the lack of federal action.”

Paul Ginsburg, PhD Director of the Schaeffer Initiative

Coupons that cover out-of-pocket costs for brand-name drugs increased sales by more than 60 percent, entirely by reducing sales of bioequivalent generics

Leemore Dafny, Christopher Ody, and Matthew Schmitt found coupons that cover the cost of copays and other cost-sharing for brand-name drugs increased sales of those drugs by more than 60 percent, entirely at the expense of bioequivalent generics, which are generally significantly less expensive. The authors found that introducing a copay coupon for a brand drug resulted in an increase of $30 million to $120 million in spending per drug over the first five years after the entry of a generic bioequivalent into the market. This shift to brand drug usage, in turn, increases insurance premiums. These findings imply that lawmakers may want to consider banning drug coupons system-wide like they already are in government programs, particularly in the cases where a bioequivalent generic exists and the welfare implications are clear.  Full paper here.

ACOs generate $398 million in spillover savings on top of the $287 million in net savings within shared savings ACO contract

Michael McWilliams finds that accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) in 2014 are responsible for more savings than they are commonly given credit for – $685 million in total – despite 95 percent of participants choosing a non-risk bearing financial contract. ACOs are generally evaluated based on their net savings produced after bonus payments, which amounted to $287 million in 2014. This analysis, however, also includes $126 million in estimated savings among Medicare beneficiaries not attributed to the ACOs and $272 million in projected savings within Medicare Advantage (MA) as a result of lower local fee-for-service spending resulting from ACOs, to which MA payments are tied. These findings provide a more complete picture of ACOs’ impact on costs, and as the author notes, call for a reexamination of the exclusion of non-risk bearing ACOs from qualifying for advanced payment model incentives under the Medicare Affordability and CHIP Reauthorization Act. Full article here.

Consumers in the Massachusetts 2010 exchange predominately chose more generous plans—not simply lower cost plans—when given standardized cost-sharing options and comparable information across plans

Keith M. Marzilli Ericson and Amanda Starc found that the introduction of a standardized cost-sharing benefit design and presentation increased the generosity of plans selected, thereby increasing the average actuarial value of chosen health insurance plans by 4.7 percent without any significant changes to price sensitivity. The authors examined plan selections before and after Massachusetts’ introduction of a state regulatory change in 2010 which limited the cost-sharing designs health plans on the Massachusetts exchange could offer and simplified the way in which information was presented to customers. The authors’ findings in Massachusetts potentially have implications for the Affordable Care Act’s state- and federally facilitated exchanges as regulators weigh the impacts standardization and simplification can have on consumer choice. Full article here.


The Essential Scan is produced by the Schaeffer Initiative for Innovation in Health Policy, a collaboration between the Center for Health Policy at Brookings and the USC Schaeffer Center for Health Policy & Economics

Click here to receive The Essential Scan email. 


Margaret Darling is a Senior Research Assistant at the Brookings Institution

Loren Adler is the Associate Director of the Center for Health Policy at the Brookings Institution

Stephanie Hedt is the Policy Communications Associate at the Schaeffer Center

Paul Ginsburg is the Director of Public Policy at the Schaeffer Center and Director of the Schaeffer Initiative

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