Jason Shafrin

Publications

Revising the Medicare Wage Index to Account for Commuting Patterns  
with Thomas MaCurdy, Karla López de Nava, Avni Shah and Thomas DeLeire (Appendix to "Wage Index Reform Report to Congress")

The Medicare statute requires that per-discharge payments to inpatient prospective payment system (IPPS) hospitals reflect geographic differences in the cost of labor. Under the current system, Medicare calculates an average hourly wage for each metropolitan statistical area (MSA) and residual, or "rest of state" area, to construct the hospital wage index. However, labor markets defined by fixed geographic boundaries often do not accurately reflect hospital labor markets. To improve the wage index, Acumen proposes an alternative formulation known as the Commuting-Based Wage Index (CBWI), which uses commuting data to create more flexible hospital-specific labor markets. Each hospital's CBWI value is based on a weighted sum of benchmark area wages, where the weights are the proportions of workers commuting from each area.

Final Revisions to the Sixth Update of the Geographic Practice Cost Index
Proposed Revisions to the Sixth Update of the Geographic Practice Cost Index  
with Thomas MaCurdy, Mallory Bounds, and David Pham (CMS Report)

As mandated under Section 1848(e) of the Social Security Act, the Centers for Medicare and Medicaid Services (CMS) must establish geographic indices as part of the Resource-Based Relative Value Scale (RBRVS) method for paying physicians. Whereas the Medicare hospital wage index adjusts hospital, home health agency, skilled nursing facility and other provider payments for regional variation in the cost of labor, the Geographic Practice Cost Index (GPCI) accounts for geographic variation in the price of a wider range of inputs. After both evaluating the current data and methods CMS uses to calculate the GPCIs, including an evaluation of long-standing public comment surrounding the current specifications, Acumen recommends four modifications to the data sources used and the methodology CMS uses to calculate locality GPCIs for CY 2012.

Revising the Medicare Wage Index to Account for Commuting Patterns  
with Thomas MaCurdy, Karla López de Nava, Avni Shah and Thomas DeLeire (CMS Report)

Currently, about one in three hospitals reclassify into a new labor market area under the current Medicare hospital wage index. Reclassifications occur because the labor markets to which a hospital is assigned does not adequately reflect their price of labor. This issue brief proposes a commuting-based wage index (CBWI) which would greatly reduce the need for these reclassifications. The CBWI relies on detailed commuting data to create labor markets which are tailored to each hospital based on the areas from which they draw workers. The issue brief describes the CBWI, its forecast impacts, and data sources which Medicare could use to estimate worker wages and commuting patterns.

Optimal Pay-for-Performance Scores: How to Incentivize Physicians to Behave Efficiently Using Episode-Based Measures  
with Thomas MaCurdy and Diana Zheng (CMS Report)

Implementing a pay-for-performance (P4P) program holds the promise of stemming the tide of rapidly-rising Medicare costs. By penalizing inefficient physicians and rewarding efficient ones, Medicare could potentially save millions or billions of dollars each year. The successful realization of such a system requires not only that efficiency ratings are comprehensible to both providers and policymakers, but also that they affect provider behavior as intended. This paper evaluates different mechanisms for implementing a P4P program for physicians within Medicare.

Challenges in the Risk Adjustment of Episode Cost  
Evaluating the Stability of Physician Efficiency Scores  
with Thomas MaCurdy, Elizabeth Hartmann, Mario Ho, Lauren Talbot, Ken Ueda, and Zhihao Zhang (CMS Report)

These two reports evaluate various aspects of using episode grouping software to implement a value-based purchasing (VBP) system for Medicare physicians. The first report evaluates three distinct risk adjustment models which could be implemented in a VBP system. In the second project, Dr. Shafrin determines whether episode-based VBP produce stable physician ratings over time. More stable stores provide suggestive evidence that physician actions rather than random variation is the key determinant of efficiency scores.

Revision of Medicare Wage Index: Final Report Part II   with Thomas MaCurdy, Thomas DeLeire, Karla López de Nava, Paulette Kamenecka, Yang Tan (CMS Report)

This report evaluate the current Medicare inpatient prospective payment system (IPPS) wage index framework as well as an alternative specification proposed by MedPAC. Medicare adjusts payments to inpatient hospitals according to a hospital wage index that seeks to reflect the average price of labor facing each hospital. To construct the index, Medicare currently clusters hospitals into metropolitan statistical areas (MSAs) and residual areas ("balance-of-state"), but due because many hospitals are inaccurately classified, about 30% of all hospitals reclassify to another area. In June 2007, MedPAC recommended repeal of the existing wage index statute, including the elimination of reclassification and exceptions, and proposed an alternative index. This report evaluates the advantages and disadvantages of implementing the MedPAC alternative index.

Operating on commission: How physician financial incentives affect surgery rates   (Health Economics)

This paper employs a nationally representative, household-based dataset in order to test how the compensation method of both the specialists and the primary care providers affects surgery rates. After controlling for adverse selection, I find that when specialists are paid through a fee-for-system scheme rather than on a capitation basis, surgery rates increase 78%. The impact of primary care physician compensation on surgery rates depends on whether or not referral restrictions are present.

Delivering Vaccines: A Case Study of the Distribution System of Vaccines for Children   with John Fontanesi, (American Journal of Managed Care

Although the Vaccine Management Business Improvement Project (VMBIP) was implemented to save costs, this study finds that during its initial implementation timeline, providers experienced longer delivery delays and a higher probability of a Vaccines for Children (VFC) stockout.

• After VMBIP was implemented, VFC delivery times increased from 1.6 to 12.3 business days (P<.001).
• The probability that VFC deliveries took longer than 1 week increased from 7% before the VMBIP to 89% afterward.
• Our simulation demonstrates that for 7 of 11 vaccines investigated, there was a statistically significant increase in the number of days a provider would be without VFC (P <.01).

Comparison of Pharmacists and Primary Care Providers as Immunizers   with John Fontanesi, Jan D. Hirsch, Sarah M. Lorentz, and Debra Bowers. (The American Journal of Pharmacy Benefits)

This study examines the potential role of "alternative community immunizers," specifically pharmacists, in providing immunization services. A convenience sampling of almost 700 adults eligible for vaccinations was taken from 15 ambulatory care settings and 11 pharmacies in San Diego, California between 2006 and 2008. The results of the study found that patient characteristics and beliefs were similar between primary care and pharmacies, but pharmacies proved more consistent in following safety protocols; had lower unit costs; and were more efficient, with greater productivity. We conclude that pharmacies combine the best immunization practices of routine scheduled primary care visits and mass influenza vaccination clinics, but gaps still exist in pharmacies' ability to effectively transmit immunization records securely and provider willingness to embrace these "alternative immunizers."

Other Research

Why Does Getting Married Make You Fat? Incentives and Appearance Maintenance   with Uri Gneezy

Married individuals weigh more on average than non-married individuals. We suggest that exiting the dating market decreases ones incentive to maintain their appearance and leads to an increase in body weight. We hypothesize that it is most difficult for individuals to exit a traditional marriage, and easiest for individuals to exit if the couple is cohabitating but not legally married. Using a 14-year panel data set, we test whether or not the ease of exiting a domestic relationship affects weight gain. For men, we find that the type of domestic relationship has little impact on weight gain. For women, however, marriage leads to a 2.4 kg weight gain compared to cohabitating.

Why Aristotle didn't get his flu shot: The impact of prudence on prevention   with Daniel Wiesen.

Prudence preferences have been shown to influence precautionary savings, asset allocation, and optimal prevention levels. In this paper, we will collect data from an experimental setting to measure prudence non-parametrically over both gains and losses. We find that 53.1% of individuals are prudent and 15.0% are imprudent. These preferences are constant regardless of the individuals level of risk aversion. Contrary to previous work in the literature, our results demonstrate that estimating prudence using parametric assumptions on the utility function often incorrectly categorizes risk lovers as imprudent. We also provide suggestive evidence that prudent individuals are more likely to choose lower levels of prevention.

Adam Smith meets Jonas Salk: Estimating the Social Cost of Third-Party Influenza Vaccination Restrictions   with John Fontanesi.

Influenza is the 7th leading killer in the United States. In order to attenuate the threat of an influenza outbreak, the Centers for Disease Control and Prevention (CDC) have established guidelines recommending that all parents of children between 0 and 60 months old should be vaccinated. Insurance companies, however, will not reimburse pediatricians who administer influenza vaccinations to adults. This seemingly innocuous insurance company restriction, however, is creating significant costs for society. Using a new observational dataset we estimate the cost of this insurance restriction to be between $5.8 and $188.4 million. While narrowly the paper advocates allowing pediatricians to vaccinate adults, more generally it warns of the costs inherent when third party entities inhibit the scope of physician-patient interaction.

     Last updated 23 July 2011