Physician Market Power in Perspective

Today, I have read an article entitled ” Market power and contract form: evidence from physician group practices,” Town et al. (2011) published in International Journal Health Care Finance Economics Vol. (11), pp: 115-132. The article is well written, and it addresses a critical issue about physicians behavior. Although Physicians are critical in providing health, this critical position shouldn’t be used to abuse the system (probably this is a strong conclusion).

The authors used a simple but appealing model to reach their objective that physicians market power affects the form of their contracts (Town et al., 2011). The authors maximized physician income and quality by using physicians profit under constraint of their utility. The model is  a variation from Evans’s model if I am not wrong. In their model, the authors assumed that physicians have certain reservation value or utility, for which the physicians will provide their services that correspond to certain level of quality and income. in addition, the physician will not provide any quality care, if their reimbursement or income drop below a certain level; but also the authors noted that some physicians could provide service under capitation, but they will not care less (See Pauly, 1995).

The take point from this short analysis is related to ACO and bundle payment. In other words, what will be the physicians behavior in terms of type or form of contract they will accept, known that they will be forced to accept bundle payment with the expectation for high quality care.

Food Security and Health Care

Today, I watched this wonderful presentation of OCP Group CEO and Chairman, and I was wondering about the two slides he was presenting. He is really a great presenter. The event is great in part because, food security is a critical to growth and well-being of the population, and in part health care should be built or should evolve around food consumption and quality of food produced. I would like to have a chance to present in this event and meet this knowledgeable CEO,  and more specifically, I would like to present and provide some concrete solution for North-South collaboration in improving population health.

Africa as other part of the world experience deficit in number of food calories per capita, the West on the other hand has an excess. However, the question of fair trade is required, people need the know-how not hands-out.

Robinson Crusoe will not succeed in his island if he did not have the know-how. This is true with the deficit that the African nations have when it comes to population growth and relevant technologies to balance with their population growth.

Medicaid Expansion Some Numbers and Association

Several states are reluctant to go for Medicaid expansion. I am not sure whether Medicaid expansion will be beneficial for those who decided not to implement it. The resistance to implement the expansion in the first place shows that they don’t believe that everyone should have a chance  to care. Moreover, it shows that they are using this notion that ” if you can’t pay for it, you don’t even think about it”. The same people think that businesses should thrive under their watch, though it affects negatively the health behaviors of their citizens, that businesses are worth implementing as long as they are profitable. The question, why don’t we make those who influence negatively our citizens health and behavior pay the price.

Imaging Robinson Crusoe in his beautiful island hurting himself, evidently his coconut production will decrease thus his injures will be worse than before.

I conducted a simple Bootstrap regression analysis with 1000 replication, and I used data from CMS and America Health Rank to find the type of association between those states that expanded medicaid and their overall health ranking. although this is very simple analysis, it provides an overview for interested audience to investigate more on this matter and see if Expanding or not expanding Medicaid is within their reach.

An Econometric note:

Please note that when I run the regression analysis including the constant, the coefficient corresponding to medexp becomes negative and statistically highly not significant. however, when I run the model without a constant, the coefficient becomes positive and statistically less significant. in case, I include the constant basically I assume that each state have an initial ranking. Meanwhile, the case I exclude the constant term, I am assuming that or forcing all state not to have any ranking.

correlate Rank MedExp
(obs=19)

| Rank MedExp
————-+——————
Rank | 1.0000
MedExp | -0.1953 1.0000

. regress ranks MedExp, noconstant vce(bootstrap, reps(1000))

(running regress on estimation sample)

Bootstrap replications (1000)
—-+— 1 —+— 2 —+— 3 —+— 4 —+— 5

Replications = 1000
Wald chi2(1) = 2.01
Prob > chi2 = 0.1564
R-squared = 0.1234
Adj R-squared = 0.0747
Root MSE = 26.4752

——————————————————————————
| Observed Bootstrap Normal-based
Rank | Coef. Std. Err. z P>|z| [95% Conf. Interval]
————-+—————————————————————-
MedExp | .0000881 .0000621 1.42 0.156 -.0000337 .0002098
——————————————————————————

https://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/MedicaidDataSourcesGenInfo/Downloads/Dec10-1115f.pdf

What do we know about health care determinants?

ImageAs a nation, we only spend 9% of national health expenditures in embracing healthy behavior. On the other hand, only 6% of health determinates are related to access to services, although 90% of national health expenditures is spent on medical services.[1] Therefore, presumably, providing primary care providers the tools and the means to change and educate patients about their health determinate will have a significant impact on overall spending on medical services.