Detecting Medicare Abuse

This paper identifies which types of patients and hospitals have abusive Medicare billings that are responsive to law enforcement. For a 20 percent random sample of elderly Medicare beneficiaries hospitalized from 1994-98 with one or more of six illnesses that are prone to abuse, we obtain longitudinal claims data linked with Social Security death records, hospital characteristics, and state/year-level anti-fraud enforcement efforts. We show that increased enforcement leads certain types of types of patients and hospitals to have lower billings, without adverse consequences for patients' health outcomes.

Is More Information Better? The Effects of 'Report Cards' on Health Care Providers

Health care report cards - public disclosure of patient health outcomes at the level of the individual physician and/or hospital - may address important informational asymmetries in markets for health care, but they may also give doctors and hospitals incentives to decline to treat more difficult, severely ill patients. Whether report cards are good for patients and for society depends on whether their financial and health benefits outweigh their costs in terms of the quantity, quality, and appropriateness of medical treatment that they induce. Using national data on Medicare patients at risk for cardiac surgery, we find that cardiac surgery report cards in New York and Pennsylvania led both to selection behavior by providers and to improved matching of patients with hospitals. On net, this led to higher levels of resource use and to worse health outcomes, particularly for sicker patients. We conclude that, at least in the short run, these report cards decreased patient and social welfare.

Pricing Heart Attack Treatments

In this paper, we estimate price indices for heart attack treatments, demonstrating the techniques that are currently used in official price indices and presenting some alternatives. We consider two types of price indices, a Service Price Index, which prices specific treatments provided, and a Cost of Living Index, which prices the health outcomes of patients. Both indices are complicated by price measurement issues: list prices and transactions prices are fundamentally different in the medical care field. The development of new or modified medical treatments further complicates the comparison of like' goods over time. And the Cost of Living Index is hampered by the need to determine how much of health improvement results from medical treatments in comparison to other factors. We describe methods to address each of these obstacles. We conclude that whereas traditional price indices when applied to heart attack treatments are rising at roughly 3 percent per year above general inflation, a corrected service price index is rising at perhaps 1 to 2 percent per year above general inflation, and the cost of living index is falling by 1 to 2 percent per year relative to general inflation. We discuss the implications of these results for official price index calculations.

The Effects of Fish Trap Mesh Size on Reef Fish Catch off Southeastern Florida

Catch and mesh selectivity of wire-meshed fish traps were tested for eleven different mesh sizes ranging from 13 X 13 mm (0.5 x 0.5") to 76 x 152 mm (3 X 6"). A total of 1,810 fish (757 kg) representing 85 species and 28 families were captured during 330 trap hauls off southeastern Florida from December 1986 to July 1988. Mesh size significantly affected catches. The 1.5" hexagonal mesh caught the most fish by number, weight, and value. Catches tended to decline as meshes got smaller or larger. Individual fish size increased with larger meshes. Laboratory mesh retention experiments showed relationships between mesh shape and size and individual retention for snapper (Lutjanidae), grouper (Serranidae), jack (Carangidae), porgy (Sparidae), and surgeonfish (Acanthuridae). These relationships may be used to predict the effect of mesh sizes on catch rates. Because mesh size and shape greatly influenced catchability, regulating mesh size may provide a useful basis for managing the commercial trap fishery

Productivity Change in Health Care

Economic

Are Medical Prices Declining?

We address long-standing problems in measuring health care prices by estimating two medical care price indices. The first, a Service Price Index, prices specific medical services, as does the current CPI. The second, a Cost of Living Index, measures the net valuation of treating a health problem. We apply these indices to heart attack treatment between 1983 and 1994. Because of technological change and increasing price discounts, the current CPI overstates a chain-weighted price index by three percentage points annually. For plausible values of an additional life-year, the real Cost of Living Index fell about 1 percent annually.