Policy Analysis

Policy Analysis

Led by AHE Director Robert Ohsfeldt, PhD, CEO John Schneider, PhD, and Director Cara Scheibling, AHE researchers and consultants have extensive knowledge and experience applying health economics analysis to a wide variety of health-related policy issues. Our work has been used to support and inform the legislative process, and our reports have been used to brief state and federal legislators, federal Congressional Committees (such as the House Ways and Means Committee), and the Congressional Budget Office (CBO).

Our services include:

  • Policy Research
  • Regulatory Impact & Economic Impact
  • Analysis of Regulatory Reform (including the U.S. Affordable Care Act)
  • Cost-Benefit Analysis & Cost-Impact Analysis
  • Data Analysis & Simulation Modelling
  • Peer-Review Publications & Communications
  • Legislative Analytic Support Services
  • Tobacco Policy
  • Public Health Policy
  • Environmental Health
  • International Health

Clients include corporations, health care trade associations, federal and state government (US and international), international health care agencies, law firms, public relations firms, and other health care organizations. We have also served as health economics partners on university grants and contracts and specific health-related initiatives.

Sample Projects

Policy impact on access to and cost of surgeries/procedures requiring anesthesia.
We assessed the impact of state “opt out” policy on access to and costs of surgeries and other procedures requiring anesthesia services. We used data from the National Inpatient Sample (NIS) and the State Ambulatory Surgery Database (SASD) to estimate a “difference-in-difference” model design, where we compared the pre-post differences in the “treatment” group to the pre-post differences in the control group.

Impact of recent legislation on optometrists and dentists.
We designed a study that generated evidence of the benefits of H.R. 3323 and similar state laws that exist in 35 states. We created conceptual framework reviewing and describing the theory and evidence on the effects of competition and market forces in the health industry, and how these factors are likely to be affected by the problems addressed by the legislation. Then we created and ran an online survey, which resulted in a white paper summarizing the conceptual framework and the survey results, and then a Hill briefing.

Veteran needs-assessment survey.
We conducted a needs assessment survey of veterans in New Jersey in regard to substance abuse and mental health. Working with our survey research team and the client, we created and ran a survey of veterans in the state of NJ and their mental and physical health. At the completion of the survey, we wrote an extensive report of the findings and how they compared to similar recent surveys.

Older adult substance use survey.
We conducted a survey of the older adults (65+) in New Jersey and their substance use. Working with our survey research team and the client, we created and ran a survey of older adults in the state of NJ and their mental and physical health, and their tobacco, drug, and alcohol use. At the completion of the survey, we wrote an extensive report of the findings and how they compared to similar recent surveys.

Differences in Outcomes between Surgical Procedures Performed in Ambulatory Surgery Centers (ASCs) and Physician Offices
The number of surgeries performed in physician offices has risen in recent years, doubling in the 10-year period from 1995 to 2005 to reach 10 million procedures. There have been some concerns regarding the quality of surgical procedures provided in physician offices relative to the more intensive hospital outpatient and ambulatory surgery center settings. Although some studies based on state-level adverse event reporting systems have not revealed any major quality problems, studies with more rigorous study designs have uncovered some quality differences between surgical procedures performed in physician offices and other outpatients settings, such as ambulatory surgery centers and hospital outpatient departments. In this project we conduct a retrospective study of surgical outcomes in Florida from 2008 through 2012 using a large database of private insurance claims. The primary outcomes were hospitalizations 7 days and 30 days following office-based surgical procedures. The focus is on surgical procedures that rapidly “migrated” from ambulatory surgery centers (ASCs) to office-based settings over the five-year time period.

Analysis of Congressional Budget Office scoring of Affordable Care Act provisions
A health care trade association was facing possible legislation that could adversely affect its members. The Congressional Budget Office (CBO) scored the legislation showing substantial savings if the legislation were to pass. Our team analyzed the CBO analysis and found flaws. Together with the trade association leadership, our team met with the CBO and presented our own analysis. In response to our analysis, the CBO re-scored the legislation, reducing the estimated savings associated with the legislation.

Effects of health insurance exchanges on the U.S. insurance industry
Prior to the passage of the Affordable Care Act, a national health care trade association engaged us to conduct a comprehensive analysis of how health insurance exchanges were likely to impact the U.S. health insurance market.

The economics of physician ownership of ancillary services
This project developed a conceptual framework to evaluate the tradeoffs associated with physician ownership of in-office ancillary services (IOASs). There is some evidence supporting the existence of scope and transaction economies in IOASs. Improvement in flow and continuity of care are likely to generate scope economies and improvements in quality monitoring and reductions in consumer transaction costs are likely to generate transaction economies. Other factors include the capture of upstream and downstream profits, but these incentives are likely to be small compared to scope and transaction economies. Read more on the Organizational Boundaries of Medical Practice: The Case of Physician Ownership of Ancillary Services.

International comparisons of health care data
As part of a book published by Robert Ohsfeldt and Avalon CEO John Schneider, we conducted an analysis of international OECD data on health care expenditures and outcomes. This work resulted in several related events and presentations, including a symposium. Read our blog Health Care Costs and Value: An International Perspective, or see our presentation on The Business of Health.

Nexus study of regulatory fees to offset negative externalities from tobacco use
As a result of our nexus study, the City of San Francisco currently enforces a regulatory fee imposed on tobacco sellers. The fee is distinct from existing statewide cigarette taxes in that it is designed to offset the negative externalities associated with tobacco product litter. City and municipal TPL costs are incurred through manual and mechanical clean-up of surfaces and catchment areas. According to some studies, public litter abatement costs to US cities range from $3 million to $16 million. TPL typically comprises between 22% and 36% of all visible litter, implying that total public TPL direct abatement costs range from about $0.5 million to $6 million for a city the size of San Francisco. The costs of mitigating the negative externalities of TPL in a city the size of San Francisco can be offset by implementing a fee of approximately $0.20 per pack. Read more on Tobacco Litter Costs and Public Policy.

Nexus study of regulatory fees to offset negative externalities of calorically sweetened beverages
The biological mechanism, experimental evidence, and consistent effects among diverse study designs provide a compelling case for a causal effect of CSB consumption on weight gain, obesity and/or overweight. This study used meta-analysis to calculate that, on average, about 9% of the cases of obesity in San Francisco are due to consumption of CSBs. The study then uses nationally representative medical expenditure data to estimate the percentage of annual medical payments that are attributable to obesity for those receiving health care services reimbursed by the City of San Francisco. Read more on The Costs of Sugared Beverages to San Francisco.

Effects of physician ownership of hospitals on financial health of competing hospitals
This project and paper focused on one important economic question: does the presence of specialty hospitals in a market affect general hospitals’ financial performance? We estimate longitudinal fixed-effects models for a national panel of short-term acute care hospitals for the period 1997 through 2004; models are estimated for general hospital patient-care revenue, costs, and operating margins. We find that the presence of one or more new or established specialty hospitals in a market has a negative effect on general hospital costs and a positive effect on general hospital operating margins. Results, which were consistent across several different modeling approaches, imply that the presence of specialty hospitals encourages greater efficiency on the part of incumbent general hospitals, and the existence of profits attracts market entry. Read more on the Effects of Specialty Hospitals on the Financial Performance of General Hospitals.

Effects of physician ownership of hospitals on Medicare expenditures in the market
This study examines the effect of physician-owned hospitals (POHs) on Medicare per enrollee expenditures at the metropolitan area (MSA) level nationwide, spanning the 8-year time period from 1998 to 2005. The study uses fixed effects panel data estimation with instrumental variables to account for the bias introduced by endogenous POH market entry (i.e., POHs may be more likely to open in high-growth/high-demand markets with high levels of Medicare per enrollee expenditures). After controlling for other variables that are likely to affect expenditures (especially the age and sex distribution of the MSA), we find no association between POH presence and Medicare expenditures per enrollee at the MSA level. The results are robust to changes in model specification, estimation technique, and definition of geographic market. These findings suggest that the “demand inducement” aspects of physician ownership of acute care hospitals (if any) have no meaningful impact on market-level Medicare expenditures per enrollee. Read more on The Effects of Physican Owned Hospitals on Medicare Expenditures.

Economic impact of ambulatory surgery centers (ASCs)
These were a series of projects where we calculated the economic impact of ASCs on the state and national economy. We use an economic method referred to as “input-output” analysis. These models describe each state’s economy as a series of inter-linked industries and sectors. A stimulus to one sector, such as a new firm or cluster of firms, impacts all other sectors in the economy, to varying degrees, through a “multiplier effect.” We use survey data on ASC employment and operating expenditures verified by external data sources to calculate the economic impact of all ASCs nationally and for each state. Read more on The Economic Impact on Ambulatory Surgery Centers in Washington.

Analysis of physician and health plan market structure in California
This project described the market structure of managed care organizations and physician organizations in California, a state with high levels of managed care penetration and selective contracting. We calculated Herfindahl-Hirschman (HHI) concentration indices for MCOs and POs in 42 California counties and estimated a multivariable regression model to examine the relationship between concentration measures and the prices paid by MCOs to POs. Multivariate price models suggest that PO concentration is associated with higher physician prices (p ≤ 0.05), whereas MCO concentration does not appear to be significantly associated with higher outpatient commercial payer prices. Read more on The Effect of Physician and Health Plan Market Concentration on Prices in Commercial Health Insurance Markets.

Creation of web-based tool to calculate the impact of proposed tobacco tax increase
Estimates of the projected health effects of a $1 per pack increase in the California state cigarette excise tax are developed for each county in California, as well as the state of California as a whole, for the total population and for selected age and racial/ethnic groups. These projected health effects are based on historical associations between: 1) tobacco excise tax increases and retail cigarette prices; 2) cigarette prices and patterns of smoking behavior – specifically “quits” among current smokers and “starts averted” among current non-smokers; and 3) cigarette smoking status and life-expectancy or mortality.

Evaluation of the impact of a closing of a state hospital
This project required the development of a client, family, and provider questionnaire to be administered to individuals discharged from a closed state hospital. Survey data were merged with state administrative data to create an analytic file. The main objective of the analysis was to provide a quantitative and qualitative assessment of the impact of the closure.

Cost effectiveness of a public awareness campaign for a government payer service offering
We collaborated with a large national public relations firm to provide an economic evaluation component of a larger program-level evaluation of the public awareness of some subcomponents of a government health care program.