Local Insurance Research Articles

Individual Market Volatility and Vulnerability, 2015 to 2019

The Affordable Care Act (ACA) introduced large changes to the individual market for health insurance. Using 2015–2019 HIX Compare and geographic-specific data, this study examines the volatility and vulnerability of local insurance markets using insurer participation and premium information. The study also examines how markets with higher volatility and vulnerability differ from others with respect to demographics, labor market conditions, health status, provider supply, and state policies. Entry and exit patterns suggest decreasing volatility, but forty-eight million Americans reside in markets that are vulnerable, given limited competition and high premiums.

Effect of social integration on the establishment of health records among elderly migrants in China: a nationwide cross-sectional study

ObjectivesEssential public health service use among the migrants is the key obstacle of the equalisation of public health service in China. This study aims to investigate the status of the...

ACTUARIAL APPLICATIONS OF WORD EMBEDDING MODELS

AbstractIn insurance analytics, textual descriptions of claims are often discarded, because traditional empirical analyses require numeric descriptor variables. This paper demonstrates how textual data can be easily used in insurance analytics. Using the concept of word similarities, we illustrate how to extract variables from text and incorporate them into claims analyses using standard generalized linear model or generalized additive regression model. This procedure is applied to the Wisconsin Local Government Property Insurance Fund (LGPIF) data, in order to demonstrate how insurance claims management and risk mitigation procedures can be improved. We illustrate two applications. First, we show how the claims classification problem can be solved using textual information. Second, we analyze the relationship between risk metrics and the probability of large losses. We obtain good results for both applications, where short textual descriptions of insurance claims are used for the extraction of features.

Maybe It's Time to Rethink Freestanding Emergency Departments.

Maybe It's Time to Rethink Freestanding Emergency Departments.

Utilization and expenses of outpatient services among tuberculosis patients in three Chinese counties: an observational comparison study

BackgroundThe China-Gates TB project Phase II implemented case-based payment reform in three Chinese counties in 2014, designed specifically for patients diagnosed with Tuberculosis (TB). This study aimed to examine the changes in utilization and expenses of outpatient services before and after the reform implementation, among TB patients in the three counties in China.MethodsWe collected quantitative data using surveys in 2013 (baseline year) and 2015 (final year). We used outpatient hospital records to measure service utilization and medical expenses of TB patients. We conducted qualitative interviews with local health authorities, officers of health insurance agencies, and hospital managers (n = 18). We utilized three focus group discussions with hospital staff and TB doctors and nurses. The χ2 tests and Mann-Whitney U tests were used to analyse quantitative data, and the thematic analysis using a framework approach was applied to analyse qualitative data.ResultsDantu and Yangzhong counties enacted TB-specific case-based payment method in 2014. Jurong County maintained global budget payment but raised the reimbursement rate for TB care. Compared to the baseline, the percentage of TB patients in Dantu and Yangzhong with eight or above outpatient visits increased from 7.5 to 55.1% and from 22.1 to 53.1% in the final survey, respectively. Jurong experienced the opposite trend, decreasing from 63.0 to 9.8%. In the final survey, the total outpatient expenses per patient during a full treatment course in Dantu (RMB 2939.7) and Yangzhong (RMB 2520.6) were significantly higher than those in the baseline (RMB 690.4 and RMB 1001.5, respectively), while the total outpatient expenses in Jurong decreased significantly (RMB 1976.0 in the baseline and RMB 660.8 in the final survey). Health insurance agencies in Dantu and Yangzhong did not approve the original design with outpatient and inpatient expenses packaged together, revealed by qualitative interviews. Furthermore, staff at designated hospitals misunderstood that health insurance agencies would only reimburse actual expenses. Many TB doctors complained about their reduced salary, which might be due to decreased hospital revenue generated from TB care after the payment method reform.ConclusionsThe intended effect on cost containment of case-based payment was not evident in Dantu and Yangzhong. In Jurong, where the global budget payment system maintained with the reimbursement rate enhanced, we found an effect on cost containment, but the quality of TB care might be compromised. The TB-specific case-based payment method could be redesigned to combine payment on outpatient and inpatient expenses and to set an appropriate payment standard for TB care during a full treatment course. Local health insurance agencies have to provide explicit explanations on the payment method. TB care providers should be provided with proper incentives. Monitoring and evluaiton on the quality of TB care should be undertaken at regular intervals.

Impact of local health insurance schemes on primary care management and control of hypertension: a cross-sectional study in Shenzhen, China

BackgroundIn China, the local health insurance coverage is usually related to timely reimbursement of hypertensive care in primary care settings, while health insurance that is not local could represent an...

Cross-Sectional Study on the Management and Control of Hypertension Among Migrants in Primary Care: What Is the Impact of Segmented Health Insurance Schemes?

BackgroundInformation is scarce regarding the impact of fragmented health insurance schemes on the management and control of hypertension among migrants in primary care. This study aimed to investigate the relationship between insurance status and management and control of hypertension among migrants in primary care and to examine whether social capital could facilitate migrants’ participation in local health insurance schemes.Methods and ResultsA site‐based, cross‐sectional, face‐to‐face patient survey was administered in Shenzhen, China. Hypertensive primary care users who were migrants were selected using a systematic sampling design. The participants covered by local health insurance schemes were more likely than those without coverage to be managed by primary care facilities (82.6% versus 62.0%; odds ratio=2.63, 95% CI 1.41‐4.89) and to take antihypertensive medications (87.9% versus 76.4%; odds ratio=2.38, 95% CI 1.34‐4.24), and they had higher scores in first contact use (3.49 versus 3.23; β=0.17, 95% CI 0.05‐0.29) and continuity of care (3.17 versus 3.02; β=0.11, 95% CI 0.01‐0.21). The participants covered by local insurance schemes had higher scores in perceived generalized trust than their counterparts (4.23 versus 3.95; β=0.16, 95% CI 0.09‐0.40). The hypertension control rate was also higher among the participants with local health insurance coverage (48.8% versus 42.2%; odds ratio=1.38, 95% CI 1.02‐2.12).ConclusionsIn conclusion, local health insurance schemes are associated with optimal control of hypertension for migrants compared with social health insurance schemes. Our study implies that one form of social capital, namely perceived general trust, contributes to migrant hypertensive patients’ participation in local health insurance schemes.

Immigrants’ access to care under the Affordable Care Act: An examination of California

ABSTRACT Background: Welfare provision for noncitizens has been at the center of political debates. Understanding how Californian noncitizens and undocumented immigrants access health care would provide useful information to guide health policies. Method: The neighborhood-level Census data were used to learn the factors related to insurance coverage. LA County is identified as a case study to understand the status quo of health care access for noncitizen immigrants. Data from the Center for Migration Studies was used to derive the unmet demand of My Health LA, a county program that aims to cover the uninsured. Result: Two main factors that predict the extent of local insurance coverage, especially for noncitizens, are the percentage of Latino foreign-born and their chance of naturalization. The paper also finds that in 2014, approximately 61% of undocumented immigrants and 49% of noncitizens were uninsured in LA county, compared with less than 20% for citizens. Conclusion: Improving health care access among the undocumented would effectively reduce overall uninsured rates. This study advocates expanding county indigent programs to achieve higher health care coverage of the undocumented. Using lower-bound estimates, if My Health LA were to cover the entire potential patient pool, the cap must be increased by approximately 60%.

Analysis of direct settlement of non-local patients′ medical insurance at a tertiary hospital in Tianjin

Objective To analyze the patient information and hospitalization of non-local patients whose medical expenses will be directly settled with their local medical insurance network by a tertiary hospital in Tianjin, and to suggest on further development of direct settlement of medical insurance networking for non-local patients in Tianjin. Methods A retrospective analysis was made on the data of 1 068 non-local patients whose medical expenses were directly settled via medical insurance network from September 2017 to September 2018. Results The majority of non-local patients came from Hebei province, mostly over 51 years old; these inpatient focus on the renown key disciplines such as urology and cardiology; about a half of them were surgical patients; the proportion of patients with chronic diseases was high.These non-local patients in Tianjin feature higher age, more hospitalizations, lower self-paid expenses and lower overall hospitalization costs. Conclusions We should strictly control the referral system of non-local patients, strengthen medical support to areas of poor medical conditions, strengthen the hierarchical medical system; enhance the publicity of non-local patient online settlement and policy awareness, and simplify the filing process.It is also important to enhance network construction and data stability. Key words: Insurance, hospitalization; Direct settlement; Hierarchical medical system; Supervision and management

Toward Human-Centered Urbanization? Housing Ownership and Access to Social Insurance Among Migrant Households in China

For the past few years, China’s urbanization policy has focused on expanding welfare and affordable housing for rural migrants so as to encourage them to put down roots in the city. The international literature disagrees on the relationship between homeownership and welfare—whether the former is a substitute for or a consequence of the latter. Using multilevel logistic regression on a 2015 nationally representative survey, this paper explores the determinants of housing ownership among China’s rural migrant households in their city of residence, focusing particularly on access to urban social insurance. The results show that institutional ties to the city such as enrollment in local pensions and health insurance are associated with higher likelihood of homeownership. This paper argues that policy interventions should target the social security system, as rural migrants are likely unwilling or unable to invest in urban housing due to the increased risk and precarity they typically experience. The findings also suggest that to make urbanization more sustainable, the government should aim at making cities more family-friendly, expanding alternatives to employment-based social insurance schemes, and targeting efforts on interior cities in migrant-sourcing provinces that pose fewer barriers to permanent settlement.

Tackling the Burden of Blindness in Ogun State, Nigeria: The Success of Private / Public Partnerships

Primary Health Centres in Nigeria and particularly Ogun state have suffered serious neglect over the years. A private / public partnership together with private health /education partnership have strengthened government health systems, developing a sustainable model for delivery of eye services to the most indigent. Over the last four years, in Ogun state, screening for cataract alone has increased in fourfold and the number of cataracts surgeries performed, threefold. However, ongoing subsidising of surgeries may be needed until local health insurance schemes or other ways of financing eye care become reliable. Tackling health beliefs about eye care remain one of the main barriers to uptake of services.

Impacts of Hospital Payment based on Diagnosis Related Groups (DRGs) with Global Budget on Resource Use and Quality of Care: A Case Study in China

China has implemented numerous pilots to shift its hospital payment mechanism from the traditional retrospective cost-based system to prospective diagnosis-related-group (DRG) -based system. This study investigated the impact of the DRG payment reform with global budget in Zhongshan, China. A total of 2895 patients diagnosed with acute myocardial infarction (AMI) were selected from local two largest tertiary hospitals, among which 727 were discharged prior to the payment reform and 2168 afterwards. Difference-in-difference (DID) regression models were used to evaluate the policy effects on patients' percutaneous coronary intervention (PCI) use, hospital expenditures, in-hospital mortality, and readmission rates within 30 days after discharge. Patients' PCI use and hospital expenditures increased quickly after the payment reform. With patients with no local insurance scheme as reference, PCI use for local insured patients decreased significantly by 4.55 percent (95 percent confidence interval [CI]: 0.23, 0.72), meanwhile the total hospital expenses decreased significantly by US$986.10 (b=-0.15, P=0.0037) after reform. No changes were observed with patients' hospital mortality and readmission rates in our study. The innovative DRG-based payment reform in Zhongshan suggested a positive effect on AMI patient's cost containment but negative effect on encouraging resource use. It had no impacts on patients' care quality. Cost shifting consequence from the insured to the uninsured was observed. More evidence of the impacts of the DRG-based payment in China's health scenario is needed before it is generalized nationwide.

The integration of local government, residents, and insurance in coastal adaptation: An agent-based modeling approach

Previous evaluation of flood risk overlooks the behavior and capacity of private stakeholders, thus limiting the application of adaptation policies. This study presents an agent-based model, applied to Miami-Dade County, FL, as the case study, to explore the public and private interaction in coastal flood adaptation and mitigation. The decision making of individuals' adaptive behavior is simulated based on the prospected theory under households' risk perception, insurance policies, and the local flood mitigation. The NFIP and private insurance policy are simulated separately to reflect the flood insurance market. Our results show that households' risk mitigation behaviors are clustered in high-risk coastal areas, including Miami-Beach and the east coast of the County. The overall flood risk is still high in the southern part of the County. To better reflect the flooding risk and address the affordability issue, a voucher coupled house elevation program could improve the insurance take-up rates as well as reduce the overall flood risk in the area. Results also indicate that private insurance would slightly increase if the NFIP's insurance rates increase. Afterward, four adaptation scenarios in response to future sea level rises are examined by considering the voucher-based insurance program and the local adaptation actions. Compared with the high-risk reduction but low coverage mitigation plan, more extensive coverage of public adaptation would better improve the overall adaptation outcome of the County, which indicates the importance of public participation in local risk mitigation and urban governance.

Nonparametric Estimation of Copula Regression Models With Discrete Outcomes

Multivariate discrete outcomes are common in a wide range of areas including insurance, finance, and biology. When the interplay between outcomes is significant, quantifying dependencies among interrelated variables is of great importance. Due to their ability to accommodate dependence flexibly, copulas are being applied increasingly. Yet, the application of copulas on discrete data is still in its infancy; one of the biggest barriers is the nonuniqueness of copulas, calling into question model interpretations and predictions. In this article, we study copula estimation with discrete outcomes in a regression context. As the marginal distributions vary with covariates, inclusion of continuous regressors expands the region of support for consistent estimation of copulas. Because some properties of continuous outcomes do not carry over to discrete outcomes, specification of a copula model has been a problem. We propose a nonparametric estimator of copulas to identify the “hidden” dependence structure for discrete outcomes and develop its asymptotic properties. The proposed nonparametric estimator can also serve as a diagnostic tool for selecting a parametric form for copulas. In the simulation study, we explore the performance of the proposed estimator under different scenarios and provide guidance on when the choice of copulas is important. The performance of the estimator improves as discreteness diminishes. A practical bandwidth selector is also proposed. An empirical analysis examines a dataset from the Local Government Property Insurance Fund (LGPIF) in the state of Wisconsin. We apply the nonparametric estimator to model the dependence among claim frequencies from different types of insurance coverage. Supplementary materials for this article are available online.

Comparing Canadian and United States opioid agonist therapy policies

Canada and the United States (U.S.) face an opioid use disorder (OUD) and opioid overdose epidemic. The most effective OUD treatment is opioid agonist therapy (OAT)—buprenorphine (with and without naloxone) and methadone. Although federal approval for OAT occurred decades ago, in both countries, access to and use of OAT is low. Restrictive policies and complex regulations contribute to limited OAT access. Through a non-systematic literature scan and a review of publicly available policy documents, we examined and compared OAT policies and practice at the federal (Canada vs. U.S.) and local levels (British Columbia [B.C.] vs. Oregon). Differences and similarities were noted between federal and local OAT policies, and subsequently OAT access. In Canada, OAT policy control has shifted from federal to provincial authorities. Conversely, in the U.S., federal authorities maintain primary control of OAT regulations. Local OAT health insurance coverage policies were substantively different between B.C. and Oregon. In B.C., five OAT options were available, while in Oregon, only two OAT options were available with administrative limitations. The differences in local OAT access and coverage policies between B.C. and Oregon, may be explained, in part, to the differences in Canadian and U.S. federal OAT policies, specifically, the relaxation of special federal OAT regulatory controls in Canada. The analysis also highlights the complicating contributions, and likely policy solutions, that exist within other drug policy sub-domains (e.g., the prescription regime, and drug control regime) and broader policy domains (e.g., constitutional rights). U.S. policymakers and health officials could consider adopting Canada’s regulatory policy approach to expand OAT access to mitigate the harms of the ongoing opioid overdose epidemic.

Probabilistic earthquake loss model for residential buildings in Tehran, Iran to quantify annualized earthquake loss

In this study, a comprehensive loss model using the most recent census data (2016) together with the updated earthquake catalog (till 2018) is employed to estimate the direct expected annualized loss of residential buildings in Tehran, Iran. This is an important parameter to determine insurance premium or to identify relative risk in a region. For this purpose, a fully probabilistic seismic loss model based on the stochastic event-based approach is adopted. The assessment includes the development of a robust approach to quantify the seismic hazard by taking into account dynamic soil response, compiling a high quality exposure of residential building and considering the most appropriate vulnerability models for different building classes. The result shows that average annual loss of building stock is around $0.331 billion which is about 0.29% of total exposed economic value. Also, the relative risk map of the region is presented in term of the annualized earthquake loss ratio. It demonstrates that the seismic risk in the middle and southern part of the city are much higher. In addition, a disaggregation analysis regarding the building typologies is performed to identify the most vulnerable building classes. The result indicates that the masonry and low quality steel and concrete structures with poor designing specification are the most vulnerable building classes. Majority of the buildings in southern part of Tehran are of these types, where accommodating low-income residents. The finding from this study can be used by local authorities, government and insurance sector in order to develop effective risk mitigation plans and a robust insurance scheme for Tehran, Iran. In addition, the presented approach can be applied in other cities with different socio-economic conditions.

Invited commentary

In their article, “Variability in hospital costs for carotid artery revascularization,” Drs Mell and colleagues examined variations in hospital costs for patients undergoing carotid revascularization at a regional referral center in California. The found that costs were lower in asymptomatic patients by more than a third; that surgeon specialties who commonly perform carotid revascularization tended to have lower costs; and that operating room expenses, such as devices, supplies, and materials, made up more than three-quarters of the expenses surrounding the episode of care. They argue that the variations in cost are an opportunity for efficiency and cost reduction in the care of carotid disease, especially by improving structural aspects of care in the hospital system. This is an important paper that highlights an important problem in health care in America—prices in health care. This is a paper about cost. The word “cost” appears in the title, in fact. Yet not a single dollar amount appears in the results of the manuscript. All metrics of cost, although well analyzed, have been hidden in relative cost contributions. Why? The authors thought that sharing direct cost data “may have a negative impact on local insurance contract reimbursement.” Keeping cost data opaque, the authors argue, “is common and prudent business practice for hospitals.” Many, I suspect, will respectfully disagree. Whereas it may be “common and prudent” for hospitals to not disclose their prices, keeping cost data secret does little to help surgeons and their patients. Opaque prices prevent surgeons from collaborating to strengthen their position during negotiations. For example, when Stone and colleagues shared the costs of endovascular abdominal aortic aneurysm devices with hospitals, manufacturers, and surgeons, they achieved a 10% reduction in overall costs just by sharing data.1Stone D.H. Horvath A.J. Goodney P.P. Rzucidlo E.M. Nolan B.W. Walsh D.B. et al.The financial implications of endovascular aneurysm repair in the cost containment era.J Vasc Surg. 2014; 59: 283-290, 290.e1Abstract Full Text Full Text PDF PubMed Scopus (55) Google Scholar, 2Warner C.J. Horvath A.J. Powell R.J. Columbo J.A. Walsh T.R. Goodney P.P. et al.Endovascular aneurysm repair delivery redesign leads to quality improvement and cost reduction.J Vasc Surg. 2015; 62: 285-289Abstract Full Text Full Text PDF PubMed Scopus (15) Google Scholar Similarly, European vascular care regularly involves transparent pricing to keep implantable prices low and to aid in negotiations with device manufacturers.3Sorenson C. Drummond M. Burns L.R. Evolving reimbursement and pricing policies for devices in Europe and the United States should encourage greater value.Health Aff (Millwood). 2013; 32: 788-796Crossref PubMed Scopus (17) Google Scholar Vascular surgery is an expensive specialty. We provide largely palliative procedures to the sickest patients, many of whom are cared for by Medicare or Medicaid programs. It is our duty to be good stewards of the public funds that underwrite the very care we provide. Transparency can only aid in this effort, both for our specialty and for our patients. The opinions or views expressed in this commentary are those of the author and do not necessarily reflect the opinions or recommendations of the Journal of Vascular Surgery or the Society for Vascular Surgery. Variability in hospital costs for carotid artery revascularizationJournal of Vascular SurgeryVol. 69Issue 2PreviewThe objective of this study was to understand drivers of cost for carotid endarterectomy (CEA) and carotid artery stenting (CAS) and to compare variation in cost among cases performed by vascular surgery (VS) with other services (OSs). Full-Text PDF Open Archive

Long-term care reform in Germany – at long last

Abstract Demographic and societal changes make it more and more indispensable to protect against the risk of care costs surpassing a person’s financial means. Nevertheless, only few governments have acted to create public funding systems that, if existent at all, usually only cover part of the expenses for elder care. Long-term care insurance (LTCI) is designed to fund basic care needs in later life, such as washing and dressing. Regardless of where individuals receive this support in old age, how it is funded is a growing issue. In many countries, people may augment their compulsory state system with private policies available from insurance companies. In Germany, a well-established public system that underwent major reforms exists. From 2017 onwards, a completely new care definition and assessment process replaced the former ones. Two major changes constitute the reform: First, when evaluating the need for care, the former focus on estimating the length of time required for care was replaced by the determination of the degree of independence. Second, cognitive impairments will be acknowledged more adequately than in the past, where the focus was on physical abilities. Furthermore, the contribution to be paid by the care recipient in a nursing home will no longer be dependent on the severity of the care need. In Germany, private LTC products used a combination of the social security definition, an ADL-based trigger and a dementia trigger until the end of 2016. Thus, the reform has repercussions for the local private insurance industry. What would happen to in-force business, how a new benefit trigger should look like, how old and new definition compare and how pricing rates can be derived were only some of the questions that had to be answered in advance. The reform could point the way for future public schemes and private policies elsewhere. Which questions had to be answered and what issues had to be solved in advance, together with lessons learned during and shortly after the reform was undertaken, can serve as an accompaniment for the introduction or reform of public LTC schemes and for the local insurance industry in other countries.

'Examining the Impact of Health Care Consolidation' Statement before the Committee on Energy and Commerce, Oversight and Investigations Subcommittee, U.S. House of Representatives

• The U.S. health care system is based on markets. The system will work only as well as the markets that underpin it. • These markets do not function as well as they could, or should. Prices are high and rising, there are incomprehensible and egregious pricing practices, quality is sub-optimal, and the sector is sluggish and unresponsive, in contrast to the innovation and dynamism which characterize much of the rest of our economy. • Lack of competition has a lot to do with these problems. • There has been a great deal of consolidation in health care. There have been 1,519 hospital mergers in the past twenty years, with 680 since 2010. The result is that many local areas are now dominated by one large, powerful health system, e.g., Boston (Partners), Pittsburgh (UPMC), and San Francisco (Sutter). • Insurance markets are also highly consolidated. The two largest insurers have 70 percent of the market or more in one-half of all local insurance markets. • Physician services markets have also become increasingly more concentrated. Two-thirds of specialist physician markets are highly concentrated, and 29 percent for primary care physicians. There have been a very large number of acquisitions of physician practices by hospitals, so much so that 33 percent of all physicians, and 44 percent of primary physicians are now employed by hospitals. • Extensive research evidence shows that consolidation between close competitors leads to substantial price increases for hospitals, insurers, and physicians, without offsetting gains in improved quality or enhanced efficiency. Further, recent evidence shows that mergers between hospitals not in the same geographic area can also lead to increases in price. Just as seriously, if not more, evidence shows that patient quality of care suffers from lack of competition. • This is causing serious harm to patients and to the health care system as a whole. • Policies are needed to support and promote competition in health care markets. This includes policies to strengthen choice and competition, and ending distortions that unintentionally incentivize consolidation. • These include: – Focus and strengthen antitrust enforcement. – End policies that unintentionally incentivize consolidation. – End policies that hamper new competitors and impede competition. – Promote transparency, so employers, policymakers, and consumers have access to information about health care costs and quality.

Predictive analytics of insurance claims using multivariate decision trees

Abstract Because of its many advantages, the use of decision trees has become an increasingly popular alternative predictive tool for building classification and regression models. Its origins date back for about five decades where the algorithm can be broadly described by repeatedly partitioning the regions of the explanatory variables and thereby creating a tree-based model for predicting the response. Innovations to the original methods, such as random forests and gradient boosting, have further improved the capabilities of using decision trees as a predictive model. In addition, the extension of using decision trees with multivariate response variables started to develop and it is the purpose of this paper to apply multivariate tree models to insurance claims data with correlated responses. This extension to multivariate response variables inherits several advantages of the univariate decision tree models such as distribution-free feature, ability to rank essential explanatory variables, and high predictive accuracy, to name a few. To illustrate the approach, we analyze a dataset drawn from the Wisconsin Local Government Property Insurance Fund (LGPIF)which offers multi-line insurance coverage of property, motor vehicle, and contractors’ equipments.With multivariate tree models, we are able to capture the inherent relationship among the response variables and we find that the marginal predictive model based on multivariate trees is an improvement in prediction accuracy from that based on simply the univariate trees.