NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Savannah L. Bergquist

Harvard Medical School
Department of Health Care Policy
180 Longwood Avenue
Boston, MA 02115

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org

NBER Working Papers and Publications

April 2018Intervening on the Data to Improve the Performance of Health Plan Payment Methods
with Timothy J. Layton, Thomas G. McGuire, Sherri Rose: w24491
The conventional method for developing health care plan payment systems uses existing data to study alternative algorithms with the purpose of creating incentives for an efficient and fair health care system. In this paper, we take a different approach and modify the input data rather than the algorithm, so that the data used for calibration reflect the desired levels of spending rather than the observed spending levels typically used for setting health plan payments. We refer to our proposed method as “intervening on the data.” We first present a general economic model that incorporates the previously overlooked two-way relationship between health plan payment and insurer actions. We then demonstrate our approach in two applications in Medicare: an inefficiency example focused on underpro...
 
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