Systemic Overuse of Health Care in the Privately Insured

Overuse is the provision of care where the potential for harm exceeds the potential for benefit. Overuse is a leading contributor to the high cost of the US health care system and is often physically and psychologically harmful to patients. It is a definitive misuse of resources; this wasteful utilization helps to explain why health care spending is inconsistently associated with measures of health care quality. More is not always better. The identification and elimination of overused services could improve health outcomes and reduce spending. This dissertation explores several aspects of overuse: measurement, geographic variation, trends over time, structural drivers, and the effect of an alternative payment model. The first paper describes a method for developing an index to measure overuse in commercially insured adults. Drawing from previously published research, I develop 19 claims-based measures of overused services to estimate systemic overuse. Applying this index to MarketScan claims, I find significant geographic variation in systemic overuse. Across the country, rural regions tended to have less systemic overuse than their Metropolitan Statistical Area (MSA) counterparts. Regional patterns of systemic overuse were consistent between 2011 and 2015. The second paper examines the relationship between the structural factors of the health care delivery system and regional differences in systemic overuse. I find that systemic overuse is associated with observable, structural characteristics of the regional health care system, such as the supply of primary care physicians and hospital and insurer market competition. These findings raise concerns about how the differential supply of health care resources might impact practice styles and affect wasteful utilization, both across the country and within each state. The third paper analyzes the effect of the Maryland global budget program on systemic overuse. In a difference-in-differences analysis, I compare systemic overuse between MSAs in Maryland and a matched sample of MSAs outside of Maryland, before (2011-2013) versus after (2014-2015) the global budgets began. I did not find any evidence that Maryland hospitals met their budgets via an overall reduction in overuse. This finding was inconsistent with the hypothesis that alternative payment models with global budgets can broadly discourage overuse; several possible explanations for this null effect are discussed