What can Centers for Medicare do better?

An extensive CMS Medicare Data exploration.

Deep analysis in terms of Cost, Accessibility, and Area of Focus to make medicare more beneficial to the US Population.

Tools
Google BigQuery
MySQL
Excel
Tableau
Python

Roles
Data Analyst
Business Analyst

Scope
‍3 months

Tags
Data Analytics

The basic version of Medicare, Medicare A, only covers about 🥃 half of what patients owe for a given hospital visit.
So how is the other half covered?
Beneficiaries are forced to 💰 buy additional private or public health insurance plans or 🤒 suffer with inadequate health insurance.
Medicare is the federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant, sometimes called ESRD).

There are four parts to medicare: 
  • Part A provides inpatient and hospital coverage
  • Part B provides outpatient and medical coverage
  • Part C offers an alternate way to receive your Medicare benefits
  • Part D provides prescription drug coverage
I wanted to take a closer look at the trends in patient outcomes and charges over time when they were treated through Medicare, as well as where Medicare should expand its coverage to help the most amount of patients.

The dataset used was the cms_medicare dataset on GoogleBigQuery. This public dataset was created by the Centers for Medicare & Medicaid Services and contains data for inpatients and outpatients service charges, and prescribed drug claims.

Here are some relevant terminologies you should familiarize yourself with before diving deeper into the analysis:
🥼 Inpatient
Inpatient care is the care of patients whose condition requires admission to a hospital.
👕 Outpatient
Outpatient care is a broad category that generally provides all other services to patients that are not given within a hospital setting. Also called ambulatory care, these services include wellness and prevention services, diagnostic services, treatments, and rehabilitation. Progress in modern medicine and the emergence of comprehensive outpatient clinics ensure that patients are now only admitted to a hospital as an inpatient when they are extremely ill or have severe physical trauma.
🏥 Skilled Nursing Facility (SNF)
A skilled nursing facility (SNF) has trained medical professionals and is an in-patient rehabilitation and medical treatment center. They provide different care including: medically-necessary services of licensed nurses, physical and occupational therapists, speech pathologists, and audiologists.
💸 Deductible
A deductible is the amount of money that is paid for covered services by the insured before an insurance company will pay a claim.
💵 Premium
A premium is the amount that is paid every month for one’s health insurance. In addition to the premium, other costs for health care that have to be paid include a deductible, copayments, and coinsurance.

Who this is for

🏥 Center for Medicare
🚑 Medicaid Services
♥️ Healthcare Providers
👨‍👩‍👧‍👦 Healthcare Beneficiaries

In a Nutshell 🌰 ...

I want to find out
Where should Medicare expand its coverage to help the most beneficiaries?
But since the question is so broad, let's further break it down into smaller parts.
1.
💰 Cost
How can Medicare reduce the out-of-pocket costs for patients already covered?
2.
🗺 Access
How can Medicare improve access to different treatment options and medical facilities?
3.
🔍 Focus
Does Medicare need to improve coverage for its patients and the most prevalent diseases in America? 

💰Cost

Initial Findings

Percentage of Inpatient vs. Outpatient Costs Covered by Medicare

Since inpatient visits involve an overnight stay, these visits are far more expensive and hit the deductible much faster, so Medicare has to cover a greater percentage of these visit costs.

Out of Pocket Costs Over Time vs. medicare plan a deductible

Despite Medicare covering a larger percentage of inpatient visits, patients are still paying almost as much for outpatient stays as they are for inpatient. This suggests that outpatient procedures often cost around the Medicare deductible value, so Medicare covers a smaller percentage of the outpatient visit cost.

As years pass, the gap between Medicare A deductible and both types of out of pocket costs over time has drastically widened. As the Medicare A deductible increases steadily, out of pocket costs grows at a much faster rate. This is problematic because when the deductible for Medicare A is continuously high, seniors are often forced to buy other private or public health insurance plans, which require the insured person to pay monthly premiums. Either way, beneficiaries risk reduced coverage or paying greater premiums, resulting in increased out of pocket costs.

Medicare Coverage for Most Popular Conditions over Time

Medicare coverage has been steadily declining over the last 5 years even for the most popular conditions. And although the list of conditions covered most likely grew, there is still much room for improvement in terms of how much of the bill is covered by Medicare.

Let's 🏄 Dive a Little Deeper.

What factors affect patient costs the most?

I created two linear regression models in Python to predict out of pocket costs for either inpatient or outpatient visits based on factors such as the treatment location, condition being treated, what year the treatment occurred, and how much of the treatment was covered by Medicare.

To evaluate the models, I used the statsmodel.api library in Python to carry out an Ordinary Least Squares (OLS) regression.
Conditions to be Statistically Significant
High F-Statistic
If p-value < 0.01 👉 Statistically Significant
High Correlation Variables
🤒 Condition Being Treated
📆 Year of treatment
🥼 Inpatient OLS Model
 👕 Outpatient OLS Model
High Correlation Variables
🤒 Condition Being Treated

So what should medicare do?

a.
Tackle the disproportionate allocation of cost percentages between inpatients & outpatients.
Restructure costs allocation, distributing more of the percentage costs to outpatients.
b.
Decrease Medicare A's high deductible.
This will make Medicare A more accessible to seniors, preventing them from having to pay greater premiums charged by other insurance plans, counteracting the disparity between out of pocket costs and plan deductible.
c.
Give more weight in terms of coverage to most popular conditions.
According to the OLS Models, Condition Being Treated seems to be the most significant factor in predicting out of pocket costs. Giving more coverage towards most popular conditions ensures that the plan will be reducing out of pocket costs for as many patients as possible.

🗺 Access

Let's zoom out for a moment and look at healthcare as a whole. 🔍

So, if i move from california to new york, will I have access to exactly the same healthcare plan?

To look at accessibility by location, I joined the CMS medicare dataset with the Census Bureau dataset to get more information on demographics (i.e. population).

I started by querying simple ratios such as People per Facility, People per Doctor, Tendency for a Doctor to Prescribe Medication per state, and Percentage of Total SNF Payment to Charged Amount.

After a few queries, I realized that accessibility can be interpreted in so many different ways. To evaluate how “accessible” each state truly is, I  first have to define the dimensions that make up accessibility holistically.
Here's my interpretation of accessibility with four dimensions, which I will further break down into crucial metrics: 
1.
Affordability
Metrics:
💵 Individuals with high-out-of-pocket medical spending (% of population)
⛔️ Adults who went without care because of cost (% of population)
2.
Reachability
Metrics:
⏱ Timeliness of care (national comparison to average)
👩‍⚕️ Skilled practitioners per capita
🏥 Facilities per capita
⏳ Average emergency room wait times (minutes)
🚬 Adults who smoke (% of population)
💯 HCC Score
3.
Quality (of Treatment)
Metrics:
💝 Patient experience (national comparison to average)
💊 Nursing home resident with an antipsychotic medication (% of total nursing homes by State)
4.
Outcome
Metrics:
👴 Life expectancy (years)
👍 Effectiveness of care (national comparison to average)
💉 Readmission rate (national comparison to average)
Since the unit of measurement vastly differed, I normalized each metric, converting the data series into a 0 to 1 unitless scale, where 0 would be allocated to the minimum value and 1 would be allocated to the maximum value.

These normalized metrics are then weighted according to their importance, and these weighing are used to calculate a final accessibility score for each state out of 100.

For more information on the weighing and score breakdown, methodology, and full analysis, 👉 follow this link 👈.‍‍

It turns out that no two states have the same accessibility score.

Heat map of US states ranked in terms accessibility score

Top vs. Bottom 5 States in terms of Accessibility Scores with Breakdowns of Affordability, Reachability, Outcome, and Quality Scores

Dimensional heat maps, ranked by weighted score

Darker colors 👉 Higher Scores

Geographic disparities in healthcare accessibility persists.

The highest-ranked state performs more than two times better
‍ overall than the lowest-ranked state.
So, where we live can affect both our ability to access high-quality healthcare, as well as its affordability. With the top performing state scoring almost 30 points off the full mark, it's clear that all states can work to improve their health care accessibility.

Taking a closer look at each metric individually, I noticed how states that ranked lower overall can still perform better in individual metrics. This suggests that even the lower-ranking states have something to teach. Vast progress towards healthcare accessibility could be made if different states learn from one another. The Center for Medicare and Medicaid services can assess these information and assess the specific weaknesses of each state, in terms of access to quality health care, and implement special Medicaid programs to target these problems.

So what should healthcare and medicare providers do?

a.
States with higher total accessibility score share their healthcare system to their subordinates, who are open and ready to implement the system.
This shared network of data from state to state will remedy and balance out the unequal distribution in accessibility.
b.
States with a higher particular metric score communicate their methods and models regarding that metric to other states.
With the top state scoring 30 points off the full mark, states with overall higher accessibility scores shouldn't be the sole provider for information to lower scoring states.
States with lower total score that do extremely well on a certain metric also have meaningful information to share.
c.
Have a central measure for accessibility that can be compared against one another (i.e. dimensions and metrics).
Currently, there are no centralized measure to compare healthcare accessibility between states. With a centralized measure and dataset, we can easily pinpoint which states are performing ahead of others and which are falling behind.

🔍 Focus

During Cost Analysis, I found that the most prevalent diseases found amongst Medicare beneficiaries consist of Septicemia, Simple Pneumonia, and Heart failure and shock.
🩸 Septicemia
Septicemia is a serious bloodstream infection that is treated by pipercilin/tazotactam, ceftriaxone, and cefepime.
👃 Simple Pneumonia
Simple pneumonia and pleurisy are infections that inflames the air sacs in one or both lungs. They are treated through anti-inflammatories such as diclofenac and celecoxib.
❤️ Heart Failure and Shock
Heart failure and shock occurs when the heart is unable to supply enough blood to the vital organs of the body. It is treated through surgery, stents, pacemakers, ablation, beta blockers, and ACE inhibitors.

Let's learn more about Medicare Part D: Drug Coverage. 💊

are Medicare beneficiaries effectively choosing a drug plan that specifically targets their particular situation?

As we found out during Cost Analysis, there has been a steady decline in coverage percentages for the top 5 common conditions by Medicare over the years.
Through further research, I found that the decline in coverage for beneficiaries could be correlated to a beneficiary’s poor choice in a Part D drug plan.
‍
"Less than 10% of individuals enroll in plans that are ex post optimal with respect to total cost (premiums and copayments)."
On average, Medicare consumers lose about
per year due to poor choices in drug plan selection.
$300
Source: National Bureau of Economic Research Paper

to be eligible for medicare part d, beneficiaries must be enrolled in either original Part A or a Medicare Advantage Plan.

The goal of Part D is to supplement existing coverage with retail prescription drug coverage through private insurance companies. Once enrolled, beneficiaries pay for Part D coverage through a multi-tiered cost structure.
🥇Tier 1: Maximum annual deductible of $445 (varies based on the specific plan).
🥈Tier 2: Initial coverage wherein beneficiaries are charged a copay for their prescription drugs based on the drugs classification.
🙈 Coverage Gap Tier: After exceeding the maximum initial coverage, beneficiaries would then pay 25% of the retail cost of the medication. After the coverage gap threshold is passed, beneficiaries begin paying 95% of drug costs.

a case where medicare part d may not be so effective

‍Patient Condition: Septicemia
Drug Used to Treat Septicemia: Piperacillin (antibiotic)
📍 Puerto Rico (PR)
📍 California (CA)
Total Available Part D Plans that include coverage for Piperacillin:
6
Total Available Part D Plans that include coverage for Piperacillin:
30
Compared to California, Puerto Rico's lack of Plan D options may be disproportionately affecting beneficiaries with the most common diseases. This issue is exacerbated when we also take into account how Puerto Rico appears to be the area with one of the lowest accessibility scores. 

So what should healthcare and medicare providers do?

a.
Improve program and provide more information for beneficiaries to navigate through Medicare Part D drug plans.
Provide additional resources that enable consumers to compare prices and resources between Medicare Part D drug plans to guide them in the right direction.
b.
Include more Medicare Part D drug plan options targeted for the most prevalent diseases.
As a result, a significant portion of Medicare patients would have more options that offer the necessary prescriptions, and, at the same time, minimize costs.

Other Sources

Next Project 👉
Let's get to know each other.
© 2020 Anyapa Tantipipatpong.  All rights reserved.