Medicaid, asthma, and ADHD caseloads

by on November 4, 2017 at 12:32 am in Data Source, Economics, Law, Medicine, Science, Uncategorized | Permalink

There is a new NBER working paper on these topics, by Anna Chorniy, Janet Currie, and Lyudmyla Sonchak, here is the abstract:

In the U.S., nearly 11% of school-age children have been diagnosed with ADHD, and approximately 10% of children suffer from asthma. In the last decade, the number of children diagnosed with these conditions has inexplicably been on the rise. This paper proposes a novel explanation of this trend. First, the increase is concentrated in the Medicaid caseload nationwide. Second, nearly 80% of states transitioned their Medicaid programs from fee-for-service (FFS) reimbursement to managed care (MMC) by 2016. Using Medicaid claims from South Carolina, we show that this change contributed to the increase in asthma and ADHD caseloads. Empirically, we rely on exogenous variation in MMC enrollment due a change in the “default” Medicaid plan from FFS or MMC, and an increase in the availability of MMC. We find that the transition from FFS to MMC explains most of the rise in the number of Medicaid children being treated for ADHD and asthma. These results can be explained by the incentives created by the risk adjustment and quality control systems in MMC.

The economics of medical diagnoses remain a drastically understudied area.

1 Steve Sailer November 4, 2017 at 12:37 am

Sounds plausible.

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2 mulp November 4, 2017 at 5:52 am

Conservatives are the ones behind going to managed care for Medicaid. They promised it would cut Medicaid costs.

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3 dearieme November 4, 2017 at 9:50 am

It’s perhaps the only universal truth in economics: “these results can be explained by the incentives …”

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4 GoneWithTheWind November 4, 2017 at 11:50 am

There is a monetary benefit to schools, parents and children to diagnose them as ADHD or with asthma. Remove the benefit, the free stuff, and the excessive diagnosis will magically disappear.

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5 MoralHazard November 4, 2017 at 6:11 pm

Why should we assume it is “excessive diagnosis”? Could be true that there were incentives for under diagnosis in the prior incentive system and now we are at the correct level of diagnosis.

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6 byomtov November 5, 2017 at 6:53 pm

Nah. That would upset the story line.

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7 Nationalist November 4, 2017 at 12:51 am

NCLB has also been identified as a culprit:

“The No Child Left Behind Act, signed into law by President George W. Bush, was the first federal effort to link school financing to standardized-test performance. But various states had been slowly rolling out similar policies for the last three decades. North Carolina was one of the first to adopt such a program; California was one of the last. The correlations between the implementation of these laws and the rates of A.D.H.D. diagnosis matched on a regional scale as well. When Hinshaw compared the rollout of these school policies with incidences of A.D.H.D., he found that when a state passed laws punishing or rewarding schools for their standardized-test scores, A.D.H.D. diagnoses in that state would increase not long afterward. Nationwide, the rates of A.D.H.D. diagnosis increased by 22 percent in the first four years after No Child Left Behind was implemented.

To be clear: Those are correlations, not causal links. But A.D.H.D., education policies, disability protections and advertising freedoms all appear to wink suggestively at one another. From parents’ and teachers’ perspectives, the diagnosis is considered a success if the medication improves kids’ ability to perform on tests and calms them down enough so that they’re not a distraction to others. (In some school districts, an A.D.H.D. diagnosis also results in that child’s test score being removed from the school’s official average.) Writ large, Hinshaw says, these incentives conspire to boost the diagnosis of the disorder, regardless of its biological prevalence.”

http://www.nytimes.com/2013/10/20/magazine/the-not-so-hidden-cause-behind-the-adhd-epidemic.html

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8 rayward November 4, 2017 at 7:28 am

My son had ADD when he was a child but was never diagnosed despite being evaluated by numerous specialists. Why? Well, he is 47 and when he was a child there was no such condition as ADD. Well, that’s not entirely accurate as ADD was first recognized in early 1900s, but wasn’t recognized by the APA in the DSM until 1968 and even then it was called hyperkinetic impulse disorder. It wasn’t until 1980 that the condition was called ADD in the DSM and wasn’t until 1987 that it was called ADHD in the DSM. In 2000, the DSM recognized three subtypes of ADHD. ADHD cases began to climb significantly in the 1990s. There may be many factors behind the rise in diagnoses, including: doctors were able to diagnose ADHD more efficiently, more parents were aware of ADHD and reported their children’s symptoms, and more children were actually developing ADHD. As for the explanation given in this study, the authors could lso find a correlation between global warming and the rise in the rise in the number of diagnosed cases of ADHD and asthma. Here’s another clue: during the great recession, income of many allergy and asthma specialists dropped significantly, as did the income of cardiologists. Why? Because cash-strapped patients and their parents elected not to see them to avoid deductibles and co-pays. Whether the transition from fee-for-service to a managed care plan affected deductibles and co-pays I don’t know, but that may well explain the rise in the diagnosed cases of ADHD and asthma in 2016. As for my son, ADHD was never mentioned by any specialist. One, a nationally recognized psychologist (long since deceased) diagnosed a case of “mixed dominance”. Rather than prescribing ritalin (which also was never mentioned by any of the specialists), the specialist who diagnosed “mixed dominance” prescribed swimming to treat the condition. I don’t believe it did much for his ADHD but he became an excellent swimmer. .

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9 Kevin- November 4, 2017 at 11:15 am

Good summary of the evolution of the ADHD diagnosis. I never liked the change from ADD (with both hyperactive and non-hyperactive subtypes) to ADHD, since there are definitely kids who have marked ADD and other signs, but little hyperactivity.

In any event, that nationally recognized psychologist was cunning in the treatment prescribed. I’m sure on some level they knew their “mixed dominance” diagnosis was hopelessly squishy and non-actionable, but by prescribing swimming they created a no-lose situation for themselves. Few patients follow through with such a prescription, and so it’s the patient’s fault they don’t improve in those cases.

And for patients who do follow through, there’s no doubt that regular aerobic exercise (like running/swimming/bicycling) lead to improved health and an improved sense of well being. And by prescribing something that requires that much effort, there’s probably a higher sense of getting a placebo effect, along with the general beneficial qualities of proactive and positive thinking.

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10 rayward November 4, 2017 at 11:40 am

Since you may be familiar with “mixed dominance” I will clarify for other readers that the psychologist meant that my son was neither left brain dominant nor right brain dominant, and the motion of swimming (the overhand stroke) was meant to somehow help him become one or the other. His mother had majored in psychology in college and lapped it up. I rolled my eyes and told my wife that at best the psychologist was treading water.

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11 ohwilleke November 6, 2017 at 9:25 pm

Mixed dominance is a legitimate cause of stuttering. (I am cross dominant and my stutter went away when a switched from writing with one hand to typing with both.)

But, is not a legitimate cause of ADHD (a conditions as defined by the DSM that includes ADHD without HD, because . . . . it makes no sense). Also certain subtypes of ADHD are pretty much 100% comorbid with ODD (oppositional defiant disorder) which really shouldn’t exist as a diagnosis at all.

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12 Careless November 4, 2017 at 5:52 pm

Yeah, ADHD-PI is a ludicrous attempt at shoehorning ADD into ADHD

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13 GHQ November 4, 2017 at 7:54 am

The so-called autism epidemic was similarly mostly cases of expanding definitions and over-enthusiastic diagnoses. Not autism diagnoses in general, rather the “epidemic”.
In contrast, the fellatio epidemic was real.

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14 Pshrnk November 4, 2017 at 3:01 pm

The so-called autism epidemic was also due to doctor”s bogus diagnoses so families could access extra funding at school etc.

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15 Bill November 4, 2017 at 8:29 am

Medicaid causes asthma.

Medicaid causes ADHD.

Medicaid criticism causes stupidity.

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16 Bill November 4, 2017 at 8:37 am

From Wiki:

“Low-income children missed twice as many days of school due to asthma as children from higher-income families. Rates of emergency department visits for asthma were twice as high among lower-income adults as their higher-income counterparts (18.8 percent vs. 8.8 percent).Dec 16, 2010”

Here is the link: http://newsroom.ucla.edu/releases/asthma-disproportionately-affects-179902

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17 Bill November 4, 2017 at 8:42 am

Low income kids more likely to have asthma and adhd per

https://health.usnews.com/health-care/articles/2017-02-14/low-income-kids-more-likely-to-have-adhd-asthma

“Dr. Michael Grosso is chairman of the department of pediatrics at Northwell Health’s Huntington Hospital, in Huntington, N.Y. He said that asthma and ADHD rates among poorer families could be linked with the physical and mental strains of deprivation — a phenomenon known as “toxic stress.”

Pulcini explained that children in financially struggling families are more likely to be exposed to poorer indoor and outdoor air quality, and are less likely to eat well — two conditions that have been tied to asthma risk.

Grosso added, “We now understand that infants and children who don’t have the benefit of good nutrition, a stable home environment, regular routines and protection from violence are at risk for lasting consequences including behavioral health and other medical conditions.”

Conversely, Pulcini said, the fact that better-off children are more likely to be diagnosed with autism could be tied to their families’ improved access to health resources.

Families with more financial means “have better access to resources to identify autism. Parents have more resources to get children screened and get them treated,” Pulcini said. On the other hand, children in poorer families have to undergo a more circuitous route before their autism is recognized, he said.

“Among children who are eventually diagnosed with autism, if they are poor, they are more likely to be diagnosed with ADHD first and then autism,” Pulcini noted.”

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18 rayward November 4, 2017 at 9:23 am

It’s becoming increasingly common for a child diagnosed ADHD in early childhood to be diagnosed with mild autism as the child ages. I suspect the symptoms overlap rather than causation overlapping but I don’t know – it could be both. It’s also becoming increasingly common for economists to find what they are looking for, and interpreting correlation to be causation rather than bias of the economists. I suspect the symptoms overlap rather than causation overlapping but I don’t know.

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19 Bill November 4, 2017 at 9:28 am

It is hard to understand how economists make healthcare conclusions about a patients medical condition

When

They do not wear a stethoscope.

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20 rayward November 4, 2017 at 9:40 am

That’s a reason I have so much respect for Austin Frakt, the co-creator of The Incidental Economist blog.

21 Bill November 4, 2017 at 9:26 am

Here is something that the authors did not consider: under a managed care program where the managed care company is unlikely to change there is an incentive for the managed care company to aggressively treat an early diagnosis of a problem so that, if the patient remains in the program in future years but still has the condition but its well managed, the managed care plan makes money.

The president of a managed care plan once told me: we can eliminate, or prevent, cavities in children by using plastic caps or sealants. But, it costs money, and the benefit will happen over a period of five years, and next year I might not have that family as a enrollee.

Now, think of the incentives of a managed care plan working with a Medicaid population where it is likely that the plan will continue to be the provider for a number of years because it is unlikely another plan would emerge. The incentive is to identify and aggressively treat early. The patient is still coded for asthma, but in future years the likelihood and costs will be lower.

By the way, if you are pre-diabetic and you notice that your health plan treats you aggressively, particularly if you are likely to continue in it because your employer may not be able to switch, you get the the point, unless you have ADHD.

Early aggressive treatment has long run benefits which a short term fee for service one year contract does not.

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22 Pshrnk November 4, 2017 at 3:04 pm

Oh yea! Clearly managed care has reigned in health care costs.

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23 Bill November 4, 2017 at 4:16 pm

Obviously you haven’t read the literature comparing fee for service v. managed care. Or, maybe you have, and when you said “Clearly, managed care has reigned in health care costs you meant it.”

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24 Eric November 4, 2017 at 11:14 am

Velasquez-manoff argues persuasively that auto immune diseases, including asthma, are in the rise bc of the irradiation of parasites (like hookworm) which teach our immune systems not to overreact to, say, peanuts.

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25 Careless November 4, 2017 at 5:54 pm

Do you mean “eradication” instead of “irradiation”?

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26 Mikael November 4, 2017 at 1:07 pm

The problem with this story is that many (most?) western countries have had similar trends with increasing prevalence numbers, including countries with e.g. single-payer systems to countries with “Bismarckian” social insurance systems.

So that the main cause for the US rise is medicaid-specific seems kind of…unlikely. Although the authors have a nice identification strategy, given the universal trends in ADHD and Asthma prevalence, some form of “generic” explanation must be at play here.

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27 VD November 4, 2017 at 5:35 pm

Psychiatrist here. Work one day a week in a Medicaid child psychiatry clinic. There is a decent chance adhd ‘doesn’t exist’ in the same way schizophrenia or clinical depression exist. The astounding rise in adhd diagnoses is mainly due to needing such a diagnosis to prescribe the incredibly powerful schedule II amphetamine stimulants. Amphetamine stimulants will increase the focus and control of any individual that takes them. There is in incentive for parents, doctors, and teachers to promote relatively cheap and safe pill that really does improve behavior in children.

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28 charlie November 5, 2017 at 12:28 pm

Yes, incentives matter — but it is incredibly hard to sort them out in medical areas.

I’ve wondered if the entire opioid epidemic is really just a push by states to force Medicaid to cover rehab. Well until breaking bad and the mexicans pushing heroin — after legal use was cut down.

Or the CVS push for walk in clinics that are’t emergency rooms — so they don’t have to treat everyone and then get stuck for the bill.

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