CHP/PCOR’s three new faculty members bring a varied background in behavioral health economics, law and children’s health outcomes

By Teal Pennebaker

Three researchers, whose work spans the globe as well as disciplines, have joined CHP/PCOR.  They include a health law professor, a physician economist interested in how behavioral issues influence patient outcomes, and another physician economist who will focus on health economic issues among children in developing countries.

“We are thrilled to welcome Marcella Alsan, David Studdert, and David Chan to our centers. Each of these folks fit into our centers' mission to produce rigorous relevant research by people who care deeply about the topics they probe,” CHP/PCOR Executive Director Kathryn McDonald said. “We credit the current community of scholars at Stanford with attracting these talented individuals to join forces with us.”

Professor David Studdert has spent the past six years at the University of Melbourne’ Law School teaching and studying policy issue at the intersection of health and legal systems.  His most recent research has investigated the relationship between speeding tickets and auto accidents, how patient complaints can be used as indicators health care quality, and how claimants move through workers’ compensation systems.

“David is one of the leading scholars in the world in health law and we are fortunate to have him join our faculty,” CHP/PCOR Director Doug Owens said. “David’s recruitment provides a terrific opportunity to expand our policy work, and his research will serve as the nucleus for joint training and research with our colleagues in the law school.”

Studdert, who will spend a quarter of his time at Stanford Law School, plans to focus on regulatory “hot spotting” in the short term—an approach that uses statistical profiling techniques to make regulation more efficient in areas ranging from medical malpractice to road safety. “There’s a lot going on in health care regulation in the United States,” Studdert said. “I hope to be able to collaborate with others at PCOR--it’s a very exciting, bright group of researchers with plenty of areas of mutual interest.”

Studdert has actually worked with CHP/PCOR members before—he was at RAND in the late 1990s while CHP/PCOR Professor Jay Bhattacharya was there. Similarly, CHP/PCOR’s newest faculty Marcella Alsan and David Chan have actually spent ample time together—before coming to Stanford, they did the same internal medicine residency program at the Brigham Women’s in Boston. Both Chan and Alsan will also practice medicine at the Veteran Affairs hospital part-time as is the case for some of the other clinical faculty members at CHP/PCOR. 

“We are delighted that we were able to recruit two exceptional physician economists to our centers,” Owens said. “Marcella brings deep understanding of global health from her training in infectious diseases along with the methodologic skills of an economist.  It is a rare combination and will enable her to make exceptional contributions in understanding the interplay of health and economics in the developing world. "  

Assistant Professor Marcella Alsan, who has a PhD in economics, a master’s in public health and a medical degree, will focus her research on policy questions in international health, particularly among children in developing countries.  Right now she’s finishing up a project looking at the spillover effects for the siblings and family members of children participating in a large-scale immunization program in Turkey. Alsan is also in the midst of revising a job market paper about how disease affects long-term economic development of Africa. 

“I’m a researcher, a physician and a past global health resident at Brigham and Women's hospital. All of that fits in best here at CHP/PCOR. Stanford is a stellar academic institution and has a growing global health and development community,” Alsan said. “At PCOR, they do excellent research and have wide interests. There isn’t pressure to be narrowly focused on one topic or one publication style.”

Assistant Professor David Chan, who has a PhD in economics and training in internal medicine, will focus on how behavioral issues impact productivity in health care systems. 

"Dave is uniquely trained to study the productivity of  healthcare systems.  Given the extraordinary need to reduce costs and provide high-value care, we believe Dave’s work on health care productivity will be enormously important in understanding some of the most difficult challenges for medicine today," Owens said.

Chan’s current work includes studying the impact of whether doctors choosing which patients they see affects their patients’ health outcomes; the effects on patients’ health outcomes if a doctor sees them at the beginning or end of the doctor’s shift; and whether providing doctors financial incentives—e.g. linking the number of ultrasounds a doctor gives out to their pay—impacts patient health outcomes.

“The environment at the centers is just great for someone who’s multidisciplinary. It’s a small place but surrounded by so many great partners within walking distance -- the business school, economics department, Stanford Institute for Economic Policy Research (SIEPR), the computer science department, and so on,” Chan said.  “It’s great to be back in California. I even bought a bike—I’ve never really ridden a bike this much!”

Millions of Americans who need to buy health insurance are eligible for federal subsidies. But the government may have underfunded the expense by billions of dollars, according to Stanford researchers.

In a recent article published in Health Affairs, the researchers expose the remarkable control employers will soon have on federal revenue. Employers will soon decide whether to continue providing health insurance to their employees, cut their coverage or increase premiums that workers pay. 

These choices will in part determine whether it will be financially beneficial for workers to buy insurance through the government’s new health insurance exchanges, rather than be insured through their employers.  And such decisions could change government expenditures by billions of dollars– a potential spending increase that the federal government has likely not accounted for.

"There’s going to be a lot more federal money required for insurance subsidies than people are ready for," said Jay Bhattacharya, an associate professor of medicine at Stanford and a core faculty member of Stanford Health Policy, a center at the university’s Freeman Spogli Institute for International Studies. Bhattacharya co-authored the study with medical students Daniel Austin, Anna Luan and Louise Wang from Stanford.

Because a lot of employers and employees are going to realize that employer-provided coverage isn’t worth it – that it makes more economic sense for their employees to get health insurance through the exchanges,” Bhattacharya said.

As of Oct. 1, millions of Americans began receiving federal subsidies to buy health insurance under the Affordable Care Act. People are eligible for a subsidy if they earn between 133 and 400 percent of the poverty level. For individuals, that’s between $14,404 and $43,320. And for a family of four, the range is between $29,326 and $88,200. The subsidies from the government amount to $9,247 for a family of four living on $56,604 a year.

The new health care law assumes that workers who already have affordable insurance through their employers will not use the exchanges, though no mechanism is in place to check that a person using a subsidy isn’t already insured. And while there is a penalty – about $3,000 per employee after the first 50 employees – to  large employers who stop offering health insurance, it is often cheaper for an organization to pay the fine. Providing insurance to cover an employee’s family could cost a business $16,000 or more to cover an employee’s family.

Bhattacharya was interested in understanding the financial implications for the federal government should an employer decide to keep or end its health insurance coverage for employees eligible for subsidies. So he and his colleagues modeled how much the federal government would have to provide in subsidies if an employer stopped providing health insurance to workers, and those employees then used the federal subsidies to buy themselves insurance on the exchanges.  

“These decisions that employers are making about whether or not to provide their employees health insurance has a huge effect on federal government spending,” Bhattacharya said.  

According to the researchers’ calculations, if everyone who would benefit financially from receiving health insurance through the exchanges rather than from their employer chose to buy insurance on the exchanges, the federal government would be on the hook for $132 billion per year to pay for the subsidized insurance.  While not everyone who benefits financially from dropping employer-based coverage will do so, Bhattacharya estimates that federal costs would climb by nearly $7 billion if employers raise health insurance premiums by even just $100 because it would induce millions of employees to switch to exchange-based coverage.

In many instances, Bhattacharya pointed out, companies can still ensure their employees have benefits and make more money by cutting their workers’ health insurance if they’re eligible for subsidies, paying their employees a slightly higher salary and encouraging them to receive the federal subsidies and buy their own policies. But doing so puts a heavier financial burden on the government.

On the flip side, if more employers decide to offer health insurance – perhaps wanting to avoid the small penalty or because of the appearance of not offering a basic benefit – the government could end up spending a lot less on subsidies. But Bhattacharya expects that is unlikely.

The study used data from the Medical Expenditure Panel Survey Household Component – a national survey of household health care use, insurance status, and health expenses, as well as demographic and socioeconomic information – to construct a model.  The model revealed that as employees’ health insurance contributions rise (when their insurance is provided by an employer), employees are increasingly enticed to drop their employer coverage and buy insurance through the exchange. Among workers who qualify for a subsidy and see an increase of $100 in their employer-based premium contribution levels, 2.25 million individuals would choose to instead buy insurance on the exchanges – increasing federal spending for subsidies by $6.7 billion.

“In the model we assume that if there’s a $1 benefit, employees will drop their employer-sponsored coverage. In reality there’s a lot of inertia and you most likely won’t get that $1 increase,” Bhattacharya said. “On the other hand, in the medium run, employers might say ‘employees will benefit if I drop coverage. I can raise their wages, and they’ll get better coverage on the exchanges.’”

Teal Pennebaker is a Washgington, D.C.-based freelance writer and former information editor and external relations coorinator at Stanford Health Policy.

It makes intuitive sense: If you want to want to tackle the epidemic of obesity among adults, try stopping it in childhood.

Around the country, hospitals and other health care providers have set up intensive six-month programs to treat obese children as young as 6. Children and their parents get dietary training, exercise regimens, and weekly family counseling about healthier lifestyles. The idea is that children will not just slim down but also develop healthier habits that will stay with them well into adulthood. The U.S. Preventive Services Task Force, a panel of independent health care experts convened by the government, recommends such treatment for all obese children 6 years or older.

But a new Stanford study ― drawing on health data going back 40 years, as well as some more limited data on the results of treating obesity in children ― suggests that this head-on treatment of youngsters will have a surprisingly meager impact on reducing obesity-related illness in adulthood.

The problem, in a nutshell, is that people go through a great many changes as they grow up. Many obese children slim down without any special treatment, and many thin children become overweight as adults. Even if children get treatment at the age of 6 or 8 that’s considered successful, the researchers say, many will be obese again by the time they are 30 or 40. And many who weren’t obese at young ages will be obese later.

The new study, “Analyzing Screening Policies for Childhood Obesity,” appeared in the April 2013 issue of Management Science. It was conducted by Lawrence M. Wein, a professor at Stanford’s Graduate School of Business; Yan Yang, a recent graduate of the doctoral program at Stanford’s Institute for Computational and Mathematical Engineering; and Jeremy Goldhaber-Fiebert, assistant professor at Stanford’s School of Medicine and a core faculty member at Stanford Health Policy, a research center at the university’s Freeman Spogli Institute for International Studies.

Some of their findings:

• Intensive obesity treatment has very little impact on the likelihood that obese 6-year-olds will suffer from hypertension as adults. A full 25.1% of those who receive treatment will have hypertension by the time they are 40, for example, compared to 26.8% of those who don’t get treatment.
• Early childhood screening for obesity has limited predictive value for health in adulthood. The researchers  calculate that 18.8% of 6-year-olds who are not obese will suffer from hypertension by the time they reach 40.
• You would have to provide intensive treatment to 20 obese 6-year-olds to get just one less case of adult hypertension when those individuals are 40.
• Intensive treatment has a more significant long-term impact for 16-year-olds, but even that effect may be modest. The researchers predict that about 34.9% of obese 16-year-olds who get treatment would still develop obesity-related illnesses by the age of 40, compared to 39.4% of those who didn’t get treated at age 16.

No one disputes that obesity is an epidemic health problem in the United States. About 35% of American adults are obese, a two-fold increase since 1980. Roughly 17% of children are obese, about triple the rate in 1980. Estimates of the cost of treating Americans of all ages for obesity-related illnesses, such as diabetes and cardiovascular disease, range as high as $190 billion per year.

While educating children and families about exercise and diet might be useful to individual youngsters, the issue under study at Stanford was whether widespread, intensive treatment for obese young children offers much bang for the buck. A six-month program can easily cost $3,500 per child, so treating every obese child in the United States would cost billions, and the number of service providers needed would probably far outstrip the number who currently offer treatment. At the moment, relatively few obese children get such treatment, because both public and private insurance programs are reluctant to cover it.

For any given amount of money spent on treatment, the Stanford researchers estimate, concentrating on teenagers who are 16 or older would produce a slight increase in health benefits compared to treating all obese children from the ages of 6 to 18. Alternatively, the cost of obtaining the same long-term reductions in adult obesity-related illness could be reduced by 28% by focusing on 16-year-olds.

An even smarter strategy from a public policy standpoint, the researchers argue, could be to put more money into universal efforts aimed at all children ― better nutrition in the schools, better playgrounds and fitness programs in the schools, and public efforts to reduce consumption of junk food ― rather than focusing on just obese children.

“There are a lot of good things we can do in the schools, in the supermarkets of big cities, in the food industry, and in the beverage industry,” says Wein, an affiliated faculty member at FSI's Center for International Security and Cooperation. “From a cost-effectiveness standpoint, I believe this would be a better way.”

The new study is likely to be controversial. Because almost no children received intensive obesity treatments back in the 1970s or 1980s, the researchers used statistical modeling to infer the long-term benefits. It sounds highly theoretical, but the approach is analogous to predicting the trajectory of a hurricane and then estimating how much a change in conditions would knock the hurricane off the path originally predicted.

The researchers began by getting a baseline for what happens to children in the absence of treatment, drawing on two national data sets that tracked the health conditions of children and adults over several decades. That allowed them to estimate the likelihood that children of particular weights and ages will suffer from diabetes or hypertension by the time they are 40. The researchers then combined those long-term probabilities with shorter-term results from studies of children who did and who did not receive treatment.

Businesses have used similar types of statistical modeling for years to make decisions about the timing of production, inventory acquisition, shipping, and many other issues. Wein, who began his career by using mathematical tools to optimize manufacturing systems, has used them for more than two decades to analyze potential social and health challenges: responding to disease pandemics, optimizing emergency nutrition during famines, dealing with bioterrorist threats.

The researchers emphasize that there may still be important short-term reasons to intensively treat obesity in some younger children. They also caution that their study doesn’t imply that parents should stop worrying if their children are seriously overweight. But if a prime goal of intensive childhood treatment is to reduce chronic disease in adults, they say, there are better ways to tackle the problem.

Edmund L. Andrews is a freelance writer.

Mariano-Florentino Cuéllar, a Stanford law professor and expert on administrative law and governance, public organizations, and transnational security, will lead the university’s Freeman Spogli Institute for International Studies.

The announcement was made in Feb. 11 by Provost John Etchemendy and Ann Arvin, Stanford’s vice provost and dean of research.

“Professor Cuéllar brings a remarkable breadth of experience to his new role as FSI director, which is reflected in his many achievements as a legal scholar and his work on diverse federal policy initiatives over the past decade,” Arvin said. “He is deeply committed to enhancing FSI’s academic programs and ensuring that it remains an intellectually rich environment where faculty and students can pursue important interdisciplinary and policy-relevant research.”

Known to colleagues as “Tino,” Cuéllar starts his role as FSI director on July 1.

Cuéllar has been co-director of FSI’s Center for International Security and Cooperation (CISAC) since 2011, and has served in the Clinton and Obama administrations. In his role as FSI director, he’ll oversee 11 research centers and programs – including CISAC – along with a variety of undergraduate and graduate education initiatives on international affairs.  His move to the institute's helm will be marked by a commitment to build on FSI’s interdisciplinary approach to solving some of the world’s biggest problems.

“I am deeply honored to have been asked to lead FSI. The institute is in a unique position to help address some of our most pressing international challenges, in areas such as governance and development, health, technology, and security,” Cuéllar said. “FSI’s culture embodies the best of Stanford – a commitment to rigorous research, training leaders and engaging with the world – and excels at bringing together accomplished scholars from different disciplines.”

Cuéllar, 40, is a senior fellow at FSI and the Stanley Morrison Professor of Law at the law school, where he will continue to teach and conduct research. He succeeds Gerhard Casper, Stanford’s ninth president and a senior fellow at FSI.

“We are deeply indebted to former President Casper for accomplishing so much as FSI director this year and for overseeing the transition to new leadership so effectively,” Arvin said.

Casper was appointed to direct the institute for one year following the departure of Coit D. Blacker, who led FSI from 2003 to 2012 and oversaw significant growth in faculty appointments and research.

Casper, who chaired the search for a new director, said Cuéllar has a “profound understanding of institutions and policy issues, both nationally and internationally.”

“Stanford is very fortunate to have persuaded Tino to become director of the Freeman Spogli Institute for International Studies,” Casper said. “He will not only be an outstanding fiduciary of the institute, but with his considerable imagination, energy, and tenacity will develop collaborative and multidisciplinary approaches to problem-solving.”

Cuéllar – who did undergraduate work at Harvard, earned his law degree from Yale and received his PhD in political science at Stanford in 2000 – has had an extensive public service record since he began teaching at Stanford Law School in 2001.

Taking a leave of absence from Stanford during 2009 and 2010, he worked as special assistant to the president for justice and regulatory policy at the White House, where his responsibilities included justice and public safety, public health policy, borders and immigration, and regulatory reform.  Earlier, he co-chaired the presidential transition team responsible for immigration.

After returning to Stanford, he accepted a presidential appointment to the Council of the Administrative Conference of the United States, a nonpartisan agency charged with recommending improvements in the efficiency and fairness of federal regulatory programs.

Cuéllar also worked in the Treasury Department during the Clinton administration, focusing on fighting financial crime, improving border coordination and enhancing anti-corruption measures.

Since his appointment as co-director of CISAC, Cuéllar worked to expand the center’s agenda while continuing its strong focus on arms control, nuclear security and counterterrorism. During Cuéllar’s tenure, the center launched new projects on cybsersecurity, migration and refugees, as well as violence and governance in Latin America. CISAC also added six fellowships; recruited new faculty affiliates from engineering, medicine, and the social sciences; and forged ties with academic units across campus.

He said his focus as FSI’s director will be to strengthen the institute’s centers and programs and enhance its contributions to graduate education while fostering collaboration among faculty with varying academic backgrounds.

“FSI has much to contribute through its existing research centers and education programs,” he said. “But we will also need to forge new initiatives cutting across existing programs in order to understand more fully the complex risks and relationships shaping our world.”

In addition to Casper, the members of the search committee were Michael H. Armacost, Francis Fukuyama, Philip W. Halperin, David Holloway, Rosamond L. Naylor, Douglas K. Owens, and Elisabeth Paté-Cornell.