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Market-Based Solutions to Vital Economic Issues

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COVID-19 brought heightened focus to paid sick leave policies – a benefit to which roughly 25% of civilian workers don’t have access in the U.S. After sick leave mandates were temporarily implemented during the pandemic, UNC Kenan-Flagler Business School researchers found employment increased, particularly among low-skilled workers and in industries that previously had little access to paid sick leave. In this week's Kenan Insight, our experts explore possible drivers behind this finding as well as potential policy and business implications.

We present a mathematical modeling approach that determines the optimal allocation of care manager's time and quantifies the costs and benefits of Collaborative Care. In particular, we model Collaborative Care management at the clinic level as an infinite horizon Markov Dynamic Program. The objective is a weighted sum of total patient QALYs and the clinic profits. The model incorporates insurance payment, resource utilization costs, and disease progression of comorbid diabetes and depression. We derive structural properties of the optimal allocation of the care manager's time. Using these structural properties, we develop a practical and easy-to-implement solution approach that performs close to the optimal solution. We calibrate the model with data obtained from a large academic medical center and show that our solutions could potentially improve total QALYs and clinic profits when compared to current practices. We also perform sensitivity analysis to different payment models to derive insights relevant to healthcare policy.

The 2021 UNC Business of Healthcare Conference will explore how to move forward as leaders, future leaders and consumers of healthcare amid such uncertain times. Panels and speakers will address business challenges and opportunities, with a specific emphasis on how to lead through change.

Please join us for an exclusive conversation with Kindbody Founder and CEO Gina Bartasi on Friday, Nov 5. This virtual experience is part of the Dean’s Speaker Series, hosted by UNC Kenan-Flagler Business School Dean Doug Shackelford.

Public calls for a national paid sick leave policy continue to grow in the United States. In the absence of a federal policy, many localities and states enacted their own paid sick leave mandates. We document an average increase of 1.9% in employment following the implementation of a paid sick leave policy. As predicted, workers with ex ante lower access to paid sick leave drive the employment effect, a result which holds with county-quarter fixed effects. Several non-mutually exclusive mechanisms can explain our findings. Following the implementation of a mandatory paid sick leave policy, we find a decline in labor turnover which has implications for labor productivity and, hence, labor demand. We also find results consistent with an increase in the labor supply. Finally, paid sick leave mandates are associated with an increase in household income, creating positive spillover effects on local markets and greater demand for local goods and services.

While access and quality of healthcare in the U.S. are shaped by several factors—location, work, insurance—a simple change can make a big difference for patients. According to a new study led by the institute-affiliated Center for the Business of Health Faculty Director Brad Staats, delivering mental and physical care at the same location can improve patient experience and care efficiency. This week’s Kenan Insight offers a chance for our experts to explore the findings of this new study.

For more than a year, researchers across the University of North Carolina at Chapel Hill’s (UNC) Kenan-Flagler Business School (KFBS) and School of Medicine (SOM) worked with Sharecare, Inc. (Sharecare) to establish a framework for measuring the true value of corporate well-being interventions and develop a measurement tool to quantify their impact over time. The goal of the research was to assess the value of implementing corporate well-being interventions to improve employee health and lower direct medical costs to employers.

As featured in our 2021 Trends in Entrepreneurship Report, hear experts discuss leveraging analytics to drive improved healthcare access, treatments and delivery.

AI. CRISPR. mRNA. Key components of the rapidly expanding alphabet soup of technologies driving a boom in healthcare innovation. In this Kenan Insight, we explore why the 2021 Trends in Entrepreneurship Report names emerging technology in the healthcare industry as a key trend, along with some of the challenges that come with fast-moving technological advancements.

The choice of location is a key facet of decision-making in operations. One such choice is whether to colocate activities, services, or personnel. Prior research, including in healthcare, has reported that colocation yields benefits. However, these benefits may need to be balanced with higher costs of colocation (e.g., due to operational constraints). Thus, it is critical to understand not only whether colocation makes a difference but also under what circumstances it is most beneficial, and the mechanisms through which those benefits are realized. We consider colocation in the context of healthcare services, and ask: Does colocation of mental and physical health resources improve patient outcomes? This colocation is important, as primary care serves as a gateway to address mental health concerns and referrals to specialists. We next study colocation's relationship with two important operational variables: continuity of care (CoC) with a provider, and patient severity. Finally, we examine the mediating role of patients' no-shows and medication adherence in the colocation-outcomes relationship. As America's largest integrated healthcare system, the Veterans Health Administration offers us an excellent setting to study these questions. We analyze over 300,000 patients – over an eleven-year period – who suffer from diabetes, a chronic condition, and show evidence of mental illness. We use an empirical approach to quantify the relationship between colocation and four key outcomes attributable to mental illness: hospitalizations, length of stay (LOS), 30-day readmissions, and suicidal behavior. We find that colocation is associated with improvement in outcomes. For example, a one standard deviation increase in the mean colocation measure is related to a 2.4% decrease in LOS – equivalent to an annual savings of approximately $1.5 million, on average, just for our cohort. In addition, we find that colocation and CoC are substitutes, in that colocation benefits patients whose care is fragmented. Further, we find that colocation offers greater benefits to patients whose mental health conditions are more severe. Finally, our analysis reveals that colocation improves outcomes (partially) through a reduction in the no-show rate and an increase in medication adherence. Our findings are validated by extensive robustness checks and sensitivity analyses. Our study has implications for both the theory and practice of healthcare operations. Theoretically, we advance the location literature, establish its connection with the continuity literature, and highlight key moderators and mediators in the colocation-outcomes relationship. Practically, our work offers insights into how to design an operationally efficient system and, in settings with limited resources, where to target colocation. Our study is particularly timely as it may help address the growing mental health crisis in America and around the world, further exacerbated during the COVID-19 pandemic.

Question  Is a crowdsourcing open call a feasible approach to engaging the university community in COVID-19 safety strategies?

Findings  This qualitative study evaluated 82 submissions to a university open call for creative solutions from students, faculty, and staff to inform safety in the fall 2020 semester. Solutions were shared with university leadership, and several are being further developed.

Meaning  The results of this study suggest that open calls are a promising approach to understanding university community members’ concerns and identifying stakeholder-driven, innovative solutions for safe university activity during the pandemic.

Kenan Institute Senior Fellow Mary Moore Hamrick, CEO of Political Quotient Advisors, outlines the major “buckets” of President Biden’s proposed $3 trillion infrastructure bill.

Our Healthcare Experts

Steve Sloate

Associate Faculty Director, Center for the Business of Health; Assistant Professor, Health Policy and Management, Gillings School of Global Public Health

Bradley Staats

Professor of Operations, Faculty Director of the Center for the Business of Health, UNC Kenan-Flagler Business School

Centers & Initiatives

Center for the Business of Health

Bringing together expertise from across UNC to create knowledge, prepare business leaders, and to convene important conversations around the business of healthcare.