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If these states follow their governors’ pronouncements, an estimated 6.4 million low-income, uninsured adults are at risk of remaining without insurance. Hospitals, employers and the privately insured also stand to lose in states that opt out. In this essay, two former state Medicaid directors examine the Medicaid expansion from different stakeholder perspectives and offer evidence of the sustained financial benefits that can accrue to states accepting federal funding to expand Medicaid eligibility. By Joan Henneberry, MS, Principal, Health Management Associates, and Kathy D. Gifford, JD, Managing Principal, Health Management Associates, April 2013.
Policies aimed at reversing the nation's obesity epidemic can quickly become mired in controversy, but the need for solutions is urgent: 36 percent of American adults are now obese, and obesity-related medical costs are estimated at $150 billion per year. In this essay, Dr. William Dietz outlines the range of obesity-reduction efforts developed during his 15 years at the CDC, stressing the importance of policy and environmental strategies designed to make the healthy choice the easier choice. By William H. Dietz, MD, PhD, Former Director, Division of Nutrition, Physical Activity, and Obesity, Centers for Disease Control and Prevention, March 2013.
The ACA has introduced sweeping market changes that bring new uncertainty to the task of developing premiums for products to be offered in the health insurance exchanges beginning in 2014. The added complexity greatly increases the chances that these premiums will be off the mark. In this essay, Alice Rosenblatt explains how actuaries set premiums, shows how key provisions of the ACA will affect their pricing for the October 2013 open enrollment period and describes what’s at stake if they don’t get it right. By Alice F. Rosenblatt, FSA, MAAA, CERA, AFR Consulting, LLC, October 2012.
Accountable Care Organizations are generating considerable attention for their potential to improve the value of our health care spending through better coordination of care and new payment incentives that focus on quality and efficiency of care. Yet even as ACOs develop at a fairly rapid clip across the nation, they face substantial challenges. In this essay, Steven Lieberman reviews the ACO landscape in both the public and private sectors and examines the major obstacles confronting these emerging organizations, including limited tools for influencing patient choice, the need for immediate and sustained cost savings, and system-wide concerns about rising costs due to enhanced market power. By Steven M. Lieberman, MPhil, MA, Visiting Scholar, Engelberg Center for Health Care Reform, Brookings Institution; President, Lieberman Consulting Inc., May 2012.
A growing body of research shows that palliative care improves quality of life, reduces costs and extends survival time, yet it is estimated that only a small portion of the patients who could benefit from this care are receiving it. In this essay, Dr. Diane Meier argues that widening the reach of palliative care could increase value in the health care system. She describes how variable access, workforce shortages and lack of research support present barriers to optimal use of palliative care services and concludes with policy recommendations to encourage the expansion of quality palliative care. By Diane E. Meier, MD, Director, Center to Advance Palliative Care, & Professor and Vice-Chair for Public Policy, Department of Geriatrics and Palliative Medicine, Mount Sinai School of Medicine, April 2012.
Tiered provider networks are an increasingly prominent strategy in the ongoing quest to contain spiraling health care costs. More and more health plans, self-insured employers and now even state policymakers are turning to tiered networks in the hope of directing consumers to higher-value providers while preserving patient choice. Dr. Sinaiko explains the latest developments and research and offers her thoughts on the ways this approach may evolve in the future. By Anna D. Sinaiko, PhD, Research Fellow, Department of Health Policy and Management, Harvard School of Public Health, February 2012.
In this essay, Dr. James Robinson presents results from his latest work showing that the prices hospitals charge to private insurers for 6 common procedures are 30 to 50 percent higher when the hospital is located in a market where it faces less competition from other hospitals. These findings add to the already substantial body of research showing that consolidation in hospital markets confers market power that enables hospitals to secure higher prices. When seen in the context of current policies encouraging additional provider consolidation through accountable care organizations, this work serves as an important reminder that ongoing vigilance of the potential anti-competitive effects of these new delivery systems is needed along with other measures to counteract growing market power of providers. By James C. Robinson, PhD, Leonard D. Schaeffer Professor of Health Economics and Director, Berkeley Center for Health Technology, University of California, Berkeley, November 2011.
Reforms to Medicare and Social Security are an unavoidable part of a sound fiscal policy and will continue to be a focus of debate among policy makers. In this essay, Dr. Eugene Steuerle and Stephanie Rennane help to inform this debate by presenting findings from their newly updated analysis showing that seniors retiring today can expect to receive dramatically more in entitlement program benefits during retirement than they contributed to the programs while working. For example, the average Medicare beneficiary can expect $3 in benefits for every $1 paid in payroll taxes. The authors posit that the magnitude of the resources involved when viewing these programs in tandem over a lifetime gives policymakers new impetus and flexibility to develop coordinated entitlement reforms that promote a coherent, equitable and sustainable support system for current and future generations of seniors. By C. Eugene Steuerle, Institute Fellow and Richard B. Fisher Chair, The Urban Institute & Stephanie Rennane, University of Maryland, August 2011.
Dr. Anthony Lo Sasso provides empirical evidence of the adverse selection that resulted when states adopted community rating and guaranteed issue requirements in their individual health insurance markets but did not implement complementary mechanisms to keep lower risk individuals in the insurance risk pools. Such adverse selection can raise premiums, destabilize markets and even lead to market failure. His findings highlight the importance of providing effective mechanisms to protect the integrity of the risk pool in conjunction with the community rating and guaranteed issue provisions contained in the Patient Protection and Affordable Care Act. By Anthony T. Lo Sasso, PhD, Professor, University of Illinois at Chicago, January 2011.
Reducing unit prices is one possible weapon in the battle to stem rising health care spending, but this approach can have unintended consequences if utilization increases by more than prices have fallen. In this essay, Dr. Mireille Jacobson and Dr. Joseph Newhouse present findings from their recent research on how physicians have responded to reductions in Medicare payments for chemotherapy drugs. Their work documents an increase in chemotherapy use rates and a switch from the drugs whose reimbursement declined to a drug that offered a higher profit for physicians. These findings serve as a reminder to policymakers that unanticipated behavioral responses can undermine their ability to achieve savings simply through fee reductions. By Mireille Jacobson, PhD, Senior Economist, RAND, and Joseph P. Newhouse, PhD, John D. MacArthur Professor of Health Policy and Managment, Harvard University, November 2010.
There has been considerable scholarly and political debate about the extent to which hospital and insurer consolidations are responsible for rising health insurance premiums. In this essay, health economist Dr. Austin Frakt explains how the balance of market power between hospitals and insurers affects premiums. His review of the evidence drawn from prior research on this topic indicates that excessive market power of hospitals is a significant worry as we seek to contain premium growth. Dr. Frakt offers some cautionary thoughts about the potential danger of increasing market power through the formation of new integrated delivery systems and emphasizes the need for careful enforcement of antitrust, fraud and abuse laws as we move forward with implementation of health reform. By Austin Frakt, PhD, Health Economist, Department of Veterans Affairs and Assistant Professor, Boston University, November 2010.
While there is near universal agreement that we need to move away from Medicare’s fee-for-service physician payment system, Dr. Robert Berenson argues that in the short term we still need to focus on improving the current physician fee schedule. Not only are the value-based payment systems that most reformers envision still many years from widespread reality, the existing fee schedule prices will serve as the building blocks for some of the newer aggregate payment approaches. In this essay, Dr. Berenson offers thoughts on how to improve the system in ways that both address current payment system woes and serve as a step toward future value-based payment systems. By Robert A. Berenson, MD, Institute Fellow, Urban Institute, September 2010.
The U.S. federal debt is exploding to levels not seen since World War II, and some say this threatens our living standards, compromises our independence in domestic and foreign policy, and leaves future generations with a staggering financial burden. In this essay, Maya MacGuineas reviews the budget projections and comments on Administration proposals for addressing the fiscal crisis. She also describes a new set of recommendations from the Peterson-Pew Commission on Budget Reform calling for immediate and bold steps designed to stabilize our federal debt at 60 percent of GDP by 2018. By Maya MacGuineas, MPP, President, Committee for a Responsible Federal Budget and Director of the Fiscal Policy Program, New America Foundation, May 2010.
Sin taxes on tobacco and alcohol have a long history in the U.S., and many credit cigarette taxes as being the single most effective strategy in achieving our dramatic reductions in smoking. Similar taxes have been proposed in recent years as one weapon in our fight against rising obesity rates, and a new study has just added support for this policy by showing that higher prices for sweetened sodas are associated with lower caloric intake, lower weight and better health. In this essay, Dr. Jonathan Gruber reviews the rationales for and experience with sin taxes for cigarettes and alcoholic beverages and offers his insights on using sin taxes to combat obesity. By Jonathan Gruber, PhD, Professor of Economics, Massachusetts Institute of Technology, April 2010.
The weight of the evidence indicates that hospital prices increase following hospital consolidation, sometimes by very significant amounts. While modest cost savings can be achieved, especially when physical facilities and clinical services are consolidated, these savings have not generally been passed on to payers and consumers. Evidence on quality is mixed, but some studies suggest that hospital consolidation leads to poorer outcomes. Within this context, the Federal Trade Commission and the Department of Justice are now revisiting their long-standing guidelines for horizontal mergers. Developments on this front bear watching. By William B. Vogt, PhD, Senior Economist, RAND Corporation, November 2009.
Policymakers working to reduce the number of persons without health insurance sometimes note the significant number of uninsured who are already eligible for public coverage but not enrolled. In this essay, Dr. Genevieve Kenney of the Urban Institute explores reasons behind this phenomenon and describes steps that can be taken to facilitate and encourage enrollment among eligible individuals. She stresses the importance of multi-faceted approaches that promote program awareness, simplify eligibility determination, and automate enrollment and renewal processes. As our country considers expansions in publicly funded coverage, these lessons should be top of mind in order to maximize program enrollment and reach as many uninsured people as possible. By Genevieve Kenney, PhD, Senior Fellow, Urban Institute, November 2009.
Pathbreaking work by the McKinsey Global Institute (MGI) shows that, relative to other peer countries from the Organisation for Economic Cooperation and Development, the U.S. spends nearly $650 billion more on health care than would be expected after adjusting for cross-country differences in wealth. Fully two-thirds of this added spending occurs in the outpatient sector. The highly profitable nature of many outpatient services coupled with the incentives of a fee-for-service payment system are contributing to greater intensity of outpatient care and helping to fuel this spending. In this essay, Jensen and Mendonca describe MGI's work to examine all sectors of the American health care system and identify factors responsible for the higher-than-expected spending. By Eric Jensen, Consultant, and Lenny Mendonca, Director of Firm Knowledge, McKinsey & Company, November 2009.
Patient cost sharing serves to moderate demand for health care services and is growing in importance as a way to control health care spending. Indiscriminate cost sharing, however, can cause patients to reduce use of services that are of high value in maintaining their health. In this essay, Fendrick and Chernew describe a more tailored approach to patient cost sharing – Value Based Insurance Design – that varies cost sharing according to the value of the service, encouraging patients to use high value services and avoid services of low value. (Content of this essay was published simultaneously in the American Journal of Managed Care.) By A. Mark Fendrick, MD, University of Michigan Medical Center, and Michael Chernew, PhD, Harvard Medical School, June 2009.
In this essay, Pollitz reviews the current condition of state high-risk pools, noting important trends in their availability, affordability and adequacy that currently limit their effectiveness. She then describes ways these pools might be improved and considers the potential role for high-risk pools in future health reform. By Karen Pollitz, MPP, Research Professor, Georgetown University Health Policy Institute, April 2009.
The fate of legislative proposals in the U.S. Congress often hinges on how much they are estimated to increase or decrease the federal budget deficit. Currently, the Congressional Budget Office is responsible for developing these estimates – or “scores” – for all pending legislation, following rules and procedures established by Congress and the Administration. Yet these rules and their impact on the resulting budget estimates are often poorly understood. In this essay, Van de Water describes the basic elements of budget scoring, provides some cautionary comments on how the estimates should be used, and looks at the scoring issues likely to arise as health reform legislation is advanced and debated. By Paul N. Van de Water, PhD, Senior Fellow, Center on Budget and Policy Priorities, April 2009.
President Obama has forcefully renewed his campaign commitment to a comprehensive reform of the U.S. health care system. The recent reauthorization of the Children's Health Insurance Program (CHIP) and elements of the stimulus package have been first steps toward reform. As we continue to pursue broader system reforms in this period of economic uncertainty, it is more important than ever to focus on health promotion as a key long-term path to control health care spending. In this essay, Halfon examines the Life Course Health Development (LCHD) model, which emphasizes the importance of early intervention during sensitive developmental periods in a child's life as a means to helping the child attain maximum potential health throughout his lifespan. These interventions include appropriate family support and early learning opportunities in addition to appropriate health care, with all interventions integrated across sectors and over time. While most other developed countries support their children in this way, the U.S. has lagged behind. Current national reform activities offer an opportunity to begin redressing this shortcoming. By Neal Halfon, Director, UCLA Center for Healthier Children, Families, and Communities, and Professor of Pediatrics, Health Sciences and Public Policy, February 2009.
With 46 million people uninsured in America, providing access to health care for all has been touted as a critical goal for health reform in the new Administration. The role that individual mandates may play in the path towards universal coverage has been fiercely debated. Massachusetts legislated a mandate for adults in 2006, and an individual mandate features prominently in several national reform proposals. Despite broad attention being paid to the topic, much of the discussion of mandates has occurred without thorough consideration of the evidence. In this essay, Gruber explores the primary arguments for and against individual mandates and the challenges faced in their design and implementation. Then pulling strongly from the Massachusetts experience, he examines evidence on the effectiveness of individual mandates in practice. By Jonathan Gruber, PhD, Professor of Economics, Massachusetts Institute of Technology, January 2009.
High health care costs and recognition of the gap between high quality care and what most Americans receive has garnered support for the need to promote value in our health care system. While there may be agreement at a conceptual level as to what constitutes value, measuring and encouraging it in practice have proven difficult. Prior attempts to promote value have been hindered by a lack of appropriate data systems, an absence of shared lessons learned, and a focus on narrow components of health care. In this essay, Mendelson and Carino examine key challenges to achieving value in the U.S. health care system and review public- and private-sector attempts made to promote value. After taking stock of where we stand now, they provide a vision for a value-based health care system and outline steps necessary to attain it. By Dan Mendelson, President, and Tanisha Carino, PhD, Vice President, Avalere Health, August 2008.
In this essay, the Honorable David Walker, Comptroller General of the United States, provides sobering insights on the consequences of unchecked health spending on our economic future and issues a call to action to address this fiscal crisis. Health care spending in the U.S. has increased from $1.1 trillion to $2.1 trillion in just the past decade and is predicted to double again by 2016. We now spend an average of more than $7,000 per person each year on health care. In the current debate over national health reform, much of the focus is on the very important task of achieving universal coverage. Yet failure to bring health care spending under control will jeopardize our ability to achieve universal coverage and have other detrimental impacts on our economy. As deliberations over health reform continue, Mr. Walker urges that ways to control costs and achieve high value for our health spending be elevated to be a central part of the debate. By the Honorable David M. Walker, March 2008.
In its landmark 1999 report To Err Is Human, the Institute of Medicine (IOM) asserted that between 44,000 and 98,000 people die each year in American hospitals from avoidable defects in their care – ironically, making health care a major threat to public health. In this essay, Dr. Berwick takes stock of efforts to reduce the harm from medical care, including two national initiatives spearheaded by IHI. While encouraged by recent progress, Dr. Berwick highlights the need for continued diligence in creating a pervasive "culture of safety" throughout our health care system. By Donald M. Berwick, MD, President and CEO, Institute for Health Care Improvement (IHI), January 2008.
New medical technologies may bring significant clinical advances but are often associated with increased utilization and higher spending as well. Balancing the costs and benefits of new technologies to achieve efficient diffusion and use is one of the most important challenges we face in efforts to maintain and strengthen our health care system. In this essay, Stanford University professor Dr. Laurence C. Baker considers the evidence regarding the relationship between the supply of imaging technology and the use of and spending on imaging services and suggests a payment approach that may create incentives for more optimal use of this and other medical technologies. By Laurence C. Baker, PhD, Professor of Health Research and Policy, Stanford University, November 2007.
Estimating the amount of waste and inefficiency in the health system has been a favorite parlor game among health policy analysts, with estimates in the range of 10-25%. Whatever the numbers, the geographic variations and cross-national comparisons underscore the notion that as a society we could be doing much better in terms of total health we receive for the dollars we spend. By Peter J. Neumann, ScD, Director, Center for the Evaluation of Value and Risk in Health, Tufts-New England Medical Center, July 2007.
For centuries, the practice of medicine has been based on the assumption that physicians know the right things to do and that they do them. But the literature is filled with evidence of wide variations in practice patterns amongphysicians and decisions based on little or no evidence. As the costs of health care rise, and the emphasis on quality care increases, the demand for making evidence-based medical decisions is also likely to increase. However, building the evidence solely through clinical trials is costly and time consuming. In this essay, Dr. David Eddy describes these and other obstacles and proposes a new approach to implementing evidence-based medicine. By David Eddy, MD, PhD, May 2007.
While the road to engaging consumers is steep, it is fairly well marked. Dr. Hibbard discusses the reasons that consumers have been slow to use performance reports to help them make health care choices and the barriers which need to be addressed to engage consumers. By Judith Hibbard, DrPH, Professor, Department of Planning, Public Policy & Management, University of Oregon, October 2005.
Early empirical experience is encouraging, but success will depend on the commitment to truly reward behavior changes rather than simply shift costs. By Tilman Ehrbeck, PhD, and Kimberly O'Neill Packard, McKinsey & Co., May 2005
Regional differences show that spending more does not improve—and may hurt—patients. More accountability can help. By Elliott Fisher, MD, MPH. Professor of Medicine and Community and Family Medicine, and Co-Director, Outcomes Group, White River Junction VA Medical Center, January 2005.
Strategies exist to better understand obesity and to change Americans' behaviors. By J. Michael McGinnis, MD, MPP, Counselor to the President, The Robert Wood Johnson Foundation, December 2004.
The health system fails us in our final days; there's a better way. By Joanne Lynn, MD, Director, The Washington Home Center for Palliative Care Studies; Senior Researcher, RAND Health; and President, Americans for Better Care of the Dying, December 2003.
The cost and prevalence of chronic conditions are increasing. A response is overdue. By Gerard Anderson, PhD, Professor, Johns Hopkins University, and Director, Partnership for Solutions, January 2002.
The elimination of racial and ethnic health disparities must become one of the nation's top health priorities. By David Satcher, MD, Surgeon General of the United States, December 2001.
Paying doctors is now very complex, but a better way may be emerging that promotes higher quality care. By Jamie C. Robinson, PhD, Professor of Health Economics, University of California, Berkeley, July 2001.
A paradigm shift is underway in health care. It will change medical practice in the years ahead. By John M. Eisenberg, MD, Director, Agency for Healthcare Research and Quality, January 2001.