Blog Home

Archive for the 'Cost' Category




Having A Baby: Media Confusion Over Charges, Costs, And The Benefits Of Insurance


August 6th, 2014

Note: In addition to Marc Berk, Claudia Schur also coauthored this post. 

Recent discussion about the Affordable Care Act has intensified the media’s interest in the cost of medical care. While as health services researchers we are perhaps in the best position to provide information on complex health care topics, we may need to improve our ability to distill information into one minute sound bites.

A particularly interesting example of the disconnect between media reporting and a more nuanced analysis occurred earlier this year, on March 4, when NBC ran a story about the cost of having a baby. The story confused the very different concepts of what health care providers charge, what they are actually paid, and what consumers owe, and in so doing obscured one of the key benefits for consumers of being insured.

We were startled to hear that, according to NBC, the cost of having a baby has increased more than 300 percent in the past 10 years. According to the report, the cost of a vaginal delivery went from $7,700 to $32,000, while the cost of a cesarean birth went from $11,000 to $51,000. A small heading in the table presented by NBC cited Truven Analytics as the source of these data.

Read the rest of this entry »

An Ounce Of Prevention For The ACA’s Second Open Enrollment


August 4th, 2014

Note: In addition to Jon Kingsdale, this post is coauthored by Julia Lerche.

Since recovering from its flawed rollout, the ACA has enjoyed a string of successes. By April, some eight million Americans managed to enroll; for 2015, some reluctant insurers, including the nation’s second largest (United), are jumping into the new ACA Marketplaces; and the New England Journal of Medicine recently published an analysis confirming the ACA’s significant reduction of the uninsured.

Approximately 87 percent of Marketplace enrollees claimed premium tax credits, of which an estimated 85 percent, or six million, actually paid premiums. (We assume a disenrollment rate of 3 percent per month since April 2014, which is conservative compared with the Massachusetts Health Connector’s experience and in line with the assumptions of several State-based Marketplaces.) Many of the original six million, plus more recent enrollees, will experience their second enrollment between November 15, 2014 and February 15, 2015. They will also file with the IRS for a premium tax credit as early as January 2015.

The two events in combination represent a huge risk. We hope the responsible agencies will act soon to mitigate the risks.

Read the rest of this entry »

The Payment Reform Landscape: Capitation With Quality


June 6th, 2014

When I began this blog series in February, I explained how Catalyst for Payment Reform (CPR) views different payment reform models along a continuum of financial risk. Thus far, we have used this series to explore the evidence behind “upside only” models that give providers the chance for a financial upside, but no added financial risk, or downside. We’ve looked at the evidence behind pay-for-performance and per-member per-month payments to support patient-centered medical homes. This month, we move across the risk spectrum to examine a model that offers both upside and downside financial risk for providers—capitation.

What is Capitation? Is It Widespread?

Capitation is nothing new when it comes to paying for health care. It had its heyday in the HMO era of the 1990 s, but something was seriously lacking in the capitation arrangements of the past that led to a strong backlash from consumers. Consumers feared their health plans were more interested in saving money than providing them with the quality care they needed; in a Kaiser Family Foundation Survey at the time, most reported they or someone they knew had a problem with their plan. Some of these fears proved to be warranted. Fortunately, since the 90s, payers and providers have worked to put quality safeguards in place.

When tracking value-oriented payment, CPR only examines capitation arrangements with a quality measurement and incentive component — what we call “capitation with quality.” CPR defines capitation with quality as “a fixed dollar payment to providers for the care that patients may receive in a given time period, such as a month or year, with payment adjustments based on measured performance and patient risk.”

Read the rest of this entry »

Request For Abstracts: Health Affairs Health Care And Medical Innovation Theme Issue


June 5th, 2014

Health Affairs is planning a theme issue on health care and medical innovation in early-2015. The issue will span the fields of medical technology and also cover public policy and private sector innovations that promote improvements in the delivery of care, lower costs, increase efficiency, etc. We plan to publish 15-20 peer-reviewed articles including research, analyses, and commentaries from leading researchers and scholars, analysts, industry experts, and health and health care stakeholders.

We invite interested authors to submit abstracts for consideration for this issue. To be considered, abstracts must be submitted by June 25, 2014. We regret that we will not be able to consider any abstracts submitted after that date. Editors will review the abstracts and, for those that best fit our vision and goals, invite authors to submit papers for consideration for the issue. Invited papers will be due at the journal by September 2, 2014.

More information on topics and themes for this issue, as well as process guidelines and timetables, is available below and on the Health Affairs website.

Read the rest of this entry »

The Cost Of A Cure: Medicare’s Role In Treating Hepatitis C


June 5th, 2014

Editor’s note: In addition to Tricia Neuman, Jack Hoadley and Juliette Cubanski also coauthored this post.

For a patient with hepatitis C, a potentially deadly disease, the prospect of finding a cure with minimal side effects is a really big deal. Also a big deal is the cost of Sovaldi (sofosbuvir), an oral drug approved by the Food and Drug Administration in December 2013 for the treatment of chronic hepatitis C. Sovaldi has been priced by its manufacturer, Gilead, at $1,000 per pill, or an estimated $84,000 for its entire 12-week regimen. It joins the treatment arsenal with several older drugs generally thought either to be less effective or to have more side effects, and another newly approved drug to be taken in combination with other drugs. More drugs are expected to gain approval within the year.

Sovaldi’s price tag has drawn attention in part because an estimated 3 million Americans have the hepatitis C virus and could be considered candidates for new drugs. Patients will clearly benefit from a long-awaited cure, and public and private payers could potentially see a reduction in health care spending over the long term if Sovaldi successfully cures this disease and fewer patients require high-cost liver transplants. But private insurers and public programs will face significant budgetary pressures if a large number of patients receive this treatment at current prices.

To date, attention has focused on cost implications for private health plans, Medicaid, and the Department of Veterans Affairs (VA). For example, UnitedHealth reported that the cost of Sovaldi was “multiple times” its expectations. State Medicaid officials and Medicaid plans have warned that the cost of the new treatments will pose significant fiscal challenges to state budgets and plan payment rates, even though Medicaid receives a 23.1 percent rebate (discount) for all brand drug purchases. The VA has decided to cover the drug and secured from Gilead a discount of 44 percent, one that applies to certain other federal purchasers, but is targeting treatment to the sickest patients while waiting for less expensive drugs to become available.

Less attention has been paid to the cost implications for Medicare, where coverage of Sovaldi will fall under Part D, the program’s outpatient prescription drug benefit administered by private plans. Given the drug’s effectiveness, most if not all of Part D plans will likely cover Sovaldi. The anticipated impact on costs to Medicare will be revealed to CMS later this month, when plans submit premium bids for 2015. Plans will increase their bids to cover the expected costs of new treatments, which will raise costs for both the federal government and Part D enrollees who pay premiums. CMS will release the average Part D premium for 2015 in August.

Read the rest of this entry »

Making Markets Work In Health Care: What Does That Mean?


June 3rd, 2014

Editor’s note: See Robert Berenson’s post on consolidation and market power in health care, also published today, and watch for more on these subjects in Health Affairs Blog.

Health Affairs last week posted a set of papers that represent several perspectives on Provider Consolidation in Health Care: Challenges and Solutions. To provide a context for these papers and for the broader discussion of how to make markets work in health care, I suggest a couple of thoughts.

There are two types of markets in health care: the market for health services and the market for health coverage—these markets are interrelated, and both of them are broken.

The historical correlation between provider concentration and both higher prices and lower quality is well-documented. With the increased focus under health reform on collaboration across providers and settings, and the increase in physician and hospital consolidation and the purchase of physician practices by hospitals, the concern is that this trend may lead to adverse consequences for the health system.

Read the rest of this entry »

Acknowledging The Elephant: Moving Market Power And Prices To The Center Of Health Policy


June 3rd, 2014

Editor’s note: See Stuart Guterman’s post on consolidation and market power in health care, also published today, and watch for more on these subjects in Health Affairs Blog.

Health Affairs recently published a set of papers addressing the problem of provider consolidation and consequent increased prices. Perhaps even more striking than the specific arguments made in these papers is the very fact that smart and busy people other than antitrust economists and lawyers now are actually spending a great deal of their professional time thinking about this problem. High prices and the distortions in markets resulting from differential pricing power have been the unacknowledged elephant in the policy room for decades, even as the policy community and policy makers have wrung their hands over what to do about rising health care costs. More than 40 years ago, President Nixon declared that health care spending increases were “unsustainable.” And here we still are grappling with health care spending.

Over the decades I have been told by smart health economists that the main culprit behind increasing health spending is technology, although the definition of technology turns out to be pretty flexible — new ways of providing care are considered new technology, not just machines and drugs. And nominees for the reason our baseline spending exceeds other countries’ by so much have included administrative complexity in our multi-payer, crazy quilt organization of health care; defensive medicine caused by malpractice concerns; and fraud and abuse. Jack Wennberg and colleagues at Dartmouth have argued that variations in service use that do not increase quality explain spending variations, at least in Medicare where payment (price) variations are not permitted other than to reflect differences in input costs.

All of these explanations have merit, but for non-government payers, prices have actually been the main source of high spending and variations in spending, at least in the recent past and probably for much longer. Prices for commercial and self-funded insurance products result from market negotiations between insurers and providers; the balance of power in these negotiations has sometimes shifted, most recently toward many providers, but certainly not all of them — the relatively few remaining independent hospitals and the solo and small physician practices have become “price takers,” even as other providers are able to negotiate payment rates far higher than Medicare benchmarks.

Read the rest of this entry »

Health Affairs June Issue: Where Can We Find Savings In Health Care?


June 2nd, 2014

The June issue of Health Affairs, released today, features various approaches to cost-savings in the U.S. health care system. A variety of articles analyze the effects of potential policy solutions on the Medicare and Medicaid programs and their impact on the health of beneficiaries and tax payer wallets.

Federal approaches to reduce obesity and Type 2 diabetes rates by improving nutrition could work—but the how matters. Sanjay Basu of the Stanford University School of Medicine and coauthors modeled the effects of two policy approaches to reforming the Supplemental Nutrition Assistance Program (SNAP), which serves one in seven Americans. They found that ending a subsidy for sugar-sweetened beverage purchases with SNAP dollars would result in a decrease in obesity of 281,000 adults and 141,000 children, through a 15.4 percent reduction in calories by the lowering of purchases of this source. They also found that a $0.30 credit back on every dollar spent on qualifying fruits and vegetables could more than double the number of SNAP participants who meet federal guidelines for fruit and vegetable consumption.

With more than forty-six million people receiving SNAP food stamp benefits, the authors suggest that policy makers closely examine the implications of such proposals at the population level to determine which will benefit people’s health the most and prove most cost-effective.

If you’re between ages 15–39 when you are diagnosed with cancer, the implications later in life extend well beyond your health. Gery P. Guy Jr. of the Centers for Disease Control and Prevention and coauthors examined Medical Expenditure Panel Survey data and determined that survivors of adolescent and young adult cancers had annual per person medical expenditures of $7,417, compared to $4,247 for adults without a cancer history. They also found an annual per capita lost productivity of $4,564 per cancer survivor — because of employment disability, missed workdays, and an increased number of additional days spent in bed as a result of poor health — compared to $2,314 for adults without a cancer history.

The authors suggest that the disparities are associated with ongoing medical care needs and employment challenges connected to cancer survivorship, and that having health insurance alone is not enough to close the gap. They stress the importance of access to lifelong follow-up care and education to help lessen the economic burden of this important population of cancer survivors.

Read the rest of this entry »

Health Affairs Web Firsts: Provider Consolidation In Health Care


May 19th, 2014

The clinical and economic virtues of provider consolidation have long been recognized by policy experts, but in recent years, research has shown that large provider organizations may use market power to obtain relatively high prices from payers without necessarily delivering superior quality. Four articles, being released as Web Firsts by Health Affairs, examine the issue from diverse perspectives.

A study from Paul Ginsburg and Gregory Pawlson serves as an issue overview. With continued consolidation likely, the article examines strategies that purchasers and payers can pursue to combat the rising prices that may result from growing provider leverage.

Ginsburg is the Norman Topping/National Medical Enterprises Chair in Medicine and Public Policy at the Sol Price School of Public Policy and the Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California in Los Angeles; Pawlson is a senior medical consultant at the law firm Stevens and Lee in Lancaster, Pennsylvania.

“The success of the private- and public-sector initiatives,” they conclude, “will determine whether governments shift from supporting competition to directly regulating payment rates.”

Looking broadly at the drivers of competitive outcomes, a study from William Sage, the James R. Dougherty Chair for Faculty Excellence, School of Law at the University of Texas at Austin suggests that the health care system’s long history of regulation and subsidy has not only distorted prices but has also altered the nature of the products that the system buys and sells.

Read the rest of this entry »

Health Affairs Briefing: Hospital Productivity And The Standardization Of Care


April 24th, 2014

Hospital organizational form, practices, and procedures all affect outcomes and costs. These topics and the exploration of cost-saving potential within the hospital sector were the subject of a National Bureau of Economic Research conference held last fall. The May 2014 issue of Health Affairs, “US Hospitals: Responding To An Uncertain Environment,” features four of the papers presented at that conference, as well as several other papers that take up issues surrounding the financial health of hospitals and outcomes for the populations they serve.

Please join Health Affairs Founding Editor John Iglehart on Wednesday, May 7, at the National Press Club in Washington, D.C., for a Health Affairs briefing marking the release of the May issue where the authors will present their work.

WHEN:
Wednesday, May 7, 2014
10:00 a.m. – Noon

WHERE:
National Press Club
529 14th Street NW
Washington, DC  13th Floor (Metro Center)

REGISTER NOW!

Follow live Tweets from the briefing @HA_Events, and join in the conversation with the hashtag #HA_HospitalProductivity.

Read the rest of this entry »

For High-Risk Medicare Beneficiaries: Targeting CMMI Demonstrations On Promising Delivery Models


April 22nd, 2014

Medicare beneficiaries with multiple chronic conditions, certain types of serious conditions (e.g. heart disease, pulmonary disorders, mental disorders, cancer), and functional limitations have higher health and long-term care costs and more adverse outcomes than other beneficiaries.

One of the biggest opportunities for savings for Medicare, Medicaid, and beneficiaries themselves, is through reducing hospitalizations, readmissions, and institutional care, especially for these high-risk beneficiaries. Achieving these savings and serving this population will require innovative delivery models and a clear business case to convince organizations to implement those new models.

The Affordable Care Act set aside $10 billion for experiments in innovative care delivery and payment systems.  With these funds, the Centers for Medicare and Medicaid Innovation (CMMI) is launching and evaluating several initiatives, primarily Accountable Care Organizations (ACOs), bundled payment for care innovation, and primary care transformation.  These initiatives change financial incentives for health care providers so that while they bear some financial risk for the costs of providing care, they also stand to benefit from any savings produced.

Historically, it has taken additional legislative action to apply successful delivery models more broadly across the Medicare program. Now, the health care law has removed this barrier, giving the Secretary of Health and Human Services the ability to expand successful innovations that improve quality or lower costs.  While early results show improvements in quality and modest savings, most CMMI pilots and demonstrations to date are not specifically targeted on high-risk beneficiaries, where the biggest gains can be expected.

Read the rest of this entry »

Health Insurance Coverage Is Just The First Step: Findings From Massachusetts


March 26th, 2014

As the rollout of coverage expansions under the Affordable Care Act (ACA) continues across the country, more Americans are gaining insurance coverage, with all the benefits that that implies in terms of health care access and financial protections. However, if, as President Obama has argued, affordable health care is a cornerstone of economic security for American families, findings from a survey of Massachusetts residents suggest that insurance coverage alone will not be enough.

Since its 2006 health reform initiative, Massachusetts has had the nation’s highest level of insurance coverage. But though there have been improvements in access to health care and health care affordability, insurance coverage has not eliminated the burden of high health care costs for Massachusetts families.

Health care costs are a problem for many insured adults. In 2012, more than one-third (38.7 percent) of Massachusetts adults with health insurance coverage for all of the past year reported problems with health care costs, with the level much higher for low-income insured adults (41.6 percent for those with family income at or below 138 percent of the poverty line—the income eligibility standard for the Medicaid expansion under the ACA) and middle-income insured adults (49.5 percent for those with income from 139 to 399 percent of poverty—the income group targeted by the new health insurance Marketplaces). Insured adults in Massachusetts report going without needed health care, cutting back on other spending, reducing savings, and taking on debt to deal with health care costs.

Read the rest of this entry »

Financial Orphan Therapies Looking For Adoption


March 6th, 2014

There exist scientifically promising treatments not being tested further because of insufficient financial incentives. Many of these therapies involve off-label uses of drugs approved by the Food and Drug Administration that are readily available and often inexpensive. Pharmaceutical companies—largely responsible for clinical drug development—cannot justify investing in such clinical trials because they cannot recoup the costs of these studies.  However, without prospective data demonstrating efficacy, such treatments will never be adopted as standard of care.

In an era of increasing health care costs and the need for effective therapies in many diseases, it is essential that society finds ways to adopt these “financial orphans.” We propose several potential solutions for the non-profit sector, pharmaceutical companies, health insurers, patient driven research and others to accomplish this goal.

Drug Development Today

Under today’s drug development model, the vast majority of clinical trials are sponsored by pharmaceutical companies, and the process is lengthy, expensive, and, some have argued, inefficient. The cost of developing a new FDA approved drug is estimated to exceed $1.2 billion, the average time from lead to market is typically over 10 years, and only 1 in 10 drugs entering a phase I study is finally approved. Thus pharmaceutical companies, seeking to recoup this investment, conduct a return on investment (ROI) calculation with attention to both scientific and financial considerations such as the chances of success and whether the therapy will be sufficiently profitable to justify the high cost of clinical development.

These considerations sometimes lead to inefficient outcomes from society’s perspective in which promising and potentially transformative therapies are not pursued because of improperly designed financial incentives. We call such therapies “financial orphans.”

Read the rest of this entry »

Patients’ Views On Reforming The Physician Fee-For-Service Payment System


February 28th, 2014

Virtually all serious proposals for health care cost containment include reforming the fee-for-service payment system.  Last fall’s bipartisan proposal to fix Medicare’s sustainable growth rate included provisions to reward physicians for providing high-value rather than high-volume care.  Ostensibly, realigning physicians’ financial incentives would lead to higher quality, better coordinated, and more appropriate care.

But would patients necessarily be aware that their physicians are being paid differently? And would they even care? A new research report from Public Agenda and the Kettering Foundation suggests that consumers could play a role in advancing payment reform.  But in order to work through the trade-offs of changing the system, employers and payers must help members of the public understand that most reimbursement is currently fee-for-service.

Public Agenda asked a total of 44 insured and uninsured Americans, 40 to 64 years old, to deliberate together in focus groups over the pros and cons of several approaches to cost containment. Participants had some recent contact with the health care system as patients but none were seriously ill. They considered payment reform, price transparency, increased consumer cost-sharing, government price-setting, and expanded access to Medicare, among other approaches.  We held the deliberative focus groups in February and March 2013 in Secaucus, New Jersey; Montgomery, Alabama; and Cincinnati, Ohio, as well as a pilot in Stamford, Connecticut. After the groups, we followed up with participants for in-depth interviews. These focus groups do not provide information about how other types of consumers, particularly young people, view different approaches to addressing health care costs.

Read the rest of this entry »

Jeffrey Brenner On GrantWatch: The Future For Population Health


February 21st, 2014

In a recent GrantWatch Blog post, Jeffrey Brenner raises the question, “What if Thomas Edison had to write grant proposals to invent the light bulb?” Brenner is a MacArthur fellow, medical director of the Urban Health Institute, and executive director and founder of the Camden Coalition of Healthcare Providers.

Brenner uses the Edison analogy to look at current grant funding and population health.

Since 1945 the National Institutes of Health (NIH), a federal government agency that funds medical research, has spent $547 billion dollars to cure disease and push the frontiers of medical knowledge. This spending has been supplemented by funding from private foundations. Sadly, despite all of this spending we have little understanding of how to deliver better care at lower cost to every American. At best, in the field of population health, we have a few light bulbs that stay lit for an hour or two, but we lack even basic knowledge to drive this field forward.

With 85 million baby boomers in the midst of retiring and a health care system that consumes 18 percent of our economy, it is not a small problem. We do not understand the fundamental drivers of health care utilization; the basic rules for designing and implementing effective interventions; the best ways to use data to plan, implement, manage, and evaluate interventions; nor how to train staff to run and lead these interventions. Why the lack of progress?

Read the rest of this entry »

Care Delivery And Coordination In The Accountable Care Environment


February 19th, 2014

Editor’s Note: This post is the fourth in a periodic Health Affairs Blog series on palliative care, health policy, and health reform. The series features essays adapted from and drawing on an upcoming volume, Meeting the Needs of Older Adults with Serious Illness: Challenges and Opportunities in the Age of Health Care Reform, in which clinicians, researchers and policy leaders address 16 key areas where real-world policy options to improve access to quality palliative care could have a substantial role in improving value.

As we enter the world of accountable care, palliative care programs bring tremendous assets to our health care system. Accountable care organizations (ACOs) seek to improve quality and reduce costs for a defined population of patients, and palliative care offers value on both the quality and cost sides of the equation.

Palliative care improves quality

Patients facing a serious illness value survival, quality of life, and minimization of suffering for themselves and their families. For patients with far-advanced disease, hospice care is the “gold standard” of care in meeting these goals. Palliative care achieves these goals for patients who are living with a serious illness but may not be at the end of life. Many studies demonstrate a panoply of improved outcomes for patients receiving palliative care: improved quality of life, reduced symptoms, enhanced emotional support, improved communication with physicians, earlier and more frequent use of hospice, reductions in family distress, improved survival, and greater satisfaction with care.

Read the rest of this entry »

National Health Spending Growth Remains Low For Fourth Consecutive Year


January 6th, 2014

A new analysis from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), released today in the January 2014 issue of Health Affairs, estimates that health care spending in the United States grew at a rate of 3.7 percent in 2012 to $2.8 trillion. That level of annual growth is similar to spending growth rates since 2009, which increased between 3.6 percent and 3.8 percent annually. This means that growth during all four years has occurred at the slowest rates ever recorded in the fifty-three-year history of the National Health Expenditure Accounts.

Total health care spending in 2012 grew more slowly than did the gross domestic product (GDP), which means that the share of the economy devoted to health care fell slightly from its 2011 level of 17.3 percent to 17.2 percent in 2012 (these shares reflect a large upward revision to the GDP in July 2013 that caused a corresponding downward revision to the health spending proportion of GDP). Faster growth among some services was partially offset by slower growth in other areas, said Anne B. Martin, an economist in the Office of the Actuary at CMS and lead author of the Health Affairs article.

“The low rates of national health spending growth and relative stability since 2009 primarily reflect the lagged impacts of the recent severe economic recession,” Martin said. “Additionally, 2012 was impacted by the mostly one-time effects of a large number of blockbuster prescription drugs losing patent protection and a Medicare payment reduction to skilled nursing facilities.”

Personal health care spending (health care goods and services), which accounted for 85 percent of total national health spending, increased by 3.9 percent in 2012, 0.4 percentage points faster than in 2011. This uptick in growth was influenced primarily by faster growth in hospital and physician and clinical services. Partially offsetting this acceleration was slower growth in spending for prescription drugs and nursing home care. Spending growth trends among health care payers varied as well in 2012. Medicaid and out-of-pocket spending grew faster in 2012 than in 2011, but growth in private health insurance and Medicare spending was slightly slower.

Although the Affordable Care Act  had a minimal impact on aggregate health spending through 2012, several provisions continued to affect certain subcomponents of national health expenditures, such as increased Medicaid rebates for prescription drugs, the Medicare drug coverage gap (“donut hole”) discount program, coverage for dependents under age twenty-six, and the minimum medical loss ratio provision (which requires insurers to spend a minimum percentage of premium revenue on medical claims and health care quality improvements).

Read the rest of this entry »

Recent Health Policy Briefs: Specialty Pharmaceuticals And Medicare Hospital Readmissions


November 25th, 2013

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation explains many of the current debates surrounding the use of specialty pharmaceuticals. Specialty pharmaceuticals—drugs and biologics used to treat chronic, serious, or life-threatening diseases—are complex to manufacture and distribute, often difficult to administer, and may require special patient monitoring. They are a rapidly growing share of the costs borne by both public and private health plans. A patient could pay a few thousand dollars a month to use them, and the annual total cost for some products could exceed $100,000. This policy brief discusses the potential impact of specialty pharmaceuticals on consumers and the health care industry and some of the key challenges for policy makers.

The immediately preceding Health Policy Brief describes the Medicare Hospital Readmissions Reduction Program (HRRP), established as part of the Affordable Care Act. This program imposes financial penalties on hospitals with higher than expected readmissions. The program aims to create an incentive for hospitals to reduce the number of patients who return to the hospital within 30 days for treatment of three key conditions: acute myocardial infarction (that is, heart attack), heart failure, or pneumonia. The HRRP, in operation for only two years, already has shown results. Despite this success, some policy makers fear unintended consequences for safety-net hospitals, potentially putting vulnerable populations at risk.

Health Policy Briefs are aimed at policy makers, congressional staffers, and others needing short, jargon-free explanations of health policy basics. Sign up for an e-mail alert about upcoming briefs. The briefs are also available from the Robert Wood Johnson Foundation’s website. Please feel free to forward the briefs to any of your colleagues who are tracking health issues. And after you’ve taken a look, we welcome your feedback at: hpbrief@healthaffairs.org.

Read the rest of this entry »

Premium Rate Variation In Exchanges Is An Eye Opener


August 7th, 2013

Like a burlesque strip tease for health policy wonks, the slow motion unveiling of premiums for state health insurance exchanges has generated a lot of attention, unease, and, yes, excitement. The 2014 premiums, the first for Obamacare’s centerpiece feature of health insurance marketplaces, represent nothing short of a referendum on the “affordable” in the Affordable Care Act.

In just the past few weeks, Maryland and New York have joined the show. Putting aside the “rates are too high” vs. “rates are well below expectation” arguments, one fact seems obvious from looking at the rates. With the very big exception of California, the variance among plan rates is startling.

We took a look at the rates for silver plans, the ones most closely watched as they form the basis for computing the premium subsidies. We also looked at the variation between the second-highest and second-lowest cost silver-level plans. This is a simple way to eliminate outliers at the high end and the low end of the premium range. It also allows us to include the cost of the second-lowest-cost silver plan, the premium from which the subsidies are determined.

Read the rest of this entry »

Unpacking The Meaning Of ‘Rationing’: A Response To Dowd And Allison


June 27th, 2013

Bryan Dowd and Kirk Allison are to be thanked for their lengthy treatise on the word “rationing.” It is a term whose interpretation economists have left to politicians — not invariably models of erudition. Check the subject index of introductory textbooks or even intermediary textbooks in economics and rarely will you see there the term “rationing.”

Part of the lack of clarity on the term can be laid at the doorsteps of the profession that claims to know all about resource allocation but rarely ever takes up the subject of rationing in its teaching. Sadly, modern textbooks in economics are, by and large, just copies of one another — worse than me too drugs in which at least one molecule is changed. At some point, someone forgot to cover the term, so all other texts followed.

But another reason for the lack of clarity on the term reflects the fact that even economists cannot seem to agree on its meaning.

Read the rest of this entry »

Click here to email us a new post.




This blog is protected by dr Dave\\\'s Spam Karma 2: 1320507 Spams eaten and counting...