Blog Home

Archive for the 'Health Care Costs' Category




The Medicaid Boom And State Budgets: How Federal Waivers Are Advancing State Flexibility


July 18th, 2014

Note: The authors would like to thank Erica Socker, Senior Research Associate, and Michelle Shaljian, Associate Director of Communications, for their review and editorial assistance.

According to data released by the Department of Health and Human Services, one in five Americans now receive their health insurance through a state Medicaid program. Despite this increase in enrollment, it is estimated that 6 million Americans will likely remain uninsured because 20 states have decided not to expand Medicaid as the Affordable Care Act (ACA) envisioned. There are at least four states that are considering expanding Medicaid but have yet to do so.

Medicaid expansion continues to be one of the most politically charged directives of the health care law, mainly because the Supreme Court decision left the choice to states. This decision has generated an ongoing debate about whether and how states should expand their Medicaid programs. For example, an intense debate has been underway in Virginia, over the decision to include Medicaid expansion in the state budget; putting Democratic Governor Terry McAuliffe at odds with the Republican State Legislature. Similar debates are occurring in states across the country, and are further complicated by states’ option to pursue alternative expansion approaches under a Medicaid waiver. For states that have not yet expanded the program, the success of these alternative expansion models may influence whether they can find a politically feasible path forward.

Read the rest of this entry »

ACO Results And Treating Hepatitis C Most-Read Health Affairs Blog Posts For June


July 15th, 2014

In June, Matthew Petersen and David Muhlestein’s post on the cost and quality implications of the accountable care organization (ACO) model on the health care system was the most-read Health Affairs Blog post. Not too far behind was a post on Medicare’s role in treating Hepatitis C from Tricia Neuman, Jack Hoadley, and Juliette Cubanski.

Next was Tim Jost’s examination of the employer mandate and why it should be repealed and replaced, followed by Jon Gabel’s response to a Health Affairs Web First on cancelled non-group plans.

Here’s the full list:

Read the rest of this entry »

Income Verification On The Exchanges: The Broader Policy Picture


July 14th, 2014

The Affordable Care Act scandal de jour (or at least one of them) is the difficulty the exchanges have faced in verifying the eligibility of many premium tax credit applicants. Two Department of Health and Human Services Office of Inspector General Reports in early July documented the existence of these problems. One reported that as of the first quarter of 2014, the federal exchange alone had been unable to resolve 2.6 or 2.9 million data inconsistencies. Another reported that internal controls at the federal and two state exchanges were not fully effective in ensuring that individuals enrolled in exchanges were in fact eligible.

House Republicans claim that in fact there are 4 million data inconsistencies affecting half of all enrollments. In House Energy and Commerce hearings on June 10, 2014, Republican Representative Charles Bustany Jr. claimed that $44 billion in improper payments would be made over the next 10 years. Douglas Holtz-Eakin, a former Bush Administration official, who testified at the hearings claims that improper payments may equal $152 billion. The House Energy and Commerce Health Subcommittee is holding further hearings on data inconsistencies on July 16.

The seriousness of verification issues should not be overestimated. The administration has been put in place procedures to verify carefully premium tax credit applications. Many of the discrepancies CMS is attempting to resolve do not relate to income eligibility, and those that do may result ultimately in a finding of eligibility for increased, rather than decreased, premium tax credits. A discrepancy that could result in the need for additional documentation may be as trivial as a hyphen left out of a name or a digit transposed on a Social Security number.

Unfortunately, programs proposed by Republicans and other ACA opponents that in fact make a serious attempt to cover the uninsured will require income reporting and face similar difficulties. Current reform proposals that avoid coverage eligibility determinations will not in fact cover the uninsured. While the administration could have perhaps done a better job in making eligibility determinations, any means-tested program faces a similar challenge. It is possible to design a system that does not rely on means testing and could cover low-income and high-cost uninsured Americans, as I describe below. But it would be a very different system than the ACA or alternatives currently being proposed.

Read the rest of this entry »

A Health Reform Framework: Breaking Out Of The Medicaid Model


July 10th, 2014

Editor’s note: This post is coauthored by Joseph Antos and James Capretta.

A primary aim of the Patient Protection and Affordable Care Act (ACA) is to expand insurance coverage, especially among households with lower incomes. The Congressional Budget Office (CBO) projects that about one-third of the additional insurance coverage expected to occur because of the law will come from expansion of the existing, unreformed Medicaid program. The rest of the coverage expansion will come from enrolling millions of people into subsidized insurance offerings on the ACA exchanges — offerings that have strong similarities to Medicaid insurance.

Unfortunately, ample evidence demonstrates that this kind of insurance model leaves the poor and lower-income households with inadequate access to health care. The networks of physicians and hospitals willing to serve large numbers of Medicaid patients have been very constrained for many years, meaning access problems will only worsen when more people enroll and begin using the same overburdened networks of clinics and physician practices.

It does not have to be this way. It is possible to expand insurance coverage for the poor and lower-income households without reliance on the flawed Medicaid insurance model. Opponents of the ACA should embrace plans to replace the current law with reforms that would give the poor real choices among a variety of competing insurance offerings, including the same insurance plans that middle-class families enroll in today. Specifically, we propose a three-part plan that includes a flexible, uniform tax credit for all those who lack employer-based coverage; deregulation of Medicaid; and improved safety-net primary and preventive care.

Read the rest of this entry »

Investing In The Social Safety Net: Health Care’s Next Frontier


July 7th, 2014

Editor’s note: In addition to Jennifer DeCubellis, Leon Evans also coauthored this post. 

The United States spends 250 percent more than any other developed country on health care services, yet we are ranked below 16 other countries in overall life expectancy. A less frequently discussed statistic, however, is the degree to which the U.S. under-invests in social services: for every dollar spent on health care, only 50 cents is invested in social services. In comparison, other developed countries spend roughly $2 on social services for every dollar spent on health care. The U.S. is 10th among developed countries in its combined investment in health care and social services.

This imbalance has ramifications for the nation’s Medicaid program, where just five percent of beneficiaries with complex health and social problems drive more than 50 percent of all program costs. Many individuals in this high-cost group have chronic complex medical, behavioral health, and/or supportive service needs, and in the absence of coordinated intervention, they tend to be frequent visitors to emergency rooms and have high rates of avoidable hospital admissions.

Read the rest of this entry »

Payment And Delivery Reform Case Study: Cancer Care


July 3rd, 2014

Editor’s note: In addition to Darshak Sanghavi, Mark McClellan, and Kavita Patel, this post is also authored by Kate Samuels, project manager at Brookings. It is adapted from a forthcoming full-length case study, the second in a series from the Engelberg Center’s Merkin Initiative on Physician Payment Reform and Clinical Leadership designed to support clinician leadership of health care delivery, payment, and financing reform. The case study will be presented during the Merkin Initiative’s “MEDTalk” event on July 9 from 10:30 AM to 12:30 PM EDT, featuring live story-telling and knowledge-sharing from patients, providers, and policymakers.

Oncology practices and hospitals across the nation struggle with providing sustainable, comprehensive, and coordinated cancer care. Clinical leaders with strategies and models to improve the quality and value of health care often don’t know how to navigate the landscape of payment and delivery reform options to sustain their innovations.

We use a case study approach to investigate and tell the story of the New Mexico Cancer Center (NMCC), an independent cancer center that is experimenting with innovative ways to improve patient-centered oncology care. We identify challenges for creating sustainable and supportive payments models, and we share the broader strategic and policy lessons for adopting alternative payment models.

Read the rest of this entry »

The Payment Reform Landscape: Bundled Payment


July 2nd, 2014

Getting a good deal for a package price is something we’re all familiar with as consumers.  In health care, that might mean creating incentives for health care providers to improve the continuity and coordination of care, leading to better patient outcomes and lower costs. Paying for a set of services, not “per unit of care delivered’ under the fee-for-service model, is typically called bundled or episode- based payment.

Bundled payment is a single payment to providers or health care facilities (or jointly to both) for all services to treat a given condition or provide a given treatment. Unlike some of the other payment reform models I’ve discussed on Health Affairs Blog, such as pay-for-performance, bundled payment asks providers to assume financial risk for the cost of services for a particular treatment or condition, as well as costs associated with preventable complications.

Read the rest of this entry »

Happy Birthday HCPF


July 1st, 2014

Today marks the 20th birthday of the Colorado Department of Health Care Policy and Financing.  The story of its creation provides an important reminder of how our thinking about health care has evolved over the past few decades – and how it continues to evolve today.

Back in the bad old days, Medicaid was just another social service.  Housed within a broader social services agency, Colorado Medicaid – as was the case in most states – grew up with a typical welfare mentality.  Program enrollees were beneficiaries.  If they did not enroll, we assumed it meant they did not need or want our services.  Eligibility was a cumbersome, rule-bound process with inscrutable results and unintelligible notices to applicants of what was missing from their file.

Read the rest of this entry »

The Supreme Court And The Contraception Mandate: A Temporary Setback For Contraception Coverage


June 30th, 2014

Editor’s note: See Health Affairs Blog for more coverage of the Supreme Court’s Hobby Lobby decision.

Today, the United States Supreme Court ruled that for-profit companies may avoid providing contraception coverage to employees if the companies sincerely object on religious grounds. At its narrowest interpretation, this decision is a significant but remediable setback for women’s reproductive health. At its broadest (but least likely interpretation), the decision has the potential to wreak havoc on public health regulation.

The legal challenges to the Affordable Care Act’s (ACA’s) contraception mandate have been well described in three previous Health Affairs Blog posts. To briefly recap, though, the ACA requires preventive services to be covered without copayments or other cost sharing in most employer-supported health plans. To implement this requirement, the Department of Health and Human Services (HHS) issued regulations that include all FDA-approved contraceptives, and a company that does not provide no-cost coverage of contraception is subject to substantial penalties.

Three groups of employers are exempt from the mandate: small businesses with less than 50 employees, purely religious employers, and “grandfathered” plans that have not changed meaningfully since the ACA was passed. Additionally, religiously affiliated non-profits (such as universities and hospitals) received a special accommodation from HHS by which women can receive contraception from third-party insurers at no extra cost to employees or the organization if the organization objects to covering contraception and identifies an alternate insurer.

Read the rest of this entry »

Implementing Health Reform: The Supreme Court Rules on Contraception Coverage (Updated)


June 30th, 2014

On June 40, 2014, the Supreme Court issued its opinion in Hobby Lobby v. Burwell and Conestoga Wood Products v. Burwell. The Court’s decision has very important ramifications for religious liberty in the United States, for women’s access to health care, for employers’ and employees’ rights, even for corporate law. Its importance justifies its being released on the final day of the term, an honor usually reserved for only the most notable cases. But unlike the Court’s decision in National Federation of Independent Business v. Sebelius on the last day of its term two years ago, Hobby Lobby does not pose a serious threat — indeed any threat at all — to the Affordable Care Act.

From the perspective of the ACA, the case involves only the application of one particular provision of a regulation to one particular group of employers. The Court’s decision does not invalidate any provision of the ACA. It does not even fully invalidate any regulatory requirement. It simply says that the Department of Health and Human Services must extend to one group of employers an accommodation HHS has already extended to another group.

Read the rest of this entry »

New Health Policy Brief: Risk Corridors


June 26th, 2014

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) describes the Affordable Care Act’s premium stabilization programs that encourage insurers to participate in the exchanges by eliminating some unpredictability around newly insured enrollees.

The ACA created health insurance Marketplaces and premium subsidies to make insurance more affordable, and the ACA completely changed the way insurance is priced and sold in the individual market. As of 2014, insurers (both those participating in the exchanges and those selling on the individual market outside the exchange) face a number of new restrictions.

Read the rest of this entry »

Do Insurance Marketplace Consumers Need More Doctor Choices In-Network, Or Just Better Information?


June 26th, 2014

Media outlets have focused extensively on consumer complaints about “limited networks” and not being able to find a doctor under qualified health plans (QHPs) offered through the Health Insurance Marketplaces (HIMs). In response, the Obama administration released new standards which will require all QHPs to contract with a larger proportion of essential community providers within its service area. This means that health plans will be forced to accept more health care providers within their network, which may potentially increase costs for consumers.

At the heart of the recent changes lies a fundamental question worth exploring: Is consumer satisfaction with, and perceptions of health plan “network adequacy” grounded in the number of choices for doctors within network, or is it something different?

Read the rest of this entry »

Behind The Numbers: Slight Rise In Health Care Spending Growth Projected


June 24th, 2014

PwC’s Health Research Institute (HRI) released its ninth annual Medical Cost Trend: Behind the Numbers report today. This forward-looking report is based on interviews with industry executives, health policy experts, and health plan actuaries whose companies cover a combined 93 million members. Findings from PwC’s Health and Well-being Touchstone Survey of 1,200 employers from 35 industries are also included.

HRI projects that after a five-year contraction in spending growth in the employer-sponsored market, the growth rate will rise to 6.8 percent in 2015, up from the 6.5 percent projected last year.

What are the biggest drivers of the growth in health care costs? We identify four cost inflators in this report, and I would like to highlight two. First, the economy. More than five years after the end of the Great Recession, the improved economy is finally translating into greater medical spending. Consumers are now addressing health issues they ignored or postponed previously.

Secondly, the high cost of specialty drugs. While only four percent of patients use specialty drugs, those medications account for 25 percent of total U.S. drug spending. And estimates are that U.S. specialty drug spending will quadruple by 2020

Read the rest of this entry »

This Is Not Your Mother’s Payment Model: Reflections On The APM Pilot


June 18th, 2014

Editor’s note: This post is part of a periodic Health Affairs Blog series, which will run over the next year, looking at payment and delivery reforms in Arkansas and Oregon. The posts will be based on evaluations of these reforms performed with the support of the Robert Wood Johnson Foundation.

In early 1994, as I went about finding a practice to join after residency, every physician with whom I spoke discussed managed care at length. As a young family physician dedicated to prevention and early intervention, I was convinced that managed care answered many of the historical challenges faced by primary care physicians. At last we’d be able to pay for the social workers who could facilitate important mental health care and human services for our patients and for the group nutrition classes we wanted to run in our practices.

Yet just four years later, as I left private practice to return to academic medicine, managed care was virtually dead. All its promise had been undermined by a range of structural and environmental challenges.

Read the rest of this entry »

Implementing Health Reform: Premiums And Choice In The 2014 Health Insurance Marketplace (Updated)


June 18th, 2014

In the fall of 2013 the headlines were full of stories of individuals facing steep premium increases as the Affordable Care Act’s market reforms went into effect. The question was raised repeatedly whether Affordable Care Act premiums were really affordable. Commentators observed that major national commercial insurers were avoiding the exchanges and that in some states the ACA marketplace offered few choices and little competition.

On June 17, 2014, the Health and Human Services Assistant Secretary for Planning and Evaluation (ASPE) released a report surveying Premium Affordability, Competition, and Choice in the Health Insurance Marketplace, 2014. ASPE examined over 19,000 2014 marketplace plans within the four bronze, silver, gold, and platinum metal levels in each of the 501 geographic rating areas in the 50 states and the District of Columbia; the office analyzed premium levels, available choices, and market variables that might affect cost. It is always possible to find negative anecdotes (particularly if one is not too careful in checking their veracity), but when we look beyond anecdotes at the actual data, it is clear that the ACA was largely successful in achieving many of its goals for 2014.

One of the primary goals of the ACA is to make health insurance affordable to lower-income Americans. During the 2014 open enrollment period, 5.4 million individuals selected a plan in the 36 states served by the federal exchange (which are the states primarily covered by the report since state exchange data is still being assembled and analyzed). According to the report, 87 percent of these individuals qualified for a premium tax credit. They paid a premium that was, on average, 76 percent less than the full premium that they would have owed before the premium tax credit was applied.

Read the rest of this entry »

Cancelled Non-Group Plans: What We Know Now That We Did Not Know In October


June 17th, 2014

In October of 2013 President Obama faced a political firestorm over the cancellation of millions of individual insurance plans — plans not compliant with the requirements of the Affordable Care Act (ACA). The Associated Press (AP) estimated that 4.8 million persons with non-group coverage had their policies cancelled, and this estimate was widely quoted in the media and the Congress. In headline stories, the media also reported that policyholders of the canceled plans were now offered alternative plans, often at premiums more than double of their current plans.

When the controversy over cancelled policies broke, no surveys were available to estimate the number and the cost of cancelled policies. In October, HealthCare.gov and many state-based marketplace websites were virtually non-functional, so assessing comparative cost and benefits of cancelled and Marketplace plans largely was precluded. In this post I highlight information from subsequent surveys and analyses conducted in late 2013 and 2014 that measure the number of cancelled plans and the comparative cost of coverage in the pre-ACA and post ACA-Markets. The next two paragraphs summarize findings.

Recent survey data indicates the number of persons affected by cancelled policies was about 1.9 million persons, less than the often cited 4.8 million estimate. When persons with group health insurance are included in the denominator, these cancellations affected less than one percent of persons holding comprehensive private insurance. The number of people with non-group policies who became uninsured following last October’s cancellation of policies is similar to what occurs in the normal churn of the non-group market.

Read the rest of this entry »

Treated Prevalence Versus Spending Per Case: Responding To Starr And Coauthors


June 17th, 2014

I was surprised but pleased to see the Martha Starr, Laura Dominiak, and Ana Aizcorbe article in the May issue of Health Affairs replicating earlier work of Charles Roehrig and David Rousseau. These papers attempt to understand the role that treated disease prevalence and spending per case treated assume in accounting for the growth in average per capita healthcare spending. (Treated disease prevalence can increase when either a disease becomes more common or is diagnosed more frequently.) Starr and coauthors, like Roehrig and Rousseau, conclude that spending per case treated accounts for more of the growth in per capita spending than treated prevalence.

In our own work, my colleagues and I have addressed a different question. Our line of research focuses on changes in total health care spending – as opposed to per capita spending — over time. We have updated this work now through 2011 and our major conclusion remains the same; the rise in treated disease prevalence accounts for a slightly larger share of the growth in total healthcare spending than spending per case treated.

The three research teams employ different methods and use different spending measures. (In an earlier appendix, we described in detail the differences between our approach and that of Roehrig and Rousseau.) For example, our expenditures include home health and dental services, which are excluded in the paper by Starr and colleagues.

Read the rest of this entry »

FDA Should Pass The Salt…Standards


June 16th, 2014

Editor’s note: In addition to Rep. Rosa DeLauro, Sen. Tom Harkin also coauthored this post.

For years, Americans have been inundated with messages about the dangers posed by the food we eat whether from fat, carbohydrates, or sugar. But another additive lurks in virtually every package and bag on the supermarket shelves, as well as practically every restaurant meal, and it is having a dire impact on our health.

That additive is sodium, and Americans are consuming far too much, with profoundly negative consequences on our health and well-being as a country. It is time for the U.S. Food and Drug Administration (FDA) to take serious and meaningful action to address this trend and issue federal standards to reduce the amount of salt in our foods.

Current dietary guidelines recommend that most individuals between the ages of 2 and 50 consume no more than 2,300 milligrams of sodium a day, or approximately one teaspoon of salt. For the roughly two-thirds of Americans in an at-risk population – seniors, African-Americans, those with high blood pressure, and individuals susceptible to hypertension, diabetes, or chronic kidney disease – only 1,500 milligrams is recommended.

Read the rest of this entry »

How Much Market Power Do Hospital Systems Have?


June 12th, 2014

Sometimes big game hunters find frustration when their prey moves by the time they’ve lined up to blast it. That certainly appears to be the case with the health policy target de jour: whether providers, hospital systems in particular, exert too much market power. A recent cluster of papers in Health Affairs and policy conferences this spring have targeted the question of whether hospital mergers have contributed to inflation in health costs, and what to do about them.

Hospitals’ market power appears to be one of those frustrating moving targets. The past eighteen months have seen a spate of hospital industry layoffs by market-leading institutions, and also a string of terrible earnings releases from some of the most powerful hospital systems and “integrated delivery networks” in the country. These mediocre operating results raise questions about how much market power big hospital systems and IDNs do, in fact, exert.

The two systems everyone points to as poster children for excessive market power-California-based Sutter Health and Boston’s Partners Healthcare, both released abysmal operating results in April. Mighty Partners reported a paltry $3 million in operating income on $2.7 billion in revenues in their second (winter) quarter of FY14. Partners cited a 4.5 percent reduction in admissions and a 1.6 percent decline in outpatient visits as main drivers. Captive health insurance losses dragged down Partners’ patient care results.

Read the rest of this entry »

Wynne, Jost Posts Lead Health Affairs Blog Most-Read List For May


June 10th, 2014

Billy Wynne’s post on the 340B Rx Drug Discount program was the most-read Health Affairs Blog post in May. The top-15 list also featured several contributions from Tim Jost; his posts on the final 2015 Exchange and Insurance Market Standards rule (part 1 and part 2) and COBRA/ACA interaction made the top five. Also in the top five was James Rickert’s look at patient satisfaction and perceptions of care.

Read the rest of this entry »

Click here to email us a new post.