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Hobby Lobby, Conestoga Wood, The ACA, And The Corporate Person: A Historical Myth Bedevils The Law


April 18th, 2014
by Malcolm Harkins

On March 25, 2014, the Supreme Court of the United States heard arguments in two cases—Sebelius v. Hobby Lobby Stores, Inc. and Conestoga Wood Specialties v. Sebelius—challenging the validity of the Affordable Care Act’s (“ACA”) mandate that employer-sponsored health plans cover all FDA-approved contraceptives (the “Contraceptive Mandate”). In each case, closely held plaintiff corporations contend that the Contraceptive Mandate illegally infringed upon the corporations’ freedom to exercise religion.

The cases attracted attention because the Supreme Court had agreed to hear yet another challenge to the validity of the ACA’s provisions, but it has been less noticed that both cases, and others like them, implicate a fundamental question that the Supreme Court has never decided; on what basis, if any, is a corporation a “person” entitled to assert the constitutional and statutory rights of natural persons. Without denying the significance of the challenge to the ACA’s Contraceptive Mandate, the Supreme Court’s failure to define a principled corporate person theory has had—and continues to have—important and pervasive implications for the American legal system beyond the present cases.

Typically, legal concepts creating and regulating societal rights and obligations, like the corporate personhood concept, come into being incrementally in an extended evolutionary process. That evolutionary process is characterized by a dialectic give and take in which the principles justifying—or precluding—application of the concept in a variety of different factual scenarios are gradually clarified, defined and developed through a series of judicial decisions. The problem confronting the Supreme Court as it considers the Hobby Lobby and Conestoga Wood cases is that the concept of corporate personhood did not develop gradually or in an evolutionary process in which the meaning of the concept was developed and defined. Instead, the concept of the corporate person was imposed on the law ipse dixit, that is, by judicial fiat and without definition, in a series of late nineteenth century Supreme Court cases.

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Implementing Health Reform: The Latest Affordable Care Act Coverage Numbers


April 18th, 2014
by Timothy Jost

On February 17, 2014, the White House announced that 8 million Americans have signed up for private health insurance coverage through the health insurance marketplaces, or exchanges. This significantly exceeds the White House’s original goal of 7 million enrollees. It is far more than the Congressional Budget Office’s recent projections of 6 million.

The number of actual enrollees will be smaller than this number. The CBO’s projections are for the average number of those actually enrolled in coverage over the course of a calendar year. To calculate the average number of enrollees, one must subtract from the 8 million the number of individuals who fail to pay their premiums and thus are never actually enrolled in coverage, as well as those who will drop coverage at some later point during the year. To that reduced number, then, must be added back the number who become newly covered through special enrollment periods during the remainder of the year. In the end, 6 to 7 million average enrollees is probably a reasonable estimate.

This does not, however, exhaust the number of Americans who are now covered under the Affordable Care Act. The fact sheet states that 3 million young adults are covered under their parents’ plans because of the ACA. This number is probably high, but it is clear that the ACA has dramatically increased coverage of Americans between the age of 19 and 25 — the age group most likely to lack health insurance prior to the ACA (and still).

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Four Years Into A Commercial ACO For CalPERS: Substantial Savings And Lessons Learned


April 17th, 2014
 
by Glenn Melnick and Lois Green

Editor’s note: In addition to Glenn Melnick, this post is coauthored by Lois Green.

Background: In a very short period of time, Accountable Care Organizations (ACOs) have become an important and widespread part of the US health care landscape. A recent Health Affairs Blog post estimates the total number of public (Medicare) and private ACOs at more than 600 nationally, covering more than 18 million insured population. Despite their rapid and widespread adoption, relatively little is known about how ACOs actually work and how successful they have been. This is due in part to their relative “newness,” as many reported ACOs are just getting up and running. Others have been operational for short periods of time and have yet to produce meaningful or long-term sustainable results.

This Health Affairs Blog post helps fill some of this void by reporting on the operational experiences of one of the oldest (4+ years) and largest commercial ACOs in the nation. A previous Health Affairs Blog post reported on its initial planning and start-up phase, and a subsequent Health Affairs article reported on its early financial results.

In 2007, Blue Shield of California, along with provider and employer partner organizations, began exploring development of one of the first ACO-like programs in the country to serve Commercial patients. It launched in 2010 and, as reported below, has been generating savings to consumers throughout the period. Located in the competitive Sacramento market of northern California, the ACO is an example of an innovative shared savings model involving a large insurer—Blue Shield of California; a purchaser—the California Public Employees Retirement System (CalPERS); a physician group—Hill Physicians Medical Group (HPMG); and a hospital system—Dignity Health. The population served approximately 42,000 CalPERS employees and their families covered by Blue Shield.

In this Health Affairs Blog interview, senior executives from each of the partnership organizations, all of whom have operational responsibilities and oversight of this ground-breaking Commercial ACO, discuss key operational aspects of the ACO and its implementation. They discuss evolution of the culture, governance and essential “partnership” relationships an ACO requires to survive and thrive. In addition, they detail specific operational initiatives designed to coordinate and manage care, and report on how these initiatives have fared over the four-year period since the ACO’s launch. Empirical results show success in many areas, with challenges in some others. Of particular note has been overall cost of health care (COHC) savings reported at gross savings of more than $105 million, with net savings of $95 million to CalPERS members, since 2010. Finally, the partners illuminate the ACO’s future directions and offer lessons for other organizations considering development of an ACO delivery system for the Commercial market.

The interview was supported by funding from the California HealthCare Foundation.

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We’ll Need A Bigger Boat: Reimagining The Hospital-Physician Partnership


April 17th, 2014
 
by Francis J. Crosson and John Combes

Editor’s note: In addition to Francis J. Crosson, this post is coauthored by John Combes.

Change is underway in the delivery and financing of American health care, and it is manifested in the evolving relationship of hospitals and physicians across the U.S. These developments are most striking in California, but are appearing in various forms in almost all states. Physicians and hospitals are being both “pushed” and “pulled” together in new ways by a variety of market forces, including the development of Accountable Care Organizations (ACOs) for both Medicare and commercially insured patients, increased direct employment of physicians by hospitals, the emergence of new payment mechanisms such as global payments, and, in general, by the need for physicians, physician groups and hospitals to deliver greater “value.”

All of this presents the opportunity to redesign care to be more coordinated, efficient, patient-driven, and effective. These integration forces could lead to the kind of organizations envisioned 15 years ago in the Institute of Medicine report “Crossing the Quality Chasm”, resulting in the Triple Aim of better health, better patient care experiences and outcomes, and improved affordability — driven, in part, by new patient care models and payment methods including incentives for improving the value of health care services.

Many physicians are uncomfortable with the idea of physician-hospital integration for several reasons. The long tradition of “professional autonomy”– perhaps best described as “the need for physicians to be able to make appropriate and scientifically based patient-by-patient decisions in the best interest of those patients” — can raise fears among some physicians about becoming part of a larger practice or institution and losing that autonomy. Additionally, some physician groups have shown that they can develop a successful ACO without the need for hospital and insurance partners, preferring to manage the clinical and financial risk alone.

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Implementing Health Reform: CBO Projects Lower ACA Costs, Greater Coverage


April 15th, 2014
by Timothy Jost

On April 14, 2014, the non-partisan Congressional Budget Office, together with the staff of the Joint Committee on Taxation, released an updated estimate on the Effects of the Insurance Coverage Provisions of the Affordable Care Act. The CBO report brings good news for the ACA. The CBO projects now that the ACA’s coverage provisions will cost $5 billion less for this year than it projected just two months ago. Over the 2015 to 2024 period, CBO projects that the ACA will cost $104 billion less than it projected in February. At the same time, the CBO projects that the number of uninsured Americans will in fact decrease by an additional one million over the next decade, by 26 rather than 25 million, as it estimated in February.

The CBO report estimates that the net cost of the ACA’s coverage provisions will be $36 billion in 2014, $1,383 billion over the 2015 to 2024 period. This estimate consists of $1,839 billion for premium tax credits and cost-sharing reduction payments, Medicaid, CHIP, and small employer tax credits, offset by $456 billion in receipts from penalty payments, the excise tax on high-premium insurance plans, and the effects on tax revenues of projected changes in employer coverage. The CBO report does not include an estimate of the total reduction in the federal deficit attributable to the ACA, as the CBO has concluded that it is no longer possible to estimate the net effect of ACA changes on existing federal programs, but the most recent CBO estimate from 2012 projected that the ACA would reduce the federal deficit over the 2013 to 2022 period by $109 billion. Given projected further reductions in Medicare spending projected in a CBO budget report also released on April 14, it is reasonable to believe that the ACA’s impact on the budget may be even greater than earlier estimated.

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Look At Consequences Of Rejecting Medicaid Expansion Leads First Quarter Health Affairs Blog Most-Read List


April 14th, 2014
by Tracy Gnadinger

Given their recent mention in Paul Krugman’s New York Times‘ column, it’s not surprising that Sam Dickman, David Himmelstein, Danny McCormick, and Steffie Woolhandler‘s discussion of the health and financial impacts of opting out of Medicaid expansion was the most-read Health Affairs Blog post from January 1 to March 31, 2014.

Next on the list was Robert York, Kenneth Kaufman, and Mark Grube‘s discussion of a regional study on the transformation from inpatient-centered care to an outpatient model focused on community-based care. This was followed by Susan Devore‘s commentary on changing health care trends and David Muhlestein‘s evaluation of accountable care organization growth.

Tim Jost is also listed four times for contributions to his Implementing Health Reform series on Medicaid asset rules, CMS letter to issuers, contraceptive coverage, and exchange and insurance market standards.

The full list appears below.

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Origins In Oregon: The Alternative Payment Methodology Project


April 14th, 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. The authors of this post are part of the team evaluating the Oregon model.

How the country pays for health care is currently at odds with its vision of how health care should be delivered. Traditional fee-for-service health care payments are linked to the volume of visits, rather than the quality of patient-centered care.

To unlink payment from the volume of services provided and begin aligning it with value, Oregon recently launched the Alternative Payment Methodology (APM) demonstration project, where participating community health centers (CHCs)—aka federally qualified health centers—no longer earn revenue based on the number of individual patient seen. Instead, community health centers will receive a monthly payment based on the size and composition of their patient population, shifting the paradigm from the number of doctor visits to the provision of high-quality, team-based, patient-centered care.

APM is being piloted at three Oregon Community Health Centers: Virginia Garcia Memorial Health Center, Mosaic Medical, and OHSU Family Medicine at Richmond. The clinics are receiving technical assistance from the Oregon Primary Care Association (OPCA) and other community, regional and national partners.

With funding from the Robert Wood Johnson Foundation, a team of researchers from Oregon Health and Science University and OCHIN, one of the nation’s largest health information networks, is investigating the impact of APM on the delivery of primary care in safety-net populations. In addition to regular posts like this one, the research team will also share lessons learned and perspectives from key stakeholders on Frontiers of Health Care.

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The Latest Health Wonk Review


April 11th, 2014
by Chris Fleming

Billy Wynne at Healthcare Lighthouse offers this week’s April Fool’s edition of the Health Wonk Review. All of the posts in Billy’s “April Fool’s” edition are an excellent read, including the Health Affairs Blog post by Dean Aufderheide on mental illness in America’s jails and prisons.

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Implementing Health Reform: Changing Focus, And Changing Leadership, At HHS (Updated)


April 11th, 2014
by Timothy Jost

With the March 31, 2014 deadline for applying for qualified health plan coverage through the health insurance exchanges behind us, and the April 15, 2014 deadline for completing those applications upon us, Affordable Care Act implementation has quieted considerably. The Centers for Medicare and Medicaid Services have been very active on the Medicare front, releasing in recent days their 2015 Medicare Advantage Rate Announcement and Call Letter and publishing data on Medicare payments to 880,000 Medicare providers. But on the exchange and insurance market reform side, CMS has only one major proposed rule pending at this time, the Exchange and Insurance Market Standards Rule proposed in March, and nothing pending for regulatory review at the Office of Management and Budget.

I am unaware of any major regulatory issuances expected in the immediate future from the Departments of Treasury or Labor, although Treasury does have a number of proposed rules on the table that have yet to be finalized dealing with issues such as minimum value of employer coverage or premium tax credit reporting requirements for exchanges.

On April 10, the media reported two major Health and Human Services developments. First, Secretary of Health and Human Services Kathleen Sebelius announced at a Senate Hearing that 7.5 million Americans have now signed up for health plans through the exchanges. Although opponents of the ACA continue to quibble about how many of these individuals have actually paid their premiums and how many were uninsured previously, the number far exceeds earlier estimates of how many would enroll in health insurance through the exchanges. A recently released Rand survey, which does not fully take into account the late surge that increased exchange enrollment by over 70 percent in the last month, indicates that in fact the ACA has made a significant dent in the number of uninsured in the United States.

The second announcement was of the resignation of Secretary Sebelius herself, and of the nomination of Sylvia Mathews Burwell as her replacement.

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Medicare Advantage Rolls On


April 11th, 2014
by Billy Wynne

Monday afternoon, the Centers for Medicare and Medicaid Services (CMS) released the final rates and other reimbursement policies for Medicare Advantage (MA) plans, referred to as the Final Call Letter. Once again, the Administration took pains to ameliorate planned cuts to MA, demonstrating the program’s increasing popularity with seniors and, by extension, its robust political strength.

For my money, we’ll look back at this year as the final hurdle the program jumped on its path to dominating the Medicare benefit for a generation to come. It’s already well on its way, covering 30 percent of Medicare beneficiaries and growing. So let’s take a quick tour of the MA program’s initially volatile history and the winning streak it’s been on of late, culminating with the breaks the Administration cut it this go round.

The history. First there was the growth and then precipitous decline of managed care in the 90s, a wave that the program – then called Medicare+Choice – rode alongside the commercial sector.

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Takeaways From The Aspen Institute’s Care Innovation Summit


April 10th, 2014
by Matthew Richardson

Back in February, The Aspen Institute and The Advisory Board Company sponsored the Care Innovation Summit in Washington, DC. With a keynote address from Secretary of Health and Human Services Kathleen Sebelius, the daylong summit featured some of the newest data and research on the rapidly evolving U.S. health care landscape.

Featured speakers such as Jeffrey Brenner of the Camden Coalition of Healthcare Providers and Claudia Grossmann of the Institute of Medicine in addition to others from State and Federal government, insurers, hospitals, and research institutions offered insights on higher-value care and improved health for individuals and populations.

Here are five most memorable takeaways:

1. Health Care Cost Inflation Has Slowed

Perhaps the most eye-catching data trend presented was the dramatic slowing of Medicare spending showcased by Patrick Conway, Director of CMMI (presentation available here). The collapse of annual per capita spending growth is important not only because it implies significant value changes are underway in the provision of ever more services by Medicare, but also because it can further mean many things to many people.

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Implementing Health Reform: Medicaid & CHIP February 2014 Report


April 5th, 2014
by Timothy Jost

On April 4, 2014, the Centers for Medicare and Medicaid Services released their Medicaid & CHIP February 2014 Monthly Applications, Eligibility Determinations, and Enrollment Report. (Blog post here.) For the first time, the February monthly report provides meaningful data on enrollment.

Like previous reports, the report gives the total number of applications received by all reporting state agencies (2,207,513) and total number of individuals determined eligible for Medicaid and CHIP by state agencies (2,249,120). For comparison, the numbers of applications is down from initial January reports (2,266,778), but the number of determinations is up (2,436,879).

As with previous reports, however, these numbers are subject to so many qualifications as to be little use for determining growth of the Medicaid program. The data do not include numbers from New York and Washington, while Tennessee only reported CHIP data. They are also very preliminary — the January determinations figure was revised upwards by about a fifth in February.

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What The Affordable Care Act Means For Pregnant Inmates


April 4th, 2014
 
by Katy Kozhimannil and Rebecca Shlafer

Editor’s note: This post is published in conjunction with the March issue of Health Affairs, which features a cluster of articles on jails and health.

The Affordable Care Act (ACA) is anticipated to expand coverage to 44 million Americans. As John Iglehart noted in his introduction to the March issue of Health Affairs, expansion of Medicaid through the ACA will open an important door for a particularly vulnerable population – those who are cycling in and out of the criminal justice system.

Although Medicaid does not cover standard health care for inmates during incarceration, expansion of Medicaid to single and childless adults has meant that prisons and jails can start enrolling inmates (a substantial portion whom meet these criteria) so they are covered upon release.

The ACA also allows Medicaid to pay for inmates’ care for hospital stays longer than 24 hours. Such changes have important implications for a group of inmates that is not often the focus of health policy dialogue – incarcerated pregnant women.

A Particularly Vulnerable and Costly Group: Pregnant Prisoners

Nationwide, 75 percent of incarcerated women are of reproductive age, and about 6-10 percent of female prisoners are pregnant during their incarceration. Incarcerated women fare worse than incarcerated men, and their reproductive health care needs, including access to contraception and abortion services, often go unmet. Inmates who are pregnant face additional risks. Compared with similar women that are not incarcerated, pregnant inmates have more risk factors and worse birth outcomes, for both mothers and babies.

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Recent Health Policy Briefs: Mental Health Parity And ICD-10 Update


April 3rd, 2014
by Tracy Gnadinger

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation examines the issue of mental health parity. The push to make coverage for mental health treatment equal to that of physical health has been on legislative to-do lists for some time, both in Congress and in state houses. This brief looks […]

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The Payment Reform Landscape: Price Transparency


April 2nd, 2014
by Suzanne Delbanco

Editor’s note: This is the third post in a Health Affairs Blog series on payment reform by Catalyst for Payment Reform Executive Director Suzanne Delbanco. The first two posts are available here and here.

Last week Catalyst for Payment Reform (CPR) and our partners at the Healthcare Incentives Improvement Institute (HCI3) released our second annual Report Card on State Price Transparency Laws. This year, we decided not to grade states on a curve and to place greater emphasis on the price information actually available to consumers—not just what is written in the law.

Forty-five states received an F in this year’s Report Card, but there were a couple of notable exceptions: Massachusetts and Maine. Each month in this blog, I’ve been sharing insights about payment reform and which models are proving to work, so this naturally raises the question: what is the relationship between payment reform and the success of state price transparency efforts?

At CPR, we like to say price transparency is one of the core building blocks of payment reform and a higher-value health care system. Purchasers and consumers need transparency for three primary reasons: (1) to help contain health care costs; (2) to inform consumers’ health care decisions as they assume greater financial responsibility; and, (3) to reduce unknown and unwarranted price variation in the system.

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Implementing Health Reform: First Marketplace Open Enrollment Ends With More Than Seven Million Enrollees


April 2nd, 2014
by Timothy Jost

The White House announced on Tuesday April 1, 2014 that as of the end of open enrollment, 11:59 p.m. on March 31, 2014, 7.1 million Americans had signed up for health plans under the Affordable Care Act. Tens of thousands more will be added from individuals who attempted to apply during the open enrollment period but were unable to complete their applications. And many more will be enrolled through special enrollment periods as they undergo life changes over the coming year.

Of course, arguments will continue as to how many of those who selected a plan will pay their premiums (which they must do before they are covered); how many were previously uninsured; and whether those who enrolled are young, healthy, and male enough to offer insurers a risk pool like that they anticipated when they set their rates. There is ample evidence that many have not yet paid, but it is reasonable to expect that the payment rate will pick up as enrollees figure out how to pay their insurers and insurers figure out who their enrollees are. There is also evidence that many of those who signed up were previously covered. Of course, one of the purposes of the ACA was to make insurance affordable, so if someone who was struggling to afford coverage (and might have had to drop it in the near future) can now afford it, that is also a success. Moreover, millions of the uninsured have also signed up for Medicaid and some have also obtained coverage in the individual market outside the exchange or from their employer. Finally, the size of the risk pool suggests that it is reasonably balanced demographically.

In any event, 7 million enrollees was the number that has constantly been held up as the unobtainable goal for the exchanges, and it has been reached–indeed surpassed. Pictures all over the web today of long lines and full waiting rooms of people eager to enroll in coverage demonstrate that in fact people want health care coverage and the ACA is allowing them to get covered.

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Health Reform And Criminal Justice: Advancing New Opportunities


April 1st, 2014
by Chris Fleming

Community Oriented Correctional Health Services (COCHS) and Health Affairs invite you to join thought leaders from public safety, health care, philanthropy, and all levels of government to further explore the intersection of health reform and criminal justice. As implementation of the Affordable Care Act continues, it is time to take stock of how far we have come in addressing the needs of the jail population through policy and planning, and to set our direction for the future.

This national event will take place on Thursday, April 3, from 8:00 a.m. to 4:00 p.m., at the Columbus Club in Union Station, Washington, D.C. It is being organized with support from the Robert Wood Johnson Foundation, the Jacob & Valeria Langeloth Foundation, and Public Welfare Foundation. Registration for in-person attendance is closed, but a live webcast is available.

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Mental Illness In America’s Jails And Prisons: Toward A Public Safety/Public Health Model


April 1st, 2014
by Dean Aufderheide

Editor’s note: This post is published in conjunction with the March issue of Health Affairs, which features a cluster of articles on jails and health. 

Mental Illness in America’s Jails and Prisons

The United States continues to have one of the highest incarceration rates in the world, with 5 percent of the world population, but nearly 25 percent of the world’s prisoners.  Inmates are spending more time behind bars as states adopt “truth in sentencing laws,” which requires inmates to serve 85 percent of their sentence behind bars.

In 2012, about 1 in every 35 adults in the United States, or 2.9 percent of adult residents, was on probation or parole or incarcerated in prison or jail, the same rate observed in 1997.  If recent incarceration rates remain unchanged, an estimated 1 out of every 20 persons will spend time behind bars during their lifetime; and many of those caught in the net that is cast to catch the criminal offender will be suffering with mental illness.

Nearly a decade ago, I wrote an article with Patrick Brown titled “Crisis in Corrections: The Mentally Ill in America’s Prisons.”  It was about the alarming growth in the number of mentally ill individuals behind bars.  Since then, it has been shown that about 20 percent of prison inmates have a serious mental illness, 30 to 60 percent have substance abuse problems and, when including broad-based mental illnesses, the percentages increase significantly. For example, 50 percent of males and 75 percent of female inmates in state prisons, and 75 percent of females and 63 percent of male inmates in jails, will experience a mental health problem requiring mental health services in any given year.

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Health Policy Leader Alan Weil To Become New Health Affairs Editor-in-Chief


March 31st, 2014
by Chris Fleming

Health Affairs and its publisher Project HOPE are pleased to announce that Alan Weil will become the journal’s new editor-in-chief on June 2, 2014.

Weil, a highly respected expert in health policy and current member of Health Affairs’ editorial board, will lead the journal after serving as the executive director of the National Academy for State Health Policy (NASHP) since 2004. His work with state policymakers of both political parties put Weil at the forefront of health reform policy, implementation, innovation, and practice. Prior to his leadership of NASHP, he served in both the public and private sectors. He directed the Urban Institute’s “Assessing New Federalism” project; served as the executive director of the Colorado Department of Health Care Policy and Financing and a health policy advisor to Colorado’s then-governor, Roy Romer; and was the assistant general counsel in the Massachusetts Department of Medical Security.

“We’re delighted to welcome Alan to the Project HOPE family,” said John P. Howe III, M.D., President and CEO of Project HOPE. “He comes to Health Affairs with more than 24 years of experience in health policy development and a stellar record of leadership and innovation in this field. I’m confident he will lead the journal’s talented staff on a new and successful path forward. I am extremely grateful to John Iglehart, the Founding Editor of Health Affairs for his stewardship of the journal for more than 25 years, ensuring its coveted rank as the leading health policy journal of our time.”

“Alan Weil’s extensive background in health and health care policy will serve him well in his new role as Health Affairs’ editor-in-chief,” noted John Iglehart, who currently leads the journal. “With his position on the front lines of health system change, he is an experienced leader who has deep familiarity with and longstanding connections to the health policy, research, and health care leadership communities. In particular, in his role as NASHP’s executive director, Alan worked on complex issues of critical importance to leaders in state and federal government and the private sector. This background will serve Health Affairs well as it continues to grow in influence both in the US and globally.”

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Exhibit Of The Month: More HIV Testing With Medicaid Expansion


March 28th, 2014
by Tracy Gnadinger

Editor’s note: This is the second post in the new “Exhibit of the Month” series. Readers who’d like to highlight other noteworthy exhibits from the same issue are encouraged to make their pitch in the comments section below.

This month’s exhibit examines the potential impact of the Affordable Care Act’s Medicaid expansion on HIV testing from 2013-2017, comparing a nationwide eligibility expansion with one limited to the eighteen states that had committed to expansion as of July 2013.

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