Health Affairs

The Affordable Care Act survived the Supreme Court and a presidential election, so why does it face such an uncertain future? One reason is that it was essentially silent on how to control costs. This has led many pundits — including the likes of Paul Krugman and Robert Reich — to argue that the best approach would be to extend Medicare to everyone. A January National Research Council report on the relative disadvantage of America in global health outcomes, especially compared to countries with national health insurance, added further fuel to the fire. But is a larger government role in health insurance the best approach?

The idea of universal Medicare is powerful and attractive. Mr. Krugman points out that in the last forty years, average Medicare costs per person have grown by 400 percent while those for private insurance have increased more than 700 percent. His numbers suggest that if everyone had Medicare for the last 40 years, we might now spend only 14 percent of GDP on health care instead of nearly 18 percent, while also reaching universal coverage. Mr. Reich argues that “Medicare-for-All” would save between $58 billion and $400 billion annually, and similarly concludes: “Medicare isn’t the problem. It’s the solution.” Critics of the U.S. system are also quick to point out that Americans don’t live as long as their counterparts in countries that spend much less, suggesting universal Medicare could save money and improve our health.

The argument for universal Medicare basically comes down to three key claims: (1) Medicare gets lower prices, (2) Medicare’s administrative costs are lower; and (3) Greater spending does not mean better health. Each of these deserves closer attention.

Three years after wellness was hailed as perhaps the only truly bipartisan component of the Affordable Care Act, both lay and trade commentators have begun observing that the assumptions behind it were incorrect while downsides were overlooked. As a predictable result, savings have proven elusive even in seemingly ideal baseline circumstances for health improvement. For example, a wellness program at BJC HealthCare in St. Louis reduced hospitalizations for wellness-sensitive medical events, but the savings were limited (and offset by other cost increases) by the fact that older employees there on average were hospitalized for a wellness-sensitive medical event only once every 12 years to begin with. (See Note 1.)

Consistent with that finding, commentators (including the authors) have noted that every vendor claiming savings from what the Affordable Care Act (ACA) terms “health contingent” wellness programs has employed obviously flawed study design (like comparing the results from active motivated participants to non-motivated non-participants, and crediting the program, rather than the obvious difference in motivation, for the savings) and/or has simply made up or misinterpreted their own outcomes .

One reason for the absence of savings is that the biometric screenings themselves on which wellness economics are based cost far more money than they can conceivably save, due to both the likelihood of overdiagnosis and the marginal benefit of taking frequent measurements in generally healthy adults. Routine screening lacks an evidence basis and is eschewed by the medical community. For example, the federal government recommends lipid screening only once every five years.

Diagnostic and Statistical Manual of Mental Disorders (DSM-5), the association’s comprehensive guide that sets the classification, diagnosis, and treatment of mental disorders across the United States and the world. In an April 24 Health Affairs Web First analysis and commentary, Helena Hansen of New York University and coauthors argue that the revision process for the DSM-5 missed crucial population-level and social determinants of mental health disorders and their diagnoses.

Some of these include environmental factors triggering biological responses that manifest in behavior; differing cultural perceptions in defining normal and abnormal behaviors; and institutional pressures, such as insurance reimbursements, disability benefits, and pharmaceutical marketing. At stake, the authors believe, are billions of dollars in insurance payments and the accurate diagnoses and treatment of patients.

To address future DSM revisions, the Hansen and her colleagues propose the formation of an independent, multidisciplinary task force; the commentary outlines how this task force would operate.

This commentary is in response to the March 5, 2013 Health Affairs article, “Wellness Incentives in the Workplace: Cost Savings through Cost Shifting to Unhealthy Lifestyles.” In that article, Jill Horwitz and coauthors express concerns about new rules governing workplace health promotion (wellness) programs due to take effect in 2014 as part of the Patient Protection and Affordable Care Act of 2011, Public Law 111-148 (“ACA”). In addition to increasing access to health care services for all Americans, the ACA aims to place greater emphasis on health promotion and disease prevention and to encourage employer adoption of workplace wellness programs.

As I discuss below, some of the concerns raised by Horwitz et al. are legitimate points that I agree with. However, I believe that Horwitz and her colleagues go too far when they appear to question the basic idea that employees with modifiable health risks cost more than those without such risks, calling into question the entire concept of workplace wellness programs and indeed of prevention in general. In this post, I explain how well-designed wellness programs can benefit both employers and employees, and I offer some suggestions to ensure that such programs are both effective and fair.

A specific provision of the ACA (Section 2705), which is at the heart of the controversy addressed by Horwitz et al., will allow employers to design incentive-based wellness programs that reward not only participation in health promotion programs but also “outcomes” related to having healthy habits and managing biometric values within “normal” ranges. Under the new rules, financial incentives (e.g., different health plan designs, payment terms, premiums levels, deductibles, co-insurance or co-payments) could be offered to workers who are nonsmokers, are at a given weight or BMI, or are effectively controlling their blood pressure, total cholesterol, and blood glucose. Rewards or incentives would also be made available to employees who eat a healthy diet or are physically active.

Poorly manufactured and fraudulent medicines kill thousands of people around the world each year. For infectious diseases like malaria and HIV, shoddy medicines also accelerate drug resistance and dramatically alter the course of epidemics. With few new drugs under development, recent progress against these major killers in the poorest countries is precarious.

Bad drugs have become a big problem for one major infectious disease in particular: tuberculosis. If we don’t solve this issue, we may see the gains we’ve made against TB slip away.

According to the World Health Organization, global TB cases continued on a slow downward trend in 2011. While this is good news, the disease still claimed 1.4 million lives that year—more than any other infectious disease except HIV/AIDS. Meanwhile, multidrug-resistant TB cases rose to 630,000 worldwide. Resistant TB is deadly and costs significantly more to treat. For example, curing a single case of it in the United States can cost more than $200,000. Treatment takes two years, and the side effects can be severe, including nausea, vomiting, joint pain, and even hearing loss.

The March issue of Health Affairs, released today, includes a variety of articles revolving around health and wellness, including an examination of mortality rates among American men and women by county. The issue also addresses whether physicians will see a return on investment from the adoption of electronic health records (EHRs), and it raises questions about cost savings from workplace wellness programs and the impact on less healthy workers.

Female mortality rates increased in 42.8 percent of counties in the United States during 1992–2006. Although mortality rates are falling in most counties in the United States, female mortality rates increased in 1,224 counties, compared to an increase in 108 counties for men, write David Kindig, professor emeritus of population health sciences at the University of Wisconsin–Madison, and Erika Cheng, a doctoral candidate there. Their study is the first to examine the relationship between socioeconomic and behavioral factors and mortality at the county level.

The authors found that for both men and women, factors associated with lower mortality included having a college degree, higher median household income, Hispanic ethnicity, and living in a higher population density area. For women, living in counties in the South and West was associated with a 6 percent higher mortality rate than living in the Northeast. Smoking rates were also a key factor in higher mortality rates. The researchers recommend targeted approaches that are suited to the unique needs of a county; they observe that investments in health care, public health, behavioral change, and social and physical environment will be needed to improve mortality rates.

The US spends far more per person on health care than any other nation. But a growing body of research demonstrates that Americans – rich or poor, minority or not – suffer from a widening “health disadvantage” when compared to citizens of other high-income countries. On January 9, the Institute of Medicine (IOM) and the National Research Council released “U.S. in International Context: Shorter Lives, Poorer Health.” Commissioned by the National Institutes of Health, a panel chaired by Professor Steven H. Woolf at Virginia Commonwealth University painstakingly investigated whether Americans of all ages were affected by a growing health gap previously observed between older Americans and their foreign counterparts.

The panel examined several decades of data from the US and 16 comparable high-income countries, most of which are European. What they found is, or should be, alarming, even for seasoned health advocates and policymakers. The report’s authors sound the alarm at the outset: “We uncovered a strikingly consistent and pervasive pattern of higher mortality and inferior health in the United States, beginning at birth.”

What does this report mean for clinicians and health systems, especially at a time when doctors, nurses and other health care professionals are adjusting to a shifting landscape of structural reforms? Is this a clarion call for clinicians, educators and policymakers to engage in realigning the way we deliver care? Or will this news drive clinicians to sound a retreat from the front lines of population health-oriented system change?

On January 11, two days after the release of the IOM report, I talked with one of the IOM panelists behind the report, Paula Braveman MD MPH, Professor of Family and Community Medicine and Director, Center on Social Disparities in Health at UCSF. I spoke with her on behalf of HealthBegins, a social enterprise and online community of clinicians and others committed to improving health care and the social determinants of health. We discussed the report and what it means for America’s clinicians.

This commentary is in response to a January 16, 2013 Health Affairs Blog post entitled “Is It Time to Re-Examine Workplace Wellness ‘Get Well Quick’ Schemes?” by Al Lewis and Vik Khanna. After the initial blog appeared, my email box was filled with messages asking for a rebuttal to the initial posting, which, to many, seemed like a condemnation of the worksite health promotion (wellness) field and its lack of credibility and honesty in reporting program savings. Instead of just immediately posting a response, I called Al Lewis to discuss the value of worksite health promotion in order to “set the record straight.” It turns out that we agree on many issues but there are also differences.

We agree that there are unscrupulous wellness vendors who claim very large and often implausible savings from worksite health promotion programs. The return-on-investment (ROI) figures bantered about, sometimes as high as 10:1, are not credible. At the same time, I believe it would be wrong to “throw out the baby with the bath water.” In this case, the “baby” refers to well-designed, evidence-based, comprehensive, appropriately resourced, non-gimmick, and well-executed worksite health promotion programs.

Stated positively, good worksite programs deserve credit and should be supported by the business community, not condemned. This is because there is good and growing evidence, reported in a rigorous scientific literature, that “best-practice” worksite health promotion programs improve population health and save money for businesses. Savings are realized from lower health care cost trends, reduced absenteeism, and heightened worker productivity.

Health Affairs readers may have noticed something a little different about the Narrative Matters essay in January’s issue. The essay, “To Fight Bad Suga’, Or Diabetes, My Neighborhood Needs More Health Educators,” by Joseph West of Sinai Urban Health Institute, is the first to include the Policy Checklist, a new feature that will accompany all of our Narrative Matters essays going forward.

The feature points readers to related readings, enacted or proposed legislation, current or planned governmental and private initiatives, and other resources that can help to round out perspectives on a given health policy issue. In the case of the checklist accompanying West’s essay, about the need for more community health workers to serve residents in one poor Chicago community devastated by diabetes, the checklist points to Affordable Care Act grants for outreach to medically underserved populations, community-based diabetes management projects like the CDC’s Project DIRECT, and Health Affairs papers on a national diabetes prevention strategy and on the measured benefits of community health workers.

In August, the Center for Sustainable Health Spending (CSHS) was awarded a grant from the Robert Wood Johnson Foundation to, among other things, examine the relationship between disease prevention and health care costs. This project heightened my interest in the wonderfully-researched report from the Congressional Budget Office (CBO) entitled Raising the Excise Tax on Cigarettes: Effects on Health and the Federal Budget, and its excellent summary in the New England Journal of Medicine (NEJM).

The report was years in the making and is noteworthy for its original research and its thorough and insightful literature review. As the title suggests, its economic focus is on the federal budget. In some ways this is a very broad perspective as it brings into play smoking’s impact on employment and earnings (hence tax payments), as well as health care costs and Social Security payments. But in other ways it is quite narrow, being limited to federal revenues and costs. Before discussing this CBO report, and the complex economics of disease prevention and longevity it underscores, I’d like to create some context.

On November 21, Health Affairs released a series of Web First articles profiling the winners of Robert Wood Johnson Foundation (RWJF) Young Leaders Awards, which were announced this Fall on the occasion of the Foundation’s fortieth anniversary. The RWJF Young Leader Awards highlight the important contributions that people can make early in their careers to improving health and health care for all Americans.

The awardees, all age forty or younger, have made exceptional contributions in a broad spectrum of activities that display their commitment to their communities:

Sweeping reforms implemented by the IRS and Treasury in 2009 have pulled back the veil surrounding the community benefit investments required of all nonprofit hospitals seeking federal tax exempt status. Will this new transparency, in combination with important tax law reforms enacted by Congress as part of the Affordable Care Act, lead to greater hospital investment in community health?

The Evolution Of Community Benefit Law

Since the 1950s, federal tax law has recognized that in order to qualify for tax-exempt status, nonprofit hospitals owe certain duties to the communities they serve. IRS Revenue Ruling 56-185 (1956) established a “financial ability” standard that required charitable hospitals to be “operated to the extent of [their] financial ability for those not able to pay for the services rendered and not exclusively for those who are able and expected to pay.” In 1969, this early ruling was amended by Revenue Ruling 69-545, which substituted a more amorphous “community benefit” standard that has essentially survived into the present time, although with important modifications under the Affordable Care Act.

As noted by the Joint Committee on Taxation, the express purpose of Revenue Ruling 69-545 was to eliminate any enforceable obligation on the part of tax-exempt hospitals to furnish financial assistance to indigent inpatients. Following an unsuccessful legal challenge to the validity of the ruling (Eastern Kentucky Welfare Rights Organization v Simon, 370 F. Supp. 325, 338 (D.D.C. 1973), rev’d, 506 F.2d 1278 (D.C. Cir. 1974), vacated on other grounds, 426 U.S. 26 (1976)), the community benefit standard remained moribund and essentially went unexplored for decades.

An August 22 Health Affairs Web First traces the evolution of the health policies of the US Department of Housing and Urban Development (HUD) from the Johnson administration to the Obama administration. The article, by Raphael Bostic of the University of Southern California’s Sol Price School of Public Policy and coauthors, also looks at the... Read the rest of this entry »

Using the term health expenditures yields a narrow and seriously misleading view of what it will really cost to improve population health. I’ve been worried about this for some time, but most recently while reading the excellent and important new report on For the Public’s Health: Investing in a Healthier Future from the Institute of... Read the rest of this entry »

Chief Justice John Roberts did right by America.  Thursday’s ruling by the U.S. Supreme Court upheld the constitutionality of the law’s minimum coverage provision and allowed the Affordable Care Act to move forward.  Health reform is often simpler than it looks, and so was the Court’s decision.  In practical terms, a majority of Justices ruled... Read the rest of this entry »

As I write this, the Supreme Court has yet to reveal its decision about the Affordable Care Act. Regardless of what they decide, we can be certain of one thing. This November, the ability of Americans to get the facts they need to make informed choices about the future of US health policy will be... Read the rest of this entry »

Editor’s note: For more on the state of prevention efforts and the impact of the cuts to the Prevention and Public Health Fund, see this Health Affairs Blog “Contributing Voices” post by Georges Benjamin and an additional post about a Health Policy Brief on the Fund. The Prevention and Public Health Fund, created by the... Read the rest of this entry »

Editor’s note: For more on the state of prevention efforts and the impact of the cuts to the Prevention and Public Health Fund, see this Health Affairs Blog “Contributing Voices” post by Jeffrey Levi and an additional post about a Health Policy Brief on the Fund. Two years ago with enactment of the Affordable Care... Read the rest of this entry »

The Centers for Medicare & Medicaid Services (CMS) recently announced that 32 health care organizations from around the country had signed on to the new Pioneer Accountable Care Organization (ACO) initiative, part of a broader push to incentivize ACOs in the Affordable Care act. ACOs provide financial incentives for healthcare teams—including primary care physicians, specialists,... Read the rest of this entry »

David Colby, vice president of Research and Evaluation at the Robert Wood Johnson Foundation (RWJF), has announced the lineup for RWJF’s Most Influential Research Articles of 2011. As it has done in past years, the foundation has listed 20 RWJF-funded articles across the broad spectrum of its program areas. The articles were selected based on... Read the rest of this entry »