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The Dane Difference: Why Are Dane County’s Exchange Premiums Lower?


December 18th, 2014

During the next few years, states and the federal government will likely seek solutions to control costs and improve quality in the Affordable Care Act (ACA) health insurance marketplaces. State and federal policymakers should look carefully at the decades-long success of the Wisconsin State Employee Health Plan (WSEHP) in controlling the rapid rise of health insurance costs in Dane County—where Madison, Wisconsin’s state capital, and the University of Wisconsin, are located—as they seek to improve the effectiveness of the ACA’s marketplaces and health insurance costs in general.

The WSEHP consistently obtains substantially lower health insurance premiums in Dane County than in Wisconsin’s 71 other counties. In 2013, an individual plan in the WSEHP was about $1,400 cheaper annually in Dane County, or 16 percent less than the average in the rest of the state; and a family plan was about $3,500 cheaper, also a 16 percent difference. This Dane difference has existed for at least a decade, with the gap slowly widening over that time.

Why does WSEHP get much lower premiums in Dane County than in the state’s 71 other counties, and what lessons can policymakers learn from this difference?

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How To Succeed At Payment Reform (By Really Trying)


December 18th, 2014

Editor’s note: This is part 2 of a blog post adapted by the author from his recent keynote address at the New York State Health Foundation Conference, “Payment Reform: Expanding the Playing Field.” You can watch his half-hour speech, beginning around the eight-minute mark.

In my previous post, I explained “Why I Oppose Payment Reform.” Despite the reservations I laid out in that post, I do not actually oppose payment reform.

To summarize the case for payment reform, fee-for-service payment has supported a fragmented delivery system with little accountability for cost or quality.  As there is growing consensus that we want to move from our current system toward one that maximizes the health outcomes we achieve relative to the resources we expend, alternative payment models may provide us with a path. We should remember, however, that payment reform is a tool, not an end in itself; and we should be clear about our goals and then deploy the tool where it can help us achieve those goals.

Achieving payment reform is a process.  Here are five elements that are necessary for a successful process.

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ACO Quality Results: Good But Not Great


December 18th, 2014

On September 23, 2014, the Centers for Medicare and Medicaid Services (CMS) released Year 1 Quality Performance results for Accountable Care Organizations (ACOs) that began participating in the Medicare Shared Savings Program (MSSP) in 2012 or 2013. Another report, released shortly before, outlined financial performance of the ACOs and showed that only 49 ACOs, or 22 percent of those ACOs, qualified for shared savings payments by successfully reducing total spending.

Opportunity for continued quality improvement aside, a troublesome snag for the program could be a very low correlation between improved quality and earned savings: our analysis shows that, in performance year one, improved quality and earned savings only correlate at 8.6 percent, so low that it is statistically insignificant (Figure 1).

In practice, this means that better quality is not associated with better financial results. Twenty-one of the 49 ACOs that did earn shared savings actually scored below the average quality of the group. For the first year, quality outcomes did not affect the size of shared savings payments, but in future years ACOs that perform poorly on quality measures will lose a portion of any shared savings.

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Health Affairs Web First: The Bottom Line On Different Management Models In State Health Exchanges


December 17th, 2014

The Affordable Care Act gives states discretion as to how they design their health insurance Marketplaces. Some states run their own Marketplace; others are part of the federally facilitated exchange; and a few chose a state-federal partnership. All states have plan management responsibilities, and if a state runs its own Marketplace, it has management choices. A “clearinghouse” model of management is when all health plans meeting published criteria are accepted into the exchange.

This model is used by some state-run exchanges and all the state-federal partnerships and federally facilitated exchanges. The alternative is the “active purchasing” model, allowing a state to directly negotiate premiums, provider networks, and other details. This model has been adopted by ten of the seventeen state-run exchanges.

A new study, released today as a Web First by Health Affairs, found that in the 2013–14 open enrollment period, state-based Marketplaces using a clearinghouse model had significantly lower adjusted average premiums for all plans within each metal tier (bronze, silver, and gold) compared to state-based Marketplaces having active purchasing models. This study offers the first attempt to assess the premium differences across Marketplace models.

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Shared Decision Making And The Use Of Patient Decision Aids


December 17th, 2014

More than 30 years ago, a Reagan-era Presidential Commission urged the national adoption of “shared decision making” (SDM) as a way to improve communication and informed consent in health care. Since then, many patient decision aids (PDAs) have been developed — tools that present information about common medical choices in standardized, user-friendly formats. More than 100 published, randomized trials using PDAs have shown many benefits.

Summarizing these benefits, a recent Cochrane review concluded that using PDAs can lead to patients gaining knowledge, having a more accurate understanding of risks, harms and benefits, feeling less conflicted about decisions and rating themselves as less passive and less often undecided. But there remains a lack of evidence that these tools actually change the way clinicians and patients communicate, and it is unclear to what extent more medical decisions are actually being shared.

A discussion paper recently published by the Institute of Medicine (IOM) reviewed the literature on the implementation of PDAs in clinical practice and concluded that, despite some areas of progress, “the promise of SDM remains elusive.” In this blog post, we expand on some ideas raised in the recent Discussion Paper and provide specific recommendations in three areas: technological support for shared decision making, recognition that failure of shared decision making comprises a medical error, and a transformation in how we conceptualize “informed consent.”

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Implementing Health Reform: Enrollment And Reenrollment For 2015 (Updated)


December 16th, 2014

The December 15, 2014 deadline for reenrolling in qualified health plan (QHP) coverage to assure continuous coverage as of January 1, 2015 has come and gone.  Individuals who were enrolled through the federally facilitated marketplace (FFM) for 2014 but did not return to the marketplace to shop for 2015 plans will be passively reenrolled in their 2014 plan or in a plan similar to it.  The 2015 open enrollment period lasts through February 2015, and individuals can return to the FFM at any time before then to change plans.  But the change will not be effective for January 1.

A number of state-operated exchanges—including New York, Massachusetts, Idaho, Rhode Island, Washington, Minnesota, and California—have reportedly either extended the date by which individuals can enroll or reenroll and still have coverage effective January 1 or given individuals who had begun the enrollment process as of December 15 extra time to complete the process for January 1 coverage.  The FFM has not extended the deadline.

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New Health Policy Brief: Physician Compare


December 16th, 2014

A new policy brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) looks at the evolution and current development plans for Physician Compare, a website mandated by the Affordable Care Act (ACA). A simple version of the site first launched in 2010.

Since then the Centers for Medicare and Medicaid Services (CMS) has slowly been adding limited sets of data listing the various physician groups participating in a number of Medicare quality improvement initiatives. In 2015 the site will expand to include more recent and extensive information about physician performance and quality of care, in a format that’s similar to the other ACA-generated websites — Hospital Compare, Nursing Home Compare, Home Health Compare, and Dialysis Facility Compare.

These sites, which encompass tens of thousands of facilities nationwide, are credited with advancing accountability and motivating improvements in care and quality. They are also faulted as poorly organized and inadequately audited when the data are submitted by facilities.

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Investing In The Health And Well-Being Of Young Adults


December 15th, 2014

Young adulthood — ages approximately 18 to 26 — is a critical time in life. What happens during these years has profound and long-lasting implications for young adults, and — because many are parents — for the next generation.  Healthy, productive, and skilled young adults are critical for the nation’s workforce, global competitiveness, public safety, and national security.

Although young adults are resilient and adaptable, they are surprisingly unhealthy, showing a worse health profile than both adolescents and adults in their late 20s and 30s. Recent national attention on young adults has focused primarily on enrolling them in health care insurance to offset the higher costs associated with care for older adults under the Affordable Care Act 2010 provisions — mistakenly implying that it is not in their own interest to have health insurance. Unfortunately, too little attention has been paid to young adults’ specific health needs and the transitions they face once they are in the health care delivery system.

The Institute of Medicine and National Research Council recently released a new report titled Investing in the Health and Well-Being of Young Adults, which reviews what is known about the health, safety, and well-being of young adults and offers recommendations for policy and research. It was prepared by a committee with expertise in multiple disciplines, including public health, health care, behavioral health, sociology, social services, human development, neuroscience, economics, business, occupational health, media, and communications. We served as chair and a member of the committee, respectively.

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Narrative Matters: Shining A Light On Child Health


December 15th, 2014

Last month, a group of writers, clinicians, policy makers and other experts gathered at Airlie House in Warrenton, Virginia, for the 2014 Narrative Matters Symposium. About an hour outside the city, the scenic fall setting—rolling farm land and trees with auburn and gold leaves—was the perfect backdrop to take attendees outside of their normal day-to-day work and introduce them to others who also are deeply passionate about improving the health of vulnerable children.

The focus of this year’s symposium was “Vulnerable Children: Using Stories to Shine a Light on Child Health.” Manuel Pastor, professor of Sociology and American Studies & Ethnicity at the University of Southern California, delivered a keynote address in which he discussed the changing demographics of the United States, which by 2043 is projected to be a “majority minority” nation — driven, not by immigration itself, but by the rising number of children born in this country to immigrants. Economists have noted that inequality in the nation causes slower economic growth, Pastor pointed out, concluding that if we reduce income disparities, we are actually contributing to national prosperity.

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Implementing Health Reform: Beneath The Hood Of The ‘Cromnibus’


December 12th, 2014

The “Consolidated and Further Continuing Appropriations Act, 2015” or “Cromnibus” legislation moving through Congress contains a number of provisions that relate to the implementation of the Affordable Care Act (ACA).

Risk Corridors

The provision that has been most widely noted so far requires the risk corridor program to be budget neutral for 2014. The risk corridor program moves funds from qualified health plans (QHPs) that have lower than anticipated allowable costs to those with higher than anticipated allowable costs. Section 1342 of the ACA, which creates the risk corridor program, contains no explicit appropriation.

A report issued earlier this year by the Government Accountability Office (GAO), which is the final authority on the legitimacy of government expenditures, determined that the continuing resolution for 2014 permitted the Centers for Medicare and Medicaid Services (CMS) to fund the risk corridor program for 2014 both from payments collected from plans with lower than anticipated costs, which were properly characterized as user fees, and from funds transferred from other CMS accounts. No risk corridor payments were in fact payable in 2014, however, as risk corridor payments will first be made in 2015 for 2014.

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The Innovation Conundrum In Health Care


December 12th, 2014

Editor’s note: This post is part of a series of several posts related to the 4th European Forum on Health Policy and Management: Innovation & Implementation, to be held in Berlin, Germany on January 29 and 30, 2015. For more information or to request your personal invitation contact the Center for Healthcare Management.

It is never too early for new technology in health care. In contrast to the innovator’s dilemma in other industries where the adoption can be sluggish because current customers may not be able to use the future’s toolbox, in medicine innovators always can be assured of an audience when announcing the “life-saving impact” of something new.

Coverage and widespread implementation usually are a different story, but creating hype and demand for unusual and unfamiliar medical technology has never been hard. But who then drives the invention, diffusion, application, and evaluation of such innovation?

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The Accidental Administrative Law Of Policymaking In The Medicare Program


December 11th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

When Congress establishes a new regulatory program, it lodges the program in a regulatory agency or executive department. A regulatory agency generally has presidentially appointed commissioners with staggered terms and expert staff. This design provides insulation from politics and facilitates applying technical expertise to regulatory problems. Also, administrative agencies make rules and policy and have the powers of investigation, adjudication, and sanction to enforce compliance. Administrative law, an essential instrument of democracy, regulates the operation and procedures of government agencies.

The Social Security Amendments of 1965 established Medicare in the Social Security Administration (SSA). Medicare initially contained two parts, hospital insurance for hospital and related services and supplementary medical insurance for physician and other outpatient services. Pursuant to contract, Medicare contractors handle claims and pay providers as well as adjudicate appeals and make program policy.

This post chronicles the development administrative law, policymaking, and regulation in the Medicare program. It describes how the program evolved a revolutionary collaborative model of regulation that could provide a useful guide for other programs.

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Two Theologies Have Blocked Medicare-For-All


December 11th, 2014

Editor’s note: This post is part of a series of several posts stemming from presentations given at “The Law of Medicare and Medicaid at Fifty,” a conference held at Yale Law School on November 6 and 7.

In the 50 years since Medicare was enacted, Congress has never seriously considered extending Medicare to all Americans, nor even lowering Medicare’s eligibility age below 65. This pattern persisted even during those periods when national health insurance was at the top of the national agenda. This is not what the original advocates of Medicare anticipated when Medicare was enacted in 1965. They saw Medicare as the cornerstone of a national system of health insurance that would eventually cover all Americans.

Two Myths that Undercut Medicare-for-All: Managed Care and Competition

In the paper we presented at the Yale conference, we reviewed short- and long-term factors affecting the debate about Medicare over its lifetime, and then turned to a discussion of two long-term factors: the rise of what came to be called the managed care movement, and the resurgence of a longstanding campaign promoting the idea that competition can right the wrongs of American medicine.

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What To Watch For During This Year’s Open Enrollment Period: Lessons From The Health Reform Monitoring Survey


December 10th, 2014

The Obama Administration recently lowered its expectations on the number of individuals that are likely to enroll in health insurance plans through the Marketplace by the end of 2015—suggesting that it might be more difficult than expected to find and enroll remaining uninsured residents while retaining people who signed up during the first open enrollment period (New York Times; Wall Street Journal; Washington Post’s “Wonkblog”).

One potential barrier to enrollment is low levels of Marketplace awareness among the uninsured: September 2014 estimates from the Urban Institute’s Health Reform Monitoring Survey (HRMS) indicate that only 52 percent of uninsured adults reported hearing some or a lot about the health insurance Marketplace created by the Affordable Care Act (ACA). Despite this large knowledge gap, awareness of the Marketplace has improved since last September, when only 30 percent of the uninsured reported hearing some or a lot about the Marketplace prior to the first open enrollment period.

While increasing awareness of the Marketplace will continue to be important as the second open enrollment period unfolds, there are two additional issues that may determine how many more uninsured people actually gain coverage this year. First, will the remaining uninsured be reluctant to seek coverage and enroll during the current open enrollment period, and if so, why? Second, for people seeking information on health plans, what sources of information are they likely to turn to, and will those sources be adequate to meet the demand?

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California’s Proposition 46 And The Uncertain Future Of Medical Malpractice Liability Reform


December 10th, 2014

On November 4, 2014, Californians voted against Proposition 46, an unprecedented statewide ballot initiative that would have, among other things, raised the $250,000 cap on noneconomic damages to $1.1 million and indexed it to the rate of inflation in future years. The margin was significant — 67 percent voted against it.

For nearly 40 years, noneconomic damages, which entail payments to patients for pain and suffering resulting from medical malpractice (as opposed to economic damages such as lost wages and medical costs), have been at the forefront of debates over the U.S. medical liability system. Currently, 22 states have caps on noneconomic damages of varying sizes in place. If it had passed, the ballot initiative would have raised the cap on noneconomic damages in California from among the most restrictive to the least restrictive among all states with caps.

Opponents of Proposition 46, and supporters of malpractice reform more generally, argued that raising the noneconomic damages cap would have increased malpractice awards and subsequently malpractice premiums, which would be passed on to patients and insurers as higher costs.

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The Latest Health Wonk Review


December 9th, 2014

Last week, Hank Stern at InsureBlog provided us with a “post-turkey day” edition of the Health Wonk Review. Included in Hank’s nice round-up is a Health Affairs Blog post by Suzanne Delbanco summarizing the lessons learned from her series here on payment reform.

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CMS Proposes Coverage For Lung Cancer Screening With Low Dose CT


December 9th, 2014

On November 11, the Centers for Medicare and Medicaid Services (CMS) released its Proposed Decision Memo for Screening Lung Cancer with Low Dose Computed Tomography (LDCT), which is expected to be finalized in mid-December. Despite a negative assessment by its own advisory committee, CMS has proposed coverage with evidence development (CED) for an annual “lung cancer screening counseling and shared-decision-making visit” and, for appropriate beneficiaries, additional screening with LDCT.

Under CED, Medicare provides conditional coverage for a new treatment or technology while additional data is collected to confirm its effectiveness and make a final determination. Through this proposed decision, CMS has followed the lead of numerous other expert and advisory groups, which have concluded that the overall benefits of such screening for at-risk individuals outweigh concerns regarding gaps in evidence, generalizability and potential harms.

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From The National Coordinator For Health IT: The Federal Strategy For Collecting, Sharing, And Using Electronic Health Information


December 8th, 2014

Making our nation’s health and wellness infrastructure interoperable is a top priority for the Administration, and government plays a vital role in advancing this effort. Federal agencies are purchasers, regulators, and users of health information technology (health IT), as they set policy and insure, pay for care, or provide direct patient care for millions of Americans. They also contribute toward protecting and promoting community health, fund health and human services, invest in infrastructure, as well as develop and implement policies and regulations to advance science and support research.

The Office of the National Coordinator for Health IT (ONC) has a responsibility to coordinate across the federal partners to achieve a shared set of priorities and approach to health IT.  To that end, today we released the draft Federal Health IT Strategic Plan 2015-2020, and we are seeking feedback on the federal health IT strategy.  This Strategic Plan represents the collective priorities of federal agencies for modernizing our health ecosystem; however, we need your input. We will accept public comment through February 6, 2015. Please offer your insights on how we can improve our strategy and ensure that it reflects our nation’s most important needs.

A collection of 35-plus federal departments and agencies collaborated to develop the draft Federal Health IT Strategic Plan: 2015-2020, identifying key federal health IT priorities for the next six years (Exhibit 1). The landscape has dramatically changed since the last federal health IT strategyWhen we released that Plan, the HITECH Act implementation was in its infancy. Since then, there has been remarkable growth in health IT adoption. Additionally, the Affordable Care Act implementation has begun to shift care delivery and reimbursement from fee-for-service to value-based care.

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Evolving Medicaid To Better Serve Children With Medically Complex Conditions


December 8th, 2014

The fragmented Medicaid system must evolve to better meet the needs of children with medically complex conditions, a growing population responsible for a high proportion of health care spending. Regional care networks and national data support are two viable tools for containing costs while improving care for our nation’s most vulnerable children.

The Case for Change

Medicaid has evolved into an essential health care payor for the nation’s children, supporting health care coverage for more than 30 million children.

The program has become particularly vital to families of children with complex medical conditions. Care for this population was not widespread when Medicaid was created nearly 50 years ago. In the early 1960s very few infants born with extreme prematurity and/or congenital conditions survived. Thanks to advances in pediatric subspecialty training and technology, the life prospects for these children have greatly improved, and Medicaid now supports an estimated 2 million children with medical complexity. This population is projected to double over the coming decade.

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Children’s Health: Health Affairs’ December Issue


December 8th, 2014

The December issue of Health Affairs includes a number of studies examining current threats to the health and health care of America’s children, and what can be done to meet their needs within an ever-evolving health care system. Some of the subjects covered: the role of Medicaid in reducing early-term elective deliveries; how pediatric services are covered in the state insurance Marketplaces; Medicaid spending on children with complex medical conditions; and the effect of abuse and neglect on children’s health and school engagement.

This issue of Health Affairs is supported by The W.K. Kellogg Foundation as well as by the Children’s Hospital Association, The David and Lucile Packard Foundation, Nemours, the Annie E. Casey Foundation, and The Child and Adolescent Health Measurement Initiative.

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