Health Affairs

The Affordable Care Act included provisions to accelerate the transition to value-based payment, including Accountable Care Organizations (ACOs). Many private sector insurers, providers and employers also are moving in this direction.

However, many of today’s measures are inadequate to the task of assessing and paying for value. Current measures focus on process and clinical outcomes, as opposed to health status, and few are based on patient-reported data that would measure the overall care experience.

In addition, most measures are add-ons to current work rather than an integral part of the care process, requiring manual chart reviews and retrospective data analysis. Not only does this make implementation burdensome, it limits opportunity for real-time feedback and adjustment.

These inadequacies create opportunities to implement new measures that will be more meaningful to consumers, clinicians, purchasers and policy makers. But to avoid a proliferation of measures that are inconsistent or questionable in terms of assessing value, a framework is needed to define specific measures for each component of value – health outcomes, patient experience and per capita cost (see Table 1, click to enlarge). Read the rest of this entry »

In less than nine months millions of Americans will receive new health care coverage through provisions of the Affordable Care Act. Most observers believe that strong physician leadership can help heath care reform succeed, through the optimization of care quality and cost management. But, at the same time, too many American physicians are dissatisfied with current medical practice and unsure of what to do about it. Many would not recommend a career as a physician to their own children.

There are multiple causes for this dissatisfaction where it exists, including unpredictable reimbursement for services, excessive work burden and long hours, and excessive time devoted to non-clinical activities, including “paperwork”.

One possible reaction to physician dissatisfaction is a shrug of one’s shoulders. Most physicians are well paid, compared to most Americans, and are highly respected. We suggest, however, that improving physician practice satisfaction should be important for both patients and policymakers. Read the rest of this entry »

States are beginning to release information on what health insurance premiums will be in 2014. That’s when the Affordable Care Act’s (ACA) market reform rules that apply to the individual and small group markets will go into effect. The natural temptation will be to simply compare the 2014 premiums to those in 2013 to determine how the ACA may have affected premiums beyond any usual changes due to rising medical spending. But such comparisons will mask not only the reasons for any premium changes, but also how premium changes will differ across states and individuals. Premiums will go up for some individuals and down for others.

When examining how premiums change beginning in 2014, it is important to understand the various factors underlying these changes. These factors include the effectiveness of the individual mandate and premium subsidies at attracting low-cost enrollees into the insurance market; the new benefit requirements that may lead to higher premiums but lower out-of-pocket costs; employer decisions regarding whether to continue offering insurance and the health status of those whose coverage is dropped; how each state’s current issue and rating rules compare to those beginning in 2014; and each individual’s demographic characteristics and health status (and income when determining premiums net of subsidies). Read the rest of this entry »

Much has been made of the slowdown in health spending growth and the role played by the economy.  I have to confess that my first take, after studying plots of business cycles and health spending, was that health spending “had a mind of its own” and paid no attention to business cycles.  Consider the two most recent recessions depicted in the chart below.  During the recession of 2001, health spending growth actually shot up at the same time that the growth in gross domestic product (GDP) was dropping, and continued to rise even after the recession officially ended.

During the Great Recession, spanning December 2007 through June 2009, the growth in health spending dropped by about 2 percentage points and then leveled off while GDP growth dropped by nearly 10 percentage points and then quickly rebounded to a more normal long run rate of growth (though not sufficient to make a large dent in unemployment).  I hope you can see why I was skeptical of a predictable relationship. Read the rest of this entry »

Following the third straight year in which the Centers for Medicare and Medicaid Services estimated the growth in national health expenditures to be a record-low 3.9 percent, considerable speculation on the causes of slower spending growth has come from a variety of sources. There seems to be a consensus among actuaries, academics, and other analysts that the recession and the associated increase in unemployment and decline in insurance coverage led individuals to cut back on their use of health care services. (See here, here, here, here, and here.) But, while the recession is clearly associated with the dramatic slowdown in spending growth from 2007-2009, there is also evidence that the slowdown in spending preceded the recent recession and seems to be continuing during the modest economic recovery.

Observers of this more general trend have begun to suggest that fundamental structural changes in the health system are playing a role in recent spending trends. The ability of some high profile providers and health systems to achieve high quality outcomes with greater efficiency has garnered a lot of attention and some suggest that more salaried employment of physicians could be altering the practice patterns that developed under a fee-for-service system.  Others have pointed to patient-centered medical homes, accountable care organizations, and other payment and delivery system reforms as potential contributors to the slowdown in spending growth. The Obama administration has also argued that the Affordable Care Act has started to have a moderating effect on spending growth.

The extent to which the economy versus broader systemic changes has been driving slower spending growth has enormous implications for forecasting future spending trends. If the economy has been the primary driver of recent trends, we should expect spending growth to return to historically high levels as the economy recovers. The Congressional Budget Office (CBO) and the CMS actuaries have revised their Medicare and Medicaid forecasts downward to reflect the latest trends, but both entities seem to suggest that spending growth over the long term will return to historical levels. If, however, more structural changes are at work, then perhaps there is reason to be hopeful that health care spending growth will continue at a rate much closer to the rate of growth in the economy. Read the rest of this entry »

“Medical home” has become a term of art within the current wave of health reform.  It’s in the medical literature, on the internet and embedded in the Patient Protection and Affordable Care Act of 2010.

There is much debate over what “medical home” means and whether or not it works.  The Patient Centered Primary Care Collaborative published an overwhelmingly positive compilation of evidence last year supporting the concept.  At almost the same time, the Agency for Healthcare Research and Quality released a review of the literature that was much less positive, suggesting that the impact of practice transformation to the medical home is much less certain. So, in the end, what are we to believe when the messages are so mixed?

Given how the concept has evolved over time, it is not surprising that we are confused.  Historically, the term “Medical Home” comes from the American Academy of Pediatrics, which, in 1967, coined the term to describe a repository of records that would offset the dispersal of records between pediatric offices, health departments and hospitals.  Over the next 30 years, the concept developed into one of relationship between children, families and pediatricians.  Pediatric medical homes were primary care pediatric practices, partnering with families to serve children and youth with special health care needs, and emphasizing the need for care coordination within the many systems that serve the needs of children. Read the rest of this entry »

Tens of millions of uninsured people will soon have the ability to gain health coverage as the first enrollment period under the Affordable Care Act (ACA) begins on October 1, 2013, with actual coverage starting in January 2014. New marketplaces will be established for the purchase of private insurance, pre-existing coverage exclusions and discriminatory premiums will end, and comprehensive benefits will be included in health plans.

Most significantly for the vast majority of uninsured Americans, the ACA offers unprecedented financial assistance (in the form of a tax credit) to make private health plan premiums more affordable and, in many states, expanded Medicaid coverage.

The ACA represents a truly historic series of improvements – a legislative triumph that eluded many presidents before Barack Obama. As noteworthy as this achievement is, however, substantial coverage expansion will only occur if uninsured families learn about these new opportunities and actually get enrolled in private or public health coverage.

Enroll America was formed in 2011 with that goal of educating consumers about the new law and helping them to enroll in the plan that is right for them. There remains an enormous amount of work to do and challenges to overcome to make sure the ACA lives up to its potential. Read the rest of this entry »

In a publication released in numerous states as well as a JAMA Forum article and a recent list of ten supposed “myths” about Medicaid expansion, the Heritage Foundation repeatedly cites our paper for the proposition that “40 of 50 states are projected to see increases in costs due to the Medicaid expansion,” and that expansion would force such states “to dig deep into their already overstretched budgets.” Even in the 10 remaining states, according to Heritage, the budget gains we projected to result from expansion were speculative and uncertain, since they supposedly relied on states cutting payments for hospital uncompensated care.

These claims distort our work.  We identified 10 states in which Medicaid expansion would yield net savings based on just one factor—namely, unusually generous prior Medicaid coverage, for which states could claim enhanced federal matching funds. The modest additional gains resulting from uncompensated care savings did not tip any state from the red into the black.

Medicaid Expansion Offers Budget Savings, Revenue, and Economic Gains to States

More importantly, Heritage ignored our explanation that, because we were limited to “data available for all 50 states and the District of Columbia, we were unable to estimate several potential sources of state fiscal gain;” and that if additional, state-specific factors were considered, “many more states could realize net fiscal gains.”  Nor did Heritage acknowledge that all states must pay for national health reform but only those that expand Medicaid will receive large, offsetting allotments of federal Medicaid dollars, with resulting economic activity, jobs, and state revenue. Read the rest of this entry »

As a longtime physician, I know that having access to stable, affordable health coverage is a critical step in achieving better health outcomes.

That view is underscored in a study that appeared in today’s (May 2) New England Journal of Medicine (NEJM) on the effects of Medicaid coverage on individuals’ health and finances. Led by researchers at Harvard and MIT, the study—the Oregon Health Insurance Study—offers a good snapshot of how being insured can help low-income Americans.

Here’s the background:  In 2008, Oregon officials created a lottery giving uninsured, low-income adults a chance to apply for Medicaid. Nearly 90,000 people signed up, and approximately 30,000 were selected. By randomly providing health insurance to some, but not all, Oregon effectively established both treatment and control groups, presenting a unique opportunity to analyze the effects of having public health insurance.

The study in NEJM highlighted the latest data from the experiment. It showed that enrollment in Medicaid, after about two years, profoundly increased patients’ use of needed medical services, and vastly reduced the financial strain that previously limited their care. Read the rest of this entry »

The torrent of Affordable Care Act guidance that marked the end of April has continued into May, as the Centers for Medicare and Medicaid Services (CMS) released on May 1, 2013, a Health Insurance Marketplace Guidance on the role of agents, brokers, and web brokers in the health insurance marketplaces, formerly known—and still referred to here—as the exchanges.

Agents and brokers are the traditional channel through which most Americans and their employers have purchased health insurance coverage.  The ACA and implementing guidance offer new forms of assistance to help consumers enroll in insurance coverage, including navigators, in-person assisters, enrollment counselors, and the exchange itself with its call center and web portal.  Nevertheless, if the exchanges are to fulfill expectations by signing up millions of Americans for health insurance coverage, agents and brokers, including web-based brokers, will pay a vital role.  They will play a particularly important role in assisting small employers in signing up for the SHOP exchanges.  This guidance describes their role. Read the rest of this entry »