Category Archives: Health Care

Municipal hospital – Cities fund clinics to temper rising healthcare costs

Source: Derek Prall, American City and County, May 20, 2013

With the cost of health benefits for city workers and their families climbing, cities nation-wide are opening municipal healthcare facilities. To get a better understanding of the trend, American City & County spoke with three cities in Florida to see if the quest for publicly-funded, affordable health care is bearing fruit…

Affordable Care Act

Source: Capitol Ideas, Vol. 56 no. 3, May/June 2013

Articles include:

Affordable Care Act 101 – Guide to Health Care Reform
By Mary Branham
The Patient Protection and Affordable Care Act, sometimes referred to as “Obamacare,” has been taking effect slowly since its passage in February 2010. Changes have been made to state Medicaid programs and requirements for insurance companies….

ACA Choices for States – The Path to Success

By Mary Branham
States Make Tough Choices on Expanding Medicaid, Operating Exchanges. Fourteen states—and the District of Columbia—that will be operating a state-based insurance exchange, and six states that have committed to a partnership exchange with the federal government, also are expanding Medicaid. On the flipside, only six states that are deferring to the federal government for an exchange support expanding the joint federal-state health insurance program for low-income people. That leaves 17 states rejecting, outright, two major parts of the act. Four states are still mulling whether to expand Medicaid….


Community Health Centers – Health Care Reform To Do List

By Jennifer Ginn

When Jan. 1, 2014, rolls around, one of the most significant parts of the Affordable Care Acts takes effect. That’s when all U.S. citizens and legal residents are required to have health insurance coverage.
While tens of millions of Americans will join the rolls of the insured, one thing is not so clear: Where will those millions of people get their primary care? Many of the newly insured probably will find themselves at a federally qualified community health center. These centers, created in 1965, are designed to ensure everyone has access to basic primary care and preventive services regardless of insurance coverage or ability to pay. …

Containing Costs: Bending the Medicaid Cost Curve

Source: Debra Miller, Capitol Ideas, Vol. 56 no. 3, May/June 2013

U.S. health care costs are likely to be around $2.8 trillion in 2013. In 2010, U.S. spending on health was 17.6 percent of gross domestic product; for comparison, the Netherlands spent 12 percent of GDP, the next highest spender of developed nations. The Centers for Medicare and Medicaid Services expects health spending to hit $4.6 trillion by 2020—19.8 percent of GDP. While spending growth has slowed in recent years—it has been near 4 percent for about four years and has reached a 14-year low—many believe the spending levels are unsustainable.

State governments bear some of the burden. The biggest health care expense for states is their share of the Medicaid program, which provides health insurance for low-income individuals. In 2011, total Medicaid spending was $407.7 billion. The program has surpassed K–12 education as the biggest state budget expenditure.

Those are some of the reasons states are looking for ways to contain costs. Here are four examples where states are attempting to do just that.

The Proportion of Work-Related Emergency Department Visits Not Expected to Be Paid by Workers’ Compensation: Implications for Occupational Health Surveillance, Research, Policy, and Health Equity

Source: Matthew R. Groenewold, Sherry L. Baron, Health Services Research, Article first published online: May 13, 2013
(subscription required)

From the abstract:
Objective: To examine trends in the proportion of work-related emergency department visits not expected to be paid by workers’ compensation during 2003–2006, and to identify demographic and clinical correlates of such visits.

Principal Findings; A substantial and increasing proportion of work-related emergency department visits in the United States were not expected to be paid by workers’ compensation. Private insurance, Medicaid, Medicare, and workers themselves were expected to pay for 40 percent of the work-related emergency department visits with this percentage increasing annually. Work-related visits by blacks, in the South, to for-profit hospitals and for work-related illnesses were all more likely not to be paid by workers’ compensation.

Conclusions; Emergency department-based surveillance and research that determine work-relatedness on the basis of expected payment by workers’ compensation systematically underestimate the occurrence of occupational illness and injury. This has important methodological and policy implications.

Peer pressures – Use of CEO compensation comparisons draws heightened scrutiny

Source: Melanie Evans, Modern Healthcare, May 11, 2013
(subscription required)

As chief executive pay continues to draw heightened scrutiny in the wake of the Great Recession, compensation comparisons used by governing boards to justify the payouts to shareholders and regulators are coming under fire from critics. The practice, common in the healthcare sector, has drawn fire for years. Critics claim reliance on peer group analysis is flawed and artificially inflates salaries and bonuses. Their complaints are beginning to be heard, including by the healthcare sector. One of the largest publicly traded health systems has revised its executive compensation peer group, which considers the market in which companies must compete on pay to recruit and retain top talent. … The use of peer groups by board compensation committees in determining CEO pay has played a major role in driving those salaries upward, critics contend. Ira Kay, a compensation consultant and proponent of their use, says executives operate in a competitive market for top talent and incentives such as stock options, bonuses and generous retirement packages have successfully retained highly mobile executives….

CEO pay at Leading Hospital Chains

Medicaid: Alternative Measures Could Be Used to Allocate Funding More Equitably

Source: U.S. Government Accountability Office, GAO-13-434, May 10, 2013

From the summary:
GAO identified multiple data sources that could be used to develop measures to allocate Medicaid funding to states more equitably than the current funding formula–known as the Federal Medical Assistance Percentage (FMAP)–which is based solely on per capita income (PCI). To be equitable from the perspective of beneficiaries and allow states to provide a comparable level of services to each person in need, a funding allocation mechanism should take into account the demand for services in each state and geographic cost differences among states. To be equitable from the perspective of taxpayers, an allocation mechanism should ensure that taxpayers in poorer states are not more heavily burdened than those in wealthier ones, by taking into account state resources. To illustrate, GAO identified at least one federal data source that could be used to develop measures of each of these aspects, in order to allocate Medicaid funding more equitably.

Increased health care cost sharing works as intended – It burdens patients who need care the most

Source: Elise Gould, Economic Policy Institute, Briefing Paper #358, May 8, 2013

From the summary:
A number of different health care policy proposals that have emerged in recent years share a common goal: make households directly pay for a larger share of most health expenditures by encouraging higher deductibles, higher copays, or higher co-insurance rates. The rationale of such proposals is that too-generous insurance policies (either those provided by employers or public insurance such as Medicare) distort the prices consumers face, and that removing this distortion would allow patients to choose their health care more wisely, hence slowing health care cost growth. The “success” of increased cost sharing hinges on the ability of patients to make educated decisions about their health care purchases much like they do when buying other goods and services such as milk, cars, or cell phone plans.

This brief argues that this is a flawed strategy for health care cost containment. The health care market is unlike other markets; thus, forcing increased cost sharing on American households is a deeply inefficient strategy for trying to contain health care costs. Forcing Americans to pay a higher share of health costs will not induce them to shop around and compare prices when they are experiencing chest pains or their child is suffering from an asthma attack. Further, consumers of health care are in no position to second-guess their doctor when she tells them an MRI is better than an X-ray (and hence worth the higher price) to diagnose a condition. Lastly, unlike other markets, prices of health care services faced by consumers bear very little relation to providers’ cost to supply these services. Hence, these prices provide little to no information for consumers looking to judge the relative efficacy of various health care interventions….

Limiting the Tax Exclusion of Employer-Sponsored Health Insurance Premiums: Revenue Potential and Distributional Consequences

Source: Lisa Clemans-Cope, Stephen Zuckerman, and Dean Resnick, Urban Institute, Timely Analysis of Immediate Health Policy Issues, May 2013

From the Robert Wood Johnson Foundation summary:
As attention is increasingly paid to the federal budget and deficit reduction measures, taxing employer-sponsored health coverage is likely to be debated in earnest. In 2011 alone, federal tax revenues were reduced by $268 billion because of subsidized employer-sponsored health coverage – the largest federal expenditure, by far.

New analysis by the Urban Institute with funding from RWJF finds that capping the dollar amount at which this coverage is tax exempt, would raise hundreds of billions of dollars over the next decade by taxing the most expensive employer-sponsored health insurance premiums and other benefits.

The analysis finds that:
– $264 billion in new revenues would be raised from 2014 – 2023 by imposing a 75 percentile cap on employer-sponsored health coverage.
– The policy change would affect public-sector employees to a greater extent than private-sector employees.
– The cap would lead to a tax increase for 15.7 percent of people who file taxes in 2014 and 20.0 percent in 2023.

Medicare Essential: An Option To Promote Better Care And Curb Spending Growth

Source: Karen Davis, Cathy Schoen, Stuart Guterman, Health Affairs, Vol. 32 no. 5, May 2013
(subscription required)

From the abstract:
Medicare’s core benefit design reflects private insurance as of 1965, with separate coverage for hospital and physician services (and now prescription drugs) and no protection against catastrophic costs. Modernizing Medicare’s benefit design to offer comprehensive benefits, financial protection, and incentives to choose high-value care could improve coverage and lower beneficiary costs. We describe a new option we call Medicare Essential, which would combine Medicare’s hospital, physician, and prescription drug coverage into an integrated benefit with an annual limit on out-of-pocket expenses for covered benefits. Cost sharing would be reduced for enrollees who seek care from high-quality low-cost providers. Out-of-pocket savings from lower premiums and health care costs for a Medicare Essential enrollee could be $173 per month, compared to what an enrollee would pay with traditional Medicare, prescription drug and private supplemental coverage. Financed by a budget-neutral premium, we estimate that this new plan choice could reduce total health spending relative to current projections by $180 billion and reduce employer retiree spending by $90 billion during 2014–23. Given its potential, such an alternative should be a part of the debate over the future of Medicare.

Related:
Medicare Essential: A Policy Proposal to Enhance Benefits, Improve Care, and Lower Health System Costs
Source: Karen Davis, Cathy Schoen, and Stuart Guterman, Commonwealth Fund blog, May 6, 2013