Health Policy

important historical moments in employment-based health insurance

-1929 Baylor Hospital's employment based prepaid health plan for HOSPITAL care -after WWII, growth of private insurance *health care tech expanded and costs increased *wartime economic policies stimulated provision of insurance by employers (wage controls needed a way to recruit) *federal tax code also included provisions to include insurance benefits (couldn't be taxed on them)

US health care system pre-ACA

-employment-based health insurance system -gov't programs (Medicaid and Medicare) provide insurance to many -large & growing # of uninsured -rapid increases in health care spending -concerns about quality of care problems: 1. rapid increases in healthcare spending 2. large & growing # of uninsured and underinsured 3. concerns about quality of care

What is a quality measure?

1. at PROCESS level: A/B, eg. all patients who could have had a flu shot (B) who got a flu shot (A) 2. at outcome level: what is the mortality rate of patients with X at site Y? 3. pt experience level 4. structural level (does a hospital have a NICU)

how to improve efficiency

1. competition among insurers ex. more choice in insurance like managed care in hte US or like in Germany/Netherlands 2. competition among providers ex. increase patient cost-sharing - which will make them have to shop (canada, france ,germany, italy, japan,us) ex. more competition among providers (UK fundholders) 3. pay for performance

Key components of the ACA

1. individual mandate ($960 tax) 2. expand Medicaid (138% FPL for all) 3. creation of the state-based insurance exchanges 4. Subsidies for lower income (100%-400% FPL) on the market 5. Employer penalties for employees who receive tax credits for plan purchase through exchange 6. insurance market reforms Rates of uninsurance for health care dropped post-ACA, although about 29 million (9.2% of overall population) remain uninsured in early 2015; dental coverage rates remain low

What are the two international approaches to the creation of health care policy?

1. market based approaches 2. gov't based approaches we're on the market based approach but the gov jumps in for market failures

general uses of quality measures

1. measure nation's health 2. help payers identify and reward good providers (by quality, by quality and cost -> tiers) 3. help provider groups and hospitals (and you) identify good doctors; help patients identify good providers (consumerism and transparency) and improve equity of care should the same measures be used for each of these things?

How much did the US spend on healthcare in 2014?

3.03 trillion 9523/capita 17.5% GDP 45% gov share

how are most ppl insured in the US

54% have private insurance, most often sponsored by employer over past 20 years, shift away from indemnity coverage to managed care with recent movement toward high deductible plans

True/False: The majority of covered workers who buy single (sometimes called "individual") coverage for themselves are enrolled in plans that require them to make a contribution of less than or equal to a quarter of the total premium. True False

A 61% of covered workers with single coverage are in plans that require them to make a contribution of less than or equal to a quarter of the total premium in 2015.

True/False: In 2015, Harvard began requiring coinsurance for lab tests and X-rays in all plan offerings for employees. True False

A Harvard benefit plans had not previously required coinsurance for in-network labs and X-rays - Harvard plans covered these services at 100%, with no cost sharing requirement. Beginning in 2015, all Harvard benefit plans included a coinsurance requirement for these services.

In 2015, Harvard University offered a new (i.e., never offered by Harvard before) type of plan to its employees. That type of plan is: A high deductible health plan An HMO plan A POS plan A PPO plan

A In 2015, Harvard added a high deductible health plan as one of the plans that employees could choose.

True/False. Risk adjustment based on enrollee demographic characteristics alone will not adequately account for differences in health care spending across individuals. True False

A Risk adjustment that also accounts for diagnostic information does a much better job at explaining differences in spending.

What did the New York Times propose in its editorial on the Partners-South Shore merger? Splitting the Brigham and Women's Hospital and Massachusetts General Hospital into two separate systems for health plan bargaining purposes Advocating that the merger with South Shore was critical for the purposes of better coordination of care with patients in that system Permanently splitting Partners into three separate financial entities

A Splitting the Brigham and Women's Hospital and Massachusetts General Hospital into two separate systems for health plan bargaining purposes The New York Times expressed concerns that Partners has too much market power and this has resulted in excessively high prices in the region. They argued that one possible way to alleviate these resulting price hikes is to allow for health plans to have separate contracts with the Brigham and Women's Hospital and Massachusetts General Hospital.

Deductible

A feature of health plans in which consumers are responsible for health care costs up to a specified dollar amount. After the deductible has been paid, the health insurance plan begins to pay for health care services.

Copayment

A fixed dollar amount paid by an individual at the time of receiving a covered health care service from a participating provider. The required fee varies by the service provided and by the health plan.

Managed care

A health delivery system that seeks to control access to and utilization of health care services both to limit health care costs and to improve the quality of the care provided. Managed care arrangements typically rely on primary care physicians to act as "gatekeepers" and manage the care their patients receive.

Coinsurance

A method of cost-sharing in health insurance plans in which the plan member is required to pay a defined percentage of their medical costs after the deductible has been met.

Health savings account

A tax-exempt savings account that can be used to pay for current or future qualified medical expenses. Employers may make HSAs available to their employees or individuals can obtain HSAs from most financial institutions. In order to open an HSA, an individual must have health coverage under an HSA-qualified high deductible health plan. These HSA-qualified high-deductible health plans must have deductibles of at least $1,150 for an individual and $2,300 for a family in 2009.

Out-of-pocket maximum

A yearly cap on the amount of money individuals are required to pay out-of-pocket for health care costs, excluding the premium cost.

What is the challenge to trying to influence the demand side of utilization and spending of health care?

AKA benefit design they are blunt tools -> ppl reduce use of low and HIGH value care -> they don't really seem to shop that well efforts to increase transparency leaves something to be desired how much can we expect consumerism to achieve?

As reported in the Boston Globe last year, the federal government approved a plan that would shift the way Massachusetts "safety net" hospitals (i.e., hospitals that treat a large proportion of Medicaid and uninsured enrollees)are reimbursed. Under the new plan, payment for these hospitals would move away from a fee-for-service based system toward a system in which they are given a global budget to cover the care of their Medicaid patients. Name 2 potential advantages of this type of system and 1 potential disadvantage/concern. Potential Advantage #1:Potential Advantage #2:Potential Disadvantage or Concern:

Answers: Potential advantages are that the hospitals would have flexibility to use resources in the way they think best meets the needs of the patient population, facilities will have incentives to control costs/utilization,and the state would have greater predictability in their Medicaid expenditures for care provided by these facilities. A potential concern is that it may be difficult for the facility to manage this level of financial risk for the large proportion of their patients who are enrolled in Medicaid (may be worse for smaller hospitals). Safety net hospitals whose costs exceed the budget in one or more years will face intense financial pressure and could go out of business. A second concern could be about the possibility of stinting (i.e., under provision of care), which could result in poor quality.

True/False: The majority of employers offering health insurance benefits to workers use tiered providers networks in their plans to provide incentives to enrollees to seek providers that are more efficient or deliver higher-quality care. True False

B In 2015, only 17% of employers offering health insurance benefits used these designs.

What is the median number of different physicians a Medicare beneficiary sees in year? 1 primary care physician and 2 specialty physicians 2 primary care physicians and 5 specialty physicians 4 primary care physicians and 8 specialty physicians

B In Tom Bodenheimer's piece on coordinating care, he notes the many different physicians our older population sees every year. He uses that to motivate the need for better coordination. Problems with coordination are something that many of the first year students noted in their case write-ups.

True/False: Most large firms offering health benefits to current employees also offer health benefits to retirees of their firm. True False

B Less than a quarter (23%) of large firms that offered health benefits in 2015 also offered retiree health benefits.

True/False. Concurrent risk adjustment is superior to prospective risk adjustment in all cases. True False

B There are tradeoffs involved with both approaches - neither is superior to the other.

How do we measure the value of health care technologies? Why is measuring value important?

Bapu would argue that the single most important factor that improves your quality of life is the AVAILABILITY of technology (which drives quality and cost) -> interesting in the context of the limitation of access in UK and Canada You have to be able to measure value in order to put investment in other things in the quality argument, interesting in the context of McKeown;s TB research why does the healthcare system have to know that we value life around $120,000 - we have to decide whether it's a good idea to invest in a certain drug - have to know about teh value of a life to decide what to invest in would you rather live in a world that has access to those technologies or one that has lower premiums our current way to measure value of drugs depends on small extensions of life an dhow much ppl value this -important point: we should be spending more on R&D because there are spillover effects (happiness of your family) that does not get accounted for in the traditional way of assessing marginal extensions of life - current way of valuing drugs doesn't take into consideration that your life matters to other ppl

What is the AQC?

Blue Cross Blue Shield of Massachusetts (BCBSMA), the largest health plan in the state, established the Alternative Quality Contract (AQC) in 2009. The AQC pays provider organizations who sign up for the program via a risk-adjusted prospective payment (the global payment or budget) for all care provided to a fixed population. Thus, if the costs of caring for the organization's patients exceed the payment, provider organizations must bear those excess costs. However, if the costs are lower than expected, then the organization might profit. It is important to emphasize that the provider organization is responsible for the costs of all care its patients receive, even if the care is provided by someone outside the organization. A provider organization's payment is risk adjusted such that an organization that cares for a sicker population will have a higher payment per patient than an organization that cares for a healthier population. AQC organizations can also receive bonuses based on performance on 64 outpatient and hospital measures

What fraction of physicians owns their own practice? ~85% ~55% ~35% ~10%

C As illustrated in the graph in the concept video on provider organization, even within this century there has been a large shift in ownership. In 2000 ~60% physicians owned their practice and latest numbers suggest ~35% own their own practice.

Under the Alternative Quality Contract, a physician organization's financial responsibility is for: Care provided by the primary care and specialty physicians within the organization, but not hospital care Care provided by the physicians and hospitals within the organization, but not care that is provided by those outside the organization Care provided by the physicians and hospitals within the organization as well as care outside the organization

C The AQC makes the organization responsible for all care, including care provided by providers inside and outside the organization. In the small group sessions we will discuss what incentives that creates for organizations and what impact it has had on spending and quality.

What is an IPA? Integrated Provider Association International Physician Association Independent Practice Association

C The acronyms used to describe the different types of physician organizations are quite confusing. Independent Practice Associations are physician groups in which the individual practices are owned and operated independently but only come together for the purposes of contracting with health plans. This distinction is considered important when we consider issues of consolidation and whether IPAs have the ability to more effectively coordinate care.

What is the most common reason cited for their lack of insurance by individuals who are uninsured? Work doesn't offer insurance Don't need insurance Too expensive Immigration status Unemployed

C too expensive In a Kaiser Family Foundation survey of uninsured adults, 48% reported "too expensive" as the reason they lacked insurance. This was the most commonly cited reason.

Which payment strategies encourage efforts to better coordinate care across providers? Fee-for-service Capitation Salary Episode of illness (e.g., one payment for all care related to their diabetes) Fee-for-service & capitation Capitation & episode of illness None of the above

Capitation & episode of illness

Which payment strategies encourage more managing of care by telephone vs. office visits? Fee-for-service Capitation Salary Episode of illness (e.g., one payment for all care related to their diabetes) Capitation & salary Capitation & episode of illness None of the above

Capitation & episode of illness

Barriers to the use of value-based insurance design include which of the following: Privacy concerns related to identifying employees with specific conditions Potential for adverse selection if one plan in the market reduces cost sharing for treatments commonly used by individuals with specific health conditions Implementation costs Potential for fraud, if patients or providers misreport information so the patient is eligible for lower cost sharing of a particular treatment Answers a, c, and d Answers c and d All of the above

Chernew, Rosen, and Fendrick discuss a number of barriers to the implementation of value-based insurance design in their paper, including answers a, b, c, and d.

What is the most common plan type among covered workers? Health Maintenance Organization (HMO) High deductible health plans with a saving option (HDHP/SOs) Point of Service (POS) Preferred Provider Organization (PPO) Indemnity plan

D PPO plans enrolled 52% of covered workers in 2015.

Under the Affordable Care Act, plans could use all of the following tools to encourage enrollment by healthier individuals (and discourage enrollment by sicker individuals) EXCEPT: Impose limits on covered services Contract with a relatively small number of clinicians in specialties that disproportionately deliver care to higher-cost individuals (e.g., oncologists, psychiatrists, HIV specialists) Use marketing to attract younger, healthier individuals Exclude from coverage individuals with certain pre-existing health conditions Require prior approval for coverage of services used by higher-cost individuals

D Under the Affordable Care Act, plans are prohibited from using pre-existing condition exclusions.

Which of the following is NOT an example of a managed care technique used by health plans: Tiered prescription drug formularies Health coaching Prior authorization requirements Exclusive provider network Limit on the number of covered outpatient visits

E Limit on the number of covered outpatient visits A limit on the number of covered outpatient visits is a benefit limit that affects nominal benefit design. The other four are all managed care techniques used by plans to influence utilization and spending by enrollees.

Medicaid

Enacted in 1965 under Title XIX of the Social Security Act, Medicaid is a federal entitlement program that provides health and long-term care coverage to certain categories of low-income Americans. States design their own Medicaid programs within broad federal guidelines. Medicaid plays a key role in the U.S. health care system, filling large gaps in the health insurance system, financing long-term care coverage, and helping to sustain the safety-net providers that serve the uninsured. covered over 68 million in 2011 -33 million children (>1 in 4) -19 million adults -16 million elderly and persons with disabilities historically and in non-expansion states, means-tested with categorical eligibility -low-income children, pregnant women, elderly, ppl with disabilities, some parents

Medicare

Enacted in 1965 under Title XVII of the Social Security Act, Medicare is a federal entitlement program that provides health insurance coverage to 45 million people, including people age 65 and older, and younger people with permanent disabilities , end-state renal disease, and Lou Gehrig's disease. covers approximately 55 million people *46 million elderly * 9 million non-elderly disabled *300,000 with end-stage renal dz or ALS estimated expenditures in 2014: 597 billion

True/False: All providers who accept Medicare patients must also accept patients covered by Medicaid. True False

False Providers who accept Medicare beneficiaries are not required to also accept Medicaid beneficiaries.

True/False. After implementation of the ACA, Medicaid coverage will be expanded to all adults residing in the U.S. who have incomes less than 138% of the FPL. True False

False This would not be the case in states that choose not to expand their Medicaid programs under the ACA or for undocumented individuals.

Which payment strategies encourage use (& overuse) of complex services? Fee-for-service Capitation Salary Episode of illness (e.g., one payment for all care related to their diabetes) Fee-for-service & salary Fee-for-service & episode of illness All of the above

Fee-for-service

Which payment strategies for hospitals encourage longer lengths of stay? Fee-for-service Per diem Per admission (DRG) Bundled payments/capitation Fee-for-service & per diem Per diem & per admission All of the above

Fee-for-service & per diem

Which payment strategies for hospitals encourage more admissions? Fee-for-service Per diem Per admission (DRG) Bundled payments/capitation Fee-for-service & per diem Fee-for-service & per admission Fee-for-service & per diem & per admission

Fee-for-service & per diem & per admission

Health maintenance organization (HMO)

Health Maintenance Organizations with a network of health care providers that deliver and manage care no claims at point of service usually requires a PCP and might require referrals to get to specialists most restrictive

how can we address the potential for adverse selection while ensuring adequate risk protection?

If insurers aren't paid in a way that reflects how much the beneficiary is going to cost then the plan will try to attract more healthy ppl with their BENEFIT DESIGN (high deductible, limited provider networks, etc.). and you risk RISK POOL SEPARATION -> r risk adverse selection you need risk adjustment to prevent risk pool separation

In 2015, who is covered under medicaid/other public?

In non-expansion states, low-income children, pregnant women, elderly, individuals with disabilities, some parents; in expansion states, all < 138% of federal poverty level - VA, Tricare, State Children's Health Insurance Program

From a New York Timesarticle by Abby Goodnough on December 29, 2014:"Amanda Mayhew ...earns little enough to qualify for Medicaid under the new guidelines, and she enrolled in August.She has been to the dentist five times to begin salvaging her neglected teeth, has had a dermatologist remove a mole and has gotten medication for her depression, all free."What economic concept does the quote about Ms. Mayhew best exemplify? A. Adverse selectionB. Risk poolingC. Asymmetric information✓D. Moral hazardE. Market power

Moral Hazard. Ms. Mayhew could not afford these services before qualifying for Medicaid, but faced with lower or nonexistent out-of-pocket costs, consumes more health care

Do all procedures cost the same everywhere?

NO!

Why do you think Harvard includes dental cleanings with no cost sharing requirements in its dental benefit? (Name 2 possible reasons.) Reason 1:Reason 2

One reason Harvard may be including dental cleanings with no cost sharing is to ensure that enrollees get good preventive care that could help prevent major dental problems later. Another reason is to ensure that low spending people with few dental problems join this voluntary benefit in order to ensure risk pooling. Otherwise, only those with major dental problems or immediate need for orthodontics might sign up

Historically, coverage of mental health and addiction treatment services had been more limited than coverage of other types of health care services.The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 requires employer-sponsored health plans with 50 or more employees to offer equal coverage for mental health and addiction services as for other types of health care services. How, if at all, do you think this law will affect adverse selection in the insurance market?

One reason that plans applied special limits on these services prior to this law was to prevent adverse selection on the basis of mental health and addiction treatment services. Plans were concerned that if they offered more generous coverage of these services than their competitors did, they might disproportionately attract individuals with chronic and severe mental health and addiction disorders, a group that has higher than average costs. By removing the potential to use differential coverage limits, the potential for adverse selection will be tempered. All plans will now be required to cover these services at parity with their coverage for other types of services

What role does the government play in the U.S. health insurance system?

Our employment-based system covers close to 2/3 of the non-elderly and the government covers a significant proportion of the rest through programs like Medicare and Medicaid.

For calendar year 2014, Harvard University offeredits employees an optional dental benefit with a monthly employee contribution of $15.94for individual coverage and $45.07 for family coverage. The 2014coverage was as follows Why do you think Harvard chose to require that the orthodontics benefit has 50% coinsurance and a $1500 lifetime benefit per person?

Periodontics, endodontics, and oral surgeryPlan pays 75% after deductibleMajorrestorative servicesPlan pays 75% after deductibleOrthodonticsPlan pays 50% (no deductible) for children up to age 19, up to $1500 lifetime benefit per personMax annual benefit$3000 per personAnnual deductible$50 per person; $150 per familya)Why do you think Harvard choseto require that the orthodontics benefit has 50% coinsurance and a $1500 lifetime benefit per person? Answer:A likely reason for offering 50% coinsurance and having a $1500 lifetime benefit per person is an effort to control moral hazard. For example, if an enrollee has to pay half of the bill at the point of service they will think more carefully about whether they need orthodonticsthan if they paid no coinsurance. The $1500 lifetime benefit per person will also serveto limit Harvard's liability for these services. Harvard likely chose orthodontics for such a benefits structure (vs. basic restorative services) as there is a sense that orthodontics aremore elective and therefore susceptible to concerns about moral hazard

What are the goals of the Medicare premium support model advanced by Speaker of the House Paul Ryan and others?

Restructuring Medicare from a defined benefit program to a defined contribution program such as premium support has significant implications for the federal budget, Medicare beneficiaries, and the health care system as a whole. premium support: certain private insurance companies that meet certain standards would compete for the enrollment of Medicare beneficiaries the federal gov't would manage the competition by 1)setting certain standards for the plans 2) paying fixed contribution towards the plan premium -> this would help manage the burden on the federal government beneficiaries would pay for whatever was on top of the subsidy, but they also have choice in teh plan they choose; except for really sick or low income ppl who would have increased subsidies from the gov't as well as help with cost-sharing

Which provider organizations and BCBSMA (Blue Cross Blue Shield MA) members can participate in an AQC?

Some examples of participating provider organizations in an AQC include: large multispecialty groups, independent practice associations representing smaller physician practices, or physician-hospital organizations (i.e., a combination of 1 or more hospitals and physician groups). These provider organizations must include a group of primary care physicians (PCPs) that care for at least 5,000 BCBSMA members. An enrollee is assigned to the provider organization to which their PCP belongs. As of 2015, 20 large provider organizations, representing over 90% of BCBSMA network primary care physicians (PCPs) and caring for over 650,000 enrollees, are covered under the AQC. Several of your practice sites participate in the AQC, including Beth Israel Deaconess Physician Organization, Partners (which includes the Brigham &Women's and MGH), and the Mt. Auburn Cambridge Independent Practice Association.

What has been the role of health care technological change in driving health care outcomes and costs in the last five decades?

TECHNOLOGICAL CHANGE IS THE KEY DRIVER OF HEALTH CARE COSTS AND QUALITy adoption of new technologies (new drugs, new devices, new therapies) accounts for 40-50% of excess costs - new tech costs a lot - this is the key driver in the increasing costs of healthcare other things, defensive med (almost no contribution), aging pop, chronic dz -> all account for a lot less, admin costs (consolidation accounts for this bc the more you micromanage, the more admin you need)

How does the AQC compare to other payment reforms?

The AQC is similar to models used by other payers like Medicare. The Medicare Pioneer ACO and Shared Savings Program demonstration models also place large provider organizations at financial risk for the total cost of care for their enrollees and provide bonuses based on the quality of care delivered. However, the AQC passes full financial risk for the cost of care onto the provider organization, as the organization must absorb all expenditures above that budgeted amount. In contrast, in the Medicare programs the provider organizations only bear partial financial risk as Medicare will bear some or all of the costs if expenditures for the patient population exceed the budget.

Affordable Care Act

The Affordable Care Act provides Americans with better health security by putting in place comprehensive health insurance reforms that will: Expand coverage, Hold insurance companies accountable, Lower health care costs, Guarantee more choice, and Enhance the quality of care for all Americans. The Affordable Care Act actually refers to two separate pieces of legislation — the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) — that, together expand Medicaid coverage to millions of low-income Americans and makes numerous improvements to both Medicaid and the Children's Health Insurance Program (CHIP).

How does the U.S. compare to other higher-income countries with respect to health care spending and key system outcomes?

The U.S. has the lowest life expectancy at birth among OECD comparable countries (79 years) Disease burden is higher in the U.S. than in comparable countries For most of the leading causes of death, mortality rates are higher in the U.S. than in comparable countries The U.S. has the highest rate of deaths amenable to health care among comparable OECD countries The U.S. has higher rates of medical, medication, and lab errors than comparable countries Since 1980, the gap has widened between U.S. health spending and that of other countries The U.S. has fewer physician consultations per capita than most comparable countries Patients in the U.S. have much shorter average hospital stays than patients in comparable countries Previous Next What does a check-up of the U.S. healthcare system tell us? http://Whatdoesacheck-upoftheU.S.healthcaresystemtellus? SHARE CHART FACEBOOKTWITTEREMAIL EMBED This chart collection accompanies our video, "Health of the Healthcare System," a diagnostic look at the state of our healthcare system. How does the U.S. healthcare system compare to health systems of other high-income countries, and how has it fared over time? The video takes us through a check-up of our system by assessing four key areas: how healthy we are, the quality of care we receive, how much it costs, and how accessible it is. The following charts explore these key areas in more detail. The U.S. has the lowest life expectancy at birth among OECD comparable countries Life expectancy at birth in the U.S is lower than comparable OECD countries (countries with above median total GDP and GDP per capita for at least one of the past ten years). In 2011, U.S. life expectancy was just under 79 years, compared to an average of about 82 years for comparable OECD countries. + show more Disease burden is higher in the U.S. than in comparable countries Age standardized disability adjusted life year (DALY) rate per 100,000 population, 2010 United States United Kingdom Belgium France Austria Germany Netherlands Canada Average Australia Sweden Switzerland Japan Note: "Average" is the simple average of the comparable countries shown above. Comparable countries are defined as those with median GDP and above median GDP per capita in at least one of the past ten years. Though DALYs have declined in the U.S. and comparable countries since 2000, the U.S. continues to have higher age-adjusted rates of years of life lost to disability and premature death than comparable countries. For most of the leading causes of death, mortality rates are higher in the U.S. than in comparable countries Age-adjusted major causes of mortality per 100,000 population, in years, 2010 Circulatory system diseases Cancers (Neoplasms) Respiratory system diseases External causes Nervous system diseases Mental/behavioral disorders Endocrine/ nutritional/metabolic diseases Note: Comparable countries are defined as those with above median GDP and above median GDP per capita in at least one of the past ten years. major causes of death, the U.S. has lower than average mortality rates for cancers and higher than average rates in the other categories relative to comparable OECD countries. These categories accounted for more than 85 percent of all deaths in the U.S. in 2010. The U.S. has the highest rate of deaths amenable to health care among comparable OECD countries Amenable mortality per 100,000 population, in years, 2002 - 2003 and 2006 - 2007 France Australia Japan Sweden Netherlands Austria Germany UK Average US Note: "Average" is the simple average of the comparable countries shown above. Comparable countries are defined as those with median GDP and above median GDP per capita in at least one of the past ten years. Researchers have looked at mortality that results from medical conditions for which there are recognized health care interventions that would be expected to prevent death. While the health care system might not be expected to prevent death in all of these instances, differences in mortality for these conditions provides information about + show more Foot and leg amputations due to diabetes are decreasing in the U.S. and comparable countries Lower extremity amputations due to diabetes are higher in the U.S. than in comparable countries, however the U.S. is making significant progress as the rate of such amputations has decreased by 54% between 2006 and 2010. The U.S. has higher rates of medical, medication, and lab errors than comparable countries Percent of sicker adults who have experienced medical, medication, or lab errors in past two years, 2011 U.K. Switzerland France Germany Average Australia Sweden Netherlands Canada U.S. 0% 5% 10% 15% 20% 8% 9% 13% 16% 16% 19% 20% 20% 21% 22% Note: Experienced medical mistake, given wrong medication or dose, lab test error, or delay receiving abnormal test results. "Average" is the simple average of the comparable countries shown above. Comparable countries are defined as those with median GDP and above median GDP per capita in at least one of the past ten years. Source: 2011 Commonwealth Fund International Health Policy Survey in Eleven Countries, available here: http://www.commonwealthfund.org/interactives-and-data/international-survey-data According to a recent international survey by the Commonwealth, the U.S. has higher rates of medical, medication, and lab errors than comparable countries. This includes medical mistakes, incorrect medications or dosages, lab test errors, or delays receiving abnormal test results. Circulatory and ill-defined conditions, such as check-ups, are the largest categories of health spending Total expenditures in $ billions by disease category, 2012 Ill-defined conditions Circulatory Musculoskeletal Respiratory Endocrine Nervous system Cancers and tumors Injury and poisoning Genitourinary Digestive Other Mental illness Infectious diseases Dermatological Pregnancy and childbirth $0 $100 $200 $300 $250 $243 $188 $158 $139 $134 $125 $119 $114 $108 $94 $80 $68 $45 $39 Circulatory conditions had been the largest contributor to health spending, for at least a decade, until 2012 when they were surpassed in total spending by ill-defined conditions (a category including check-ups, follow-up appointments, preventive care, and treatment of minor conditions such as colds, flus, and allergies). In 2012, about $250 billion was spent on ill-defined conditions, and $243 billion went toward the treatment of circulatory conditions. Since 1980, the gap has widened between U.S. health spending and that of other countries Total health expenditures as percent of GDP, 1970 - 2012 1970 1980 1990 2000 2010 4% 5% 6% 7% 8% 9% 10% 11% 12% 13% 14% 15% 16% 17% United States France Netherlands Austria Switzerland Belgium Germany Canada Sweden Japan United Kingdom Australia Average Source: Kaiser Family Foundation analysis of 2013 OECD data. "OECD Health Data: Health expenditure and financing: Health expenditure indicators." OECD Health Statistics (database). doi: 10.1787/data-00349-en (Accessed on June 25, 2014). Notes: Data unavailable for: the Netherlands in 1970, 1971, and 2012; Australia in 1970 and 2012; Germany in 1991; and France from 1971 through 1974, 1976 through 1979; 1981 through 1984, and 1986 through 1989. Break in series in 2003 for Belgium and France and in 2005 for the Netherlands. 2012 data for Canada and Switzerland are estimated values. Over the past four decades, the difference between health spending as a share of the economy in the U.S. and comparable OECD countries has widened. In 1970 the U.S. spent about 7% of its GDP on health, similar to spending by several comparable countries (the average of comparably wealthy countries was about 5% of GDP in 1970). + show more The U.S. has fewer physician consultations per capita than most comparable countries Doctors Consultations, per capita, in all settings, 2010 Switzerland U.S. U.K. Australia Netherlands France Austria Belgium Canada Average Germany Japan 0 1 2 3 4 5 6 7 8 9 10 11 12 13 4 4 5 6.6 6.6 6.7 6.9 7.4 7.7 8.1 9.9 13.1 Source: Kaiser Family Foundation analysis of 2013 OECD data: "OECD Health Data: Health care utilisation", OECD Health Statistics (database). doi: 10.1787/health-data-en (Accessed on October 29, 2014). Notes: In cases where 2011 data were unavailable, data from the countries' last available year are shown. "Average" is the simple average of the comparable countries shown above. Comparable countries are defined as those with above median GDP and above median GDP per capita in at least one of the past ten years. Along with Switzerland, the U.S. has the fewest physician consultations per capita among higher-income OECD countries. Consistent with this lower physician use, the U.S. also has fewer physicians per capita and about one in every ten adults (11%) report that they either delayed or did not receive needed medical care due to cost in 2013. Patients in the U.S. have much shorter average hospital stays than patients in comparable countries Average number of days in the hospital per visit (all causes) (2010) Japan Germany Switzerland Average Austria Canada U.K Belgium Sweden France Netherlands Australia U.S. 0 5 10 15 18.2 9.5 9 8.1 7.9 7.7 7.4 6.9 6 5.7 5.6 5 4.8 Source: OECD (2013). "OECD Health Data: Health care utilisation." OECD Health Statistics (database). doi: 10.1787/health-data-en (Accessed on September 10, 2014). Notes: In cases where 2011 data were unavailable, data from the last available year are shown. Notes: In cases where 2011 data were unavailable, data from the last available year are shown. Note: "Average" is the simple average of the comparable countries shown above. Comparable countries are defined as those with above median GDP and above median GDP per capita in at least one of the past ten years. U.S. patients on average experience shorter hospital stays than in other OECD comparable countries. The average price of an angioplasty or bypass in the U.S. is higher than in other comparable countries The U.S. performs fewer angioplasties and more coronary bypass surgeries than comparable countries, but for both procedures prices are substantially higher than in other countries where data are available. According to the International Federation of Health Plans, the national 95th percentile average for an angioplasty in the US is $61,184. + show more The average price of a caesarean section in the U.S. is more than the price of a normal delivery The average cost per Caesarean section in the U.S. is 1.7 times higher than in comparable countries where data are available. The average cost of normal delivery in the U.S. is about 13 percent higher than in comparable countries and about 254 percent higher than normal deliveries in the Netherlands (the country with the lowest cost). The average price of an MRI in the U.S. is significantly higher than in other comparable countries Average price of an MRI (2013) Switzerland Australia Netherlands U.S. $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 $1,100 $1,200 $138 $350 $461 $1,145 Source: International Federation of Health Plans (2013), "2013 Comparative Price Report, Variation in Medical and Hospital Prices by Country" In 2013, the U.S. performed 107 MRI exams per 1,000 population. The average price per MRI exam in the U.S is 3.6 times higher than the comparable country average (though most countries do not have data available). According to the International Federation of Health Plans, + show more The average price of Cymbalta in the U.S. is 76% more than the average price in Canada Average Price, 2013 England Netherlands Switzerland Canada United States $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 $46 $52 $76 $110 $194 Source: International Federation of Health Plans Notes: U.S. average prices are calculated using commercial claims data from Truven MarketScan Research databases. Methods and sources for comparable countries can be found here: http://www.ifhp.com/1404121 In 2013, the U.S. had the highest average price for Cymbalta (prescribed to treat depression, anxiety, and fibromyalgia). The average price of Cymbalta in the U.S. was almost double the average price in Canada and 4 times the average price in England. The average price of Celebrex in the U.S. is about 63% higher than in Switzerland Average Price, 2013 Canada Netherlands England Switzerland United States $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 $51 $112 $112 $138 $225 Source: International Federation of Health Plans Notes: U.S. average prices are calculated using commercial claims data from Truven MarketScan Research databases. Methods and sources for comparable countries can be found here: A report by the International Federation of Health Plans (IFHP) found that drug prices in the U.S. are higher on average than prices in similarly wealthy and sizable countries. The following slides provide some examples of specific drugs included in the IFHP report. In 2013, the United States had the highest average price for Celebrex (prescribed for pain). + show more The average price of Nexium in the U.S. is almost 3 times more than the average price in Switzerland Average Price, 2013 Netherlands England Switzerland United States $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 $23 $42 $60 $215 Source: International Federation of Health Plans Notes: U.S. average prices are calculated using commercial claims data from Truven MarketScan Research databases. Methods and sources for comparable countries can be found here: http://www.ifhp.com/1404121 Nexium is prescribed to treat acid reflux. According to the International Federation of Health Plans, the average price of Nexium in the U.S. in 2013 was almost three times more than the average price in Switzerland, which had the second highest price after the U.S. On average, larger shares of household budgets are devoted to health expenses than 10 years ago Mortality rates for breast and colorectal cancer in the U.S. are lower than in comparable countries In 2013, the U.S. had the lowest insured rate of comparably wealthy countries On average, other wealthy countries spend about half as much per person on health than the U.S. spends

Premium

The amount paid, often on a monthly basis, for health insurance. The cost of the premium may be shared between employers or government purchasers and individuals.

What are the goals of the AQC?

The goals of the AQC are to create incentives to better control health care spending growth while improving the efficiency, coordination, and quality of care.

McKeown thesis

The historical analyses of Thomas McKeown attributed the modern rise in the world population from the 1700s to the present to broad economic and social changes rather than to targeted public health or medical interventions. it continues to stimulate support, criticism, and commentary to the present day, in spite of his conclusions' having been largely discredited by subsequent research The ongoing resonance of his work is due primarily to the importance of the question that underlay it: Are public health ends better served by targeted interventions or by broad-based efforts to redistribute the social, political, and economic resources that determine the health of populations? Various historians took issue with McKeown's summary dismissal of the importance of medical intervention and made the case for the importance of, among other measures, smallpox inoculation and the development of hospitals It was ultimately on empirical grounds that the McKeown thesis was overturned. The quantitative techniques used by historical demographers grew in sophistication from the 1950s to the 1980s.21 A group of French scholars at the Institute National d'Etudes Démographiques in Paris developed a technique known as family reconstruction with which they were able to study the period predating the institution of death registration in France in 1792 Applying a variety of sophisticated new statistical and analytic techniques to the parish registers to overcome problems of accuracy and interpretation, Wrigley and Schofield produced a comprehensive and authoritative volume that conclusively demonstrated the invalidity of a central feature of McKeown's reasoning—that the growth in population was due to a decline in mortality, not a rise in fertility. Indeed, the book treated the McKeown thesis dismissively, consigning it to mentions in a few footnotes. Simon Szreter in a 1988 article.27 Szreter claimed that the thesis suffered from conceptual inaccuracy, especially with respect to the catchall term "rising standards of living," which conflated a heterogeneous group of phenomena, some of them related to economic changes and others to social reforms. More damning, Szreter conducted a new analysis of McKeown's own data on mortality trends in the 19th century and found that McKeown had misinterpreted the death records, confusing tuberculosis, bronchitis, and pneumonia. This misreading led to, among other errors, an incorrect description of the timing of the decline in tuberculosis mortality and an underestimation of deaths from bronchitis and pneumonia, which Szreter asserted played a more prominent role in overall mortality than McKeown had allowed

As reported by the Wall Street Journal on December 15, 2014, UnitedHealthcare, a large health insurance company, will begin paying MD Anderson Cancer Center a fixed amount of money per patient per year for all cancer care (including surgery, chemotherapy, and imaging scans) delivered to UnitedHealthcare enrollees with a specific set of cancer diagnoses who seek treatment at the center.Name TWO likely consequences of this arrangement.Consequence#1: Consequence#2:

This bundled payment approach creates incentives for MD Anderson Cancer Center to be more cost conscious in their delivery of care to cancer patients, as they receive a fixed payment regardless of the services they deliver. •MD Anderson would also have more flexibility in meeting patients' care needs, including providing services such as care coordination and other services that may not be covered in a traditional fee-for-service system. •The approach could also create incentives to try to avoid patients whose costs are likely to be higher than the flat rate (e.g., by referring them to other specialists).

Why would a health insurance plan choose to implement a coinsurance requirement for filling a prescription drug instead of a copayment requirement?

To address moral hazard with respect to high cost Rx drugs -make patients more cost conscious by exposing them to more of the cost.

Explain why a physician's income could either increase or decrease if the reimbursement method was changed from fee-for-service to capitation.

Under a fee for service system, physicians could make more money because they control the quantity of services they provide and are paid based on the number and type of services they deliver. If they want to make more money, they can increase their productivity, in theory.However, under a capitation system, if a physician attracted a disproportionately healthy patient population, the capitation payments could exceed the cost of care required by the patients and the physician might also be able to take on a larger panel. Capitation without appropriate risk adjustment creates incentives for physicians to try to avoid sicker patients.

How does the US compare in per capita total healthcare expenditures?

We spend more on health care than any other country in the world and many consider our system best in world technically.

Individual practice association

a US term for an association of independent physicians, or other organization that contracts with independent physicians, and provides services to managed care organizations on a negotiated per capita rate, flat retainer fee, or negotiated fee-for-service basis a legal entity organized and directed by physicians in private practice to negotiate contracts with insurance companies on their behalf Perhaps the most significant function of an IPA is to exert influence on behalf of its members to counterbalance the leverage of health care insurers

Integrated medical group

a managed care system similar to a single-specialty medical group, except that various specialties and usually primary care are also provided - also for insurance negotiation power?

Integrated delivery system

a network of health care organizations under a parent holding company. Some IDS have an HMO component, while others are a network of physicians only, or of physicians and hospitals. the term is used broadly to define an organization that provides a continuum of health care services

how are medical systems characterized

access rules- how to avoid moral hazard 1. makr ppl pay for some of it 2.restrict # of facilities (PA vs. Ontario example) financing rules - have to extract money from ppl (taxes or individual payments) and payment rules- when you divorce payment from the receivers, you have to deterimne how th eprovider gets paid -> physician incentives matter a lot

What are potential benefits of shifting to a premium support? What are potential concerns?

advocates say: promote more cost-effective model than the one that relies on gov't price setting and regulation because beneficiaries have financial incentives to choose cost-effective plans and competition will insure quality, price, and service it could make federal Medicare expenditures predictable and easy to control, which is not a strength of the current program. Medicare Advantage program, private insurers cover about 26 percent of Medicare beneficiaries, the highest rate since private plan options first became available to most beneficiaries beginning in the 1980s. An opportunity to significantly expand that market under premium support has the potential to be very attractive to private insurers naysayers: will end Medicare's guaranteed benefit, shifting costs from govt to beneficiaries, reducing access and quality for poor, elderly, disabled; funds may just shift to covering high admin costs of private insurers (rather than taking prices down); lead to cut backs on money that supports GME, finance medical tech A potential threat to achieving budget savings is if, as has occurred in the past under the Medicare Advantage program, relatively high government payments are required in order to attract sufficient participation by private plans. Thus, if payments to plans are constrained and plans are subject to requirements that they perceive to be too restrictive, then plans tend to react by limiting their service areas or pulling out of the Medicare program altogether. A conversion to premium support would also require decisions about whether to continue federal support for medical training and sustaining hospitals serving low-income populations and those located in rural areas

What are some common challenges shared across different health systems?

all countries have faced a tradeoff btwn equality and efficiency; btwn market/income control and gov control typically equality has been judged more important but this is less true than it use to be Western countries are struggling with how to improve efficiency w/o creating material differences in care across groups there is no perfect system and different countries have achieved good outcomes using very different approaches that reflect THEIR COUNTRY'S VALUES

Point of service (POS) plan

an HMO with an out-of-network benefit

Why does insurance work?

because you are pooling risk the top 1% of spenders account for 21% of spending; the top 5% accounts for the top 49.5% of spendign but, when you are choosing a health plan you have ASYMMETRIC INFORMATION so the insurance companies are at risk for adverse selection

What are the pitfalls of requiring too little cost sharing?

by lowering the cost of care to patients at the point of service, insurance encourages use of services whose clinical benefits might not justify the total cost. This excess consumption is commonly termed "moral hazard" and reduces the value provided by the health care system -> By incresing costa at the point of service, moral hazard can be reduced and value increased -> the optimal amount of cost sharing reflects a balance between the risk and income-transfer effects of insurance against the moral hazard costs tradeoff between moral hazard and risk protection -> as you increase protection against risk through more generous insurance, you increase moral hazard

Which payment strategies encourage greater number of patients in one's panel, especially healthy patients? Fee-for-service Capitation Salary Episode of illness (e.g., one payment for all care related to their diabetes) None of the above

capitation

Which payment strategy most encourages greater use of preventive care services? Fee-for-service Capitation Salary Episode of illness

capitation

what are the two primary strategies for influencing utilization and spending?

change benefit design- influence patient behavior demand side influences services pts want and use, make consumers more efficient in how they use care (price shop) ex. co-insurance, co-payment, high deductibles, limited provider networks, reference pricing, tiering providers change provider payment systems - influence provider behavior supply side:

Barriers to VBID

concern over costs of increased use cost of implementation data issues insufficient research human resource concerns fraud legal barrier privacy concerns unintended incentives adverse selection

metrics for our health care system

cost, quality, equity, access TAKE HOME: all proposed health policy changes must be evaluated in terms of their potential effects on access, cost, and quality, as well as health equity. to goal: maximize value of care -> ultimately improve value over time value = benefit/spending ex. of ways we've tried to do this: 1. value based insurance design where it's lower cost-sharing for higher value and higher cost sharing for lower value - that is on the insurance design end 2. global payment (payment o provider end) - fixed pot, let the physicians figure out how to spend it -> incentives to deliver higher value care

High deductible health plan

currently fastest growing model in the US Health insurance plans that have higher deductibles (the amount of health care costs that must be paid for by the consumer before the insurance plan begins to pay for services), but lower premiums than traditional plans. Qualified high-deductible plans that may be combined with a health savings account must have a deductible of at least $1,150 for single coverage and $2,300 for family coverage in 2009.

In your opinion, which system studied could the U.S. learn the most from? Why?

different culture, different values -learn how things DON'T work balanced billing in France and how that puts a lot on the poor (but eventually they can afford it) -> moving to third party payer canada- fragmentation British- NICE control

IN 2015, who is covered under medicare?

elderly, some individuals with disabilities, ESRD (end stage renal disease) or ALS

reference pricing

employers allow employees to use any hospital but establish a limit on what the employer will pay - offers a broader range of choices to employees but requires them to bear more financial responsibility for their choices. meant to explicitly target hospital services, both to counteract perceived increases in hospital market power and to forestall the need to increase cost sharing for primary care services focus is on the prices negotiated between hospitals and insurers, aka the allowed charge, instread of hte higher list price nomially charged by teh hospital (billed charge) - employees pay difference between employer limit and allowed charge

How does global budget payment incentivize physician group organization?

encourages coordination so you end up wanting a larger organization, with different types of care which will allow for better coordination of care, better consolidation BUT consolidation will effect price!

Competing forces of healthcare that every country is tring to balance

equality - ideally everyone has access, no barriers to health technology- technology has made the cost of healthcare explode - you have to finance explosion of technology -> improves quality but also increases cost- ppl are happiest when tech is limited in a way that they don't notice ( as you restrict/regulate more, things become more noticable, the tighter the budget, the longer the wair) efficiency

Value-based insurance design

explicitly acknowledges and responds to patient heterogeneity; thoery argues for cost sharing that varies by individual designed by Mark Fendrick- advocates that copayment rates be set based on the value of clinical services (benefits & costs) - not just on costs encourages use of services when the clinical benefits exceed the cost and discourages the use of services when the benefits do not justify the cost according to the California Public Employee's Retirement System (CalPERS) for hospitals charging low prices and meeting specified geographic accessibility and quality standards VBPD factilities are low-price hospitals 2 approaches: 1) target clinically valuable services for copayment reduction (ex. beta blocker) 2) targets pts with select clinical diagnoses and lowers copayments for specific high-value services (differential copayment)

True/False. The reference pricing system adopted by CalPERS in 2011 resulted in more enrollees using lower-priced facilities for knee and hip replacement surgery but no change in prices charged by these facilities for these procedures. True False

false As noted in the Robinson and Brown article on the reading list, the reference pricing system resulted in a 21.2% increase in surgical volume at lower-priced facilities and a 34.3% decrease in surgical volume at higher priced facilities in the first year after implementation. However, prices did decline at both lower- and higher-priced facilities.

True/False. Prior to the passage of the Affordable Care Act, an unmarried 26-year-old working male with no children and no qualifying disabilities would be eligible for Medicaid in most states if his income was less than 100% of the Federal Poverty Level. True False

false This individual would not fall into any of the eligibility categories prior to the ACA (based on the information provided).

True/False. A PPO plan is an HMO plan that also includes some coverage for out-of-network services. True False

false A POS (or point of service) plan is an HMO plan that includes coverage for out-of-network services.

True/False: Medicare pays for most chronic long term care in the U.S. True False

false Medicaid pays for most chronic long-term care in the U.S.

True/False. The RAND Health Insurance Experiment found that there is more moral hazard for outpatient general medical care than for outpatient mental health care. True False

false The RAND Experiment found the opposite - use of outpatient mental health care use was about twice as responsive to the out-of-pocket price enrollees faced as use of outpatient general medical care.

True/False: All US citizens are eligible for Medicare Part A as soon as they turn age 65. True False

false They (or their spouse) have to have had 10 or more years of work history paying into the Social Security program to be eligible for Medicare Part A. However, the vast majority of individuals over age 65 qualify based on this requirement.

True/False. Most uninsured individuals have no full-time workers in their household. True False

false As of 2014, almost three-quarters (73%) of uninsured individuals had at least one full time worker in their household. low income working families make up over 40% of teh remaining uninsured

Preferred provider organization (PPO) plan

fully covered care within the contracted netwrok ability to obtain out-of-network care at higher costs no claims if in-network usually does not require a PCP less restrictive of the options

what are the criteria fora good quality measure?

good scientific evidence importance feasibility of implementation estimate of impact on adherence to measures

tiered provider networks

health insurance products that group providers into tiers based on teh cost or efficiency of care they deliver and then steer pts to choose these providers through lower premiums or cost sharing tiered networks are expected to constrain overall health plan costs by steering patients to lower cost priveders while encouraging hospitals and physicians to improve their efficiency or accept discounted payment rates in exchange for preferred-tier placement

What are some key differences across different health systems in different countries?

importance of market forces and the role of gov't importance of patient cost sharing as a mechanism to influence utilization (and deter unnecessary care) How prices are set whether coverage is universal or not in europe, cost is social issue, in Us cost is a personal issue dissatisfaction is common though the US is particularly bad - Americans hate the cost (a lot of other countries hate the access)

global payments encourage coordination which encourages consolidation which affects price how?

increase price bc it increases market power Cape Cod hospital has a lot of power bc they are the only hospital so if you are an insurance company, you need this hospital in your network spending = PRICE x quantity can we encourage integration (ex. ACOs) w/o encouraging monopolies? bc market power will restrict our ability to restrict prices over time...

What are the concerns with requiring too much cost sharing?

it will prevent services, particularly preventative services and PCP visits

What are the problems with quality metrics according to Dr. Ferris

many existing metrics are measured in a way that does not resonate with clinicians and/or addressable things many aspects of care are unrepresented in current metrics (es. speciality care) systematically miss some of the metrics most important to patients have to have the right metrics if we are going to encourage pts to choose based on quality and pay based on qulaity

social security amendments of 1965

medicare- for elderly medicaid- for welfare recipients *originally believed to be the smaller of the two programs, mainly for children and mothers created because there was a disproportionate proportion of children, disabled, unemployed, elderly that lacked health insurance

Market power

negotiating power? A major concern in either scenario is the potential for hospitals to convert greater market power into higher prices and less competition

what at the two ways for insurance plans to influence use and spending by enrollees

nominal benefit design- the list of benefits covered under specific financial terms (10 visits of a certain type) see picture managed care techniques - physicians and patients are managed -influences on physicians: financial incentives for MDs to provide less costly or higher quality care, prior authorization requirement,s exclusive provider network -influences on patients: differential cost sharing (eg. tiered drug formulary), education for pts (mail, internet), health coaching/outreach plans use a combination of nominal benefit design and managed care techniques to influence service use, spending, and quality of care

Moral hazard

our behavior changes when we are protected from the consequences of our actions by insurance by lowering the cost of care to patients at the point of service, insurance encourages use of services whose clinical benefits might not justify the total cost. This excess consumption is commonly termed "moral hazard" and reduces the value provided by the health care system

How do different appraoches to compensating providers influence provider behavior? how will the move toward global payment with quality standrads affect cost, quality, and access?

pay for performance: overlayed on top of everything, attached to every payment arrangement. WHy? to maintain quality. Really important in terms of global payments because you want to prevent stinting (ex. really important part of the AQC to make sure quality is maintained) under fee-for service model: providers don't bare financial risk; retrospective payments for services rendered; poor coordination bc no incentive for this' global payment/capitation: providers want to spend less, provide less; issues with stinting; but keep ppl healthy, keep them out of hospital, use generic drugs -> ENCOURAGES COORDINATION

What are examples of public and private insurance?

public: traditional medicare, canada, UK -the more you regulate, the more you save private: medicare advantage, germany, netherlands, switzerland

What must a process measure have?

relate to outcomes in a meanginful way

What are the drivers of health care innovations? What role does the U.S. play in the development of health care technologies?

research and development drive health care innovations cost of developing a drug is 1-2 billion dollars -> opportunity costs included; 90% failure rate for drugs; acquistion costs; clinical trials are 2/3rds of costs for new drugs (1/3rd is basic sci) -> overall COST OF THE RISK (inherent uncertainty we make a lot of the tech advancements

What must an outcomes measure have?

robus enough case mix adjustments (different populations for pt experience- did the measurement accurately reflect how they felt?

Which payment strategies encourage fewer patients in one's panel? Fee-for-service Capitation Salary Episode of illness (e.g., one payment for all care related to their diabetes) None of the above

salary

Why do health plans include any cost sharing?

to prevent the moral hazard, to prevent people from excess concumption because they are protected from the cost

what is the point of insurance?

to protect against unpredictable, large financial losses however, we know, bc of the Rand experiment, that presence of insurance affects our consumption decisions -> when we have insurance, we will use care that we might not have used if we had to buy it ourselves (moral hazard)

Where is most of the healthcare spending concentrated?

top 5% of spenders has about 50% of costs and costs of premiums and workers' contributions to premiums are rising faster than wages are rising and faster than inflation "Nearly thirty percent of Medicare's costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas." --Peter Orszag, Director of the Office of Management and Budget, 2009

True/False. Proponents of increasing competition in health care markets argue that it can result in lower costs and higher quality. True False

true

True/False. The fastest growing type of health plan in recent years is the high deductible health plan. True False

true The share of workers with employer-sponsored health insurance who have a high deductible health plan increased from basically zero in 2005 to 20% in 2014. The share for other plan types has remained fairly stable or decreased.

What drives regional variation in health care use and spending?

uninsured rates vary by state and by region, with individuals living in the south and west the most likely to be uninsured. The ten states with teh highest uninsured rates in 2014 were all in teh south and west. THis cariation reflects diff. economic conidtions ,state expansion status, availability of employer-based coverage, and demographics a lot of what we know about healthcare costs comes from medicare data but a new study suggests that areas of the US spending less o Medicare do not necessarily spend less on health care overall

How might cost sharing be designed to minimize the deleterious consequences and what are the drawbacks of different options?

value-based insurance design where copayments and coinsurance are essentially based on the individual VBID is a clinically sensitive form of cost sharing because it recognizes that services vary in the value that they provide to patients and that not all patients with a specific clinical conidtion receive the same level of benefit rom a specific intervention

What are the strengths and weaknesses of consolidation? Does it matter if it is horizontal vs. vertical integration?

weaknesses: A major concern in either scenario is the potential for hospitals to convert greater market power into higher prices and less competition

What are teh things to think about when thinking about measuring and improving quality?

what measures do you use? how do you adjust for risk? what is at stake? 1. public reporting -> reputations 2. pay for performance too much money -> perverse incentives; to little money and no one will pay attention

How does the US compare to other countries in per capita total current health care expenditures?

what things could we change from here? more investment in health promotion explicit rationing (NICE comes to the US) **Reformed payment systems? ex. accountable care organizations, bundled payment systems, pay for performance **more cost sharing?