Job-based health insurance, 1977-1998: the accidental system under scrutiny

It's the Prices, Advanced Capitalism, and the Need for Rate Setting - Stupid

Competition cannot stem the rise of health care expenditures because it leaves agency diffuse and transferred in part to the institutions of advanced capitalism, which excel in generating demand for their services. The United States should turn to state rate setting to concentrate purchasing power.

Selection and Plan Switching Behavior

A majority of employees can choose among health insurance plans of varying generosity. They may switch plans if prices, information, or their health status change. This paper analyzes switching behavior presumptively caused by changes in health status. We show that people who move to a less generous plan have lower medical spending prior to the switch than the average for the generous plan in which they started, while those who move to a more generous plan appear to anticipate higher spending, which they delay until after the switch. This transfer of costs from a less to a more generous plan increases the burden of adverse selection. Our data suggest that switching may be more important to the level of premiums than previously documented.

The search for a national child health coverage policy

Thirty-eight percent of US children depend on publicly financed health insurance, reflecting both its expansion and the steady erosion of employment-based coverage. Continued funding for the Children's Health Insurance Program (CHIP) is an immediate priority. But broader reforms aimed at improving the quality of coverage for all insured children, with a special emphasis on children living in low-income families, are also essential. This means addressing the "family glitch," which bars premium subsidies for children whose parents have access to affordable self-only employer-sponsored benefits. It also means addressing the quality of health plans sold in the individual and small-group markets-whether or not purchased through the state and federal exchanges-that are governed by the "essential health benefit" standard of the Affordable Care Act (ACA). In this article we examine trends in coverage and the role of Medicaid and CHIP. We also consider how the ACA has shaped child health financing, and we discuss critical issues in the broader insurance market and the need to ensure plan quality, including the scope of coverage, use of a pediatric medical necessity standard that emphasizes growth and development, the structure of pediatric provider networks, and attention to the quality of pediatric health care.

Who serves the underserved? Predictors of physician care to medically indigent patients

Using a national sample of 466 doctors, this work is the first to determine how sociodemographic characteristics, family lives, educational experiences and work environments combine over the life course to shape physician attitudes and behaviors toward serving the medically indigent. Survey data reveal that most physicians have positive experiences with indigent patients, and feel responsible for providing care for the needy. On average, one-quarter of doctors’ patients are medically indigent, and physicians provide six hours of charity care per week.

Multivariate regression and path analyses indicate that disparate social forces predict humanitarian attitudes and behaviors of physicians. Physician attitudes toward the indigent are shaped largely by socializing forces, including medical education and relationships with mentors. In contrast, care of indigent patients is driven by physician attitudes and by characteristics of medical practice such as specialty and practice setting. Implications for scholarship and for medical education, practice and health policy are discussed.

Insurance company denial of payment and enforced changes in the type and dose of opioid analgesics for patients with cancer pain

Opioids are the mainstay of treatment for moderate to severe cancer pain. The variations in average monthly cost can make it difficult for most patients to procure them without adequate insurance coverage. There are increasing numbers of denials of payment and statements made by insurance agents and other sources regarding inappropriate opioid use, resulting in severe pain and emotional distress for cancer patients and their families. This case series describes five events where the insurer was a major barrier to opioid access.

Hospitals, finance, and health system reform in Britain and the United States, c. 1910-1950: historical revisionism and cross-national comparison

Comparative histories of health system development have been variously influenced by the theoretical approaches of historical institutionalism, political pluralism, and labor mobilization. Britain and the United States have figured significantly in this literature because of their very different trajectories. This article explores the implications of recent research on hospital history in the two countries for existing historiographies, particularly the coming of the National Health Service in Britain. It argues that the two hospital systems initially developed in broadly similar ways, despite the very different outcomes in the 1940s. Thus, applying the conceptual tools used to explain the U.S. trajectory can deepen appreciation of events in Britain. Attention focuses particularly on working-class hospital contributory schemes and their implications for finance, governance, and participation; these are then compared with Blue Cross and U.S. hospital prepayment. While acknowledging the importance of path dependence in shaping attitudes of British bureaucrats toward these schemes, analysis emphasizes their failure in pressure group politics, in contrast to the United States. In both countries labor was also crucial, in the United States sustaining employment-based prepayment and in Britain broadly supporting system reform.

Future of the US healthcare system and the effects on the practice of hand surgery

The multitier healthcare system of the USA has several major flaws. High costs and uncertain quality of care indicate that this system is no longer practical. Several improvement initiatives, such as the Oregon Health Plan, Leapfrog, Lean Manufacturing, and Pay-for-Performance have been implemented into the current system. All of these quality improvement models are being experimented in a limited fashion and do not address the biggest problem in the US healthcare, inequality of care. There is now increasing support for a universal health coverage model as an ethically sound and just way to decrease health disparities in the USA. The current quality initiatives as well as an adoption of universal coverage appear to be the best way to improve quality of care, reduce cost, and increase equality in healthcare. These initiatives may have considerable effects on the practice of hand surgery in the near future, and thus, it is important for the field of hand surgery to become more engaged in advocacy and public policy arena. The purpose of this paper is to examine the current problems in the US healthcare system and to evaluate potential solutions that will enhance quality while simultaneously curbing the unchecked increase in healthcare expenditure.

The form and context of federalism: meanings for health care financing

This article examines the meaning of federalism for health care financing (HCF) and is based on two considerations. First, federal institutions are embedded in their national context and interact with them. The design and performance of HCF policy will be influenced by contexts, the workings of the federal institutions, and the interactions of these institutions with different elements of the context. This article unravels these influences. Second, there is no unique model of federalism, and so we have to specify the particular form to which we refer. The examination of the influence of federalism and its context on HCF policy is facilitated by using a transnational comparative approach, and this article examines four mature federations: the United States, Australia, Canada, and Germany. The relatively poor performance of the U.S. HCF system seems associated with the fact that it operates in a context markedly less benign than those of the other national HCF systems. Heterogeneity of context appears also to have contributed to important differences between the United States and the other countries in the design of HCF policies. An analysis of how federalism works in practice suggests that, while U.S. federalism may be overall less favorable to the development of well-functioning HCF policies, the inferior performance of these policies is to be principally attributed to context.

Fact and fiction: debunking myths in the US healthcare system

The United States has the most expensive and complex healthcare system in the world. Despite the magnitude of funds spent on the system, Americans do not achieve the high standards of health seen in other developed countries. The current model of health insurance has failed to deliver efficient and effective healthcare. The administrative costs and lack of buying power that arise out of the existing multipayer system are at the root of the problem. The current system also directly contributes to the rising number of uninsured and underinsured Americans. This lack of insurance leads to poorer health outcomes, and a significant amount of money is lost into the system by paying for these complications. Experience from other countries suggests that tangible improvements can occur with conversion to a single-payer system. However, previous efforts at reform have stalled. There are many myths commonly held true by both patients and physicians. This inscrutability of the US healthcare system may be the major deterrent to its improvement. A discussion of these myths can lead to increased awareness of the inequality of our healthcare system and the possibilities for improvement.

A road map for universal coverage: finding a pass through the financial mountains

Government already pays for more than half of U.S. health care costs, and nearly all universal health insurance proposals assume continued government involvement through tax subsidies and other means. The question of what specific taxes could be used to finance universal coverage is, however, seldom carefully examined, in part due to efforts by health care reform proponents to downplay tax issues. In this article we undertake such an examination. We argue that the challenges of relying on taxes for universal coverage are even greater than is generally appreciated, but that they can nevertheless be met. A proposal to fund a universal health insurance voucher system with a value-added tax illustrates issues that would arise for tax-financed plans in general and provides a broad framework for a bipartisan approach to universal coverage. We discuss significant problems that such an approach would face and suggest solutions. We outline a long-term political and legislative strategy for enacting universal coverage that draws upon precedents set by comparable legislative initiatives, including tax reform and Medicare. The results are an improved understanding of the relationship between systemic health care finance reform and taxation and a politically realistic plan for universal coverage that employs undisguised taxes.

There's "private" and then there's "private": ERISA, its impact, and options for reform

The Employee Retirement Income Security Act of 1974 (ERISA), a federal law regulating private employer-sponsored employee benefit plans, was primarily designed for pension plans, but has had a profound impact on state health care reform efforts. ERISA's broad preemption language has been judicially interpreted to preclude states from most forms of regulation of employer health plans, including benefit design (except through regulation of insurance products) and incorporating employer expenditure requirements in state health reform financing. But since 1974, Congress has never seriously returned to reexamine several fundamental questions: Should employers be required to offer or contribute to employee health coverage? Should ERISA preempt state efforts to take such actions? Or should ERISA incorporate more comprehensive regulation of health plans in these areas? Although the politics of ERISA preemption have thus far blocked federal reform, while allowing state reform activity to be simultaneously curtailed, new health reform efforts may force Congress to address these questions.

Health centers at 40: implications for future public policy

As health centers celebrate their 40th anniversary, the larger American healthcare system faces challenges as daunting as any in its history. These include rising, unchecked costs of care, deteriorating access to care--especially among low-income, uninsured, and minority Americans--and unsettled quality of care for many. The authors argue that, as policymakers face the challenge of health system reform, the health centers program serves as a potential model for improving the cost-effectiveness and appropriateness of healthcare, setting the course for primary healthcare. At the same time, the program's very future depends on matters that extend into the broadest reaches of US health policy, in the areas of coverage, finance, workforce, quality improvement, and population health.

The managed care backlash: did consumers vote with their feet?

The managed care backlash led many to predict the demise of health maintenance organizations (HMOs). This paper examines trends in HMO enrollment in all metropolitan communities from 1994 to 2000 to identify factors that led to diminishing enrollment in the backlash era and circumstances in which HMOs maintained or expanded their presence. We use a database constructed from a wide variety of sources that describe HMO penetration and other characteristics of all metropolitan statistical areas. We found the backlash is not evidenced in a large degree of consumer switching. However, HMOs were more likely to maintain their presence in areas with high-cost growth and with greater managed care experience. Medicaid HMO growth continued to expand rapidly, indicating the possibility of a two-tiered system in which low-income beneficiaries have less choice than the privately insured.

Health plan liability and ERISA: the expanding scope of state legislation

The federal Employee Retirement Income Security Act of 1974 (ERISA) supersedes state laws as they relate to employer-based health care plans. Thus, cases brought under ERISA are heard in federal courts. We examined the intent, scope, and impact of recent laws passed in 10 states attempting to expand the legal rights of health plan enrollees to sue their plans. In June 2004, the US Supreme Court ruled that state-law causes of action brought under the Texas Health Care Liability Act involving coverage decisions by Aetna Health Inc and CIGNA Health Care of Texas were preempted by ERISA. The full implications of this decision are not evident at present.

Design Of Mental Health Benefits: Still Unequal After All These Years

This paper examines recent trends in the design and organization of coverage for mental health care using data from a Henry J. Kaiser Family Foundation and Health Research and Educational Trust (KFF/HRET) national employer survey. Legislation and changes in the delivery of mental health services have altered how mental health insurance is bought and sold. However, our findings reveal that mental health coverage is still typically not offered at a level equivalent to coverage for other medical conditions. We attempt to synthesize these data with prior research as a foundation for informed debates.

Managed competition and consumer price sensitivity in social health insurance

This paper examines whether the introduction of managed competition in Dutch social health insurance has resulted in effective price competition among insurance funds. We find evidence of limited price competition, which may be caused by low consumer price sensitivity. Using aggregate panel data from all insurance funds over the period 1996-1998, estimated premium elasticities of market share are -0.3 for compulsory coverage and -0.8 for supplementary coverage. These elasticities are much smaller than in managed competition settings in US group insurance. This may be explained by differences in switching experience and higher search costs associated with individual insurance.

Obstacles to employers' pursuit of health care quality

Large employers' roles in improving health care quality are shifting away from value-based purchasing toward direct efforts to improve health care delivery within local markets. Although most large employers adopted the tools required for value-based purchasing, inadequate information on quality has frustrated employers and limited their ability to make choices based on quality. More recent quality initiatives aimed at directly improving local health delivery systems may be limited to specific markets where the largest employers can exert substantial influence.

The mental health/primary care interface in the United States: history, structure, and context

This paper, the first in a series commissioned by NIMH for the "Challenges for the 21st Century: Mental Health Services Research Conference," seeks to provide a broad perspective on the primary care/mental health interface in the United States. The manuscript examines both the care of mental disorders in medical settings, and also the medical care of the seriously medically ill. The first section provides a historical overview of the cycling patterns of growth and retrenchment of primary care medicine during the 20th century, and the how those changes have paralleled the care of mental disorders and the mentally ill. The second section examines the four core features of primary care -first contact, longitudinality, comprehensiveness and coordination -and their implications for these issues. An historical and system-level perspective can provide a crucial step towards improving care on the mental health/primary care interface.

Financial risk sharing with providers in health maintenance organizations, 1999

The transfer of financial risk from health maintenance organizations (HMOs) to providers is controversial. To provide timely national data on these practices, we conducted a telephone survey in 1999 of a multi-staged probability sample of HMOs in 20 of the nation's 60 largest markets, accounting for 86% of all HMO enrollees nationally. Among those sampled, 82% responded. We found that HMOs' provider networks with physicians, hospitals, skilled nursing homes, and home health agencies are complex and multi-tiered Seventy-six percent of HMOs in our study use contracts for their HMO products that involve global, professional services, or hospital risk capitation to intermediate entities. These arrangements account for between 24.5 million and 27.4 million of the 55.9 million commercial and Medicare HMO enrollees in the 60 largest markets. While capitation arrangements are particularly common in California, they are more common elsewhere than many assume. The complex layering of risk sharing and delegation of care management responsibility raise questions about accountability and administrative costs in managed care. Do complex structures provide a way to involve providers more directly in managed care, or do they diffuse authority and add to administrative costs?

Employee demand for health insurance and employer health plan choices

Although most private health insurance in US is employment-based, little is known about how employers choose health plans for their employees. In this paper, I examine the relationship between employee preferences for health insurance and the health plans offered by employers. I find evidence that employee characteristics affect the generosity of the health plans offered by employers and the likelihood that employers offer a choice of plans. Although the results suggest that employers do respond to employee preferences in choosing health benefits, the effects of worker characteristics on plan offerings are quantitatively small.

Determinants of public and private insurance enrollment among Medicaid-eligible children

BACKGROUND

Many Medicaid-eligible children are not enrolled in Medicaid and are not covered by private insurance. Reducing persistent lack of insurance for children requires a better understanding of why Medicaid-eligible children do not participate.

RESEARCH QUESTIONS

Does the availability of free or low-cost medical services substitute for Medicaid or private insurance enrollment among Medicaid-eligible children? Does the availability and affordability of insurance coverage, particularly the offer of employer-sponsored insurance (ESI) and the presence of managed care, affect child insurance coverage?

RESEARCH DESIGN

We use data from the National Health Interview Survey for 1994 and 1995, supplemented with county level measures of insurance and provider supply, to estimate a multinomial choice model of insurance coverage among children identified as Medicaid-eligible. We focus on county supply of public hospitals and community/migrant health centers (C/MHC); and the availability and cost of ESI. We control for child and parent characteristics.

RESULTS

A positive effect of C/MHC supply is found on Medicaid enrollment, but no evidence is found of substitution between low-cost providers and Medicaid or private coverage. Local availability of ESI and private HMO penetration increased private insurance enrollment.

CONCLUSIONS

Local community providers can play an important role in outreach and enrollment for Medicaid. Availability and cost of ESI constrain private coverage for Medicaid-eligible children. Policies that encourage offers of insurance coverage by employers, decrease premiums, and encourage adoption of managed care could have important positive effects on coverage for this population.

Promoting private health insurance in Australia

Health insurance policy in Australia has been distinguished by considerable instability over the past five years. This paper reviews the rationale and emerging evidence on three major policy initiatives--a move to allow selective contracting, the introduction of a 30 percent government subsidy for private health insurance, and the abolition of pure community rating. Policy making on private health insurance has been characterized by insufficient attention to research that might provide a stronger evidence basis for policy reforms.

Three decades of health care use by the elderly, 1965-1998

Over the past three decades health spending and hospital use increased more for the elderly than for persons under age sixty-five. Medicare spending for the oldest old (age eighty-five and older) increased faster than for persons ages sixty-five to seventy-four, but that increase was due entirely to greater postacute care use. Health care trends are consistent with the idea that Medicare has improved the health of the elderly. Greater spending increases for the elderly may reflect legislative developments such as the passage of Medicare and its continued fee-for-service nature and the failure to pass universal coverage, as well as changes in the health care delivery system such as the rapid growth in managed care enrollment among persons under age sixty-five.

Universal coverage in the United States: lessons from experience of the 20th century

Both the rising numbers of uninsured Americans and the recent presidential election have put the issue of universal health insurance coverage back on the national agenda. Lack of health insurance is a major barrier to care for 44 million Americans, and lack of high-quality, comprehensive insurance is a barrier to millions more. Universal coverage is one of the best ways to ensure that all Americans have equitable access to quality care, and it also contributes to the financial stability of health care providers, especially those in the urban safety net. A wide variety of ideas to expand health care coverage were proposed, and in some cases enacted, during the last century. At the beginning of the 21st century, the American health care system is made up of varied elements, ranging from employer-sponsored health insurance for the majority of working-age adults to the public Medicare program for the elderly. While this patchwork system leaves many Americans without health insurance, it also creates many different ways to expand coverage, including various options in both the private and public sectors. By understanding how the current health care system developed, how the various proposals for universal health coverage gained and lost political and public support, and the pros and cons of the various alternatives available to expand coverage, we create a solid base from which to solve the problem of the uninsured in the 21st century.

Window shopping: state health reform politics in the 1990s

Throughout the 1990s states sought politically acceptable policies to reduce the ranks of the uninsured. Visions of comprehensive health reform and universal coverage yielded by mid-decade to more modest measures to repair private health insurance markets, and to these enactments were added several new public programs (state and federal) to expand coverage for lower-income children and, in some cases, adults. Because governments remain ill equipped to counter the power of business, insurers, and providers in conflicts fought on private turf, reform agendas have been more readily set, moved, and cleared in public-sector arenas. Although the number of uninsured rose steadily until 1999, "catalytic federalism"--the accelerating interplay between state and federal reform forces and funds--may be putting the programmatic foundations for broader coverage incrementally into place.

Selection bias in HMOs: a review of the evidence

Early reviews found that health maintenance organizations (HMOs) attracted healthier beneficiaries in the Medicare program and healthier employees in the market for employer-based insurance. This review finds that HMOs still attract healthier Medicare beneficiaries, that HMOs no longer attract healthier employees, and that HMOs attract healthier Medicaid recipients. This review also found conflicting evidence about whether Medicare HMOs are overpaid, no evidence that HMOs are overpaid in the market for employer-based insurance, and evidence that concerns about overpaying Medicaid HMOs have diminished because many states are adopting mandatory programs.