What accounts for differences in uninsurance rates across communities?

Using data from the 1996-97 Community Tracking Study household survey, this study examines variations in uninsurance rates across communities in the United States. Specifically, regression-based decomposition is used to identify factors that account for high rates of uninsurance in some communities. Differences in explained rates between "high uninsurance" and "low uninsurance" communities are the result of differences in the racial/ethnic composition and socioeconomic status of the population (33%), differences in employment characteristics (26%), and state Medicaid eligibility requirements (12.7%). Although higher costs are associated with a higher likelihood that individuals are uninsured, high-cost communities tend to have lower rates of uninsurance as a result of other factors. Despite the large number of identifiable factors included in the analysis, there is still a substantial amount of unexplained regional variation in uninsurance rates.

Tax credits and purchasing pools: will this marriage work?

Bipartisan interest is growing in Congress for using federal tax credits to help low-income families buy health insurance. Regardless of the approach taken, tax credit policies must address risk selection issues to ensure coverage for the chronically ill. Proposals that link tax credits to purchasing pools would avoid risk selection by grouping risks similar to the way large employers do. Voluntary purchasing pools have had only limited success, however. This Issue Brief discusses linking tax credits to purchasing pools. It uses information from the Center for Studying Health System Change's (HSC) site visits to 12 communities as well as other research to assess the role of purchasing pools nationwide and the key issues and implications of linking tax credits and pools.

Trends in out-of-pocket spending by insured American workers, 1990-1997

This paper examines trends in out-of-pocket spending for insured workers from 1990 to 1997. Data are from the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. The survey collects detailed quarterly data on all consumer spending from logs kept each year by more than 10,000 households with job-based health insurance. During the study period, total out-of-pocket spending in constant dollars remained unchanged. Spending for medical expenses, drugs, and supplies declined by 23 percent, but this decline was offset by rising employee contributions for health insurance premiums. The shift to managed care, whose benefit structure requires less cost sharing, may have played a role in reducing out-of-pocket spending.

Back to the future? New cost and access challenges emerge. Initial findings from HSC's recent site visits

Every two years, researchers at the Center for Studying Health System Change (HSC) interview health care leaders in 12 nationally representative communities to assess changes in local health care markets. The third round of site visits is under-way, and early findings from 2000-2001 indicate significant changes in health care financing and delivery are taking place across the country. This Issue Brief discusses developments in managed care, hospital consolidation, physician-hospital tensions, risk contracting and health plan premiums. State and federal policy makers charged with balancing cost, coverage, access and quality of health care should consider these emerging trends in their decision making.

At the brink: how Harvard Pilgrim got in trouble

The Massachusetts insurance commissioner placed Harvard Pilgrim Health Care (HPHC) in receivership in January on the basis of large projected losses that put the nonprofit plan in a significant negative net worth position. Because Harvard Pilgrim was the largest health plan in the market, with substantial amounts payable to hospitals and physicians, its financial problems shook the Boston health care community. The story also attracted national attention because of the plan's prominence and its reputation for quality. The Center for Studying Health System Change (HSC) followed the Harvard Pilgrim story closely as part of its continuous tracking of Boston--one of the 12 Community Tracking Study sites visited every two years--and is able to put this event in broader context. Many of Harvard Pilgrim's problems are evident in plans elsewhere. This Issue Brief discusses the causes of the plan's financial problem and the state's response, which has preserved the organization.

Update on the nation's health care system: 1997-1999

A major component of the Community Tracking Study is biennial site visits to twelve communities randomly selected to be representative of metropolitan areas. In the second round of visits, conducted in 1998 and 1999, we found an intensification of an earlier trend toward looser forms of managed care to be causing enormous turmoil, as health care organizations stumbled over and often abandoned strategies conceived for more tightly managed care. Communities' health care systems are not evolving as many anticipated but rather have focused increasingly on horizontal consolidation and regional scope.

Are defined contributions a new direction for employer-sponsored coverage?

Defined contributions for health benefits are being promoted as the new silver bullet for employers to combat the rising costs of health care, the managed care backlash and the changing climate for employer liability. As interest in this concept grows, so does the number of proposed alternatives for implementing it. Originally called fixed contributions, defined contributions now also refer to cash transfers or vouchers, with reliance on the individual market for health insurance. A more recent angle for defined contributions is using the Internet as an on-line marketplace for purchasing health insurance. This Issue Brief examines defined-contribution strategies and assesses issues relevant to employers, employees and public policy makers.

The Community Tracking Study analyses of market change: introduction

OBJECTIVE

To introduce two articles and describe methods that are common to them.

DATA SOURCES/STUDY SETTING

Interviews conducted in person in 1996/1997 with leaders of organizations involved in the financing and delivery of healthcare.

STUDY DESIGN

As part of the Community Tracking Study, 12 metropolitan statistical areas (MSAs) were selected randomly from MSAs with populations over 200,000. Researchers made baseline site visits to these communities and conducted from 36 to 60 interviews, depending on the size of the site. The communities were compared to identify common patterns of change and differences across communities.

DATA COLLECTION/EXTRACTION METHODS

Researchers conducted interviews with a broad cross-section of leaders in each community. Interview modules were designed to obtain multiple perspectives on a question.

PRINCIPAL FINDINGS AND CONCLUSIONS

Fundamental changes in the way care is actually delivered is likely to lag behind the extensive changes in organizational relationships that are taking place.

Tracking health care costs: long-predicted upturn appears

After three years of anticipation, health care cost trends have taken an upward turn. In employment-based insurance, premium increases for 1999 were in the 5 percent range, up from 3 percent for 1998. The rate of increase in underlying costs of private insurance--lagged by one year--also rose by approximately 2 percentage points. Many had expected a sharper upturn in premium increases than underlying cost increases. This would have heralded a turn in the insurance underwriting cycle, which has not yet occurred. This Issue Brief tracks the rate of growth of health care costs and the experience with premiums for employment-based health insurance and discusses the impact of these trends on consumers.

Competition, quality of care, and the role of consumers

Two researchers in the field of health care financing discuss how the establishment of standards might encourage consumers to participate more actively in choosing their health care providers.

The dynamics of market-level change

Health care exhibits a competitive dynamic today that increasingly resembles that in other service industries. Organizations are becoming larger to achieve scale economies and to increase market power. Vertical integration, whether through ownership or complex contracts, is also being pursued both to seek efficiencies and to improve the bargaining position of the organization. External forces that are driving these changes include more aggressive activities on the part of purchasers to contain their costs, developments in information technology, management innovation in other service industries, and advances in medical technology. Within the health care industry, there is a pattern of organizations taking the initiative to respond to these external forces--often in anticipation of them--and other organizations then responding to the pressures in turn placed on them. Although information on strategies is communicated rapidly throughout the country, what is attempted and what succeeds differs a great deal across communities. The nature of current health care institutions in the community, including the presence of large entities with extensive capital and strong management in a particular segment of the health system and the community's experience with managed care are important factors in the path that change takes.

The RWJF Community Snapshots Study: introduction and overview

Teams of researchers visited fifteen communities--selected to reflect a range of health care market development, regions, and population size--to obtain a "snapshot" of health system change. The study found that organizational change is pervasive, even in those communities that do not receive attention in the trade press, but that much of the change has not yet affected consumers. While the forces driving change are similar across the communities, the responses--and the shape of change--differ in important ways. Factors leading to the differences include the size and capabilities of existing health care organizations, the community's experience with managed care, and the political and business cultures of the community.

A bumpy road to Medicare payment reform

The publication of proposed rules for the Medicare physician fee schedule has triggered intense controversy, especially over the level of the conversion factor. Under the Health Care Financing Administration's interpretation of the provision requiring "budget neutrality," fee levels would be at least 16 percent lower than they would have been under the current payment method. That reduction stems from projections of physician behavior in response to changes in fees and the interaction of an asymmetric transition with the budget neutrality requirement. Other interpretations would better reflect the intent of Congress and would make better policy. The relative value scale still is far from final, but the version just published shows a greater shift in payment toward evaluation and management services than the initial phase of the study by Hsiao and colleagues.

Working toward a more rational pattern of fees

Following its congressional mandate to reform physician payment, the Physician Payment Review Commission has been examining the concept of a fee schedule. The commission, which operates almost entirely in public, has extensive contact with physician groups and beneficiary organizations, and provides extensive opportunities for formal testimony at public meetings and for frequent informal interactions at the staff level. By sending various organizations a draft outline of issues it hopes to take up in its next report to Congress, it is soliciting suggestions from them long before any decisions are made. Such issues as geographic variation in payment, the ways in which CPT codes are used, a relative-value scale, and the increasing volume of services are being subjected to intense scrutiny, and the commission is drawing conclusions.