Thursday, April 18, 2013

Diverse Groups Forge Consensus on Curbing Health Care Spending While Improving Quality

Unlikely partnership releases five integrated recommendations to improve health care.

  • Published: 4/11/2013

Calling itself the Partnership for Sustainable Health Care, the group includes nationally prominent advocates for employers, insurers, consumers, health care providers and others. Participants include America’s Health Insurance Plans, Ascension Health, Families USA, National Coalition on Health Care and Pacific Business Group on Health.
“No single organization working alone, and no single policy approach, will achieve the lower-cost, higher-quality imperative. Moderating health costs while improving quality of care must be an all-hands-on-deck commitment,” said Ron Pollack, executive director of Families USA. “It is high time for us to bend the cost curve and improve patient care by fully engaging the public and private sectors, rather than perpetuating cost shifts among sectors or to consumers.”
The organizations recommend a set of integrated, system-wide approaches involving both the public and private sector that they say will significantly curb the growth in health care spending and enhance the delivery of care. The organizations met regularly for more than a year to develop proposals and were supported in their work with a grant from the Robert Wood Johnson Foundation.
“We believe our health system will generate better value when consumers and providers face aligned incentives—based on evidence of what works—that reward quality care and efficient use of resources,” said David Lansky, president and CEO of the Pacific Business Group on Health. “Our work together shows that representatives of diverse interests can work in the public interest toward a common approach to improving health care.”
The group’s recommendations are five-fold:
  1. Transform the way health care providers are paid, to emphasize value of services provided, rather than volume. Partnership members believe that private and public insurance programs must transition from the current ‘fee-for-service’ payment system to one that better rewards quality and value. They call on the public and private sectors to implement a range of alternative payment and delivery models over the next five years, in order to quantify results and spread successful models.
  2. Pay for care that is proven to work. Partnership members recommend a tiered reimbursement strategy that links payment directly to effectiveness. They recommend that both public and private insurers reduce payment for services that prove to be less effective and to have weaker value than alternative therapies.
  3. Encourage consumers to choose high-quality care. Partnership members recommend incentivizing consumers to select high-performing providers. They point to models like value-based insurance design, which offer financial incentives to consumers—such as reduced cost-sharing—when they opt for evidence-based treatments and obtain care from providers who deliver high-quality care. Traditional Medicare should be modified to allow tiered cost-sharing for beneficiaries who use high-quality providers, and drugs and services that are proven effective.  
  4. Improve the nation’s health care infrastructure. Partnership members recommend reforms aimed at strengthening the foundational infrastructure of America’s health care system so that cost- and quality-related innovations can be implemented more effectively. They call for establishing a uniform and prudent set of quality and other performance measures to be used by both the public and private sectors to support provider payment reform, consumer incentives and healthy competition in health care markets.  
  5. Incentivize states to improve care. Partnership members recommend establishing a gain-sharing program for states, which would encourage innovative approaches to controlling health care costs. States that participate would outline specific savings goals, with defined rewards for meeting them. States that slow the growth of total spending would be rewarded with a percentage of the savings. The recommendations include numerous ways to ensure that cost-reduction is accomplished responsibly and builds upon the access gains achieved through the Affordable Care Act. 
“These five ideas are game-changers that can place our health system on a sustainable path. Together, they can provide significant long-term relief for families and businesses facing rising costs and uneven quality,” said John Rother, president and CEO of the National Coalition on Health Care. “By encouraging new forms of health care delivery and spending our health care dollars more wisely, they can produce the real health-cost reform that our elected leaders in Washington have been searching for.”
Leaders of the Partnership believe their comprehensive approach to integrate public and private sector actions toward improving the health system will help stop the ‘silo effects’ of health care, including shifting costs from one partner or sector to another.
“High-value, affordable health care for individuals and families requires a sustained commitment by all stakeholders to actively engage and address the drivers of health costs throughout the system,” said Karen Ignagni, president and CEO of America’s Health Insurance Plans. “Today's report presents an actionable roadmap for reform.”
The leaders say they understand that change will not happen easily or quickly, but believe these recommendations create the opportunity for significant momentum in the immediate future, for system-wide transformation, toward which substantial progress can be achieved in just five years.
“To meet America’s health care needs, with special attention to the poor and vulnerable, we know that health care providers must fundamentally reconfigure delivery systems, care processes and cost structures. Moving to managing the health of defined populations demands recognition and acceptance of the magnitude of the transformational change required,” said Robert Henkel, FACHE, president and CEO of Ascension Health. “The consensus recommendations we present today provide a roadmap to move our country toward an achievable, high-performing, person-centered, coordinated system with lower costs.”
The Partnership organizations plan to continue their work by reaching out to and engaging many other health care stakeholder groups that are also interested in promoting health cost efficiencies while improving quality of care.
See the Partnership for Sustainable Health Care recommendations at
Media Contact:
Alexis Levy | Robert Wood Johnson Foundation | | (609) 627-5702

About the Robert Wood Johnson Foundation

The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation’s largest philanthropy devoted exclusively to health and health care, the Foundation works with a diverse group of organizations and individuals to identify solutions and achieve comprehensive, measurable, and timely change. For 40 years the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime. Follow the Foundation on Twitter or Facebook

Monday, April 1, 2013

Joel Hay: We can't afford Affordable Care Act

The Orange County Register
Obamacare's biggest selling point is that beginning next year all Americans will have a path to health care coverage. In fact, as Chief Justice Roberts upheld in a 5-4 vote at the Supreme Court last summer, after 2013, it will be illegal for any of us not to carry health insurance. Obamacare's biggest flaw is how expensive and wasteful it will be in accomplishing this expanded health care access.
The Affordable Care Act will add about 27 million Americans to the insured population and will likely increase government health care spending by more than $2.5 trillion over the next decade. Even the Congressional Budget Office estimates the 10-year Obamacare costs at $1.9 trillion through 2023, and this doesn't include any of the $300 billion annual health insurance premium tax exemptions that are crucial to ensuring that most private employers don't push all of their workers into the Obamacare Health Insurance Exchanges in 2014. It also doesn't include the $716 billion that was taken out of Medicare to help fund Obamacare without raising federal deficits.
This means that each newly added Obamacare beneficiary will cost the federal government about $100,000 to insure over the next 10 years. Only in Washington, D.C. could this even begin to sound logical or financially responsible. I'll bet that at least 95 percent of those who will get Obamacare coverage would rather just take the $100,000 than the Medicaid or Health Insurance Exchange health plans that federal and state bureaucrats are busily designing for them. For $100k, they'd gladly take their chances with the free care already provided by USC medical professors and residents at L.A. County Medical Center or other similar existing facilities.
Obamacare does nothing to deal with the 800-lb. health care gorilla – government programs cost too much. Medicare already has a $60 trillion unfunded liability for promises to future retirees. Just the spending for Obamacare, Medicaid and Medicare will raise deficits for the next 60 years to a level that will absorb over 20 percent of the entire economy, as much as the federal government spends on all its programs today. Actually, Obamacare does pay lip service to cost containment with a whole slew of new gobbledy-speak acronyms like ACOs (Accountable Care Organizations), PCMHs (Patient-Centered Medical Homes), EHRs (Electronic Health Records) and PCORI (Patient-Centered Outcomes Research Institute).
The problem is, while adding substantial administrative overhead costs, there is no evidence that any of these new bureaucratic contraptions will save any money.
The Obama stimulus spending pumped $30 billion into expanding electronic health records over the past four years and the consensus is that this has increased health care costs, not reduced them. As Stephen Soumerai from Harvard Medical School and Ross Koppel from the University of Pennsylvania wrote, "... The most rigorous studies to date contradict the widely broadcast claims that the national investment in health IT – some $1 trillion will be spent, by our estimate – will pay off in reducing medical costs."
All of the Patient-Centered Medical Home demonstrations done thus far have found that they significantly increase health care costs. Accountable Care Organizations, which are supposed to give physicians financial incentives to manage their patients better, have no mechanism to keep patients returning to them for care, and are thus as loophole-free as Swiss cheese. Even ACO proponents claim that in ideal circumstances ACOs will only slow the rate of growth of health care spending, not actually reduce it. And PCORI? PCORI is now spending billions of dollars to analyze health care services. This money is provided by a new Obamacare head tax on every health plan beneficiary. But there is a slight catch. Under Obamacare, it is illegal for PCORI to actually evaluate medical costs.
It could all have been done so much more simply by guaranteeing every American a catastrophic coverage health insurance plan that kicks in once their existing health benefit costs or annual out-of-pocket medical expenditures exceeded 15 percent of family income. By using existing health insurance premium tax expenditure loopholes to pay for it, taxes increases would have been unnecessary.
The Congressional Budget Office projects that at least 30 million people will still be uninsured in 2022, more than the 27 million that Obamacare adds to the covered roles.
But by then Democrats will be looking to pass Obamacare Part Deux, which will almost surely be single-payer health care for all. And when health care is free, you'll get what you pay for.
Joel W. Hay is a professor at the USC Schaeffer Center for Health Policy and Economics.