National Health Policy: CAUSE Goals and the 2010 ReformsApril 27, 2010

Osher Lifelong Learning Institute

John Amson Capitman, PhD.Nickerson Professor of Health PolicyCentral Valley Health Policy Institute

California State University, Fresno

The 2009/2010 health reform debate ◦ Underlying Philosophical arguments

Goals for Health Reform◦ Continuous, Affordable, Universal, Sustainable Effective

(CAUSE) PPAC (+ Reconciliation): Short-term changes PPAC (+ Reconciliation): Middle-term changes

◦ Low-income/uninsured◦ Medicare ◦ Privately insured

Assessing PPAC using the CAUSE goals Next Steps/ The “devil” in implementation detail Questions

Health Reform: CAUSE Perspective

“Private sector dominant”/ Massachusetts model—approach from outset◦ No serious debate of Universal/single payer plans◦ No serious debate of goals for reform◦ “Card not care” : “health reform” vs “health insurance

reform” Successful lobbying by insurance and

pharmaceutical industries August tea parties---astro-turf and manufactured

rage House and Senate bills passed Reconciliation after presidential intervention

The 2009/2010 Health Reform

Health care as:◦ RIGHT◦ PRIVILEDGE◦ RESPONSIBILITY

US historic compromise: All of the above

US compromise: International comparisons

Underlying Political Philosophy Debate

IOM Report as basis Approach based on “real US health system”

rather than political philosophy CAUSE and the goals for reform

◦ Continuous, ◦ Affordable, ◦ Universal, ◦ Sustainable ◦ Effective

Health Care CAUSE

Failure of prevention adherence Most spending for chronic disease Unnecessary burden of poor management

of chronic disease Unnecessary burden of preventable disease

No breaks in coverage/primary care access Patient centered medical home Reimburse “cognitive services” Improved transition management

Continuous

About 50 million uninsured and about same number find it unaffordable/inadequate---about ¼ find health care unaffordable

Health care costs biggest source of bankruptcy Employer coverage has decreased –unaffordable

to many small businesses—limits mobility

Keep total health care expense to 10% or less of pre-tax income for those within 500% of poverty

Break link between employment and coverage

Affordable

Uninsured and inadequately insured have worse health outcomes, increase costs of care for all, increase unequal healthcare burden on low-income communities

Exclusion of demographic (e.g. “undocumented”, young adults) and need (e.g. behavioral health, community long-term care) groups increases overall system costs

Universal access promotes efficiency and public health

Remove demographic and need barriers to care

Universal

Under current law and practice, Medicare goes broke next decade

AND: health care grows ½ of economy reducing US global position

Establish budget discipline for health care at national, state, and local levels

Change reimbursement systems to promote prevention and efficiency

Use financial transactions tax or FAT (financial activity tax) to finance health care

Sustainable

Despite spending more, US has poorer health outcomes across life span

Regional, race/ethnic, rural/urban, condition inequalities in care and outcomes

Over-use of high cost/low efficacy services Low adherence to prevention recommendations

Change reimbursement and tort laws to promote evidence-based and safe practice

Change reimbursement and regulation to promote prevention and “cognitive” services

Address health inequities through financing and regulatory changes

Effective

Persons 23-26 remain on parents’ plan

New federally-funded high risk pool

Tax credit for small employers to purchase coverage

Private insurance reforms (lifetime cap, cancellations, pre-existing conditions for children, preventive services with no co-pay, reporting on loss ratio and cost increase)

PPAC+ Reconciliation: Short-Term

Medicaid expanded to 133% of FPL. Establish state exchange (uninsured/insured

but unaffordable 133-400 %FPL, small business employees) for legal residents.

Subsidized coverage with total exposure less than 10% of pre-tax for 133-200% FPL, but less affordable.

Increased Medicaid rates Demonstrations, start-up funds, training

funds to improve safety-net capacity and effectiveness

PPAC: middle-term changesuninsured/low-income

Reduced subsidy for Medicare Advantage plans—Medicare solvent for 15 years

Donut hole in Part D closed by 2020—short-term asssistance

Immediate benefit improvements◦ Annual physical◦ No co-pay for preventive services◦ Improves primary care reimbursement◦ Transitional care benefits◦ Bundled payments and other reimbursement reform

demonstrations Comparative effectiveness and payment review

commissions

PPAC: middle-term changesMedicare

Individual mandate to hold qualifying insurance

Phased-in reforms (guaranteed issue, community rating, maximum out-of-pocket) apply to employer and individual markets

Establishes level of exposure, loss ratios, minimum benefits etc. for qualifying plans

Tort reforms Medical home demonstration Comparative effectiveness research Oversight for premium increases

PPAC: middle-term changesprivate insurance

GRADE

Rational

Continuous C 1) Reduces risk of dropped coverage, 2) fewer uninsured for job change, 3) only demonstration on patient-centered medical home, 4) no co-pay for prevention, 5) inadequate payment reform

Affordable B 1) Makes health care affordable for under 200% FPL, 2) Does not ensure affordability for 200-400% FPL, 3) Does not limit growth of private premiums for 400+ FPL

Universal C 1) Excludes “undocumented” 2) Unaffordable coverage may reduce enrollment below 95% estimate, 3) Rural initiatives/safety net expansions/disparity initiatives may not improve access

Sustainable D 1) Extend Medicare solvency by 6 years, 2) Helps states expand Medicaid, 3) Some effort to “bend costs curve” but not enough, 4) No budget discipline for health care

Effective C 1) Commissions and demonstrations to improve effectiveness, 2) Better consumer information 3) public health/healthy community initiatives, 4) health care safety and quality initiatives

PPAC: CAUSE Assessment

1) PPAC leaves health care profit motive intact. ◦ Insurers will seek to limit (unprofitable) enrollment and coverage◦ Pharmaceutical and other private health care will seek cost increases◦ Ineffective, high-technology procedures will be pushed

How will CA ensure that abuses actually stop?Can CA develop public options?Can CA institute additional practice and payment changes?

2) PPAC leaves undocumented uninsured (at least 200,000 in SJV) a state and local responsibility.

How will CA and local government respond?

Next Stepsthe “devil” in (implementation) detail

3) PPAC increases MediCal eligibility, expands Healthy Families, and creates Exchange but leaves much flexibility in benefits design and administrative process.

How will CA manage new beneficiaries? How will CA expand safety net services to meet new demand?

4) PPAC will slow but not limit premium rate hikes.

What else can CA do to keep health care affordable?

5) PPAC will promote comparative effectiveness knowledge but not require practice change.

How can CA promote adoption of evidence-based practice? How can CA promote patient-centered medical home and disease

management?

Next Stepsthe “devil” in (implementation) detail