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week_three_lecture.pptxMCHM 6301: Health Care Policy Analysis
WEEK 3: Alternative Responses and Initiatives for Health Policy
Overview
What are the alternatives concerning healthcare access, quality and cost(at the federal, state, and local levels).
Concept of Universal coverage through an administered system at the federal level.
Oligopolistic Competition (the options that it provides for the following:
Expand/contract coverage for entitlement and categorical programs
Allow states to reallocate uncompensated care funds
Employer mandate
Eliminate ERISA constraints for the states
Expand capacity of the system
Fund services for special populations
What are the alternatives for payers , employers, patients, providers
Offering of incentives
What Are the Governmental Alternatives?
Many Proposals -
Three Foci of Most Proposals are:
Access
Quality
Cost
Chapter Gives Examples Only
Not intended to be:
Mutually exclusive
Collectively exhaustive
Hopefully not too repetitive either
Stratified by vision of the system
Administered systems
Oligopolistic competition
Free-market competition (aka consumer driven care
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Access to Care Alternatives
For administered systems
Universal coverage
Captive providers
Single “sponsor”
Note all three are often erroneously assumed for a single payer system as with the NHS in the UK
Expanded/reduced eligibility and benefits
This is one route taken over time in U.S.
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Universal Coverage
Objective of most proposals
Hawaii has had it, Massachusetts is implementing it. Other on way before ACA.
As Table 5-2 implies, U.S. government spend more than UK government.
However, there is supply rationing in many places where universal coverage exists and some say, “It’s the prices, stupid” while other say “It’s the wages, stupid”.
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For Oligopolistic Competition
Expand/contract coverage for entitlement and categorical programs
Allow states to reallocate uncompensated care funds
Employer mandate
Eliminate ERISA constraints for the states
Expand capacity of the system
Fund services for special populations
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Expand/Contract Coverage for Entitlement, Categorical Programs
Examples
Add another year to the SCHIP cohort
Add home dialysis to hospital dialysis programs
Hard to argue against when there are live examples to bring into a hearing, sort a “camel’s nose under the tent”
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Payer Alternatives
Employers
Who is eligible and when
How much to pay for premiums or services
Which plans from which source to offer and how many are meaningful alternatives
Relationship with insurer/ self-insurance
Worker education and incentives to change
Remember what they want from earlier chapter
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Functions of Insurers
Negotiate contracts with providers and insured
Collect and invest premiums
Process claims
Control medical-loss ratio
Pay providers according to contracts
Develop and maintain provider network
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Method of Payment
Fee-for-service
Pay-for-performance
Risk sharing
Withhold
Capitation
Other sharing agreement
Mixtures of the above
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Plans Offered
Driven by what payers want:
Indemnity dropping fast
POS high
Administration wants more use of high-deductible, low premium plans coupled with medical savings accounts. They are increasing slowly.
May appeal to those who might otherwise drop coverage
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Utilization Constraints
Numerous, but not terribly effective
Co-pays and deductibles
Prior authorization
Reauthorization of additional days
Limits on coverage
POS policies where out-of-network use costs more
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Consumer Education
Insurers as well as employers increasingly investing in Web portals for enrollees. These customize the educational material to the individual’s Dx
Driven by employers who expect to reap the rewards of prevention and self-help
Insurers are to invest further if individual policies really take hold. Degree will depend on levels of customer loyalty.
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Case Management/Carve-Outs
Case management involves separate unit to manage a defined set of cases such as congestive heart failure, mental illness, catastrophic cases
Use staff to manage the handoffs, make arrangements for services, follow-up on conformance, etc. Often simple like asking congestive heart failure patients to phone their weight in periodically.
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Provider Professionals’ Alternatives
Organization of practice
Services provided
Incentives
Pricing
Patient relationship
Primary vs. specialty care
Efficiency
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Organization of Practice
Corporate component as in academic medical center
LLC
Partnership
Group practice
Fraternity
Condominium
Solo or group, single or multispeciality
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Why a Group?
After hours coverage
Efficiency of operations/economies of scale
Clout in contract negotiations
Collegiality
Intellectual stimulation
Quality oversight
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Incentives
Fee-for-service – promotes volume
Withhold – weakly promotes cost reduction
Pay-for-performance – promotes conformance to specific objectives
Pay-for-quality – promotes quality
Inclusion in network – promotes volume, but includes threat if other values not met
Capitation – promotes utilization reduction
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Institutions’ Alternatives
Organizational structure
Scope and scale of services
Pricing/discounts
Efficiency
Quality improvement
Consumer information
Credentialing decisions
Involving payers in change processes
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Efficiency
Allocation of capital is one key
Improve efficiency
Add provider perks
Arms race among hospitals
Expanding services
Patient/provider education
Staffing
Labor substitution
Ratios of specialists to PCPs, nursing staffing
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Scope and scale of services
Types of patients served
Procedures performed
Referral networks
Amount of focus and specialization
Willingness to cross-subsidize some services
Strategy for population retention
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Consumer information
Used as a marketing device
“Ask a nurse”
Stimulate referrals
Web portals for chronically ill patients
Making medical records available to patients through Web
Identify certain services such as cardiac center, cancer center
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Credentialing Decisions
Necessary for community-based providers to have hospital credentials to get Medicare and Medicaid payment
Economic credentialing
Type of patient referred
Profitability of referred patients
Discouraging participation in competing enterprises like specialty hospitals
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Consumer Alternatives
Plan selection
Premium/deductibles/co-pays
Coverages
Risks to assume or insure against
Provider selection
When to seek care and for what
Self-help
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Provider Selection
Health plan
Clinicians
PCPs
Convenience providers
Specialists
Referral or self-referred
Information sources
Pharmaceutical supplies
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Issues with Low Utilizing Consumers
Under 65, 20% of population use 80% of resources. They tend to the chronically ill and many are not in the work force.
How do we keep the healthy ones – the “young immortals” contribution to the system, even if they are less likely to use it.
Emphasize catastrophic coverage and discount premiums heavily. HSAs are one example. Allow low utilizers to stay but on their terms.
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Value-driven Initiative
Mandatory insurance participation with subsidies for poor
Take systems approach with case management reducing error and waste
Provide cost and quality transparency
Narrow product lines of providers, integrate health systems, refer more complex cases to centers of excellence
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Value-driven Initiative - 2
Electronic reporting focused on cost and quality of bundles of care (e.g., physician and hospital bundled for one disease entity) with strong, reliable reporting
Create strong incentives to reduce waste and improve efficiency at all levels
Text sees it as something requiring an administered system to get off the ground
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