• Reading list

    [book] Accounting for Health and Health Care: Approaches to Measuring the Sources and Costs of Their Improvement, National Academies Press.

    It has become trite to observe that increases in health care costs have become unsustainable. How best for policy to address these increases, however, depends in part on the degree to which they represent increases in the real quantity of medical services as opposed to increased unit prices of existing services. And an even more fundamental question is the degree to which the increased spending actually has purchased improved health.

    Accounting for Health and Health Care addresses both these issues. The government agencies responsible for measuring unit prices for medical services have taken steps in recent years that have greatly improved the accuracy of those measures. Nonetheless, this book has several recommendations aimed at further improving the price indices.

    Health Savings Accounts and Health Reimbursement Arrangements: Assets, Account Balances, and Rollovers, 2006–2010, by Paul Fronstin

    Accountable Care Organizations: The Case For Flexible Partnerships Between Health Plans And Providers, by Jeff Goldsmith

    Under the Affordable Care Act, the new Center for Medicare and Medicaid Innovation will guide a number of experimental programs in health care payment and delivery. Among the most ambitious of the reform models is the accountable care organization (ACO), which will offer providers economic rewards if they can reduce Medicare’s cost growth in their communities. However, the dismal history of provider-led attempts to manage costs suggests that this program is unlikely to accomplish its objectives. What’s more, if ACOs foster more market concentration among providers, they have the potential to shift costs onto private insurers. This paper proposes a more flexible payment model for providers and private insurers that would divide health care services into three categories: long-term, low-intensity primary care; unscheduled care, including unscheduled emergency services; and major clinical interventions that usually involve hospitalization or organized outpatient care. Each category of care would be paid for differently, with each containing different elements of financial risk for the providers. Health plans would then be encouraged to provide logistical and analytic support to providers in managing health costs in these categories.

    Private-Payer Innovation In Massachusetts: The ‘Alternative Quality Contract’, by Michael E. Chernew, Robert E. Mechanic, Bruce E. Landon and Dana Gelb Safran

    In January 2009 Blue Cross Blue Shield of Massachusetts launched a new payment arrangement called the Alternative Quality Contract. The contract stipulates a modified global payment (fixed payments for the care of a patient during a specified time period) arrangement. The model differs from past models of fixed payments or capitation because it explicitly connects payments to achieving quality goals and defines the rate of increase for each contract group’s budget over a five-year period, unlike typical annual contracts. All groups participating in the Alternative Quality Contract earned significant quality bonuses in the first year. This arrangement exemplifies the type of experimentation encouraged by the Affordable Care Act. We describe this unique contract and show how it surmounts hurdles previously encountered with other global-payment models.

    Projecting The Impact Of The Affordable Care Act On California, Peter Long and Jonathan Gruber

    The Affordable Care Act is the most fundamental legislative transformation of the US health care system in forty years. This analysis estimates that the act will provide health insurance for an additional 3.4 million people in California in 2016. This will mean that nearly 96 percent of documented residents of California under age sixty-five will be insured. Enrollment in Medi-Cal, the state’s Medicaid program, is expected to increase by 1.7 million people, while 4.0 million people are expected to enroll in the state’s planned new health insurance exchange. Employer-sponsored insurance and spending on health insurance will decline slightly. Low-income households will experience substantial financial benefits, but families at the highest income levels will pay more.

    Waivers Under the Medicare Shared Savings Program: An Outline of the Options, by Douglas A. Hastings, Robert G. Homchick, Peter M. Leibold, Arthur N. Lerner, Beth Schermer, Lisa D. Vandecaveye. [See also Jason Shafrin’s summary.]

    The Patient Protection and Affordable Care Act of 2010 (PPACA) encourages the development of new patient care models designed to improve the coordination, quality, and efficiency of healthcare services to Medicare and Medicaid patients. One of the primary initiatives for delivery model innovation under PPACA is the Medicare Shared Savings Program, commonly referred to as Accountable Care Organizations (ACOs). To assist in the creation of ACOs, PPACA grants the Secretary of Health and Human Services the authority to waive certain provisions of the fraud and abuse laws under the Social Security Act or other provisions of Medicare law (ACO waivers).

    The Public Interest Committee of AHLA has authored a concise outline – Waivers Under the Medicare Shared Savings Program: An Outline of the Options – describing possible approaches the Secretary for the Department of Health and Human Services can consider in crafting ACO waivers. This Outline addresses a range of ACO waiver options, listing the pros and cons of each method. It does not provide an exhaustive review of all waiver options nor does it list every permutation of each option.

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