• Reading list

    How Can We Bend the Cost Curve? Payment Incentives and Integrated Care Delivery: Levers for Health System Reform and Cost Containment, by Holly Korda and Gloria N. Eldridge (Inquiry)

    The Patient Protection and Affordable Care Act encourages use of payment methods and incentives to promote integrated care delivery models including patient-centered medical homes, accountable care organizations, and primary care and behavioral health integration. These models rely on interdisciplinary provider teams to coordinate patient care; health information and other technologies to assure, monitor, and assess quality; and payment and financial incentives such as bundling, pay-for-performance, and gain-sharing to encourage value-based health care. In this paper, we review evidence about integrated care delivery, payment methods, and financial incentives to improve value in health care purchasing, and address how these approaches can be used to advance health system change.

    What Can We Expect from the “Cadillac Tax” in 2018 and Beyond? by Bradley Herring and Lisa Korin Lentz (Inquiry)

    One controversial aspect of the Patient Protection and Affordable Care Act is the provision to impose a 40% excise tax on insurance benefits above a certain threshold, commonly referred to as the “Cadillac tax.” We use the Employer Health Benefits Survey, sponsored by the Kaiser Family Foundation and Health Research and Educational Trust, to examine the number and characteristics of plans that likely will be affected. We estimate that about 16% of plans will incur the tax upon implementation in 2018, while about 75% of plans will incur the tax a decade later due to the indexing of the tax thresholds with the Consumer Price Index. If the Cadillac tax is ultimately implemented as written, we find that it will likely reduce private health care benefits by .7% in 2018 and 3.1% in 2029, and will likely raise about $931 billion in revenue over the ensuing 10-year budget window from 2020 to 2029.

    What We Talk about When We Talk about Health Care Costs, by Peter J. Neumann (The New England Journal of Medicine)

    Patients and Doctors – The Evolution of a Relationship, by Robert D. Truog (The New England Journal of Medicine)

    Health Status and Hospital Prices Key to Regional Variation in Private Health Care Spending, by Chapin White (National Institute for Health Care Reform)


    • The real debate on the Cadillac tax is that it’s hard to believe that it will actually be implemented. Republicans are ideologically opposed to any tax increase, while the tax is also very difficult for Democrats because many of the plans that are affected by the tax will be for unions, a key constituency. And a 40% marginal tax rate is extremely high by contemporary standards. So one interpretation of the Herring and Lentz paper is that it documents just how politically painful it will be to go through with the implementation of the plan, at least “as written”.

      • I also expect the Cadillac tax to be delayed and/or reduced. The irony is that every policy expert and economist I know things the employer-based tax subsidy should go away. The Cadillac tax doesn’t do that exactly, but it is in that spirit. The rest is politics as usual.