1. Evaluation of Medicare’s Bundled Payments Initiative for Medical Conditions. Karen E. Joynt Maddox, E. John Orav, Jie Zheng and Arnold M. Epstein. N Engl J Med 2018;379:260-9. https://www.ncbi.nlm.nih.gov/pubmed/30021090
2. Medicare ACO Program Savings Not Tied to Preventable Hospitalizations or Concentrated among High-Risk Patients. J. Michael McWilliams, Michael E. Chernew and Bruce E. Landon. Health Affairs 36:2017;2085–2093. https://www.ncbi.nlm.nih.gov/pubmed/29200328
3. Care patterns in Medicare and their implications for pay for performance. Pham, H. H., D. Schrag, A. S. O’Malley, B. Wu, and P. B. Bach. New England Journal of Medicine 2007; 356(11):1130-1139. https://www.ncbi.nlm.nih.gov/pubmed/17360991
4. Time Out — Charting a Path for Improving Performance Measurement. Catherine H. MacLean, Eve A. Kerr and Amir Qaseem. N Engl J Med 2018: 378;19.
5. Adherence and health care costs. Iuga AO and McGuire MJ. Risk Manag Helathc Policy 7:35-44, 2014. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3934668/
6. Greater Use of Preventive Services in U.S. Health Care Could Save Lives at Little or No Cost. Michael V. Maciosek, Ashley B. Coffield, Thomas J. Flottemesch, Nichol M. Edwards and Leif I. Solberg. Health Affairs 29: 2010;1656–1660. https://www.ncbi.nlm.nih.gov/pubmed/20820022
7. Healthy Aging Brain Center improved care coordination and produced net savings. French DD, LaMantia MA, Livin LR, Herceg D, Alder CA, Boustani MA. Health Affairs 2014;33:613-8. https://www.ncbi.nlm.nih.gov/pubmed/24711322
8. Adding value to relative-value units. Stecker EC and Schroeder SA. N Engl J Med 2013;369 (23):2176-79. https://www.nejm.org/doi/10.1056/NEJMp1310583?url_ver=Z39.88-2003&rfr_id=ori%3Arid%3Acrossref.org&rfr_dat=cr_pub%3Dwww.ncbi.nlm.nih.gov
9. Principles Supporting Dynamic Clinical Care Teams: An American College of Physicians Position Paper. Robert B. Doherty and Ryan A. Crowley, for the Health and Public Policy Committee of the American College of Physicians. Ann Intern Med 2013:159;620-626. http://annals.org/aim/fullarticle/1737233/principles-supporting-dynamic-clinical-care-teams-american-college-physicians-position
10. Making It Safe to Grow Old: A Financial Simulation Model for Launching MediCaring Communities for Frail Elderly Medicare Beneficiaries. Antonia K. Bernhardt, Joanne Lynn, Gregory Berger, James A. Lee,Kevin Reuter, Joan Davanzo, Anne Montgomery and Allen Dobson. The Milbank Quarterly, 2016;1-29. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5020161/
RESEARCH FOUNDATION REPORTS:
1. Uncompensated Care for the Uninsured in 2013: A Detailed Examination. Teresa A. Coughlin, John Holahan, Kyle Caswell, and Megan McGrath. www.kff.org. May 30, 2014 https://www.kff.org/uninsured/report/uncompensated-care-for-the-uninsured-in-2013-a-detailed-examination/
2. Chronic Care: Making the case for ongoing care. Anderson, GF. Princeton, NJ: Robert Wood Johnson Foundation. 2010. The Effects of Medicaid Expansion under the ACA: Updated Findings from a literature Review, Larisa Antonisse, kff.org, Sep 2017 https://www.rwjf.org/en/library/research/2010/01/chronic-care.html
3. Best Care at Lower Cost: The Path to Continuously Learning Health Care in America (2013). The National Academies Press Open Book. http://www.nationalacademies.org/hmd/Reports/2012/Best-Care-at-Lower-Cost-The-Path-to-Continuously-Learning-Health-Care-in-America.aspx
4. How have providers responded to the increased demand for health care under the Affordable Care Act? Wishner JB and Burton RA. Urban Institute, November 2017. https://www.rwjf.org/en/library/research/2017/11/how-have-providers-responded-to-the-increased-demand-for-health-care-under-the-aca.html
5. The cost and volume of comparative effectiveness research. In Learning what works: Infrastructure required for comparative effectiveness research: Workshop summary. Holve, E., and P. Pittman. Institute of Medicine. Washington, DC: The National Academies Press. 2011:89-96. https://www.nap.edu/read/12214/chapter/2#10
6. Employer Health Benefits: 2017 Annual Survey. Gary Claxton, Matthew Rae, Michelle Long, Anthony Damico, Gregory Foster and Heidi Whitmore. The Kaiser Family Foundation and Health Research & Educational Trust. 2017. https://www.kff.org/health-costs/report/2017-employer-health-benefits-survey/view/print/
1. Centers for Medicare and Medicaid Services Financial Report, 2017. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=2ahUKEwj63u_W0PTdAhVfIzQIHZnlAmMQFjAAegQIChAC&url=https%3A%2F%2Fwww.cms.gov%2FResearch-Statistics-Data-and-Systems%2FStatistics-Trends-and-Reports%2FCFOReport%2FDownloads%2F2017_CMS_Financial_Report.pdf&usg=AOvVaw1-Udg09bY8IZdj9vcX5H_l
2. Medicare Payment Advisory Commission. Report to Congress: Medicare Payment Policy. Chapter 13. “Status report on the Medicare Advantage Program.” March 2017. http://www.medpac.gov/-documents-/reports
A. States with single-payer initiatives
There are 18 states with single-payer initiatives.
Physicians for a National Health Plan has updates on statewide initiatives here.
B. Details on two statewide single-payer initiatives
I. The New York Health Act
The NY Health Act establishes a legal framework for single-payer health care coverage in NY. It might be successful in doing so if certain federal waivers are obtained. Without these, although the Act proposes a workaround, it is difficult to see how a true single-payer system can function in such an environment. However, this is only one of its problems. The costs of NY Health are sure to be large (and no attempt has been made to measure them) and savings from a single-payer system are insufficient to cover costs. Being limited to one state also complicates the plan far more than a federal program would. The Act addresses many concerns related to statewide universal coverage, such as out-of-state medical care, in-state care for out-of-state residents, coverage for retirees moving into the state (whose costs are much higher than their contributions), and retirees who move out of state (who would expect to have coverage after retirement and have unexpected costs), coverage for college students, and undocumented immigrants. However, it does not determine how these issues will be managed, how much they will cost, nor how they will be paid for. NY Health proposes eliminating long-term care coverage until the board of trustees can develop a plan for coverage. How this is going to happen in two years when the authors have not been able to figure it out ahead of time is unclear. This is a serious flaw in the plan as it dramatically limits the ability to decrease hospital costs. The plan does not adequately define who is a resident, leaving this difficult issue to the Commissioner. The administrative structure seems unnecessarily complicated.
The NY Health Act has the laudable goals of providing a “comprehensive universal guaranteed health care coverage program and a health care cost control system for the benefit of all residents of New York.”
It provides for:
1. A trust fund to hold revenues to be dispensed to pay for health care costs.
2. A board of trustees responsible to propose regulations and amendments to attain the goals of the program, with the approval of the Commissioner of Health. Members receive no compensation.
3. The appropriate legal framework to allow for a single payer system in New York, including:
a. waivers for collective bargaining to set fair prices
b. waivers from the federal government to receive money into the trust fund in lieu of payments for health benefits under federal programs or, in the absence of those, a system for using NY Health as a second payer**
c. paying for certain out-of-state medical care
d. allowing colleges and universities to purchase NY Health care for non-resident students
e. some leeway during the period from first enactment to full implementation (to be determined by the Commissioner)
f. full allowance for enrollment of undocumented immigrants
g. coordination with no-fault and other sources of medical payments
h. allowance for non-competing supplemental insurance
4. Six regional advisory councils. Each with at least 27 members. Members are not compensated.
5. Comprehensive health care coverage for all members, defined as all health care services that would be covered under any current program except for long-term care, until the board has come up with a proposal for coverage for that, which it must do within 2 years.
6. Members pay no premiums, deductibles or copayments.
7. The NYS Premium Drug Program is applied universally.
8. All care will be paid for as long as a member is enrolled with a care coordinator, defined as the patient’s primary care physician, primary specialist, gynecologist or mental health professional, as appropriate, at the individual’s choice, as long as the provider is an approved care coordinator. (Emergency care is exempted from the requirement for enrollment with a care coordinator.)
9. Allowance is made for approval for capital expenses and payment for graduate medical education.
10. Recognition is made that allowance needs to be made for special groups: those who live in NY and work out-of-state and vice versa, those who live in NY and retire in NY, those who live in NY and retire out-of-state.
11. Revenues for the program will be obtained from progressive taxes:
a. A graduated payroll tax on earned income deducted by employers or paid by self-employed.
b. A graduated tax on other taxable income.
The NY Health Act does NOT provide for:
1. Any method for reducing health care costs beyond:
a. The single payer system, which will reduce the cost of insurance and excess administrative costs (to a less extent if federal waivers cannot be obtained and depending on the level of administrative burden the program demands)
b. The requirement of members to use a care coordinator. This has been used by many HMOs with little evidence of cost saving.
c. The plan calls for the Commissioner to develop new payment methods but requires maintaining fee-for-service payments until those are developed. These have been shown to increase administrative costs without evidence of decreased costs.
2. Any estimates for program costs or method for estimating them.
3. Long-term care. It actually eliminates long-term care coverage for some members. This is the worst part of the plan and will likely lead to increased health care expenditures. It would probably hold up federal waivers.
4. The definition of “resident” is left to the commissioner. This could be more difficult than it seems, especially for new residents.
NY Health is administratively burdensome. There are 6 regional advisory boards, with a total of 162 members, all appointed by the governor, advising the board of trustees, with 40 members, all also appointed by the governor (and 4 ex officio members, including the Commissioner). The board of trustees advises the Commissioner, who advises the board of trustees, which can establish and amend regulations to “effectuate” the act, with the approval of the Commissioner. The Commissioner is also authorized to establish certain procedures, regulations and standards, without referring to the board.
**The most serious issue is the Employee Retirement Income Security Act (ERISA), which specifically pre-empts any state laws relating to employer-sponsored benefits. This could result in court challenges of any workaround the State develops. Although states have broad powers of taxation and legal powers regarding health and insurance, court decisions in this area can be unpredictable.
The full text of the NY Health Act can be found here.
II. The Healthy California Act
SUMMARY: The Healthy California Act provides comprehensive medical benefits to all residents of the state. It specifies how it will deal with undocumented immigrants, out-of-state care for residents, and students. It recognizes the problems of retirees out of state, but not those who retire into the state (whose costs are much higher than their contributions), or travelers in the state. It recognizes the need to address the cost of long-term care, but defers it for two years. It puts a large administrative burden on its newly created Board without considering the feasibility of doing so. It does not address with any detail the costs or savings to be expected from the program nor the revenues that would be required to finance it.
DETAILS: The Healthy California Act is a bill whose goal is to provide affordable healthcare to all residents of California. Its provisions include:
C. An analysis of the statewide initiatives for healthcare reform previously undertaken in Massachusetts and Vermont
Lessons from Statewide Healthcare Reform
• No state has yet attempted to implement a single-payer health plan
• Massachusetts (MA) implemented a near-universal health insurance reform that served as a model for the ACA
• From MA we learn that universal insurance coverage alone does not guarantee access to care due to problems with affording care, especially among vulnerable groups
• Vermont (VT) attempted to reform delivery of care with an all-payer, statewide accountable care organization
• From VT we learn that payment reform alone is not enough to control costs and changing financing from premiums and out-of-pocket costs to taxes requires transition planning and good communication
Single-payer plans like Medicare for All offer greater opportunities for cost savings and fewer obstacles to implementation than either of these statewide plans. ACAMFA’s transition model is particularly geared to use the lessons learned from VT and MA to avoid many of their problems, especially cost control.
Key Take Home Lessons of Massachusetts HealthCare Reform Act 58:
1. The act served as a model for the ACA and shows both its potential and its limitations if fully implemented as intended. It was not a single-payer plan.
2. It achieved its goal of full insurance coverage with improved health of residents. Emergency room visits and preventable hospital admissions decreased, and health outcomes for children and overall mortality improved (3).
3. Many anticipated negative effects did not materialize (e.g., that it would drive increases in part-time workers because of healthcare costs, that employer-sponsored insurance would be crowded out by public insurance, or the plan would be unsustainable).
4. Healthcare coverage did not guarantee access to affordable healthcare due to difficulties finding healthcare providers and paying medical bills.
5. Cost remains the major concern. Statewide health care spending in 2018 grew 3.1% over the previous year. Although this met the state benchmark for cost control, for individuals with private insurance, out-of-pocket costs increased 6.1% and premiums rose 5.2% over the previous two years, outpacing wages and inflation. In addition, more residents signed up for high-deductible plans, increasing their out-of-pocket costs more (4)
6. Prescription drugs and hospitals have become the biggest drivers of total spending and out-of-pocket costs, which in turn has resulted in a reduction in use of services and medications by patients.
7. Many opportunities exist to hold down costs within the framework of healthcare reform acts like the one in MA and the ACA, or more broadly with Medicare for All, including expanding subsidies, drug payment reform, expanded use of nurse practitioners and physician assistants, increased coverage for home health care, use of new models of care, and improved auditing for fraud and abuse. (5)
Bottom Line: The Massachusetts Health Reform Act has mainly been a success: uninsurance is down, access to care is up, health outcomes have improved, and employment has not been affected. The main drawback is the cost to the state and the individual resulting in a continued vulnerable group of uninsured and inadequate utilization of services among those with insurance and low income.
Brief Review of Massachusetts’s Healthcare Reform Act
Key Features of Chapter 58: The Act encompassed four broad components which are the following (1):
1. Individual Mandate required individuals 17 and over to obtain coverage or pay a penalty. Those with incomes below 150% of the Federal Poverty Level (FPL) were exempted.
2. Employer Mandate required employers with more than 50 full-time employees to demonstrate a fair and reasonable contribution to employee coverage.
3. Reforms to Non-group and Small-group Insurance Markets. Created the Health Connector which makes private plans available to individuals, families, and employers with 50 or fewer employees. Also standardized private plan benefit levels.
4. Government Expansion and Subsidies. Expanded Medicaid benefits to children whose parents earn up to 300% of FPL. Also created Commonwealth Care, a subsidized plan for adults at 100-300% FPL.
Specific Details: Since its introduction, the impact of Massachusetts comprehensive health reform on a wide range of outcomes (from insurance coverage to employment) has been the subject of numerous studies. A large review in 2016 examined health insurance coverage, access and affordability over time and across population subgroups and geographic areas of Massachusetts (2).
1. This intensive review found that Massachusetts achieved near-universal insurance coverage. Uninsurance dropped significantly and remained at or below 5% since 2008 to the present.
2. Massachusetts has the highest coverage in the nation, well above coverage levels in the remaining states, and has maintained the highest coverage since then.
3. Although Massachusetts has attained near-universal coverage, gaps persist, especially among nonelderly adults. Among nonelderly adults, uninsurance was particularly high for immigrants, minorities, those with less than a high school education, and those with family income at or below 138% of the federal poverty level.
4. Annual premiums for coverage in the state, which long have been among the highest in the country, increased by more than 50% between 2005 and 2014 despite employers’ seeing lower premiums by shifting more of the costs of care to employees. The cost of coverage was the most common reason cited for being uninsured. Nearly half of the uninsured in Massachusetts who had access to an employer plan chose not to enroll because of costs.
5. Although expansion of coverage in Massachusetts led to improved access and affordability of care early, those gains faded somewhat over time. In 2015 more than one-third of full-year-insured adults reported going without some type of needed care during the prior year, which was attributed in part to difficulty finding providers who would see them and difficulty getting timely appointments.
6. About 1 in 5 full-year-insured adults reported unmet need for care because of cost. Furthermore, 1 in 6 reported problems paying medical bills. More than 20% of insured adults reported medical debt.
Summary: In 2006, Massachusetts enacted its own health reform legislation to put the state on the road to near-universal health insurance coverage and make healthcare accessible and affordable (the state’s 2006 Chapter 58 Act Providing Access to Affordable, Quality, Accountable Health Care). As intended, this legislation achieved near-universal insurance coverage as well as improved health outcomes, but gains in improved access to and affordability of care faded over time. Many vulnerable populations and communities in the state have high uninsurance rates, and among those with coverage, gaps in access and affordability remain. Overall costs to both the state and the consumer remain high.
1. Massachusetts Acts of 2006. 2006. Chapter 58: An Act Providing Access to Affordable, Quality, Accountable Health Care. Boston, MA. The 188th General Court of the Commonwealth of Massachusetts
2. Long SK, Skopec L, Shelto A, Nordahl K, and Walsh KK. 2016. Health Affairs. vol. 35, #9. Payment Reforms, Prescription Drugs & More. Massachusetts Health Reform At Ten Years: Great Progress, But Coverage Gaps Remain. Free Access, https://doi.org/10.1377/hlthaff.2016.0354
3. Sanzenbacher, GT. 2014. What we know about health reform in Massachusetts. Center for Retirement Research at Boston College. May 2014: 14-9.
4. Stephens JH, Ledlow GR, Sach MV, Reagan JK. 2017. An Analysis of the Massachusetts Healthcare Law. Hosp. Top. Apr-Jun;95(2):32-39. doi: 10.1080/00185868.2017.1300473.
5. Song Z, Yunan Ji, Safran DG, Chernew ME. 2019. Health Care Spending, Utilization, and Quality 8 Years into Global Payment. N Engl J Med 2019;381:252-63. DOI: 10.1056/NEJMsa1813621
Key Takehome Lessons of Healthcare Reform in Vermont: Green Mountain Care
1. Green Mountain Care was a payment-reform plan to transition VT from a fee-for-service to a capitated payment model. It was not a single-payer plan. (3)
2. VT already had 50% of providers participating in Affordable Care Organizations (ACOs). The goal was to have at least 80% enroll in the Vermont All Payer ACO Model (VAPM),a statewide ACO covering at least 70% of residents. VT received waivers from the federal government to use funds from CMS to make payment to their beneficiaries. (3)
3. The estimates for savings from the ACO model were overly optimistic, there was no transition planning and administrative processes were poor, making it politically difficult to explain the trade-offs of public financing over premiums and out-of-pocket costs leading to its cancellation before it got started. (1)
Bottom line: Some unique features of Vermont’s healthcare system made the attempt to change its healthcare financing feasible, but poor implementation led to its cancellation. The statewide ACO model envisioned would be unlikely to succeed in less homogenous states with less ACO penetration.
The Course of Green Mountain Care
1. In 2009, Green Mountain Care (GMC) was planned as a publicly financed insurance system for Vermont residents. Initially, it was planned to cover 87% of healthcare costs for all residents. (3)
2. GMC would be managed as a public-private system financed through a 14.2% payroll tax (10.6% paid by employers, 3.6% by employees) at a cost of $1,429 per household per year. The employee contribution was projected to be $370 less than current premiums (with higher premiums paid by those with incomes more than 400% of the federal poverty level). (3)
3. The program would be run by a public-private partnership administered by a third party. It would be managed as a statewide Accountable Care Organization, VAPM, that would make capitation payments to the 14 hospitals and health centers, which employed 2/3 of the state’s primary care physicians. Participation in VAPM would be voluntary. (3)
4. GMC was later expanded to include non-residents working in Vermont and to cover 94% of costs, increasing the expense of the program. (1)
5. The federal government agreed to have payments from Medicare and Medicaid used for capitation payments by VAPM. (3)
6. As the cost of healthcare increased, estimates of the cost of GMC increased as did the amount of taxes that would be required. A later analysis estimated that payroll taxes would need to be increased by 11.5% and income tax by 9%. (1)
7. When the ACA was initiated, Vermont’s state exchange was one that had technical problems, causing concern among residents about the administration’s ability to handle a publicly financed healthcare system. (2)
8. By the end of 2014, the governor lost faith in the political feasibility of GMC and announced withdrawal from the plan. (2)
Summary: Green Mountain Care was planned as a statewide Accountable Care Organization that would transform healthcare delivery from fee-for-service to capitation payment with the expectation of significant savings. Financing would also be changed from premiums and out-of-pocket payments to payroll and income taxes. The plan was cancelled due to unrealistic expectations for savings and poor planning.
1. Verlin J. The rise and fall of Vermont’s single payer plan. Cornell Policy Review. July 13, 2017. https://www.cornellpolicyreview.com/rise-fall-vermonts-single-payer-plan/
2. Goldstein A. Why Vermont’s single-payer effort failed and what Democrats can learn from it. The Washington Post. April 29, 2019.
3. Grembowski D, Marcus-Smith M. The 10 conditions that increased Vermont’s readiness to implement statewide health system transformation. Popul Health Manag 2018 Jun;21 (3):180-187. Doi: 10.1089/pop.2017.0061. Epub 2017 Aug 22 PMID 28829924
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