John Amson Capitman, PhD.
Nickerson Professor of Health Policy
Central Valley Health Policy Institute
California State University, Fresno
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The 2009/2010 health reform debate
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Goals for Health Reform
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◦ Underlying Philosophical arguments
◦ 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
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“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”
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Successful lobbying by insurance and
pharmaceutical industries
August tea parties---astro-turf and
manufactured rage
House and Senate bills passed
Reconciliation after presidential intervention
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Health care as:
◦ RIGHT
◦ PRIVILEDGE
◦ RESPONSIBILITY
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US historic compromise: All of the above
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US compromise: International comparisons
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IOM Report as basis
Approach based on “real US health system”
rather than political philosophy
CAUSE and the goals for reform
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Continuous,
Affordable,
Universal,
Sustainable
Effective
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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
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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
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Uninsured and inadequately insured have worse
health outcomes, increase costs of care for all,
increase unequal healthcare burden on lowincome 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
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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
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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
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Persons 23-26 remain on parents’ plan
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New federally-funded high risk pool
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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)
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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
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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
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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
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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
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 200400% 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
1) PPAC leaves health care profit motive intact.
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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?
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?