Editor’s Note: This column appeared in Bridge Magazine.

Soon, many hundreds of thousands of Michigan citizens will be obtaining mental health coverage through the Affordable Care Act—coverage that many have never had before. Our Center wanted to understand what Michiganders might be facing in terms of the need for these services and access to care. To find out, we surveyed primary care physicians in Michigan as well as consumers, and we found that we have a big problem in our state today—a problem that could get much worse in the future.

Specifically, 68 percent of Michigan primary care physicians say that there is inadequate access to mental health care for children; 57 percent say that there is inadequate access to mental health care for adults; and, 64 percent say that there is inadequate access to substance use services. And, in some parts of the state, the numbers are even higher: At least three out of four providers in the Muskegon, Petoskey, and St. Joseph regions consistently reported that mental health services were inadequate in all three categories.

This lack of access to mental health care is particularly troubling in light of the magnitude of the need for mental health care: 1 in 4 Michigan residents report ever having been diagnosed with depression and/or an anxiety disorder—a quarter of the state’s population! And, the numbers are even higher for those who are low income or uninsured with more than one-third reporting these conditions.

Lack of access to mental health care is a serious issue in our state. Michigan ranks 42 out of the 50 states in our ratio of inpatient hospital beds to population. In some areas of the state, there are no child psychiatrists at all. And, as our survey data shows, even in the areas of the state with the best access to care (mostly Southeast Michigan), more than one-third of primary care physicians say that they have a hard time finding places to refer patients.

By some estimates, there is more mental health care being provided in prisons than in the community at large. Indeed, more than 50 percent of those in prisons nationally have been identified as having been diagnosed with a mental illness. And as Michigan closed 12 of its 16 state mental hospitals between 1987 and 2003, rates of incarceration for the mentally ill are reported to have increased significantly and in some reports, quadrupled.

This is an enormous public health and public policy issue.

Depression, anxiety and other mental illnesses take a tremendous toll on individuals, families and society. In our Center’s survey, respondents with these diagnoses reported difficulty in carrying out activities of daily living, including work, five days a month—two times greater than those with other chronic diseases.

In February 2013, Governor Snyder supported the need to improve mental health in Michigan by charging a bipartisan Mental Health and Wellness Commission with looking at ways to strengthen Michigan’s mental health system. The commission will report at the end of this year.

But, in order to make substantial progress in mental health care in our state, there will need to be an enormous commitment at every level of government as well as a partnership with the private sector. Our current mental health system is fragmented in its funding, governance and delivery systems. Funding comes from the state, the counties and private health plans. Governance is at the state level and at the county levels in the public mental health system. And, the courts and our state laws have a critical role to play. All these entities will need to work together in ways they have not before if we are going to address the depths of the problem we face.

Unless we fundamentally change the current fragmented and under resourced mental health system, the insurance coverage that so many will soon have will mean very little to those who need it the most.

On November 4, our Center—along with the Knight-Wallace Fellows at Michigan, Institute for Healthcare Policy and Innovation, and Michigan Radio—held a symposium at the University of Michigan on communication of the Affordable Care Act. The symposium was energetic and the panelists thoughtful. But, what has been most striking to me has been the reaction we have received from those who attended (almost 400 were there). For the most part, people loved the different opinions expressed and were thrilled to hear viewpoints different from their own. The reaction of our audience shows that actual dialogue is possible when we create the right opportunities.

We were fortunate to have as panelists many of those who have given this issue a tremendous amount of thought. Our policy panel included:

• John Ayanian, MD, MPP, director of the Institute for Healthcare Policy and Innovation at the University of Michigan
• Tom Buchmueller, professor at the Stephen M. Ross School of Business at the University of Michigan
• Michael Cannon, director of Health Policy Studies at the Cato Institute
• Heather Howard, JD, director of the Robert Wood Johnson Foundation’s State Health Reform Assistance Network

Our journalism panel included:

• Reed Abelson, health care business reporter at The New York Times
• Steven Brill, author of “Bitter Pill: Why Medical Bills are Killing Us” featured in TIME Magazine
• Jonathan Cohn, senior editor at The New Republic
• Holman Jenkins, Jr., member of the editorial board and columnist at The Wall Street Journal
• Sarah Kliff, health policy reporter at The Washington Post
• Julie Rovner, health policy correspondent at NPR

The journalists were thoughtful and reflective about how they cover the Affordable Care Act. They clearly have given much thought to even what they call it—Obamacare or the ACA. And, they were impressive in how much research they have done on the facts and how much they try to represent those facts. Even those who editorialize rather than simply report about the ACA (Holman Jenkins, Jr., and Jonathan Cohn) expressed their thoughts as questions or frameworks for really probing the law and its impact rather than polemicizing.

On the policy side, Heather Howard focused on how implementation was going and the role of the states. John Ayanian and Tom Buchmueller framed the law in terms of its impact on patient care and economic impacts. All three were expressed support for the law. Michael Cannon, on the other hand, forcefully articulated a negative view of the law along with how it has been described. He laid out how the law does not reflect the kinds of market principles that Michael thinks are necessary to truly reform health care along with his concerns that the law moves health care reform in the wrong direction.

Most of those in the audience were generally supportive of the ACA and Michael’s views were often at odds with theirs. But, even though his views were strongly different from the audience at large, it was his comments that generated the most positive reaction from the attendees. Indeed, they were grateful to hear a viewpoint that was clearly and cogently articulated and that was so different from their own. They gave us comments like, “This is what should happen at a university” and “I’m very glad that Michael Cannon was included—he was sharp and engaged and pushed the conversation into fascinating territory.”

We all spend a lot of time with people who think like we do. We tend to work in environments where there are shared world views shaped by common experiences. We tend to socialize with those who have similar beliefs to ours. But, as a result, we miss the opportunity to learn about different world views and different ways of thinking. Creating more opportunities for that kind of understanding seems to be a hunger we share. We can, indeed, learn from each other—if only we have those chances. We are grateful to all of our panelists for giving us that chance at the University of Michigan.

When I was at Blue Cross Blue Shield of Michigan, we used to say that you couldn’t sell any products without having all key providers included in them. But, that was at a time when health benefits were considered “fringe benefits,” unions were powerful drivers of benefit designs and employers covered most of the health insurance premium. Times, however, are different now: in part because of the economic changes in our country and in part because of the design of the Affordable Care Act. And, as a result, some of the emerging products look quite different from what we have seen in the past.

Whether the old watchword has changed or not is something that only time will tell (and our Center examines the growing categories of health plan products and provider arrangements in the commercial market and how they may affect consumers in our brief, Emerging Health Insurance Products in an Era of Health Reform). But, the fate of these new products will say much about the future of the employer market for health insurance as well as how much impact the current trend of consolidation of providers will have on the cost of coverage.

Consumers are indicating in polls that they are increasingly willing to trade off access to providers if it means lower health care costs. As a result, health plans across the country are at least dipping their toes into the market for what are known as “narrow network products” or products that use “reference pricing” as a cost-control strategy. In the world of health care cost control, neither of these are new ideas but they have been packaged and named differently from what they looked like in the past.

The narrow networks of the past were generally staff or network model HMOs. That is, these were products that used a limited panel of physicians and hospitals as “in-network” providers and patients needed permission to go outside this network in order for any benefits to be paid. These products also generally paid providers under a different mechanism than fee for service—usually capitation or salaried approaches, or some mix of the two.

The narrow networks of today are more specifically focused on providers willing to accept a particular price, within some quality parameters. And, they generally focus on hospital providers. They may or may not use financial incentives to improve performance, but they generally don’t use capitation as a payment mechanism.

The reference pricing strategy of the past is what old-line commercial insurance companies used to do when they paid health insurance claims. They directed their payment to the covered individual and provided up to whatever their maximum rate was to that individual who then was responsible for paying their provider.

The reference pricing strategy of today entails a health plan letting members know what the maximum amount is that they will pay for a particular service; an identification of who accepts that maximum amount and then, letting the member go anywhere but they have to pay the difference in price at the higher cost providers. Generally, health plans today pay the provider directly and the member pays the provider for any differential payment beyond what the health plan pays.

The narrow network approaches of the past changed in the mid-1990s to become managed care but with many more providers included. The networks expanded because most consumers did not want to get their care from health plans that had limited access. But, these broader network products generally resulted in higher health plan costs in trade for the addition of more providers.

The old style reference pricing strategy failed because employers did not feel this approach resulted in effective management of the cost of health care because few commercial carriers provided meaningful limits on how much they paid for services.

Times have changed and the emphasis of these products has changed from the approaches of the past. If consumers are, indeed, ready to make the tradeoffs that they were seemingly not ready to make before, then more employers may be comfortable shifting their products to narrow networks to follow this trend or consider encouraging employees to get coverage through the individual health insurance exchanges. And, if reference pricing becomes acceptable to consumers, then there is reason to worry about the potential for an increase in health care costs in markets where there is considerable provider merger activity occurring.

In any case, these trends will be fascinating to watch as health reform unfolds over the next several years.

Like everyone I know who is a health policy junkie, I have been very excited about the launch of the health insurance exchanges. But, my excitement is not just because of my professional interest—and wanting to see how these things actually work and how health care changes as a result—it is also for personal reasons. My 27-year-old goddaughter had to leave her parents’ policy after she turned 26 and had to purchase expensive—and pretty limited coverage—in the individual health insurance market. So, we have been looking forward to the new products hoping they will give her more choices at better rates.

My goddaughter is exactly who everyone who cares about the success of the Affordable Care Act hopes will enroll. She is young, healthy and uses very little medical care. She knows that she should have coverage in case of a catastrophic event and she has some family history that inclines her that way. And, even though she uses very little medical care, she does care a lot about one thing: prescription drugs.

So, I went onto the Michigan Health Insurance Marketplace the day it opened to look for coverage for her. And, yes, I experienced all of the problems that have been widely covered in the press—it took me forever to get on; I started the application multiple times and it didn’t always save things or work smoothly or let me get to the finish before crashing. And, she has some unique circumstances that the application doesn’t clearly address. That is, she is a University of Michigan law student and has no income now, but will start a job in September 2014 that will give her a nice income (and, employer-sponsored health coverage). And, she is in Michigan now but will be moving to St. Louis in May. So, how do coverage and tax credits work in her case?

But, the challenges of enrolling are not what I found most interesting about the experience (they eventually sorted themselves out by Saturday afternoon—maybe because everyone but me was watching the Michigan-Minnesota football game instead of going on www.healthcare.gov). Rather, what was most interesting to me was what tipped the balance for her to get health insurance on the Exchange.

As we dug into the plans offered in the Exchange (using some excellent health plan sponsored websites in addition to www.healthcare.gov), we quickly realized that many of the plans offered in Washtenaw County have limited provider networks—HMOs or something similar. These would work fine for her while she is in Ann Arbor but starting in May, when she moves to St. Louis, it would make care more complicated. That left the Blue Cross Blue Shield of Michigan bronze, silver, gold and catastrophic plans because their PPO network provides coverage out of state as well as in Michigan. But, these plans all require that a deductible be met before prescription drug coverage kicks in.

The gold plan had the lowest deductible but the highest premium. For gold coverage, she would pay about $3,500 a year without a tax credit. After we realized how much gold coverage would cost, we actually did discuss whether it was really worth her getting coverage at all. After all, she is low risk and would only have a gap in coverage of about nine months and the penalty for not having coverage in 2014 is pretty small. And then we remembered something crucial: the drug she really cares about is a contraceptive. And, contraceptives are considered preventive benefits under the Affordable Care Act and must be provided with no cost-sharing. That means that she can get coverage under a bronze plan for about $2,200 a year with a high deductible but still get the drugs that mean the most to her at no cost. Her coverage will be comparable to what she has now but will cost her less than she is currently paying (even if she doesn’t get a tax credit) and give her a broader choice of providers.

While there has been much focus on the controversy around requiring contraceptives to be covered as a preventive benefit, there has been no focus on the important role they play in making health insurance coverage attractive to young women. And in the end, that part of the law may prove crucial to tipping the balance for young people like my goddaughter to get covered under the Affordable Care Act. And getting young people into coverage will, indeed, help to make health care coverage more affordable for those who need it the most.

Health care reform is indeed a journey—not a destination. And, judging from all of the requests that our Center is getting to explain the Affordable Care Act, it is probably going to be a journey for a very long time (assuming, of course, that it doesn’t get “defunded”/ delayed/repealed or otherwise stopped in the next few couple of weeks!).

So, in this rush to the opening bell, I have spent a lot of time talking about health care reform. The point about this being the opening bell is important. Yes, open enrollment on the health insurance exchange (referred to as the Marketplace) will begin October 1, but it actually won’t affect as many people as some might think based on the hubbub about health reform. For many people, nothing will change October 1 because they will continue to get employer-sponsored coverage as they always have. Or, they will remain Medicare eligible and continue to get Medicare coverage as they always have. Or, they will continue to get their coverage through the VA or the existing Medicaid program as they always have. Or, they will be newly eligible for Medicaid (in Michigan) but that coverage won’t be available until sometime in late March or early April (for anyone who would be eligible for Medicaid, it is important to know that there will be no penalties if you don’t get health insurance coverage before Medicaid expands).

So, what really happens on October 1? Those who will be most immediately affected are those who buy health insurance coverage themselves and don’t get it through an employer. October 1 is the day you can start shopping on the Marketplace and learn what options are available to you. But you can take your time. Even if you wait to enroll in health insurance until early December, your coverage will still be effective on January 1. And, you can wait to shop in the Marketplace until the end of March with no penalties applied. So, October 1 is truly the start of this journey; it is by no means the destination itself.

Every health care reporter in the state is working on stories to help explain these changes. At CHRT, we are doing the same to help dispel as many myths as possible and help people understand how the law affects consumers, employers, providers and the state at large. For so many people, the Affordable Care Act will provide real and tangible benefits. But, there will be some who experience changes that are not as positive for them. And there will certainly be some unanticipated effects from a law and implementation as complex as this one. We want to help people become as informed as possible about these changes. If you want to hear more, you can listen to an interview that I did for Stateside with Cynthia Canty that tries to help consumers understand more about the law.

We have been busy producing so much information about the law—everything from how it looks from a consumer’s perspective to how the taxes work in the law—that we decided to put a special button on our website to that you can easily navigate the information about the ACA. You can see all the briefs we have produced so far here[CHRT’S HCR BUTTON]. And, there will be more to come soon!

There is no question that this law is not easy to understand—and, not easily captured in a sound bite. But, then again, our current health care system in America is also not easy to understand—just ask the foreign students who take the class I teach with my colleagues at the University of Michigan School of Public Health called “Health Insurance in America.” When our foreign students hear about how the current system works, they shake their heads and ask us to explain it again. Unfortunately, though there are many good things the ACA has already done and is likely to do in the future if given a chance, one thing it hasn’t done, is to make our system of health care financing in America easier to explain!

Editor’s Note: This column appeared in Bridge Magazine.

About six months after the Affordable Care Act (ACA) was passed in 2010, our Center hosted a symposium in Ann Arbor on the future of the health care safety net. Sara Rosenbaum, an expert on both the ACA and federally qualified health centers (FQHCs), spoke at the event and her remarks emphasized that the ACA was designed to have FQHCs as a centerpiece. Her viewpoint was a surprise to many who had not focused on the centrality of the connection between FQHCs and the ACA. But, as we now head into the launch of the major coverage expansions included in the ACA, it is clearer how important FQHCs have become in the fabric of the health care delivery system.

FQHCs were started in 1964 as part of Lyndon Johnson’s Great Society program (a term he coined at the University of Michigan). FQHCs were founded within the Office of Economic Opportunity (OEO) and known initially as Neighborhood Health Centers. Though the OEO was eliminated in the 1970s, Neighborhood Health Centers flourished and changed to become what we know today as FQHCs.

There are more than 1,100 FQHCs nationally and 30 in Michigan today. And, they serve a significant percentage of the population. In 2011, more than 546,000 people in Michigan got care from an FQHC. While the vast majority of those were either uninsured or Medicaid recipients, more than 20 percent of those who received care at FQHCs had private coverage or Medicare—coverage that offers a good choice of providers located in other settings as well.

Between 2007 and 2011, the numbers of patients seeking care at FQHCs in Michigan increased by 22 percent while the number of visits increased by almost 27 percent. Our own Cover Michigan Survey also noted this growth in clinics as a source of care for many Michigan patients. And, FQHCs have been expanding to meet the increased demand for care.

While most of the care delivered by FQHCs is basic medical care, the fastest growing area of care is mental health. Mental health practitioners are in short supply in many areas in our state and FQHCs’ ability to deliver this kind of care makes them a crucial service site in Michigan.

It looks, at last, like Michigan will indeed be expanding access to Medicaid. Assuming that the federal government approves at least the first waiver that will be requested by the state of Michigan, thousands of Michigan residents will soon move from being uninsured to having Medicaid coverage. Many others will go from being uninsured to having private coverage with the help of tax credits. Many of these individuals are already getting their care from FQHCs. So, little change in their location of care may result from these big coverage expansions. What will result, however, is an even further embedding of FQHCs in the mainstream of health care delivery.

While it may be debatable that the ACA intended FQHCs to be as central to the care delivery system as Sara Rosenbaum asserted, a variety of trends do seem to be converging to increase the importance of FQHCs in the delivery of medical care in our state and nationally. And, that fact may mean that integrated, coordinated medical care will get a boost as well. After all, FQHCs were among the first set of providers who saw themselves as a “patient centered medical home” – responsible for all aspects of a patient’s medical care. Having a provider who considers that kind of integrated care to be core to its mission is a great thing. So, intended or not, the ACA may accelerate a trend that already exists as more and more Michigan citizens turn to FQHCs for high quality and accessible medical care.

Patient engagement is a hot topic in health care right now. Providers, regulators and health plans are all trying to figure out how to better involve patients in their own medical care. Shared decision making—a concept that grew out of Jack Wennberg’s work on regional variation in the use of health care services—is a tool that fits right into the patient engagement framework.

Jack and his colleagues have been studying variation in use of health care services for almost three decades. While there is some dispute about the extent of unwarranted variation in health care, there is little debate that it exists. Long ago, Jack categorized this unwarranted variation into two main groupings, “supply sensitive care” and “preference sensitive care.” Supply sensitive care is variation in use of medical care that seems to be related to the number of practitioners/facilities rather than the underlying medical needs of the patients. Preference sensitive care, by contrast, is care with alternative treatment approaches that are all acceptable from a clinical standpoint but that have different risks and benefits. For that type of care, the patient’s preferences should provide the guide to what treatment path should be followed.

Much of the debate about unwarranted variation in care centers around whether supply sensitive care exists and to what degree (we looked at this question ourselves at CHRT in an issue brief). But, no one debates the concept of preference sensitive care and the value of having patients better informed about their care options. And, many believe that too many treatment choices are based on physician rather than patient preferences.

To try to increase patient involvement in decision making about their own care, Jack and his colleagues formed the Informed Medical Decisions Foundation in the late 1980s. The foundation believed that both physicians and patients needed more tools if patients were going to be able to effectively engage in decisions about their care.

The foundation began by developing decision aids for patients to use in making decisions about certain types of conditions (back pain, benign prostate disease, breast cancer, cardiac care and the like). The idea was to enable patients to watch videos/DVDs to learn about the risks and benefits of various procedures so they could make a more informed decision about what treatment approach was right for them. The decision aids were to be used in partnership with clinicians so that decision making was shared.

Getting these decision aids out to patients and used in discussions with physicians proved to be a big challenge. The tools were somewhat expensive and difficult to distribute. Physicians perceived them as adding to their time rather than saving them time. The aids seemed to have the most success in highly structured medical settings, like staff model HMOs where there were support structures in place to help physicians work with patients. But, uptake was quite limited.

Fast forward to today where patient engagement is the watchword. Google “patient engagement” and you get 39 million results. Hospitals across the country have developed offices of family-centered care. The latest health care innovation grant request from the Centers for Medicare and Medicaid Innovation specifies shared decision making as one area of focus for project proposals. And, states like Washington have identified shared decision making as one approach to mitigate malpractice exposure. The idea seems to have taken hold such that the May 27, 2013, online issue of JAMA Internal Medicine ran five articles on the topic of shared decision making alone.

The interest in the topic shows that the foundation’s work over the past two decades may be having its moment. Perhaps dissemination of these tools and concepts will soon become an expected part of the patient/physician interaction and not an isolated event. Increasing patient autonomy in decision making is without question the right thing to do—how great it is that there seems to be a broader movement that might help bring that idea to reality.

The debate about the Affordable Care Act (ACA) rages on as we get closer and closer to the big coverage changes that take effect starting on January 1, 2014 (with open enrollments for the health insurance exchange beginning in just a few months). The nature of the debates indicates that there is some misperception about who will be helped by these coverage changes. Those who want to repeal the ACA do not seem to realize that most of those who would be helped simply don’t have affordable choices today.

CHRT just released several issue briefs that should help policy makers and the public at large better understand the two groups of individuals who will be most affected by the ACA coverage changes: those who would be eligible for Medicaid in states that choose to expand Medicaid and those who would be eligible for tax credits to buy private health insurance through the insurance exchanges. CHRT’s reports examines the demographic characteristics of those two groups of individuals and details the regional variation of the ACA’s coverage of Michigan’s uninsured.

Ever since the Supreme Court decision of June 2012 made the Medicaid expansion optional, there has been considerable debate in many states about the pros and cons of such an expansion. In Michigan, initial proposals to expand Medicaid would have eliminated that coverage after 48 months. The compromise bill places higher cost sharing requirements on those who are on Medicaid for longer than 48 months. Those provisions imply that many in the legislature believe that individuals who would come into the Medicaid program under the expansion have other choices today. The reality is quite different.

In Michigan, those who would be newly eligible for Medicaid are working at much higher rates than those in the existing Medicaid program—50 percent of the newly eligible are working compared to only 29 percent in the current program. Those who would be newly eligible are also better educated than those currently enrolled in Medicaid—more than 85 percent have graduated from high school compared to less than 75 percent of those in the current Medicaid system. They are also more likely to be male and white than those in the current Medicaid program.

While there are many who would become newly eligible for Medicaid that have employer coverage today, the largest group that will become eligible for Medicaid are uninsured. They simply have no other affordable options.

Similarly, when we look at the population that would be eligible for tax credits to buy health insurance on the health insurance exchange. More than 70 percent of those who will be exchange eligible for tax credits are working and more than 90 percent of them have graduated from high school.

These individuals who would most be helped to get coverage in the ACA are working in low wage jobs that don’t offer them any affordable options today. And, as we showed in an earlier release, as the cost of health care has gone up, small businesses have been dropping health coverage for at least the last decade – so fewer and fewer people are able to get their health coverage through their employment. In other words, those who would be most helped by the Affordable Care Act are not able to get health coverage through no fault of their own.

So, the question really does come down to: do we want all Americans to have health care coverage or not? If we do and if we want to build on the current public/private system rather than replace it, then it would seem that the idea of expanding Medicaid and providing tax credits to individuals to enable them to afford health coverage does make sense and will help the private market work better. If not this approach, then what?

But, maybe at core, the critics of the Affordable Care Act really don’t think we should have health coverage for all in this country. Then, the core question is: do we really want to live in a society where millions of people are cut out of affordable health coverage?

In 1999, The Institute of Medicine (IOM) issued a seminal report on the safety of health care in the U.S.: To Err is Human. The IOM noted that up to 98,000 deaths occurred annually as a result of errors in the health care system. They recommended systemic change to improve the safety of the system. One of the recommendations included in the report was to make better use of electronic order entry systems for prescription drugs since handwritten orders were shown to account for a meaningful number of medication errors. Thus began a journey toward more widespread use of electronic medical record systems, with a hope that they would help reduce medical errors and improve the quality and cost effectiveness of care.

In 2004, then-President George W. Bush included the promotion of electronic medical records in his State of the Union address. He set a goal of assuring that most Americans would have electronic health records (EHRs) within 10 years. President Bush’s plan included funding for demonstration projects, the development of common standards and the promotion of EHRs. Despite his ambitious goal and the administrative support for EHRs, by 2008, only 17 percent of health care providers had electronic medical records.

With the enactment of the American Recovery and Reinvestment Act (ARRA) in 2009, a new direction was set for the implementation of electronic health records. ARRA included incentives for health care providers to implement electronic records through a program called HITECH (Health Information Technology for Economic and Clinical Health Act). Significant incentives. CMS estimated that between $14 and $27 billion would be provided over the course of the program. Physicians adopting electronic records in 2011 could receive $44,000 in Medicare incentives over five years. Additional incentives were available for Medicaid EHRs. But, the incentives are only in effect until 2014. For those providers that do not achieve what is known as “meaningful use” of electronic records, there are penalties starting in 2015.

So, what has happened to date as a result of the HITECH program? The U.S. Department of Health and Human Services (HHS) had set a goal of 50 percent of eligible physician offices and 80 percent of eligible hospitals using EHRs by the end of 2013. According to HHS, as of the end of April, 55 percent of eligible office-based providers—or about 291,325 physicians—have received $5.9 billion in incentive payments; and about 80 percent of eligible hospitals and critical access hospitals—or about 3,880 hospitals—have received incentive payments.

Compare those figures to the 17 percent of only five years earlier and look at the graphs in the HHS press release (see further below) and a dramatic picture emerges. If there was ever any doubt about the power of financial incentives to change health care, the HITECH program should set those doubts entirely to rest.

While some physicians still complain about the conversion, there is no question that the HITECH program has been a success in achieving its goals in a way that the prior effort was not. Payers, purchasers and health policy leaders should all take note: establishing a program with clear carrots and sticks (not to mention, the creation of an entire industry geared to respond to this initiative) is an important path forward for dealing with other cost and quality issues in health care.

Editor’s Note: This column previously appeared in Bridge Magazine.

In recent months, a conversation has burgeoned in health and public policy forums about the slowdown in the growth of health care spending. We are all asking the same questions: Is this slowdown real? Are some of the past cost containment efforts and recent provisions in the ACA beginning to take root?

In February 2013, Congressional Budget Office (CBO) director Douglas Elmendorf testified before Congress on the CBO’s budget outlook for 2013-2023. As reported in the New York Times and elsewhere, the health care outlook was remarkable: projected Medicare and Medicaid spending for 2020 was down 15 percent over projections made three years ago. Specifically, the CBO noted “net outlays for Medicare… grew by 3 percent… in 2012—a slower rate of growth than any recorded since 2000.” And, “the CBO’s current baseline also shows lower spending per person in the Medicaid program than was shown in August, primarily because of adjustments to account for the slowed growth in Medicaid spending… CBO has reduced its 10-year projections of outlays for Medicare by $137 billion…the third consecutive year in which spending was significantly lower than CBO had projected.”

In a February 2013 spending brief, the Altarum Institute noted that these trends were not limited only to Medicare and Medicaid, but could be seen in health care spending across the board. National health expenditures grew by only 4.3 percent in 2012, slightly higher than the past two years but much lower than historical trends.

But what do the trends in health spending look like for Michigan?

Information on total health expenditures at the state level is limited; CMS only has state-level spending data through 2009. But, these trends are consistent with what we are seeing at the federal level. Indeed, since 2000, health spending in Michigan has tracked along with—but somewhat below—the national average.

Data we have seen from Blue Cross Blue Shield of Michigan (BCBSM), the state’s largest private health insurer, also point to a slowing of health care cost increases in Michigan similar to what we are seeing nationally. And, we believe that these trends will continue, at least in the near term.

A June 2013 Health Affairs blog citing a PwC Health Research Institute projection suggested that the slowdown is the result of several factors. In addition to the influence of the recent recession, the blog cited the continuation of the movement to deliver care in lower-cost settings, reductions in hospital readmissions (and the associated costs of complications), and shifts in employer coverage toward greater use of high-deductible health plans.

In Michigan, providers, employers and health plans are all engaged in these activities. Michigan providers have been at the forefront of improving quality and efficiency through the Michigan Health & Hospital Association’s Keystone Center initiatives and the Blue Cross Blue Shield of Michigan Collaborative Quality Initiatives. Under the Centers for Medicare & Medicaid Services Innovation Center created by the Affordable Care Act, eight Michigan health systems are participating with Medicare as Accountable Care Organizations and Michigan is home to the largest Patient-Centered Medical Home demonstration project in the country—both efforts testing innovative health care payment and service delivery models. These efforts are all helping to slow the overall growth in health spending in the state.

Health care in America today is going through large-scale change: Both in how care is delivered and how it is financed. While only time will tell, we all have reason to be optimistic that the changes we are witnessing today are not one-time phenomena but the reflection of an important and favorable trend.