May 2010

Healthcare Topics and Trends Update

CHRT's monthly online newsletter, providing convenient access to recently-published articles relating to healthcare quality, sustainability and access.

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Health Care Reform

Health Coverage for the High-Risk Uninsured: Policy Options for Design of the Temporary High-Risk Pool

National Institute for Health Care Reform, May 2010

Among the first tasks required by the recently enacted health reform law, is the creation of a temporary national high-risk pool program to provide subsidized health coverage to people who are uninsured because of pre-existing medical conditions. While as many as 5.6-million to 7-million Americans may qualify for the program, the $5 billion allocated over four years will allow coverage of only a small fraction of those in need, potentially as few as 200,000 people a year. Policy makers will need to tailor eligibility rules, benefits and premiums to stretch the dollars as far as possible. Another consideration is how the new pool will fit with existing state high-risk pools or other state interventions in the private nongroup, or individual, health insurance market. Policy makers also will need to consider how to manage the transition of enrollees from high-risk pools to the new health insurance exchanges scheduled to be operational in 2014 to prevent adverse selection and encourage insurer participation. This report examines the following nine implementation issues: Bridging the coverage gap for the high-risk uninsured, temporary pool provisions, estimating the target population, policy options, eligibility, benefits, premiums, treatment of existing programs, and prospects.

A “Customary and Necessary” Program — Medicaid and Health Care Reform

New England Journal of Medicine May 5th, 2010

In its final cost estimates, the Congressional Budget Office (CBO) projected that 94% of the U.S. population will have health care coverage by 2019, up from 83% under current policy. Of the 32 million people gaining benefits, half — 16 million people — are expected to derive their coverage through Medicaid and the Children’s Health Insurance Program (CHIP). This expansion will come at a 10-year cost of $434 billion in additional federal funding. CBO estimates also show that the Medicaid reforms will not merely boost program enrollment over 10 years but will actually stave off an increase in the number of uninsured persons resulting from, among other factors, a decline in the number of children and adults covered by Medicaid and CHIP. The article offers detailed insight into Medicaid’s expansion and addresses future hurdles for the “new Medicaid.”

Lessons Learned: Who Didn’t Enroll In Medicare Drug Coverage In 2006, And Why?

Health Affairs, May 13, 2010

This study, the first in-depth analysis of Part D enrollment among Medicare beneficiaries without prior drug coverage, finds that 63 percent of all eligible seniors and 69 percent of low-income beneficiaries were enrolled in Part D in 2006. However, only 29 percent of low-income beneficiaries were enrolled in the subsidy program, leaving millions without coverage. Many reported that premiums were too costly, enrollment too difficult, and information too hard to obtain for enrollment. Passage of the Patient Protection and Affordable Care Act of 2010 could have mixed effects on Part D enrollment. The new law will close the doughnut hole in Part D through a series of measures including pharmaceutical industry payments for brand-name medications for beneficiaries in the coverage gap beginning in 2011, lowering the catastrophic threshold between 2014 and 2019, and fully phasing out the gap in 2020. However, because these provisions will ultimately raise Part D premiums, albeit for improved coverage, they may have the perverse impact of reducing applications for nonsubsidized Part D plans and may affect applications for the low-income subsidy for beneficiaries with incomes of 135–150 percent of the federal poverty level.

Fixing Medicare's Physician Payment System

New England Journal of Medicine, May 27, 2010

The article addresses two major problems in Medicare’s physician payment system, an unrealistic sustainable growth rate (SGR) and the relatively inadequate fees paid to primary care physicians. The first major problem is that of the SGR: The SGR is established as a spending target for the year, but when health care spending exceeds the year’s SGR, the following year's spending is supposed to be reduced proportionately. Congress continues to postpone fee reductions in this manner, making the (theoretical) eventual adjustment that much more severe. On April 15, Congress voted to postpone a 21% reduction in Medicare fees that was to have gone into effect April 1, but a long-term solution is not yet in sight. The second major problem in the physician payment system is that of the relatively inadequate fees paid to primary care physicians. There is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. The article explores possible solutions to the problems of unattainable SGRs and low primary care fees.

Medicaid Coverage and Spending in Health Reform: National and State-By-State Results for Adults at or Below 133% FPL

Kaiser Family Foundation, May 2010

The analysis is among the first to show the distribution of new Medicaid enrollees and costs, as well as the impact on the uninsured for all 50 states and the District of Columbia. According to this report, Michigan should see an increase in new Medicaid enrollees of 589,965—430,744 of which were previously uninsured. For Michigan, this amounts to a 50.6% reduction in the number of uninsured adults below 133% of the federal poverty level. Total spending for Michigan’s expansion is estimated at $14.4 billion, and of that $14.4 billion, the state is only expected to pay $686 million. Essentially, the federal government is footing 95.4% of the cost for expansion. The analysis offers similar estimates for all 50 states, demonstrating that Health reform will offer Medicaid coverage to millions of low-income adults for the first time and help establish a national floor for Medicaid eligibility that contrasts sharply with the wide variation in eligibility across state Medicaid programs today.

Obesity

State Indicator Report on Physical Activity, 2010

The Centers for Disease Control and Prevention, May 25, 2010

The State Indicator Report on Physical Activity 2010 provides information on physical activity behavior and policy and environmental supports within each state. According to the report released by the Centers for Disease Control and Prevention, many states do not have the policy or environmental measures in place to help their residents meet the recommended levels of physical activity to promote health. The report includes data about individual behaviors related to physical activity, as well as the presence or absence of physical features and policies that can make being physically active either easy or hard to do. The report looks at community access to parks or playgrounds, community centers, and sidewalks or walking paths in neighborhoods. The data showed substantial limits to the number of parks and other areas where physical activity would be convenient. Physical activity, essential to overall health, can help control weight, reduce the risk of heart disease and some cancers, strengthen bones and muscles, and improve mental health.

Patient Centered Medical Home

Prospects For Rebuilding Primary Care Using The Patient-Centered Medical Home

Health Affairs, May 2010

This analysis examines implementation issues, determining feasibility and identifying potential problems inherent in adopting the Patient-Centered Medical Home (PCMH) model. Many commentators have adopted the model as policy shorthand to address the reinvention of primary care in the United States. This article examines potential barriers to implementing the medical home model for policy makers and practitioners. Such barriers include developing new payment models and the need for up-front funding to assemble the personnel, infrastructure, and methods to facilitate transformation of existing practices into functioning medical homes.