A national long-term care program for the United States. A caring vision. The Working Group on Long-term Care Program Design, Physicians for a National Health Program.

The financing and delivery of long-term care (LTC) need substantial reform. Many cannot afford essential services; age restrictions often arbitrarily limit access for the nonelderly, although more than a third of those needing care are under 65 years old; Medicaid, the principal third-party payer for LTC, is biased toward nursing home care and discourages independent living; informal care provided by relatives and friends, the only assistance used by 70% of those needing LTC, is neither supported nor encouraged; and insurance coverage often excludes critically important services that fall outside narrow definitions of medically necessary care. We describe an LTC program designed as an integral component of the national health program advanced by Physicians for a National Health Program. Everyone would be covered for all medically and socially necessary services under a single public plan, federally mandated and funded but administered locally. An LTC payment board in each state would contract directly with providers through a network of local public agencies responsible for eligibility determination and care coordination. Nursing homes, home care agencies, and other institutional providers would be paid a global budget to cover all operating costs and would not bill on a per-patient basis. Alternatively, integrated provider organizations could receive a capitation fee to cover a broad range of LTC and acute care services. Individual practitioners could continue to be paid on a fee-for-service basis or could receive salaries from institutional providers. Support for innovation, training of LTC personnel, and monitoring of the quality of care would be greatly augmented. For-profit providers would be compensated for past investments and phased out. Our program would add between $18 billion and $23.5 billion annually to current spending on LTC. Polls indicate that a majority of Americans want such a program and are willing to pay earmarked taxes to support it.     

Why not private health insurance? 1. Insurance made easy

How realistic are proposals to expand the financing of Canadian health care through private insurance, either in a parallel stream or an expanded supplementary tier? Any successful business requires that revenues exceed expenditures. Under a voluntary health insurance plan those at highest risk would be the most likely to seek coverage; insurers working within a competitive market would have to limit their financial risk through such mechanisms as "risk selection" to avoid clients likely to incur high costs and/or imposing caps on the costs covered. It is unlikely that parallel private plans will have a market if a comprehensive public insurance system continues to exist and function well. Although supplementary plans are more congruous with insurance principles, they would raise costs for purchasers and would probably not provide full open-ended coverage to all potential clients. Insurance principles suggest that voluntary insurance plans that shift costs to the private sector would damage the publicly funded system and would be unable to cover costs for all services required.     

Expanding Medicare and employer plans to achieve universal health insurance

This article presents a proposal for expanding Medicare and employer-based health insurance plans to achieve universal health insurance. Under this proposed health care financing system, employees would provide basic health insurance coverage to workers and dependents, or pay a payroll tax contribution toward the cost of their coverage under Medicare. States would have the option of buying all Medicaid beneficiaries and other poor individuals into Medicare by paying the Medicare premiums and cost sharing. Other uninsured individuals would be automatically covered by Medicare. Employer plans would incorporate Medicare's provider payment methods. This proposal would result in incremental federal governmental outlays on the order of $25 billion annually. These new federal budgetary costs would be met through a combination of premiums, employer payroll tax, income tax, and general tax revenues. The principal advantage of this plan is that it draws on the strengths of the current system while simplifying the benefit and provider payment structure and instituting innovations to promote efficiency.     

A call for action. The Pepper Commission's blueprint for health care reform

After a year of deliberation and investigation, the Pepper Commission recommended action to ensure that all Americans would have health insurance protection in an efficient, effective health care system. Because it believes that action is urgent, the commission would build universal coverage by securing, improving, and extending the combination of job-based and public coverage we now have. Reform would entail the following elements: a combination of incentives and requirements that would guarantee all workers (with their nonworking dependents) insurance coverage through their jobs; replacement of Medicaid with a new federal program that would cover all those not covered through the workplace and workers whose employers find public coverage more affordable; guaranteed affordable coverage for employers--through reform of private insurance, tax credits for small employers, and the opportunity to purchase public coverage; a minimum benefit standard for private and public plans that would cover preventive and primary services as well as catastrophic care and would include cost sharing, subject to ability to pay; and a combination of public and private sector initiatives to promote quality and contain costs.     

Integrated delivery systems: has their time come in Canada?

In the 1990s every Canadian province is struggling to reduce health care expenditures without jeopardizing access to health care or quality of care. The authors propose a new model for health care delivery: the Canadian Integrated Delivery System (CIDS). A CIDS is a network of health care organizations; it would provide, or arrange to provide, a coordinated continuum of services to a defined population and would be held clinically and fiscally accountable for the outcomes in and health status of that population. A CIDS would serve 100,000 to 2 million people; the care it would provide would be funded on a capitation basis. For providers, there would be explicit financial incentives to minimize costs. At the same time, service quality and consumer choice of primary care practitioner would be maintained. Primary care physicians and specialists would work with other health care service providers to offer a full spectrum of care. CIDS providers would form strategic alliances with community agencies, hospitals, the private sector and other health care services not managed by the CIDS, as needed. For physicians, affiliation with a CIDS that provided strong clinical leadership could be beneficial to their income stability and autonomy. Pilot projects of this model in several communities would determine whether this concept is feasible in the Canadian health care context.     

State Children's Health Insurance Program

Despite a number of efforts by states and the federal government over several years, millions of low-income children still lack health insurance coverage and, therefore, have limited access to healthcare services. To address these problems, Congress has created, and states are now implementing, the new State Children's Health Insurance Program (SCHIP). Policymakers and agency officials who design, operate, and sponsor health coverage programs such as SCHIP must determine what constitutes an effective program. Efforts to maximize the number of children with coverage are important. The challenge for each state and its communities is to effectively identify and enroll eligible low-income children. They must create outreach strategies to find and enroll children in Medicaid and SCHIP. However, a truly effective program must go beyond simply enrolling children in health coverage programs. They must also assure that newly enrolled children receive quality comprehensive health care.     

The 'USHealth Act'. Comprehensive reform for a caring America

USHealth is a program proposed by Congressman Roybal to provide catastrophic and basic health coverage for all Americans, regardless of age, income, or illness. It would be managed by the USHealth Administration, an independent off-budget government agency, and would consolidate Medicare, Medicaid, and private insurance into a single insurance program. Roybal argues the case for his proposal, focusing on cost-containment; the expansion of coverage to include nursing and long-term care; the prioritization of quality assurance; financing along the lines of the current Medicare model; and commitment to "true" criteria: protection of the uninsured, protection of underinsured working families, short-term catastrophic protection for underinsured persons, containment of health care costs, assurance of quality care, and full financing now and in the foreseeable future.     

A national health program: northern light at the end of the tunnel

Woolhandler and Himmelstein are members of Physicians for a National Health Policy, a working group that proposes a reform of health care financing in the United States. In this commentary, they describe a national health program (NHP) that would create a single tax-funded comprehensive insurer in each state, federally mandated but locally controlled. The NHP would be similar to the Canadian system of financing health care, which is described here and contrasted with the inflationary, fragmented, bureaucracy-laden system now in place in the United States. Woolhandler and Himmelstein call for a complete overhaul of health care financing in this country that would reduce bureaucratic overhead and intrusion into the physician patient relationship, reduce health care costs, reallocate funds from administration to clinical care, and allow all Americans access to care.     

A need for managed care in Saudi Arabia

Is the Kingdom of Saudi Arabia getting value for money invested in health? Quality care is being provided throughout health facilities in the Kingdom, however there is minimal control of utilization in all health sectors, consequently leading to abuse and over utilization, particularly in the public sector. Managed care programs have proven effective in reducing unnecessary inpatient and ancillary service utilization by reducing use of expensive procedures and unnecessary, highly specialized services, and shifting to less expensive care options. Health maintenance organizations are the best example of a managed health care model; tracking good performance and cost savings averaging between 20-40% compared to more traditional health plans. Key features of health maintenance organizations include serving a defined population voluntarily enrolled in the health plan; assumption of contractual responsibility and financial risk by plan to provide a range of services, and payment of a fixed periodic payment by the enrollee, independent of the actual use of services. The key characteristic that distinguishes health maintenance organizations from other delivery systems is prepayment for the care that is provided. Preferred Provider Organizations offer discounts for services received from a selected set of physicians and hospitals. Services received by enrollees are not fully reimbursed from this selected list of providers. Preferred Provider Organizations use health maintenance organizations administrative processes for controlling costs but do not include some of the intrinsic cost and quality controls of health maintenance organizations. Review of several studies indicate that patients enrolled in prepaid group practices (managed care organizations) were hospitalized 15-40% less often than those enrolled in fee-for-service health plans.     

Liberal benefits, conservative spending. The Physicians for a National Health Program proposal

The Physicians for a National Health Program proposes to cover all Americans under a single, comprehensive public insurance program without copayments or deductibles and with free choice of provider. Such a national health program could reap tens of billions dollars in administrative savings in the initial years, enough to fund generous increases in health care services not only for the uninsured, but for the underinsured as well. We delineate a transitional national health program budget that would hold overall health spending at current levels while accommodating increases in hospital and physician utilization. Future national health program spending would be indexed to the growth in gross national product adjusted for demographic, epidemiologic, and technologic shifts. Financing for the national health program would transfer funds into the public program without disrupting the general pattern of current revenue sources. We suggest a funding package that would augment existing government health spending with earmarked health care taxes. Because these new taxes would replace employer-employee insurance premiums and substantial portions of current out-of-pocket expenditures, they would not increase health costs for the average American.     

Social health insurance: A knowledge-do gap in eastern Nepal

Health care costs, and those for inpatient care in particular, pose a barrier to seeking health care, and cost be a major cause of indebtedness and impoverishment, particularly among the poor. The Ministry of Health in Nepal intends to initiate alternative financing schemes such as community and social health insurance schemes as a means to supplement the government health sector financing source. Social Health Insurance (SHI) is a mechanism for financing and purchasing / delivering health care to workers in the formal sector regulated by the government. Considering all these facts BP Koirala Institute of Health Sciences (BPKIHS) has introduced SHI scheme in 2000 as an alternative health care financing mechanism to the community people of Sunsari and Morang districts. In the beginning small area was elected as a pilot project to launch the scheme. A major objective of SHI is to reduce poverty caused by paying for health care and to prevent already vulnerable families from falling into deeper poverty when facing health problems. A total of 26 organizations with 19799 populations are at present in SHI scheme. Sixteen rural based organizations with 14,047 populations and 10 urban based organizations with 5752 people are the beneficiaries in this scheme. BPKIHS SHI Scheme is the outcome of the visionary thinking on social solidarity and as an alternative health care financing mechanism to the community. BPKIHS is mobilizing people's organizations and is offering health services through its health insurance scheme at subsidized expenses. This has helped people to avail with health facilities who otherwise would have been left vulnerable because of their penetrating health needs. There is huge gap between premium collection and expenditures. The expenditures are more and this may be due to knowledge - do gap in the program. If conditions are unsuitable, SHI can lead to higher costs of care, inefficient allocation of health care resources, inequitable provision and dissatisfied patients. It can also be more difficult to realize the potential advantages of SHI in future. The future challenges confronting the scheme are to give the continuity and sustainability of the program to its catchments areas. This might entail a shift in its program operation mechanism. People's active involvement is required, which will further provide a sense of ownership in the scheme amongst the people.     

Including the poor: the fiscal impacts of Medicaid expansion

This article presents the fiscal impacts of the comprehensive reform of the Medicaid program put forth by the Health Policy Agenda for the American People. Proposed reforms include establishment of improved uniform eligibility standards, improvement in the scope and depth of coverage in state Medicaid programs, and increased provider payment rates. We estimate that expanding Medicaid coverage to all currently uninsured nonelderly persons below the federal poverty line would cost approximately $9 billion. A substantial portion of these costs would offset current spending elsewhere in the health care system. Improvement of state packages and increased provider payment could result in sharp increases in costs. We provide a range of estimates considering both the set of benefits provided and the behavior of the private insurance market.     

National health information privacy: regulations under the Health Insurance Portability and Accountability Act.

Health information privacy is important in US society, but existing federal and state law does not offer adequate protection. The Department of Health and Human Services, under powers granted by the Health Insurance Portability and Accountability Act of 1996, recently issued a final rule providing systematic, nationwide health information privacy protection. The rule is extensive in its scope, applying to health plans, health care clearinghouses, and health care providers (hospitals, clinics, and health departments) who conduct financial transactions electronically ("covered entities"). The rule applies to personally identifiable information in any form, whether communicated electronically, on paper, or orally. The rule does not preempt state law that affords more stringent privacy protection; thus, the health care industry will have to comply with multiple layers of federal and state law. The rule affords patients rights to education about privacy safeguards, access to their medical records, and a process for correction of records. It also requires the patient's permission for disclosures of personal information. While privacy is an important value, it may conflict with public responsibilities to use data for social goods. The rule has special provisions for disclosure of health information for research, public health, law enforcement, and commercial marketing. The privacy debate will continue in Congress and within the president's administration. The primary focus will be on the costs and burdens on health care providers, the ability of health care professionals to use and share full medical information when treating patients, the provision of patient care in a timely and efficient manner, and parents' access to information about the health of their children.     

Patient satisfaction among elderly enrollees and disenrollees in Medicare health maintenance organizations. Results from the National Medicare Competition Evaluation

More than 1 million Medicare beneficiaries have enrolled in health maintenance organizations (HMOs) and competitive medical plans under a new program in which beneficiaries can freely enroll in a risk-based HMO in their area or remain in the fee-for-service sector under Medicare. Based on a randomly selected nationwide sample of beneficiaries, we analyzed differences in patient satisfaction between 2091 beneficiaries who were continuously enrolled in an HMO plan for 1 year and 1000 beneficiaries in the fee-for-service sector. We also studied the reasons for disenrollment. No significant difference in overall satisfaction was found between HMO enrollees and fee-for-service beneficiaries. However, HMO enrollees expressed less satisfaction compared with fee-for-service beneficiaries regarding the professional competence of their health care providers and the willingness of the HMO staff to discuss problems. On the other hand, HMO enrollees were more satisfied than fee-for-service beneficiaries with waiting times and claims processing. Approximately half of the disenrollment from an HMO within 1 year was attributed to misunderstanding the terms of enrollment.     

Medicare risk contracting. Lessons from an unsuccessful demonstration

The Tax Equity and Fiscal Responsibility Act of 1982 provided a full-risk Medicare capitation financing option for health maintenance organizations and competitive medical plans. Two rounds of demonstrations were conducted, followed by the publication of final regulations in January 1985. The first-round demonstration at Marshfield, Wis, was operational for 28 months. Thirty-seven percent of all resident beneficiaries enrolled. Aggregate losses exceeded $3 million (11.6% of revenue). Management implemented increasingly more stringent utilization review. Overall hospital utilization declined 261.7 days per 1000 from fiscal year 1981 to 1982; nonetheless, federal reimbursement was insufficient to meet program costs and the demonstration was terminated. The central reimbursement method used in Medicare risk contracting (adjusted average per capita cost) does not adequately control for enrollment selection, unmet medical need, or recent regional cost variations. Reimbursement set at 95% of estimated fee-for-service costs does not recognize, and in the long run will not support, an efficiently operating delivery system.     

The Health Security Partnership. A federal-state universal insurance and cost-containment program

The Health Security Partnership attempts to assure (1) that all Americans have insurance coverage for a set of comprehensive health care benefits, (2) that cost-containment issues are addressed in a manner that does not impinge negatively on the quality of care, and (3) that provider freedom to deliver appropriate clinical care is strengthened. It assigns important responsibilities to the federal government (eg, specification of benefits, review of proposed state health care budgets), while permitting states to select, develop, and administer specific program design features they deem appropriate (eg, states could build on and expand the existing health system infrastructure, including private insurance, and/or extend the role of tax-supported programs). It is estimated that in its first year the program would add about 5% to America's health expenditures, but within a few years, cost-containment efforts and administrative efficiencies would reduce overall expenditures below what they otherwise would be.     

Cost-effectiveness of primary tetanus vaccination among elderly Canadians.

Although tetanus is now rare, vaccination is currently recommended for the entire population. Most elderly North Americans have never received tetanus vaccination. We evaluated the expected cost-effectiveness of using mailed reminders from family physicians to increase primary tetanus vaccination coverage among elderly Canadians. We estimated that over 10 years the program would prevent five cases of tetanus and one death from tetanus, resulting in a gain of 13 life-years. There would be 16,700 adverse reactions to tetanus toxoid, 17% in people already immune to tetanus. The net cost of the program (in 1984 Canadian dollars) would be $1.9 million per case of tetanus prevented, $7.1 million per death prevented and $810,000 per life-year gained. These high cost-effectiveness ratios are largely attributable to the very low risk of tetanus, even among nonimmune elderly people. Tetanus toxoid and physicians' services for vaccination would account for 86% of the program costs. Because the mailed reminders would be responsible for only 13% of the program costs, other possible programs to increase primary tetanus vaccination coverage could not be expected to have substantially lower cost-effectiveness ratios. We conclude that efforts to increase primary tetanus vaccination coverage among elderly Canadians would be a questionable use of health care resources.     

Proposal of the Physicians' Working Group for Single-Payer National Health Insurance

The Physicians' Working Group for Single-Payer National Health Insurance^*

JAMA. 2003;290:798-805.

The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet more than 41 million Americans have no health insurance. Many more are underinsured. Confronted by the rising costs and capabilities of modern medicine, other nations have chosen national health insurance (NHI). The United States alone treats health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In this market-driven system, insurers and providers compete not so much by increasing quality or lowering costs, but by avoiding unprofitable patients and shifting costs back to patients or to other payers. This creates the paradox of a health care system based on avoiding the sick. It generates huge administrative costs that, along with profits, divert resources from clinical care to the demands of business. In addition, burgeoning satellite businesses, such as consulting firms and marketing companies, consume an increasing fraction of the health care dollar. We endorse a fundamental change in US health care—the creation of an NHI program. Such a program, which in essence would be an expanded and improved version of traditional Medicare, would cover every American for all necessary medical care. An NHI program would save at least $200 billion annually (more than enough to cover all of the uninsured) by eliminating the high overhead and profits of the private, investor-owned insurance industry and reducing spending for marketing and other satellite services. Physicians and hospitals would be freed from the concomitant burdens and expenses of paperwork created by having to deal with multiple insurers with different rules, often designed to avoid payment. National health insurance would make it possible to set and enforce overall spending limits for the health care system, slowing cost growth over the long run. An NHI program is the only affordable option for universal, comprehensive coverage.

     

Effects of a faculty prepaid group practice in a pediatric primary care clinic

Medical student and resident education at a hospital-operated pediatric primary care clinic (PPCC) was threatened by chronic financial deficits and by a state mandate that all patients receiving medical care through the state Aid to Families with Dependent Children program be enrolled in a health maintenance organization (HMO). To comply with the mandate, the PPCC was reorganized in 1984 as a faculty-operated prepaid group practice independent of the hospital. The new PPCC contracted with an HMO to provide care, with reimbursement based on capitation. The PPCC continues to serve the same patient population as before the reorganization, continues its teaching activities, and no longer has financial deficits. The experience at this clinic shows that converting to a faculty prepaid group practice can be cost-effective, promote efficiency, and improve faculty-hospital relations. Such a group practice is an appropriate organization for maintaining medical education programs while providing care in a capitation payment system.     

Transforming insurance coverage into quality health care: voltage drops from potential to delivered quality

Although the US health care system is often touted as one of the best in the world, disparities exist in quality of care received by different populations, in different regions, and across different institutions and clinicians. Initiatives to provide access to health insurance have been a major policy tool to ensure that Americans receive high-quality health care. However, availability of insurance coverage does not automatically lead to high-quality care. This article explores points of vulnerability in the US health care system at which the potential to achieve high-quality care can be lost: (1) access to insurance coverage; (2) enrollment in available insurance plans; (3) access to covered services, clinicians, and health care institutions; (4) choice of plans, clinicians, and health care institutions; (5) access to a consistent source of primary care; (6) access to referral services; and (7) delivery of high-quality health care services. Ensuring high-quality health care requires that each of these "voltage drops" be recognized and addressed. JAMA. 2000;284:2100-2107.