Group Chap 4: Health Care Policy & Group Insurance

Question 1

Background

Triple Aim of Healthcare
1. Better Care for Population
2. Better health for individuals
3. Lower per-capita cost

Answer 1

1. Questions surrounding health policy include:
   a. Is a basic level of quality health care a right or a privilege?
   b. What level of expense is justified for medical treatment?
   c. Should health insurance be mandatory?
   d. Who should finance health care?
   e. What role should the government play?
   f. How should individuals be held personally accountable for their own health?
2. Health policy literature has attempted to address these by viewing three elements: high quality, wide access, and low cost
3. Rare to achieve all three at once; high quality not accessible, or may be expensive
4. In the recent decades in the US, dialogue shifted from traditional view to “the triple aim” which consists of
   a. Better care for individuals
   b. Better health for populations
   c. Lower per-capita costs
5. Triple aim as a platform to discuss three key policy elements
   (1) Health care, which comprises the former paradigm of cost, quality and access
   (2) Population health, policy must address upstream causes of poor health that lead to a greater need for health care
   (3) Lower cost, how health care is financed
   - Financing of health care is separate and distinct from health care costs
   - The concept of health care financing, how health care is paid for (for example, insurance premiums) is frequently confused with the concept of the cost of health care (the amounts that providers are compensated for providing that care)

Question 2

Better Care for Individuals

1. SOA report on Quality and Efficiency
2. 6 Characteristics of Healthcare Performance
   i. Safety
   ii. Effectiveness
   iii. Patient Centeredness
   iv. Timeliness
   v. Efficacy
   vi. Equity

Answer 2

1. Improving care for individual patients must focus on health care quality; consistent definition remains elusive
2. Society of Actuaries’ report on quality and efficiency includes quality programs which include:
   a. Agency for Healthcare Research and Quality (AHRQ); mission to improve the quality, safety, efficiency, and effectiveness of health care

b. National Quality Forum (NQF); builds consensus among health care stakeholders regarding national priorities and goals

c. NCQA assesses and measures health care organizations through accreditation and recognition programs, also administers Healthcare Effectiveness Data and Information Set (HEDIS), a tool to measure plan performance on care and service

3. Institute of Medicine’s (IDM) report “Crossing the Quality Chasm” lists six characteristics of health care performance: safe, effective, patient-centered, timely, efficient and equitable

4. Safety
a. Avoid injuries from the care that is intended to help them

b. Adverse events at hospitals may occur in 1/3 of all admissions

c. “Never Events” – list of adverse events that are usually preventable
- Wrong-site surgeries
- Transfusion with wrong blood type
- Bedsores (ulcers)
- Falls or Trauma
- Nosocomial infections (infections acquired in hospital)

d. Medicare will not pay providers for these events

5. Effectiveness
a. Provide services to those who can benefit and refrain from services not likely to benefit

b. Comparative Effectiveness Research (CER) – compares methods and benefits to make informed decisions about what will help and what will not

6. Patient Centeredness
a. Care should be responsive to individual patient preferences, needs and values

b. Patient experience – whether care was provided as it should have been (not the same as patient satisfaction)

c. Patient Centered Medical Home (PCMH) – model of primary care that is patient-centered, comprehensive, coordinated, accessible and continuously improving

7. Timeliness
a. Reduce wait times and delays – making best use of patient’s and provider’s time
b. Related to access – ability for individual to seek and receive care when needed

8. Efficiency
a. Avoid waste (of supplies, ideas, energy and unnecessary care)

b. Current Incentives that Encourage Waste and Unnecessary Care in US System
i. Fee-for-Service Payment
- Pay for each service instead of paying for outcomes
ii. Third-Party Payment
- Shields consumer from the cost of service and discourages efficient use of funds
iii. Fear of Litigation
- Provider may feel obliged to perform unnecessary services

9. Equity
a. Health equity means that everyone has a fair opportunity to be healthy….. removing obstacles to health such as poverty, discrimination, and their consequences o Key population factors
i. Payer – those with public care assistance should not get lower priority
ii. Location – not all neighborhoods/regions have appropriate balance of providers
iii. Race and Culture – should not be a factor

b. The study of health equity must consider social determinants of health (SDOH), defined by the WHO

Question 3

Better Health for Populations

Answer 3

1. According to World Health Organization, “Health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity”
2. Concept of health is broader than whether an individual receives medical care
3. Health policy can reach beyond the individual and address health at the level of larger populations.
   Populations can be defined by geography, age, health insurance coverage, or race

a. Should address upstream causes of ill health
- Economic conditions
- Neighborhood, Physical Environment and Housing
- Education
- Food, Water and Air
- Community and Connection
- Violence and Trauma
- Health Care

Question 4

Lower per Capita Costs

Answer 4

1. Health expenditures-to-GDP is nearly one-and-one-half times higher in the US than in all other countries that are part of Organization for Economic Cooperation and Development (OECD)
2. Health expenditures have grown faster than the rest of the economy
3. High costs have rendered health care unaffordable for many Americans; premiums are too high or cannot afford the out-of-pocket costs of care
4. For the cost, outcomes are no better in the US and could even be deemed worse; US lags most other OECD countries in indicators such as life expectancy and infant mortality
5. Employers struggling to provide health insurance as costs take larger portions of their budgets and hard to compete globally

Question 5

Financing of Health Care

1. Canada - provinces are single payer and administrator of care
2. UK - Single payer system
3. Germany - financed by SHI
4. Netherlands - mandatory health insurance provided by private insurers
5. US - mix of public and private

Answer 5

1. Financing in Other Systems
a. In most countries, health care is financed by a combination of public and private sources

b. Range from primarily public funding, such as Canada paid by tax revenues; to primarily private funding such as Germany, care is paid by employer-funded non-government health insurance pools

c. All Canadians have access to provincial health care

d. Canada’s provinces are the single payers and administrators of care
- Supplemental private insurance to cover a small portion of services not covered by the provincial plans

e. English health care system is single-payer system
- National Health Service (NHS), funded primarily by taxes, pays General Practitioners, hospital-based specialists, and public hospitals
- A mix of for-profit and not-for-profit insurers cover supplemental services

f. German health care system is financed by private Statutory Health Insurance (SHI) funds, “sickness funds”, which are non-governmental, non-profit bodies regulated by law
- Funded by compulsory wage-based contributions from employers and EEs, with a complex risk adjustment system

g. Netherlands, coverage is mandatory and provided by private health insurers
- Financed by a mixture of income-related contributions and premiums paid by the insured, and employers must reimburse their EEs for this contribution
- Supplemented significantly by general tax revenues, including coverage for all children under age 18
- Dutch system bears the closest resemblance to the ACA

h. Financing in the U.S.
- U.S. system is a mix of public and private funding. Public is primarily Medicare and Medicaid
i. Medicare (federal funding) covers elderly and disables
ii. Medicaid (federal and state funding) covers lower income children and adults

• The majority of U.S. health care will be financed by public funds in only a few years
• Commercial insurance accounts for over 1/3 of U.S. National Health Expenditures
• Health insurance is sponsored by employers with a portion of the premiums paid by the employer, and the remaining paid by the EE