Stanford Health Policy is a joint effort of the Freeman Spogli Institute for International Studies and the Stanford School of Medicine
Sherri Rose
By Tara Templin
Our healthcare system is fragmented, with a misalignment of incentives, or lack of coordination, that spawns inefficient allocation of resources. Fragmentation adversely impacts quality, cost, and outcomes. Eliminating waste from unnecessary, unsafe care is crucial for improving quality and reducing costs--and making the system financially sustainable. Many believe this can be achieved through greater integration of healthcare delivery, more specifically via integrated delivery systems (IDSs).
The coverage, cost, and quality problems of the U.S. health care system are evident. Sustainable health care reform must go beyond financing expanded access to care to substantially changing the organization and delivery of care. The FRESH-Thinking Project held a series of workshops during which physicians, health policy experts, health insurance executives, business leaders, hospital administrators, economists, and others who represent diverse perspectives came together.
This book focuses on the role of computers in the provision of medical services. It provides both a conceptual framework and a practical approach for the implementation and management of IT used to improve the delivery of health care. Inspired by a Stanford University training program, it fills the need for a high quality text in computers and medicine. It meets the growing demand by practitioners, researchers, and students for a comprehensive introduction to key topics in the field. Completely revised and expanded, this work includes several new chapters filled with brand new material.
We review the rise, stabilization, and decline of employment-based insurance; discuss its transformation from quasi-social insurance to a system based on actuarial principles; and suggest that the presence of Medicare and Medicaid has weakened political pressure for universal coverage. We highlight employment-based insurances flaws: high administrative costs, inequitable sharing of costs, inability to cover large segments of the population, contribution to labor-management strife, and the inability of employers to act collectively to make health care more cost-effective.
State public employee health plans (PEHPs) provide health benefits for millions of state and local workers, retirees, and their dependents nationwide. This paper explores major issues and challenges that PEHP leaders and state policymakers are addressing. These include the perennial challenge of funding benefits for a diverse and aging workforce; new accounting standards affecting public employers; and the changing relationship between states, retired public employees, and the Medicare program.
Many stakeholders agree that the current model of U.S. health care competition is not working. Costs continue to rise at double-digit rates, and quality is far from optimal. One proposal for fixing health care markets is to eliminate provider networks and encourage informed, financially responsible consumers to choose the best provider for each condition. We argue that this "solution" will lead our health care markets toward even greater fragmentation and lack of coordination in the delivery system.
Stanford University has a "managed competition" model of health insurance. Stanford contributes the cost of the low-cost plan, and employees are responsible for premium differences between this plan and other offerings. Each employee gets what he or she wants and is willing to pay for, and everyone has low-cost access to health insurance. Stanford risk-adjusts the premiums based on age and sex and plans soon to adjust including prescription drug data. In the past five years, premiums have risen rapidly, in line with the rest of the market.
Purchasers of health care are not holding the healthcare system accountable for quality and cost. Employers need to: Offer their employees a wide range of choices in health coverage. Earmark for employees' purchase a fixed dollar amount for health care set at or below the price of the low-priced plan. Insist that carriers and providers report the quality of care delivered.
The "market forces" to which economists ascribe the ability to motivate improvement in quality and efficiency are largely nonexistent in U.S. health care. One thus might ask, "Could market forces be made strong enough to deliver efficient health care systems?" There is some evidence to suggest that the answer is "Yes." This paper offers a short list of some changes that would be needed to create such a health care economy.
Toward a 21st Century Health System is a collection of essays that explore a key element of the health care delivery system -- large multispecialty physician group practices. Edited by policy experts Alain Enthoven and Laura Tollen, and written by a panel of health policy scholars and leaders including Stephen Shortell, Hal Luft, Donald Berwick, James Robinson, and Helen Darling, this resource addresses a variety of topics, including:
Employment-based health insurance is failing. Costs are out of control. Employers have no effective strategy to deal with this. They must think strategically about fundamental change. This analysis explains how employers' purchasing policies contribute to rising costs and block growth of economical care. Single-source managed care is ineffective, and effective managed care cannot be a single source.
Sara J. Singer, Alan M. Garber,and Alain C. Enthoven have designed a comprehensive, new approach for expanding access to health insurance. The proposal is built on the following key elements:
THE PLAN WOULD PROVIDE near-universal coverage by making private plans more affordable and helping low- and middle-income people buy coverage. This would be accomplished though tax credits and by creating “insurance exchanges” that would provide health insurance choices and promote competition among health plans.
To understand "managed care," one needs to understand the traditional model of health care organization and finance that managed care was intended to replace. That model was aptly characterized "Guild Free Choice" by Charles Weller to indicate that "free choice" was being used as a restraint of trade to block the emergence of any form of economic competition among doctors. Its principles were: "Free choice of doctor at all times;" "free choice of treatment, i.e.
What should be government's role in a market-oriented health care system?
What's the appropriate amount of regulation?
Who should regulate-states, federal government, or market forces?
What role do the courts play in this regulation?
Are there existing models that might guide leaders in designing an effective regulatory structure?
Medical Necessity was not a problematic issue when remote third party payers rarely challenged physicians' decisions and reimbursed physicians for whatever procedures they chose to order and perform. Over the past several decades, the term medical necessity has served as an innocuous placeholder, enabling insurance plans and physicians to make judgments about coverage that were usually unchallenged.
Signs of a managed care backlash in California are increasing. This paper reports and interprets the recently completed work of the California Managed Health Care Improvement Task Force, focusing on the managed care backlash and the state's regulatory response. Although cost containment was a contributing factor, the causes of and solutions to the backlash differ among consumers, physicians, health care workers, politicians, and health plans. The recommendations of the task force could improve the market for health insurance.