Judith Feder

Case-mix payment for nursing home care: lessons from Maryland.

Even before Medicare adopted case-based payments for hospitals, some state Medicaid programs employed case-mix payment systems for nursing home care. Their purpose was less to promote cost containment than to improve access to nursing homes for the most costly patients. This paper evaluates one such system, adopted by the state of Maryland in 1983 as part of an overall reimbursement reform. Using data on nursing home patient characteristics, costs, and staffing, as well as interviews with officials and various providers of care, the article shows that Marylands system was successful in shifting nursing home service away from light-care and toward heavy-care patients. Furthermore, the shift occurred without inducing readily measurable declines in quality of care and with little additional administrative cost (partly because the state built its case-mix system on preexisting patient review activities). Although states could learn from and improve upon Marylands experience--most notably in offering incentives to improve quality of care and in targeting community care on the light-care patients that nursing homes become less willing to serve--Maryland demonstrates that case-mix payment can change nursing home behavior in desired directions without substantial negative consequences.

Why Employers Will Continue to Provide Health Insurance: The Impact of the Affordable Care Act

The Congressional Budget Office, the Rand Corporation, and the Urban Institute have estimated that the Patient Protection and Affordable Care Act (ACA) will leave employer-sponsored coverage largely intact; in contrast, some economists and benefit consultants argue that the ACA encourages employers to drop coverage, thereby making both their workers and their firms better off (a “win-win” situation). This analysis shows that no such “win-win” situation exists and that employer-sponsored insurance will remain the primary source of coverage for most workers. Analysis of three issues—the terms of the ACA, worker characteristics, and the fundamental economics of competitive markets—supports this conclusion.

Medicaid and Long-Term Care for the Elderly: Implications of Restructuring

Because it absorbs about a third of Medicaid spending, long-term care would be affected by any major changes in the financing or structure of this federal–state program. Analysis of the implications for long-term care of the Medicaid restructuring proposals that Congress considered in the 1995–96 federal budget debate leads to this conclusion: the fiscal pressure and incentives that would be created by fixed dollar or block grants, or by limits on federal spending per beneficiary (per capita caps), when combined with enhanced state flexibility in program design, could significantly hinder service choice and quality, reduce access to care, and increase out-of-pocket payments by Medicaid beneficiaries or their families.

Too big to fail: the enactment of health care reform.

Informed by the work of health policy scholars and my own painful personal experience, I firmly believed that success in the latest round of health care reform would depend on advocates’ ability to persuade the public, most of whom have health insurance, that they had more to gain than to lose from reform — that they simply couldn’t afford the status quo. But I was wrong. Just after the Patient Protection and Affordable Care Act (ACA) passed, polling by the Kaiser Family Foundation revealed that less than half the population (46 percent) viewed the law “favorably” — with almost as many (40 percent) reporting “unfavorable” impressions. A July 2010 poll found that half of Americans were favorably inclined. But even with the improvement, it’s clear that by the summer of 2010 the majority of Americans, heavily invested in the current system, were still not convinced that reform will make them better off. Nevertheless, health care reform is now the law of the land. Why? Because a process that failed to convince voters nevertheless convinced Democrats in the Congress that it was they who could not afford the status quo. The real story of health reform’s enactment is how the legislative battle got Democrats so invested that they couldn’t afford to fail. Clearly, the investment began with President Barack Obama’s decision to make health reform his top legislative priority. Like former President Bill Clinton, President Obama viewed affordable health care as more than a campaign promise; he and his administration saw affordable health care as critical to the nation’s longterm fiscal solvency and economic pros-

Why We Need a Patients' Bill of Rights

Over the last ten years, Americans have experienced a substantial change in the way they receive health care. Not surprisingly, that shift has generated popular discontent. Also not surprisingly, that discontent has generated heated political debate about the need for greater consumer protections in the health care marketplace. The nature of that debate— particularly its partisanship at the national level—has called into question its basis in policy. Some argue that there really is no problem in terms of the quality of care; that change, while disruptive, is constructive in bringing cost concerns into play in decisions about the delivery of medical care. From this perspective, the only significant threat managed care poses is to provider incomes. If that’s the case, then action to mitigate that threat represents at best political pandering and at worst a costly caving to the interests of a well-paid few. In other words, the market is working and politicians should leave it alone. Although pandering and caving are undoubtedly a part of the political process, this argument ignores the fundamental problem that underlies the current debate: a lack of accountability in the health care market. Since the demise of the Clinton health plan, the United States has followed a market-based approach to health care cost containment. The more we rely on market forces in health care, the more important it is that the market is held to the kind of accountability provided in other

Health Care of the Disadvantaged: The Elderly

This paper explores threats to the maintenance and expansion of public commitment to financing health care for the elderly. Threats come from rising costs that increase financial burdens, especially on low-income elderly; efforts to contain costs that may undermine benefits; and financing initiatives that treat the elderly as the sole revenue source for addressing problems in that age group. A review of these threats provides lessons not only for sustaining and improving health care for the elderly, but also for policy toward equally or more disadvantaged groups.

Financing long-term services and supports: challenges, goals, and needed reforms

ABSTRACT The need for long-term services and supports (LTSS) presents a growing financial burden on disabled individuals, their families, and state Medicaid budgets. Strategies for addressing this problem pose both a policy design and a political challenge. This article begins by explaining the choices and trade-offs policy makers face in designing new policy and offers the outlines of a specific approach to navigating these. It then concludes with an assessment of current LTSS policy directions and politics—specifically, the movement to constrain, rather than enhance, federal financing for LTSS and the counterpressures necessary to strengthen meaningful insurance protection. While the political environment has become even less conducive to expansion of public benefits, the underlying problem of LTSS financing will grow and persist. And politics change. Thus, in this paper we offer and explain the choices we would make to bridge the political divide—specifically, a proposal to develop a new public–private partnership based on a public program to cover “back-end” or catastrophic costs plus measures making private insurance more attractive for the “up-front” risk, an approach that has recently been endorsed by a number of bipartisan groups.

“Mind the Gap”: Researchers Ignore Politics at Their Own Risk

No matter how distasteful researchers find policy politics, effective policy requires that they engage. Drawing on her career bridging the research/politics gap in health care policy, the author makes a case for why and how researchers can do just that.

Discussion of papers by Karen Scott Collins and Jan Blustein

I’m just going to shift and briefly comment on the way in which policy proposals are addressing the issues that we’ve heard discussed this morning, looking first at discussions of competition and Medicare restructuring, and second at expansion or changes in the Medicare benefit, particularly prescription drugs. A lot of the discussion of restructuring Medicare focuses on the “magic” of managed care and competition, and the assumption that having private health plans deliver Medicare benefits and compete for people’s business will lead them to deliver care efficiently. Sometimes the assumption is that new benefits will magically appear as efficiency reduces cost and we will all go off happily into the sunset. That set of assumptions doesn’t jibe with any evidence we have. Let me briefly review some of that evidence. First, even the proponents of managed care, in observing its experience with the working-age population, have emphasized that what we have seen in the last few years is “managed costs” far more than any “managed care.” The focus of managed care among the working-age population is on discounting the prices plans pay for services, something that Medicare excels at, and we certainly don’t need managed care to do that and limiting care, although this seems to be done more with arbitrary limits than in truly managing care. Robert Friedland of the National Academy on Aging and Society and I have done some work reviewing the literature on managed care, especially for chronically ill elderly patients. Our review raises some concerns, not only about whether care has been managed, but about the quality of care where managed care has applied limits on services to an older or a chronically ill population. The evidence is limited, but what we have suggests the following: that Medicare beneficiaries in managed care, as compared with beneficiaries in fee–for–service, receive fewer home health services, with poorer outcomes; that there is a risk that people are more likely in managed care plans to leave hospitals following a stroke and be placed in nursing homes, rather than rehabilitation facilities, which has implications for their prognoses and their recovery; and in general that managed care has been deleterious to the health status of older, poorer people with chronic illnesses. On costs, managed care plans seem to want more, not less, money from Medicare. At the same time that the argument is being put forward that greater reliance on private plans and competition will reduce Medicare costs, we’re