Katherine Swartz

Insurance or a regular physician: which is the most powerful predictor of health care?

OBJECTIVES This study compared the relative effects on access to health care of relationship with a regular physician and insurance status. METHODS The subjects were 1952 nonretired, non-Medicare patients aged 18 to 64 years who presented with 1 of 6 chief complaints to 5 academic hospital emergency departments in Boston and Cambridge, Mass, during a 1-month study period in 1995. Access to care was evaluated by 3 measures: delay in seeking care for the current complaint, no physician visit in the previous year, and no emergency department visit in the previous year. RESULTS After clinical and socioeconomic characteristics were controlled, lacking a regular physician was a stronger, more consistent predictor than insurance status of delay in seeking care (odds ratio [OR] = 1.6, 95% confidence interval [CI] = 1.2, 2.1), no physician visit [OR] = 4.5%, 95% CI = 3.3, 6.1), and no emergency department visit (OR = 1.8, 95% CI = 1.4, 2.4). For patients with a regular physician, access was no different between the uninsured and the privately insured. For privately insured patients, those with no regular physician had worse access than those with a regular physician. CONCLUSIONS Among patients presenting to emergency departments, relationship with a regular physician is a stronger predictor than insurance status of access to care.

Language Proficiency and the Enrollment of Medicaid-Eligible Children in Publicly Funded Health Insurance Programs

Objectives: The purpose of the study was to examine the effect of language proficiency on enrollment in a state-sponsored child health insurance program. Methods: 1055 parents of Medicaid-eligible children, who were enrolled in a state-sponsored child health insurance program, were surveyed about how they learned about the state program, how they enrolled their children in the program, and perceived barriers to Medicaid enrollment. We performed weighted χ2 tests to identify statistically significant differences in outcomes based on language. We conducted multivariate analyses to evaluate the independent effect of language controlling for demographic characteristics. Results: Almost a third of families did not speak English in the home. These families, referred to as limited English proficiency families, were significantly more likely than English-proficient families to learn of the program from medical providers, to receive assistance with enrollment, and to receive this assistance from staff at medical sites as compared to the toll-free telephone information line. They were also more likely to identify barriers to Medicaid enrollment related to “know-how”—that is, knowing about the Medicaid program, if their child was eligible, and how to enroll. Differences based on language proficiency persisted after controlling for marital status, family composition, place of residence, length of enrollment, and employment status for almost all study outcomes. Conclusions: This study demonstrates the significant impact of English language proficiency on enrollment of Medicaid-eligible children in publicly funded health insurance programs. Strong state-level leadership is needed to develop an approach to outreach and enrollment that specifically addresses the needs of those with less English proficiency.

Integrated Health Care, Capitated Payment, and Quality: The Role of Regulation

We review the evolution and growth of managed care organizations and the payment techniques that could cause a conflict between patient welfare and physician income. We then discuss the existing types of federal and state regulation of managed care and suggest some new incentives that could buttress the ethical practice of medicine in the medical marketplace. Astute observers of medicine have long been anxious about the effect of the profit motive on the quality of medical care [1]. In areas as diverse as the role of for-profit institutions, the nature of conflicts of interest, and the shape of managed care, concerns about the influence of financial incentives on physician decision making have been raised [2]. Under traditional health care financing mechanisms, financial incentives generally prompted the increased use of resources on behalf of the patient. There were few (if any) costs to physicians who ordered more tests or therapy, and potentially there were profits. Financial incentives for the inappropriate utilization of care were constrained by a mix of widely held ethical views, the nonprofit organization of much of medical care, and some regulation. Medical ethics placed patient welfare before profit making in all circumstances. Nonprofit organizations were thought to be less likely to abuse patient care for financial reasons [3]. Regulations such as certificate of need were intended to temper the drive to overutilization. Today, a quiet revolution is occurring. Annual growth rates of 8% to 13% in health care costs have finally led employers and government to demand moderation. The health care market has responded with managed care, defined as oversight of provider decision making, such that providers are forced to consider the costs of alternative protocols of care. Traditional methods of health care financing and organization are being replaced with new integrated systems of care that can accommodate managed care. Physicians are either employees of these organizations or are closely linked to them. The physician is no longer the independent decision maker guided solely by a professional code, a paradigm that has dominated theories of medical ethics [4-7]. This new world presents an important challenge to the quality of care being provided. Managed care devices, especially the use of capitated payment, create strong incentives to reduce care, potentially at the expense of quality [6]. Although many persons recognize this, few have proposed ways to moderate the drive to constrain costs so as not to hurt patients. Most proposals today reiterate the traditional values of the physicianpatient relationship, and they call for independent, provider-based review of decisions made in the managed care environment, even though substantial governmental oversight of managed care organizations already exists [8-12]. We review the ways in which managed care has expanded from prepaid group practices to vertically integrated health care delivery systems [13]; we describe in some detail the new conflicts between cost containment and quality of care that arise from financial incentives used by managed care organizations; and we address the role of regulation in moderating cost-quality tradeoffs in integrated managed care. Our purpose is to emphasize the need for a multipronged public policy approach to ensure a minimum level of quality of care as medical care in the United States is increasingly being delivered by managed care entities. Toward Universal Managed Care Managed care has a long tradition in the United States, but the passage of the Health Maintenance Organization Act of 1973 boosted the managed care industry [14]. Health maintenance organization market share slowly expanded during the 1970s and the first half of the 1980s. Physician decision making in health maintenance organizations had to be cost-effective because the organizations were at risk for costs of care [6]. Lower cost per insured life provided an economic advantage for managed care. The efficacy of techniques developed by traditional health maintenance organizations was not lost on the rest of the health insurance industry. Cost savings generated by traditional utilization review techniques had started to plateau by the mid-1980s, and insurers began to look for alternative ways to reduce costs. In particular, insurers began to organize physicians into networks. So-called preferred provider organizations evolved rapidly, leading to a blurring of distinctions between the various institutions that had previously been referred to as the managed care industry [15, 16]. For the sake of clarity, we refer to health maintenance organizations, preferred provider organizations, and point-of-service plans that formally underwrite health care risk as managed care organizations. With the start of the 1990s, another period of change has begun [13, 17]. As care management matures, fewer services are sought from specialists, and hospitals need larger primary care bases to feed their existing hospital-based secondary and tertiary care systems. This situation has caused greater horizontal and vertical integration of health care, with hospitals, physicians, and (in some cases) managed care organizations coming together into one cohesive structure in an increasing number of metropolitan areas [18]. The primary movers of the new care systems are frequently hospitals that fear losing their referral bases and being eliminated by existing managed care organizations. They recruit physicians, often by acquiring group practices, and try to develop vertically integrated working structures. Many of the physicians in these arrangements are salaried by or have exclusive contracts with the hospitals, allowing the hospitals to take on capitated risk for patient care [19]. As such, the systems emulate the ability of the managed care organizations to control costs by managing physicians through utilization management techniques, practice guidelines, critical pathways, and other care protocols [20-22]. In some metropolitan areas, managed care is becoming universal [23]. The relation of vertically integrated care structures to existing insurers and managed care organizations is complex. In some cases, the integrated plans compete directly with managed care organizations, especially for primary care patients. In other cases, integrated delivery systems may still bid for patients from managed care organizations, specifically for hospital services. Financial Arrangements of Managed Care The question facing policymakers, health care providers, and patients is, With all of the financial incentives imbedded in managed care and integrated systems of health care delivery, how can we ensure that quality of care is maintained and that physicians can be appropriate agents for their patients? Reiteration of professional ethics is one approach, but calls to reject all market values in health care are unrealistic [12]. Rather, the market should be constrained by rational regulation. To evaluate how well different regulatory policies work, we first need to understand the financial incentives that managed care organizations and integrated delivery systems now use to encourage physicians to be cost conscious. Managed care organizations and the emerging integrated delivery systems select from several basic financial arrangements when contracting with physicians, but two are most important: salary and capitation. Salary was the traditional payment method used by staff-model health maintenance organizations. Salaries have long been supplemented by bonus arrangements intended to encourage greater productivity among physicians. Capitation-based payment to physicians in managed care organizations is the alternative and increasingly prevalent method for structuring the financial arrangements between physicians and the managed care organizations. Within capitation, various subarrangements can exist. In the simplest arrangement, an individual physician receives a certain amount of money per month for each member of the managed care organization who designates the physician as his or her primary care physician. In a variation on this arrangement, a group of physicians might contract with the managed care organization and receive a certain amount of money per month for each member of the managed care organization who designates the group as his or her site for receiving medical care. Another strategy is to hold back part of the capitated payment until the end of the year; this is often known as a withhold or a risk withhold. The money in the withhold account is similar to the reserves required of insurance companies and banks: It is a mechanism for ensuring that the physicians have enough money to pay for the care of the insured lives in their care. Of course, if all of the money in the withhold account is exhausted, the management of the managed care organization is at risk for additional expenditures. If money remains in the withhold account at the end of the year, the physicians receive it as a lump sum. This is often viewed as a bonus arrangement. Capitation payments for specialists and inpatient hospital care are arranged in various ways. In some contracts, the managed care organization retains percentages of the premium that are used to pay for specialists, prescription drugs, and inpatient hospital use. Alternatively, the managed care organization may pay a higher percentage of the premium as the base capitation payment to the primary care physician, forcing the primary care physician, in turn, to pay for specialists, prescription drugs, and hospital care. Specialists may be paid on reduced fee schedules or may receive flat consultancy retainers (equivalent to a salary for being on call for a certain number of hours per month). They may even be paid capitated amounts for being available for a panel of insured lives. The few investigations of the financial incentives used by managed care organizations su

Reinsuring Risk to Increase Access to Health Insurance

At least 41 million Americans are currently without health insurance in any given month (U.S. Bureau of the Census, 2002). They are uninsured for a variety of reasons, and most people who lack coverage are affected by more than one reason. Two generalizations can be made, however. First, a majority simply cannot afford to purchase health insurance unless it is heavily subsidized. Most do not have access to employer-sponsored coverage and so must purchase any insurance in the non-group (individual) health-insurance market - a market where, as I explain below, insurance is typically twice as expensive as employer-group coverage if it is not denied outright. Since about two-thirds of the uninsured have incomes below

Commentary: Generating Rigorous Evidence for Public Health: The Need for New Thinking to Improve Research and Practice

35,000, non-group health-insurance premiums often exceed 10 percent of their incomes. The second generalization is that, to an important extent, high premiums in the non-group market and denial of coverage reflect market failure due to asymmetric information. Insurers can never know as much as an individual does about his or her health, family history of health problems, and tendency to seek medical care. Because of this asymmetry, it is impossible for an insurer to set premiums that accurately reflect the non-random portion of health-care costs for different individuals. The non-group market is the only health-insurance option for people without employersponsored coverage. Tax-related subsidies as proposed by members of Congress and the Bush administration do not address the market-failure problems and so are unlikely to make insurance much more affordable. To increase access to health insurance, risk in the non-group market needs to be shifted to a broader population base. In what follows, I first describe the three distinct health-insurance markets in which people can obtain health insurance, and the special nature of competition among insurance companies in the non-group market. Then I make the case for government to act as reinsurer and assume the risk of extremely high-cost people. Efficiency in the non-group health-insurance market would be improved if the government reinsured the market. Equity also would be increased if the government acted as reinsurer because more uninsured people would have access to insurance. Finally, I describe precedents for this role for government in other markets, and why tax-related subsidies will not succeed in increasing health-insurance coverage unless the risks of extremely high costs are shifted to the government.

Lessons from New Jersey

This commentary describes the concept of evidence-based public health, including the limitations of evidence. Increased attention to evidence may have numerous benefits for public health practice, including access to higher-quality information on what works, a higher likelihood of successful programs and policies being implemented, greater workforce productivity, and more efficient use of resources. To broaden thinking on the sources and scope of evidence, the three reviews in this symposium seek to (a) compare and contrast several evaluation designs that are alternatives to the randomized controlled trial; (b) describe two research approaches that are useful in addressing complex, multilevel public health issues (i.e., mixed methods research and mixed studies reviews); and (c) provide an overview of the value and approaches for generating practice-based evidence. These reviews highlight the complexity and interrelatedness of public health challenges, limitations of researcher-driven, quantitative approaches, and the need to broaden our current concepts of evidence.

Financing Long-Term Care: Ex-Ante, Ex-Post or Both?

With little popular support for expanding or initiating entitlement programs of any sort (Blendon et al. 1998), state policy makers who are concerned about the rising number of people without health insurance are looking to initiatives that rely on the private sector. Policy makers are interested especially in regulations that would expand access to the individual (nongroup) insurance market. Some states have already implemented regulations that are intended to help people obtain individual coverage (e.g., limits on preexisting-condition exclusions, rate bands on premiums, guaranteed issue of policies to all applicants) (Chollet and Kirk 1998; GAO 1996). Furthermore, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires portability of coverage from group to individual policies for a limited number of statutorily defined “eligible individuals” (Nichols and Blumberg 1998). But in addition to these efforts, policy makers are increasingly interested in developing markets for individual coverage that offer more choice to all state

Markets for Individual Health Insurance: Can We Make Them Work with Incentives to Purchase Insurance?

This paper attempts to examine the heterogeneity in the public financing of long-term care (LTC) and the wide-ranging instruments in place to finance LTC services. We distinguish and classify the institutional responses to the need for LTC financing as ex ante (occurring prior to when the need arises, such as insurance) and ex post (occurring after the need arises, such as public sector and family financing). Then, we examine country-specific data to ascertain whether the two types of financing are complements or substitutes. Finally, we examine exploratory cross-national data on public expenditure determinants, specifically economic, demographic and social determinants. We show that although both ex ante and ex post mechanisms exist in all countries with advanced industrial economies and despite the fact that instruments are different across countries, ex ante and ex post instruments are largely substitutes for each other. Expenditure estimates to date indicate that the public financing of LTC is highly sensitive to a countrys income, ageing of the population and the availability of informal caregiving.

New estimates of gaps and transitions in health insurance.

Simple income-based incentives to purchase health insurance (tax credits or deductions, or subsidies) are unlikely to succeed in significantly reducing the number of uninsured because income is not a good predictor of the extent to which individuals use medical service. Proposals to provide incentives to low-income people so they will purchase individual health insurance need to address the inherent tension between the interests of low-risk and high-risk people who rely on individual coverage. If carriers are forced to cover all applicants and to community rate premiums, low-risk people will drop coverage or not apply for it because premiums will exceed their expected need for insurance. Concern for people who currently have access to individual coverage calls for careful examination of options to permit incentive programs to succeed with the individual insurance markets. In particular, attention should focus on using alternatives to simple income-based subsidies to spread the burden of high-risk peoples costs broadly, rather than impose the costs on low-risk people who purchase individual coverage. This paper describes three such alternatives. One uses risk adjustments and two rely on reinsurance so that carriers are compensated for the higher costs of covering high-risk people who use incentives to buy insurance. One alternative also permits risk selection by insurance carriers.

Cost And Coverage: Implications Of The McCain Plan To Restructure Health Insurance

Changes in individual or family circumstances cause many Americans to experience gaps and transitions in public and private health insurance. Using data from the 2004-2007 Survey of Income and Program Participation, this article updates earlier analyses of insurance gaps and transitions. Eighty-nine million people (one third of nonelderly Americans) were uninsured for at least 1 month during those 4 years. Approximately 23 million lost insurance more than once. The analyses call attention to the continuing instability and insecurity of health insurance, can inform implementation of national reforms, and establish a recent baseline that will be helpful in evaluating the reforms’ effects on coverage stability.