Variations in inpatient mortality among hospitals in different system types, 1995 to 2000.

BACKGROUND: Relatively few studies focused on the impact of system formation and hospital merger on quality, and these studies reported typically little or no quality effect. OBJECTIVE: To study associations among 5 main types of health systems--centralized, centralized physician/insurance, moderately centralized, decentralized, and independent--and inpatient mortality from acute myocardial infarction (AMI), congestive heart failure, stroke, and pneumonia. DATA AND METHODS: Panel data (1995-2000) were assembled from 11 states and multiple sources: Agency for Healthcare Research and Quality State Inpatient Database, American Hospital Association Annual Surveys, Area Resource File, HMO InterStudy, and the Centers for Medicare and Medicaid Services. We applied a panel study design with fixed effects models using information on variation within hospitals. RESULTS: We found that centralized health systems are associated with lower AMI, congestive heart failure, and pneumonia mortality. Independent hospital systems had better AMI quality outcomes than centralized physician/insurance and moderately centralized health systems. We found no difference in inpatient mortality among system types for the stroke outcome. Thus, for certain types of clinical service lines and patients, hospital system type matters. Research that focuses only on system membership may mask the impact of system type on the quality of care.

Medicare and Medicaid managed care: a tale of two trajectories.

Two decades of efforts to promote managed care models in Medicare and Medicaid have resulted in vastly different experiences as measured by enrollment, plan participation, and ability to achieve the goals of public policy-makers. The Medicare Modernization Act of 2003 introduced a major transformation to engage and retain private health plans. It is useful for plan administrators to consider why the trajectories for the programs have been so divergent and to assess prospects for success in the Medicare Advantage initiative.

A widening rift in access and quality: growing evidence of economic disparities.

Data from the Community Tracking Study provide a valuable perspective from which to observe how economic disparities--largely a function of different sources of coverage--influence access to medical care in the United States. Many recent investments and initiatives are focused on affluent communities and are accessible mainly to people with employer-based or Medicare coverage. For people with Medicaid or no coverage at all, access to basic care is worsening, as a result of stalled coverage expansions and service cutbacks. An improving economy could forestall further cuts and permit reversal of earlier Hones, but progress in closing this rift does not appear imminent.

Geography and destiny: local-market perspectives on developing Medicare Advantage regional plans.

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 established regional preferred provider organizations (PPOs) as a new private-plan option for beneficiaries in the Medicare Advantage (MA) program, starting in 2006. Developing network-based Medicare products uniformly priced across statewide or multistate regions presents unprecedented challenges and opportunities for health insurers. We held discussions with local health plan and hospital informants in six of the twelve Community Tracking Study (CTS) communities to obtain their perspectives on key considerations in evaluating whether they can and will offer regional PPO products under the MA program.

Medicaid and managed care: a lasting relationship?

The Medicaid program made a major commitment to managed care during the past decade. Following turbulent early years, the marriage matured and stabilized because managed care models responded well to a number of the states' goals and Medicaid purchasers were willing to make key trade-offs on behalf of their beneficiaries that conformed to the designs of managed care products. The relative tranquility in Medicaid managed care contrasts sharply with turmoil in both the commercial and Medicare sectors. But continuing changes in the managed care marketplace and financial distress in state budgets present new challenges to the strength and durability of this relationship.

The puzzling popularity of the PPO.

Surging growth in preferred provider organization (PPO) participation has been fueled by migration away from the undesirable features of health maintenance organizations (HMOs). While employers, consumers, and providers seem to know what it is they do not want from HMOs, the advantages offered by PPO design are not so clear. This is attributable in part to difficulties in determining what a PPO arrangement actually is. But it may also reflect a lack of strong evidence that PPOs control costs, provide active care management, or promote quality improvement.

Medicaid managed care: the last bastion of the HMO?

States rely on health maintenance organizations (HMOs) for their Medicaid beneficiaries because they offer guaranteed access to comprehensive benefits at a predictable cost. This is true despite movement away from HMOs, or at least the more restrictive variants, in the private sector. Plans that focus on Medicaid are becoming more central to states' programs as commercial plans exit. Publicly traded, Medicaid-focused plans are also emerging. Medicaid participating plans are aggressively managing costs and care, contrasting sharply with commercial insurance where the trend is toward less intrusive managed care. In this context, state Medicaid managed care programs are facing important policy challenges related to plan participation, mainstreaming, and product design.

Are market forces strong enough to deliver efficient health care systems? Confidence is waning.

Our paper draws lessons for policymakers from twelve communities as we identify the power and limits of general market-based strategies for improving the efficiency of health systems. The vision of market forces driving our system toward efficiency attracted politicians, policy analysts, and practitioners in the 1990s. Today some policy advocates profess even more faith in unfettered market forces. Market participants in the twelve communities in the Community Tracking Study, however, have become doubtful, and our analysis confirms the logic of their pessimism. Major barriers to efficient market outcomes exist amid growing willingness to consider renewed government interventions.

The changing face of managed care.

Managed care plans--pressured by a variety of marketplace forces that have been intensifying over the past two years--are making important shifts in their overall business strategy. Plans are moving to offer less restrictive managed care products and product features that respond to consumers' and purchasers' demands for more choice and flexibility. In addition, because consumers and purchasers prefer broad and stable networks that require plans to include rather than exclude providers, plans are seeking less contentious contractual relationships with physicians and hospitals. Finally, to the extent that these changes erode their ability to control costs, plans are shifting from an emphasis only on increasing market share to a renewed emphasis on protecting profitability. Consequently, purchasers and consumers face escalating health care costs under these changing conditions.

An empty toolbox? Changes in health plans' approaches for managing costs and care.

OBJECTIVE: To examine how health plans have changed their approaches for managing costs and utilization in the wake of the recent backlash against managed care. DATA SOURCES/STUDY SETTING: Semistructured interviews with health plan executives, employers, providers, and other health care decision makers in 12 metropolitan areas that were randomly selected to be nationally representative of communities with more than 200,000 residents. Longitudinal data were collected as part of the Community Tracking Study during three rounds of site visits in 1996-1997, 1998-1999, and 2000-2001. STUDY DESIGN: Interviews probed about changes in the design and operation of health insurance products--including provider contracting and network development, benefit packages, and utilization management processes--and about the rationale and perceived impact of these changes. DATA COLLECTION/EXTRACTION METHODS: Data from more than 850 interviews were coded, extracted, and analyzed using computerized text analysis software. PRINCIPAL FINDINGS: Health plans have begun to scale back or abandon their use of selected managed care tools in most communities, with selective contracting and risk contracting practices fading most rapidly and completely. In turn, plans increasingly have sought cost savings by shifting costs to consumers. Some plans have begun to experiment with new provider networks, payment systems, and referral practices designed to lower costs and improve service delivery. CONCLUSIONS: These changes promise to lighten administrative and financial burdens for physicians and hospitals, but they also threaten to increase consumers' financial burdens.

Medicare contracting risk/Medicare risk contracting: a life-cycle view from twelve markets.

OBJECTIVE: To examine the evolution of the Medicare HMO program from 1996 to 2001 in 12 nationally representative urban markets by exploring how the separate and confluent influences of government policy initiatives and health plans' strategic aims and operational experience affected the availability of HMOs to Medicare beneficiaries. DATA SOURCE: Qualitative data gathered from 12 nationally representative urban communities with more than 200,000 residents each, in tandem with quantitative information from the Centers for Medicare and Medicaid Services and other sources. STUDY DESIGN: Detailed interview protocols, developed as part of the multiyear, multimethod Community Tracking Study of the Center for Studying Health System Change, were used to conduct three rounds of interviews (1996, 1998, and 2000-2001) with health plans and providers in 12 nationally representative urban communities. A special focus during the third round of interviews was on gathering information related to Medicare HMOs' experience in the previous four years. This information was used to build on previous research to develop a longitudinal perspective on health plans' experience in Medicare's HMO program. PRINCIPAL FINDINGS: From 1996 to 2001, the activities and expectations of health plans in local markets underwent a rapid and dramatic transition from enthusiasm for the Medicare HMO product, to abrupt reconsideration of interest corresponding to changes in the Balanced Budget Act of 1997, on to significant retrenchment and disillusionment. Policy developments were important in their own right, but they also interacted with shifts in the strategic aims and operational experiences of health plans that reflect responses to insurance underwriting cycle pressures and pushback from providers. CONCLUSION: The Medicare HMO program went through a substantial reversal of fortune during the study period, raising doubts about whether its downward course can be altered. Market-level analysis reveals that virtually all momentum for the program has been lost and that enrollment is shrinking back to the levels and locations found in the mid-1990s.

Medicaid confronts a changing managed care marketplace.

After two decades of concerted efforts, more than one-half of all Medicaid beneficiaries are now enrolled in managed care arrangements. Most States appear strongly committed to continued reliance on managed care, but the contemporary managed care marketplace is undergoing a number of significant changes. We describe how several of these developments are being revealed in commercial managed care and discuss implications for Medicaid purchasers and beneficiaries. State Medicaid agencies will have to adapt managed care strategies to respond to the evolving products and practices of managed care plans and their interest in public sector product lines.

Medicaid and rural health care.

The impact of Medicaid policies on systems of rural health care has typically been understood in terms of payment methods and rates. But Medicaid agencies have multifaceted influences, including service funding, promotion of access and quality, and infrastructure. We present in this article a general framework to explore these facets and examine literature that has attempted to identify and measure the impacts of the Medicaid program on rural health care systems. While the literature is relatively sparse, there is evidence that rural health systems have been both bolstered and challenged by Medicaid policies in several areas. Several contemporary developments in Medicaid, including increased state flexibility, uneven coverage expansion, and aggressive Medicaid purchasing strategies, suggest that tensions between Medicaid policy and rural health care needs could grow in the future. These tensions provide focus for developing a research agenda that explores the intersection of Medicaid and rural concerns; a number of research questions that would be a part of this agenda are presented.

Sole hospital commitment to health promotion and disease prevention (HPDP) services: does ownership matter?

Hospitals have been increasingly involved in health promotion and disease prevention (HPDP) in the last two decades. Concurrent with this trend, environmental changes and market pressures have resulted in more hospital consolidations and conversions from not-for-profit (NFP) to for-profit (FP) organizations. The emergence of a large number of sole community hospitals has attracted the attention of policy-makers and community stakeholders because sole community hospitals have more power in the local market and may discontinue unprofitable services to pursue profit maximization. This may be especially true when the sole hospital is a FP organization. On the other hand, sole community hospitals are confronted with a variety of expectations to offer community-oriented services that promote community population health, regardless of ownership. There is relatively little literature that has attempted to examine the behavior of sole community hospitals. This study depicts the profile of sole hospitals' involvement in HPDP services and estimates the possible influence of community constituencies on hospitals with respect to their providing community-oriented services. The results indicate that typically, when there is only one hospital in the community, hospital ownership has no significant influence on hospital HPDP services than their NPD counterparts. Implications for policy-makers and health care leaders are also discussed.

Early experiences with consumer engagement initiatives to improve chronic care.

Engaging consumers to be more active participants in their health and health care is an appealing strategy for reforming the U.S. health care system, but little is known about how to mount and sustain communitywide consumer engagement initiatives. The Robert Wood Johnson Foundation launched a program in 2006 in fourteen communities to align forces around improving quality and efficiency by promoting public reporting and expanding the involvement of consumers in all facets of their care. These multistakeholder organizations provide an early glimpse into the opportunities and challenges that lie ahead as policymakers attempt to integrate consumers more completely in their reform strategies.

Safety net hospital emergency departments: creating safety valves for non-urgent care.

Hospital emergency departments (EDs) are caring for more patients, including those with non-urgent needs that could be treated in alternative, more cost-effective settings, such as a clinic or physician's office. According to findings from the Center for Studying Health System Change's 2007 site visits to 12 nationally representative metropolitan communities, many emergency departments at safety net hospitals--the public and not-for-profit hospitals that serve large proportions of low-income, uninsured and Medicaid patients--are attempting to meet patients' non-urgent needs more efficiently. Safety net EDs are working to redirect non-urgent patients to their hospitals' outpatient clinics or to community health centers and clinics, with varied results. Efforts to develop additional primary, specialty and dental care in community settings, along with promoting the use of these providers, could stem the use of emergency departments for non-urgent care, while increasing access to care, enhancing quality and containing costs.

Public health workforce shortages imperil nation's health.

After the 9/11 terrorist attacks, interest in the state of America's public health system spiked, especially related to emergency preparedness. Significant new federal funding flowed to state and local agencies to bolster public health activities. But the spotlight on shoring up the nation's public health system has faded, and the public appears unaware of escalating threats to such basic services as disease surveillance. Local health departments face a mounting workforce crisis as they struggle to recruit, train and retain qualified workers to meet their communities' needs, according to a new study by the Center for Studying Health System Change (HSC). Factors influencing the workforce shortage include inadequate funding, uncompetitive salaries and benefits, an exodus of retiring workers, insufficient supply of trained workers, and lack of enthusiasm for public health as a career choice. Local public health agencies have pursued strategies to improve workforce monitoring and planning, recruitment, retention, development and training, and academic linkages. However, little progress has been made to alleviate the shortages. Without additional support to address workforce issues, including the recruitment of the next generation of public health leaders, it is unlikely that local public health agencies will succeed in meeting growing community need, a situation potentially imperiling the public's health.

Pursuing cost containment in a pluralistic payer environment: from the aftermath of Clinton's failure at health care reform to the Balanced Budget Act of 1997.

Following a decade in which Medicare operated as the leading 'change agent' within the US health care system, the private sector rose to the fore in the mid 1990s. The failure of President Clinton's attempt at comprehensive, public sector-led reform left managed care as the solution for cost control. And for a period it worked, largely because managed care organizations were able to both squeeze payments to selective networks of medical providers and significantly reduce inpatient hospital stays. There was a lot of 'fat' in the nation's convoluted health care system that could be (and was) eliminated through competitive negotiations between medical providers and insurers, employers, or managed care organizations. One of our primary arguments in this article is that managed care operated partly as a systematic suppression of price discrimination or differential pricing (often referred to as 'cost shifting'), as managed care organizations qua purchasing agents prevented hospitals and physicians from summarily raising prices to private payers to meet their financial requirements. Over time, however, managed care fell victim to inflated expectations, its own initial success, and larger fiscal forces. During this same period, Republicans and Democrats struggled to reach a consensus over the future direction of Medicare. Their disagreements contributed to the impasse over budget policy in 1995 and the infamous partial federal government shutdown. After President Clinton's reelection in 1996, partisan disagreements over Medicare dissipated. And, in 1997, Congress and the president passed the Balanced Budget Act of 1997, which emerged as a massive piece of patchwork legislation that sought to balance the federal budget, rein in Medicare spending, and increase the number of the programme's beneficiaries in private health plans.

Public employees' health benefits survive major threats, so far.

Previous studies of public employees' health benefits indicate that they have been spared many of the changes evident in the private sector. But the recession and plunging state revenues in the early 2000s presented growing challenges to trying to preserve these benefits. Findings from the Round Five site visits of the Community Tracking Study (2005) reveal that benefits have still witnessed surprisingly few major modifications. But a growing gap between public- and private-sector benefits and new accounting requirements for government entities' retirement costs raise new threats to this protected status.