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.

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.

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.

Stretching the safety net to serve undocumented immigrants: community responses to health needs.

A small but increasing proportion of immigrants to the United States is undocumented. Because most undocumented immigrants lack health insurance, they primarily rely on safety net providers for care. Communities with more developed safety nets and historically large numbers of immigrants appear more adept at caring for both legal and undocumented immigrants, according to Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. Communities with less experience caring for immigrant populations and less-developed safety nets face challenges caring for this population, but many are taking steps to improve their ability to meet immigrant needs. As the number of immigrants in the U.S. grows, the need to develop community health care capacity for immigrants will intensify.

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.

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.

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.

Balancing margin and mission: hospitals alter billing and collection practices for uninsured patients.

A barrage of publicity about aggressive hospital billing and collection practices and a spate of lawsuits alleging hospitals overcharged uninsured patients have put hospitals in a harsh national spotlight. In the wake of a campaign by hospital associations to encourage hospitals to create formal policies for billing uninsured patients, many hospitals have modified billing and collection practices for low-income, uninsured patients, according to the Center for Studying Health System Change's (HSC) 2005 site visits to 12 nationally representative communities. Almost all of the hospitals interviewed that had adopted more generous charity care policies indicated expenses previously classified as bad debt have shifted to charity care write-offs. To date, these changes have had little impact on hospital bottom lines, and the impact on access to care for uninsured people remains unclear.

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.

Financial performance indicators for health plans in Medicaid managed care.

This study is a descriptive analysis of the financial performance of licensed managed care plans that participate in Medicaid by ownership, provider-sponsorship, and the level of Medicaid focus and Medicaid enrollment. Using 2001 Interstudy data, health plan financial data for the Medicaid product line are analyzed on a national level for individual plans. Using SEC 10-K financial filings, company level analysis of two publicly traded, Medicaid-focused, managed care plans are analyzed as well. The analysis found that for-profit and non-profit plans had similar profit margins; however, for-profit plans incurred higher administrative costs ratios and lower medical benefits ratio. Plans with higher Medicaid enrollment had higher medical benefits ratios, while both provider-sponsored and non-provider sponsored plans had similar profit margins. Finally, publicly traded Medicaid focused plans achieved profit margins considerably higher than other Medicaid-focused plans.

Paying for quality: health plans try carrots instead of sticks.

Growing national attention to improving quality and patient safety is spurring development of quality-based financial incentives for physicians and hospitals. Health plans in particular are driving these pay-for-performance initiatives, according to findings from the Center for Studying Health System Change's (HSC) 2002-03 site visits to 12 nationally representative communities. For now, there is little standardization across plans in how quality improvement is measured, and incentive payments typically are modest in comparison with providers' total revenue. Nevertheless, today's nascent efforts can provide a foundation on which to build. Support from major plans and public and private purchasers, sufficiently large financial incentives properly aligned with base provider payment systems, and improvements in quality measurement can all help foster widespread provider acceptance and, ultimately, improvements in health care quality.

Preferred provider organizations and Medicare: is there an advantage?

A key component of the new Medicare reform law is an overhaul of Medicare managed care, including a strong emphasis on recruiting private plans--especially preferred provider organizations (PPOs)--to participate in the new Medicare Advantage program. Citing the popularity of PPOs for privately insured Americans, proponents have touted PPOs as critical to injecting more and better competition into Medicare. This study, based on findings from the Center for Studying Health System Change's (HSC) site visits to 12 nationally representative communities, explores the reasons for the strong growth in commercial PPO enrollment and examines whether PPOs--as currently structured--can add value to Medicare. The available evidence suggests that the PPO model will face challenges in achieving the policy goals set forth in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA), including increasing benefits, improving quality and slowing cost growth.

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 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.

Getting along or going along? Health plan-provider contract showdowns subside.

Although contract negotiations between health plans and providers have remained tense during the past two years, overt impasses have declined, according to findings from the Center for Studying Health System Change's (HSC) 2002-03 site visits to 12 nationally representative communities. The balance of power stabilized during the period, with providers, particularly hospitals, solidifying their dominant negotiating positions and securing concessions from plans in the form of significant payment rate increases and more favorable contract terms. Many plans have recognized and accepted their weaker position relative to providers, suggesting the recent lull indicates plans have found it in their interests to accommodate provider demands for higher payments, rather than resist them and possibly trigger a contract showdown. Though no immediate change is likely in this environment, there are emerging forces that could swing the power pendulum back toward plans.