A New Era in American Health Care: Realizing the Potential of Reform Karen Davis June 2010 The Commonwealth Fund is a private foundation that promotes a high performance health care system providing better access, improved quality, and greater efficiency. The Fund’s work focuses particularly on society’s most vulnerable, including low-income people, the uninsured, minority Americans, young children, and elderly adults. The Fund carries out this mandate by supporting independent research on health care issues and making grants to improve health care practice and policy. An international program in health policy is designed to stimulate innovative policies and practices in the United States and other industrialized countries. Pub. no. 1419 Cover photos, clockwise from upper left: D.A. Fleischer, Roger Carr, University of Wisconsin-Milwaukee Media Production, © Edward Rozzo/Corbis. Center: Paula Lerner. Contents 5 What Are the Key Features of Health Reform? 7 Who Is Helped by Health Reform? 16 How Will the Health Care System Change? 23 Challenges in Implementation and Long-Term Concerns 24 Conclusion 25 Notes 27 About the Author 27 Acknowledgments list of exhibits 6 Exhibit 1. Major Features of Commonwealth Fund Proposals and the New Health Reform Law 8 Exhibit 2. Trend in the Number of Uninsured Nonelderly, 2013–2019 Before and After Health Reform 9 Exhibit 3. Uninsured Young Adults Most Likely to Have Cost-Related Access Problems and Medical Bill or Debt Problems in the Past Year 11 Exhibit 4. Small Business Tax Credits Under Affordable Care Act for Family Premiums 12 Exhibit 5. More Than One-Quarter of Adults Under Age 65 with Medical Bill Burdens and Debt Were Unable to Pay for Basic Necessities 15 Exhibit 6. More Than One-Third of Older Adults Report Medical Bill Problems 17 Exhibit 7. Only 65 Percent of Adults Report Having an Accessible Personal Clinician 18 Exhibit 8. Three of Four Adults Have Difficulty Getting Timely Access to Their Doctor 19 Exhibit 9. Doctors Use of Electronic Patient Medical Records 21 Exhibit 10. Nearly Half of U.S. Adults Report Failures to Coordinate Care 21 Exhibit 11. Physicians in U.S. Less Likely to Receive Incentives for Quality or Meeting Goals ABSTRACT Through a pragmatic mix of public and private financing, the new Patient Protection and Affordable Care Act will expand health care coverage, establish health insurance exchanges with market rules that protect individuals and families, and begin to transform the health care system by encouraging greater value and efficiency through a series of payment and delivery system initiatives. In this report, Commonwealth Fund president Karen Davis outlines the key features of the new reform law, discusses who will be most helped and how, and describes the ways in which the health care system will begin to provide more patient-centered, accessible, and coordinated care to all Americans. Davis also discusses the challenges that will need to be overcome as the law’s provisions are implemented over the coming months and years. A New Era in American Health Care: Realizing the Potential of Reform Karen Davis After a century of trying, the United States has joined What Are the Key Features of the world’s other major industrialized nations in pro- Health Reform? viding all its citizens with access to essential health Through a pragmatic mix of public and private care. When President Obama signed the Patient financing, the new law will expand health care cover- Protection and Affordable Care Act on March 23, age, establish health insurance exchanges with market 2010, he delivered on a key promise from his 2008 rules that protect individuals and families, and begin presidential campaign and succeeded in placing the to transform the health care system by encouraging nation on a path toward a high performance health greater value and efficiency through a series of pay- system that serves everyone. Such change has been a ment and delivery system initiatives. Exhibit 1 shows long time coming. Theodore Roosevelt first proposed how these changes mirror in large part the recom- comprehensive reform in 1912, followed by Presidents mendations outlined in the report Path to a High Harry Truman, Richard Nixon, Jimmy Carter, George Performance Health System, published by the H. W. Bush, and Bill Clinton.1 Commonwealth Fund Commission on a High Commonwealth Fund analysis shows that the Performance Health System in February 2009.3 new law will deliver on all three of the goals President Obama set forth when Congress began crafting Key features of reform include: reform legislation last year: 1. New federal insurance market rules that • Expand access to affordable health insurance for prohibit restricting coverage or varying those without coverage; premiums based on health, set limits on the • Improve the affordability of insurance for those share of private premiums going for non- who already have it; and medical costs, and establish essential standard benefit packages that guarantee beneficiaries a • Slow the rise in health care costs for individuals, comprehensive array of services with limits on families, and employers while not adding to the levels of cost-sharing. federal budget deficit.2 2. New health insurance exchanges that will more efficiently pool risk, lower administrative costs, and provide eligible individuals and small businesses a choice of affordable health plans. Exhibit 1. Major Features of Commonwealth Fund Proposals and the New Health Reform Law Commonwealth Fund’s Path Health Reform Law and Fork in the Road reports Individual Mandate $2,000 per employee for employers with Employer Shared Responsibility Lower of 7% of earnings or $2,500 per employee 50+ employees not offering coverage Insurance Market Rules Rules on enrollment, premiums, and Rules on enrollment, premiums, medical loss, consumer protections consumer protections Insurance Exchanges National, public plan option, start in 2010 State, new nonprofit plan options, start in 2014 Benefit Standard Comprehensive; 84% actuarial value Comprehensive; 70% actuarial value Income-Related Premium and 0–12% of income sliding scale premium caps up 2%–9.5% of income up to 400% FPL; Cost-Sharing; Medicaid Expansions to 28% tax bracket; Medicaid to 150% poverty Medicaid to 133% poverty Mandatory Medicare/public payment reform—ACOs, Voluntary Medicare payment innovations—ACOs, Medical Homes, 5% increase in primary care, Medical Homes, 10% increase in primary care, Payment Reform 1% productivity improvement, Medicaid at 1% productivity improvement, Medicaid primary Medicare levels; Rx prices care at Medicare levels, CMS Innovation Center, Independent Payment Advisory Board Comparative effectiveness tied to benefit Comparative effectiveness research; System Reform design; HIT; Medicare Advantage reform HIT; Medicare Advantage reform Source: Commonwealth Fund analysis of health reform law; The Commonwealth Fund Commission on a High Performance Health System, The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way (New York: The Commonwealth Fund, Feb. 2009); and C. Schoen, K. Davis, S. Guterman, and K. Stremikis, Fork In the Road: Alternative Paths to a High Performance U.S. Health System (New York: The Commonwealth Fund, June 2009). 3. Affordability provisions for low- and 5. Improvements to Medicare prescription middle-income families including an drug benefits including $250 rebates for essential standard benefit package, premium seniors falling into the “doughnut hole” in 2010 assistance on a sliding scale up to four times and elimination of that coverage gap by 2020. poverty income (about $88,000 for a family of four), and expansion of Medicaid eligibility 6. Creation of a new long-term care financing up to 133 percent of the federal poverty level program to support community living for the (almost $30,000 for a family of four). disabled. 4. A commitment to shared responsibility 7. Investment in a stronger primary care that preserves employer-sponsored insurance, foundation, one that includes increases in provides health insurance tax credits to small payment for primary care under Medicare and businesses, assesses a contribution from Medicaid, incentives for practices to organize larger businesses whose employees receive as patient-centered medical homes providing government-financed premium subsidies, and more accessible and coordinated care, and requires that individuals have coverage. investment in primary care training and expansion of community health centers and the National Health Service Corps. 6 The Commonwealth Fund 8. Establishment of an innovation center Who Is Helped by Health within the Centers for Medicare and Medicaid Reform? Services to rapidly test and spread effective A majority of Americans stand to gain under health payment methods that reward quality of care, reform. Primary beneficiaries include the uninsured rather than volume of services. Additional and intermittently insured, the underinsured, those payment and system reform provisions who cannot afford their out-of-pocket costs or health encourage accountability for patient outcomes insurance premiums, small businesses and their and use of medical resources, and provide employees, young adults who will be able to stay on incentives for productivity improvement. their parents’ policies until they find a job with health benefits, and those who are denied coverage because 9. Creation of an Independent Payment they have preexisting conditions or major health Advisory Board with the authority to make recommendations for reducing cost growth problems. and improving quality in both the Medicare Most Americans fall into one of these categories program and the health system as a whole. and have personally experienced the shortcomings of our current system. Two-thirds of all working-age 10.Investment in the infrastructure required adults report problems with coverage, access to care, for a high-performance health system, or medical bills under the old system.5 including publicly reported information on The following examples illustrate how the new quality, cost, and performance of providers coverage options, benefit standards, and market rules and insurers; use of modern information contained in the reform law will benefit different technology in medical care and health types of people. insurance; and national strategies and policies on disease prevention, public health, quality, Uninsured individuals, whether low- or safety, and the health care workforce. modest-wage workers or unemployed, will be able to get and afford the care they need. The Commonwealth Fund has published a series Currently, almost three-fourths of those who are unin- of reports detailing the major features of health sured at any point during the year report not getting reform proposals, and timelines for the provisions needed care. Sixty percent also report medical debt incorporated into the final law.4 and bill problems.6 The Congressional Budget Office (CBO) estimates that by 2019 health reform will increase the proportion of the insured population from 83 percent to 94 percent7 (Exhibit 2). About half of the 32 million newly insured will be covered by Medicaid, with no financial barriers to care. The other half will receive help in purchasing private coverage. Some will take up employer cover- age for the first time, or benefit from new affordable offers for job-based coverage—stimulated, for A New Era in American Health Care: Realizing the Potential of Reform 7 Health Care Reform: How Will It Change Lives? Sandra’s Story* Before: Sandra works part-time as a waitress in a restaurant while she pursues her nursing degree. She does not qualify for benefits through her job, and she can’t afford to buy her own health insurance. She re- ceives no preventive or routine care, and tries to avoid going to the doctor when she is sick. The last time she saw a doctor she was diagnosed with hypertension and given a prescription, but she couldn’t afford to fill it and hasn’t been back since. After: Sandra’s employer might receive new tax credits that make it easier to offer affordable health insurance. Or, she will be eligible for federal premium credits that will help her buy insurance through an insurance ex- change. Preventive care will be free. She will not be disqualified because of her hypertension or charged a higher premium. *These and other examples throughout this essay are illustrative and not based on actual individuals. example, by new tax credits for small businesses. Young adults graduating from high school Those without employer coverage can receive federal or college will no longer be uninsured and no longer dependent on emergency rooms assistance to purchase qualified health plans through for care. the insurance exchanges; this applies to individuals and families earning between 133 percent ($29,327 Nearly 30 percent of young adults are uninsured, for a family of four) and 400 percent of poverty often aging out of their parents’ plans and unable to ($88,200 for a family of four). For families in that find jobs that offer health insurance benefits.8 Fifty- income range, premium contributions will be lim- three percent report going without needed care in the ited to between 3.0 and 9.5 percent of income. last year, and four of 10 report difficulty paying medi- cal bills or accumulated medical debt (Exhibit 3). Exhibit 2. Trend in the Number of Uninsured Nonelderly, 2013–2019 Before and After Health Reform Millions 80 Before reform After reform 60 53 53 54 51 51 51 52 40 31 26 21 21 22 23 20 0 2013 2014 2015 2016 2017 2018 2019 Note: The uninsured includes unauthorized immigrants. With unauthorized immigrants excluded from the calculation, nearly 94% of legal nonelderly residents are projected to have insurance under the new law. Sources: The Congressional Budget Office Cost Estimate of H.R. 4872, Reconciliation Act of 2010, Mar. 20, 2010, http://www.cbo.gov/doc.cfm?index=11379. 8 The Commonwealth Fund Exhibit 3. Uninsured Young Adults Most Likely to Have Cost-Related Access Problems and Medical Bill or Debt Problems in the Past Year Percent of adults ages 19–29 reporting cost-related access problems or medical bill or debt problems: Total Insured now, uninsured during the year 100 Insured all year Uninsured now 80 76 68 63 59 60 53 42 37 40 27 20 0 Any of five access problems Any medical bill problem or outstanding debt Notes: Access problems include not filling a prescription; skipping a medical test, treatment, or follow-up; having a medical problem but not seeing a doctor or going to a clinic; not seeing a specialist when needed; and delaying or not getting needed dental care. Medical debt or bill problems include not being able to pay medical bills; being contacted by a collection agency; changing way of life to pay medical bills; and medical bills/debt being paid off over time. Source: S. R. Collins and J. L. Nicholson, Rite of Passage: Young Adults and the Affordable Care Act of 2010 (New York: The Commonwealth Fund, May 2010). One-fourth of young adults use emergency rooms benefits. In 2014, about 7 million young adults with during the year, incurring bad debts that may affect incomes below 133 percent of the poverty level their future credit as well as the financial stability of ($14,404 for a single adult) will become eligible for safety-net institutions serving those who cannot pay. Medicaid; states have the option to cover low-income Effective September 2010, young adults will be adults beginning in 2010 at the current federal permitted to stay on their parents’ insurance policies matching rate. In addition, young adults will be able up to age 26, or until they find a job with health to purchase coverage through health insurance Health Care Reform: How Will It Change Lives? Marcus’s Story Before: When Marcus graduated from college with a business degree, he knew it might take a while to find a job, so he reluctantly moved back home with his parents while he looked. Since he is no longer a student, he is no longer eligible for coverage under his parents’ health plan. He tries to help out around the house, but when he shattered his ankle falling off a ladder, requiring extensive surgery and rehab, his parents had to take out a loan to pay for his care. After: Marcus will be covered by his parents’ policy until he turns 26. Alternatively, he might be eligible for Medicaid, or he might qualify for help paying for coverage through a health insurance exchange. A New Era in American Health Care: Realizing the Potential of Reform 9 Health Care Reform: How Will It Change Lives? Linda’s Story Before: Linda has decided to go into business for herself and plans to work from home. But now she faces a tough dilemma. While her current employer offers a decent health plan, with her diabetes she can’t afford to buy coverage on her own, and the benefits don’t cover all the medications and supplies she needs. Start- ing her own business has been a longstanding dream, but she can’t afford to pay for her diabetes care out- of-pocket. After: Linda will be able to afford coverage through the health insurance exchange, where the premiums will likely be lower for comprehensive coverage than in today’s individual insurance market. That’s because the exchange will pool risk, her premium won’t depend on her health condition, and the government will provide Linda with financial assistance to keep her share of the premium under 9.5 percent of her income. The ben- efits will be comprehensive, covering what she needs to control her diabetes. exchanges in 2014; 85 percent of those young adults limited to workers buying coverage in the individual (those with incomes below four times the poverty market and workers in firms with 50 or fewer level of $43,320 for a single adult) will be eligible to employees, or, at each state’s option, firms with 100 receive help paying premiums and medical bills.9 or fewer employees. After 2017, states have the option of opening the exchange to firms of any size. Workers will no longer lose coverage when changing jobs. Small business owners will be able to offer Thirty-two percent of adults report at least one change health coverage and afford premiums. in their health plan in the past three years.10 These About 78 percent of firms with 10 to 24 employees changes in coverage often result in spells without any and 49 percent of firms with three to nine employees insurance, loss of specific benefits, or the need to now offer coverage to their workers—even though change doctors. Some people even lose their group insurance premiums for small businesses tend to be coverage altogether, necessitating the purchase of higher than premiums for larger businesses for health insurance on the more expensive individual market, plans with similar benefits.12 These percentages may where enrollees are particularly vulnerable to changes increase as workers seek to fulfill their obligation to in carriers and gaps in coverage.11 This churning has carry health insurance. In Massachusetts, for example, stark consequences for continuity of care and proper the share of workers with employer coverage increased management of chronic conditions. from 80 percent to 84 percent under health reform, The new health reform law will help workers at as more employers offered coverage and some work- every income level keep their insurance coverage if ers who had been eligible for coverage opted to take they already have it, or purchase coverage if they do it up.13 not. Beginning in 2014, workers in small firms or As an added incentive for employers to offer cov- those buying insurance in the individual market will erage, tax credits will be available to offset up to 35 be able to purchase coverage through insurance percent of employers’ premium contribution for two exchanges that more efficiently pool risk and reduce years for low-wage firms with fewer than 25 employ- administrative costs. Initially, eligibility will be ees. A temporary program is slated to begin in 2010; 10 The Commonwealth Fund Exhibit 4. Small Business Tax Credits Under Affordable Care Act for Family Premiums Credit per employee Tax credit Net employer contribution Net employee contribution 10,000 $9,435—projected family premium 7,500 5,000 50% employer 2,500 contribution $4,718* 0 Temporary Program Permanent Program Permanent Program for (2010–2013) (2014) Nonprofits * To be eligible for tax credits, firms must contribute 50% of premiums. Firms receive 35% and later 50% of their contribution in tax credits. Note: Projected premium for a family of four in a medium-cost area in 2009 (age 40). Premium estimates are based on actuarial value = 0.70. Actuarial value is the average percent of medical costs covered by a health plan. Small businesses are eligible for new tax credits to offset their premium costs in 2010. Tax credits will be available for up to a two-year period, starting in 2010 for small businesses with fewer than 25 employees and with average wages under $50,000. The full credit will be available to companies with 10 or fewer employees and average wages of $25,000, phasing out for larger firms. Eligible businesses will have to contribute 50 percent of their employees' premiums. Between 2010–13, the full credit will cover 35 percent of a company's premium contribution. Beginning in 2014, the full credit will cover 50 percent of that contribution. Tax-exempt organizations will be eligible to receive the tax credits, though the credits are somewhat lower: 25 percent of the employer's contribution to premiums in 2010–13 and 35 percent beginning in 2014. Source: Commonwealth Fund analysis of Affordable Care Act (Public Law 111-148 and 111-152). Premium estimates are from the Henry J. Kaiser Family Foundation Health Reform Subsidy Calculator, http://healthreform.kff.org/Subsidycalculator.aspx. the permanent program, scheduled to start in 2014, and lower premiums they will bring. As workers will provide up to a 50 percent credit for two years change jobs, they may be able to continue coverage (Exhibit 4). through another participating employer, or, if their In 2014, small employers can elect to purchase new employer does not offer health benefits, pur- coverage for their employees through the exchanges, chase subsidized coverage through the exchanges. taking advantage of the reduced administrative costs Health Care Reform: How Will It Change Lives? Mark’s Story Before: Mark employs three mechanics in his garage, and business is steady. Mark is lucky, he gets insur- ance through his wife’s employer. So does one of his employees, but the other two are uninsured. He’d like to be able to offer health insurance to his workers, but he just can’t swing it financially. He knows that being able to offer benefits is not just good for his workers, it’s also good for his business. Whenever he is hiring, he sometimes loses good prospects if they can get health benefits somewhere else. After: With tax credits to offset some of his costs, and with the ability to buy comprehensive health insurance, likely at a lower cost through the exchanges, small business owners like Mark will be more likely to offer coverage. A New Era in American Health Care: Realizing the Potential of Reform 11 Families will face fewer difficulties paying Beginning in 2014, insurance plans out-of-pocket expenses. must meet essential benefit standards covering hospital care, physician services, More than 60 percent of individuals who have accu- prescription drugs, preventive services mulated medical debt were insured at the time they without cost-sharing, and pediatric dental incurred the expenses.14 Shrinking coverage—the and vision care, among other benefits. typical employer plan now covers 80 percent of aver- Plans will be classified into different “tiers” to allow age medical expenses—and increasing deductibles families to understand their out-of-pocket liability. during the past decade have resulted in a sharp rise in Actuarial values—the proportion of costs actually the number of Americans who face substantial out-of- covered—will range from 60 percent (bronze tier) to pocket costs, rendering them “underinsured.”15 One- 90 percent (platinum tier). The percentage of expenses fourth of insured Americans who have difficulty covered will vary depending on family income, and paying their medical bills report using up all their out-of-pocket expenses will be limited for individuals savings or taking on credit card debt to pay those and families of all income levels. bills (Exhibit 5). Exhibit 5. More Than One-Quarter of Adults Under Age 65 with Medical Bill Burdens and Debt Were Unable to Pay for Basic Necessities Percent of adults ages 19–64 with medical bill problems or accrued medical debt Uninsured Anytime Insured All Year During Year No Insured now, underinsured time uninsured Uninsured Percent of adults reporting: Total indicators Underinsured in past year now Unable to pay for basic necessities (food, heat, or rent) because of 29% 16% 29% 42% 40% medical bills Used up all of savings 39 26 46 46 47 Took out a mortgage against your home or 10 9 12 11 11 took out a loan Took on credit card debt 30 28 33 34 26 Insured at time care was provided 61 80 82 46 24 Source: S. R. Collins, J. L. Kriss, M. M. Doty, and S. D. Rustgi, Losing Ground: How the Loss of Adequate Health Insurance Is Burdening Working Families—Findings from the Commonwealth Fund Biennial Health Insurance Surveys, 2001–2007 (New York: The Commonwealth Fund, Aug. 2008). 12 The Commonwealth Fund Health Care Reform: How Will It Change Lives? Janice’s Story Before: Janice is a self-employed musician. Because she’s young and healthy, she figures she will be okay without health insurance for a few years. When she discovers that she’s pregnant, and that her husband’s employer policy covers only him, she looks for individual coverage that will help her with the expenses of prenatal care and delivery. What she found astonished her: not only was it almost impossible to find insurers who would even offer her coverage, but the few that did would charge her more for basic coverage than they would charge a man, and would require an expensive rider to cover the maternity-related costs. After: Health plans will be prohibited from charging higher premiums due to gender, health status, or family history. In addition, they will provide comprehensive benefits, including maternity care. Janice will be able to obtain affordable coverage on her own through the newly created health insurance exchange. Low-income mothers will be able to afford maternity riders, all remained largely unaffordable for prenatal care. low- and middle-income individuals. Work by The Commonwealth Fund shows that many Beginning in 2014, insurers will be prohibited women face problems securing affordable health cov- from charging higher premiums because of gender, erage and care.16 Women are less likely to have health status, or family history. Pregnant women in employer-sponsored insurance available to them and the Medicaid program will see new coverage options often must seek coverage in the more expensive indi- for freestanding birth centers that allow women to vidual market. The practice of gender rating means use midwives and birth attendants recognized in that women pay substantially more than men for simi- each state. Medicaid will also cover free smoking ces- lar or worse insurance. Pregnant women without sation programs for pregnant women. The employer coverage face particular difficulty securing Department of Health and Human Services, mean- adequate individual coverage for prenatal care: a while, is authorized to make grants to states to pro- recent study showed that across the country just 13 mote improvements in maternal, prenatal, and infant percent of individual insurance market plans available health. And states are eligible to receive federal funds to a 30-year-old woman provided maternity cover- to provide home visitation services for maternal age.17 While a limited number offered additional health and prenatal care. A New Era in American Health Care: Realizing the Potential of Reform 13 Men and women will have access to cancer Older adults will no longer be denied screening for early detection. coverage because of health problems and preexisting conditions. Despite significant strides in improving the delivery of preventive services, many adults still fail to receive Older adults seeking health insurance coverage typi- recommended preventive care and cancer screening. cally face prohibitively high premiums, large deduct- The Commonwealth Fund’s National Scorecard on ibles, and troubling exclusions for health problems U.S. Health System Performance finds that only half and preexisting conditions. A Commonwealth Fund of all adults, and less than one-third of uninsured study found that 24 percent of the near-elderly (ages adults, are up-to-date with recommended preventive 50 to 70) failed to get health care services because of care.18 Failure to detect colon, breast, and cervical the cost.19 More than one-third (35%) had a problem cancer at an early stage contributes to high mortality paying their medical bills in the last year or were pay- rates for these diseases. ing off medical debt they had accrued over the last Beginning in 2010, all recommended preventive three years (Exhibit 6). services will be covered without cost-sharing under Beginning 90 days after enactment of the law, new individual and group plans (for Medicare ben- older adults with preexisting conditions who have eficiaries, this will begin in 2011). States that expand been uninsured for at least six months will be eligible Medicaid coverage to include approved preventive for subsidized insurance through a national high-risk services with no cost-sharing will receive increased pool. Premiums will be set for a standard population federal funding for these services. This will remove and cannot vary by more than a factor of four based financial barriers to care and save lives. The on age—that is, older adults will pay no more than Commonwealth Fund’s national scorecard estimates four times what younger adults pay for coverage. that reaching achievable levels of preventive care In 2014, insurance companies will be required to would result in 70 million more Americans obtain- cover all individuals regardless of health status and ing timely preventive care. charge the same premium regardless of preexisting conditions. Premiums may vary based on age, but by no more than a three-to-one ratio. These provisions will greatly increase the affordability and availability of coverage for older adults with health problems. Health Care Reform: How Will It Change Lives? Maria’s Story Before: Maria knows she should have a regular Pap test and mammogram. But her insurance only covers part of the cost and as a single mom she is on a very tight budget. Her mother is still healthy at 84, so she figures her chances of getting cancer are pretty slim, anyway. After: Since all recommended preventive services will be fully covered, Maria will not have to pay anything for her preventive tests. In addition, states that expand Medicaid coverage in the same way will receive in- creased federal funding for these services. 14 The Commonwealth Fund Exhibit 6. More Than One-Third of Older Adults Report Medical Bill Problems Percent of adults ages 50–70 with any medical bill problems or outstanding medical debt* 80 60 54 40 35 33 20 0 Total, ages 50–70 Insured Uninsured * Problems paying/not able to pay medical bills, contacted by a collection agency for medical bills, had to change way of life to pay bills, or has medical debt being paid off over time. Source: S. R. Collins, K. Davis, C. Schoen, M. M. Doty, S. K. H. How, and A. L. Holmgren, Will You Still Need Me? The Health and Financial Security of Older Americans (New York: The Commonwealth Fund, June 2005). Individuals with functional limitations will health care, Medicaid is the only program available to be able to afford help to continue living finance care for those with long-term disabilities and at home. needs and without significant income or assets. More than 10 million Americans are estimated to Unfortunately, workers and retirees with functional need long-term care assistance and support to perform limitations must “spend down” their savings—essen- daily activities. That number is projected to grow sub- tially impoverishing themselves—before becoming stantially as the population ages and more individuals eligible for Medicaid assistance. become disabled.20 Long-term care is simply unafford- The health reform law establishes a national, able for the majority of the population. While Medicare voluntary insurance program for purchasing com- covers some short-term skilled nursing and home munity living assistance services and supports in Health Care Reform: How Will It Change Lives? Ed’s Story Before: When his wife died unexpectedly, Ed was dropped by the health insurance plan they had gotten through her employer. Self-employed, and too young for Medicare, he is looking for individual coverage. But at 58, the only plans he’s being offered come with exorbitant premiums and high deductibles. Even if he were able or willing to pay that much—which he isn’t—he wouldn’t even get coverage for his depression, because it is a preexisting condition. After: Ed will be able to get health coverage, regardless of his preexisting condition, through the new high- risk pool. In addition, his premium will be set for a standard population, and will cost no more than four times as much as comparable coverage for a younger adult. Eventually, Ed will be able to buy comprehensive, subsidized coverage through the exchange. A New Era in American Health Care: Realizing the Potential of Reform 15 Health Care Reform: How Will It Change Lives? Esther’s Story Before: If Esther budgets her Social Security payments very carefully, she can make ends meet. Since her small house and car are both paid for, her biggest expense is her prescription drugs. At 70, with a combina- tion of chronic conditions including diabetes, hypertension, and congestive heart failure, she takes a lot of medication. When she reaches a spending threshold of $2,700—the start of the Medicare “doughnut hole”— she has to pay 100 percent of the cost. Sometimes she takes half-doses or skips a day to make the medica- tion last longer. She also skips her annual wellness visit, including important preventive services, to save on the copayment. After: Esther will receive a rebate on her doughnut hole spending and discounts on brand-name and generic drugs. She will also be eligible for annual wellness visits and all recommended preventive services without cost sharing. 2012. Known as the Community Living Assistance In addition, beginning in 2011, Medicare bene- Services and Supports (CLASS) program, it will pro- ficiaries are eligible for an annual wellness visit and vide a cash benefit to individuals with limitations, all recommended preventive services, without any enabling them to purchase nonmedical services and cost-sharing. supports necessary to remain at home. After a five- year vesting period, the program will begin to pro- How Will the Health Care vide benefits to those who need assistance. The pro- System Change? gram is financed through voluntary payroll deduc- By putting more emphasis on preventive and primary tions—all working adults will be automatically care, and by rewarding quality, the Affordable Care enrolled in the program unless they opt out. Act not only improves the affordability of health insurance, it also pushes the health care system to Medicare beneficiaries will receive free deliver more patient-centered, accessible, and coordi- preventive care and no longer face the prescription drug “doughnut hole.” nated care. Under the new reforms, patients will be more Medicare prescription drug coverage currently includes likely to have: a gap—called a “doughnut hole”—where beneficiaries are required to pay 100 percent of their prescription • A physician practice that is accessible drug costs between $2,700 and $6,154. Under health 24/7 and helps arrange specialist reform, Medicare beneficiaries entering the coverage appointments. gap will receive a $250 rebate in 2010. In 2011, ben- A strong network of primary care physicians is eficiaries covered by private drug plans (other than central to a high performance health system that those with high incomes) will receive a 50 percent works for everyone.21 Yet only two-thirds of American discount on brand-name drugs. Beneficiaries will then adults under age 65 report having an accessible pri- receive additional discounts on brand-name and mary care provider (Exhibit 7).22 In addition, nearly generic drugs, to close the doughnut hole by 2020. three-quarters of all adults were not able to see their Rather than paying 100 percent of prescription costs, doctor quickly when sick, found it difficult to get beneficiaries will pay 25 percent. 16 The Commonwealth Fund Exhibit 7. Only 65 Percent of Adults Report Having an Accessible Personal Clinician Percent of adults ages 19–64 with an accessible primary care provider* U.S. Average 2002 66 2005 65 U.S. Variation 2005 White 69 Black 59 Hispanic 49 400%+ of poverty 73 200%–399% of poverty 63 <200% of poverty 53 Insured all year 74 Uninsured part year 51 Uninsured all year 37 0 20 40 60 80 100 * An accessible primary care provider is defined as a usual source of care who provides preventive care, care for new and ongoing health problems, referrals, and who is easy to get to. Data: B. Mahato, Columbia University analysis of Medical Expenditure Panel Survey. Source: The Commonwealth Fund Commission on a High Performance Health System, Why Not the Best? Results from the National Scorecard on U.S. Health System Performance, 2008 (New York: The Commonwealth Fund, July 2008). through to their doctors by phone, or said it was dif- ensure coordination of care and shared accountabil- ficult to get care after regular work hours without ity for health outcomes. This major change from solo going to the emergency room (Exhibit 8).23 or small group practices will require not just funding Health reform will test a new model of care that but technical assistance and infrastructure support. changes the way health care is organized. Patients can To support provider groups as they reorganize—a enroll in a patient-centered medical home, which is challenging task even for large providers—the gov- accountable for ensuring that patients get all recom- ernment will begin to fund regional or state health mended care. By offering care on nights and week- information exchange networks, and test strategies ends, by using information technology and office for ensuring access to after-hours care, case manage- systems to remind patients about preventive care, ment help, and more. and by assisting them with obtaining needed spe- The new law will also establish a Center for cialty care, medical homes provide high-quality, Medicare and Medicaid Innovation, effective January coordinated care. 2011, to oversee and test these and other innovative Financial incentives will help these practices suc- payment methods. Priority will be given to models ceed. New pilot programs will support and reward that both improve quality and reduce costs such as practices with an extra “medical home fee” paid by medical homes, accountable care organizations that insurers and public programs. Moreover, they can assume responsibility for quality and cost across the earn bonuses for ensuring that their patients receive continuum of patient care, funding for care coordi- preventive care and help with managing a chronic nation, and bundled payment for hospital acute and illness. Care teams, including physicians, nurses, post-acute care. pharmacists, and other health professionals, will A New Era in American Health Care: Realizing the Potential of Reform 17 Exhibit 8. Three of Four Adults Have Difficulty Getting Timely Access to Their Doctor Percent reporting that it is very difficult/difficult: Getting an appointment with a doctor the same or next day 30 when sick, without going to ER Getting advice from your doctor by phone during 41 regular office hours Getting care on nights, weekends, or holidays 60 without going to ER Any of the above 73 0 25 50 75 100 Source: S. K. H. How, A. Shih, J. Lau, and C. Schoen, Public Views on U.S. Health System Organization: A Call for New Directions (New York: The Commonwealth Fund, Aug. 2008). By increasing primary care payment rates, and years beginning in 2010; provides state grants for making low-interest student loans more available, health care providers that serve a large percentage of the Affordable Care Act also aims to increase the medically underserved populations; and provides for supply of primary care physicians and advanced a Medicaid global payment system demonstration practice nurses, making it easier for patients to find project that allows up to five states to make global a primary care provider. capitation payments—covering all services provided to a patient during an episode of care—to safety-net • Better access to community health hospitals from 2010 to 2012. It also provides grants centers able to serve more patients. to assist in development of community-based col- Federally qualified health centers provide com- laborative care networks, or integrated health care prehensive primary care and mental health services delivery systems, to serve low-income or medically to some of our nation’s most vulnerable individuals underserved communities from 2011 to 2015. and families. Recent Commonwealth Fund analysis shows that of the 16 million patients who received • Electronic medical records which ensure, care from health centers in 2007, 90 percent were at with the patient’s authorization, complete medical records are accessible or below 200 percent of the federal poverty level, 45 when needed. percent had public insurance, and 40 percent had no U.S. health providers have been slow to adopt insurance at all.24 These centers are truly the corner- electronic health information systems, in part because stone of our nation’s health care safety net, providing of concerns about the value and the costs of imple- care to everyone regardless of their insurance status mentation.25 A 2009 Commonwealth Fund survey or ability to pay. of primary care physicians shows that the U.S. is far The Affordable Care Act expands funding to behind most of its industrialized peers in the use of community health centers by $11 billion over five health information technology (IT) (Exhibit 9).26 18 The Commonwealth Fund Without an information system that ensures the • Doctors and hospitals that are rewarded right information is available at the right time, tests for higher quality and better patient outcomes. are repeated, appointments with specialists have to be rescheduled, and patients are not informed about The prevailing fee-for-service payment system abnormal lab tests in a timely manner (Exhibit 10). rewards physicians for the volume of care they pro- The American Recovery and Reinvestment Act vide, rather than the value of that care. The U.S. lags of 2009 provides financial assistance for physicians behind its counterparts in this regard (Exhibit 11).27 and hospitals to adopt health information systems to The new reform law will reward hospitals for report quality information, deploy decision support achieving benchmark levels of performance in heart to help providers provide the best care, and improve attack, heart failure, and pneumonia care, and for the quality of care. It funds regional extension cen- preventing surgical infections. Starting in October ters that link information systems across providers, 2012, hospitals that meet or exceed the designated so that with the patient’s permission all of a patient’s performance standards will receive enhanced pertinent medical information is accessible to pri- Medicare payments, taken from a pool of money col- mary care physicians, emergency room physicians, lected from all hospitals. These process-of-care mea- specialists, hospitals, nursing homes, and home sures were designed to be achievable—the ultimate health nurses. The Affordable Care Act provides fur- goal for all hospitals should be 100 percent perfor- ther incentives to establish such information systems: mance. By 2012, the Secretary of Health and Human it rewards high-quality care and enables health care Services (HHS) is required to submit a plan to organizations that assume responsibility for total Congress on how to move home health and nursing patient care to share in the savings. home providers into a value-based purchasing payment system. Exhibit 9. Doctors Use of Electronic Patient Medical Records Percent 99 97 97 100 96 95 94 94 80 72 68 60 46 40 37 20 0 NETH NZ NOR UK AUS ITA SWE GER FR US CAN Note: Not including billing systems. Source: C. Schoen, R. Osborn, M. M. Doty, D. Squires, J. Peugh, and S. Applebaum, “A Survey of Primary Care Physicians in 11 Countries, 2009: Perspectives on Care, Costs, and Experiences,” Health Affairs Web Exclusive, Nov. 5, 2009, w1171–w1183. A New Era in American Health Care: Realizing the Potential of Reform 19 The legislation also includes physician payment improve care and reduce spending, HHS is required reforms that encourage physicians, hospitals, and by 2016 to submit a plan for expansion. other providers to join together to form accountable care organizations to gain efficiencies and improve • Hospitals with an incentive to reduce quality of care. Those that meet quality-of-care tar- hospital-acquired infections gets and reduce costs relative to a spending bench- The new legislation demands greater transpar- mark can share in the savings they generate for ency and public reporting on hospitals’ performance Medicare. Furthermore, all physicians and hospitals at preventing infection. Later this year, the Centers meeting benchmarks for high-quality care will be for Medicare and Medicaid Services (CMS) will eligible for bonuses under new value-based purchas- begin reporting rates of medical errors and selected ing provisions. hospital-acquired conditions on its Hospital Compare Web site. Starting in 2011, federal payments for • Better information and support when Medicaid services related to hospital-acquired condi- discharged from the hospital. tions will be prohibited. Beginning in 2015, hospi- U.S. hospital readmission rates for Medicare tals that have among the highest rates of these hospi- patients within the first 30 days following discharge tal-acquired conditions will have their Medicare range from 14 percent to 21 percent.28 Inadequate payments reduced by 1 percent. communication during care transitions—when patients are discharged from the hospital to home or • More patient information on quality of to a nursing facility, for example—often contributes physicians, hospitals, and health plans. to readmissions or avoidable complications. The Physicians who report data on the quality of Commonwealth Fund is working with Massachusetts, their care through a qualified program will be eligible Michigan, and Washington State on the State Action for one-half-percent Medicare bonus payments. In on Avoidable Rehospitalizations (STAAR) initiative addition, HHS will develop a Physician Compare to test interventions that reduce readmissions, such Web site by January 2011. Combining Medicare as making sure patients have the information they data on quality with that of private insurers should need for self-care and have scheduled a follow-up improve the scope and reliability of information on appointment with their physician. performance. To further this aim, the legislation also Medicare payments will be reduced for hospitals authorizes, effective January 2012, the release of with high rates of potentially preventable readmissions Medicare claims data to measure the performance of for certain eligible conditions or procedures, as providers and suppliers in a way that protects patient determined by the HHS secretary. In addition, by privacy. 2013, HHS will develop a national, voluntary pilot program encouraging hospitals, doctors, and post- • More choice of health insurance plans, acute care providers to test “bundled” Medicare including nonprofit plans. payment models spanning three days before and 30 A 2007 Commonwealth Fund survey showed days after a hospitalization. If the pilot programs that 42 percent of workers with employer-based cov- erage had only one choice of health plan. Even when 20 The Commonwealth Fund Exhibit 10. Nearly Half of U.S. Adults Report Failures to Coordinate Care Percent U.S. adults reported in past two years: Your specialist did not receive basic medical information from your 13 primary care doctor Your primary care doctor did not receive a report back from a specialist 15 Test results/medical records were not available at the time of appointment 19 Doctors failed to provide important medical information to other doctors 21 or nurses you think should have it No one contacted you about test results, or you had to call 25 repeatedly to get results Any of the above 47 0 20 40 60 Source: S. K. H. How, A. Shih, J. Lau, and C. Schoen, Public Views on U.S. Health System Organization: A Call for New Directions (New York: The Commonwealth Fund, Aug. 2008). Exhibit 11. Physicians in U.S. Less Likely to Receive Incentives for Quality or Meeting Goals Percent of physicians reporting any financial incentive for targeted care or meeting goals* 100 89 81 80 80 65 62 60 58 40 36 20 0 UK NETH NZ AUS CAN GER US * Can receive financial incentives for any of six: high patient satisfaction ratings, achieve clinical care targets, managing patients with chronic disease/complex needs, enhanced preventive care (includes counseling or group visits), adding non-physician clinicians to practice, and non-face-to-face interactions with patients. Source: C. Schoen, R. Osborn, M. M. Doty, D. Squires, J. Peugh, and S. Applebaum, “A Survey of Primary Care Physicians in 11 Countries, 2009: Perspectives on Care, Costs, and Experiences,” Health Affairs Web Exclusive, Nov. 5, 2009, w1171–w1183. A New Era in American Health Care: Realizing the Potential of Reform 21 workers have a choice of plans, the plans are often actively trying to ensure high quality care—either different products offered by the same insurer. Nor through the way they select participating physicians do all plans provide adequate benefits or ensure and hospitals, or through the information and sup- adequate participation of physicians in essential port they offer to providers regarding benchmark specialties. quality care. Health insurance exchanges will increase the Under health reform, Medicare private managed choice of high-quality private plans and health care care plans that receive a four- or five-star quality cooperative plans, and will make it easy to compare designation will receive bonuses. Health plans that these choices. In addition, the federal government operate through the new health insurance exchanges will contract with private insurance carriers to offer will report on their quality improvement activities, multistate plans through each exchange. At least one including their efforts to prevent hospital readmis- of the new multistate plans must be nonprofit. The sions. By 2015, health plans operating in the government will negotiate contracts, much as it does exchanges will be allowed to enter into contracts for the Federal Employees Health Benefits Program. with hospitals with fewer than 50 beds only if the The new Consumer Operated and Oriented hospitals use a patient safety evaluation system and Plan (CO-OP) program, meanwhile, will foster the have implemented a comprehensive program for creation of nonprofit, member-run health insurance patient discharge. companies, or cooperatives, that will provide cover- age and deliver health services. In making grants, • Reduced health insurance premiums priority will be given to cooperatives that operate on and health spending. a statewide basis, are organized as integrated care Between 2000 and 2009, health insurance pre- systems, and have significant private support. miums rose by 108 percent, while workers’ earnings The insurance exchanges provide an important rose by just 32 percent. As a result, average family avenue for setting quality standards on insurance and premiums for group policies have risen from 11 per- care. In overseeing the exchanges, the HHS secretary cent to 18 percent of median family income.29 In the is charged not only with ensuring a sufficient choice absence of reform, premiums were projected to rise of qualified plans and providers but also with estab- to 24 percent of a family’s income by 2020. Under lishing certification criteria for qualified plans, the new reform law, the average family stands to save requiring plans to provide the essential benefits pack- nearly $2,000 or more in 2019.30 age and meet marketing requirements, and ensuring Premiums will be held down by requirements that essential community providers are included in that limit the percentage of premium revenue going networks and accredited on quality. to administrative costs, and that require carriers seek- ing certification as qualified health plans to submit a • Private plans that are rewarded for justification in advance for any premium increase. better care. Premium growth will be monitored and used as a Currently, employers and Medicare beneficiaries criterion for allowing plans into the exchanges. tend to make choices based largely on premiums, The establishment of health insurance exchanges without information showing whether plans are in 2014 will further lower administrative costs and 22 The Commonwealth Fund premiums in the individual and small-business mar- Challenges in Implementation kets as transparency, choice among plans with com- and Long-Term Concerns parable actuarial value, and new nonprofit plans For the Affordable Care Act to achieve its goals, all enhance competition, and the requirement for peo- stakeholders must work together to realize its poten- ple to obtain coverage broadens the risk pool. tial. Employers play a particularly pivotal role. Our The upward spiral of health care costs will also current system of private employer-based coverage is slow as those that pay for health care begin to adopt preserved under health reform. But employers must innovative payment methods that reward quality and maintain and expand their commitment to financing value, rather than volume. For example, the new coverage for employees, or the cost to the federal gov- Independent Payment Advisory Board within the ernment will grow significantly. executive branch will have significant authority to The insurance exchanges will be open to all indi- identify areas of waste and additional federal budget viduals and small businesses and ultimately may be savings. This 15-member board will present Congress open to firms of all sizes. Risk adjustment and rein- with comprehensive proposals to reduce “excess cost surance will protect against adverse selection. Insurers growth” and improve quality of care for Medicare are required to meet the same conditions inside and beneficiaries. In years when Medicare costs are pro- outside exchanges. But the potential to selectively jected to be unsustainable, the board’s proposals will move higher-risk individuals or small groups to cov- take effect unless Congress passes an alternative mea- erage through the exchange while covering healthier sure that achieves the same level of savings. The individuals directly is worrisome and will need to be board will be prohibited from making proposals that closely monitored. ration care, raise taxes or Part B premiums, or change The new innovation center is charged with rap- Medicare benefit, eligibility, or cost-sharing stan- idly testing innovative methods of payment that will dards. Beginning in 2014, it will issue an annual move away from fee-for-service to a system that public report that provides information on health rewards results. It will be successful, however, only if system costs, utilization, access and quality of care, providers participate and work to develop and exe- and will issue nonbinding recommendations to con- cute the most promising payment and delivery sys- trol medical costs throughout the health system. tem models and implement “best practices” that A Commonwealth Fund report found that the offer better care to patients, lower costs to payers, impact of health reform on health insurance premi- and stable financing for providers. Innovations in ums and health spending will be significant. It esti- Medicare’s method of paying providers should be mates that, on net, the combination of provisions in leveraged by similar changes in private insurance the new law will reduce health care spending by plans. Qualified health plans participating in health $590 billion over 2010–2019. The annual growth exchanges will need to adopt cutting-edge methods rate in national health expenditures would be slowed of payment and ensure adequate networks of partici- from 6.3 percent to 5.7 percent.31 pating providers. Any attempt to game the system by increasing premiums or prices in advance of implementation will increase cost and undermine the success of A New Era in American Health Care: Realizing the Potential of Reform 23 health reform. Particular attention will need to be experience is gained from payment and system paid to reviewing premium and health care prices in reforms will be essential—as will flexibility, the transition to coverage implementation. cooperation, and coordination among public and States and the federal government share in private payers, providers, and patients. Moving implementation responsibilities. Adequate resources toward a high-performance health system requires will be required to ensure effective implementation. vigilance and participation from a diverse set of Economic stresses on states from the economic con- stakeholders. This may prove difficult. Uniting these traction will need to be alleviated to ensure that interests, however, would help bring us closer to a Medicaid remains a quality program ready to absorb health system in which everyone gets the care they a large number of newly eligible poor and near-poor need, and everyone has the opportunity to live a individuals. long, healthy, and productive life. A special focus on our nation’s fragile safety net of hospitals and clinics serving the poor and unin- Conclusion sured will also be necessary in the transition to cover- The Affordable Care Act will usher in a new era in age. Community-oriented health systems must be American health care—one in which every American developed to be accountable for meeting the needs of has access to affordable health insurance coverage and the vulnerable population they serve. Over the lon- no one is turned away simply because they have a ger term, stakeholders must ensure that affordability preexisting condition. The new insurance market pro- provisions for low- and moderate-income families tections set to take effect in this and subsequent years remain adequate, and prevention, control of chronic are designed to work in concert with important pay- disease, and promotion of good health are a national ment and system reforms that will improve access and priority. quality and reduce cost growth for everyone. Reform While all stakeholders understand that we can no is a historic victory for all Americans. But it will longer conduct business as usual, meaningful health require the efforts of all stakeholders to make the reform will require an ongoing commitment to promise a reality. innovation and improvement. Learning quickly as 24 The Commonwealth Fund NoteS 5 S. R. Collins, J. L. Kriss, M. M. Doty, and S. D. 1 Rustgi, Losing Ground: How the Loss of K. Davis, “Universal Coverage in the United Adequate Health Insurance Is Burdening States: Lessons from Experience of the 20th Working Families—Findings from the Century,” Journal of Urban Health, March 2001 Commonwealth Fund Biennial Health Insurance 78(1):46–58. Surveys, 2001–2007 (New York: The 2 K. Davis and S. R. Collins, A New Era in American Commonwealth Fund, Aug. 2008). Health Care (New York: The Commonwealth 6 Ibid. Fund, March 2010). 7 3 Congressional Budget Office, Cost Estimate of The Commonwealth Fund Commission on a High H.R. 4872, Reconciliation Act of 2010, Mar. 20, Performance Health System, The Path to a High 2010, http://www.cbo.gov/doc.cfm?index=11379. Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way (New York: The 8 J. L. Nicholson, S. R. Collins, B. Mahato, E. Gould, Commonwealth Fund, Feb. 2009). C. Schoen, and S. D. Rustgi, Rite of Passage? 4 Why Young Adults Become Uninsured and How For more details, see S. R. Collins, K. Davis, R. New Policies Can Help, 2009 Update (New York: Nuzum, S. D. Rustgi, S. Mika, and J. L. Nicholson, The Commonwealth Fund, Aug. 2009). The Comprehensive Congressional Health Reform Bills of 2009: A Look at Health Insurance, 9 S. R. Collins and J. L. Nicholson, Rite of Passage: Delivery System, and Financing Provisions (New Young Adults and the Affordable Care Act of York: The Commonwealth Fund, Jan. 2010); S. R. 2010 (New York: The Commonwealth Fund, Collins, K. Davis, J. L. Nicholson, S. D. Rustgi, and May 2010). R. Nuzum, The Health Insurance Provisions of 10 the 2009 Congressional Health Reform Bills: C. Schoen, R. Osborn, M. M. Doty, M. Bishop, Implications for Coverage, Affordability, and J. Peugh, and N. Murukutla, “Toward Higher- Costs (New York: The Commonwealth Fund, Jan. Performance Health Systems: Adults’ Health Care 2010); K. Davis, S. Guterman, S. R. Collins, K. Experiences in Seven Countries, 2007,” Health Stremikis, S. D. Rustgi, and R. Nuzum, Starting Affairs Web Exclusive, Oct. 31, 2007, w717–w734 on the Path to a High Performance Health 11 K. Klein, S. A. Glied, and D. Ferry, Entrances and System: Analysis of Health System Reform Exits: Health Insurance Churning, 1998–2000 Provisions of Reform Bills in the House of (New York: The Commonwealth Fund, Sept. 2005). Representatives and Senate (New York: The 12 Commonwealth Fund, Jan. 2010); The J. Gabel. R. McDevitt, L. Gandolfo et al., Commonwealth Fund, Timeline for Health Care “Generosity and Adjusted Premiums in Job- Reform Implementation: Health Insurance Based Insurance: Hawaii Is Up, Wyoming Is Provisions (New York: The Commonwealth Fund, Down,” Health Affairs, May/June 2006 April 2010); The Commonwealth Fund, Timeline 25(3):832–43. for Health Care Reform Implementation: System 13 and Delivery Reform Provisions (New York: The S. K. Long and K. Stockley, “Massachusetts Commonwealth Fund, April 2010); and The Health Reform: Employer Coverage from Commonwealth Fund, Timeline for Health Care Employees’ Perspective,” Health Affairs Web Reform Implementation: Revenue Provisions Exclusive, Oct. 1, 2009, w1079–w1087. (New York: The Commonwealth Fund, April 2010). 14 Collins, Kriss, Doty, and Rustgi, Losing Ground, 2008. A New Era in American Health Care: Realizing the Potential of Reform 25 15 24 C. Schoen, S. R. Collins, J. L. Kriss, and M. M. M. M. Doty, M. K. Abrams, S. E. Hernandez, K. Doty, “How Many Are Underinsured? Trends Stremikis, and A. C. Beal, Enhancing the Capacity Among U.S. Adults, 2003 and 2007,” Health of Federally Qualified Health Centers to Achieve Affairs Web Exclusive, June 10, 2008, High Performance: Results from The w298–w309. Commonwealth Fund 2009 National Survey of 16 Federally Qualified Health Centers (New York: S. D. Rustgi, M. M. Doty, and S. R. Collins, The Commonwealth Fund, April 2010). Women at Risk: Why Many Women Are 25 Forgoing Needed Health Care (New York: The K. Davis and K. Stremikis, Health Information Commonwealth Fund, May 2009). Technology: Key Lever in Health System 17 Transformation (New York: The Commonwealth National Women’s Law Center, Still Nowhere to Fund, Jan. 2009). Turn: Insurance Companies Treat Women Like a 26 Pre-Existing Condition (Washington, D.C.: C. Schoen, R. Osborn, M. M. Doty, D. Squires, J. National Women’s Law Center, Oct. 2009) Peugh, and S. Applebaum, “A Survey of Primary 18 Care Physicians in 11 Countries, 2009: The Commonwealth Fund Commission on a High Perspectives on Care, Costs, and Experiences,” Performance Health System, Why Not the Best? Health Affairs Web Exclusive, Nov. 5, 2009, Results from the National Scorecard on U.S. w1171–w1183. Health System Performance, 2008 (New York: 27 The Commonwealth Fund, July 2008). K. Davis, Closing the Quality Chasm: 19 Opportunities and Strategies for Moving Toward S. R. Collins, K. Davis, C. Schoen, M. M. Doty, a High Performance Health System, Invited S. K. H. How, and A. L. Holmgren, Will You Still Testimony, Senate Committee on Health, Need Me? The Health and Financial Security of Education, Labor, and Pensions, Hearing on Older Americans (New York: The Commonwealth “Crossing the Quality Chasm in Health Care Fund, June 2005). Reform,” Jan. 29, 2009. 20 Kaiser Family Foundation, The Community Living 28 Commission on a High Performance Health Assistance Services and Supports (CLASS) Act, System, Why Not the Best?, 2008. (Washington: Kaiser Family Foundation, Oct. 29 2009). K. Davis, Why Health Reform Must Counter the 21 Rising Costs of Health Insurance Premiums (New K. Davis and K. Stremikis, “Family Medicine: York: The Commonwealth Fund, Aug. 2009). Preparing for a High-Performance Health Care 30 System,” Journal of the American Board of D. M. Cutler, K. Davis, and K. Stremikis, The Family Medicine, March–April 2010 23(Suppl Impact of Health Reform on Health System 1):S11–S16. Spending (Washington, D.C., and New York: 22 Center for American Progress and The Commission on a High Performance Health Commonwealth Fund, May 2010). System, Why Not the Best?, 2008. 31 23 Ibid. S. K. H. How, A. Shih, J. Lau, and C. Schoen, Public Views on U.S. Health System Organization: A Call for New Directions (New York: The Commonwealth Fund, Aug. 2008). 26 The Commonwealth Fund ABOUT the author Karen Davis, Ph.D., is president of The Commonwealth Fund. She is a nationally recognized economist with a distinguished career in public policy and research. In recognition of her work, Ms. Davis received the 2006 AcademyHealth Distinguished Investigator Award. Before joining the Fund, she served as chairman of the Department of Health Policy and Management at The Johns Hopkins Bloomberg School of Public Health, where she also held an appointment as professor of economics. She served as deputy assistant secretary for health policy in the Department of Health and Human Services from 1977 to 1980, and was the first woman to head a U.S. Public Health Service agency. A native of Oklahoma, she received her doctoral degree in economics from Rice University, which recognized her achievements with a Distinguished Alumna Award in 1991. Ms. Davis has published a number of significant books, monographs, and articles on health and social policy issues, including the landmark books Health Care Cost Containment; Medicare Policy; National Health Insurance: Benefits, Costs, and Consequences; and Health and the War on Poverty. She can be e-mailed at kd@cmwf.org. ACKNOWLEDGMENTS The author gratefully acknowledges the following Commonwealth Fund staff for their contributions to this report: Sara Collins, whose analysis of the health reform legislation provided much of the foundation for this report; Kristof Stremikis, for his extensive research support; Cathy Schoen, for her work on the Fund report Path to a High Performance Health System, which described the key strategies for achieving a high performance health system; and John Craig and Ed Schor for their helpful comments on earlier drafts. In addition, the author thanks Ann Gordon and Chris Hollander for their editorial support and Suzanne Augustyn for the report’s lovely design. A New Era in American Health Care: Realizing the Potential of Reform 27 1 East 75th Street • New York, NY 10021 Tel: 212.606.3800 1150 17th Street NW • Suite 600 • Washington, DC 20036 Tel: 202.292.6700