Payments by results: what does it mean?
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Although overlaps exist in the provision of home care services financed by Medicare and Medicaid, interactions of the two funding sources at the beneficiary and home care provider levels have not been widely studied. The recent dramatic declines in Medicare home health spending present a rare opportunity to examine how changes in Medicare spending can affect the provision of Medicaid home care services. We conducted a study of Medicare-Medicaid dynamics in the state of Connecticut to shed light on the inter-relationships of the two funding sources.
Wide variation in Medicare home care utilization became apparent in the 1990s. This study examined the impact of patient, provider, agency, and market factors on five measures of home care practice. Data were collected at 44 agencies in eight states. The final analysis sample included 732 home care episodes for which longitudinal patient data were available. Results indicated that patient factors, such as complexity and functional status, were important predictors of the care a patient received. Agency and market characteristics also strongly influenced care practices. Characteristics of the care providers, on the other hand, exerted only minimal influence.
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To meet its goal of universal health insurance coverage, the Clinton health plan requires all employers to offer health insurance to their employees. Using survey data on more than 2,200 small businesses, we estimate how many firms and employees would be affected by this mandate and calculate the financial burden, adjusting for the small-business subsidies recommended in the Clinton plan. Because of the payroll caps, almost 60 percent of small businesses that now offer insurance will experience a reduction in premiums. The average reduction is approximately $1,500 per full-time equivalent (FTE) per year. The majority of firms that offer insurance and face an increase in liability under the Clinton plan will incur an increase of less than $1,000 per FTE per year. Firms that do not now offer insurance will incur, on average, a liability of $500 to $900 per FTE.
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Until recently, when anthrax triggered a concern about preparedness in the public health infrastructure, U.S. health policy and health spending had been dominated by a focus on payment for medical treatment. The fact that many of the conditions driving the need for treatment are preventable ought to draw attention to policy opportunities for promoting health. Following a brief review of the determinants of population health-genetic predispositions, social circumstances, environmental conditions, behavioral patterns, and medical care-this paper explores some of the factors inhibiting policy attention and resource commitment to the nonmedical determinants of population health and suggests approaches for sharpening the public policy focus to encourage disease prevention and health promotion.
The problems of quality and cost in the U.S. health care system are unlikely to be solved without strong leadership from the federal government, which can mobilize action to set national priorities for quality; develop and promulgate standards for care; and stimulate implementation of performance measures and standards for providers. All of these functions would best be carried out by a new federal agency. Furthermore, the federal government should design payment policies based on the performance standards, invest in needed information technology, and invest in research related to improving care and in training professionals to support nationwide quality improvement.
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Infectious and parasitic diseases create enormous health burdens, but because most of the people suffering from these diseases are poor, little is invested in developing treatments. We propose that developers of treatments for neglected diseases receive a "priority review voucher." The voucher could save an average of one year of U.S. Food and Drug Administration (FDA) review and be sold by the developer to the manufacturer of a blockbuster drug. In a well-functioning market, the voucher would speed access to highly valued treatments. Thus, the voucher could benefit consumers in both developing and developed countries at relatively low cost to the taxpayer.
Defenders of tax preferences for nonprofit hospitals and health plans, including Mark Schlesinger and Brad Gray, contend that nonprofits deserve government support because they provide greater "community benefit" than their for-profit counterparts. This argument is unconvincing. There is some evidence that nonprofits deliver marginally more "community benefit" but no evidence that tax exemption is the cause. Absent proof that tax expenditures, including exemption, "buy" social benefits that are worth the cost to taxpayers, these expenditures are unjustified. The better course would be to pay nonprofits for performance, by tying tax benefits to accomplishments (beyond current achievements) in health promotion, quality, and care for the needy.
Although technological innovation can improve health outcomes, the precise magnitude of the contribution and its value are not easily measured. The findings reported by Jonathan Skinner and colleagues temper the favorable conclusions reached by observing correlations between improvement in heart attack outcomes over time with spending on medical products and services. Improvements in health care depend not only on producing better technologies, but also on using technology better.