Health and the welfare of U.S. business

Business leaders continue to blame the skyrocketing cost of health care for jeopardizing the global competitiveness of U.S. industries, and they continue to turn to Washington for the solution. Yet after a study of 16 countries, Wharton researchers David Brailer and R. Lawrence Van Horn have discovered that health care costs do not directly hinder U.S. competitiveness. Their conclusion: there is indeed a health care crisis in the United States as well as a competitiveness crisis. But the two are unrelated, and confusing them makes it difficult to solve either one. The real problem, according to the authors, is the hands-off approach that employers typically adopt when it comes to health care. No matter how Washington responds to the health care crisis, employers must explore their own role in ensuring the health of their work force. And they must realize that their role can be a strategic one. Instead of containing costs by fine-tuning benefits packages, companies can control costs and improve health care delivery by treating health care like any other crucial component of production. Brailer and Van Horn propose three strategies for managing health care delivery: First, companies must intervene in the supply side of the health care market. This may mean creating a clinic alone or with other companies, or joining with other companies to procure health care. Second, companies need to translate corporate health benefits into the most cost-effective set of services at the local level. Finally, companies must encourage and educate employees to participate in decisions regarding health care delivery.(ABSTRACT TRUNCATED AT 250 WORDS)     

Asymmetric information in health insurance: evidence from the National Medical Expenditure Survey.

Adverse selection is perceived to be a major source of market failure in insurance markets. There is little empirical evidence on the extent of the problem. We estimate a structural model of health insurance and health care choices using data on single individuals from the NMES. A robust prediction of adverse-selection models is that riskier types buy more coverage and, on average, end up using more care. We test for unobservables linking health insurance status and health care consumption. We find no evidence of informational asymmetries.     

The Employer's Role in Reforming the U.S. Health Care System

In 2005 large U.S. employers spent an average of almost $7,400 per head on health care benefits, a 73% increase in the last five years. If the current trend continues, American companies may find it difficult to compete in a global marketplace where international competitors provide labor with heath care at a fraction of U.S. costs. This article argues that effective reform of the U.S. health care system will require major efforts from all major “stakeholders,” starting with the federal government and state and local governments and including insurance companies and the “consumers” of health care services. By far the important role, however, is reserved for private‐sector employers, which have been the incubator for recent innovations in American health care and are in the best position to coordinate and drive health care reform. But incremental steps in cost‐sharing, small‐scale pilot projects of consumer‐based designs, and employee awareness campaigns will not be enough. Employers need to take radical steps to break through the inertia that has built up among all stakeholders over the past 50 years. Chief among the author's proposals for employers are the following:

• ? In choosing a health care plan for employees, use value‐based purchasing criteria that consider more than just the price and access to services.
• ? Help consumers by demanding information from providers and insurers about the cost and efficacy of health care services, and of alternative treatments, before the choices are made.
• ? Encourage “consumerism” by setting up benefit plans that have a Health Reimbursement Arrangement (HRA) or a Health Savings Account (HSA) component.

As the author states in closing, “Let these reforms begin with employers as the organizing force to drive needed change across the system. That may very well be the only way to save our employment‐based model.”     

Finding a lasting cure for U.S. health care

In "Making Competition in Health Care Work" (July-August 1994), Elizabeth Olmsted Teisberg, Michael E. Porter, and Gregory B. Brown ask a question that has been absent from the national debate on health care reform: How can the United States achieve sustained cost reductions while at the same time maintaining quality of care? The authors argue that innovation driven by rigorous competition is the key to successful reform. A lasting cure for health care in the United States should include four basic elements: corrected incentives to spur productive competition, universal insurance to secure economic efficiency, relevant information to ensure meaningful choice, and innovation to guarantee dynamic improvement. In this issue's Perspectives section, eleven experts examine the current state of the health care system and offer their views on the shape that reform should take. Some excerpts: "On the road to innovation, let us not forget to develop the tools that allow physicians, payers, and patients to make better decisions." I. Steven Udvarhelyi; "Health care is not a product or service that can be standardized, packaged, marketed, or adequately judged by consumers according to quality and price." Arnold S. Relman; "Just as antitrust laws are the wise restraints that make competition free in other sectors of the economy, so the right kind of managed competition can work well in health care." Edward M. Kennedy "Biomedical research should be considered primarily an investment in the national economic well-being with additional humanitarian benefits." Elizabeth Marincola.     

How companies tackle health care costs: Part III.

As corporations look for ways to cut the rising costs of health care, they direct most of their efforts at modifying the demand for services. Some have attempted to effect changes in the health care system as a whole, and a smaller number have instituted programs to attack the problem at its source by improving the health of their employees. This article explores and evaluates existing corporate health promotion activities and concludes that such programs should form the third part of a three-pronged attack on health care costs.     

How companies tackle health care costs: Part II.

In this continuing examination of responses to the growing costs of health care, based on a survey of more than 200 large companies, the author discusses the results of employers' efforts to trim these expenses. Most companies have chosen to meet the cost-cutting challenge by changing demand--that is, by redesigning their health insurance policies--and by changing the suppliers of health care services. After a critical analysis of these mechanisms, the author concludes that most of these strategies do little more than shift the costs from one payer to the next. To affect the total cost of the system, she maintains the business sector must use its power to bring about changes in the reimbursement of providers and in the underlying structure of the health care system.     

How companies tackle health care costs: Part I.

From the experience of a cross-section of Fortune "500" companies and top nonindustrials, these authors develop a profile of the newer types of health plans and benefits designed to cut health care costs. After examining the various plans, their funding, and their results, however, the authors conclude that another form of health insurance, more like other kinds of insurance policies that cover only catastrophic events, is the most promising from all points of view. In a second article, Regina Herzlinger will examine corporate efforts to reshape the system of supplying health care.     

ERISA preemption. St. Francis Medical Center v. Blue Cross and Blue Shield of Kansas, Inc

ERISA preempts hospital's state law action challenging insurer's rule banning health plan participants from assigning their benefit claims to health care providers who had not signed contracts with insurer.     

Medicare on the critical list. Understanding the etiology of the disease will help in the search for a cure.

Medicare, and its companion program Medicaid, came into being as part of Lyndon Johnson's Great Society. Their purpose was to provide the elderly with equal access to high-quality medical care. Though the goals were laudable, the magnitude of the costs and of the effects was unforeseen. As the two programs made medical care available to a large segment of the population, the demand grew. At the same time, private industry became more generous with its health insurance plans. Because of their emphasis on hospital care, the governmental and private industry plans helped push hospital prices up. Now that both sectors are finding the cost of medical care unacceptably high, Congress is proposing remedial legislation and corporations are trying alternative health care plans. These authors explore how well the maladies of Medicare may respond to the various cures that are being proposed.     

Retiree health care benefits: new rules, new strategies.

Two recent court decisions in a retiree health care benefits age discrimination case are likely to bring changes to employer-sponsored retiree health care. After reviewing the cases and how the Equal Employment Opportunity Commission has responded to them, this article discusses employer implications. Although the court decisions add complexity to retiree health plan design, they also provide employers with the valuable opportunity to analyze the match between their retiree health plans and business needs.     

The Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191)

The purpose of this article is to provide a general overview and reference source for the Health Insurance Portability and Accountability Act, which was signed into law by President Clinton last August. The focus of the article is on Title I--Improved Availability and Portability of Health Insurance Coverage, and on Title III--Tax-Related Health Provisions. The author points out that due to the trend towards an incremental approach to health care legislation, this act must be viewed as one of a series of initiatives being taken by the federal government intended to impact the cost of the U.S. health care delivery system.     

Communicating the need for additional savings in the face of retiree health benefit cutbacks.

In preparing for retirement, employees need to consider not only their pension benefits but also the challenge of financing their retirement health care needs. Various trends evolving in our society indicate that future retirees will be increasingly dependent on their own retirement savings. Evidence suggests that employees are not fully aware of the significance of health costs in retirement and must be educated to the need to save for retiree health care expenses. This article discusses the issues of Medicare reduction and retiree health benefit cutbacks and the relative communication and education challenges such issues pose to employers.     

美国医疗保险扩面改革之路的里程碑

虽然美国有两大类三大层次的医疗保险体系,但没有实现如其他大多数发达国家那样的全民医保,缺乏一张覆盖全国的社会医疗网络,始终是美国近10年来备受诟病的社会问题.没有医疗保险的问题始终处于社会政策争议的前沿和核心.之前克林顿总统失败的改革方案核心就是实现全民医保,15年后,奥巴马新医改方案又明确将扩大覆盖面作为其改革的重中之重.然而,历经波折得以通过的奥巴马医改法案却依然面临诸多反对和抗议,其中最为核心的是关乎强制参险的条款.2012年6月28日,美国最高法院裁定奥巴马医疗保险改革的大部分条款合乎宪法,最具争议的强制参险也得以保留,这意味着美国在实现全民医保时代的进程中向前迈出了一大步.     

Direct provider contracting: one employer's experience.

Employers and unions typically offer an array of health care options to their plan participants including many managed care options. However, until recently, few have considered contracting directly with an integrated delivery system (IDS), therefore circumventing health plans altogether. This article offers a case study of one employer's experience with direct IDS contracting, including employee contribution strategy, benefits design and evaluation of the delivery system.     

经合组织国家医疗融资结构的收敛：经验与启示

摘要：医疗融资是医疗体制中的一个重要组成部分,具有募集资金、分担与降低风险、购买医疗服务等功能。文章基于17个OECD国家1972—2010年间的医疗融资数据,采用公共融资占医疗总融资的比例和人均公共融资作为收敛检验指标,利用盯收敛和p收敛两种判定收敛的方法,结果显示,总样本中这两项指标均发生了收敛现象,收敛的程度随医疗体制类型和时间段的不同而不同,且并非总是单调的。文章的结论虽只是初步的,但深入研究医疗融资结构收敛及其成因和效果,必将对我国医疗体制改革尤其是医疗融资政策设计具有重要意义。     

Retiree health care benefits: strategies for a changing workforce.

Demographic, economic and cultural trends foretell a dramatically different environment for retiree health care coverage. This article will focus on the redesign of retiree health benefits to meet the retirement objectives of employers and employees, anticipate changing demographics, and respond to changes in Medicare and other government initiatives, including the Consumer Bill of Rights. The material will discuss recent design trends, including managed care, and present results of a study the author co-authored for the Kaiser Family Foundation on changes in retiree health plans.     

Outlook for hospitals: systems are the solution. Interview by Jeff C. Goldsmith

Like all industries, the health care industry undergoes change. A fragmented system of isolated, free-standing community hospitals is undergoing rapid consolidation into large multihospital corporations and systems. If the history of other industries is any guide, this consolidation will accelerate as the nation instills greater economic competition in the health marketplace. In the future, say the managers of two very different hospital networks, large multihospital systems will predominate. Two big questions, then, are: Should these systems be proprietary or voluntary? And how should they go about meeting people's changing health care needs? These interviews with the physician founders of two multihospital organizations, Hospital Corporation of America in Nashville and Rush-Presbyterian-St. Luke's Medical Center in Chicago, focus on these organizations' contrasting corporate strategies and on the mechanisms that will enable them to survive a shakeout in the industry. The differences between the two systems are linked to the philosophies of their founders, who disagree about how and where patients will get the best treatment.     

The Effects of Uncertainty on the Demand for Health Insurance

This article analyzes the effects of uncertainty and increases in risk aversion on the demand for health insurance using a theoretical model that highlights the interdependence between insurance and health care demand decisions. Two types of uncertainty faced by the individuals are examined. The first one is the uncertainty in the consumer's pretreatment health and the second is the uncertainty surrounding the productivity of health care. Comparative statics results are reported indicating the impact on the demand for insurance of shifts in the distributions of pretreatment health and productivity of health care in the form of first‐order stochastic dominance, Rothschild–Stiglitz mean‐preserving spreads, and second‐order stochastic dominance. The demand for insurance increases in response to a Rothschild–Stiglitz increase in risk in the distribution of the pretreatment health provided that the health production function is in a special class and the price elasticity of health care is nondecreasing in the pretreatment health. Provided also that the demand for health care is own‐price inelastic, the same conclusion is obtained when the uncertainty is about the productivity of health care.     

Defined contribution health plan to consumer driven health benefits: evolution and experience

Today, the idea of placing more choice on employees "consuming" health care and giving them more responsibility and incentive to control health care costs and utilization is alive and thriving in the form of consumer-driven health care. This article examines the evolution of consumer-driven health benefits--including the experience of the first generation of "defined contribution" health care participants (i.e., retirees) and the results of different approaches employers have taken to early consumer-driven plan designs. The author then describes what's needed to answer the question: "Can consumer-driven health care control health cost?"     

Health care fraud: a primer on the schemes and the tools to fight health care fraud

As the national debate over health care reform moves forward, one issue with which policy makers must grapple is the percentage of health care dollars lost to fraud and abuse. The General Accounting Office estimates that as much as ten percent of total health care dollars are lost to the inappropriate, and in some cases criminal, practices of health care providers. This article discusses the characteristics of the health care industry that make it particularly susceptible to abuse and then reviews the efforts by the Office of Inspector General, Department of Health and Human Services, to deter and punish those who defraud the federal health care programs.