John Amson Capitman , PhD. Nickerson Professor of Health Policy

1. National Health Policy: CAUSE Goals and the 2010 ReformsApril 27, 2010Osher Lifelong Learning Institute John AmsonCapitman, PhD. Nickerson Professor of Health Policy Central Valley Health Policy Institute California State University, Fresno

2. Health Reform: CAUSE Perspective • The 2009/2010 health reform debate • Underlying Philosophical arguments • Goals for Health Reform • Continuous, Affordable, Universal, Sustainable Effective (CAUSE) • PPAC (+ Reconciliation): Short-term changes • PPAC (+ Reconciliation): Middle-term changes • Low-income/uninsured • Medicare • Privately insured • Assessing PPAC using the CAUSE goals • Next Steps/ The “devil” in implementation detail • Questions

3. The 2009/2010 Health Reform • “Private sector dominant”/ Massachusetts model—approach from outset • No serious debate of Universal/single payer plans • No serious debate of goals for reform • “Card not care” : “health reform” vs “health insurance reform” • Successful lobbying by insurance and pharmaceutical industries • August tea parties---astro-turf and manufactured rage • House and Senate bills passed • Reconciliation after presidential intervention

4. Underlying Political Philosophy Debate • Health care as: • RIGHT • PRIVILEDGE • RESPONSIBILITY • US historic compromise: All of the above • US compromise: International comparisons

5. Health Care CAUSE • IOM Report as basis • Approach based on “real US health system” rather than political philosophy • CAUSE and the goals for reform • Continuous, • Affordable, • Universal, • Sustainable • Effective

6. Continuous • Failure of prevention adherence • Most spending for chronic disease • Unnecessary burden of poor management of chronic disease • Unnecessary burden of preventable disease • No breaks in coverage/primary care access • Patient centered medical home • Reimburse “cognitive services” • Improved transition management

7. Affordable • About 50 million uninsured and about same number find it unaffordable/inadequate---about ¼ find health care unaffordable • Health care costs biggest source of bankruptcy • Employer coverage has decreased –unaffordable to many small businesses—limits mobility • Keep total health care expense to 10% or less of pre-tax income for those within 500% of poverty • Break link between employment and coverage

8. Universal • Uninsured and inadequately insured have worse health outcomes, increase costs of care for all, increase unequal healthcare burden on low-income communities • Exclusion of demographic (e.g. “undocumented”, young adults) and need (e.g. behavioral health, community long-term care) groups increases overall system costs • Universal access promotes efficiency and public health • Remove demographic and need barriers to care

9. Sustainable • Under current law and practice, Medicare goes broke next decade • AND: health care grows ½ of economy reducing US global position • Establish budget discipline for health care at national, state, and local levels • Change reimbursement systems to promote prevention and efficiency • Use financial transactions tax or FAT (financial activity tax) to finance health care

10. Effective • Despite spending more, US has poorer health outcomes across life span • Regional, race/ethnic, rural/urban, condition inequalities in care and outcomes • Over-use of high cost/low efficacy services • Low adherence to prevention recommendations • Change reimbursement and tort laws to promote evidence-based and safe practice • Change reimbursement and regulation to promote prevention and “cognitive” services • Address health inequities through financing and regulatory changes

11. PPAC+ Reconciliation: Short-Term • Persons 23-26 remain on parents’ plan • New federally-funded high risk pool • Tax credit for small employers to purchase coverage • Private insurance reforms (lifetime cap, cancellations, pre-existing conditions for children, preventive services with no co-pay, reporting on loss ratio and cost increase)

12. PPAC: middle-term changesuninsured/low-income • Medicaid expanded to 133% of FPL. • Establish state exchange (uninsured/insured but unaffordable 133-400 %FPL, small business employees) for legal residents. • Subsidized coverage with total exposure less than 10% of pre-tax for 133-200% FPL, but less affordable. • Increased Medicaid rates • Demonstrations, start-up funds, training funds to improve safety-net capacity and effectiveness

13. PPAC: middle-term changesMedicare • Reduced subsidy for Medicare Advantage plans—Medicare solvent for 15 years • Donut hole in Part D closed by 2020—short-term asssistance • Immediate benefit improvements • Annual physical • No co-pay for preventive services • Improves primary care reimbursement • Transitional care benefits • Bundled payments and other reimbursement reform demonstrations • Comparative effectiveness and payment review commissions

14. PPAC: middle-term changesprivate insurance • Individual mandate to hold qualifying insurance • Phased-in reforms (guaranteed issue, community rating, maximum out-of-pocket) apply to employer and individual markets • Establishes level of exposure, loss ratios, minimum benefits etc. for qualifying plans • Tort reforms • Medical home demonstration • Comparative effectiveness research • Oversight for premium increases

15. PPAC: CAUSE Assessment

16. Next Stepsthe “devil” in (implementation) detail 1) PPAC leaves health care profit motive intact. • Insurers will seek to limit (unprofitable) enrollment and coverage • Pharmaceutical and other private health care will seek cost increases • Ineffective, high-technology procedures will be pushed How will CA ensure that abuses actually stop? Can CA develop public options? Can CA institute additional practice and payment changes? 2) PPAC leaves undocumented uninsured (at least 200,000 in SJV) a state and local responsibility. How will CA and local government respond?

17. Next Stepsthe “devil” in (implementation) detail 3) PPAC increases MediCal eligibility, expands Healthy Families, and creates Exchange but leaves much flexibility in benefits design and administrative process. How will CA manage new beneficiaries? How will CA expand safety net services to meet new demand? 4) PPAC will slow but not limit premium rate hikes. What else can CA do to keep health care affordable? 5) PPAC will promote comparative effectiveness knowledge but not require practice change. How can CA promote adoption of evidence-based practice? How can CA promote patient-centered medical home and disease management?