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« Previous: PART II: RESOURCES FOR THE STUDY: DEVELOPING A MEASURE OF MEDICAL CARE ECONOMIC RISK - WORKSHOP SUMMARY
Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
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1

Introduction

As stated in Part I, the Office of the Assistant Secretary for Planning and Evaluation, in the U.S. Department of Health and Human Services (HHS), requested the National Academies to convene an ad hoc panel of experts to organize, commission papers for, and conduct a public workshop toexplore the development and implementation of a new measure of medical care economic risk as a companion measure to the new supplemental income poverty measure. The workshop will examine retrospective and prospective measures of medical care risk, defined as the risk of incurring high out-of-pocket medical care expenses, including insurance premiums, relative to income (referred to from here on as measure of medical care economic risk). It will consider the variability of risk across populations and the vulnerability of population groups, including the insured, underinsured, and uninsured and those with chronic health conditions, acute but not catastrophic conditions, and catastrophic conditions.

In accordance with its contract charge the Panel on Measuring Medical Care Risk in Conjunction with the New Supplemental Income Poverty Measure held a day-long workshop on September 8, 2011. The presentations and discussions that took place at the workshop are summarized here.

WORKSHOP FOCUS

The U.S. Department of Health and Human Services is responsible for carrying out the provisions of the Affordable Care Act of 2010 (ACA), which is intended to extend health insurance coverage to most Americans. For monitoring the effectiveness of health care reform in providing coverage for low-income families and children, a new Supplemental Poverty Measure

Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
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(SPM) became available to HHS in fall 2011; the new measure subtracts health insurance premiums and other out-of-pocket expenses for medical care from income in determining a family’s resources for basic needs (see Short, 2011). Although this new supplemental measure will deduct medical out-of-pocket expenses from resources prior to determining poverty status, it will not adequately address the medical care economic risk to the population in terms of the adequacy of their health insurance coverage to pay for expected health care needs. The implementation of the ACA significantly increases the need for a companion measure of medical care economic risk, which would estimate the proportion of families and children who are at risk of incurring high out-of-pocket medical care expenses, including insurance premiums in relation to their income, for monitoring the effectiveness of health care reform.

The goal of the workshop was therefore to critically examine the state of the science in the development and implementation of a new measure of medical care economic risk. Such a measure needs to be feasible to implement with data that are available or likely to become available in the near future. Its purpose is to serve a monitoring function by reflecting changes in medical care economic risk that are attributable to implementation of health care reform and other factors.

Workshop participants examined

  • Concepts of medical care economic risk, examining retrospective and prospective measures of risk;
  • Issues surrounding the development of thresholds—the variability of risk across populations, including geographic variations in exposure to medical care economic risk; the vulnerability of population groups, including the insured, underinsured, and uninsured and those with chronic health conditions and acute catastrophic and noncatastrophic conditions;
  • Issues in defining resources—what is included in income in determining the ability to pay for insurance and for medical out-of-pocket expenditures, how the self-employed and different age groups pay for big expenses (assets, loans, free care); and
  • Implementation issues—data availability currently and prospectively, data quality concerns, and timeliness concerns.

WORKSHOP ORGANIZATION

The panel developed the agenda for the workshop in line with the contract charge and identified potential participants. To provide expert and detailed analysis of some of the key issues for the workshop beyond the time and resources of its members, the panel commissioned three background papers from experts in the field. The full text of these papers appears in Part III.

Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
×

The workshop was structured to combine invited presentations and discussions among the participants on the various issues related to the development and implementation of a measure of medical care risk to inform policy that is feasible to collect and that will monitor changes in medical care economic risk over time. The workshop drew people from a wide variety of disciplines and perspectives and from federal and state agencies, the academic community, and private-sector organizations. The workshop agenda and a list of presenters appear in Appendix A. The slides used in support of the presentations are available at http://sites.nationalacademies.org/DBASSE/CNSTAT/Medical_Care_Economic_Risk/index.htm.

PLAN OF THE WORKSHOP SUMMARY

This report is a summary of the presentations and the discussions flowing from the presentations during the sessions outlined in the agenda. Following this Introduction, Chapter 2 sets the context for the workshop. Chapter 3 focuses on the concept of a medical care economic risk measure, the criteria for a useful measure, and the pros and cons of retrospective and prospective measures. Chapter 4 discusses issues in the development of thresholds, tracking geographic variations in exposure to medical care economic risk, trends in financial burden of expenditures from chronic conditions, and trends in health insurance. Chapter 5 addresses issues in defining resources, starting with assessing the distribution and measurement of resources and using income and asset data from the Medical Expenditures Panel Survey, followed by presentations on how the elderly finance medical care and the financial burden of long-term care among the elderly. Chapter 6 discusses implementation issues, including availability, quality, and timeliness of data. Chapter 7 recaps the issues and next steps that may advance the current efforts from the perspective of the participants attending the workshop for developing a measure of medical care economic risk.

It is important to be specific about the nature of this report, which was prepared by the workshop rapporteur. It is a factual summary of what transpired at the workshop and is therefore limited to the views and opinions of those participating in the workshop, reflecting their concerns and areas of expertise and is confined to the material presented. The presentations and discussions were also limited by the time available for the workshop. Neither the workshop nor this summary is intended as a comprehensive review of research relative to a medical care economic risk measure, nor is it designed to generate consensus conclusions or recommendations from the participants. Workshops such as this, even though they are not designed to produce consensus recommendations and conclusions, can be very helpful in documenting what is happening in a field and providing a sense of where the field can move forward.

Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
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Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
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Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
×
Page122
Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
×
Page123
Suggested Citation:"1 Introduction." Institute of Medicine and National Research Council. 2012. Medical Care Economic Risk: Measuring Financial Vulnerability from Spending on Medical Care. Washington, DC: The National Academies Press. doi: 10.17226/13525.
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The United States has seen major advances in medical care during the past decades, but access to care at an affordable cost is not universal. Many Americans lack health care insurance of any kind, and many others with insurance are nonetheless exposed to financial risk because of high premiums, deductibles, co-pays, limits on insurance payments, and uncovered services. One might expect that the U.S. poverty measure would capture these financial effects and trends in them over time. Yet the current official poverty measure developed in the early 1960s does not take into account significant increases and variations in medical care costs, insurance coverage, out-of-pocket spending, and the financial burden imposed on families and individuals. Although medical costs consume a growing share of family and national income and studies regularly document high rates of medical financial stress and debt, the current poverty measure does not capture the consequences for families' economic security or their income available for other basic needs.

In 1995, a panel of the National Research Council (NRC) recommended a new poverty measure, which compares families' disposable income to poverty thresholds based on current spending for food, clothing, shelter, utilities, and a little more. The panel's recommendations stimulated extensive collaborative research involving several government agencies on experimental poverty measures that led to a new research Supplemental Poverty Measure (SPM), which the U.S. Census Bureau first published in November 2011 and will update annually. Analyses of the effects of including and excluding certain factors from the new SPM showed that, were it not for the cost that families incurred for premiums and other medical expenses not covered by health insurance, 10 million fewer people would have been poor according to the SPM.

The implementation of the patient Protection and Affordable Care Act (ACA) provides a strong impetus to think rigorously about ways to measure medical care economic burden and risk, which is the basis for Medical Care Economic Risk. As new policies - whether part of the ACA or other policies - are implemented that seek to expand and improve health insurance coverage and to protect against the high costs of medical care relative to income, such measures will be important to assess the effects of policy changes in both the short and long term on the extent of financial burden and risk for the population, which are explained in this report.

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