Improving the Medicare Market Adding Choice and Protections (1996) / Chapter Skim
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E The Structure and Accountability for Medicare Health Plans: Government, the Market, and Professionalism
E The Structure and Accountability for Medicare Health Plans: Government, the Market, and Professionalism
Pages 137-158
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From page 137... ...
This legislation follows the rapid movement of most of the insured population under age 65 from traditional health insurance plans into managed care plans. The reconciliation bill's health plan provisions reflect many agendas for Medicare's future.
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From page 138... ...
It is organized into three sections: • an overview of how governments structure markets, including the traditional fee-for-service health care market; • a consideration of how the new Medicare model would differ from the traditional health care market in terms of who is accountable, what they are accountable for, and how they are held accountable; and • a discussion of three strategies for how federal legislation might structure the respective influences of government, consumers, and professionalism differently to achieve excellent performance from Medicare health plans. ACCOUNTABILITY IN CONTEXT In the modern world, a vast amount of day-to-day activity is organized around "the market." Individuals purchase (rather than produce)
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From page 139... ...
If the light bulb needed to be changed, the market would already have changed it." Examples of instances of more extensive government involvement include the following: • establishing health and safety standards for products and services, for example, food quality, prescription drugs, automobile seat belts, public health inspections, building codes, and Federal Aviation Administration airline standards; • regulatory oversight of the banking and insurance industry to ensure financial solvency; • standardizing information disclosure, for example, requirements for audited corporate financial statements, food labelling, and credit card insurance rates; • standards and inspections, particularly where public funds are involved, to ensure service quality for vulnerable populations, for example nursing home inspections; and • licensure of professions and trades. Many of these interventions involve, to some degree, the
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From page 140... ...
U.S. health care financing has departed from a competitive market system by sharply reducing the role of consumer purchasing decisions that are the ultimate adjudicatory force in most markets.
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From page 141... ...
Medicare has seldom been a market-oriented purchaser of care, nor has it made much effort to inform Medicare enrollee choices about health care providers, treatment options, or competing private health plans. Several laudable exceptions have been disclosure of nursing home inspections, public listing of hospitals with high mortality rates, preventive care mailings, and some use of centers of excellence arrangements.
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From page 142... ...
Yet it also creates opportunities for new professional influences through a health plan's medical director and groups of health professionals working collectively to improve quality of care, assess new medical research and treatment protocols, and devise team approaches to disease management. The reconciliation bill creates the basic market rules for a new Medicare health plan market.
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From page 143... ...
The reconciliation legislation addresses these aspects of a health plan's accountability primarily by requiring that health plans have internal quality assurance programs, in accordance with U.S. Department of Health and Human Services (DHHS)
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From page 144... ...
To generate such competitive market forces, the federal government would provide consumers with comparative information on health plan performance (report cards)
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From page 145... ...
ACCOUNTABILITY FOR MEDICARE HEALTH PLANS How well will the reconciliation bill's health plan accountability structure, through government statutory requirements and consumer choice, work to produce competition for excellence? Skeptics question how well Medicare enrollees, on their own, will be able to be sophisticated and demanding purchasers of health care.
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From page 146... ...
Although there are grounds for seriously questioning the reconciliation bill's provisions, there are a number of ways in which it is a major advance for Medicare's elderly and disabled population. Today's enrollees may only choose between Medicare and HMOs and have no comparative information or organized open season; the reconciliation bill features an organized health plan market, with a common open season for all plans, comparative report card information, more types of plans (including the PPO and point-of-service [POS]
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From page 147... ...
Public policy can opt for a consumer-choice, competitive health plan model for Medicare reform and still strengthen health plan accountability compared with that in the reconciliation bill's provisions. Three broad strategies could make Medicare health plans more effectively accountable and could promote competition for excellence.
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From page 148... ...
The federal government does not normally negotiate on behalf of federal employees to achieve better cost or improve quality. Table E-1 from recent RAND research by Steve Long and colleagues, provides national estimates for the number of health plan choices available to private sector employees.
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From page 149... ...
In Washington State, employers choose the health plan for their workers, and Florida and Illinois employers choose the plans from which their workers may select. Other purchasing alliances offer open employee choice.
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From page 150... ...
Option #1. Raise the standards for entry into the Medicare health plan market.
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From page 151... ...
The federal government could go beyond setting higher minimum entry requirements to actively using Medicare's purchasing power, $160 billion of outlays, to promote competition for excellence in the Medicare health plan market. This option would involve the federal government making use of the best practices of large employer and purchasing alli
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From page 152... ...
Fortunately, the Medicare health plan market is now so concentrated that this expanded role could be initiated selectively on a demonstration or research and development basis. The most promising areas would likely include Florida and California, which have 60 percent of Medicare HMO enrollees and a highly competitive Medicare market.
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From page 153... ...
If the consumer cooperative approach is followed, the federal government could assume this purchasing role in areas underserved by private cooperatives such as rural areas. The federal government could also contract out its purchaser function to state-chartered health plan cooperatives or state employees plans, for example, CalPERs or the Health Insurance Plan of California.
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From page 154... ...
A network of Medicare ombudsman offices, operating in areas with significant Medicare health plan enrollments, could be provided to assist Medicare enrollees who are considering health plan enrollments and those who have complaints about their health plans. The Medicare program now has an underdeveloped consumer assistance function; its placement of personnel in local Social Security offices ceased when HCFA was created.
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From page 155... ...
Given the advances in research methods, his view was that this clinical knowledge could now advance rapidly. If health plan medical directors, accrediting agencies, health care professionals, report card designers, and Medicare enrollees are to perform their roles better, they need a far better scientific basis for their judgments.
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From page 156... ...
Option #2. Assure effective public accountability and high professional standards for the accrediting organizations for Medicare health plans.
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From page 157... ...
COMPETITION FOR EXCELLENCE There are as yet many unanswered questions about how well a consumer-choice health plan market, based on the FEHBP model, will work in fostering competition for excellence. This paper has focused on strategies for strengthening the roles of government, the consumer, and high professional standards while still retaining the basic reconciliation bill market reforms.
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From page 158... ...
158 IMPROVING THE MEDICARE MARKET Stocker, M
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