Improving the Medicare Market Adding Choice and Protections, Summary (1996) / Chapter Skim
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SUMMARY
SUMMARY
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This call for smaller government comes in the wake of a dramatic revolution that continues to take place in the private health care sector, characterized by the move to managed care, increased vertical and horizonal integration, and new partnerships and relationships among insurers, providers, and purchasers in an increasingly competitive marketplace. All of these changes and new dynamics have placed a special focus on the need to reform the Medicare program to make it more efficient and to secure its future viability.
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General Accounting Office, 19961. The pressing need to reduce Medicare's rate of growth and to create a more competitive, market-oriented environment for health delivery is resulting in a major emphasis on moving beneficiaries away from the current fee-for-service system, in which the vast majority of the Medicare population continues to receive care, into a broad range of managed care and other delivery options, including health maintenance organizations with a point-of-service option, preferred provider options, unrestricted private fee-for-service plans that have utilization review, a network of contracted providers, plans that combine insurance with iEnrollment in managed care is growing at approximately 2 percent per year.
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Only by laying a sound infrastructure in which individuals can make informed purchasing decisions and in which competition is based on quality performance can there be the public confidence needed to move Medicare beneficiaries safely and responsibly into a marketplace for choice and managed care. Among the 37 million Medicare beneficiaries are those with limited financial resources, those with very serious disabling conditions, and those for whom catastrophic medical expenses are commonplace.
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HCFA reports that 70,000 Medicare beneficiaries are enrolling in managed care plans each month. The current national debate over "brining the market" to Medicare and offering choice in health plans with an emphasis on managed care arrangements stimulated the Institute of Medicine to appoint a committee that would provide guidance to policy makers and decision makers on ensuring public accountability, promoting informed purchasing, and installing the necessary protections to help Medicare beneficiaries to operate effectively, safely, and confidently in the new environment of greater health plan choice.
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about ensuring public accountability and informed purchasing in the current Medicare program and other health plans, (2) recommend how public accountability and informed purchasing can be ensured for Medicare beneficiaries in managed care and other health plan choices, and (3)
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In considering its work and statement of task, the committee had to be mindful of the relatively short time frame within which this report had to be completed and the limited resources available to support the commissioned papers/research syntheses and the symposium activity. Given the committee's broad charge and the many issues that potentially fall under the rubric of ensuring public accountability and informed purchasing in an environment of choice and managed care, the committee believed that it was important and essential to set some priorities, parameters, and caveats regarding its work agenda.
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The committee heard evidence that the move to a choice paradigm with an emphasis on managed care represents greater challenges and problems for the current generation of Medicare beneficiaries, particularly the older cohort. With the increasing role of managed care, there is every expectation that future Medicare beneficiaries will have had considerable experience with this new delivery structure and therefore will be better informed and more comfortable consumers of managed care.
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The committee's major charge and responsibility was to provide direction and guidance on how to promote public accountability and informed purchasing by and on behalf of Medicare beneficiaries in a new market-oriented environment characterized by choice and managed care. The committee was cognizant that in the new health care marketplace, Medicare beneficiaries as consumers or customers will be given both greater freedom and more responsibility for choosing their health plans and for making many of the important decisions associated with purchasing their health care and judging its value, adequacy, and responsiveness.
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Conditions of participation should be carefully constructed to bear the burden of assuring informed choice by beneficiaries and accountability by health plans for access to 3For the purpose of this report, the term Medicare choices is an umbrella term for traditional Medicare, Medigap insurance, and alternative health plans (including managed care)
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As indicated elsewhere, it is also critical that risk selection measurement and adjustment technologies be improved for use by traditional Medicare and health plans. As improved technology for measuring risk selection is developed, HCFA should study the traditional Medicare program's risk pool relative to those of other health plans and assess whether program funding fairly reflects Medicare's risk profile to enable it to offer a product of competitive value to beneficiaries.
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From page 11... ...
should have the prerogative of changing plans or rejoining the traditional Medicare program within 90 days. Beneficiaries should be allowed to return to their previous Medigap policy with no additional premium costs and with no restrictions placed on preexisting conditions if they disenroll from a health plan within 90 days and return to the traditional Medicare program.
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Health Plan, Medigap Insurance, and Traditional Medicare Marketing Practices Su brecommerldatiorls To promote comparable levels of accountability, the committee recommends that serious consideration be given to having a new entity approve in advance the public information and marketing materials used by health plans and by the traditional Medicare program (see p.
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The federal government should also collaborate with states to ensure consistency in these requirements and should be able to effectively sanction health plans and Medigap insurance providers that break the marketing rules. RECOMMENDATION 3 The committee recommends that special and major efforts be directed to building the needed consumer-oriented information infrastructure for Medicare beneficiaries.
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From page 14... ...
Emphasis should be placed on providing beneficiaries with easy telephone access to individuals who can guide them on the use of the materials providing comparisons of health plans and who can provide additional clarification and information on plans and providers. To the degree possible, health plans will be asked to submit information in a format that will allow beneficiaries or their families to access the information via the Tnternet.
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. Choice Facilitating Organizations Su brecommert~atiorts The committee recommends that nothing in law or regulation should inhibit the development of private organizations whose major purpose is to facilitate choice for Medicare beneficiaries, including groups that offer preselected panels of health plans.
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Choice Facilitating Organizations may be particularly useful during the early phase of Medicare choice development. The Informed Choice Fund Su brecommert~atiorts The committee recommends that an 7rlformed Choice Furld be developed for use by the federal government for the purpose of strengthening the infrastructure used to inform Medicare beneficiaries of their health plan choices.
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Standardized Packaging, Pricing, and Marketing of Benefits Su brecommert~atiorts The committee wants to preserve the general approach taken by the law governing Medigap insurance without restricting choice to the same extent. it believes that health plans should be moved toward standardized packaging, pricing, and marketing of selected benefit packages to allow beneficiaries to more 5The Physician Payment Review Commission's 1996 Annual Report to Congress provides a worthwhile discussion of the pros and cons of annual versus continuous open enrollment seasons.
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From page 20... ...
The federal government should commission the Medicare Customer Service and Enrollment Center to develop and use formats that allow beneficiaries to make easy and clear comparisons of benefits and other information on Medicare choices, drawing on the best practices used by employers and private and public organizations. The federal government should also suggest questions that Medicare beneficiaries should ask about nonstandard packages.
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Physicians and Professionalism Su brecommert~atiorts The committee recommends that neither the Medicare choices' payment incentives nor their coverage and treatment protocol policies motivate providers to evade their ethical responsibility to provide patients with complete information about their illness and treatment options (such as referrals to a specialist) , what to the best of the provider's knowledge the patient's plan covers, and which health plans in the provider's experience provide the broadest range of services to the patient in question.
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The federal government might well foster competition and innovation among private credentialing agencies for different aspects of this function. Communication with beneficiaries about the quality of a health plan and traditional Medicare plans should be done by the Medicare Customer Service and Enrollment Center by using the latest information available from credentialing processes and the latest techniques for communicating plan performance.
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RECOMMENDATION 7 Serious consideration should be Even and a study should be commissioned for establishing a new function along the lines of a Medicare Market Board, Commission, or Council to administer the Medicare choices process and hold all Medicare choices accountable. The proposed entity would include an advisory committee composed of key stakeholders, including purchasers, providers, and consumers.
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In recommending the consideration of a new function such as a Medicare Market Board, the committee was cognizant of the fact that even a new entity will be limited or circumscribed by the realities of the political and fiscal environments in which it must operate and be accountable. The committee envisions any proposed entity to have general responsibilities in the following areas: · Data collection', data publication', consumer education', arid support Contract with a Customer Service and Enrollment Center for these functions and augment the Center's services by using Choice Facilitating Organizations.
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From page 26... ...
Congress on the extent to which beneficiaries are able to make informed choices, the extent to which government and beneficiaries are succeeding in holding plans accountable for ensuring quality of care and containing costs, and ways to improve the system's performance. Review traditional Medicare and health plan costs and performance to determine whether the amount and form of the federal government's contribution to costs (e.g., premium payment)
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