The Commonwealth Fund: The Problem of Underinsured, Rising Deductibles Make It Worse

A new report from The Commonwealth Fund was issued last week finding that 31 million people with health coverage in the United States were underinsured in 2014.

The share of working-age adults who had health insurance all year but were underinsured was statistically unchanged since 2010, after nearly doubling, from 12 percent to 22 percent, between 2003 and 2010. People are considered underinsured if they have had health insurance for a full year, but have high deductibles or out-of-pocket expenses relative to their income.

The study, The Problem of Underinsurance and How Rising Deductibles Will Make It Worse, is based on The Commonwealth Fund’s Biennial Health Insurance survey, which interviewed people 19-64 years old between July and December 2014. It could not separately assess the effects of the Affordable Care Act on underinsurance because people insured all year in the survey had coverage that began prior to the law’s major insurance expansions going into effect.

The rate of growth in medical costs and insurance premiums has slowed in recent years. However, millions of consumers continue to be saddled with high out-of-pocket health care costs. While the number of underinsured people in the United States held constant in 2014, the steady growth in the proliferation and size of deductibles threatens to increase underinsurance in the years ahead.

The Affordable Care Act’s coverage expansions and protections have greatly improved the quality of insurance coverage available to people who lack job-based health benefits. In addition, cost-sharing subsidies significantly reduce deductibles for people with low incomes who buy plans in the marketplaces. But those subsidies phase out quickly, leaving families with deductibles that may be high relative to their incomes. In addition, the law has only limited ability to improve the cost protection of employer plans, which is the source of most American’s health insurance. 

Reforms and new approaches are needed to improve the cost protection of health plans. These could include innovations in benefit design that slow growth in deductibles and emphasize incentives that encourage people to utilize, rather than delay, timely health care. In addition, policymakers should identify and address holes in health plans—like out-of-network physicians in in-network hospitals—which are surprising many families with unexpected costs. Finally, systemwide efforts to lower the underlying rate of medical cost growth and share those savings with consumers will be critical.y had coverage that began prior to the law’s major insurance expansions going into effect.

'SHOP' Health Insurance Marketplaces Providing Small Businesses with Choice of Insurers, Plans

Read more below about a new Issue Brief from The Commonwealth Fund.

The Affordable Care Act seeks to help small employers offer coverage by reforming the small-group market and establishing Small Business Health Options Program (SHOP) marketplaces. Seventeen states and the District of Columbia chose to operate their own SHOP marketplaces in 2014, with the federal government operating the SHOP marketplace in 33 states. This brief examines state decisions to enhance the value of SHOP marketplaces for small employers and finds that most have set predictable participation and eligibility requirements and will offer a competitive choice of insurers and plans. States also are seeking to facilitate small employers’ shopping experience through online tools and access to personalized assistance. While not all SHOP marketplaces are yet functioning as intended, their establishment offers an opportunity to identify successful strategies for improving the affordability and accessibility of coverage for small employers.

Access the full Issue Brief here.

PCORI's Budget Doubles in 2014

According to a Congressional Quarterly article published on the Commonwealth Fund's website, the 2014 budget for the Patient-Centered Outcomes Research Institute (PCORI) will increase from $320 million in 2013 to $650 million next year because of a surcharge on Medicare premiums and premiums charged by commercial insurers and employer plan sponsors under the health law. Some of the money will focus on product-to-product comparisons, according to a new analysis by the California Healthcare Institute. But most of it won't, instead paying for studies on how to improve teamwork among doctors, for example, or the ways in which doctors communicate with patients about potential treatments. Insiders refer to such approaches as "systems interventions."

That differs from the original vision many promoters of comparative effectiveness research had for the field—one in which studies would be focused predominantly on investigating which drug, device or other treatment worked best for a particular condition. The two fields—treatment comparisons and system interventions—can work hand in hand. However, the full funding of PCORI in 2014 is a development most observers haven't noticed when they discuss the big changes coming next year under the health law. But it's an important one, analysts say.

Finding Consensus on Policies to Slow Health Spending Growth

The United States spends $2.7 trillion on health care each year. While this is by far the most in the world, our health outcomes generally aren’t better than those of other countries. Fortunately, there a number of policies that could potentially control our health spending.

The Commonwealth Fund recently asked researchers at George Washington University to identify major areas of consensus among seven prominent proposals advanced in the past year to contain U.S. health costs and transform the health care delivery system. To learn what they found, view our new online matrix, Comparing Health Care Cost-Containment Proposals, which organizes the policy options by category and by payer. A companion blog post by The Commonwealth Fund's Stuart Guterman and Rachel Nuzum, meanwhile, highlights the key commonalities, from improving market competition to setting spending targets.

The organizations with proposals analyzed for this project include: 

• Bipartisan Policy Center 
• Brookings Institution 
• Center for American Progress 
• The Commonwealth Fund Commission on a High Performance Health System 
• National Coalition on Health Care 
• Partnership for Sustainable Health Care 
• Moment of Truth Project

Should "Value" Be the New Mantra in Health Care?

In a guest post on the Harvard Business Review blog, Commonwealth Fund president David Blumenthal and senior researcher Kristof Stremikis write that while "putting value at the forefront of health care reform may seem obvious and non-controversial," a number of challenges need to be met before we can "turn the promise of value measurement into the reality of better care at lower cost." What seems special about it is that, seemingly simple, it is actually complex and subtle. Under its umbrella, a wide range of interested parties can find the things they hold most dear, from improved patient outcomes to coordination of care to efficiency to patient-centeredness. And it is intuitively appealing. As Thomas Lee noted in the New England Journal of Medicine, "no one can oppose this goal and expect long-term success." The question, of course, is whether the term will help spur the fundamental changes that our health care sector so desperately needs. In this regard, a closer examination of the value concept confirms its appeal but also exposes the daunting challenges facing health system reformers.

Many State-Run Health Insurance Exchanges Set to Exceed Requirements for Plan Choice, Quality Reporting

Consumers and small businesses in states that have opted to run their own health insurance exchanges will likely have a greater ability to make informed choices regarding their coverage as well as more information about plan quality than what current federal regulations require, a new Commonwealth Fund report finds. The report, by researchers from Georgetown University's Health Policy Institute, examines the key design decisions made by the 17 states that, along with the District of Columbia, chose to establish their own exchanges. Use the Commonwealth Fund's interactive map to explore how health insurance exchanges are shaping up across the U.S., or read a Health Affairs primer on the exchanges and what lies ahead.

Wellness Programs Could Factor into Employer Future Insurance Decisions, Expert Says

The Commonwealth Fund reports that the success of workplace wellness programs could have an impact on whether employers decide to move their workers into the new health insurance exchanges, or marketplaces, an official from CVS Caremark suggested at an event last week.

Troy Brennan, executive vice president and chief medical officer of CVS Caremark, said he thinks there is a big chance that many employers will be considering how they can use the exchanges in 2017 or 2018. (The ACA sets 2017 as the date when states have the option of opening up exchanges to employers with more than 50 employees.)  Workplace wellness programs factor into that picture, Brennan argued, "so it's a really critical time" to examine them. "The reason why you offer workplace-based health insurance is because you think you're going to be able to promote better health in your workforce, and as a result of that, have a better operating company," he said. "If these wellness programs don't work or if they turn out to be sort of bankrupt or maybe they're just targeting the wrong people, then I think there's less and less of an argument to maintain employer-based insurance and a lot of employers are going to be looking at sort of, "what should we be doing with the exchanges?'"

Brennan spoke at an event focused on the effectiveness of wellness workplace programs. It was sponsored by the Alliance for Health Reform and The Robert Wood Johnson Foundation.

Commonwealth Fund's Biennial Health Insurance Survey

Eighty-four million people―nearly half of all working-age U.S. adults―went without health insurance for a time last year or were underinsured because of high out-of-pocket costs relative to income, according to a new study based on findings from the Commonwealth Fund's 2012 Biennial Health Insurance Survey.

At the same time, the report finds that the proportion of young adults who were uninsured during the year fell from 48 percent to 41 between 2010 and 2012, reversing a decade-long trend for the 19-to-25 age group. The health reform law’s provision allowing young people to remain on their parents’ health insurance until age 26 is likely the reason for the improvement, the authors say.

The survey also finds that medical debt continues to burden U.S. households, leading in many cases to lower credit ratings and even bankruptcy. In 2012, 41 percent of working-age adults, or 75 million people, had problems paying their medical bills or were paying off medical bills over time.

Commonwealth Fund Tracking State Insurance Market Reforms

Last month, federal regulators at the Center for Consumer Information and Insurance Oversight released guidance on how the Affordable Care Act’s new private insurance market reforms—including guaranteed access to health care coverage and the ban on denying or limiting benefits for people with preexisting health conditions—will be enforced. While states are the primary regulators of insurance, the guidance recognizes that the Centers for Medicare and Medicaid Services is responsible for enforcing the reforms in states that lack the authority or ability to do so.

In a new blog post, Katie Keith, J.D., and Kevin W. Lucia, J.D., of the Georgetown University Center on Health Insurance Reforms describe what the new guidance means for enforcement of some of the law’s most significant reforms. An interactive map, meanwhile, highlights the legislative steps states have taken―or not taken―to enforce the insurance protections.

Health Insurers Spent Less Than 1% of Premium Dollars on Care Improvement in 2011

Health insurance companies reported spending an average of less than 1 percent of the premiums they collected from policyholders in 2011 on activities directly supporting improvement of health care quality, according to a Commonwealth Fund study released today.

The new report, by Mark A. Hall and Michael J. McCue, looks at differences in medical loss ratios, consumer rebates, and quality improvement expenses, based on insurers' corporate structure and ownership. The authors find that insurance companies spent a combined $2.3 billion on direct quality improvement activities―an average of $29 per subscriber. The study examines all segments of an insurer's book of business, from individual market policies to large group self-insured.

The Affordable Care Act's medical loss ratio rule requires insurers to spend at least 80 or 85 percent of premiums on medical claims and quality improvement activities―those likely to improve health outcomes, prevent hospital readmissions, improve patient safety, and increase wellness and health promotion―or else pay rebates to consumers.

New Research on Corporate Wellness Programs: Do They Work?

More employers are launching wellness programs to encourge healthy behaviors among their workers and control health care spending. But can these initiatives deliver on their promise?

In the new issue of Health Affairs, Commonwealth Fund–supported researchers led by Gautam Gowrisankaran, Ph.D., report on their study of one wellness program begun in 2005 by a St. Louis hospital system. Their findings show a substantial decrease in hospitalizations for targeted conditions, but they also reveal that the associated cost-savings were counterbalanced by increased spending for prescription drugs and outpatient care, not to mention the costs of the program and incentives themselves. At least in the short term, it appears that while wellness programs may improve employee health and productivity, they're unlikely to lead to substantial reductions in health care spending.

This research is important to learn from as employers move more toward an approach of population health management.  In addition, it remains to be seen whether the new stronger ACA incentives for health-contingent wellness programs have the potential to show substantial reductions in health care spending.

New Tool for Tracking Accountable Care at State Level

A number of states are at the forefront of efforts to design and implement innovative payment and delivery approaches that advance accountability in health care delivery.

Encouraged by state legislative mandates, as well as provisions in the Affordable Care Act to reorient federal health spending to promote accountable care, these states are developing a variety of initiatives to achieve better health outcomes at lower costs.

With the support of The Commonwealth Fund, the National Academy for State Health Policy (NASHP) is tracking state activity to promote accountable care on its interactive State Accountable Care Activity map. NASHP has defined "accountable care" models as organizations or structures that:

• assume responsibility for a defined population of patients across a continuum of care; 
• are held accountable through payments linked to value and reliable performance measurements; 
• demonstrate that savings are achieved in conjunction with improvements in care.

Coalitions are invited to check out the activities in their states and examine whether there are ways for employers to be involved in these state-level efforts.

Commonwealth Fund Case Study Highlights Telehealth

Remote patient monitoring—better known as telehealth—can facilitate communication between patients and their caregivers and engage patients in managing their own care. A new set of case studies published by the Commonwealth Fund highlights three successful telehealth programs:

• The Veterans Health Administration's Care Coordination Home Telehealth program, which demonstrates the possibility of implementing telehealth on a broad scale and achieving cost-effective, high-quality outcomes for chronic care patients. 
• Partners HealthCare's Connected Cardiac Care Program for heart failure patients, which has generated an estimated $10 million in savings since 2006 for more than 1,200 enrollees. 
• Colorado-based Centura Health at Home, which has merged a clinical call center with telehealth to improve outcomes for older patients after hospital discharge. 

Each of the programs started as a pilot with the support of a small group of advocates who believed in the technology’s potential for offering improved care for a targeted population. Early lessons include promoting a culture of openness and preparedness; using a multidisciplinary team-based approach; establishing leadership support; minimizing barriers to patient enrollment, like cost; and including nonstandard measures, like patient experience and staff satisfaction, in program evaluations.  Other commentary and research on telehealth point out the natural alignment between telehealth and the patient-centered medical home - a concept some employers are already utilizing to help manage employee population health.

New Commonwealth Fund Cost Containment Report

In a new report released this week, the Commonwealth Fund Commission on a High Performance Health System, to hold increases in national health expenditures to no more than long-term economic growth, recommends a set of synergistic provider payment reforms, consumer incentives, and system-wide reforms to confront costs while improving health system performance. This approach could slow spending by a cumulative $2 trillion by 2023—if begun now with public and private payers acting in concert. Payment reforms would: provide incentives to innovate and participate in accountable care systems; strengthen primary care and patient-centered teams; and spread reforms across Medicare, Medicaid, and private insurers. With better consumer information and incentives to choose wisely and lower provider administrative costs, incentives would be further aligned to improve population health at more affordable cost. Savings could be substantial for families, businesses, and government at all levels and would more than offset the costs of repealing scheduled Medicare cuts in physician fees.

The report provides specific recommendations organized around three guiding principles: 1) Provider Payment Reforms to Promote Value and Accelerate Delivery System Innovation, 2) Expand Options and Encourage High-Value Choices by Consumers, and 3) Systemwide Action to Improve How Health Care Markets Function. This report is different from the myriad cost containment reports published lately because it focuses on the need to contain costs across the entire health care system, and explicitly acknowledges the roles that both employers and employees have in this endeavor.

New and Updated Data on WhyNotTheBest.org

Updated and expanded performance data on measures of patient safety and health care quality are now available on The Commonwealth Fund's dedicated website, WhyNotTheBest.org. The new data, for measures developed by the Agency for Healthcare Research and Quality, come from hospitals in 16 states (including the four newly added states of Massachusetts, Nevada, Oklahoma, and Virginia) and are based on reports from all payers—Medicare, Medicaid, and private insurers. WhyNotTheBest.org is a unique source for exploring these data across states and regions.

In particular, new measures have been added to the following data sets:

• inpatient quality indicators, which track mortality and utilization rates for various conditions; 
• patient safety indicators, which track potentially avoidable complications and adverse events; and 
• prevention quality indicators, which measure hospital admissions that might have been avoided with better medical care outside of the hospital.

Commonwealth Fund Publishes Health Care Costs Report

A set of synergistic policies designed to accelerate innovation in care delivery could slow health spending growth by $2 trillion over 10 years, according to a new report released today by the Commonwealth Fund Commission on a High Performance Health System. The report, Confronting Costs: Stabilizing U.S. Health Spending While Moving Toward a High Performance Health Care System, describes a comprehensive set of policies to change the way public and private purchasers pay for care, enhance consumers' choices of high-value care, and address the market forces driving up costs.

Estimates show that if the Commission's strategic approach is implemented soon, with public and private payers acting in concert, over 10 years federal spending could be reduced by $1.04 trillion, state and local government spending by $242 billion, and employer spending by $189 billion, compared with projected trends.

Families would also realize significant savings—$537 billion over a decade—as a result of lower future health insurance premiums and out-of-pocket costs. The Commission endorses the goal of holding health care spending growth to no more than the rate of long-term growth in the economy while at the same time improving health system performance.

Employer Health Insurance Premiums Rose 62%, Deductibles More Than Doubled Across States from 2003 to 2011

Average premiums for employer-sponsored family health insurance plans rose 62 percent between 2003 and 2011, rising far faster than incomes did in all states, according to a new Commonwealth Fund analysis that tracks trends in job-based coverage state by state.

The study also finds that annual costs for the share of insurance premiums paid by workers grew an average of 74 percent, and deductibles more than doubled during the period. Total health insurance premiums now amount to 20 percent or more of annual median family incomes in 35 states, affecting 80 percent of the U.S. working-age population.

Commonwealth Fund Research on Shared Decision Making Tools

When patients are given decision aids, such as educational booklets, DVDs, or interactive tools, to help them make treatment choices, they are more knowledgeable and satisfied with their care. But the use of such aids as part of "shared decision making"—a communication approach that seeks to balance clinicians' expertise with patients' preferences—has until recently been limited to research trials. Now some health systems and public policymakers are supporting more widespread use of shared decision making in efforts to promote patient engagement, reduce inappropriate use, and control costs.

The latest issue of Quality Matters from the Commonwealth Fund examines a recent national IOM survey of adults facing a medical decision—to take a new medication, have elective surgery, or undergo a cancer screening—in which patients overwhelmingly said they wanted to learn about the risks associated with various treatment options and have their providers listen to them. But less than half of patients reported that their provider asked them about their goals and concerns for treatment.

To address this problem, some private payers and public policymakers, as well as some health care systems, are encouraging the practice of shared decision making, which involves not just a physician recommending a course of action, or a patient left on their own to make a choice, but rather both parties working together to balance clinicians' experience and expertise with patients' preferences and values. Decision aids such as educational literature, videos, or Web-based tools are designed to help patients prepare for these conversations by weighing the potential benefits, risks, and uncertainties of a medical procedure.

As we work to implement more value-based purchasing strategies, shared decision making can play an important role in changing the physician-patient relationship to work toward providing more patient-centered care.

Join a Webinar—Using WhyNotTheBest.org to Benchmark and Improve Performance: Stories from the Field

WhyNotTheBest.org gives health care professionals and researchers a tool to benchmark health care performance and find resources to guide their improvement efforts. Created by The Commonwealth Fund, the free Web site brings together performance data from multiple sources to track the delivery of recommended care, readmission and mortality rates, incidence of bloodstream infections, patient safety and quality, use of health information technology, and more. Users can build reports comparing individual hospitals or hospital groups to others like them, such as safety nets, academic medical centers, or rural hospitals. With the site’s interactive map, they can explore regional variation and track delivery system reforms, like the emergence of accountable care organizations.

Join a webinar on Friday, November 16, at 11 a.m. E.T. to see a demonstration of WhyNotTheBest.org and hear stories from the field from those using the tool in their work.

Speakers include Joy Gill, clinical data analyst, Adventist HealthCare; Justine Carr, M.D., chief medical officer and senior vice president of quality and safety, Steward Health Care System; and Kim Paull, director of analytics, Rhode Island Office of the Health Insurance Commissioner, with Kevin Quinn, vice president, payment method development, Xerox State Healthcare. The Commonwealth Fund's Anne-Marie Audet, M.D., M.Sc., and Martha Hostetter will demonstrate the tool and moderate the event.

To register, go to https://cc.readytalk.com/cc/s/showReg?udc=y1pzq7oj8el8

Few ACOs Ready to Accept Financial Risk for Patient Management

Few hospitals interested in becoming accountable care organizations are ready to take on financial risk, according to a survey released by The Commonwealth Fund. There are already 154 Medicare Shared Savings Program ACOs serving nearly 2.4 million Medicare beneficiaries, and dozens more ACOs are involved in partnerships with private insurers. But so far, the majority of ACOs are pursuing models that allow them to share in any savings they achieve without losing money if they fail to cut costs. In other words, there’s a lot of carrot but not much stick.

The Commonwealth Fund report suggests that’s likely to continue, though hospitals are making advances in how they manage patient care, specifically related to use of data and electronic medical records. The nationwide survey of nearly 1,700 hospitals measured hospitals’ readiness to participate in ACOs. It was conducted in September 2011, before the federal government released final rules for the Medicare Shared Savings Program.

Only thirteen percent of respondents reported that they were either already participating in an ACO, or planning to participate in the next year.

The results show that hospitals already involved with ACOs are improving the coordination of patient care and doing a better job of ensuring safe transitions among care settings—both hallmarks of the ACO model. At the same time, it’s clear that hospitals will need to strengthen their capacity to undertake population-based care and to fully assume financial risk for the patient population for which they are accountable. The survey results indicate that the use of data analytics and electronic medical records are an integral part of successful population health management.