Press Release

Embargoed Until Contact

July 7, 2010
12:01 AM EST

Kay Campbell
(301) 652-1558


Sue Ducat
Director of Communications
(301) 841-9962


July Health Affairs: Roadmaps for the Unexplored Territory of Health Reform

Testing Accountable Health Organizations; Building a Federal Center for Medicare and Medicaid Innovation; Reform's Effect on Drug and Device Makers; Covering Children; Using E-Health Technologies


Bethesda, MD -- The new health reform law charges the U.S. Department of Health and Human Services (HHS) with testing new payment and delivery models intended to improve health outcomes and restrain costs. But as the July issue of Health Affairs points out, implementing all of these activities will require a combination of flexibility, leadership, coordination, and political adroitness if reform is to succeed and stay on schedule.


An as yet untested, but potentially promising, aspect of health reform is stimulating the formation of new accountable care organizations (ACOs) in the Medicare program. The design of ACOs is a work in progress, but in essence, they would constitute a new way of paying for and delivering care to a group of patients at a sustainable cost. Stephen M. Shortell of the School of Public Health at the University of California, Berkeley, and his colleagues argue that ACOs could offer advantages to patients, providers, and payers. However, a key issue will be how to structure and implement the organizations so those potential benefits are maximized. That means structuring flexible models and payment approaches that are adapted to local needs and market conditions. The authors suggest that the government create three tiers of qualification criteria for ACOs, which would allow practices to assume greater risk and receive larger rewards over time. Such a system would also promote a more rapid diffusion of successful models nationally, they say.


ACOs are just one of several potentially promising payment models under consideration by the Centers for Medicaid and Medicare (CMS). In his analysis of proposed reforms, Jeff Goldsmith of Health Futures says there is probably no "silver bullet" to replace Medicare fee-for-service payment but notes that major reform models do allow for sharing of financial risk by hospitals or physicians, a critical factor in reducing Medicare expenses.


The establishment of a new Center for Medicare and Medicaid Innovation by 2011 will strengthen the CMS's authority and capacity to promote much-needed improvements in payment and service delivery, say Michael S. Barr, of the American College of Physicians, and colleagues. But the authors urge regulators to learn from the experience of the Medicare Health Support Program, a three-year experiment in improving chronic care. Lessons include the importance of strong leadership, receptivity of beneficiaries to care management, and having timely data about patients' status.


The success of the Patient Protection and Affordable Care Act depends on skillful and persistent implementation over the next few years by the administration, says Theda Skocpol of Harvard University. But she predicts that there will be many efforts by those opposed to reform to undermine it in various ways--including by reducing taxes or fees, loosening regulations on private insurers, and making health reform less generous to lower and middle-income Americans.


The Impact on Industry


The pharmaceutical and medical technology industries stand to gain from health reform and suffer relatively little pain, according to two analyses by leading industry experts.


• The impact of health reform on drug companies, while significant, is overshadowed by trends that are reshaping pharmaceutical use and the pharmaceutical industry, says Ian D. Spatz of the Rock Creek Policy Group and Manatt, Phelps & Phillips. Unlike 1993, when this industry opposed health reform, pharmaceutical companies played a central role in shaping the debate over health care reform, striking a deal that limited harm to the industry, he says.


• The medical devices and diagnostics industry will face both new challenges and new opportunities under health reform, say David Nexon and Stephen J. Ubl of AdvaMed. Implementation of new payment modalities under health reform will be critical and will play an important role in determining the speed of future medical progress.


Children and Insurance Coverage


Three studies call for policy changes to better serve children through Medicaid and the Children's Health Insurance Program (CHIP) as the country prepares to expand public health coverage to millions of uninsured Americans.


• Children with private health insurance are over six and half times more likely to lose coverage within the three months after one or both parents lose a job compared to children whose parents remain employed. For every 1,000 jobs lost, 311 privately insured children lose coverage, write Gerry L. Fairbrother, of the Cincinnati Children's Hospital Medical Center, and co-authors. They estimate that more than 45 percent of the poorest and most vulnerable of privately insured children have become uninsured. State and federal policy makers need to be much more aggressive in enrolling children in public health insurance when parents lose their job, the authors say, including waiving waiting periods and removing eligibility barriers.


• Roughly two million children enrolled in Medicaid or CHIP became uninsured in 2008, despite still being eligible for these programs, according to Benjamin D. Sommers of Harvard University. His analysis of insurance trends from 2002 to 2008 shows that although retention rates for children in public health insurance programs have improved, enrollment of eligible children has declined.


• A study by Nadereh Pourat of the University of California, Los Angeles, and Len Finocchio of the California HealthCare Foundation examines how Medicaid is addressing disparities in access to oral health care. Despite higher rates of tooth decay, children in Medicaid, especially Latino and African American children, are less likely to visit dentists than are privately insured children. Findings from the California study show the need for much more strategic efforts to reduce disparities in access to dental care among publicly insured children, including boosting Medicaid reimbursement for dental care, expanding training for pediatric care among general dentists, and training dental students in the community.


E-Health and Patient Care


How can online communication improve the patient-provider relationship and health outcomes? Two papers examine how e-mail, mobile phones, and other Internet-based technology can be better harnessed to deliver care.


• A study of 35,423 Kaiser Permanente patients with diabetes and hypertension, or both, showed a marked improvement in the effectiveness of care among those using e-mail to communicate with their doctor, compared with those who used traditional methods. Secure e-mail, integrated with a comprehensive electronic health record, is a powerful tool to achieve the "triple aim" of high-value health care--improving the experience of care, improving the health of populations, and reducing per capita costs, write Yi Yvonne Zhou of Kaiser Permanente and colleagues. Secure patient-physician e-mail has been offered by Kaiser Permanente in Southern California since 2007; all primary and specialty care physicians and approximately three million patients have registered to use it.


• Evidence shows that health benefits and cost savings result from more frequent exchanges of information between patients and clinicians using online communication, writes Ronald F. Dixon of Massachusetts General Hospital. Poor integration of online tools with electronic health records and a visit-based payment system has prevented the health care industry from embracing information technology and modernizing the way we deliver care and engage patients, he observes.




Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears each month in print, with additional Web First papers published weekly at Address inquiries to Sue Ducat at (301) 841-9962 or