An Orientation to Health Policy and Legislation

An Orientation to Health Policy and Legislation

Topical Overview:

1) The Foundations of U.S. Exceptionalism in Health Care

2) The Patient Protection and Affordable Care Act (ACA)Historical and Political ContextPolicy AimsBasic StructurePolitical Prospects for Successful Implementation

3) The ACA and Washington StateProgress Toward ImplementationImpacts on Safety Net Hospitals

Gunnar Almgren, Associate Professor of Social Work and Social WelfareUniversity of Washington, Seattle Campus

2

American Exceptiionalism in Health Care U.S. Health Care Expenditures as a Proportion

of the GDP

Source: OECD Health Data, 2012

Comparison of OECDPublic Expenditures with US

3

American Exceptiionalism in Health Care Health Insurance Coverage for Core Health Care Services

Source: OECD Health Data, 2012

Source: OECD, Health at a Glance, 2011


The Foundations of U.S. Exceptionalism in Health Care:

Libertarian Political Philosophy and Federalist Governance Structure

The Power of the AMA/Medical Free Enterprise Ideology at Critical Junctures in U.S. Policy History

Weak and Divided U.S. Labor Movement

Path Dependence

Stakeholder Mobilization

The Commodification of Health Care and Health Care Inflation

Racial/Ethnic Diversity and Racial/Ethnic Social Stratification


An Orientation to Health Care Policy and Legislation: Foundations of U.S. Exceptionalism in Health Care

Phases in the Evolvement of the Employment Based Health Care System and the Evolvement of the Crisis in Insurance Coverage

1) Pre-WWII 1929-1940: Founding and development of nascent health insurance industry (Blue Cross 1929, Blue Shield 1939 and Formation of AMA/AHA/Blues Alliance)

2) Post WWII 1946-1965: Hill-Burton, Taft-Hartley and Expansion of Employment Based Insurance Model

3) 1965-1980 Golden Era of Private/Public Health Care Partnership

4) 1980-1994 Era of Segmentation, Commodification and Public/Private Retrenchment

5) 1994-2009 ERA of Abdication, Institutionalized Incrementalism, Employment-Insurance Devolvement

6) 2010------- Centrist Reform, PPACA

Gunnar Almgren, The University of Washington

An Orientation to Health Policy and Legislation: The PPACA

The Emergence of the Centrist Health Care Reform: Why Did Obama Succeed Where Others Had Failed?

• Escalating Loss of Health Insurance/Medical Bankruptcy Among Middle Class

• Electoral Mandate

• Party Control of Both Houses of Congress

• Obama’s Adept Splitting of PhRMA/AHIP Block

• Lessons Learned Among Progressives From Clintons’ 1994 Health Care Reform Debacle


The ACA: Health Care Reform Policy Alternatives

Roads taken and not taken….Employer Based Insurance/Means-Based Public Residual

Health Care 17.3% of GDP

Medicare Trust Fund Collapse

50 million uninsured

Employment Insurance Devolution

Safety Net Hospital Closures

Limited Entitlement PublicSocial Insurance/PrivateInsurance Residual

State Level HealthReform –Innovation andDiffusion

Major Points to Keep in Mind About Patient Protection and Health Affordability Act: AKA Health Care Reform, Obama Care, Government Takeover of Health Care etc…

1. The PPACA Seeks Three Major Accomplishments within Current Mixed Public/Private Based System of Health Care Finance:

• Expand Health Insurance Coverage to Over 90 Percent of Legal U.S. Residents

• Bend the Curve of Health Care Inflation

• Increase Health Care Quality

Households

Federal Government

Health Insurance Industry

State Government

Federal SubsidiesInsurance Exchanges and Safety-Net Programs

Medicare ReformACO’s, Reduced Payments, Increased Subsidies for Safety-NetHospitals

Insurance Market Reform

ExpandedSafety NetPrograms

Individual Health InsuranceMandate Coupled withTax and IncomeSubsidies for HealthInsurance Purchase

Large Employer Mandate andSmall Business Subsidies

Providers

Employers

The Essentials of PPACA’s (Carrots and Sticks) Approach to Health Care Reform

Employer Group Insurance Plans

Individual Insurance Plans

Employment Based Health Insurance

Major Points to Keep in Mind About Patient Protection and Health Affordability Act: AKA Health Care Reform, Obama

Care, Government Takeover of Health Care etc…

2. The PPACA Has Three Major Components:

• Insurance Market Reform

• Coverage Expansion

• Health Care System Delivery Reforms



3. PPACA’s Key Insurance Market Reforms Include:

• Elimination of Lifetime Limits, Pre-Existing Conditions Clauses, and Imposition of Lower Out-of-Pocket Limits

• Limiting the Allowable Administrative Costs, Including Profits, in the Pricing of Premiums

• Introducing Employer and Individual Insurance Coverage Mandates, with tax penalties and subsidies (effective 2014)

• Creating at the State Level, Health Insurance Co-Ops and Insurance Exchanges

• Defining basic benefit packages



4. Coverage Expansion Provisions Include:

• The provision of various forms of subsidies to individuals and employersfor the purchase of health insurance, along with employer and individualinsurance coverage mandates (as previously described)

• The expansion of mandatory Medicaid eligibility criteria, supported byincreased federal subsidies to states for newly eligible Medicaidenrollees

• The promotion of state level “basic health plan” options.

• Requiring that all individual and group plans extend the maximum age of coverage for adult children up to age 26 (effective in 2010).



5. Health Care System Delivery Reforms Include

• Heavy investment in Preventative Health Services

• Increased Investment and Payment Incentives in Primary Care

• Significant Investment in Innovative Approaches to the Management of Chronic Disease, as Well as Payment Mechanisms that Reward Cost Effective Clinical Care

• Identification and Elimination of Inflationary Provider Incentives (such as Proprietary Doctor Owned Hospitals)

Service Delivery Reform: From Silos to Integrated Health Care Organizations

Source. Leo Greenawalt, Washington State Hospital Association,Lecture UW School of Social Work, October 19, 2010. Used with Permission

Health Care System Delivery Reforms: From Silos to Integrated Health Care Organizations

Source. Leo Greenawalt, Washington State Hospital Association,Lecture UW School of Social Work, October 19, 2010. Used with Permission

Three Criteria for Successful Social Policy:

1. The policy must be implemented as designed.

2. The policy must achieve its basic aims.

3. The policy’s unintended consequences must not be so detrimental as to outweigh its intended benefits.

Complex and sweeping policy innovations, where ultimately successful, achieve their accomplishments in a protracted series of revisions that adapt both to political realities and what is learned over the course of policy implementation.

The ACA: Political Prospects for Successful Implementation The ACA: Political Prospects for Successful Implementation

• ACA Usefulness as a Target of Partisan Politics

• ACA’s Status as Redistributive Social Welfare Policy

• The Vulnerability of the ACA to “Death From 1,000 Cuts” through Litigation and Legislation at All Levels

• Constitutional to the ACA in the form of litigation from individuals, states and provider groups.

• The Complexity of the ACA

• Among Progressives, Ideological Division and Ambivalence About ACA

• Opposition of Powerful Stakeholders, Most Notably AHIP

• Unintended Consequences (e.g closure of Safety Net Hospitals in “Red” States)

The ACA: Political Prospects for Successful Implementation


The ACA and Washington State:

Progress Toward Implementation: Safety Net Health Care

1) Community Health CentersWashington State’s 25 CHCs’ have been allocated 109 million to support ongoing health center operations and to establish new health center sites, expand services, and/or support major capital improvement projects.

2) Medicaid/SCHIP (aka Apple Care)Under the ACA, states will be subsidized to expand their Medicaid enrollment to cover those under age 65 with incomes up to 133% of the FPL. The ACA also provides increased federal subsidies to the SCHIP program. In Washington, this translates to 500,000 newly eligible for Medicaid (Buettgens et al, (2012) The ACA Medicaid Expansion in Washington, The Health Policy Center, Urban Institute, Wash. DC ).



The ACA and Washington State:Progress Toward Implementation: Safety Net Health Care, Medicaid/Apple Care


Source: Buettgens et al, The ACA Medicaid Expansion in Washington, The Health Policy Center, Urban Institute, Wash. DC

An Orientation to Health Policy and LegislationThe ACA and Washington State:


3) Impacts on Safety Net Hospitals*

It is estimated that of the 330,000 new Medicaid/Apple Care enrollees under the ACA, 55,000 will be children

Overall, hospital utilization among Medicaid patients is expected to increase by 7 percent by 2019 –although these new Medicaid patients have a higher average level of overall health than the baseline Medicaid population.

Uncompensated care costs for the newly eligible Medicaid population is projected to decrease by $360 million.

Under what may be the heroic assumption that Safety Net hospital uncompensated care costs will dramatically fall due to expanded public and private insurance coverage, the ACA reduces DSF by $14 billion between 2014 and 2019.


*Estimates from Buettgens et al, (2012) The ACA Medicaid Expansion in Washington, The Health Policy Center, Urban Institute, Wash. DC .


The ACA and Washington State:


3) The Basic Health Plan

On hold, future uncertain

4) The State Health Insurance Exchange

Full implementation on track for January 1, 2014.


An Orientation to Health Policy and Legislation

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