A conversation with Donald Berwick on implementing national health reform

Michael Birnbaum interviews Donald Berwick shortly after his departure from the Centers for Medicare and Medicaid Services about the national health care landscape. Berwick discusses the strategic vision, policy levers, operational challenges, and political significance of federal health care reform. He rejects the notion that the Affordable Care Act represents a government takeover of health care financing or service delivery but says the law's Medicaid expansion and its creation of health benefit exchanges present a "watershed moment for American federalism." Berwick argues that the solution to Medicare's cost-containment challenge lies in quality improvement. He is optimistic that accountable care organizations can deliver savings and suggests that shifting risk downstream to providers throws the health insurance model into question. Finally, looking to the future, Berwick sees a race against time to make American health care more affordable.     

An end to a consensus on health care in the Federal Republic of Germany?

Over the past fifteen years the national government in the Federal Republic of Germany has animated the political debate about rising health care expenditures. However, it has only provided health policy leadership by shifting the burden of financing health and medical care to others. This paper presents three cases that illustrate the political and institutional constraints inherent in the German policy process that limit the proposal and implementation of appropriate policy solutions to rising health care costs. Cost controls have been inhibited because of the near-universal entitlement of national health insurance, the access all social groups have to advanced medical care, and policies targeted at providers rather than users of health services. The paper also underscores the past and future importance of regional policy coalitions in shaping national health policy.     

Playing fair: fairness beliefs and health policy preferences in the United States

Conventional wisdom suggests that the best way to persuade Americans to support changes in health care policy is to appeal to their self-interest - particularly to concerns about their economic and health security. An alternative strategy, framing problems in the health care system to emphasize inequalities, could also, however, mobilize public support for policy change by activating underlying attitudes about the unfairness or injustice of these inequalities. In this article, we draw on original data from a nationally representative survey to describe Americans' beliefs about fairness in the health domain, including their perceptions of the fairness of particular inequalities in health and health care. We then assess the influence of these fairness considerations on opinions about the appropriate role of private actors versus government in providing health insurance. Respondents believe inequalities in access to and quality of health care are more unfair than unequal health outcomes. Even after taking into account self-interest considerations and the other usual suspects driving policy opinions, perceptions of the unfairness of inequalities in health care strongly influence respondents' preferences for government provision of health insurance.     

Three meanings of capacity; or,why the federal government is most likely to lead on insurance access issues

This essay considers on what health policy issues the federal government is best able to lead. Positive leadership requires knowledge, power, and will. The federal government has different supplies of each for different aspects of quality of, cost of, and access to health care. Here I review technical capacity to attain desired ends, define the institutional strengths and weaknesses of the federal government, and outline current dynamics of the national political process. This analysis suggests both prospects for and some characteristics of successful policy. The federal government is more likely to lead on insurance than on other health policy issues because its supply of relevant knowledge and power is relatively high on insurance issues and the political barriers are lower than conventional wisdom suggests. But that leadership could take the form of either the expanding or contracting of access to insurance.     

Explaining health care system change: problem pressure and the emergence of "hybrid" health care systems

In this article, we will further the explanation of the state's changing role in health care systems belonging to the Organisation for Economic Cooperation and Development (OECD). We build on our analysis of twenty-three OECD countries, which reveals broad trends regarding governments' role in financing, service provision, and regulation. In particular, we identified increasing similarities between the three system types we delineate as National Health Service (NHS), social health insurance, and private health insurance systems. We argue that the specific health care system type is an essential contributor to these changes. We highlight that health care systems tend to feature specific, type-related deficiencies, which cannot be solved by routine mechanisms. As a consequence, non-system-specific elements and innovative policies are implemented, which leads to the emergence of "hybrid" systems and indicates a trend toward convergence, or increasing similarities. We elaborate this hypothesis in two steps. First, we describe system-specific deficits of each health care system type and provide an overview of major adaptive responses to these deficits. The adaptive responses can be considered as non-system-specific interventions that broaden the portfolio of regulatory policies. Second, we examine diagnosis-related groups (DRGs) as a common approach for financing hospitals efficiently, which are nevertheless shaped by type-specific deficiencies and reform requirements. In the United States' private insurance system, DRGs are mainly used as a means of hierarchical cost control, while their implementation in the English NHS system is to increase productivity of hospital services. In the German social health insurance system, DRGs support competition as a means to control self-regulated providers. Thus, DRGs contribute to the hybridization of health care systems because they tend to strengthen coordination mechanisms that were less developed in the existing health care systems.     

Regulating through information: disclosure laws and American health care

Efforts to reform the American health care system through direct government action have failed repeatedly. Nonetheless, an alternative strategy has emerged from these experiences: requiring insurance organizations and health care providers to disclose information to the public. In this Article, Professor Sage assesses the justifications for this type of regulation and its prospects. In particular, he identifies and analyzes four distinct rationales for disclosure. He finds that the most commonly articulated goal of mandatory disclosure laws--improving the efficiency of private purchasing decisions by giving purchasers complete information about price and quality--is the most complicated operationally. The other justifications--which he respectively terms the agency, performance, and democratic rationales--hold greater promise, but make different, sometimes conflicting assumptions about the sources and uses of information. These insights have implications not only for health care, but also for other regulated practices and industries.     

Physician payment and cost-containment strategies in West Germany: suggestions for Medicare reform

The West German health care system pays ambulatory care physicians on a fee-for-service basis but employs a national relative value scale and regional capitation-based revenue pools to achieve expenditure controls on total physician reimbursement. Physician-controlled organizations manage these pools and conduct utilization reviews on their own members. The capitation rates are determined by negotiations between the physician associations and health insurers. The West German government has been able to exert some influence on the outcome of these negotiations through a quasi-governmental advisory body. Aspects of this structure could be adopted by Medicare in order to determine conversion factors for resource-based relative value scales or to create expenditure control and incentive structures for Medicare-participating physicians.     

American health policy: cracks in the foundation

Much American health policy over the past thirty-five years has focused on reducing the additional health care that is consumed when a person becomes insured, that is, reducing moral hazard. According to conventional theory, all of moral hazard represents a welfare loss to society because its cost exceeds its value. Empirical support for this theory has been provided by the RAND Health Insurance Experiment, which found that moral hazard--even moral hazard in the form of effective and appropriate hospital procedures--could be reduced substantially using cost-sharing policies with little or no measurable effect on health. This article critically analyzes these two cornerstones of American health policy. It holds that a large portion of moral hazard actually represents health care that ill consumers would not otherwise have access to without the income that is transferred to them through insurance. This portion of moral hazard is efficient and generates a welfare gain. Further, it holds that the RAND experiment's finding (that health care could be reduced substantially with little or no effect on health) may actually be caused by the large number of participants who voluntarily dropped out of the cost-sharing arms of the experiment. Indeed, almost all of the reduction in hospital use in the cost-sharing plans could be attributed to this voluntary attrition. If so, the RAND finding that cost sharing could reduce health care utilization, especially utilization in the form of effective and appropriate hospital procedures, with no appreciable effect on health is spurious. The article concludes by observing that the preoccupation with moral hazard is misplaced and has worked to obscure policies that would better reduce health care expenditures. It has also led us away from policies that would extend insurance coverage to the uninsured.     

Purpose and function in government-funded health coverage

Government-funded health insurance programs that claim to provide comprehensive funding of their clients' demands have commonly adopted a purposive (deductive) approach to the problem of health care funding. This involves determining the extent of covered benefits by seeking an "adequate" definition of health or health care. Payment is then limited to only those procedures medically required or indicated. In this paper we argue that the purposive approach is inadequate, and that attempted adherence to it results in a curious dislocation of service, serious inequities, and an unhealthy contemplation of the definition of health. These problems are the result of structural deficiencies in the approach, and so will not be rectified by tinkering with the definitions adopted. As an alternative, we present an outline of a functional (inductive) approach, which seeks to identify which of the expectations of its clients the government health insurance system may realistically satisfy.     

Health care and the labor market: learning from the German experience

Many observers have begun to question the U.S. reliance on an employment-based private health insurance system. In thinking about the future of this system, it is instructive to examine the German experience. The German health insurance system is almost entirely organized and financed around the labor market. In recent years, the German labor market has changed in several ways. Among other changes, more German women now work, the proportion of retirees in the population has increased, the share of manufacturing in employment has declined, and the economy has become more open. These labor market changes have made it more difficult to organize health insurance around employment in Germany. Recent changes in the German health insurance system have, to some extent, decoupled health insurance from employment. This decoupling is likely to continue as the labor market changes further. We explore the implications of this experience for the United States.     

Selective justice,genetic discrimination,and insurance: should we single out genes in our laws?

This article discusses the desirability of legislation focusing on genetic discrimination, in particular in the context of insurance. Many American states and some European countries as well as the Council of Europe have introduced protective measures against discrimination on the basis of genetic susceptibility. The author questions their effectiveness and queries whether they may be inequitable, because they fail to address more fundamental underlying issues related to the nature of insurance, access to health care, and unequal distribution of wealth. There is also a problem of definition in these statutes. They fail to capture what constitutes genetic information. Nonetheless, the author argues it is important to consider the social consequences of genetic testing. Michael Walzer's theory of justice is used to examine the role of insurance and health care. Using this approach, the author finds the American system of distribution for health care to be problematic. This is then used to inform the author's discussion of the future of health care in Canada. Anti-discrimination provisions could be used in a way that is consistent with Walzer's theory of justice. They would encompass both genetic and non-genetic health factors. These can be modelled on current anti-discrimination statutes in Canada. The author then proposes administrative committee structures to regulate the use of genetic data in Canada.     

A road map for universal coverage: finding a pass through the financial mountains

Government already pays for more than half of U.S. health care costs, and nearly all universal health insurance proposals assume continued government involvement through tax subsidies and other means. The question of what specific taxes could be used to finance universal coverage is, however, seldom carefully examined, in part due to efforts by health care reform proponents to downplay tax issues. In this article we undertake such an examination. We argue that the challenges of relying on taxes for universal coverage are even greater than is generally appreciated, but that they can nevertheless be met. A proposal to fund a universal health insurance voucher system with a value-added tax illustrates issues that would arise for tax-financed plans in general and provides a broad framework for a bipartisan approach to universal coverage. We discuss significant problems that such an approach would face and suggest solutions. We outline a long-term political and legislative strategy for enacting universal coverage that draws upon precedents set by comparable legislative initiatives, including tax reform and Medicare. The results are an improved understanding of the relationship between systemic health care finance reform and taxation and a politically realistic plan for universal coverage that employs undisguised taxes.     

Side effects: a dose of competition and access to care

The Federal Trade Commission and Department of Justice 2004 report Improving Health Care: A Dose of Competition argues in favor of increasing competition among health care providers. Several of the proposals within the report, however, may pose risks for access to care. The report urges that the current system of implicit cross-subsidies for indigent care be replaced with insurance expansions that provide coverage to individuals. Such a substitution would certainly enhance access, but would be very costly and likely require considerable government intervention in the health care system. In the absence of a substantial expansion in coverage, reductions in cross-subsidies could limit access to care through the existing safety net. The report argues that insurance mandates limit access to care by driving up cost and reducing choice. In some cases, such as mental health and substance abuse, however, the unregulated market may not cover a benefit at all, leaving people with less coverage and less choice. Finally, the report stresses the importance of linking costs to quality. Such a linkage is likely to lead to a health care system in which poor people obtain poor-quality care at low prices--a result that many would find disturbing.     

From shared cost to block funding and beyond: the politics of health insurance in Canada

This paper takes as its starting point recent major changes in arrangements between the federal and provincial government in Canada concerning the sharing of costs for health insurance programs. The switch from a shared cost (conditional grant) to a modified block funding system was motivated by federal desires to limit and make predictable their expenditures, by provincial desires to increase the flexibility of their allocation of funds and by a mutual desire to limit any growth of health care costs as a proportion of GNP. Concerns related directly to improving medical care delivery were insignificant The changes will effectively centralize responsibility for program financing and program delivery, thus providing a powerful incentive for provincial governments to apply very strong measures to control costs. For reasons largely external to the relationship between public sector insurers and the suppliers of medical services, these attempts are unlikely to be successful in the short run. The probable impact of this difficulty on government and members of the health care delivery system is assessed.     

论美国医疗过失案件中注意标准的确定——从历史的视角纵向分析

医疗注意义务是整个医疗过失理论的核心，而注意标准概念则是重中之重。本文从不同时期的判例着手，重点展示美国的注意义务标准的历史发展过程和总体趋势：合同还是侵权，单一程式标准还是多因素可变标准，提高病人安全还是控制医疗费用。通过分析不同时段内法理与司法实践的主要特点，本文将美国医疗注意标准的各种影响因素逐步列出，突出行业惯例和地域因素在整个体系内的辉煌与落败。如今美国的医疗注意义务标准也面临挑战，即医疗保健体系与医疗保险改革背后对医疗费用控制的政策对它产生了冲击。     

Health care financing reforms in Germany: the case for rethinking the evolutionary approach to reforms

Health care reform has been a perpetual issue in German politics since reunification. Reform initially focused on restructuring the health care system of the former East Germany. It has subsequently focused on questioning whether the financing of the German social health insurance (SHI) system is sustainable, in light of economic malaise that characterized the 1990s and heightened global competition. In this article, we document twelve significant attempts to reform health care financing in Germany and critically appraise them according to the principles of solidarity and subsidiarity on which SHI systems were built. While the reforms in the aggregate offered the prospect of addressing the challenges faced by the system, the modest results of the reforms and remaining deficiencies of the system underscore the limitations of the evolutionary approach to reforms. This suggests that reformers should consider a more revolutionary approach.     

The German Berufsgenossenschaften (institutions for statutory accident insurance and prevention): organisation, mandate and activities in the area of mental health

The present article first describes the institution of the German Berufsgenossenschaften (BGs, the institutions for statutory accident insurance and prevention) and their mandate. Besides rehabilitation and compensation, these comprise the prevention of occupational accidents and diseases, and work-related hazards. The main focus within the area of mental health is the prevention work, but rehabilitation and compensation within the German social insurance system in general, and with respect to mental health, will also be explained. Furthermore, the prevention-rehabilitation interface will be illustrated and the cooperation with the health insurance institutions will be described. In the second part, selected results of a survey regarding mental health and stress will be presented.     

Why we must end insurance discrimination against mental health care

In this Policy Essay, Representative Patrick Kennedy argues that insurance discrimination against those suffering from mental illness constitutes a serious and often overlooked deficiency of the modern American health care system. While the Mental Health Parity Act of 1996 was an important step toward resolutions of this issue, many loopholes remain that allow insurance companies to deny much-needed coverage to those suffering from such illnesses. This Essay details how improving access to health insurance for the mentally ill is not only socially beneficial, but also economically sound; the cost of instituting mental health parity is far outweighed by the costs that employers bear because of the reduced productivity of untreated mental illness sufferers. Representative Kennedy recommends that these problems may be addressed by additional mental health policy legislation--specifically, the proposed Paul Wellstone Act.     

National health insurance and the new health occupations: nurse practitioners and physicians' assistants

This article considers a number of issues which might arise in formulating policy for new health occupations. Its particular focus is on nurse practitioners and physicians' assistants and their treatment under potential national health insurance arrangements. The development and expansion of these occupations are described, as is the evidence on their performance with respect to the quality of medical care provided, the impact on the cost of such care, and changes in access to care. We then discuss several issues which might arise in the context of national health insurance legislation, including reimbursement rates and methods, certification and licensure, training subsidies, deployment incentives, and compatibility with an increased supply of physicians.     

Lessons from Germany: some reflections occasioned by Schulenburg's "report"

Germany created the first national health insurance scheme, and its turbulent history has carried many lessons for all other countries. Health care financing--like all social security financing--redistributes wealth and inevitably is caught up in class politics. Cost-sharing by patients is not a neutral device in social engineering to improve efficiency, but it is a gambit in distributive politics. Health care involves the wealth and power of the doctors, and they become militant and successful forces in social politics. The forces for higher spending are stronger than the forces for restraint. Only exceptional political will be government can control costs.