Health plan pay-for-performance strategies.

OBJECTIVE: To examine health plan strategies, planning, development, and implementation of pay-for-performance programs (financial incentives for hospitals and physicians tied to quality and efficiency) at the community level, focusing on differences across markets. STUDY DESIGN: A fifth round of site visits to 12 nationally representative metropolitan areas between January 2005 and June 2005, based on more than 1000 protocol-driven interviews with representatives from health plans, provider organizations, employers, and policy makers. METHODS: In each of 12 communities, we interviewed several executives from 35 health plans, including chief executive officers, marketing executives, and network contracting directors. Additional perspectives were obtained from representatives of employers, large medical groups, and hospital systems. RESULTS: Growing numbers of health plans are developing and implementing pay-for-performance programs for physicians and hospitals. Although in their early stages, plans' customized programs show substantial design variation within and across markets. This design variation reflects local conditions that include information technology capabilities, data availability, relative leverage of health plans and providers, willingness of providers to participate, and employer influence. The concerns of providers include the administrative burden of health plans' customized programs and the potential for conflicting financial incentives. CONCLUSIONS: Most health plans are committed to pay-for-performance programs. Although providers would prefer health plans in their communities to use a single standardized set of measures and methods, this is unlikely given local market environments. A national effort directed at standardization might significantly reduce the extent of customization but also may limit the opportunities for local collaboration with providers.

Consumer-directed health insurance products: local-market perspectives.

During the past few years, health plans have focused product development on consumer-driven health plans. This paper examines how these products are faring in twelve Community Tracking Study (CTS) communities. Although there has been a proliferation in the number and variety of consumer-directed plan options available, employers have taken a cautious approach. Given the increased financial stake and decision-making responsibility consumers hold when enrolled in these plans, respondents expressed frustration that the availability of information support has lagged behind the demands placed on consumers.

An update on Medicare beneficiary access to physician services.

After declining markedly between 1997 and 2001, Medicare seniors' access to physician care stabilized between 2001 and 2003, according to a national study by the Center for Studying Health System Change (HSC). Access to care trends were parallel for Medicare seniors 65 and older and privately insured people between the ages of 55 and 64--the near-elderly--suggesting that health system developments were much more important influences on beneficiary access than any effects of Medicare's 2002 physician payment rate reduction. In addition, access to care for both Medicare seniors and privately insured near-elderly people was comparable in local health care markets where commercial insurance payment rates far exceed Medicare's. However, both Medicare seniors and older privately insured people waited longer for physician appointments.

Rhetoric vs. reality: employer views on consumer-driven health care.

Because of rising premiums, employers are investigating new health insurance approaches that maintain workers' broad choice of providers while raising awareness of health care costs through increased patient financial responsibility. Employers' knowledge of new health plan products, including consumer-driven health plans and tiered-provider networks, has grown considerably in recent years, according to findings from the Center for Studying Health System Change's (HSC) 2002-03 site visit to 12 nationally representative communities. But employers are concerned that consumer-driven health plans would take considerable effort to implement without much cost savings. They also are skeptical that tiered-provider networks can adequately capture both cost and quality information in a way that is understandable to patients.

Employers shift rising health care costs to workers: no long-term solution in sight.

Despite concerns that an economic downturn would prompt employers to rein in rapidly rising health insurance premiums by radically reducing benefits, few have made dramatic benefit changes, according to findings from the Center for Studying Health System Change's (HSC) 2002-03 site visits to 12 nationally representative communities. Key employer changes focused on increasing patient cost sharing and revising family coverage policies. Few employers adopted innovative health benefit strategies or major design changes. Given employers' lack of confidence in alternative strategies and their unwillingness to restrict workers' choice of providers, employers will likely continue incremental cost-sharing increases in the face of ongoing premium increases.

Patient cost-sharing innovations: promises and pitfalls.

Over the next decade, health plans and employers will refine patient cost sharing to encourage workers to seek more cost-effective care, according to a panel of market and health policy experts at a Center for Studying Health System Change (HSC) conference. Instead of using a single, large deductible, employers and health plans will likely vary patient cost sharing by choice of provider, site and type of service, so patients choosing less effective care options pay more. Employers also will try to limit financial hardships for low-income workers by, for example, varying cost sharing based on workers' income. However, significant obstacles could hinder the effectiveness of emerging cost-sharing strategies, including inadequate information on quality of care and provider resistance.

Patient cost sharing: how much is too much?

Responding to successive years of double-digit health insurance premium increases, employers continue to restructure health benefits to slow the rise in company costs by increasing patients' financial stake in their care. A new Center for Studying Health System Change (HSC) study examines how increased patient cost sharing through higher deductibles, copayments and coinsurance raises patients' out-of-pocket costs. Increased patient cost sharing creates more financial burdens for seriously ill and low-income workers. Concerns about financial hardships for seriously ill and low-income workers may limit employers' ability to slow rising premiums through increased patient cost sharing.

Referral gridlock: primary care physicians and mental health services.

BACKGROUND: Patients' barriers to mental health services are well documented and include social stigma, lack of adequate insurance coverage, and underdiagnosis by primary care physicians. Little is known, however, about challenges primary care physicians face arranging mental health referrals and hospitalizations. OBJECTIVE: To examine how practice setting and environment influence primary care physicians' ability to refer patients for medically necessary mental health services. DESIGN: Cross-sectional analysis using nationally representative survey data from the 1998 to 1999 Community Tracking Study physician survey. The overall survey response rate was 61%. PARTICIPANTS: A 1998 to 1999 telephone survey of 6586 primary care physicians. MEASUREMENTS: Primary care physicians' report of whether they could obtain medically necessary referrals to high-quality mental health specialists or psychiatric admissions. RESULTS: Overall, 54% of primary care physicians reported problems obtaining psychiatric hospital admissions, and 54% reported problems arranging outpatient mental health referrals. Primary care physicians practicing in staff and group model HMOs were much less apt to report difficulties than physicians in solo and small-group practices (P <.001). Reports of inadequate time with patients (P <.001) and smaller numbers of psychiatrists in a market area (P <.01) also were associated with problems obtaining mental health referrals. Pediatricians were more apt to report problems than general internists (P <.001). CONCLUSIONS: Primary care physicians face greater hurdles obtaining mental health services than other medical services. Primary care is an important entry point for mental health services, yet inadequate referral systems between medical and mental health services may be hampering access.

So much to do, so little time: physician capacity constraints, 1997-2001.

Signs of tightened physician capacity--or physicians' ability to provide services relative to demand--appeared between 1997 and 2001, according to a study by the Center for Studying Health System Change (HSC). Patients waited longer for appointments, and more physicians reported having inadequate time with patients. Despite signs of tightened physician capacity, the supply of physicians grew modestly, the proportion of physicians working with nurse practitioners and other caregivers increased and doctors spent more time in direct patient care. This seeming contradiction emerged as the retreat from tightly managed care gave patients freedom to seek more care without substantial out-of-pocket cost increases. Current physician capacity constraints may ease if higher out-of-pocket costs prompt patients to seek less care.

Managing costs, managing benefits: employer decisions in local health care markets.

OBJECTIVES: To better understand employer health benefit decision making, how employer health benefits strategies evolve over time, and the impact of employer decisions on local health care systems. DATA SOURCES/STUDY SETTING: Data were collected as part of the Community Tracking Study (CTS), a longitudinal analysis of health system change in 12 randomly selected communities. STUDY DESIGN: This is an observational study with data collection over a six-year period. DATA COLLECTION/EXTRACTION METHODS: The study used semistructured interviews with local respondents, combined with monitoring of local media, to track changes in health care systems over time and their impact on community residents. Interviewing began in 1996 and was carried out at two-year intervals, with a total of approximately 2,200 interviews. The interviews provided a variety of perspectives on employer decision making concerning health benefits; these perspectives were triangulated to reach conclusions. PRINCIPAL FINDINGS: The tight labor market during the study period was the dominant consideration in employer decision making regarding health benefits. Employers, in managing employee compensation, made independent decisions in pursuit of individual goals, but these decisions were shaped by similar labor market conditions. As a result, within and across our study sites, employer decisions in aggregate had an important impact on local health care systems, although employers' more highly visible public efforts to bring about health system change often met with disappointing results. CONCLUSIONS: General economic conditions in the 1990s had an important impact on the configuration of local health systems through their effect on employer decision making regarding health benefits offered to employees, and the responses of health plans and providers to those decisions.

The role of public employers in a changing health care market.

Public employers provide health insurance coverage to nearly 16 percent of all U.S. workers. Their reactions to rapidly rising premiums can have an important effect on local markets for health insurance because of their size, their visibility, and their reflection of public policy. However, public employers are constrained in their responses by tight budgets set by elected officials and statutes regarding due process, public input, and public accountability. As insurance markets consolidate and premiums continue to increase, public employers face tough choices regarding employee benefits.

Obstacles to employers' pursuit of health care quality.

Large employers' roles in improving health care quality are shifting away from value-based purchasing toward direct efforts to improve health care delivery within local markets. Although most large employers adopted the tools required for value-based purchasing, inadequate information on quality has frustrated employers and limited their ability to make choices based on quality. More recent quality initiatives aimed at directly improving local health delivery systems may be limited to specific markets where the largest employers can exert substantial influence.

Growing physician access problems complicate Medicare payment debate.

Projected cuts in Medicare physician payments raise serious concerns that Medicare beneficiaries will lose access to needed physician services. A study by the Center for Studying Health System Change (HSC) shows growing physician access problems among Medicare and privately insured patients. Patients have the most difficulties obtaining care from specialists and in certain communities. Proposals to increase Medicare fees across the board may prevent deterioration of access for Medicare beneficiaries but are unlikely to address system-wide access problems that vary by specialty and market.

Employer-sponsored health insurance: pressing problems, incremental changes.

Despite large premium increases, employers made only modest changes to health benefits in the past two years. By increasing copayments and deductibles and changing their pharmacy benefits, employers shifted costs to those who use services. Employers recognize these changes as short-term fixes, but most have not developed strategies for the future. Although interested in "defined-contribution" benefits, employers do not agree about what this entails and have no plans for moving to defined contributions in the near future. While dramatic changes in health benefits are unlikely in the short term, policymakers may want to watch for future erosions in health coverage.

Who do you trust? Americans' perspectives on health care, 1997-2001.

A turbulent backlash against managed care in the mid-1990s pitted consumers and health care providers against health plans in a struggle for control over medical decision making. New findings from the Center for Studying Health System Change (HSC) Community Tracking Study Household Survey indicate consumer confidence in the system and trust in physicians increased slightly between 1997 and 2001, perhaps as a result of changes in laws and loosening of health plan restrictions. Nevertheless, there is strong evidence of continued public concern about the influence of health plans on medical decision making. For example, the level of trust in their physicians among people in fair or poor health has not increased, and more than 40 percent of privately insured Americans continue to believe their doctor is strongly influenced by health plan rules when deciding about their care.