Goals or Principles of Health Care Reform

Transcription

1 to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire s future. One Eagle Square Suite 510 Concord, NH (603) Fax: (603) Goals or Principles of Health Care Reform Board of Directors Martin L. Gross, Chair John B. Andrews Cotton M. Cleveland John D. Crosier Todd I. Selig Donna Sytek Georgie A. Thomas James E. Tibbetts Kimon S. Zachos Author Daphne A. Kenyon, Ph. D. November 2004 Co-Executive Directors Douglas E. Hall (603) doughall@nhpolicy.org Richard A. Minard, Jr. (603) rminard@nhpolicy.org About this Paper This paper is one of a series of issue briefs published by the NH Center for Public Policy Studies on the broad topic of health-care finance and insuring the New Hampshire workforce. The Concord-based Endowment for Health has sponsored this work and this was first presented to the Endowment s Citizens Roundtable in the fall of Daphne A. Kenyon is an economist and the principal of D. A. Kenyon & Associates of Windham, NH. She is a member of the research team coordinated by the NH Center for Public Policy Studies.

2 Goals or Principles of Health Care Reform Policymakers, citizens and analysts judge health care policy proposals against goals or principles they hold, either implicitly or explicitly. Individuals with different goals are likely to prefer different policy options. Typically it is necessary to make tradeoffs among the various desirable goals. This means that the relative weights that people place on various goals will also make a difference in the policy options they prefer. This issue brief describes health care policy principles set forth by several organizations. Alternative principles are listed in the appendix and referenced in the discussion. The discussion highlights the variety in principles and the variety in the weights placed on different principles. The objective of this issue brief is to stimulate a general discussion of goals among Roundtable members before they decide upon specific health care policy proposals. It is not expected that the explicit or implicit goals of the Roundtable will match the goals of any organization described below. Because different people define principles in different ways, the diagram on the next page is meant to explain how goals or principles are defined in this paper. Goals or principles are viewed as fundamental objectives or desirable qualities in a health care system. They are more specific than values, such as equity or freedom of choice, and more general than criteria. Common Goals Goals for health policy tend to fall into categories that are consistent across advocacy organizations, but the specific goals, and even more important, the weights given to each, are not always consistent. Goals common to most advocacy organizations are discussed in this section. Universal Health Care Coverage. The New Hampshire Citizens Alliance specifies that patients should be able to access the full range of needed services, and the Institute of Medicine asserts that health care coverage should be universal. Any statement that patients should have access to needed services leaves open the question of how to define need. The National Coalition on Health Care (NCHC) defines health care coverage for all as access to a defined core benefit package. The NCHC also specifies that participation should be mandatory, with subsidies for the less affluent. The NCHC states that individuals and employers should be able to purchase supplemental coverage beyond the core package. It is important to note that some policymakers would choose to have optional, rather than mandatory, universal health insurance coverage.

3 Goals or Principles of Health Care Reform 2 Criteria Goals or Principles Values Neither set of principles derived from the more politically conservative organizations -- the Cato Institute and the Galen Institute -- assert that health coverage for all is an important principle. In fact, the health policy director of the Cato Institute has asserted it would be better to expand the safety net system rather than aim at providing health insurance to all those currently uninsured. Reduced Growth in Health Care Expenditures. The Institute of Medicine s principle that, the health insurance strategy should be affordable and sustainable for society, is in a similar spirit. Several of the lists of principles refer to a need for an efficient health care system, which is also similar. The National Coalition on Health Care states that increases in costs and premiums associated with the core benefit package should be brought into alignment with increases in per capita gross domestic product. The Coalition also argues that efforts should be made to increase the patient value associated with any given level of health care spending. Not all policy analysts would agree with the NCHC s specific definition of cost management, though. To the extent that individuals place a higher value on improvements in their health obtained through greater health care spending, one can argue that it may be beneficial for health care costs or spending to increase faster than increases in per capita gross domestic product. Improvement of health care quality and safety. It is difficult to make this goal operational because of the difficulty in defining quality. The New Hampshire Citizens Alliance states that a health care system should promote quality as judged by both patients and providers. The NCHC notes it will be necessary to make measures of quality available in order to improve accountability and to help payers and patients make better choices.

4 Goals or Principles of Health Care Reform 3 Equitable financing. The NCHC argues that subsidies should be provided for less affluent individuals based on ability to pay. Many of the sets of criteria listed in the appendix echo that emphasis on helping the less affluent. The Cato Institute notes a different type of inequity in the current health care system. Those who are covered by employer-sponsored health insurance benefit from favorable federal income tax treatment that is not afforded to others who purchase health insurance from the individual market. The Cato Institute argues this inequity should be eliminated by adding a tax credit for those who choose to purchase insurance in the individual market. Other Goals Some other goals that are less commonly espoused are: All individuals should have a reasonable choice of health care providers (AARP). There should be fewer, but more transparent, subsidies (Cato Institute). The health system should be stable (Galen Institute). Health care coverage should be continuous (Institute of Medicine). The health care system should treat health care as a service, not as a commodity (New Hampshire Citizens Alliance). Health care administration should be simplified (National Coalition on Health Care). Even when different organizations include similar goals, the emphasis they place on the various goals can differ markedly. Thus the Galen Institute states that the health system must be responsive to consumer demand, but indicates that stability and efficiency are more important goals. At minimum, the above discussion of alternative principles for evaluating health care reform policies should remind the reader why health care reform is so difficult. Not only do people espouse different principles, but some principles inevitably conflict (e.g., affordability of health care for individuals and affordability of health policies for society as a whole). Finally, even if two individuals can agree on the same set of principles, they may disagree on their relative importance. Secondary Goals or Criteria The Roundtable may want to consider a few criteria not considered by the organizations above. Some New Hampshire health care policies, such as expansion of the Medicaid and Healthy Kids programs or adoption of a pilot program for expanding the use of information technology in the health care sector, may increase the federal funds the state is eligible for. The Roundtable could make maximizing the use of federal funds one of its criteria. Another criterion could be to promote policies with certain or predictable effects. This is another choice based on values: should New Hampshire policymakers take a risk and try a new approach that may or may not work? Or should policymakers be more conservative and only choose among policies proven effective in other states?

5 Goals or Principles of Health Care Reform 4 Finally, the Roundtable may want to give greater emphasis to effective policy options, where effectiveness is defined either as having a measurable impact, or having a large impact per dollar spent. Under the first definition of effectiveness, a policy that reduced growth in health care costs by 10 percent would be judged as more effective than one that reduced growth in health care costs by one percent. Under the second definition of effectiveness, one might examine the per capita cost of expanding health insurance coverage. The option that had the lower per capita cost would be judged most effective. Conclusion One s choice among various health care reform proposals will be heavily influenced by one s goals or principles. The major objective of this issue brief was to clarify various sets of underlying goals or principles that we all bring to discussions of health care policy.

6 Goals or Principles of Health Care Reform 5 Appendix Organizational Principles for Health Care Reform The AARP has set forth principles to help the organization evaluate and compare different health care reform proposals. The AARP principles for acute health care are: All individuals have a right to health care services when they need them. All individuals have a right to reasonable access to health care coverage that provides adequate financial protection against health care costs. All individuals have a right to high-quality health care. All individuals should have a reasonable choice of health care providers. Financing of the health care system should be equitable, broadly based, and affordable to all individuals. Methods of provider reimbursement should promote high quality medical care and efficiency in service delivery and should compensate providers fairly. Health care spending should be more rational and should be managed through more efficient planning, budgeting, and resource coordination. Health promotion and disease prevention efforts should be strengthened. Individuals share a responsibility for safeguarding their health by educating themselves and taking appropriate preventive measures to protect their health, safety, and well-being. The acute and long-term care systems should be coordinated to ensure a continuum of care across an individual s lifetime. 1 The market-based health care reform principles put forward by the Director of Health Policy Studies of the Cato Institute are these: Consumer-driven choices and personal responsibilities Less third-party payment and more first-party control 5-D health care: decentralized, deregulated, depoliticized, diverse, dynamic Competitive, contractual, and accountable insurance Tax parity and level playing fields 2 Fewer, but more transparent, subsidies Defined contributions replace defined benefits. 3 1 AARP Principles in The Health Care System, 1999 Public Policy Agenda. The AARP has a second set of principles with respect to long-term care. 2 Workers who are insured by employer-sponsored insurance plans benefit from favorable tax treatment because employers do not pay federal income taxes on the payments they make for health insurance. Miller argues in favor of a tax credit for workers who decline employer-sponsored coverage and want to purchase health insurance in another market. 3 In a defined contributions health plan the employer s contributions are set at a fixed level instead of the health insurance benefits. These plans transfer the risks of rising health insurance costs from the employer to the

7 Goals or Principles of Health Care Reform 6 The Galen Institute s priorities or beliefs are these: The health system must be stable. (A health care system that tries to insulate medical care from scarcity will be unstable from both the economic and political standpoints. In contrast, equilibrium systems reach a balance that produces solutions that most people can live with.) The health system must be efficient. The health system must be responsive to consumer demand. Consumers and their physicians should have authority and responsibility over their own health care decisions. The health system must confront scarcity. (No system can meet the demands for medical care in the quantities that are generated when patients view it as free or nearly so.) 4 The Committee on the Consequences of Uninsurance of the Institute of Medicine has set forth these five principles for eliminating uninsurance: Health care coverage should be universal. Health care coverage should be continuous. Health care coverage should be affordable to individuals and families. The health insurance strategy should be affordable and sustainable for society. Health insurance should enhance health and well-being by promoting access to highquality care that is effective, efficient, safe, timely, patient-centered, and equitable. 5 The National Coalition on Health Care has agreed on these five principles for building a better health care system: Health care coverage for all. Cost management. Improvement of health care quality and safety. Equitable financing. This includes subsidies based on abilities to pay and measures to reduce or eliminate cost-shifting. Simplified administration. 6 The New Hampshire Citizens Alliance has crafted five basic characteristics of a quality health care system, summarized below: employee. Tom Miller, Director of Health Policy Studies, Cato Institute, A New and Improved Health Policy Agenda for 2003, 2003, Hwww.cato.org/events/transcripts/ miller.pptH, supplemented by Tom Miller, Improving Access to Health Care without Comprehensive Health Insurance Coverage: Incentives, Competition, Choice, and Priorities. 4 Jesse S. Hixon, Ph.D., Six Questions Everyone Should Ask About Health System Reform, Galen Institute Health Policy Report, March 2002 and the Galen Institute web site at 5 Institute of Medicine, Insuring America s Health: Principles and Recommendations, Washington, DC: The National Academies Press, 2004: chapter 4. 6 National Coalition on Health Care, Building a Better Health Care System: Specifications for Reform, July 20, 2004, Hwww.kaisernetwork.orgH. See also the National Coalition web site at

8 Goals or Principles of Health Care Reform 7 Affordable access to health care services is affordable for all people Accessible patients are able to access the full range of needed services High Quality as judged by patients and their providers Equitable access to health care not determined by an individual s ability to pay Treats health care as a service, not a commodity use of health care services based on need, not cost or marketing. 7 7 New Hampshire Citizens Alliance, Characteristics of a Quality Health Care System, xerox, undated. Before stating the five basic characteristics of a quality health care system, the NH Citizens Alliance states two underlying principles: (1) All human beings have a fundamental right to health care, and (2) A quality health care system has universal access.

9 Want to know more? -- Become a subscriber. The NH Center for Public Policy Studies needs you. Since 1996 the Center has delivered to New Hampshire s policy makers, news organizations, and citizens objective analysis that has become the foundation for better public policy. The Center gets no state or federal appropriation. We have survived and flourished because of the extraordinary generosity of the New Hampshire Charitable Foundation and a growing list of private donors. To maintain our independence, we need to broaden our base of contributors. Our goal: 100 new contributors, each donating $1,000 for an annual subscription to our research reports and an invitation to our policy forums. Our guarantee: Even if you don t subscribe, you can get our reports for free. You can download them from our website or call and we ll mail you copies. For free. That s our mission: to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire s future, and to do so in ways that make the information available to everyone: legislators, school boards, small-business owners, voters. As long as we can raise enough unrestricted money to support our inquiry into problems that matter to New Hampshire, we will keep making that information available at no cost to people who will use it. Our independence: The Center is a private, nonpartisan, not-for-profit organization. Our board of directors sets our research agenda. This report is a product of a research project sponsored by the Endowment for Health but most of the Center s work has no particular sponsor. Unrestricted donations allow the Center to pursue topics that grant-makers typically won t support: local governance, school funding, corrections. The Center exists only because of the generosity of our donors. To subscribe: Send a check to: The NH Center for Public Policy Studies One Eagle Square, Suite 510 Concord NH Please include your mailing address and your name as you would like it to appear in our list of donors. Your donation is 100 percent tax deductible. For more information about the Center and its work, Co-Executive Director Richard Minard at rminard@nhpolicy.org.

10 Our Supporters The Center s continued service to New Hampshire is possible because the following individuals, organizations, and corporations have made generous unrestricted donations to the Center in 2003, 2004, or for The Center s supporters do not necessarily endorse, nor has the Center asked them to endorse, any of the findings or recommendations in our reports. * indicates a pledge to repeat a gift over three or more years Sustaining Partners (gifts of $100,000 or more since 1996) The NH Charitable Foundation Harold Janeway Ruth & the late James Ewing The Putnam Foundation Sustaining Benefactors (gifts totaling $25,000 or more in any three-year period) Whit & Closey Dickey John Morison The Jameson Trust Tyco Labs Jefferson Pilot Financial William Welsh Major Donors (annual gifts of $5,000 to $25,000) Anonymous Anonymous Harvey & Christina Hill Donors (annual gifts of $2,000 to $5,000) Subscribers (annual gifts of $1,000) Anthem Blue Cross/Blue Shield James & Ellen Adams Bassett Cotton Cleveland & John Garvey* Martha Fuller Clark & Geoffrey E. Clark Granite State Electric Martin Gross* High Point Communications Group, Inc. Laconia Savings Bank John & Susan Lynch* New England Life Care, Inc. Northeast Delta Dental Walter & Dorothy Peterson* Friends of the Center (annual gifts up to $1,000) Anonymous* Paul and Mary Avery John & Pam Blackford John and Judith Crosier* Jameson French ~ Northland Forest Products Inc. Morton Goulder* William G. & Erika Johnson Ann McLane Kuster & Brad Kuster Gordon & Patty Humphrey Bruce & Jane Keough* Public Service of NH* Ocean National Bank Joseph & Augusta Petrone James Putnam* Mike Smith Storyland/Heritage NH John & Marjory Swope* Betty Tamposi Unitil* Jack & Pat Weeks* Beverly & Dan Wolf* J.A. Wright & Co. Kimon & Anne Zachos* Ledyard National Bank Douglas & Nancy McIninch* New England Wire Technology Corp. NH Farm Bureau Federation John & Alice Pepper Mary & John Rauh* Frederick K. Upton