THE COMMONWEALTH FUND Health Care Reform in the 2008 Presidential Election Sara R. Collins, Ph.D. Assistant Vice President The Commonwealth Fund Alliance For Health Reform Briefing March 14, 2008

2 THE COMMONWEALTH FUND Why Does the Current Health Insurance System Fail to Promote High Performance? Access to care is unequal Poor access to care is linked to poor quality Care delivery is inefficient Fragmented health insurance system makes it difficult to control costs Financing of care for uninsured and underinsured families is inefficient Positive incentives in benefit design and insurance markets are lacking

3 THE COMMONWEALTH FUND Five Key Strategies for High Performance 1.Extending affordable health insurance to all 2.Aligning financial incentives to enhance value and achieve savings 3.Organizing the health care system around the patient to ensure that care is accessible and coordinated 4.Meeting and raising benchmarks for high- quality, efficient care 5.Ensuring accountable national leadership and public/private collaboration Source: Commission on a High Performance Health System, A High Performance Health System for the United States: An Ambitious Agenda for the Next President, The Commonwealth Fund, November 2007

4 THE COMMONWEALTH FUND Roadmap to Health Insurance for All: Principles for Reform Provides equitable and comprehensive insurance for all Benefits cover essential services with financial protection Premiums/deductibles/out of pocket costs affordable Coverage is automatic, stable, seamless Choice of health plans or care systems Broad health risk pools; competition based on performance, not risk or cost shift Simple to administer: lowers overhead costs providers/payers Minimizes dislocation Financing adequate/fair/shared across stakeholders

5 THE COMMONWEALTH FUND Health Insurance Reform and the Presidential Candidates: Two Distinct Approaches Expanded coverage through individual insurance market with tax incentives, changes to employer benefit tax exemption, and deregulation of state markets (McCain) Universal coverage through mixed private– public group insurance, reorganized and regulated private group insurance markets, with shared responsibility for financing from government, employers, individuals (Clinton, Obama)

6 THE COMMONWEALTH FUND Features of Candidates Approaches to Health Care Reform ClintonObamaMcCain Individual Mandate YesChildren onlyNo Employer Shared Responsibility Large firms offer or contribute X% of payroll Offer or contribute X% of payroll No Medicaid/ SCHIP Expansion Yes No Private Insurance Markets New group Health Choices Menu through FEHBP with private & public plan options New group National Health Insurance Exchange with private & public plan options Purchase private individual insurance in any state Subsidies for Low to Moderate Income Tax credit for premium >X% of income Sliding scale premium subsidies Tax credit $2,500 for individuals, $5,000 for families Quality and Efficiency Measures HIT, Transparency, P4P, Prevention, Comparative effectiveness, Chronic disease management, Disparities, Malpractice reform HIT, Transparency, P4P, Prevention, Chronic disease management, Malpractice reform Source: S. R. Collins and J. L. Kriss, Envisioning the Future: The 2008 Presidential Candidates' Health Reform Proposals, The Commonwealth Fund, January 2008.

7 THE COMMONWEALTH FUND Where Leading Candidates Stand on Health Care Reform Features ClintonObamaMcCain Most Candidates From Both Parties Agree Expand coverage Yes Health IT Yes Transparency Yes Malpractice reform Yes Prevention Yes Some Candidates Agree Yes Pay for performance Yes Comparative effectiveness Yes Candidates Differ Universal coverage Yes No Individual mandate YesChildren onlyNo Employer pay or play Yes No Changes to employer benefit tax exemption YesNoYes Regulation of insurance markets Yes No Financing Source Yes No Source: S. R. Collins and J. L. Kriss, Envisioning the Future: The 2008 Presidential Candidates' Health Reform Proposals, The Commonwealth Fund, January 2008.

8 THE COMMONWEALTH FUND Support for the Proposal That Employers Should Either Provide Health Insurance to Their Employees or Contribute to a Fund That Would Help Cover Workers Without Health Insurance Percent of adults who say that employers should either provide health insurance or contribute to a fund Source: S. R. Collins and J. L. Kriss, The Public's Views on Health Care Reform in the 2008 Presidential Election, The Commonwealth Fund, January Analysis of the Commonwealth Fund Biennial Health Insurance Survey (2007).

9 THE COMMONWEALTH FUND Support for a Health Reform Proposal That Requires That Everyone Have Health Insurance, with Government Helping Those Who Cannot Afford It Percent of adults who strongly/somewhat favor a requirement that everyone have health insurance Source: S. R. Collins and J. L. Kriss, The Public's Views on Health Care Reform in the 2008 Presidential Election, The Commonwealth Fund, January Analysis of the Commonwealth Fund Biennial Health Insurance Survey (2007).

10 THE COMMONWEALTH FUND Who Do You Think Should Pay for Health Insurance for All Americans? Percent of adults who say health insurance costs should be paid for by: Note: Bars do not total to 100% because survey respondents who refused to answer or answered dont know are not shown. Source: S. R. Collins and J. L. Kriss, The Public's Views on Health Care Reform in the 2008 Presidential Election, The Commonwealth Fund, January Analysis of the Commonwealth Fund Biennial Health Insurance Survey (2007).

11 THE COMMONWEALTH FUND Fifteen Options that Achieve Savings Cumulative 10-Year Savings Producing and Using Better Information Promoting Health Information Technology-$88 billion Center for Medical Effectiveness and Health Care Decision-Making-$368 billion Patient Shared Decision-Making-$9 billion Promoting Health and Disease Prevention Public Health: Reducing Tobacco Use-$191 billion Public Health: Reducing Obesity-$283 billion Positive Incentives for Health-$19 billion Aligning Incentives with Quality and Efficiency Hospital Pay-for-Performance-$34 billion Episode-of-Care Payment-$229 billion Strengthening Primary Care and Care Coordination-$194 billion Limit Federal Tax Exemptions for Premium Contributions-$131 billion Correcting Price Signals in the Health Care Market Reset Benchmark Rates for Medicare Advantage Plans-$50 billion Competitive Bidding-$104 billion Negotiated Prescription Drug Prices-$43 billion All-Payer Provider Payment Methods and Rates-$122 billion Limit Payment Updates in High-Cost Areas-$158 billion Source: Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending, Commonwealth Fund, December 2008.

12 THE COMMONWEALTH FUND Savings Can Offset Federal Costs of Insurance For All: Federal Spending Under Two Scenarios Dollars in billions * Selected options include improved information, payment reform, and public health. Data: Lewin Group estimates of combination options compared with projected federal spending under current policy.. Source: Bending the Curve: Options for Achieving Savings and Improving Value in U.S. Health Spending, Commonwealth Fund, December 2008.

13 THE COMMONWEALTH FUND References S. R. Collins and J. L. Kriss, Envisioning the Future: The 2008 Presidential Candidates' Health Reform Proposals, The Commonwealth Fund, January S. R. Collins and J. L. Kriss, The Public's Views on Health Care Reform in the 2008 Presidential Election, The Commonwealth Fund, January K. K. Shea, S. R. Collins, and K. Davis, Health Care Opinion Leaders' Views on the Presidential Candidates' Health Reform Plans, The Commonwealth Fund, January The Commonwealth Fund Commission on a High Performance Health System, A High Performance Health System for the United States: An Ambitious Agenda for the Next President, November S. R. Collins, C. Schoen, K. Davis, A. K. Gauthier, and S. C. Schoenbaum, A Roadmap to Health Insurance for All: Principles for Reform, The Commonwealth Fund, October