The Path to Reform as laid out by the Commonwealth Fund

By Clive Riddle , February 19, 2009

The Commonwealth Fund Commission on a High Performance Health System today published their report, the Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way, which the Commonwealth Fund in a press release distributed today bills as a proposal for “a comprehensive set of insurance, payment, and system reforms could guarantee affordable health insurance coverage, improve health outcomes, and slow the growth of health spending by $3 trillion by the end of the next decade” and “details the Commission’s recommendations for an integrated set of policies and assesses the impacts of specific policy actions from 2010 to 2020, compared to the status quo.”

The Commonwealth Fund is a major policy stakeholder organization in Washington, and has the ear of various key Democratic party health care leaders. Not that the eventual Administration or Congress reform proposal would mirror the Commonwealth Fund’s report by any means, but it has significant potential to influence the discussion, and thus bears reading.

 Here’s some projected results the report touts would be ultimately achieved via their proposed package:

• Insurance reforms would extend coverage to everyone within two years, with only 1 percent uninsured throughout the next decade. The number of uninsured, currently 48 million and estimated to increase to 61 million by 2020, would instead under the proposal decrease to 19.7 million in 2010, 6.3 million in 2011 and stabilize at 4 million for the rest of the decade
• Combined with payment and system reforms initiated in 2010, the integrated approach to reform could slow the growth of national health spending by a cumulative $3 trillion by 2020.
• Spending would still go up but at a slower rate. The U.S. is expected to spend $42 trillion on health care over the next 11 years, with spending rising 6.7 percent per year, the proposal package would lower this rate to 5.5 percent per year.

So how would such lofty results be achieved? Here’s a verbatim summary as provided in the 122 page report:

• National Health Insurance Exchange. Offers businesses and individuals a choice of private plans and a new public plan, phased in by size of firm with all eligible by 2014. Premium of the public plan would be community rated within broad age bands. Benefits are similar to the standard option in the Federal Employees Health Benefits Program. The plan would use Medicare’s claims administrative structure and reformed payment methods and rates.
• Individual Mandate. All individuals are required to obtain coverage.
• Affordability. Premiums are capped at 5 percent of income for low-income individuals and 10 percent of income for those in higher-income tax brackets.
• Shared Financial Responsibility. Employers are required to provide coverage or contribute to a trust fund. The example used in the model included 7 percent of payroll, up to $1.25 an hour.
• Medicaid/SCHIP Expansion. All individuals with incomes up to 150 percent of the federal poverty income level are eligible for Medicaid acute care benefits. Medicaid provider payment rates are raised to Medicare levels. The federal matching rate is increased to offset state costs.
• Medicare. The two-year waiting period for coverage of the disabled is eliminated. Medicare beneficiaries are offered a supplement with the same acute care benefits as in new public plan and premium affordability provisions.
• Insurance Market Reforms. Require community-rate premiums (age bands permitted) and guaranteed issue and renewal of policies. Premium and insurance information would be publicly available on the Web.
• Enhance Payment for Primary Care. Increase Medicare payments for primary care by 5 percent and apply differential updates for primary care and other care.
• Encourage Development and Spread of Patient-Centered Medical Homes. Provide payment per patient in addition to fee-for-service to practices qualified to provide patient-centered care. Reduced premiums and cost-sharing available to patients who designate a primary care practice as their medical home. Shared savings would be distributed on the basis of performance.
• Bundled Payments for Acute Care Episodes. Expand acute care payment to include services during the hospital stay and 30 days post-discharge in a global fee. The policy would be phased in, starting with inpatient services in 2010, then post-acute care in 2013, and hospital inpatient and outpatient physician care in 2016.
• Correcting Price Signals. Modify payments by: 1) slowing the rate of Medicare payment updates in geographic areas with high costs; 2) reducing prescription drug costs by having Medicare pay Medicaid prices for drugs used by dually eligible beneficiaries and determining Medicare payments for unique drugs with effective monopolies based on prices paid in other countries; and 3) resetting benchmarks for Medicare Advantage plans in each county to projected per-capita spending under traditional Medicare.
• Accelerate the Adoption and Use of Health Information Technology. Require all providers to report key health outcomes electronically by 2015 to qualify for payment updates. Provide funding to support health information networks and assistance for safety-net providers and small practices through a 1 percent assessment on insurance premiums and Medicare outlays.
• Center for Medical Effectiveness and Health Care Decision-Making. Create a mechanism to develop information on the clinical and cost-effectiveness of alternative treatment options. Fund the Center with a .05 percent assessment on insurance premiums and Medicare and Medicaid spending. Use the information in benefit designs with higher out-of-pocket costs or differential pricing depending on comparative effectiveness and include physician–patient shared decision
• Reduce Tobacco Use. Increase federal taxes on tobacco products by $2 per pack of cigarettes. Use revenues to fund public health programs and insurance expansion.
• Reduce Obesity and Alcohol Use. Establish a new tax on sugar-sweetened soft drinks of 1 cent per 12-ounces to finance state obesity prevention programs, and increase the federal excise tax on alcohol by 5 cents per 12-ounce can of beer, with proportionate increases on other alcohol products. Use funds for prevention and insurance expansion.

The Commonwealth Fund Commission on a High Performance Health System was established by the organization in 2005, to “seek opportunities to change the delivery and financing of health care to improve system performance, and to identify public and private policies and practices that would lead to those improvements. It also explores mechanisms for financing improved health insurance coverage and investment in the nation's capacity for quality improvement.”

So who has a seat at the table for the Commission. Not all major stakeholders. Integrated hospital/medical group systems, large non profit health plans, some progressive employers, and like-minded associations, policy institutions and academic institutions are well represented. For profit health plans and health care providers, non-integrated private providers, public agencies and dissimilar institutions are not. Here’s the list of the Commission members:

• James J. Mongan, M.D. (Chair), President and CEO, Partners HealthCare System, Inc.
• Maureen Bisognano, Executive Vice President and COO, Institute for Healthcare Improvement
• Christine K. Cassel, M.D., President and CEO, American Board of Internal Medicine and ABIM Foundation
• Michael Chernew, Ph.D., Professor, Department of Health Care Policy, Harvard Medical School
• Patricia Gabow, M.D., CEO, Denver Health
• Robert Galvin, M.D., Director of Global Health Care, General Electric Company
• Fernando A. Guerra, M.D., Director of Health, San Antonio Metropolitan Health District
• Glenn M. Hackbarth, J.D., Consultant
• George C. Halvorson, Chairman and CEO, Kaiser Foundation Health Plan, Inc.
• Robrrt M. Hayes, J.D., President, Medicare Rights Center
• Cleve L. Killingsworth, Chairman and CEO, Blue Cross Blue Shield of Massachusetts
• Sheila T. Leatherman, Research Professor, School of Public Health, University of North Carolina
• Gregory P. Poulsen, Senior Vice President, Intermountain Health Care
• Dallas L. Salisbury, President and CEO, Employee Benefit Research Institute
• Sandra Shewry, President and CEO, California Center for Connected Health
• Glenn D. Steele, Jr., M.D., Ph.D., President and CEO, Geisinger Health System
• Mary K. Wakefield, Ph.D., R.N., Associate Dean for Rural Health and Director, Center for Rural Health, University of North Dakota
• Alan R. Weil, J.D., Executive Director, National Academy for State Health Policy
• Steve Wetzell, Vice President, HR Policy Association