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What political propaganda has been so successful that people still believe in it today?There are actually there are three common miss conception in American Politics that are used as propaganda tag lines.Republican Administrations are better with EconomicsDemocrats are weak on National DefenseUniversal Health care will ruin level of care and destroy innovation in the medical field.All of these would be a multi-page answer as you will see from just working out on one and that one that I have chosen to respond with is :Universal health care will lower standard of care . Under universal health care medical advancement would stop.It is based on a false argument about free market rooted in pre Great depression economic philosophy which was all basically proven wrong by… wait for it … The Great DepressionThe level of Care argument is based in 1900s criticism by health lobbyistActually in the late 1980s early 1990s with the emergence of HMOs Physicians had created an elegant model that could have been applied to and was taken from the same universal health care system established by the US as part of the reconstruction of Japan.We would have universal health care at an affordable rate through no governmental means had insurance companies not destroyed the HMO model by leveraged buy outs and political lobbyingNot having it is killing babies.I am disabling comments on this because I know this topic very well. I know the history , the counter arguments and the history of the counter arguments and to be honest those who would argue the opposite tend to be very snide in comments and not accurate as I have said below in all the answers is that they date back almost 100 years and over a century of the it working in the rest of the world proves it wrong : You are more than free to write your own answer or if I trusted alt conservative readers to respond in an objective voice I wouldn’t, but life is too short to ignore the condescension I get in these replies while researching and counter-citing the outlandish rebukes that have no result in altering opinionUniversal health care will lower standard of care . Under universal health care medical advancement would stop.This dates back to the beginning of the new deal when Medicare was initially conceived as a different system than Medicare . Medicare like the ACA was a compromised deal.The way the argument works and has worked since 1929 is this. Democratic administrations and congresses fight for universal medical care they propose a watered downed version of what we know works because we … (this is what kills me) designed the policies and methods that have been adopted by other countries. So administration and congressional bill introductions offer a weakened plan that then gets more weakened and strip to pass at which point the opposition use these mauled ripped apart pieces of policy to attack the opposition. Basically I force you to compromise even more on a compromise then throw the passed legislation back in your face as how your plan doesn't work and this is why it seems democrats always lose the debate because they are saying “what the hell that is not our plan, it was your plan we dint want it but its what passed” Which is exactly why both Ryan and DJT were not and still are not able to offer a health care package unless they steal it completely from the democratic platform but then can not sustain an argument about why their opponents are wrong.( You can see how this can start to become a book because right now we could go into the argument I stated at the beginning that Republicans are better at the Economy : at this point we could extend into the entire argument about government involved and partnered in corporations we know works because we designed Japan at reconstruction that way … .but this answer even at this juncture is huge and we do not really have the time to go through how we know 40 years of Republican economic myths about unregulated industry doesn't work because we deliberately excluded those systems when we rebuilt both China’s and Japan’s economy after world war 2. Oh yea, missed that one in both high school and college history; what Reagan did not tell us and what DJT will not tell you are does not know, is that the the looming economic destruction from the Japanese in the 1980 and losing jobs to them and fearful they were holding so much debt: and China today is because we designed their systems with all of the stuff we refuse to put to work in the American economy because of the GOP fear of socialism and its not a fear of socialism its a fear of lower share holder pay outs.. I have to digress here because this is an entirely different topic and this is already a long parenthetic digression)Brief History of Universal Health Care in AmericaIn 1993, President Bill Clinton pushed for universal health care to lower the Medicare budget. First Lady Hillary Clinton led the initiative. Hillarycare used a managed competition strategy to achieve its purpose. The government would control the costs of doctor bills and insurance premiums. Health insurance companies would compete to provide the best and lowest cost packages. The plan encountered too much resistance from doctors, hospitals, and insurance companies to pass Congress.In the 2008 presidential campaign, Senator Barack Obama outlined a universal plan. Obama's health care reform plan offered a publicly-run program similar to that enjoyed by Congress. People could choose it or buy private insurance on an exchange. No one could be denied health insurance because of a pre-existing condition. The federal government would expand Medicaid funding and add subsidies.In 2009, President Obama proposed the Health Care for America Plan. It provided Medicare for all who wanted it. Monthly premiums were $70 for an individual, $140 for a couple, $130 for a single-parent family, and $200 for all other families.Employers could continue offering their plan if it was as good as the national plan. If they elected the national plan, they would pay a 6% payroll tax. The federal government could have bargained for lower prices and reduce inefficiencies. That would have lowered health care costs by 1.5% per year. It would have reduced visits to the emergency room by the uninsured.Too many people were afraid of universal health care. In 2010, Congress passed the Patient Protection and Affordable Care Act. More than half or 57% of Americans incorrectly think the ACA is universal health care. It attempted to enforce mandatory health insurance, similar to Germany's plan. But it allowed too many exemptions. It also allowed states to decide whether they would expand Medicaid. As a result, 13 million people still went without insurance. Trump's tax plan removes the mandate in 2019.2020 presidential candidate Bernie Sanders proposes a Medicare-for-all universal health plan. The government-run program would enroll all Americans. They would have no deductibles, copayments, or out-of-pocket expenses. Sanders would raise taxes to pay for it. The country would transition from Medicare, Medicaid, and all insurance to the new program over four years. The Veterans Affairs and Indian Health Services would remain.The plan would cover hospital visits, primary care, medical devices, lab services, maternity care, and prescription drugs. It would also cover vision and dental benefits as well as long-term care. Obamacare dropped long-term care because it was too expensive.The plan would cut administrative costs associated with the variety of insurance plans available today. The New England Journal of Medicine estimates that U.S. administrative costs are double that of Canada. A 2011 study estimates U.S. doctors spend four times as much as Canada dealing with insurance companies.“It was an effort to get universal health insurance, really, in the beginning of the 20th century,” admits Nancy Altman, president of Social Security Works. But FDR underestimated how contentious the idea would appear, especially given states like California had already introduced legislation (albeit failed) around universal health care.”Universal health care was almost part of the original Social Security Act of 1935The counter argument to it was completely generated by the GOP responding to fears of the nations conservatives at the speed that FDR was pushing new policies. You have to remember the country, like when President Obama took over, was on the verge of economic collapse.Some will try and compare the Great Depression and the Economic meltdown and argue that the Great Depression was worse. It was only because of the length of response to it. The truth is that the effects were basically the same the difference being that the Great Depression lasted longer and took longer to recover from because of the policies and safeguards that FDR implemented that Reagan and the Bushs administrations chipped away at or maybe we are going to ignore that every Republican Administration since WW2 has come with an economic crises, the S&L Crisis of the 1980, the economic meltdown , The Great Depression etc. The only reason Nixon was able to avoid one was because he stole out of the democratic play book took us off the Gold Standard and increased the debt ceiling causing the formation of the Libertarian movement. I do not want to dwell that long on this because it will drift of topic.This is how it works , since Theodore Roosevelt the Democratic Party has been pushing for health care for all and since then it has been being fought . FDR, Truman and Johnson all pushed the goal further as well as Clinton and Obama. Even Nixon was in favor of it , however, did not have the political capital to spend on it.The argument had no factual basis then as it still really does not now . Any statistical proof offered is based primarily on push questions . The reason for it being blocked initially was for two reasons Hoover and later completely politic retribution for FDR winning the Presidency. Thats it that is why we have not had universal health care since 1930.“ GOP and private medical lobbies like the American Health Association, which accused FDR of socialist conspiracy and government overreachHoover did not propose universal health care because he was very close to being by today”s standard. In fact the Libertarian party only was formed as a result of Nixon wanting to increase the debt ceiling and remove us from the gold standard.“His predecessor, President Herbert Hoover, had upheld a policy of federal distance when it came to economic matters. A proponent of the free market, even amidst crisis, Hoover instead called on states to stabilize income and private charities to serve the immediate needs of the poor. It didn’t work. In 1931, the unemployment rate hit 15.8 percent. By 1933, the year FDR took office, it would reach 25 percent. Families were homeless and starving. Those who did work could not afford any sick time. The effects of nationwide poverty impacted all Americans.” Universal health care was almost part of the original Social Security Act of 1935“Because Roosevelt was pushing quickly, and had offhandedly mentioned the potential of comprehensive health care, Americans grew concerned. Their suspicions were fanned by the GOP and private medical lobbies like the American Health Association, which accused FDR of socialist conspiracy and government overreach.”Universal health care was almost part of the original Social Security Act of 1935Why America Is the Only Rich Country Without Universal Health CareAdditionally believe it or not we have a really bad form of it independent of the ACA and Medicare .The reason hospital costs are what they are is because uncollected and unpaid costs are dispersed across those costs that can be covered . So the cost of care would actually go down as the level of care would remain.The medical breakthroughs and new techniques have nothing to do with private insurance or medicine. These are developed by research grants and the like and not paid for as standards of care . In fact these procedures are more likely to be covered via universal health care as private insurance does not cover anything seamed experimental.In truth universal health care has been basically a fact of life for the rest of the world since the 1900, FDR was attempting to pass a policy that would con temporize American Medical Economics with the rest of the industrialized world:Many European countries were passing the first social welfare acts and forming the basis for compulsory government-run or voluntary subsidized health care programs.The United Kingdom passed the National Insurance Act of 1911 that provided medical care and replacement of some lost wages if a worker became ill. It did not, however, cover spouses or dependents. U.S. efforts to achieve universal coverage began with progressive health care reformers who supported Theodore Roosevelt for President in 1912, though he was defeated.Progressives campaigned unsuccessfully for sickness insurance guaranteed by the states. A unique American history of decentralization in government, limited government, and a tradition of classical liberalism are all possible explanations for the suspicion around the idea of compulsory government-run insurance.[The American Medical Association (AMA) was also deeply and vocally opposed to the idea,which it labeled "socialized medicine". In addition, many urban US workers already had access to sickness insurance through employer-based sickness funds. History of health care reform in the United States - WikipediaHere is the worst part we are supposed to be the most advanced country in the world. we are supposed to have medical care that supercedes everyone. Universal health care is supposed to destroy standard of care. Yet, in response to all these claims the opposition of universal medical coverage is at a failure to explain why America is on par with some of the worst places in the world for pre-nadial care and infant mortality. If universal health care ruins standard of care then how come so many babies born in the system do not survive compared with other countries that have it.We want to be pro-life because human life is sacred ( but our medical care system is resulting in an infant mortality rate on par with the third word.This argument should sound familiar it is the exact same argument used today and has been being used by the medical lobby and later the medical and insurance lobby since the 1900 adopted by the GOP in order to assist in winning political elections.The truth is that universal health care does and has worked for over a century around the rest of the civilized industrial first world and any one who is a governmental employee or a servicing military member can attest to the low cost and complete care. The tricare and other government plans are actually based on the pre-medicare compromise proposed under the New Deal:Here is a comparison of how universal health care works as well as a complete understanding of it :Summary of Seven Countries' Universal Health PlansAustralia: Australia adopted a two-tier system. The government pays two-thirds, and the private sector pays one-third. The public universal system is called Medicare. Everyone receives coverage. That includes visiting students, people seeking asylum, and those with temporary visas. People must pay deductibles before government payments kick in. Half of the residents have paid for private health insurance to receive a higher quality of care. Those who buy private insurance before they reach 30 receive a lifetime discount.Government regulations protect seniors, the poor, children, and rural residents.In 2016, health care cost 9.6% of Australia's gross domestic product. The per capita cost was US$4,798. The Organization for Economic Cooperation and Development disclosed that 22.4% of patients reported a wait time of more than four weeks to see a specialist. On the other hand, only 7.8% of patients skipped medications because the cost was too high. In 2015, the Australian life expectancy was 84.5 years.Canada: Canada has a single-payer system. The government pays for services provided by a private delivery system. The government pays for 70% of care. Private supplemental insurance pays for vision, dental care, and prescription drugs. Hospitals are publicly funded. They provide free care to all residents regardless of the ability to pay. The government keeps hospitals on a fixed budget to control costs. It reimburses doctors at a fee-for-service rate. It negotiates bulk prices for prescription medicine.In 2016, health care cost 10.6% of Canada’s GDP. The cost per person was US$4,752, and 10.5% of patients skipped prescriptions because of cost. A whopping 56.3% of patients waited more than four weeks to see a specialist. As a result, many patients who can afford it go to the United States for care. In 2015, the life expectancy was 82.2 years. Canada has high survival rates for cancer and low hospital admission rates for asthma and diabetes.France: France has an excellent two-tier system. Its mandatory health insurance system covers 75% of health care spending. That includes hospitals, doctors, drugs, and mental health. Doctors are paid less than in other countries, but their education and insurance is free. The French government also pays for homeopathy, house calls, and child care. Of that, payroll taxes fund 40%, income taxes cover 30%, and the rest is from tobacco and alcohol taxes. For-profit corporations own one-third of hospitals.Patients give care consistent high ratings.In 2016, health care cost 11% of GDP. That was US$4,600 per person. In 2013, 49.3% of patients reported a wait time of more than four weeks to see a specialist. But only 7.8% of patients skipped prescriptions because of cost. In 2015, the life expectancy was 85.5 years.Germany: Germany has mandatory health insurance sold by 130 private nonprofits. It covers hospitalization, outpatient, prescription drugs, mental health, eye care, and hospice. There are copays for hospitalization, prescriptions, and medical aids. There is additional mandatory long-term care insurance. Funding comes from payroll taxes. The government pays for most of the health care. It limits the amount of the payments and the number of people each doctor can treat. People can buy more coverage.In 2016, health care cost 11.3% of GDP. That averaged US$5,550 per person. Only 3.2% of patients skipped prescriptions because of cost. Also, 11.9% of patients reported a wait time of more than four weeks to see a specialist. But most Germans can get next-day or same-day appointments with general practitioners. In 2015, the life expectancy was 83.1 years.Singapore: Singapore's two-tier system is one of the best in the world. Two-thirds is private and one-third public spending. It provides five classes of hospital care. The government manages hospitals that provide low-cost or free care. It sets regulations that control the cost of the entire health care system. People can buy higher levels of deluxe care for a fee. Workers pay 20% of their salary to three mandated savings accounts. The employer pays another 16% into the account. One account is for housing, insurance, or education investment.The second account is for retirement savings. The third is for health care. The Medisave account collects 7% to 9.5% of income, earns interest, and is capped at the $43,500 income. More than 90% of the population enrolls in Medishield, a catastrophic insurance program. The Medifund pays for health costs after the Medisave and Medishield accounts are exhausted. Eldershield pays for nursing home care. Once an employee turns 40, a portion of income is automatically deposited into the account.In 2009, Singapore spent 4.9% of its GDP on health care. That's US$2,000 per person. In 2015, life expectancy was 83.1 years.Switzerland: The country has mandatory health insurance that covers all residents. Quality of care is one of the best in the world. Coverage is provided by competing private insurance companies. People can buy voluntary insurance to access better hospitals, doctors, and amenities. The government pays for 60% of the country's health care. Dental care is not covered. Vision is only covered for children. The government subsidizes premiums for low-income families, about 30% of the total. There is a 10% coinsurance cost for services and 20% for drugs.These out-of-pocket costs are waived for maternity care, preventive care, and child hospitalization. The government sets prices.In 2016, health care spending was 12.4% of GDP. It was US $7,919 per person. There were 11.6% of patients who skipped prescriptions because of cost. Also, 20.2% of patients reported a wait time of more than four weeks to see a specialist. In 2015, life expectancy was 83.4 years.United Kingdom: The United Kingdom has single-payer socialized medicine. The National Health Service runs hospitals and pays doctors as employees. The government pays 80% of costs through general taxes. It pays for all medical care, including dental, hospice care, and some long-term care and eye care. There are some copays for drugs. All residents receive free care. Visitors receive care for emergencies and infectious diseases. Private insurance for elective medical procedures is available.In 2016, health care costs were 9.7% of GDP. The cost was US$4,193 per person. Only 2.3% of patients skipped prescriptions because of cost. But 29.9% of patients reported a wait time of more than four weeks to see a specialist. To keep prices low, some expensive and uncommon drugs aren't available. Hospitals can be crowded with long wait times. In 2018, the flu outbreak extended wait times to 12 hours. But most measures of health, like infant mortality rates, are better than average. In 2015, life expectancy was 81.2 years.Comparison to the United StatesThe United States has a mixture of government-run and private insurance. The government pays most of the cost, but also subsidizes private health insurance through Obamacare. One-third of the costs is for administration, not patient care. Health care service providers are private. Sixty percent of citizens get private insurance from their employers. Fifteen percent receive Medicare for those 65 and older. The federal government also funds Medicaid for low-income families and the Children's Health Insurance Program for children.It pays for veterans, Congress, and federal employees. Despite all these, there are 28 million Americans who have no coverage. They either are exempt from the Obamacare mandate or can't afford insurance.In 2016, health care cost 18% of GDP. That was a staggering US$9,892 per person. Exactly 18% of patients skipped prescriptions because of cost. But only 4.9% of patients reported a wait time of more than four weeks to see a specialist. In 2015, life expectancy was 79.3 years. The third leading cause of death was a medical error. The quality of care is low. It ranks 28th according to the United Nations.Why does the United States have such high costs and such low quality? Most patients don't pay for their medical services. As a result, they can't price-shop doctors and hospital procedures. There is no competitive reason for providers to offer lower costs. The government can negotiate lower prices for those covered by Medicare and Medicaid. But competing health insurance companies don't have the same leverage.Insurance and drug companies want to maintain the status-quo. They don't want the government restricting prices. They lobby to prevent universal health care. But 60% of Americans want Medicare for all. California, Ohio, Colorado, Vermont, and New York are moving toward universal health care in their states.Affordable universal health care was at its closest before being dessimated by the insurance lobby with the rise and fall of the HMO :The problem with American health care is not the care. It’s the insurance.Both parties have stumbled to enact comprehensive health care reform because they insist on patching up a rickety, malfunctioning model. The insurance company model drives up prices and fragments care. Rather than rejecting this jerry-built structure, the Democrats’ Obamacare legislation simply added a cracked support beam or two. The Republican bill will knock those out to focus on spackling other dilapidated parts of the system.An alternative structure can be found in the early decades of the 20th century, when the medical marketplace offered a variety of models. Unions, businesses, consumer cooperatives and ethnic and African-American mutual aid societies had diverse ways of organizing and paying for medical care.Physicians established a particularly elegant model: the prepaid doctor group. Unlike today’s physician practices, these groups usually staffed a variety of specialists, including general practitioners, surgeons and obstetricians. Patients received integrated care in one location, with group physicians from across specialties meeting regularly to review treatment options for their chronically ill or hard-to-treat patients.Individuals and families paid a monthly fee, not to an insurance company but directly to the physician group. This system held down costs. Physicians typically earned a base salary plus a percentage of the group’s quarterly profits, so they lacked incentive to either ration care, which would lose them paying patients, or provide unnecessary care. Opinion | How Did Health Care Get to Be Such a Mess?A Regulated System of Health PlansOne way to achieve universal coverage is through a system of competing private health insurance carriers. In the Netherlands and Switzerland, people are legally required to buy private insurance or else pay a fine. The Dutch choose between plans offered on a national marketplace, while the Swiss shop on regional marketplaces. These systems resemble the marketplaces introduced in the U.S. by the Affordable Care Act (ACA).1But there are key differences. In the Netherlands, financing is shared between individuals and their employers, and insurance plans also cover dependents. But the Swiss pay the entirety of their plan costs, and children require the purchase of separate plans.The Dutch also pay lower premiums, averaging around $115 to $150 per month, compared to $385 per month in Switzerland. In comparison, average employee premiums in the U.S. in 2017 were $118 for single-person plans and $435 for family plans. Approximately 40 percent of the Dutch, moreover, receive tax subsidies to purchase insurance, similar to the subsidies introduced by the ACA.Cost-sharing is also lower in the Netherlands: there is none for primary care and preventive services, while copayments for other services are capped at $475 per year, after which they are free. By contrast, the Swiss face copayments for all services up to a deductible of their choosing, between $248 and $2,065. After this, 10 percent to 20 percent coinsurance applies on all services, capped at $579 per year for adults. All told, average annual out-of-pocket costs in Switzerland are nearly four times higher than those in the Netherlands ($2,313 vs. $605).A Single Public PlanIn countries that have public insurance systems, also known as “single payer” systems, national, regional, or local governments are the main payer of health care. In the United Kingdom, the National Health Service is funded by national taxes, while other systems are decentralized, with revenues raised through regional taxes (Canada) or local taxes (Sweden). In Norway, funding is split: primary care is funded through municipal taxes, while national taxes pay for hospital and specialty care.The House and Senate bills that would introduce a single public plan for the U.S., however, differ from the approaches taken in other countries in two important ways.First, many of these proposals would impose no patient cost-sharing. This is in contrast to Scandinavia, where patients pay copayments for most services. Norwegians pay $17 (U.S.) for primary care visit, $39 for specialist visits, and up to $51 for prescription drugs. At the same time, total annual out-of-pocket spending is capped at $221 per year (as of 2017), after which services are free; also, vulnerable populations such as children and pregnant women are exempt from most cost-sharing. Even in countries where physician and hospital services are free, such as the U.K. and Canada, patients pay some portion of prescription drug costs.Second, the single public plans that have been proposed in the U.S. so far would provide everyone with a wide range of benefits, including vision, dental, and long-term care. Most countries with universal coverage, however, cover vision and dental benefits only for targeted populations such as children and low-income adults. Similarly, long-term care is not typically covered. Instead, these services are financed separately, whether through national long-term care insurance or local taxes.Variations on a Theme: A Look at Universal Health Coverage in Eight CountriesCONCLUSION“Although more than half Americans support the idea of universal health care, U.S. health care is not as inclusive as in Germany, Switzerland, France, Singapore, and the United Kingdom. Obamacare is the closest to universality the United States has ever implemented, but it falls short because of its many exemptions.For universal health care to work, everyone, including healthy people, must pay premiums or additional taxes to pay for health care. This funds the security health blanket for all citizens. Ideally, with a health care system under government regulation, everyone will have access to quality treatments at low costs. Such a system would provide very affordable preventative care and implement strict control of pricing and quality of drugs and medical services.”Why America Is the Only Rich Country Without Universal Health CareThe truth is that the reason we do not have health care is because of lobbyist working on behalf of privatized health care in the 1900 and basically a libertarian President in Hoover. The Great Depression taught us that most economic theory leading up to it did not work, and we know this because we built hybrid economies all over asia when we reconstructed them. That there is no correlation between level and care and universal healthcare and in most instances level and speed of care increases. We know from medicare, governmental plans, and service member health care that administration can be cheaper when not paying out to share holders and bonuses to sales people , adjusters and CEOs. We know that 35 percent minimum of the amount you spend on insurance and closer to 43 percent to the hospital goes to administration and share holders and not the level of care. We know that it has nothing to do with medical advancement because this is done through grants and non directed research money and fellowships and never covered under health insurance anyway. It is not in private health cares best interest to develop new procedures because the cost of a new procedure though better takes a minimum of a decade to become mainstay. We know from the opiod epidemic exactly what private health care does to the medical system (if you do not understand this statement suggest that you watch any of the many videos easily available. John Oliver has a perfect summary of it on Last Week Tonight titled Opiod Epidemic 3) But the bottom line is that universal health care saves babies.History of health care reform in the United States - WikipediaThe Nation: Health Care Through FDR's LensesUniversal health care was almost part of the original Social Security Act of 1935Opinion | How Did Health Care Get to Be Such a Mess?Variations on a Theme: A Look at Universal Health Coverage in Eight CountriesWhy America Is the Only Rich Country Without Universal Health CareVariations on a Theme: A Look at Universal Health Coverage in Eight Countries

Yes it would be massively cheaper. Look at the systems implemented in any country outside the US (or even within it like TRICARE): Germany, Taiwan, etc.Lower prices are achieved through systemic efficiencies, cost management including collective bargaining, etc. These programs have a range of imperfections and benefits, the most significant of which are higher average lifespans at lower cost—and notably I presume higher lifespan productivity from reduced illness.You’ll find arguments around the details and rarely do they including any basis in a well reasoned, grounding in fact. I imagine you could get a PhD on the subject but the outcomes are clear, we spend approximately 2 times, meaning double, what is typical per person. This is a total lack of due diligence in government oversight and a natural failing of our flawed system.I used to work for a clinical evidence based care guidelines company connected with actuaries and the quality of care and treatment plans vary widely across the country. I also happen to observe a range of details in a clinical support role as well as my large extended family. You would not believe the inexcusable waste, poor outcomes, mistakes, pressures from business interests to increase revenue. Doctors have demonstrated they can’t get past their demands on time, business and insurance interests have demonstrated they can’t see past the numbers—this is a problem with distributed governance and nothing more or less. A solution would, be a distributed system with balanced competing concerns: evidence based outcomes, ethics, actuarial science, auditing with standard coding, payment processing and outcome reporting. Implementations at the State level with national guidelines established through license-required participation, required reporting and a proper electronic system would probably more than halve the current cost of what we spend. Because we are a larger population than the other systems we should achieve greater results at lower cost—yet we have the opposite today. Please vote—it is our duty as citizens and this is a key issue (17% of GDP!).

The six major government health care programs—Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP), the Department of Defense TRICARE and TRICARE for Life programs (DOD TRICARE), the Veterans Health Administration (VHA) program, and the Indian Health Service (IHS) program—provide health care services to about one-third of Americans. The federal government has a responsibility to ensure that the more than $500 billion invested annually in these programs is used wisely to reduce the burden of illness, injury, and disability and to improve the health and functioning of the population. It is imperative that the federal government exercise strong leadership in addressing serious shortcomings in the safety and quality of health care in the United States.RECOMMENDATION 1: The federal government should assume a strong leadership position in driving the health care sector to improve the safety and quality of health care services provided to the approximately 100 million beneficiaries of the six major government health care programs. Given the leverage of the federal government, this leadership will result in improvements in the safety and quality of health care provided to all Americans.Suggested Citation:"2 Overview of the Government Health Care Programs." Institute of Medicine. 2003. Leadership by Example: Coordinating Government Roles in Improving Health Care Quality. Washington, DC: The National Academies Press. doi: 10.17226/10537.The six major government health care programs serve older persons, persons with disabilities, low-income mothers and children, veterans, active-duty military personnel and their dependents, and Native Americans. Three of these programs—Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP)—were devised for groups for whom the health care market has historically failed to work because of their high health care needs and low socioeconomic status. The remaining three programs—DOD TRICARE, VHA, and IHS—serve particular populations with whom the federal government has a special relationship, respectively, military personnel and their dependents, veterans, and Native Americans.Many millions of Americans receive services through multiple government programs simultaneously. Low-income Medicare beneficiaries who qualify for both Medicare and Medicaid account for 17 percent of the Medicare population and 19 percent of the Medicaid population (Gluck and Hanson, 2001; Health Care Financing Administration, 2000). These “dual eligibles” account for a total of 28 percent of Medicare expenditures and 35 percent of Medicaid expenditures. Native Americans eligible to receive services through IHS may also qualify for Medicaid if they satisfy income and other eligibility requirements, and those aged 65 and older may qualify for Medicare. Nearly 45 percent of veterans are 65 years and older and also qualify for Medicare (Van Diepen, 2001b). In addition, many Americans eligible for these programs have private supplemental insurance as well. Thus, patients and clinicians would surely benefit from greater consistency in quality enhancement requirements, measures, and processes across public and private insurance programs.Table 2-1 provides a capsule summary of the six government health care programs. A more detailed description of the programs is provided in the following section. The broad trends affecting the needs and expectations of the programs’ beneficiaries are then reviewed. The final section examines some key features of the programs beyond their quality enhancement processes.MEDICARE1Medicare provides health insurance to all individuals eligible for social security who are aged 65 and over, those eligible for social security because of a disability, and those suffering from end-stage renal disease (ESRD)—a total of about 40 million beneficiaries and growing. While chronic condition and 63 percent have two or more (Anderson, 2002). The over 30 percent of the Medicare population that has a physical and/or cognitive impairment accounts for about 60 percent of expenditures (see Figure 2-1). Medicare beneficiaries with three or more chronic conditions account for the bulk of program expenditures (see Figure 2-2). The most prevalent diagnoses in persons aged 65 and over—high blood pressure, osteoporosis, chronic obstructive pulmonary disease, asthma, diabetes, heart disease, and stroke—are all chronic illnesses requiring medical management over extended time periods and multiple settings (Medical Ex-Suggested Citation:"2 Overview of the Government Health Care Programs." Institute of Medicine. 2003. Leadership by Example: Coordinating Government Roles in Improving Health Care Quality. Washington, DC: The National Academies Press. doi: 10.17226/10537.FIGURE 2-1 Medicare beneficiaries with cognitive and/or physical limitations as a percentage of beneficiary population and total Medicare expenditures, 1997. NOTE: A person with cognitive impairment has difficulty using the telephone or paying bills, or has Alzheimer’s disease, mental retardation, or various other mental disorders. A person with physical impairment is someone reporting difficulty performing three or more activities of daily living.SOURCE: Reprinted with permission from Moon and Storeygard, 2001.penditure Panel Survey, 1998). The fastest-growing sectors in Medicare in terms of spending (though not the largest proportion of total program spending) have been home health, skilled nursing facilities, and hospice care, reflecting a shift in demand toward more chronic care.MEDICAID2Medicaid serves about 42 million people who are poor and who require health care services to achieve healthy growth and development goals or meet special health care needs. The program covers low-income people who meet its eligibility criteria, such as children, pregnant women, certain low-income parents, disabled adults, federal Supplemental Security Income (SSI) recipients (low-income children and adults with severe disability), and the medically needy (non-poor individuals with extraordinary medical expenditures who meet spend-down requirements generally for long-term care). There is a good deal of variability across states in the maximum income for eligibility.Unless otherwise indicated, data in this section are based on Centers for Medicare and Medicaid Services, 2000a.Suggested Citation:"2 Overview of the Government Health Care Programs." Institute of Medicine. 2003. Leadership by Example: Coordinating Government Roles in Improving Health Care Quality. Washington, DC: The National Academies Press. doi: 10.17226/10537.FIGURE 2-2 Medicare beneficiaries with five or more chronic conditions account for two-thirds of Medicare spending.SOURCE: Centers for Medicare and Medicaid Services, 1999.Medicaid is administered and financed jointly by the federal government and the states, although the federal government pays for over 50 percent of aggregate program expenditures (U.S. Government Printing Office, 2002). There is a good deal of variability in methods of health care delivery and financing across states. Medicaid programs rely extensively on private-sector health care providers, managed care plans, and community health centers to deliver services and, to a lesser degree, state, county, or other publicly owned facilities or programs. Nationwide, over half of the total Medicaid population is enrolled in Medicaid managed care arrangements. Institutionalized, disabled, dually eligible, and elderly beneficiaries are most likely to receive services through FFS payment arrangements.The majority of Medicaid beneficiaries are children (54 percent), most under the age of 6 (see Figure 2-3). Each year, over one-third of all births in the United States are covered by Medicaid. While a minority of the program in terms of population (26 percent), the aged/blind/disabled account for 71 percent of program expenditures. Over half of Medicaid expenditures are for long-term care services, with the majority going to institutional long-term care providers (Centers for Medicare and Medicaid Services, 2000a).While coordinated collection of Medicaid data from the states is lacking, other data sources indicate a substantial prevalence of chronic condi-Suggested Citation:"2 Overview of the Government Health Care Programs." Institute of Medicine. 2003. Leadership by Example: Coordinating Government Roles in Improving Health Care Quality. Washington, DC: The National Academies Press. doi: 10.17226/10537.FIGURE 2-3 Distribution of persons served through Medicaid and payments by basis of eligibility, fiscal year 1998.NOTE: Disabled children are included in the aged, blind and disabled category.SOURCE: Centers for Medicare and Medicaid Services, 2000a.tions in the program. These conditions include asthma, diabetes, neurological disorders, high blood pressure, mental illness, substance abuse, and HIV/AIDS (Centers for Medicare and Medicaid Services, 2001c; Medical Expenditure Panel Survey, 1996; Westmoreland, 1999).STATE CHILDREN’S HEALTH INSURANCE PROGRAM3Designed as a joint federal-state program, SCHIP was created in 1997 to provide health insurance to poor and near-poor children through age 18 without another source of insurance. Approximately 4.6 million children were enrolled in SCHIP as of fiscal year 2001 (Centers for Medicare and Medicaid Services, 2000b). SCHIP is targeted to children with incomes that exceed Medicaid eligibility requirements but remain under 200 percent of the federal poverty level (FPL) (Rosenbach et al., 2001). Some states recognized American Indian and Alaska Native tribes. IHS currently provides health services to approximately 1.4 million American Indians and Alaska Natives belonging to more than 557 federally recognized tribes in 35 states.The provision of these health services is based on treaties, judicial determinations, and acts of Congress that result in a unique government-to-government relationship between the tribes and the federal government. IHS, the principal health care provider, is organized as 12 area offices located throughout the United States. These 12 areas contain 550 health care delivery facilities operated by IHS and tribes, including: 49 hospitals; 214 health centers; and 280 health stations, satellite clinics, and Alaska village clinics. Almost 44 percent of the $2.6 billion IHS budget is transferred to the tribes to manage their own health care programs.Poverty and low education levels strongly affect the health status of the Indian people. Approximately 26 percent of American Indians and Alaska Natives live below the poverty level, and more than one-third of Indians over age 25 who reside in reservation areas have not graduated from high school. Common inpatient diagnoses include diabetes, unintentional injuries, alcoholism, and substance abuse.BROAD TRENDS AFFECTING THE NEEDS AND EXPECTATIONS OF BENEFICIARIESIn identifying ways to improve the quality enhancement processes of government health care programs, it is important to understand both the needs and expectations of today’s beneficiaries and the trends likely to affect these needs and expectations in the future. As beneficiaries’ needs and expectations evolve over time, so, too, must the government health care programs. This section highlights two important trends: the increase in chronic care needs and expectations for patient-centered care.Chronic Care NeedsTrends in the epidemiology of health and disease and in medical science and technology have profound implications for health care delivery. Chronic conditions (defined as never resolved conditions, with continuing impairments that reduce the functioning of individuals) are now the leading cause of illness, disability, and death in the United States and affect almost half the U.S. population (Hoffman et al., 1996). Most older people have at least one chronic condition, and many have more than one (Administration on Aging, 2001). Fully 30 percent of those aged 65–74, and over 50 percent of those aged 75 and older report a limitation caused by a chronic condition (Administration on Aging, 2001). The proportion of children and adolescents with limitation of activity due to a chronic health condition more than tripled from 2 percent in 1960 to over 7 percent in the late 1990s (Newacheck and Halfon, 1998).Thus, the majority of U.S. health care resources is now devoted to the treatment of chronic disease (Anderson and Knickman, 2001). This trend is strongly reflected in the government health care programs. In the Medicare and VHA programs, most of the beneficiaries have multiple chronic conditions. Diseases such as asthma, diabetes, hypertension, cancer, congestive heart failure, and mental health and cognitive disorders are important clinical concerns for all or nearly all of the programs.The increasing prevalence of chronic illness challenges systems of care designed for episodic contact on an acute basis (Wagner et al., 1996). Hospitals and ambulatory settings are generally designed to provide acute care services, with limited communication among providers, and communication between providers and patients is often limited to periodic visits or hospitalizations for acute episodes. Serious chronic conditions, however, require ongoing and active medical management, with emphasis on secondary and tertiary prevention. The same patient may receive care in multiple settings, so that there is frequently a need to coordinate services across a variety of venues, including home, outpatient office or clinic setting, hospital, skilled nursing facility, and when appropriate, hospice.There is mounting evidence that care for chronic conditions is seriously deficient. Fewer than half of U.S. patients with hypertension, depression, diabetes, and asthma are receiving appropriate preventive, acute, and chronic disease management services (Clark, 2000; Joint National Committee on Prevention, 1997; Legorreta et al., 2000; Wagner et al., 2001; Young et al., 2001). Health care is typically delivered by a mix of providers having separate, unrelated management systems, information systems, payment structures, financial incentives, and quality oversight for each segment of care, with disincentives for proactive, continuous care interventions (Bringewatt, 2001). For individuals with multiple chronic conditions, coordination of care and communication among providers are major problems that require immediate attention.There are many efforts under way to develop new models of care capable of meeting the needs of the chronically ill. For example, Healthy Future Partnership for Quality, an initiative in Maine now in its fifth year, enrolls insured individuals (from leading health plans and the state Medicaid program) and uninsured individuals (covered by a 10 percent surcharge on the fee for each insured participant and paid by insurance companies) with chronic illness in an intensive care management program that provides patient education, improved access to primary care and preventive services, and disease management (Healthy Futures Partnership for Quality Project, 2002). The diabetes telemedicine collaborative in New York State (IDEATel, 2002) is a randomized controlled trial supported by CMS and others. It involves 1,500 patients, half of whom participate in home monitoring (using devices that read blood sugar, take pictures of skin and feet, and check blood pressure), intensive education on diabetes, and reminders and instructions on how to manage their disease.The changing clinical needs of patients have important implications for government quality enhancement processes. These processes and the health care providers they monitor should be capable of assessing how well patients with chronic conditions are being managed across settings and time. This capability necessitates consolidation of all clinical and service use information for a patient across providers and sites, a most challenging task in a health care system that is highly decentralized and relies largely on paper medical records.Patient-Centered CarePatient-centered care is respectful of and responsive to individual patient preferences, needs, and values and ensures that patient values and circumstances guide all clinical decisions (Institute of Medicine, 2001). Informed patients participating actively in decisions about their own care appear to have better outcomes, lower costs, and higher functional status than those who take more passive roles (Gifford et al., 1998; Lorig et al., 1993, 1999; Stewert, 1995; Superio-Cabuslay et al., 1996; Van Korff et al., 1998). Most patients want to be involved in treatment decisions and to know about available alternatives (Guadagnoli and Ward, 1998); (Deber et al., 1996; Degner and Russell, 1988; Mazur and Hickam, 1997). Yet many physicians underestimate the extent to which patients want information about their care (Strull et al., 1984), and patients rarely receive adequate information for informed decision making (Braddock et al., 1999).Patient-centered care is not a new concept, rather one that has been shaping the clinician and patient relationship for several decades. Authoritarian models of care have gradually been replaced by approaches that encourage greater patient access to information and input into decision making (Emanuel and Emanuel, 1992), though only to the extent that the patient desires such a role. Some patients may choose to delegate decision making to clinicians, while patients with cognitive impairments may not be capable of participating in decision making and may be without a close family member to serve as a proxy. Patients may also confront serious constraints in terms of covered benefits, copayments, and ability to pay (discussed below under benefits and copayments)American Society of Internal Medicine (ACP-ASIM) Foundation, and the European Federation of Internal Medicine embodies three fundamental principles to guide the medical profession, including:Principle of Patient Autonomy. Physicians must have respect for patient autonomy. Physicians must be honest with their patients and empower them to make informed decisions about their treatment. Patients’ decisions about their care must be paramount, as long as those decisions are in keeping with ethical practice and do not lead to demand for inappropriate care (American Board of Internal Medicine et al., 2002, p. 244).The current focus on making the health care system more patient-centered stems at least in part from the growth in chronic care needs discussed above. Effective care of a person with a chronic condition is a collaborative process, involving extensive communication between the patient and the multidisciplinary team (Wagner et al., 2001). Patients and their families or other lay caregivers deliver much if not most of the care. Patients must have the confidence and skills to manage their condition, and they must understand their care plan (e.g., drug regimens and test schedules) to ensure proper and safe implementation. For many chronic diseases, such as asthma, diabetes, obesity, heart disease, and arthritis, effective ongoing management involves changes in diet, increased exercise, stress reduction, smoking cessation, and other aspects of lifestyle (Fox and Gruman, 1999; Lorig et al., 1999; Von Korff et al., 1997).Pressures to make the care system more respectful of and responsive to the needs, preferences, and values of individual patients also stem from the increasing ethnic and cultural diversity that characterizes much of the United States. Although minority populations constitute less than 30 percent of the national population, in some states, such as California, they already constitute about 50 percent of the population (Institute for the Future, 2000). A culturally diverse population poses challenges that go beyond simple language competency and include the need to understand the effects of lifestyle and cultural differences on health status and health-related behaviors; the need to adapt treatment plans and modes of delivery to different lifestyles and familial patterns; the implications of a diverse genetic endowment among the population; and the prominence of nontraditional providers as well as family caregivers.Although there has been a virtual explosion in Web-based health and health care information that might help patients and clinicians make more informed decisions, the information provided is of highly variable quality (Berland et al., 2001; Biermann et al., 1999; Landro, 2001). Some sites provide valid and reliable information. These include the National Library of Medicine’s Medline Plus sites (Lindberg and Humphreys, 1999); the National Diabetes Education Program, launched by the Centers for Disease Control and Prevention and the National Institutes of Health (U.S. Government Printing Office, 2001); and the National Health Council’s public education campaign. There are also notable efforts to provide consumers with comparative quality information on providers and health plans. Examples are the health plan report cards produced by the National Committee for Quality Assurance and by the Consumers Union/California HealthCare Foundation Partnership and nursing home quality reports produced by CMS (Centers for Medicare and Medicaid Services, 2001a; Consumers Union/California Healthcare Foundation Partnership, 2002; National Committee for Quality Assurance, 2002). These efforts are discussed further in Chapter 5. There is little doubt, however, that we are embarking on a long journey to determine how best to make valid and reliable information available to diverse audiences with different cultural and linguistic capabilities (Foote and Etheredge, 2002).In general, communication with consumers is enhanced through the use of common terminology, standardized performance measures, and reporting formats that follow common conventions. At the program level, the predilection of each government program to design and operate its health care quality enhancement processes independently is a serious problem.KEY PROGRAM FEATURESAlthough the focus of this report is on quality enhancement processes, the committee believes it important to acknowledge other important program features—such as benefits, payment approaches, and program design and administration—that influence quality. Just as the quality enhancement processes of the government programs are being assessed in this report, these other aspects of program design must be evaluated in the future for alignment with the objectives of those processes.Benefits and CopaymentsHealth insurance was established in the United States in the 1930s and 1940s as a way to help the average person cope with the high costs of hospital care (Stevens, 1989). Today hospital care, although still very expensive, consumes about one-third of the health care dollar, and other facets of health care, such as prescription medications (9 percent with a growth rate of 13.8 percent) have grown in importance (Centers for Medicare and Medicaid Services, 2002c; Strunk et al., 2002). Increased demand for these other facets of care reflects the growth in chronic care needs discussed earlier as well as new treatment options stemming from the extraordinary advances made in medical knowledge and technology, including minimally invasive surgery.The benefit package of an insurance program has a direct effect on the likelihood of patients receiving needed health care services (Federman et al., 2001). Although there are frequent changes in the benefit packages of the various government health care programs, these modifications have not always kept pace with the needs, especially the chronic care needs, of the populations being served (Bringewatt, 2001).When one assesses the extent to which the government health care programs provide coverage for benefits important to persons with chronic conditions, the results are mixed (see Table 2-2). The basic Medicare package, for example, generally does not cover outpatient prescription drugs or personal care, and coverage is very limited for preventive services, nursing home services, family counseling, and dietitian–nutritionist services. Medicare payment mechanisms are designed for acute care, often by a single provider; there is no Medicare payment mechanism that recognizes care delivered by a team of providers to an individual with multiple chronic conditions or that rewards prevention efforts such as extensive patient education for self-care.Other government programs offer important benefits in specific areas. VHA provides extensive mental health outpatient and inpatient services, especially for veterans with service-related disabilities. Medicaid provides residential care to the disabled and mentally retarded and long-term care for the elderly as a major part of program spending. Its benefit package is very comprehensive, including complex therapies for chronic conditions and congenital neurological disorders, such as cerebral palsy and Down syndrome, although states vary substantially in the scope of such benefits. Both Medicaid and SCHIP programs cover outpatient prescription medications. Note that IHS is not included in Table 2-2 because it is not an entitlement program or an insurance plan; therefore, it has no established benefit package (Indian Health Service, 2001). It is estimatedCost-sharing provisions are also important. Persons with chronic conditions are the heaviest users of health care services. Deductibles and especially copayments can be sizable for these individuals. Some government health care programs, such as VHA, have minimal cost-sharing provisions, while others, especially Medicare, make more extensive use of such provisions.Also important is how the different programs interpret “medical necessity.” Even when a service is covered, payment for that service to a particular patient can be denied because of failure to meet a medical necessity criterion. In some instances, the quantity and duration of certain repetitive services may be limited unless the person shows functional improvement, not just stability or a slowing of decline (Anderson et al., 1998).The committee believes that each of the six government health care programs should review its benefit package and medical necessity criteria to identify enhancements in coverage or cost sharing that would facilitate the provision of more appropriate care to today’s beneficiaries. Such analyses should be conducted under alternative financial scenarios, including budget neutrality and varying levels of growth in expenditures. Efforts should also be made to understand how well the benefit packages of various government health care programs meet the needs of vulnerable populations and how well these packages fit together for those who are dual- or triple-eligible.Payment ApproachesEfforts to improve quality of care will be far more effective if implemented in an environment that encourages and rewards excellence. Unfortunately, current methods of payment to health plans and providers have the unintended consequence of working against quality objectives. This is true for both capitated and FFS payment methods.Capitation is a payment arrangement in which health plans are paid a fixed amount for each enrollee under their care, regardless of the level of services needed by and actually provided to the person. Some health plans also pay physicians on a capitated basis for certain outpatient care, putting them at some degree of financial risk.Capitated payment rates are usually based on the average cost per enrollee of the enrolled group, often with adjustments for demographic characteristics (e.g., age and sex). Capitation rates are usually not adjusted for the health status of the enrolled population. Therefore, health plans and providers receive the same payment for someone who is less healthy and more likely to use a large number of services, such as a person with a chronic condition, as they do for someone who is healthier and likely to use no or fewer services during the year.Health plans or clinicians that develop exemplary care programs for persons with chronic conditions may, as a result, attract a disproportionate share of these individuals. Under capitated payment systems, this situation has a highly negative financial impact on the health plan and providers (Luft, 1995; Maguire et al., 1998). Persons with chronic conditions are more likely both to use services and to use a greater number of services during the year than those without chronic conditions. In 1996, for example, mean health care expenditures for a person with one or more chronic conditions were nearly 4 times the overall average ($3,546 versus $821) (Partnerships for Solutions, forthcoming). The average number of inpatient days per year is 0.2 for persons with no chronic conditions compared to 4.6 for those with five or more such conditions.Risk adjustment is a mechanism designed to ensure that payments to health plans and other capitated providers more accurately reflect the expected cost of providing health care services to the population enrolled. Capitated plans and providers caring for a population that includes less healthy, higher-cost enrollees should receive higher payments. As more states require their entire Medicaid populations, including those who are disabled and have high health care needs, to enroll in managed care, adjustment of payments becomes even more necessary to ensure quality of care for enrollees (Maguire et al., 1998). Some states have addressed this issue. Michigan, for example, has created a separately funded capitated option for children with special health care needs (Department of Health and Human Services, 2000).Numerous options exist for risk-adjusting payments, but their application in government health care programs has been limited (Ellis et al., 1996; Hornbrook and Goodman, 1996; Newhouse et al., 1997; Starfield et al., 1991). The Medicare+Choice program has initiated demonstration projects to pilot the application of capitated payments adjusted for health status (Centers for Medicare and Medicaid Services, 2000d).Regardless of whether the beneficiary is enrolled in an indemnity or capitated plan, the physicians on the front line of care delivery in the private sector are generally compensated under FFS payment methods (Center for Studying Health System Change, 2001; Institute of Medicine, 2001). FFS is the most common method of payment to physicians under Medicare, Medicaid, and SCHIP.Under FFS payment, physicians have strong financial incentives to increase their volume of billable services (e.g., visits and office-based procedures and tests). Sometimes the incentives of FFS or other physician payment methods are attenuated by incentives (e.g., bonuses) tied to performance (e.g., measures of safety, clinical quality, service), but this is not the norm. In a 1998–1999 survey of a nationally representative sample of physicians, fewer than 30 percent indicated that their compensation was affected by performance-based incentives, a result similar to findings from a survey conducted in 1996–1997 (Stoddard et al., 2002). When they are used, performance-based incentives are more likely to be tied to patient satisfaction (24 percent) and quality measures (19 percent) than to measures that may restrain care, such as profiling (14 percent).The principal “reimbursable event” under FFS is a face-to-face encounter between a physician and patient, which may or may not trigger other reimbursable events, such as diagnostic tests and minor office procedures. Services such as e-mail communications, telephone consultations, patient education classes, and care coordination are important for the ongoing management of chronic conditions, but they are not reimbursable events. Moreover, physicians who communicate with patients through e-mail or telephone to emphasize patient education, self-management of chronic conditions, and to coordinate care may experience a reduction in overall revenues if these uncompensated services have the effect of reducing patient demand for or time available to devote to reimbursable face-to-face encounters.There is no perfect payment method; all methods have advantages and disadvantages. FFS contributes to overuse of billable services (e.g., face-to-face encounters, ancillary tests, procedures) and underuse of preventive services, counseling, medications, and other services often not covered under indemnity insurance programs. Overuse, especially the provision of services that expose patients to more potential harm than good, is a serious quality-of-care and cost concern. On the other hand, capitated payments may contribute to underuse—the failure to provide services from which patients would likely benefit. This is especially true when there is a good deal of turnover among plan enrollees so that the long-term cost consequences of underuse tend to be borne by another insurer. Although particular payment methods may contain a bias towards underuse or overuse, it is important to note that the quality-of-care literature contains ample evidence of both phenomena occurring in both FFS and capitated payment systems, reinforcing the notion that payment is but one, albeit an important, factor influencing care (Chassin and Galvin, 1998).The committee believes enhancements can be made in both capitated and FFS payment approaches to encourage the provision of quality health care. It should also be noted that there are some promising efforts under way to design alternative payment approaches and evaluate their impact on quality. The National Health Care Purchasing Institute, a nonprofit research institute supported by The Robert Wood Johnson Foundation, has identified various incentive models that might be effective in motivation.The Buyers Health Care Action Group, an employer coalition in Minnesota, provides gold ($100,000) and silver ($50,000) awards to care systems for performance on quality improvement projects (Bailit Health Purchasing, 2002a)PacifiCare in California has developed a quality index that profiles providers on the basis of measures of clinical quality, patient safety, service quality, and efficiency. This information is used to reward providers on the basis of their performance, as well as to construct a tiered system of premiums, copayments, and coinsurance rates for enrollees that vary inversely with provider performance in terms of quality and efficiency (Ho, 2002)The Employers’ Coalition on Health in Rockford, Illinois, makes incentive payments to provider groups based on whether the group completes care flowsheets on 95 percent of its diabetic encounters and maintains hemoglobin A1c levels below 7.5 for the majority of patients. Incentive payments to medical groups have been approximately $28,000 per year ($3.60 per member per year) (Bailit Health Purchasing, 2002a)Blue Shield of California has introduced a variable cost-sharing model under which patients pay either an additional $200 copayment or 10 percent of the hospital’s fee each time they are admitted to a hospital that is not on Blue Shield’s preferred list. Blue Shield rates hospitals on the basis of measures of quality, safety, patient satisfaction, and efficiency (Freudenheim, 2002)General Motors’ value-based purchasing approach rates health plans according to their performance on various clinical quality measures, patient satisfaction measures, NCQA accreditation results, and cost-effectiveness measures, and adjusts employee out-of-pocket contributions so that those choosing the best-ranked plans have the lowest contributions (Salber and Bradley, 2001).It may be hoped that much more will be known about the impact of various financial and non-financial incentive models in the near future. The Robert Wood Johnson Foundation (National Health Care Purchasing Institute, 2002) has recently announced an initiative entitled “Rewarding Results,” which will provide support for payment demonstrations that reward improvements in quality. This initiative is being evaluated under an Agency for Healthcare Research and Quality contract.Program Design and AdministrationBenefits coverage and payment methods are among the most important design features of the six government health care programs reviewed in this report, but they are not the only ones that influence the likelihood of patients receiving high-quality care. Other important features include delivery system and provider choices, fluctuations in eligibility and delivery system options, and administrative efficiency.In some government health care programs, consumers have multiple options in terms of delivery system and choice of providers, while in others the options are more limited. Under Medicare, 87 percent of beneficiaries have chosen to enroll in FFS arrangements, which provide extensive choice of clinicians and hospitals. Most Medicare beneficiaries who live in metropolitan areas also have the option of enrolling in Medicare+Choice plans, enrollment that historically has been associated with enhanced benefits for little or no additional out-of-pocket expense. Enrollment in managed care is mandatory for the majority of the Medicaid population in most states, and in some instances, there is little or no choice of plan. DOD TRICARE, the VHA, and IHS programs are all structured to encourage, and in some cases require, use of their own health care delivery systems, which are similar to group or staff-model health plans.Studies of the clinical quality (in terms of both medical care processes and patient outcomes) in managed care and indemnity settings consistently find little or no difference between the two (Chassin and Galvin, 1998; Miller and Luft, 1993; Schuster et al., 1998). But it is clear that some consumers have strong preferences for one delivery system over another, and that most prefer to have choice (Gawande et al., 1998; Ullman et al., 1997). Limited choice of health plans may or may not seriously constrain the choice of clinicians and hospitals, since plan networks vary greatly in size and structure (Lake and Gold, 1999). In the private sector, there has been a pronounced trend in recent years toward larger networks of providers in response to consumer demand for more extensive choice (Draper et al., 2002; Lesser and Ginsburg, 2000). In the absence of comparative quality information on providers, consumers apparently equate choice with quality.The design and financing of some government health care programs result in frequent changes in eligibility and delivery system options that disrupt patterns of care delivery. Since the implementation of changes in Medicare payment policies stemming from enactment of the Balanced Budget Act of 1997, there has been a steady erosion of health plans participating in the Medicare+Choice program. Since 1998, 2.2 million Medicare beneficiaries have been involuntarily disenrolled from Medicare+Choice plans, affecting approximately 5 percent of beneficiaries in 2002. Of the health plans that remain, the proportion offering prescription drug coverage during the period 1999 through 2002 dropped from 73 to 66 percent, and the proportion charging zero premiums to beneficiaries from 62 to 39 percent (Gold and McCoy, 2002). Under Medicaid, beneficiaries move in and out of the program as their eligibility changes in accordance with minor fluctuations in income, causing beneficiaries to lose contact with providers and further complicating the tracking of care. For many eligible children and women, the re-enrollment process is initiated only when they present themselves at a hospital or physician’s office seeking service for an illness; this process results in adverse selection in capitated plans.Lastly, efforts must be made to reduce administrative burden. In recent years, there has been a steady growth in regulatory requirements in most if not all of the government health care programs. The Secretary’s Advisory Committee on Regulatory Reform estimates that about two regulations are published each week, resulting in the promulgation of more than 120 regulations in each of the last two years (Wood, 2002). The American Hospital Association (2002) has identified 100 new or revised regulations pertaining to hospitals that have been issued by federal agencies since 1997, of which 57 are significant. Some of these regulations relate to quality enhancement processes and data requirements, while others relate to such areas as payment, patient confidentiality and privacy, and fraud and abuse.The current practice of promulgating separate regulations for each type of provider (e.g., hospital, home health agency, nursing home, ambulatory care provider) has produced excessive burdens and barriers to the provision of coordinated care. Unnecessary regulations frustrate clinicians and reduce the time available to devote to patient care. They can also interfere with the movement of individuals across settings, thus hampering the transition from hospital to nursing home to home health agency, for example.Regulatory burden must also be fair. For example, the quality measurement and reporting requirements applied to Medicare+Choice plans should be applied to FFS Medicare institutional and individual providers. These issues are addressed further in Chapters 3 and 4.In summary, while technically comprising separate areas of analysis, the issues of benefits, payment, program design, and administration are inextricably linked to achieving consistent levels of high-quality care.