What's New with HCFO - April 15, 2005 (Print All Articles)
Learn more about HCFO!
HCFO provides public and private decision-makers with usable and timely information on health care policy, financing, and market developments through targeted face-to-face and virtual convening, research translation and dissemination, and issues identification. HCFO supports research and policy analysis, evaluation, and limited demonstration projects examining major changes in health care financing, and their effects on cost, access, or quality.
Click here to see what's new at HCFO and to learn more about the program, hot topics in health services research and health policy, HCFO's grantees, and the latest in health services research.
Hot Topic – Genetic Information Meets Insurance Underwriting
As the field of genetics continues to advance, policymakers will face a host of clinical, social, moral, and financial issues. Earlier this year, Congress weighed in with proposed legislation in the Senate and the House prohibiting discrimination on the basis of genetic information with respect to health insurance and employment. In February 2005, the Senate voted unanimously in favor of bill S. 306, the Genetic Nondiscrimination in Heath Insurance Act of 2005. [1] In March, a bipartisan group of co-sponsors introduced an identical bill in the House, H.R. 1227.[2]
While a number of states have passed laws prohibiting discrimination based on genetic information, federal policymakers want to ensure more comprehensive protections. A notable feature of the proposed federal legislation prohibits insurers from using, requesting, or disclosing genetic information for purposes of underwriting, determining enrollment eligibility, rating premiums, or creating, renewing, or replacing a plan, contract, or coverage for health insurance or health benefits. The restrictions extend to employer-sponsored, individual, and Medicare supplemental markets.
Health insurance underwriting is the process through which individuals’ medical history and other factors are evaluated for purposes of coverage determination. While current privacy rules permit the use of health information for “health care operations,” including underwriting, the proposed federal legislation specifically prohibits the use of genetic information for this purpose.
At issue in the proposed legislation is genetic information that is currently known by individuals or information that will become known to an individual who undergoes genetic testing. Supporters of the proposed legislation argue that individuals should not face genetic discrimination regarding health insurance or employment. Insurers argue that having access to genetic information is important for managing risk and setting premium rates and accordingly, should be available for underwriting purposes. They state that failure to disclose this type of information could lead to adverse selection and higher insurance costs for everyone.[3]
While there have been significant changes in health care technologies and attendant costs in the past 10 years, it is interesting to note that work in the early 1990s by HCFO grantee William R. Braithwaite, M.D., Ph.D., at the University of Colorado demonstrated that medical screening as part of insurance underwriting could be eliminated in the small-group market without an increase in premiums. Braithwaite cautioned that his analysis did not eliminate the potential for adverse selection.
It is clear that advances in research and applications are likely to change the way genetic testing is used in health care. Genetic testing will undoubtedly have broad effects on health care financing in the insurance context and elsewhere. The challenge for policymakers will be to accommodate changes in knowledge, while at the same time balancing the competing interests of stakeholders.
Currently, genetic testing is most often used to confirm diagnoses or to predict who is most at risk for a particular disease or condition. Advance knowledge of risk factors could point to preventive services or the need for early detection, and could allow providers to more cost-effectively target services. Additionally, new applications for genetic testing are currently being developed, one of which is pharmacogenomics (PGx), which studies all of the many genes that determine drug effects. HCFO grantee Louis F. Rossiter, Ph.D., at the College of William and Mary is examining the emerging market for PGx, and his preliminary analysis suggests that PGx could be cost-effective in the long term.
Rossiter’s work may inform what is likely to be a debate in the not too distant future—whether the direct costs of genetic testing will be covered by insurers. The issue then becomes whether it is feasible for insurers to use genetic information for coverage decisions but not for underwriting decisions. As the technology matures, this issue will certainly challenge stakeholders.
HCFO-funded research:
Title: The Emerging Market for Pharmacogenomics and Health Care Competition
Institution: College of William and Mary
Time: February 2004 – April 2005
Principal Investigator: Louis F. Rossiter, Ph.D.
How does pharmacogenomics (PGx) fit or fail to fit within the current systems of financing and organization of health care? The researcher plans to: 1) gather information and summarize the PGx products and services available now or in the near term; 2) conduct open-ended interviews of key informants regarding the way suppliers are bringing these products to market; and 3) study the implications for financing and the organization of the delivery system, including reimbursement rules, for at least three current health care products and services that are being affected or replaced by PGx in the near future. The objective of this study is to suggest ways in which current payment methods could be changed to accommodate PGx and how a larger study could use patient-level claims data to design changes or a new system to recognize PGx.
Click here for further information on this grant.
Title: An Analysis of the Effects of Medical Underwriting
Institution: University of Colorado, Health Sciences Center
Time: September 1991 – February 1994
Principal Investigator: William R. Braithwaite, M.D., Ph.D.
Does medical underwriting really have a positive financial impact on insurers? This study compared claims allowed for two different pools of small firms covered by the same insurance company—one guaranteed issue and one fully medically underwritten—to determine if medical underwriting reduces the financial cost to an insurer of covering a particular group. This research was intended to provide policymakers with an indication of the potential impacts of proposed efforts to limit medical underwriting through regulation.
Glazner, J., W.R. Braithwaite, S. Hull, and D.C. Lezotte. “The questionable value of medical screening in the small-group health insurance market,” Health Affairs 1995 Summer, Vol. 14, No. 2, pp. 224–34. http://content.healthaffairs.org/cgi/reprint/14/2/224
Click here for further information on this grant.
[3] Statement of Thomas F. Wildsmith, American Academy of Actuaries. Hearing on Genetic Nondiscrimination: Examining the Implications for Workers and Employers, Committee on Education and the Workforce, Subcommittee on Employer-Employee Relations, U.S. House of Representatives, July 22, 2004. http://www.actuary.org/pdf/health/genetic_22july04.pdf
Grantee Spotlight – Joel C. Cantor, Sc.D.
Over the course of two HCFO grants, Joel Cantor, Sc.D., has analyzed the impact of risk selection in New Jersey’s Individual Health Coverage Program (IHCP) as well as the impact of the New York Health Care Reform Act (NYHCRA) of 1996. In their first HCFO study, Cantor and his colleagues evaluated NYHCRA, which replaced the regulatory control of hospital rates with negotiated rates driven by market forces. Under NYHCRA, public goods including charity care and graduate medical education received state subsidies. Specifically, they investigated the effects of NYHCRA on the delivery of care to low-income populations, access to care for vulnerable populations, and the efficiency of hospitals. Following NYHCRA, safety net hospitals reported increased financial pressures with declining net patient revenue. Hospitals, in turn, increased their efforts to affiliate with networks to improve their negotiating position with payers, and made efforts to improve overall efficiency. Few changes in policies likely to affect access of low-income populations were reported. Other factors, such as the federal Balanced Budget Act of 1997, also had a strong effect on many hospitals during this period. Cantor’s second HCFO-funded project addressed changes in New Jersey’s non-group market after the 1992 implementation of market reforms, including pure community rating and guaranteed issue regardless of health status. Cantor and his colleagues used unique administrative and survey data to examine trends in IHCP enrollment and premiums. The results indicated that, despite positive early evaluations, enrollment in the IHCP declined steadily between 1995 and 2002. A robust economy and strong market for employer coverage during this period led many younger non-group insurance enrollees to leave the individual market. This trend led to adverse risk retention in the New Jersey non-group market, threatening its long-term viability. Policy simulations by Cantor and colleagues suggest that moving from pure to modified community rating would draw many young uninsured back into the market with modestly higher premiums for older enrollees. Cantor’s research interests focus on issues of health care financing and delivery at the state and local levels. His recent work includes studies of health insurance market regulation, access to care for low-income and minority populations, the health care safety net, and the supply of physicians providing care to underserved populations. Most recently, Cantor launched an AHRQ-funded evaluation of an innovative New Jersey hospital regulatory reform intended to address disparities in access to cardiac diagnostic services. Dr. Cantor has published widely on health policy topics, and serves on the editorial board of the policy journal Inquiry. He is the director of the Center for State Health Policy and professor of public policy at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, The State University of New Jersey. He frequently serves as an advisor to New Jersey government on health care policy. He was appointed to the State’s Mandated Health Benefits Advisory Commission by Governor McGreevey, and he serves as chair of that panel. Prior to joining the faculty at Rutgers, Dr. Cantor served as director of research at the United Hospital Fund of New York and director of evaluation research at The Robert Wood Johnson Foundation. He received his doctorate in health policy and management from the Johns Hopkins University School of Hygiene and Public Health in 1988, and was elected a Fellow of AcademyHealth (formerly the Academy for Health Services Research and Health Policy) in 1996.
Selected Publications.
Monheit, A.C., J.C. Cantor, and P. Banerjee. Assessing Policy Options for the Non-Group Health Insurance Market: Simulation of the Impact of Modified Community Rating in the New Jersey Individual Health Coverage Program. New Brunswick, NJ: Rutgers Center for State Health Policy. March 2005. http://www.cshp.rutgers.edu/PDF/IHCPSimulationReport_Final.pdf.
Phillips, J., J. Miller, J. Cantor, and D. Gaboda. “Context or Composition: What Explains Variation in SCHIP Disenrollment?” Health Services Research, August 2004, Vol. 39, No. 4, pp. 865–85. Pandey, S. and J. Cantor. “The Changing Profile of the Urban Uninsured: Exploring Implications of Rise in the Number of Moderate-Income Uninsureds,” Journal of Urban Health, March 2004; Vol. 81, No. 1, pp. 135–49. Monheit, A., J. Cantor, M. Koller, and K. Fox. “Community Rating and Sustainable Individual Health Insurance Markets in New Jersey: Trends in New Jersey’s Individual Health Coverage Program reveal troubled times for the program,” Health Affairs, July/August 2004; Vol. 23, No. 4, pp.167–75. Monheit, A. and J. Cantor, Editors. State Health Insurance Market Reform: Toward Inclusive and Sustainable Health Insurance Markets. London: Routledge Press, 2004. Cantor, J., J. Blustein, M. Carlson, and D. Gould. “Next-of-Kin Perceptions of Physician Responsiveness to Symptoms of Hospitalized Patients Near Death,” Journal of Palliative Medicine, 2003; Vol. 6, pp. 531–41. Hoover, D.R., S. Crystal, R. Kumar, U. Sambamoorthi, and J.C. Cantor. “Medical Expenditures During the Last Year on Life: Findings from the 1992-96 Medicare Current Beneficiary Survey.” Health Services Research, December 2002; Vol. 37, No.6, pp. 1625–42. Prinz, T., K. Haslanger, D. DeLia , S. Fass , S. Salit, and J.C. Cantor. Hospital Markets, Policy Change, and Access to Care for Low-Income Populations in New York. Working Paper. New York: United Hospital Fund, 2000. http://www.uhfnyc.org/pubs-stories3220/pubs-stories_show.htm?doc_id=97749
HCFO Findings Brief - Managed Care Mandates Fall Short of Curbing California Medicaid Costs
Mark Duggan, Ph.D., and colleagues from the University of Maryland and the National Bureau of Economic Research assessed how mandatory enrollment in managed care has affected both spending and health outcomes for California Medicaid recipients. They found that despite a dramatic increase in Medicaid managed care enrollment—from less than 12 percent in 1993 to 51 percent in 1999—there was neither a significant reduction in spending nor improved health outcomes. To view the full findings brief, "Managed Care Mandates Fall Short of Curbing California Medicaid Costs", click here. 
HCFO Findings Brief - Structure of Hospital Networks in California Affects Pricing
New research findings from a HCFO-sponsored project conducted at Boston University has found that the effect on hospital pricing is statistically significant only when hospitals that are members of the same system (e.g., they are owned by the same company) form a network to provide particular services jointly. Such findings are timely given the recent growth in specialty hospitals and their implications on access to services. To view the full findings brief, "Structure of Hospital Networks in California Affects Pricing", click here.
Focus on Grantee Publication
Jon Christianson, Ph.D., and Roger Feldman, Ph.D., of the University of Minnesota, co-author an article in the March 2005 issue of Milbank Quarterly titled, "Exporting the Buyers Health Care Action Group Purchasing Model: Lessons from Other Communities.” The article details recent HCFO-sponsored research findings.
Current HCFO grantee publications and recent grant findings will be regularly featured in the results section of our Web site.
Annual Research Meeting (ARM), June 26-28, Hynes Convention Center, Boston
MONDAY, MAY 2 – Early Registration Cut-off
Save $100 by registering (http://www.academyhealth.org/arm/register/) on or before May 2, after which time the standard rate applies.
FRIDAY, MAY 27 – Hotel Discount Cut-off
Don’t delay! Make your hotel reservation by May 27 to guarantee the discounted group rate (subject to availability). Call today or click to reserve your room. (http://www.academyhealth.org/arm/hotel/)
- Sheraton Boston Hotel (adjacent to the Hynes Convention Center) – Tel: 617.236.2000
- Boston Marriott Copley place (5-minute walk to the Hynes Convention Center) – Tel: 617.236.5800; 1.800.228.9290
Web Updates
View the complete agenda. (www.academyhealth.org/arm/agenda)
Check out the growing list of exhibitors. (www.academyhealth.org/arm/exhibits)
Interest Group Meetings
Sign up to attend one of AcademyHealth's 10 Interest Group meetings. ARM registration is not required. (http://www.academyhealth.org/arm/adjunct/interestgroups.htm)
Seminars in Health Services Research Methods
Sharpen your skills in research methodology in full-day seminars led by experts. (http://www.academyhealth.org/arm/adjunct/seminars.htm)
Be sure to make plans to enjoy Boston before or after the ARM! (http://www.bostonusa.com/visitor/visitor.php)
New Web Resources
Announcing AcademyHealth’s New Home Page
In April, AcademyHealth launched a new and improved home page for its Web site. The goal of the redesign is to show, at a glance, the scope of work conducted by the organization, its members, and its partners, and to make relevant information and resources easily accessible to users.
The site now includes a list of “Some issues we’re working on,” which organizes by topic a wealth of relevant research and policy materials from AcademyHealth members and others, including publications, Annual Research Meeting abstracts, PowerPoint presentations, research, and policy analysis. This component will enable members and other constituents to see how AcademyHealth carries out its mission of transferring health care knowledge into action.
As with any Web site, the new home page is a work in progress. AcademyHealth invites members to visit the site and send their feedback to leanne.defrancesco@academyhealth.org.
Federal Health Data Recommendations for Improvement
Timely, accessible, reliable, and geographically relevant health data are critical for federal and state policymakers, practitioners, and researchers to monitor and improve coverage and access to health care. AcademyHealth undertook a special study to address concerns about the ability of current surveys to provide the necessary data to address state and federal policymakers' needs. The findings, available in a new report titled, "Improving Federal Health Data for Coverage and Access Policy Development Needs," provide a template for how to begin making improvements in the data sets.
The report addresses the following major themes:
- Scope and integration of current federal surveys;
- Specific improvements in current federal surveys;
- Increased investment in methodological research; and
- Increased integration and coordination among federal agencies.
Based on findings from three commissioned papers on federal health data and an expert meeting held in June 2004, the report calls upon the federal government to streamline current federal surveys by eliminating the redundancies in the information collected, and use the savings from this reduction in duplication to increase sample size in order to produce sub-national or state estimates. It also recommends that foundations complement the federal government investment in national surveys with targeted research to provide a better balance between ongoing surveillance and research.
Funded by The Robert Wood Johnson Foundation and the Centers for Disease Control and Prevention’s National Center for Health Statistics, this report focuses on data needs for the federal and state levels related to health insurance coverage and access.
New Kaiser Family Foundation Report Examines Formulary ProvisionsA new report from the Kaiser Family Foundation, "The Effects of Formularies and Other Cost Management Tools on Access to Medications: An Analysis of the MMA and the Final Rule," examines the formulary provisions of the final Medicare regulations implementing the new drug benefit, and their implications for people with Medicare who enroll in new drug plans. Author Jack Hoadley, Ph.D., of the Health Policy Institute at Georgetown University, is a HCFO grantee. His current HCFO project, "State Experience with Pharmaceutical Assistance Programs" examines information on issues such as communicating with enrollees, administering eligibility and cost sharing, and managing drug costs through a series of case studies.