Improving Chronic Care

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Abstract

During the 2008 primaries, nearly all of the Presidential candidates offered proposals to reduce the prevalence of chronic conditions and to improve the quality of care for people with chronic conditions. Although relatively high on the public policy agenda, the new Congress and Administration are likely to confront numerous substantive issues as they attempt to improve chronic care.

Purpose of health policy or idea

Presidential candidates focus on three broad topics

The Presidential candidates have focused their attention on three broad chronic care topics.

Greater emphasis on preventive services...

First, they emphasize that individuals, insurers, providers and communities should give more attention to preventive services and that overall spending on prevention needs to increase. However, taking dollars away from existing health programs to spend more on prevention and public health has always been difficult and is likely to remain a difficult policy decision for the new President and Congress. It is also unclear which preventive programs will save money in the next few years. Other critical issues are how to determine the appropriate level of spending on prevention, how to allocate prevention dollars and encourage individuals to engage in preventive care, and the time commitment required by physcians to comply with the numerous guidelines for preventive care.

The Presidential candidates also want the private sector to be more responsible for coordinating and providing preventive services. A problem with this approach is that most people change insurers and employers so often that private insurers have an economic incentive to under invest in prevention, especially for services that have a multiyear time horizon.

...improvement of care coordination and promotion of IT... 

Second, they propose to increase the level of care coordination and to promote electronic medical (health) records as a way to foster care coordination and allow people to assume greater control of their own health.  A major impediment with expanding care coordination benefits is that most evaluations of care coordination demonstrations have concluded that care coordination programs are cost increasing (Congressional Budget Office, 2004). This is because most demonstrations have not been very effective in targeting the individuals most likely to benefit from care coordination, identifying the types of clinicians most suited to provide care coordination services, and determining the level of time and skills required to perform the service.  A second problem is that most evaluations have generally compared the aggregate performance of all programs instead of identifying the most effective programs. A third problem is that most physicians are not well trained in chronic care management and care coordination. 

Creating interoperable electronic medical records will facilitate care coordination. However, their creation requires considerable effort and cost which so far the U.S. has been unwilling to undertake. The new Congress and Administration should first identify an appropriate source of funding for EMRs. Providers are unlikely to invest in transforming their entire record keeping system without a long run source of financing. Studies also suggest that physicians will incur considerable upfront and ongoing costs when they install EMRs. An even bigger challenge will be to connect all the different information systems that are evolving.

...inclusion of more preventive services in benefit basket 

Third, most candidates want insurers to include more preventive services in their benefit package, reduce the financial barriers to preventive service use, and prevent insurers from discriminating against people with pre-existing chronic conditions. The perspective of most economists, however, is that health insurance is most appropriate for rare and expensive services and not for routine and inexpensive services (Arrow, 1963). Insurers may also not want to pay for preventive services because the cost savings generally accrue several years later when the person may have changed insurers. The most common response is to mandate that all insurers provide preventive services. The consistent concern is whether mandates add to the cost of health insurance. 

Insurance discrimination against individuals with chronic conditions appears to be a topic of concern primarily for Democrats although the Republicans have argued that association health plans should be required to enroll everyone regardless of the person's health condition. The candidates' main concern appears to be that no one is denied insurance coverage because of pre-existing chronic conditions.

Main points

Main objectives

The Presidential candidates emphasize three broad chronic care topics - increased spending levels on prevention; increased levels of care coordination and implementation of EMRs; and the inclusion of more preventive services in benefit packages.

Type of incentives

Financial incentives such as increasing the amount of funds allocated to prevention and care coordination services. Non-financial such as mandating that insurers expand the preventive services covered in their benefit packages.

Groups affected

Insurance companies, consumers, providers, federal government, persons with chronic conditions

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Current policies do not encourage the use of preventive services or increased care coordination for individuals with chronic conditions.

Political and economic background

The number of individuals in the U.S. with chronic conditions is increasing. In 2000, an estimated 125 million had one or more chronic conditions. This number is expected to increase by 46 million in 2030. Sixty-five percent of health care spending in the United States is on individuals with multiple chronic conditions; twenty-one percent of spending is on 4 percent of the population that has five or more chronic conditions. Approximately 3 out of 4 Americans think that access to health care services is difficult for those with a chronic condition.

Complies with

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

In the 2000 and 2004 Presidential campaigns, the prevention and treatment of chronic conditions was barely on the radar screen. However, during the 2008 primaries, nearly all of the Presidential candidates offered proposals to reduce the prevalence of chronic conditions and to improve the quality of care for people with chronic conditions.

There are numerous reasons for the growing policy interest in chronic care including: the increasing prevalence and cost of chronic disease; the growing dissatisfaction of physicians and patients with how the current system cares for people with chronic conditions; the recognition that individuals with one or more chronic conditions are responsible for 85 percent of health care spending; and that most of the 130 million Americans with one or more chronic conditions are potential voters (Anderson, 2003 and 2007; Thorpe, 2006).

Initiators of idea/main actors

• Providers: Physicians are less satisfied providing care to individuals with chronic conditions which may result from difficulty in coordinating with other providers, inadequate training in chronic care, and payment systems which do not encourage care coordination.

• Payers: Insurance companies are unlikely to support expansion of preventive or care coordination services if they believe it will increase their costs. They currently do not pay for many supportive services that individuals with chronic conditions need.

• Patients, Consumers: Most Americans believe that access to medical care for those with chronic conditions is difficult. Many individuals with chronic conditions have difficulty paying for services.

• Political Parties: In contrast to the 2000 and 2004 election, both the Democrat and Republican 2008 presidential candidates recognize the need for improving chronic care.

Approach of idea

The approach of the idea is described as:
new: The increasing prevalence of individuals with chronic conditions, as well as the high level of spending on chronic conditions, has prompted the 2008 presidential candidates to recognize the need for improving chronic care.

Innovation or pilot project

Pilot project - The Centers for Medicare and Medicaid Services has conducted several care coordination demonstration projects.

Stakeholder positions

Most of the Presidential candidates agree that insufficient funding is currently devoted to preventive services and have specific proposals to expand preventive opportunities. These include: "a nationwide smoking ban" and "hiking and biking trails" and "increased funding for existing programs that promote awareness and prevention of chronic diseases and obesity". Other proposals focus on the financial and other barriers many people face when they want to use preventive services.

Most candidates have focused on the fact that the current fee-for-service payment system generally does not reward care coordination. There is also discussion that delivery systems models should place greater emphasis on care coordination. 

Although most Presidential candidates agree that information systems are necessary for health professionals to be able to coordinate care, there seems to be significant disagreement over the amount of money that will be required. One possibility is that candidates are discussing different phases of the activity or different activities altogether. Some of the candidates believe that all that will be needed is "start up" money to get physicians and other health professional to purchase computers and to realign their offices.

In most other countries, it is recognized that the greatest benefit from EMRs accrues to the patients and the insurers and they are the ones who also pay for the service (Anderson, 2005). The U.S. seems to have the opposite assumption - providers should pay for most of the development and ongoing expenses of the electronic medical record. However, studies in the U.S. identifying the potential savings from implementing EMRs suggest that most of the economic benefit accrues to the payors and patients in terms of fewer hospital days, physician visits, duplicate tests, etc (Blumenthal, 2007). The mismatch between "who benefits" and "who pays" will need to be resolved before most physicians will be willing to sign up.

The main tool the federal government has to alter the behavior of the private insurers is to modify the ERISA legislation [1], however, the conventional wisdom is that, "the political sensitivity to modifications in ERISA is difficult to exaggerate" (Polzer, 1994; Aaron, 2004). One proposal, that does not involve ERISA, is to require any private insurer wanting to do business with the federal government to cover preventive services. Because many insurers want to participate in the Federal Employees Health Benefit Program (FEHBP) and other government programs, this would be a powerful lever.  However, to the extent that private insurers perceive the requirement substantially increases their costs in the private sector, they will oppose these requirements and some may choose to withdraw from the FEHBP program.

[1] The Employee Retirement Income Security Act (ERISA) of 1974 prevents state governments from regulating the benefit plans (including health) offered by self-insured employers.

Actors and positions

Providers
Physicians	very supportive		strongly opposed
Payers
Insurance companies	very supportive		strongly opposed
Patients, Consumers
Patients/Consumers	very supportive		strongly opposed
Political Parties
Republican party	very supportive		strongly opposed
Democratic party	very supportive		strongly opposed

Influences in policy making and legislation

With respect to prevention, some proposals are new but most have been discussed previously. The Healthcare Research and Quality Act of 1999 authorized the Director of the Agency for Healthcare Research and Quality (AHRQ) to convene a Preventive Services Task Force to "review scientific evidence and make recommendations respecting the effectiveness of clinical preventive services." There are also laws to increase spending or expand preventive services for specific groups such as Veterans and Medicare beneficiaries, as well as laws to fund vaccines, specific diseases and to promote state prevention initiatives. 

There is an extensive history of Congress requiring CMS to fund demonstrations in order to test different care coordination models. There are also are a number of current legislative proposals to encourage care coordination.  For example, The Geriatric Assessment and Chronic Care Coordination Act of 2007 will "provide Medicare beneficiaries with access to geriatric assessments and chronic care services."

The legislative history on interoperable electronic medical records is a different story. Compared to other industrialized countries, the U.S. government was slow to recognize the need for interoperable electronic medical records for the general population (Anderson, 2005). In these countries, the governments and insurers are spending billions of dollars in development and ongoing operations.  In contrast, the U.S. has not funded the Office of the National Coordinator Health Information Technology (ONCHIT) in spite of well publicized bipartisan agreement. The most recent version of the legislation, the Wired for Health Care Quality Act authorizes $150 million in 2008 and again in 2009 to fund ONCHIT (CBO, 2007).  

Congress has repeatedly attempted to address the issue of insurance discrimination against people with chronic conditions and disabilities through legislation such as the Americans With Disabilities Act of 1990 which prohibits underwriting risks based on disability, and the Family and Medical Leave Act which states that "a group health plan…may not establish rules for eligibility….based on (A) health status, (B) medical condition, (C) claims experience, (D) medical history…"  Similar provisions are currently being discussed in Congress.  For example, The Ten Steps To Transform Health Care in America Act states, "no premium variation based on health status…shall be permitted."      

Legislative outcome

pending

Actors and influence

Providers
Physicians	very strong		none
Payers
Insurance companies	very strong		none
Patients, Consumers
Patients/Consumers	very strong		none
Political Parties
Republican party	very strong		none
Democratic party	very strong		none

Positions and Influences at a glance

Adoption and implementation

N/A

Monitoring and evaluation

N/A

Review mechanisms

n/a

Results of evaluation

N/A

Expected outcome

In the 2008 primaries, the Presidential candidates seem to have the will to encourage the prevention of chronic conditions and to improve the care for people with chronic conditions. The challenge will be to design programs that actually accomplish these objectives. While the potential for significant cost savings from several of these proposals is real, the empirical evidence is lacking in most instances.

Impact of this policy

Quality of Health Care Services	marginal		fundamental
Level of Equity	system less equitable		system more equitable
Cost Efficiency	very low		very high

Policies such as increasing funding for prevention and electronic medical records, and reimbursing providers for care coordination services can have a significant impact of the quality of care delivered for individuals with chronic conditions.

References

Sources of Information

• Aaron, Henry J and Stuart M Butler. How Federalism Could Spur Bipartisan Action on the Uninsured. Health Affairs (297) 10: 1112 - 1115, March 31, 2004.
• Anderson, Gerard F. Physician, Public, and Policymaker Perspectives on Chronic Conditions. Archives of Internal Medicine (163) 4: 437-442, February 24, 2003.
• Anderson, Gerard F, Bianca K Frogner, and Uwe E Reinhardt. Health Spending in OECD Countries in 2004: An Update. Health Affairs (26) 5: 1481-1489,  September 1, 2007.
• Anderson, Gerard F, Peter S Hussey, Bianca K Frogner, and Hugh R Waters. Health Spending in the United States and the Rest of the Industrialized World. Health Affairs (24) 4: 903-914, July 1, 2005.
• Anderson, Gerard F. Chronic Conditions: Making the Case for Ongoing Care. Johns Hopkins University, November 2007.
• Arrow, Kenneth J. Uncertainty and the Welfare Economics of Medical Care. The American Economic Review (53) 5: 941-973. Dec. 1963.
• Blumenthal, David and John P Glaser. Information Technology Comes to Medicine. The New England Journal of Medicine (356) 24: 2527-2534, June 14, 2007.
• Congressional Budget Office. H.R. 918 Patient Navigator Outreach and Chronic Disease Prevention Act of 2004. Cost Estimate. October 2004.
• Polzer, K. and P A Butler. Employee Health Plan Protections Under ERISA. Employee Retirement Income Security Act. Health Affairs (16) 5 : 93-102, September 1, 1997.
• Chirba-Martin, M A and T A Brennan. The Critical Role of ERISA in State Health Reform. Health Affairs (13) 2: 142-156, April 1, 1994.
• Sidorov, J. It Ain't Necessarily So: the Electronic Health Record and the Unlikely Prospect of Reducing Health Care Costs. Health Affairs (25) 4: 1079-1085, 2006. 
• Congressional Budget Office. S 1693, Wired For Health Care Quality Act. CBO report dated July 25, 2007.
• Thorpe, Kenneth E. and David H. Howard. The Rise in Spending among Medicare Beneficiaries: The Role of Chronic Disease Prevalence and Changes in Treatment Intensity. Health Affairs (25) 5 : w378-388, September 1, 2006.
• Veterans' Health Care Act of 1992; Balanced Budget Act of 1997, Medicare Prescription Drug Improvement and Modernization Act of 2003, Deficit Reduction Act of 2005; Indian health Amendments of 1992; Preventive Health Amendments of 1992
• Woolf, Steven H and David Atkins. The Evolving Role of Prevention in Health Care: Contributions of the U.S. Preventive Services Task Force. American Journal of Preventive Medicine (20) 3, Supplement 1: 13-20, 2001.
• Wu, S. and A. Green, RAND Corporation. Projections of Chronic Illness and Prevalence and Cost Inflation. Prepared for Partnership for Solutions. Johns Hopkins University, Baltimore MD, 2000. 
• Yarnall, Kimberly S H., Kathryn I Pollak, Truls Ostbye, Katrina M Krause, and J. Lloyd Michener. Primary Care: Is There Enough Time for Prevention? American Journal of Public Health (93) 4: 635-641, April 1, 2003.

Author/s and/or contributors to this survey

Petigara, Tanaz and Gerard Anderson

Suggested citation for this online article

Petigara, Tanaz and Gerard Anderson. "Improving Chronic Care". Health Policy Monitor, April 2008. Available at http://www.hpm.org/survey/us/b11/5