Bending the curve: Person-centered health care reform
A Framework for Improving Care and Slowing Health Care Cost Growth

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Article Highlights

  • The best way to improve care & bend the curve of cost growth is continued innovation toward more personalized care

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  • Our reforms would achieve an estimated $300 billion or more in net federal savings in the next decade

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  • Long-term savings from achieving better health and sustainable spending growth will exceed $1 trillion over 20 years

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Executive Summary:

We propose a framework for health care reform that focuses on supporting person-centered care. With continued innovation toward more personalized care, this is the best way to improve care and health while also bending the curve of health care cost growth.

Our health care system holds great promise. As a result of fundamental breakthroughs in biomedical science, improvements in data systems and network capabilities, and continuing innovation in health care delivery, care is becoming increasingly individualized and prevention-oriented. The best treatment for a patient involves not just specific services covered under traditional approaches to health insurance financing, but also includes new technologies and new kinds of care and support at home and beyond traditional health care settings. These advances require health care providers to work with patients and their caregivers to target increasingly sophisticated treatments and to coordinate care effectively ways that works best for each patient.

Our report’s person-focused reforms aim to support these changes in care—not as an afterthought or as an addition to our health care financing and regulation, but as the core goal. Instead of having to work around fee-for-service (FFS) payments and regulations that can complicate getting the highest-value care in each case, providers and patients will be able to receive more support for the specific approaches to care delivery that can make the most difference. The support comes from aligning reforms in provider payment, benefit design, regulation, and health plan payment and competition. To avoid short-term disruptions, our systematic framework involves a clear path that builds on existing reforms in the public and private sector, supports transitional steps to assist providers, and includes close evaluation and opportunities for adjustments along the way. While our primary goal is better health through better care, we estimate that our reforms would achieve an estimated $300 billion or more in net federal savings in the next decade, and provide a path to sustaining per capita cost growth that is much more in line with per capita growth in Gross Domestic Product (GDP). After the proposed reforms are implemented in the coming decade, long-term savings from achieving better health and sustainable spending growth will exceed $1 trillion over 20 years. Our proposals can be scaled up or down, and can also be combined with other proposed reforms to achieve additional reductions in health care costs. Our approach enables Congress to focus on overall cost, quality, and access goals that are very difficult to address under current law – so that whatever the spending level, that spending will do more for health.

These issues of health care quality and cost must be addressed. If a clear framework like ours is not implemented, the alternative is likely to be continued reliance on short-term cost controls, including across-the-board cuts in payments like sequestration, or delays and restrictions in both needed coverage updates for vulnerable populations and new types of innovative care—perpetuating large gaps in quality of care.

Our proposals represent an alternative to such care disruptions, cost-shifting, and threats to more innovative, person-focused care. We include proposals for Medicare, Medicaid, and private health insurance. We also propose a set of system-wide regulatory reforms and other initiatives, including antitrust and liability reforms. While some of these proposals are specific to particular programs and regulations, they are all grounded in our core goal of supporting quality care resulting in lower cost. This means a clear path for moving away from FFS payments and benefits and open-ended subsidies for insurance plan choices toward a direct focus on supporting better care and lower costs at the person level. Our proposals encompass significant reforms – such as modifications in Medicare payment mechanisms and benefits, and a change in the tax exclusion for employer-provided health insurance. The proposals reflect ideas that have gathered broad support in the past, but also include new approaches for addressing some of their shortcomings. Implementing our reforms together enables them to reinforce each other and create much more momentum for improving care while bending the cost curve.

 

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About the Author

 

Joseph
Antos
  • Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute (AEI), where his research focuses on the economics of health policy — including the Affordable Care Act, Medicare, the uninsured, and the overall reform of the health care system and its financing. He also studies the impact of health care expenditures on federal budget policy.

    Before joining AEI, Antos was assistant director for health and human resources at the Congressional Budget Office (CBO). He has also held senior positions in the US Department of Health and Human Services, the Office of Management and Budget, and the President’s Council of Economic Advisers. He recently completed a seven-year term as health adviser to CBO, and two terms as a commissioner of the Maryland Health Services Cost Review Commission. In 2013, he was also named adjunct associate professor of emergency medicine at George Washington University.

    Antos has a Ph.D. and an M.A. in economics from the University of Rochester and a B.A. in mathematics from Cornell University.



    Follow Joseph Antos on Twitter.

  • Phone: 202-862-5938
    Email: jantos@aei.org
  • Assistant Info

    Name: Neil McCray
    Phone: 2028625826
    Email: Neil.McCray@aei.org

 

Dana
Goldman
  • Dana Goldman is a Professor and the Norman Topping Chair in Medicine and Public Policy at the University of Southern California. Until Fall 2009, he held RAND's Distinguished Chair in Health Economics and directed RAND's program in Economics, Finance, and Organization. He is also an Adjunct Professor of Health Services and Radiology at UCLA.


    Dr. Goldman is a nationally-recognized health economist influential in both academic and policy circles. He is the author of over 100 articles and book chapters, including articles in some of the most prestigious medical, economic, health policy, and statistics journals. He is a health policy advisor to the Congressional Budget Office, and is a frequent speaker on health care issues. He serves on several editorial boards including Health Affairs and the American Journal of Managed Care. He is also a founding editor of the Forum for Health Economics and Policy, an online journal devoted to health economics and health policy.

  • Email: dpgoldma@usc.edu

 

Michael
Chernew
  • Michael E. Chernew, Ph.D. is a Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School. Dr. Chernew's research examines several areas related to controlling health care spending growth while maintaining or improving the quality of care. His work on consumer incentives focuses on Value Based Insurance Design (VBID), which aligns patient cost sharing with clinical value. His work on payment reform involves evaluation of bundled payment initiatives, including global payment models that include pay-for-performance components. Additional research explores the causes and consequences of rising health care spending and geographic variation in spending, spending growth, and quality.


    Chernew is Vice Chair of the Medicare Payment Advisory Commission (MedPAC), which is an independent agency established to advise the U.S. Congress on issues affecting the Medicare program. He is also a member of the Congressional Budget Office’s Panel of Health Advisors and The Commonwealth Foundation’s Commission on a High Performance Health Care System.

  • Email: chernew@hcp.med.harvard.edu

 

Mark V.
Pauly

  • Mark V. Pauly is the Bendheim Professor in the Department of Health Care Management;  professor of health care management, insurance and risk management, and business and public policy at the Wharton School; codirector of the Roy and Diana Vagelos Life Sciences and Management Program; and professor of economics in the School of Arts and Sciences at the University of Pennsylvania. A former commissioner on the Physician Payment Review Commission, Mr. Pauly has served on the advisory committee to the Agency for Health Care Research and Quality and on the Medicare Technical Advisory Panel. He currently serves on the National Advisory Council for the National Institutes of Health National Center for Research Resources, the National Academy of Sciences' Committee to Study the Veterinary Workforce, and its Committee on the Biomedical Workforce. He has been a consultant to the Congressional Budget Office, the Office of the Secretary of the US Department of Health and Human Services (which supported some of his work on individual health insurance), and health trade associations. Mr. Pauly is a coeditor-in-chief of the International Journal of Health Care Finance and Economics and an associate editor of the Journal of Risk and Uncertainty.  


  • Phone: 2158986861
    Email: pauly@wharton.upenn.edu

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