Building on California’s distinct integrated health system we show how expanding it and using risk adjusted capitation payments are able to reduce spending and improve quality. Moreover, this approach puts California on a path that will achieve universal coverage. Finally, we provide a new plan to finance universal coverage in California.
A Report by the Petris Center | Published March 26, 2018 | Link to Full Report
This report details the rapid consolidation of the hospital, physician, and insurance markets in California from 2010 to 2016. It finds that the vast majority of counties in California warrant concern and scrutiny according to the DOJ/FTC Guidelines. It also finds that consumers are paying higher health care prices and ACA premiums as a result of market consolidation. The significant variation in prices and ACA premiums across the state – particularly the large discrepancy between Northern and Southern California – suggests regulatory and legislative solutions need to be implemented to address health care market concentration in California.
By Richard M. Scheffler, Brent D. Fulton, Donald D. Hoang, and Stephen M. Shortell | Published March 28, 2018 | Link to Full Report
Health expenditures in California continue to grow with respect to the state’s gross domestic product, resulting in healthcare becoming more unaffordable to the state, employers, and individuals. In this report, we project health spending in the California from 2015 to 2022. We then estimate potential reductions in spending from the Berkeley Forum for Improving California’s Healthcare Delivery System’s initiatives to increase the use of global budgets/integrated care systems, patient-centered medical homes, and palliative care. By 2022, these initiatives generate an estimated $15.4 billion in health spending reductions, an amount sufficient to provide universal health insurance coverage in the state at a cost of $7.2 billion. The State of California, the federal government, and the private sector should consider accelerating their programs related to these initiatives to help achieve these health expenditure reductions. A companion article “Financing Universal Coverage in California: A Berkeley Forum Roadmap” to this report was published on the Health Affairs Blog on March 29, 2018.
By Brent D. Fulton | Published September 2017 in Health Affairs | Link to Full Article
This paper analyzes market concentration trends in the United States from 2010 to 2016 for hospitals, physician organizations, and health insurers, finding that hospital and physician organization markets became increasingly concentrated over this time period. Concentration among primary care physicians increased the most, partially because hospitals and health care systems acquired primary care physician organizations. The paper finds that a large number of Metropolitan Statistical Areas (MSAs) are highly concentrated – in 2016, reaching 91% for hospitals, 65% for specialist physicians, 39% for primary care physicians, and 57% for insurers. The paper concludes that public policies that enhance competition are needed, such as stricter enforcement of antitrust laws, reducing barriers to entry, and restricting anticompetitive behaviors.
By Richard M. Scheffler and Daniel R. Arnold | Published September 2017 in Health Affairs | Link to Full Article
Consolidation of health systems has rapidly increased in the last two decades: from 1998 to 2015, there were 1412 hospital mergers in the United States; 40% of those came after 2009. The paper uses prices of hospital admissions and visits to five types of physicians to analyze how this growing provider and insurer market concentration—as measured by the Herfindahl-Hirschman Index (HHI)—interact and are correlated with prices. The paper finds that insurers have the bargaining power to reduce provider prices in highly concentrated provider markets for cardiologist, radiologist, and hematologist/oncologist visit prices. This leads to a policy dilemma: there are no insurer market mechanisms that will pass a portion of these price reductions on to consumers in the form of lower premiums. The study concludes by discussing how large purchasers of health insurance, such as state and federal governments, as well as the use of regulatory approaches, could provide a solution.
By Jon R. Gabel, Daniel R. Arnold, Brent D. Fulton, Sam T. Stromberg, Matthew Green, Heidi Whitmore, and Richard M. Scheffler | Published January 2017 in Health Affairs | Link to Full Article
With the notable exception of California, states have not made enrollment data for their Affordable Care Act (ACA) Marketplace plans publicly available. Researchers thus have tracked premium trends by calculating changes in the average price for plans offered (a straight average across plans) rather than for plans purchased (a weighted average). Using publicly available enrollment data for Covered California, we found that the average purchased price for all plans was 11.6 percent less than the average offered price in 2014, 13.2 percent less in 2015, and 15.2 percent less in 2016. Premium growth measured by plans purchased was roughly 2 percentage points less than when measured by plans offered in 2014–15 and 2015–16. We observed shifts in consumer choices toward less costly plans, both between and within tiers, and we estimate that a $100 increase in a plan’s net annual premium reduces its probability of selection. These findings suggest that the Marketplaces are helping consumers moderate premium cost growth.
Edited by Richard M. Scheffler, Christopher H. Herbst, Christophe Lemiere, and Jim Campbell | Published September 2016 by the Word Bank Group | Link to Full Book
The health workforce has received major policy attention over the past decade, driven in part by the need to achieve the Millennium Development Goals (MDGs), the Sustainable Development Goals (SDGs), and universal health coverage (UHC). There is wide acceptance that a health workforce sufficient in numbers, adequately distributed, and well performing is a central health systems input, and critical for the achievements of these goals. This book, produced by the World Bank in collaboration with the University of California, Berkeley and the World Health Organization (WHO), aims to provide decision makers at subnational, national, regional, and global levels with additional insights into how to better understand and address their health workforce challenges rather than just describe them.
By Richard M. Scheffler, Daniel R. Arnold, Brent D. Fulton, and Sherry A. Glied | Published May 2016 in Health Affairs | Link to Full Article
Recent increases in market concentration among health plans, hospitals, and medical groups raise questions about what impact such mergers are having on costs to consumers. We examined the impact of market concentration on the growth of health insurance premiums between 2014 and 2015 in two Affordable Care Act state-based Marketplaces: Covered California and NY State of Health. We measured health plan, hospital, and medical group market concentration using the well-known Herfindahl-Hirschman Index (HHI) and used a multivariate regression model to relate these measures to premium growth. Both states exhibited a positive association between hospital concentration and premium growth and a positive (but not statistically significant) association between medical group concentration and premium growth. Our results for health plan concentration differed between the two states: it was positively associated with premium growth in New York but negatively associated with premium growth in California. The health plan concentration finding in Covered California may be the result of its selectively contracting with health plans.
By Richard M. Scheffler and Sherry A. Glied | Published May 2016 in the New York Times | Link to Op-Ed
In this op-ed, Sheffler and Glied discuss the increasing concentrated health insurance market in the wake of the Affordable Health Care Act, and the need for competition and regulation to work together to benefit consumers. The two report on research comparing how the states of California and New York designed their healthcare marketplaces in response to the law, and the flexibility states have in designing their marketplaces.
Edited by Richard M. Scheffler | Published January 2016 by World Scientific | Link to Full Book
This Handbook covers major topics in global health economics and public policy and provides a timely, systematic review of the field, featuring academics and practitioners from more than a dozen countries. The Handbook spans across three volumes: Volume 1 – The Economics of Health and Health Systems, Volume 2 – Health Determinants and Outcomes, Volume 3 – Health System Characteristics and Performance. Chapters deal with key global issues in health economics, are evidence-based, and offer innovative policy alternatives and solutions, making the Handbook’s approach toward global health economics and public policy a useful resource for health economists, policymakers, private sector companies, NGOs, government decision-makers and those who manage healthcare systems.