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Putting the Union Label on Health Benefits: Collective Bargaining and Cost-Saving Strategies

May 6, 2014

Historically, collective bargaining has led to comprehensive health benefits with a broad choice of providers, modest enrollee premium contributions and limited patient cost sharing at the point of service. With rising health care costs crowding out wage increases, some labor unions are pursuing measures to slow health care spending growth without increasing workers' out-of-pocket costs, according to a study by researchers at the former Center for Studying Health System Change (HSC).Examples of union cost-saving strategies include reducing unit prices by negotiating volume discounts or limiting provider networks; attempting to reduce utilization through improved care coordination, especially for patients with multiple, complex chronic conditions; and using wellness programs aimed at improving workers' health and controlling longer-term costs. In general, factors that appear to foster innovation in collectively bargained health benefits include purchasers with a concentrated volume of workers in a particular market exercising leverage to obtain discounts; direct provider contracting that sidesteps health-plan intermediaries; and financing arrangements where unions bear some responsibility or control over health benefits—for example, plans operated under Taft-Hartley trusts or joint labor-management coalitions.

Inpatient Hospital Prices Drive Spending Variation for Episodes of Care for Privately Insured Patients

February 25, 2014

When including all care related to a hospitalization—for example, a knee or hip replacement—the price of the initial inpatient stay explains almost all of the wide variation from hospital to hospital in spending on so-called episodes of care, according to a study by researchers at the former Center for Studying Health System Change (HSC) based on 2011 claims data for 590,000 active and retired nonelderly autoworkers and dependents. For example, average spending for uncomplicated inpatient knee and hip replacements ranged across 36 hospitals from less than $17,500 to $37,000 for an episode of care that included all services during the inpatient stay and all follow-up care within 30 days of discharge. The pattern of spending variation for knee and hip replacements held true for other conditions, with hospital inpatient price differences accounting for the vast majority of spending variation rather than differences in spending on physician and other non-hospital services during and after discharge or spending on readmissions. Moreover, hospitals' case-mix-adjusted relative spending per episode for different service lines—for example, orthopedics and cardiology—tend to be highly correlated with each other. Understanding why spending for episodes of care varies so much among hospitals can help private purchasers accurately target ways to control spending. This study's findings—inpatient prices drive the bulk of episode-spending variation and hospitals with high spending for one service line tend to have high spending for other service lines—indicate that private purchasers can focus on hospitals' overall inpatient price levels rather than pursue bundled payments for episodes of care or service-line-specific purchasing strategies.

Long Island Follows Bumpy New York Road to National Health Reform

September 11, 2013

At first glance, New York and the Long Island metropolitan area appear well positioned for smooth implementation of the federal Patient Protection and Affordable Care Act (ACA) of 2010, according to a new Center for Studying Health System Change (HSC) study of Long Island's commercial and Medicaid insurance markets (see Data Source). Key ACA reforms—expanded Medicaid eligibility, premium rating restrictions in the nongroup, or individual, and small-group markets, minimum medical loss ratios (MLRs)—have long been features of New York's broad public health insurance programs and highly regulated health insurance market. Once the ACA became law, there was little doubt that New York would embrace reform. Yet, partisan gridlock in Albany has made for a rough road to health reform for New York. After many months of wrangling with the state Legislature, Gov. Andrew Cuomo (D) resorted to authorizing the state health insurance exchange by executive order in 2012, giving New York's exchange a later start than in many states. Another threat to successful implementation is the state's commitment to stringent insurance regulations that exceed ACA requirements, most notably in small-group and nongroup community rating. Most respondents expected stricter state regulations to keep New York nongroup premiums very high and lead many healthier state residents to continue staying out of the nongroup risk pool. However, when 2014 premiums were released in July, the approved rates were lower than most had expected. What remains uncertain is how sustainable these rates will be over time—specifically, whether they will remain sufficiently low to attract and retain a sizable pool of younger, healthier enrollees.

Los Angeles: Fragmented Health Care Market Shows Signs of Coalescing, 2013

January 1, 2013

Although Los Angeles' diverse economy has provided some resiliency during the economic downturn, hospitals have experienced lower patient care revenues. This report provides a snapshot of the region's health care market.CHCF is updating a series of market studies in six areas: Fresno, Los Angeles, Riverside/San Bernardino, Sacramento, San Diego, and the San Francisco Bay Area. These regional market reports highlight variations in health care affordability, access, and quality of care across the state. The reports are published as part of the CHCF California Health Care Almanac, an online clearinghouse for key data and analysis examining California's medical system.Key findings of the Los Angeles report include:The area's dense urban environment has given rise to a large, fragmented health care market.Health care reform and a drop in private insurance enrollment have led to new affiliations among providers to gain more patients.The region's safety-net system has expanded its capacity to adapt to Medi-Cal's growing enrollment under health reform.

Limited Options to Manage Specialty Drug Spending

April 26, 2012

Outlines rising trends in costs of and spending on specialty drugs; health plans' efforts to curb specialty drug spending, including patient cost sharing and utilization management; and efforts to integrate medical and pharmaceutical coverage.

Americans' Access to Prescription Drugs Stabilizes, 2007-2010

December 31, 2011

Examines trends in the percentage of Americans reporting difficulty affording prescription drugs by insurance status, age group, income, and health status. Considers contributing factors such as changes in the uninsured population and fewer doctor visits.

Medical Bill Problems Steady for U.S. Families, 2007-2010

December 22, 2011

Examines changes in the proportion of people in families having difficulty paying medical bills during the recession by age group, insurance status, income, amount owed, amount paid off, and estimated time to pay off bills. Considers contributing factors.

A Long and Winding Road: Federally Qualified Health Centers, Community Variation and Prospects Under Reform

November 14, 2011

Outlines growth in the number of, demand, and federal funding for FQHCs between 1997 and 2009 in twelve communities and factors that shape FQHC development, including variations in Medicaid eligibility rules, employer-sponsored coverage, and demographics.

Employer-Sponsored Health Insurance: Down, But Not Out

October 31, 2011

Presents findings from twelve metropolitan areas about employers' efforts to control employee healthcare costs in response to the recession and national healthcare reform by firm size. Projects employer trends through 2014, including greater cost sharing.

Key Findings From HSC's 2010 Site Visits: Health Care Markets Weather Economic Downturn, Brace for Health Reform

May 31, 2011

Presents findings about hospital payment rate increases, hospital-physician alignment, and insurance premiums, funding for safety-net providers, and their implications from HSC's site visits to twelve nationally representative metropolitan communities.

State Variation in Primary Care Physician Supply: Implications for Health Reform Medicaid Expansions

March 17, 2011

Examines regional and state variations in primary care supply, physicians' acceptance of new patients, and capacity to meet increased demand from Medicaid's expansion. Considers policy implications, including reimbursement and scope-of-practice issues.

Workplace Clinics: A Sign of Growing Employer Interest in Wellness

December 13, 2010

Examines the increasing employer demand for workplace clinics, clinic management models, types of services, challenges, regulations, and the clinics' potential impact, including their ability to raise productivity and help contain healthcare costs.