Study­ing what works, doesn’t work in health in­surance re­form

Modern Healthcare - - COMMENT - By Michael D. Rich

Re­gard­less of the out­come of this year’s elec­tion, one re­sult is fairly cer­tain—the new ad­min­is­tra­tion will take a sec­ond look at the Af­ford­able Care Act.

The land­mark health re­form leg­is­la­tion Pres­i­dent Barack Obama signed into law in 2010 led to a ma­jor ex­pan­sion of health in­surance ac­ces­si­bil­ity, and set off the most sig­nif­i­cant over­haul of the U.S. health­care sys­tem since the ad­vent of Medi­care and Med­i­caid in 1965. Th­ese mile­stones of change to our health in­surance sys­tem, en­acted decades apart, share a link to one of the largest so­cial sci­ence ex­per­i­ments in U.S. his­tory.

Called the Health In­surance Ex­per­i­ment, the study was launched in 1971 by RAND Corp. re­searchers who brought non­par­ti­san, un­bi­ased anal­y­sis to the dis­cus­sion—an es­sen­tial com­po­nent of al­most any health­care de­bate, whether it’s re­gard­ing the ACA or the pros and cons of other in­surance re­forms be­ing tested across the in­dus­try.

The Health In­surance Ex­per­i­ment sought to an­swer: How much more med­i­cal care would peo­ple use if it was free, and what would be the con­se­quences for their health? At the time, the na­tional de­bate cen­tered on free, uni­ver­sal health­care and whether the ben­e­fits would jus­tify the costs. HMOs were still a rel­a­tively novel con­cept in the U.S. In ad­di­tion, more than 20 mil­lion peo­ple had signed up for Medi­care, and the fed­eral govern­ment was look­ing for hard data on cost-shar­ing.

Be­tween 1974 and 1982, RAND con­ducted field work for the study, funded by what is now HHS. More than 7,700 peo­ple were ran­domly as­signed to one of sev­eral in­surance plans that re­flected an ar­ray of cost-shar­ing op­tions. One ma­jor find­ing showed that those who paid for a share of their health­care gen­er­ally used fewer ser­vices than those who re­ceived free care, yet there was ef­fec­tively lit­tle or no dif­fer­ence in health out­comes be­tween the groups. There were ex­cep­tions—free care led to health im­prove­ments among the poor­est and sick­est, and the study sug­gested that cost-shar­ing should be min­i­mal or nonex­is­tent for the poor.

The study’s im­pact has been widereach­ing. Its con­clu­sions en­cour­aged the re­struc­tur­ing of pri­vate in­surance and helped in­crease the stature of man­aged care in Amer­ica. Its reach has ex­tended to China, where RAND con­ducted a sim­i­lar study in the 1990s that led to a ru­ral co­op­er­a­tive med­i­cal sys­tem af­fect­ing about 800 mil­lion peo­ple.

Within RAND, lessons learned from the Health In­surance Ex­per­i­ment

con­tinue to re­ver­ber­ate. It’s a re­minder that in­no­va­tive re­search and health­care re­form don’t hap­pen overnight. Be­fore re­search could be­gin, we had to come up with ob­jec­tive ways to mea­sure health sta­tus and qual­ity of care— stan­dards now used around the world.

A high-tech de­scen­dant of that re­search with roots in the 1970s is help­ing to shape on­go­ing health­care re­form. Over the past decade, RAND de­vel­oped a com­plex, com­puter-based sim­u­la­tion model called Com­pare, which as­sesses the likely ef­fects of dif­fer­ent health cov­er­age pol­icy op­tions on mil­lions of in­di­vid­u­als’ health­care choices. The in­sights gen­er­ated were shared widely with mem­bers of the Obama ad­min­is­tra­tion and Capi­tol Hill staffers dur­ing the de­bate over the ACA. When the Supreme Court up­held a key part of the re­form law that pro­vides health in­surance sub­si­dies to qual­i­fy­ing Amer­i­cans, the de­ci­sion cited RAND re­search con­ducted us­ing this model.

We con­tinue to use Com­pare to an­a­lyze ACA mod­i­fi­ca­tions and al­ter­na­tive plans pro­posed by pres­i­den­tial can­di­dates, mem­bers of Congress and other thought lead­ers. And we are ex­pand­ing our mod­el­ing ca­pa­bil­ity to con­sider how changes in pay­ments to Medi­care providers will af­fect fed­eral spend­ing, provider par­tic­i­pa­tion and health­care ac­cess among those over age 65. Th­ese are two of roughly 300 health re­search projects RAND has un­der­way at any point in time.

The ACA has done much to ex­pand ac­cess to care, and it pro­vides ad­di­tional im­pe­tus for in­no­va­tion in health­care de­liv­ery. But much more work needs to be done with re­spect to how it’s or­ga­nized and fi­nanced be­fore a broad con­sen­sus is reached re­gard­ing get­ting good value for money spent. A com­mit­ment to re­search, anal­y­sis and eval­u­a­tion will help en­sure that we get there sooner rather than later.

In­ter­ested in sub­mit­ting a Guest Ex­pert op-ed? View guide­lines at modernhealth­ Send drafts to As­sis­tant Man­ag­ing Ed­i­tor David May at dmay@modernhealth­

Michael D. Rich is pres­i­dent and CEO of the not-for-profit, non­par­ti­san RAND Corp.

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