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Top 10 Health Policy Stories of 2004

The end of the year is always a time for making lists, and not just of holiday gifts for family and friends. It's a time to reflect on our tally of the past year's accomplishments in our fields of endeavor and personal lives, and to start thinking about what is still to be accomplished in the year ahead.

In the popular media, of course, there are plenty of lists this time of year—Best and Worst Movies, Books, Music CDs, you name it. And there are traditionally lists of the Top 10 news stories, even the Top 10 stories in health and medicine. Last year, however, we couldn't find a list of the Top 10 stories or developments in health policy. So we created our own. We're pleased to do that again this year, offering our take on the most important or interesting developments in the world that the Fund follows and does its best to change for the better.

As with any list of major events, not all of the entries are positive. Most are disappointing, some downright distressing. But all have a bearing on the issues that we and our colleagues in the health policy arena deal with daily. And all are worth thinking about. Along with the list, I've mentioned some related Fund publications that might be of interest.

1. Health care costs continue to rise; consumers bear more of the burden.
Although the increase in health insurance premiums moderated in 2004 compared with 2003, it still took a double-digit jump (11.2%) for the fourth straight year, while growth in overall health care costs looked to far outpace the general inflation rate yet again. Individuals bore more of the brunt of these increases through higher out-of-pocket costs, including increased premiums, deductibles, and co-pays. They also reported more trouble paying medical bills and growing concern about the affordability of care. Large and small businesses, meanwhile, cited rising health costs as an increasingly serious drag on competitiveness.

The result was markedly increased discussion of ways to control rising costs. Options gaining attention included the "consumer-directed health care" approach that would shift even more financial responsibility to individuals through emphasis on high-deductible plans and health savings accounts, as well as association health plans and malpractice reform. Unfortunately, none of these measures is directed at the root causes of higher costs. More intriguing are recent proposals to "pay for performance," and reimportation of lower-priced prescription medications from outside the U.S., especially from Canada.

2. The number of Americans lacking health insurance keeps growing.
While health care costs continued to increase, deteriorating coverage for workers contributed to a continued rise in the numbers of working-age adults without health coverage. The number of uninsured jumped to 45 million in 2003, up from 43.6 million in 2002, and a 13% increase from 2000.

3. Debate continues over the cost of the new Medicare Modernization Act (MMA), with confusion over the drug discount cards provided by the law.
One year after passage of the MMA, some 6 million of Medicare's 40 million beneficiaries had signed up for drug discount cards, including 1.5 million of 7 million low-income beneficiaries. The administration had estimated that more than 4.5 million low-income beneficiaries would enroll. The law's complexity has been a barrier to sign-ups, experts say. Meanwhile, Office of Management and Budget cost estimates put the price tag for the drug benefit at $530 billion over 10 years, compared with the $400 billion Congressional Budget Office estimate that Congress relied on in enacting the measure.

4. Health care was a prominent issue in the election campaign.
Surveys throughout the presidential campaign, as well as Election Day exit polls, showed that health care was a top domestic policy concern among voters (70% in one poll called it "very important"), and the topic was front and center during the presidential and vice presidential debates. Voters cited concerns about costs and availability of care and health insurance coverage as prominent issues. With a new administration and Congress about to take office, issues mentioned as being high on the GOP majority's agenda included malpractice reform, association health plans, tax credits and health savings accounts, deficit reduction with potential cuts in Medicare and Medicaid, patient safety concerns, information technology, and research on the comparative effectiveness of drugs and medical procedures.

5. Concerns grow about the nation's drug development, approval, and monitoring process.
The Food and Drug Administration came under increased public, media and congressional scrutiny during the year, with critics questioning the agency's ability to monitor problems with drugs already on the market. Fueled by the voluntary withdrawal of a high-profile, new-generation pain reliever and reported concerns about other agents, critics suggested the country might need a drug safety review body independent of the FDA. FDA officials defended their ability to safeguard the public but acknowledged limitations in their monitoring abilities. This scrutiny underscored the realization that not all drugs in the same class work the same way or are equally effective—a fact with implications not only for patient safety but for efforts to balance the clinical effectiveness of drugs with growing payer pressures to keep costs down through stricter formulary rules.

6. Patient safety and medical errors gain increased attention in the ongoing debate over improving the quality of care.
Five years after publication of the landmark Institute of Medicine report, "To Err is Human," more hospitals, clinicians, and policymakers were openly discussing the need to address concerns about medical errors, but patient safety experts agreed progress has been far from sufficient. The upside: 22 states now have mandatory error reporting, covering 64% of Americans, up from 15 states in 1999; the Leapfrog Group has made patient safety a major theme of its incentive program for hospitals; the Joint Commission on Accreditation of Healthcare Organizations has required hospitals to disclose errors to patients; and more hospitals are reporting quality data to the Centers for Medicare and Medicaid Services. Among the evidence that more progress is needed: a recent survey by the Kaiser Family Foundation, U.S. Agency for Healthcare Research and Quality, and the Harvard School of Public Health showed that 40% of consumers feel the quality of care has declined in the last five years, with nearly half expressing concern about the safety of care they and their families receive.

There was also progress, albeit slow, in the "pay-for-performance" movement—rewarding physicians and hospitals for delivering high-quality care and penalizing those that don't. More health plans considered or began to implement such efforts, including HealthPartners, a large HMO in Minnesota, which said it would stop paying for 27 major medical mistakes from a list developed by the National Quality Forum. The Joint Commission on Accreditation of Healthcare Organizations unveiled a set of principles to guide adoption of pay-for-performance systems, the Medicare Payment Advisory Commission expressed enthusiasm about the concept for Medicare managed care and fee-for-service providers, and CMS chief Mark McClellan, M.D., Ph.D., endorsed the concept for Medicare, though specific proposals have not yet been advanced.

7. A mixed picture as states pursue a number of initiatives to cover the uninsured in an era of increased financial pressure.
States continued to experiment with various innovative ways to do more with less when it comes to covering the uninsured. A number of initiatives were passed or put into effect, with more being discussed. Maine implemented its Dirigo Health Plan, offering a coverage option with a $1,250 deductible to small businesses and the uninsured. Individuals and families with incomes below 300% of the federal poverty level are eligible for financial support with cost-sharing and premiums through federal–state subsidies. But in a public referendum, California voters rejected the SB2 law, which would have required businesses of a certain size to provide health coverage for employees or pay into a fund that would do so. And TennCare, the state of Tennessee's ambitious decade-old effort to cover working poor families, appeared headed for collapse.

8. Increasing recognition that the U.S. spends more than other countries on health care but doesn't systematically get the best results.
A first-time report on a set of indicators for measuring quality of health care in Australia, Canada, New Zealand, the U.K., and U.S. showed the U.S. leading on some, but lagging on others. A survey of primary care in these five countries found the U.S. systematically coming up short on access to care, including waiting times for physician appointments, but doing comparatively well on preventive services.

9. The shortage of influenza vaccine.
The state of public health policy and preparedness in the U.S. was called into question when one of the nation's two providers of flu vaccine halted shipments because of quality concerns. The U.S. was the only nation so affected. The late fall disruption in supply—coming just as physicians and the public were gearing up for the annual flu vaccination season—raised concerns about the public health system's ability to respond to a major infectious disease outbreak.

10. More talk, not a lot of action, on health care IT.
There was lots of discussion, by experts, politicians, and policymakers, about the role information technology can play in improving the safety and efficiency of the U.S. health care system, and even the appointment of new federal health care IT "czar" David Brailer, M.D. Real progress remains slow, however, and late in the year Congress rejected a $50 million funding request for Brailer's office. Still, there is movement—13 percent of hospitals have electronic medical records in place, as do up to 28 percent of physician practices, in some form or another.

Do you think we missed a major health care policy story in 2004? Let me know. It's not too early to start watching that issue as it develops in 2005.




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December 2004


Related Fund Publications

Health Care Costs

Hospital Pricing Behavior and Patient Financial Risk, Testimony before Committee on Ways and Means, Karen Davis, Ph.D., June 22, 2004

Health Care Costs and Instability of Insurance: Impact on Patients' Experiences with Care and Medical Bills, Testimony before the Subcommitte on Oversight and Investigations, Committee on Energy and Commerce, Sara R. Collins, Ph.D., June 24, 2004

Will Consumer-Directed Health Care Improve System Performance?, Karen Davis, Ph.D., August 2004

The Uninsured

Wages, Health Benefits, and Workers' Health, Sara R. Collins, Ph.D., Karen Davis, Ph.D., Michelle M. Doty, Ph.D., and Alice Ho, October 2004


How Beneficiaries Fare Under the New Medicare Drug Bill, Marilyn Moon, June 2004

Health Reform

The Affordability Crisis in U.S. Health Care: Findings from the Commonwealth Fund Biennial Health Insurance Survey, Sara R. Collins, Ph.D., Michelle M. Doty, Ph.D., Karen Davis, Ph.D., Cathy Schoen, M.S., Alyssa L. Holmgren, and Alice Ho, March 2004

Health Care Reform Returns to the National Agenda: 2004 Presidential Candidates' Proposals, Sara R. Collins, Ph.D., Karen Davis, Ph.D., and Jeanne M. Lambrew, Ph.D., Updated October 2004

Patient Safety

The End of the Beginning: Patient Safety Five Years After To Err Is Human, Robert M. Wachter, M.D., November 2004

State Coverage Initiatives
Designing Maine's DirigoChoice™ Benefit Plan, Jill Rosenthal, MPH and Cynthia Pernice, B.A., December 2004

Report from Focus Groups with Mainers About the Dirigo Health Plan, Eugene LeCouteur, M.B.A., and Michael Perry, December 2004

Stretching State Health Care Dollars During Difficult Economic Times: Overview, Sharon Silow-Carroll, M.B.A., M.S.W., and Tanya Alteras, M.P.P., October 2004

International Comparisons
First Report and Recommendations of the Commonwealth Fund's International Working Group on Quality Indicators, June 2004.

Primary Care and Health System Performance: Adults' Experiences in Five Countries, Cathy Schoen, M.S., Robin Osborn, M.B.A., Phuong Trang Huynh, Ph.D., Michelle Doty, Ph.D., Karen Davis, Ph.D., Kinga Zapert, Ph.D., and Jordon Peugh, M.A., Health Affairs Web Exclusive (October 28,2004)

Health IT

Information Technologies: When Will They Make It Into Physicians' Black Bags?, Anne-Marie Audet, M.D., M.Sc., Michelle Doty, Ph.D., M.P.H., Jordon Peugh, M.S., Jamil Shamasdin, Kinga Zapert, Ph.D., and Stephen Schoenbaum, M.D., M.P.H., Medscape General Medicine, Dec. 7, 2004


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