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The Commonwealth Fund's Top 10 Health Policy Stories of 2006

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Also check out the most-read publications on The Commonwealth Fund Web site in 2006.

As we begin 2007, we can look back with hope on some signs of progress toward a high performance health system in 2006, such as the passage of Massachusetts's universal coverage law and the success of the Institute for Healthcare Improvement's 100,000 Lives campaign for hospital safety. But several negative trends and indicators also emerge, including an ever-growing number of uninsured Americans and the failure of the U.S. health system to meet many performance benchmarks on access, quality, and efficiency. Below, we highlight what we consider the top health policy stories of 2006—and their lessons for the future.

1. Democrats take Congress in midterm elections.

As CQ HealthBeat declared on November 8th, "Health care's back, big time." During the midterm election campaign, candidates from both parties emphasized health reform. They know this is an issue their constituents care about: An August 2006 Commonwealth Fund survey showed that three-quarters of all adults believe the U.S. health care system needs either fundamental change or complete rebuilding. The public's top priorities are ensuring all Americans have adequate, reliable health insurance; reining in rising medical costs; and lowering the cost of prescription drugs.

We hope the following initiatives, among others, will top a bipartisan Congressional agenda:

  • not only reauthorizing and adequately funding the State Children's Health Insurance Program but also setting quality standards and expanding coverage to additional low-income children and their parents;

  • granting Medicare the authority to negotiate drug prices;

  • furthering the adoption of information technology and a system for health information exchange; and

  • establishing a pay-for-performance Medicare payment system for health care providers that financially rewards high-quality patient-centered care as well as efficiency.

2. The number of uninsured Americans rises again—from about 46 million to more than 47 million. Even insured Americans are financially squeezed by health care costs.

One million more Americans joined the ranks of the uninsured in 2006. Sadly, young adults (ages 19 to 29) are one of the largest and fastest-growing segments of the U.S. population without health insurance. Lack of adequate health insurance coverage makes it difficult for people to get the health care they need, and burdens them with large medical bills when they do get care. A 2006 Commonwealth Fund study showed that even insured workers face these issues. Due in part to the erosion of employer coverage, many workers have been forced to turn to the individual insurance market. These workers often find coverage unaffordable or unavailable, while families with employer coverage face ever-rising deductibles and other cost-sharing burdens. Likewise, providing health benefits—especially to older workers and early retirees—contributed to financial crises experienced this year by large employers such as Ford and GM.

3. The passage of the Massachusetts universal coverage law stimulates interest in other states.

In April, Massachusetts passed historic legislation requiring all Bay State residents to have health insurance and expanded access to coverage so that this ambitious goal might be met. The Massachusetts Health Care Reform Plan is grounded in the idea that individuals, employers, and government must share responsibility for health insurance. The plan includes an individual mandate that says that it is every person's responsibility to have coverage and be able to pay for care when they need it. Massachusetts is not the only state working toward universal coverage. In May, the Vermont Legislature created a comprehensive health insurance plan for uninsured residents under which the state provides premium assistance to lower-income individuals.

4. Medicare implements its prescription drug law providing an important benefit to many seniors but also leading the new Congress to call for further strengthening of the law, including negotiating drug prices, filling the doughnut hole, and reaching low-income seniors who are not enrolled.

Medicare's prescription drug plan, which took effect in January 2006, is satisfying many seniors, with 73 percent reporting in a recent survey that the plans cover the medications they need. However, one-quarter of those surveyed said the Medicare drug program had not lowered their drug costs and 29 percent expressed frustration with the program. In addition, many enrollees have been subject to the no-coverage gap, known as the "doughnut hole." CQ HealthBeat reports that Democrats expect the 110th Congress will provide "a lot more oversight" of the Medicare prescription drug program. Specific agenda items are likely to include giving Medicare the power to negotiate drug prices with pharmaceutical companies. Such savings could then go toward efforts to reach seniors who are not yet enrolled and the elimination of plans with a coverage gap.

5. Outgoing Congress enacts more incentives for health savings accounts (HSAs), but enrollment stalls; employers taking a more cautious look.

In December, the outgoing Congress passed a series of provisions that would allow both employees and employers to contribute more money to HSAs, which are tax-free accounts used to pay health care expenses.

However, the second Employee Benefit Research Institute (EBRI)/Commonwealth Fund Consumerism in Health Care Survey found that enrollment in "consumer-driven plans," as HSAs with high-deductible plans are known, has stalled and the satisfaction of those with consumer-driven plans continues to be lower than that of people in more comprehensive health insurance plans. In addition, the study showed HSAs have had little impact on the number of uninsured.

6. U.S. primary care is underdeveloped relative to other countries, and the nation continues to lag in use of health information technology (IT), care coordination, and more.

The Fund's 2006 International Health Policy Survey of Primary Care Doctors revealed that U.S. physicians are among the least likely to have extensive clinical information systems or quality-based payment incentives, the least likely to provide access to after-hours care, and the most likely to report that their patients often have difficulty paying for care. Only 28 percent of U.S. doctors and 23 percent of Canadian doctors said they used electronic medical records, compared with overwhelming majorities of doctors in the Netherlands (98%), New Zealand (92%), the U.K. (89%), and Australia (79%). Concepts such as medical homes, in which patients develop relationships with their providers and work with them to maintain healthy lifestyles and coordinate health services, may be one way to strengthen patient-centered primary care in the United States.

7. The U.S health system is well below benchmark performance on measures related to access, quality, and efficiency.

The first National Scorecard on U.S. Health System Performance, developed by the Commonwealth Fund Commission on a High Performance Health System, finds the nation falls short on key indicators of health outcomes, quality, access, efficiency, and equity—despite health expenditures that are twice those of the median industrialized country. Overall, the U.S. health care system scored an average 66 out of a maximum 100, based on 37 indicators of health outcomes, quality, access, efficiency, and equity.

8. Pay-for-performance (P4P) initiatives progress: An Institute of Medicine (IOM) report calls for P4P in Medicare and a Centers for Medicare and Medicaid Services–Premier, Inc. Demonstration shows that incentives leading to better care cut costs.

Advocates of P4P saw a number of promising signs this year. In September, an IOM panel released a report recommending pay-for-performance incentives, which reward providers for delivering high-quality and/or patient-centered and efficient care, as a means of speeding the process of implementing best practices in Medicare. In addition, a pay-for-performance demonstration conducted by the Centers for Medicare and Medicaid Services and Premier Inc., a nationwide alliance of not-for-profit hospital facilities and health care systems, released early results in June showing that, with a small financial incentive, hospitals improved their performance quarter after quarter for patients with heart attacks, bypass surgery, pneumonia, heart failure, and hip and knee replacements. More detailed results for two of these, heart attacks and heart bypass surgery, demonstrate that better care also results in lower costs, saved lives, fewer complications, fewer readmissions, and shorter lengths of stay.

9. The Institute for Healthcare Improvement's 100,000 Lives campaign declares success; new initiative launched.

In June, Donald Berwick, M.D., CEO of the Institute for Healthcare Improvement (IHI), announced that the 100,000 Lives Campaign, launched in December 2004, had exceeded its 18-month goal of preventing 100,000 deaths. More than 3,000 hospitals, representing more than 75 percent of U.S. hospital beds, participated, saving an estimated 122,000 lives. The 100,000 Lives Campaign focused on six interventions in participating hospitals, including deployment of rapid response teams to provide early intervention for patients whose conditions are deteriorating and medication reconciliation to prevent adverse drug events as patients are transferred from location to location within hospitals or between care settings. A new IHI campaign, The 5 Million Lives Campaign, was launched in December to protect patients from 5 million incidents of medical harm over the next two years.

10. The push for health care transparency continues at national and state level.

More and better information on the costs and quality of health services could improve the health system—by enabling providers to benchmark their performance against their peers, allowing private insurers and public programs to reward quality and efficiency, and helping patients make informed choices about their care. The first EBRI/Fund consumerism survey found that only 14 to 16 percent of insured adults had information from their health plan on the quality of care provided by their doctors and hospitals. Twelve to 16 percent had cost information for their doctors and hospitals.

However, some steps toward greater transparency have been taken over the last year. In June, Medicare began posting hospital price data on the Internet. Legislation from the last Congress that will likely be revisited includes a bill that would call for Health and Human Services to share data on the drug benefit with other government agencies, certain researchers, and congressional support agencies, such as the Congressional Budget Office and the Government Accountability Office. Likewise, in Wisconsin, public and private stakeholders—including businesses, hospitals, physicians, insurers, state employees, and the state Medicaid program—began collaborating to collect, compare, and publicly report information about the costs and quality of health care in the state. The state committed public funds to the creation of a database of health care information intended to enhance the transparency, quality, and efficiency of the health care system.

Publication Details



K. Davis and C. Haran, The Commonwealth Fund's Top 10 Health Policy Stories of 2006, The Commonwealth Fund, January 2007