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Question and Answer Session

            DR. GINSBURG: Thanks. Any other comments? No?
            Let me invite the audience, and I’ll be glad to start with the woman that I didn’t have time for before, if you still have your question.
            MS. SCHIFF: Thank you. My name is Maria Schiff, and I work for the State of Massachusetts.
            You did touch a bit on it in the second half, but my question was about if there is increasing contribution by the employee over time, which I understand because of the global situation hasn’t happened radically yet, whether there is going to be a decrease in the take-up rate, employees turning down insurance. I was struck in the first half that the word "uninsured" wasn’t used. I see in the second half that it was.
            And so, I mean, there’s two things. Employers can drop insurance, but then employees can find it just, you know, out of their reach, either because of the premium contribution or because co-pays for pharmaceuticals and other services eventually become high, and they feel they take their risk on the safety net.
            MS. GOODMAN: I think in some ways the three-tier formulary is a bit of a model, because what the structure does is, it expanded the number of drugs that were available to people and actually in a lot of cases dropped the cost for certain drugs, maintained the cost for others, and then for some the cost went up. But to the extent that people might have wanted to take or needed to take or were taking drugs that were not on formulary before, and then would instead now fit into the third tier, it actually would provide some coverage whereas there was not before.
            And I think what we’re looking at is, over the course of the 1990s, the employers did increase the premium share, and I think that that is something that has discouraged people with low wage rates from taking up the insurance because it is something that comes out of their paycheck on a weekly or monthly basis.
            And I think that to the extent that the rate of increase of insurance costs can be moderated and the structures can accommodate people with certain behaviors yielding a study to decreased cost and others leading to increased cost, so actions have consequences in this scheme, then I think it could make insurance more affordable for people who right now would be much more at risk of losing the coverage if the employer continued to just raise the premium contribution component.
            DR. GINSBURG: Bob?
            DR. REISCHAUER: I think there’s a pretty robust literature that suggests that increased premium charges will reduce participation among the young, among low-earning workers, and for people accepting family coverage, particularly when there are other alternatives like SCHIP and so on. I don’t think there is corresponding strong evidence that changing co-pays, co-insurance, has that effect. And so, you know, it depends very much how the costs are shifted onto workers.
            DR. GINSBURG: George?
            MR. GREENBERG: Yes. I had two comments. One, I was--
            DR. GINSBURG: George, could you introduce yourself?
            MR. GREENBERG: I’m George Greenberg, and I work at the Department of Health and Human Services. I guess I had two comments or questions about the various parts of the discussion.
            On the tax credit, I was intrigued by Bob Reischauer’s suggestion that you could tie that to access to FEHBP or a Medicare plan. I’ve heard Jack Meyer also talk about using tax credits to take to your employer to purchase on your behalf, or to take to a purchasing cooperative.
            So it seems to me those are all ways in which you could mitigate the effect of the tax credit simply being passed through to the private, individual market insurer’s premium increases in an unregulated market. But it seems to go against the basic thrust of the people who are advocating an individual subsidy as a more efficient economic mechanism for distributing subsidies than employer subsidies or other kinds of subsidies that we currently have. So I was just curious if there’s any further comment on that.
            The other thing I just wanted to mention briefly is that I found the discussion--I’m not a single payer advocate, but I thought the comments on the Canadian system were particularly inept. Yes, there are waiting lists for elective surgery. I think in Canada people get emergency surgery if they need it, but the main difference is, they get access to physicians and there aren’t, you know, 18 percent of the population who are uninsured, who don’t get that.
            So it’s a different system and it has different pluses and minuses, but I think I just want to comment I believe that was kind of an overdrawn characterization about what has been. Now, Americans may not tolerate long waiting lists and waits for elective surgery, but given our oversupply of hospitals, I’m not sure that’s an immediate danger.
            So that’s a comment, but I was curious about the reaction on the tax credits.
            DR. GINSBURG: Bob?
            DR. REISCHAUER: Let me react, George, to your first point, which is, I was suggesting that ability to use a tax credit to buy into FEHBP or Medicare is a way to avoid the political hurdle of having to reform the individual market, which would be very difficult politically to do. You could have an option that the tax credit could be used in the individual market, the unregulated individual market, or in this national system, you know, and I would presume that that would be the appropriate way to go.
            MS. GOODMAN: What I was referring to in terms of the comments on the single payer system in Canada was simply that the issues that we seem to be concerned with as a country are not being resolved in that system. The issues that we’re talking about are quality and access, in the context of the Patient Bill of Rights, people getting access without delays to services.
            And if you look at comparative studies which the Commonwealth Fund published, the percentage of physicians that say that their ability to provide quality care has deteriorated is higher in Canada than in the U.S. The percentage of specialists who report a major problem on limits on hospital care, long waits for specialist referrals, long waits for hospital and surgical care, limits on ordering diagnostic tests and procedures, lack of time with patients, are substantially higher in Canada than here.
            What I was saying is that to the extent that physicians are saying the Patient Bill of Rights should take us further in this direction, are not really cognizant of what they would get if they went there.
            MR. FARRELL: And to add to it on my perspective, I was adding from the viewpoint that in the last decade Canada, similarly to the United States, has at the federal level reduced its payments to hospitals, and as a result the current condition of the plants in Canada are very, very poor, so much so that they are going into a free market system of accessing public debt to support new facilities.
            And again it’s just a matter of, I think you hit it on the head, you’ll never get an American to go into that because it’s a life style. Equally, you mention our system in Canada and they spit at you, yet you see a lot of people coming across the border south to get, both from a provision of care as well as for employment opportunities. So that was the context in which my comments were made.
            MR. GREENBERG: I just want to say I think all the responses are correct. I still think the general point is that there are different strengths and weaknesses in those systems--
            MR. FARRELL: Absolutely.
            MR. GREENBERG: --and that the primary care aspect of the Canadian system is much stronger than the U.S. system. And, you know, I was just concerned that we were making, we were implying--
            MR. FARRELL: A general statement. It’s an overall statement, and the fundamental difference between the United States--yes, we have been talking at this industry like we’re in a bubble and we’re isolated from everything else, but in reality, you know, Canada has a difficult time retaining its people from emigrating to the United States because of the tax system, so it’s much overwhelmingly beyond that, but nevertheless.
            DR. GINSBURG: I think it’s a good time to go on to the next question.
            MR. LINDSEY: My name is Gary Lindsey. I’m with Partnership for Prevention in Washington.
            Earlier Roberta and Joy had mentioned about voluntary disease state management programs and other innovative programs and their impact on health care costs. Thinking about actually other areas, my question is in regard to the extent that Wall Street has looked at other areas, particularly the impact on productivity.
            There has been recent research that has been reported in the American Journal of Health Promotion, the Journal of Occupational and Environmental Medicine, looking at the impact of keeping low-risk employees low-risk and keeping them from becoming high-risk employees, and the kind of impact that it might have on productivity, and also the so called "presenteeism" at work, if you have a migraine headaches or you’re out for asthma or you have seasonal allergies, and managing those things and actually being more productive while at work.
            MS. GOODMAN: I don’t think Wall Street per se has looked at that. But I do think, as I talk to a variety of the companies that I cover, that that is clearly an issue that they are looking at, seeking to quantify, particularly for their large employer customers.
            And I think that they view developing that database and being able to show improvements in productivity and drops in absenteeism, both for issues related to the employee themselves as well as the issues related to the care of dependents, particularly children with asthma and other disease conditions, that that would represent a competitive advantage to them that would enable them to retain a client base, build a client base, and build their profitability over time. So I think ultimately we will look at it as that becomes a more important set of issues.
            DR. GINSBURG: Thank you. Well, let me get to closing the meeting now, but first I want to urge you to fill out your evaluation. We make good use of them, and they will be reflected in future meetings.
            And I would like to thank all the panelists for the great job they have done. I want to thank many on the HSC staff who have worked behind the scenes to get this meeting going, and thank The Robert Wood Johnson Foundation for their continued support, and the audience for their questions and comments. So thank you.
            [Whereupon, at 11:55 a.m., the proceedings were adjourned.]

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