Five HSC Studies Appear in May/June Health Affairs

Media Advisory
May 9, 2006

Alwyn Cassil (202) 264-3484 or

WASHINGTON, DC—Five studies from the Center for Studying Health System Change (HSC) appear in the May/June edition of Health Affairs, on topics ranging from the hospital building boom to care for the seriously mentally ill to local market perspectives on consumer-driven health plans. HSC is a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

Three of the five Health Affairs articles are based on HSC’s fifth round of site visits in 2005 to 12 nationally representative communities—Boston; Cleveland; Greenville, S.C.; Indianapolis; Lansing, Mich.; Little Rock, Ark.; Miami; northern New Jersey; Orange County, Calif.; Phoenix; Seattle; and Syracuse, N.Y. The site visit articles are as follows:

Construction Activity in U.S. Hospitals, by Gloria J. Bazzoli, Anneliese M. Gerland and Jessica May

Hospital construction activity is increasing, but little information exists on what types of hospital capacity are affected and what is motivating specific efforts. Analysis of the fifth round of Community Tracking Study site visit data revealed four general types of activity: new hospital construction or expansion of existing general hospital capacity; new or expanded capacity in specialty services; replacement of aging facilities; and expansion of capacity-constrained services. Some of these actions are responsive to community need, but others resemble a medical-arms-race response. Overall, current construction activity will provide more convenient access for some consumers but at high cost if excess capacity results.

The Struggle to Provide Community-Based Care to Low-Income People with Serious Mental Illness, by Peter J. Cunningham, Kelly L. McKenzie and Erin Fries Taylor

This paper describes gaps in services for low-income people with serious mental illnesses as reported by mental health professionals and other observers in 12 U.S. communities. According to respondents, service gaps have grown in recent years—especially for uninsured people—as a result of state budget pressures and Medicaid cost containment policies. Growing service gaps contribute to the high prevalence of serious mental illness among the homeless and incarcerated populations, as well as crowding of emergency departments. Some states and communities are aggressively addressing these gaps, although funding for new programs remains scarce.

Consumer-Directed Health Insurance Products: Local-Market Perspectives, by Lydia E. Regopoulos, Jon B. Christianson, Gary Claxton and Sally Trude

During the past few years, health plans have focused product development on consumer-driven health plans. This paper examines how these products are faring in the 12 HSC communities. Although there has been a proliferation in the number and variety of consumer-directed plan options available, employers have taken a cautious approach. Given the increased financial stake and decision-making responsibility consumers hold when enrolled in these plans, respondents expressed frustration that the availability of information support has lagged behind the demands placed on consumers.

Additionally, the following two articles by HSC researchers also appear in the May/June Health Affairs:

Why Employer-Sponsored Insurance Coverage Changed, 1997-2003, by James D. Reschovsky, Bradley C. Strunk and Paul Ginsburg

Four-and-a-half-million Americans gained employer-sponsored health insurance coverage during 1997-2001, while nearly 9 million lost coverage in the ensuing economic downturn (2001-2003), after accounting for population growth. Macroeconomic trends affecting employment, job quality and incomes drove most of the coverage changes, although key factors varied during the two periods. Take-up rates affected coverage, mostly reflecting the interaction of premium cost trends and labor-market tightness, but take-up also was influenced by the implementation of the State Children’s Health Insurance Program (SCHIP) during 1997-2001. Coverage among low-income people was most affected by economic conditions and premium costs.

Generosity and Adjusted Premiums in Job-Based Insurance: Hawaii is Up, Wyoming is Down, by Jon Gabel, Roland McDevitt, Laura Gandolfo, Jeremy Pickreign, Samantha Hawkins and Cheryl Fahlman

In this study supported by The Commonwealth Fund, employees in firms with fewer than 10 workers paid 18 percent more for health insurance in 2002, after adjusting for actuarial value—or the proportion of total medical expenses covered by insurance—than employees of firms with more than 1,000 workers. The study also found that in 2002 adjusted employer-based premiums for HMOs were 25 percent lower than premiums for indemnity plans and 18 percent lower than PPO premiums. This meant that workers in rural states with a strong indemnity plan presence, such as Montana and Wyoming, faced higher adjusted premiums than residents of urban states, such as California and Massachusetts, with a strong HMO presence.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.