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Unintended Consequences of Health Policy Programs and Policies: Workshop Summary
cific health policy programs in particular. The views expressed are solely the opinions of the authors and other participants.
A Long View: The Value of Historical Perspective
To set the stage for the discussion, Lynn Etheredge reviewed how valuable a historical perspective can be for revealing the outcomes of policies and for future policy planning. He reminded the group that, without conversations such as this, “the rich source of lessons from past health policy experiences tends to get lost and forgotten. This is unfortunate because so many of today’s priority health issues could be called ‘repeat encounters’. Whichever party is in the White House, whoever is in charge of Congress, and whoever the next round of RWJ fellows, they are inevitably going to face past issues and priorities in a different guise.”
…without conversations such as this, “the rich source of lessons from past health policy experiences tend[s] to get lost and forgotten…”
Etheredge cited Richard Neustadt and E.R. May’s book, Thinking in Time, as useful for understanding what brought us to where we are and the real-world problems facing public policy officials as they contemplate difficult choices:
“[Neustadt] argued that one of the most important things you can tell a new group who are going to deal with a public policy issue is the history of how we got to where we are. That is often overlooked but is very important because…it warns people that the status quo really does not have much standing except that it is a status quo. It wasn’t always the status quo. It didn’t get here because it was ‘right’ or someone planned that the world ought to be organized this way…. We got here in part because public policy officials made some choices in the past and sometimes where we are today is the result of successes, sometimes of unintended consequences, sometimes of both.”
The workshop… focused specifically on nine case studies covering a broad range of policy issues.
Etheredge challenged the authors and participants not only to create a record of the history of a particular policy development that will be useful to people who revisit the same kind of issue in the future but also to articulate general principles that can sensitize people to the value of discussions of how an understanding of the history of health policy in different areas can contribute to the future.
The case studies were grouped for discussion into three categories: Medicaid, Assessing Risks and Regulating Benefits, and Delivery System Restructuring. Each author briefly described how he or she became interested in the health policy issue and the major points of the case study. After a discussion of each case study, the dialogue shifted to general lessons for health policy that emerged from the nine case studies.
Medicaid’s Disproportionate Share Hospital Payment Program
David Altman’s interest in the Medicaid Disproportionate Share Hospital (DSH) payment program stemmed from his extensive exposure to the plight of highly vulnerable public hospitals in his home state of California.
Created under a Medicaid provision in the 1981 Omnibus Budget Reconciliation Act (OBRA 1981, P.L. 97–35), the DSH program requires state Medicaid payment rates to take into account the uncompensated care burden of hospitals that serve a disproportionate number of low-income patients. Other rulings over the years expanded Medicaid DSH payments to nearly $16 billion in 1997. A 1985 Health Care Financing Administration ruling allowed an additional federal match for donations that states received from health care providers. A 1996 OBRA provision allowed states to pay DSH providers above the Medicare upper-limit rate.
Based on the assumption that hospitals serving low-income Medicaid patients also serve a substantial number of indigent patients not eligible for Medicaid, DSH was intended to cross-subsidize the costs of uninsured care with the higher Medicaid DSH rate. The fragility of this assumption pointed out the risk of unintended consequences from programs that are not well targeted. With the introduction of Medicaid managed care, many hospitals for the first time competed for these publicly insured low-income patients, and public hospitals saw their Medicaid volume and revenues drop. As a result, Medicaid revenues were pulled out of public hospitals providing care for the uninsured, and hospitals that