Developing the Information Infrastructure for Medicare Beneficiaries

Summary of a Workshop

Committee on Choice and Managed Care: Furthering the Knowledge Base to Ensure Public Accountability and Information for Informed Purchasing by and on Behalf of Medicare Beneficiaries

Valerie Tate Jopeck and Marion Ein Lewin, Editors

Office of Health Policy Programs and Fellowships

INSTITUTE OF MEDICINE

NATIONAL ACADEMY PRESS
Washington, D.C.
1999



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--> Developing the Information Infrastructure for Medicare Beneficiaries Summary of a Workshop Committee on Choice and Managed Care: Furthering the Knowledge Base to Ensure Public Accountability and Information for Informed Purchasing by and on Behalf of Medicare Beneficiaries Valerie Tate Jopeck and Marion Ein Lewin, Editors Office of Health Policy Programs and Fellowships INSTITUTE OF MEDICINE NATIONAL ACADEMY PRESS Washington, D.C. 1999

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--> NATIONAL ACADEMY PRESS 2102 Constitution Avenue, N.W. Washington, D.C. 20418 NOTICE: The project that is the subject of this report was approved by the Governing Board of the National Research Council, whose members are drawn from the councils of the National Academy of Sciences, the National Academy of Engineering, and the Institute of Medicine. The members of the committee responsible for the report were chosen for their special competences and with regard for appropriate balance. The Institute of Medicine was chartered in 1970 by the National Academy of Sciences to enlist distinguished members of the appropriate professions in the examination of policy matters pertaining to the health of the public. In this, the Institute acts under both the Academy's 1863 congressional charter responsibility to be an adviser to the federal government and its own initiative in identifying issues of medical care, research, and education. Dr. Kenneth I. Shine is president of the Institute of Medicine. Support for this project was provided by The Robert Wood Johnson Foundation. The views presented in this report are those of the Committee on Choice and Managed Care and are not necessarily those of the funding organization. International Standard Book No. 0-309-06388-4 Additional copies of this report are available from the National Academy Press , 2101 Constitution Avenue, N.W., Box 285, Washington, D.C. 20055. Call 800-624-6242 or 202-334-3313 (in the Washington metropolitan area), or visit the NAP's on-line bookstore at http://www.nap.edu. The full text of this report is available on-line at http://www.nap.edu. For more information about the Institute of Medicine, visit the IOM home page at http://www2.nas.edu/iom. Copyright 1999 by the National Academy of Sciences. All rights reserved. Printed in the United States of America The serpent has been a symbol of long life, healing, and knowledge among almost all cultures and religions since the beginning of recorded history. The image adopted as a logotype by the Institute of Medicine is based on a relief carving from ancient Greece, now held by the Staatlich Museen in Berlin.

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--> Committee on Choice and Managed Care: Furthering the Knowledge Base to Ensure Public Accountability and Information for Informed Purchasing by and on Behalf of Medicare Beneficiaries HARRY P. CAIN II* (CO-CHAIR), BUSINESS ALLIANCES, BLUE CROSS AND BLUE SHIELD ASSOCIATION, CHICAGO, ILLINOIS STANLEY B. JONES* (CO-CHAIR), GEORGE WASHINGTON UNIVERSITY HEALTH INSURANCE REFORM PROJECT, WASHINGTON, D.C. HELEN B. DARLING, GROUP BENEFITS AND HEALTH CARE, WATSON WYATT WORLDWIDE, STAMFORD, CONNECTICUT ALLEN FEEZOR, INSURANCE AND MANAGED CARE PROGRAMS, EAST CAROLINA UNIVERSITY MEDICAL CENTER, PITT COUNTY MEMORIAL HOSPITAL, GREENVILLE, NORTH CAROLINA JAMES P. FIRMAN, NATIONAL COUNCIL ON THE AGING, WASHINGTON, D.C. SANDRA HARMON-WEISS, GOVERNMENT PROGRAMS, AETNA U.S. HEALTHCARE, BLUE BELL, PENNSYLVANIA RISA J. LAVIZZO-MOUREY, INSTITUTE ON AGING AND DIVISION OF GERIATRIC MEDICINE, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA MARK V. PAULY,* DEPARTMENTS OF ECONOMICS AND HEALTH CARE SYSTEMS, THE WHARTON SCHOOL, UNIVERSITY OF PENNSYLVANIA, PHILADELPHIA SHOSHANNA SOFAER, SCHOOL OF PUBLIC AFFAIRS, BARUCH COLLEGE, CITY COLLEGE OF NEW YORK, NEW YORK Study Staff Marion Ein Lewin, Study Director Valerie Tate Jopeck, Research Associate Kari McFarlan, Administrative Assistant Nancy Diener, Financial Associate *   Institute of Medicine Member

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--> Acknowledgments The March 1998 workshop that is the basis of this document could not have happened without the guidance of numerous individuals. Although it is not possible to mention by name all of those who contributed to this committee's work, the committee wants to express its gratitude to a number of groups and individuals for their special contributions. Particular thanks are extended to The Robert Wood Johnson Foundation for its continuing support of this committee's work as well as the support and encouragement of several members of its staff. Preparing the workshop and completing this summary in light of the quickly changing Medicare+Choice environment could not have been accomplished without the background information and key perspectives provided by several people. At the Health Care Financing Administration (HCFA), appreciation is extended to Michael Hash, Kathleen M. King, Kathleen Buto, Carol Cronin, and Michael McMullan. The committee particularly thanks Mary Agnes Laureno for serving as HCFA's liaison to the committee and providing us with salient information. Sincere thanks go to all of the participants at the workshop held on March 4 and 5, 1998. The speakers and resource experts (Appendix B) gave generously of their time and expertise to help inform and guide our work. We are particularly indebted to Lynn Etheredge. His commissioned paper set the stage for the workshop, and his advice throughout the committee's work has been greatly appreciated. We also appreciate Michael Hayes's careful editing of this text. The committee wishes to point out that the body of this workshop report reflects only those events that occurred prior to March 5, 1998. As is not uncommon in the health care arena in Washington, D.C., a number of significant changes that relate to the implementation of Medicare+Choice (Medicare Part C) under the Balanced Budget Act of 1997 have occurred since then. The first and most important event was the HCFA announcement on June 18, 1998, that it would step back from its intentions to launch a nationwide education and publicity campaign in October 1998 and a planned mailing of a new Medicare & You handbook (with a description of all the options) to every Medicare beneficiary household. Federal officials had tested the handbook materials in several focus groups of beneficiaries and found a high level of misunderstanding and confusion. As a result, HCFA decided to test market the handbook in only five states: Oregon, Ohio, Washington, Florida, and Arizona, home to 5.5 million beneficiaries. It should be noted that a major finding of this report and a focus of the committee's Letter Report (Chapter 9) to

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--> HCFA in June 1998 was the suggestion that "HCFA should stagger its mailings over a period of several months, both to reduce and spread out the certain upsurge in the volume of inquiries and to allow some level of market-testing of the materials." The second notable development has been the recent withdrawal of several of the nation's biggest health maintenance organizations (HMOs) from select Medicare markets. By early October 1998, HMOs withdrew from their Medicare line of business in 300 counties in 18 states, affecting more than 400,000 seniors. Plans that exited the market claimed insufficient payments as the major reason. The current market turmoil may affect the number of plan options available to Medicare beneficiaries in many states and may temporarily divert HCFA's continuing efforts to develop an adequate and responsive health plan information infrastructure for the nation's elderly citizens. The committee wants to give special thanks to the dedicated and hard working staff at the Institute of Medicine (IOM). Study Director Marion Ein Lewin's expertise in health policy and professionalism successfully advanced the progress of the committee's June 1998 Letter Report (Chapter 9) through several drafts and a rapid report review process. Valerie Tate Jopeck, who served as research associate, worked closely with the study director on many aspects of this study. She assumed primary responsibility for both coordinating the March workshop and drafting this summary of the workshop. Administrative assistant Kari McFarlan is also to be commended for her thorough and diligent administrative support of our efforts. We are especially grateful to them. Other IOM staff provided valuable guidance in the areas of both substance and process. IOM President Kenneth Shine was particularly helpful during the drafting of the committee's June 1998 Letter Report to HCFA. Clyde Behney was always available to offer excellent advice. Nancy Diener ably kept us on budget, and Claudia Carl, Sue Barron, and Mike Edington graciously ushered us through both report review processes. This report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise, in accordance with procedures approved by the National Research Council's Report Review Committee. The purpose of this independent review is to provide candid and critical comments that will assist the institution in making the published report as sound as possible and to ensure that the report meets institutional standards for objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process. We wish to thank the following individuals for their participation in the review of this report: Joyce Dubow, Senior Policy Advisor, Public Policy Institute, American Association of Retired Persons, Washington, D.C. Judith Hibbard, Professor of Health Policy, Department of Planning, Public Policy and Management, University of Oregon, Eugene Philip R. Lee, Professor Emeritus, School of Medicine, University of California, San Francisco, Institute for Health Policy Studies, San Francisco Michael McMullan, Deputy Director, Center for Beneficiary Services, HCFA, Baltimore, Maryland

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--> Martha McSteen, President, National Committee to Preserve Social Security and Medicare, Washington, D.C. Judith D. Moore, Senior Fellow, National Health Policy Forum, Washington, D.C. Gail Wilensky, Senior Fellow, Project HOPE, Bethesda, Maryland Finally, the committee would like to thank the co-chairs, Harry P. Cain II and Stanley B. Jones, for their outstanding work and dedication to this project. IOM Committee on Choice and Managed Care

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--> Contents 1   Introduction   1 2   HCFA's Plan of Action   3 3   HCFA as a Successful Consumer Service Agency   7 4   How to Reach Beneficiaries: Lessons from Private Industry   17 5   Role of Third Parties in the Information Infrastructure   23 6   Best Practices and Models for an Open-Season Enrollment Process   29 7   Special Needs Populations: Helping Those Most in Need of Assistance   35 8   Implementation Issues   39 9   Letter Report to the Administrator of the Health Care Financing Administration on Developing an Information Infrastructure for the Medicare+Choice Program   43     References   51     Appendix     A   Workshop Agenda   53 B   Workshop Participants   61

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