Information Trading How Information Influences the Health Policy Process (1997) / Chapter Skim
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7 The Information Trading Process: The Case of Medicare Payment Equity
7 The Information Trading Process: The Case of Medicare Payment Equity
Pages 120-135
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From page 120... ...
There are three key players in the information trading process. Information producers include the academicians, policy analysts, researchers, and consultants who analyze data, write reports, and contribute to the knowledge base.
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From page 121... ...
In 1982, Congress gave senior citizens an opportunity to choose an alternative to fee-for-service Medicare. The HMO option, called a risk contract, allowed beneficiaries to select a comprehensive, integratec3 health plan that offered less paperwork, no clecluctibles, low copayments, anc3 in many cases, more benefits than the traditional Medicare coverage (42 U.S.C.
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From page 122... ...
Low capacity means low utilization, leacling to low AAPCCs. Virtually no HMO risk plans are available in areas classified as rural.
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. Figure 7.1 illustrates how risk contract enrollment reflects the payment rates available in each county.
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In efficient markets that offer HMOs, fewer aciclitional desirable benefits are available, aciclitional premiums are higher, and it is often a struggle for the HMO to break even. There is no incentive for health plans to enter the rural or adjacent rural markets.
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From page 125... ...
Health plans had been living uneasily with the AAPCC formula for years. Plans in markets with low payments limited enrollment growth in some cases and held on to slim margins.
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From page 126... ...
In this case, the financial stakes were immense for some health plan interests whose growth strategies were tied to the vast revenues available in markets offering high payments (Penshorn anc3 Johnson, 19954. The plans in these areas have considerable resources anc3 political power.
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Their tracle group, Group Health Association (recently renamed American Association of Health Plans) , slid not want to raise the issue directly.
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From page 128... ...
Committee staffers varied in their level of interest. Some were unresponsive to the goal, for reasons that appear to be based partly on misinformation, partly because it presented another divisive issue, partly because of concorn about the potentially negatively affected insurance and HMO plans in areas with high payments, and partly on policy groundsthat is, concerns about market disruption, when high payment rates would be reduced, and when low payments would be increased.
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From page 129... ...
Members of the coalition managed to be tapped as witnesses in the Ways and Means Committee and the Finance Committee in July 1995. The exercise of writing testimony helped refine the message anc3 tell the story in increasingly coherent terms.
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Although the Republicans proceeded on a fully partisan basis, members of the coalition continued to meet with rural Democrats, some of whom were working on the alternative "Blue Dog" budget bill. On the Senate sicle, a meeting with Republican Senator Charles Grassley of Iowa was arranged.
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From page 131... ...
Coalition staff workoc3 closely with Democrats in both the House and the Senate to ensure that their alternatives also aciciressec3 the issue. Although President Clinton vetoed the Balanced Budget Act and killed the Medicare reform process for the year, his 1997 budget proposal contained all the essential elements that the coalition hac3 acivocatecl.
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From page 132... ...
A highly informed and motivatecl consumer can bypass the agent and acquire knowleclge clirectly from the producers. How can those who are concerned about good policy outcomes (that is, legislative anc3 regulatory outcomes that reflect a set of agreed upon principles anc3 goals)
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From page 133... ...
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The antiincumbent, antipolitician mentality rewards cancliciates who have little exposure to public service or policymaking. It is hard to keep talented, well-trainec3, policy-orientec3 staff when they face low pay, long hours, and an increasingly partisan political atmosphere.
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From page 135... ...
Federal Hospital Insurance Trust Fund.
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