Risk Selection, Risk Adjustment and Choice: Concepts and Lessons from the Americas Randall P. Ellis 1 Juan Gabriel Fernandez 2 1 Boston University 2 University of Chile and Chile Ministry of Health Presentation prepared for the V Congreso Economia de la Salud America Latina y el Caribe November 15-16, 2012, Montevideo, Urugua
Risk Selection, Risk Adjustment and Choice: Concepts and Lessons from the Americas Randall P. Ellis 1 Juan Gabriel Fernandez 2 1 Boston University 2 University.
Mar 30, 2015
Welcome message from author
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Risk Selection, Risk Adjustment and Choice: Concepts and Lessons from the Americas
Randall P. Ellis1
Juan Gabriel Fernandez2
1Boston University2University of Chile and Chile Ministry of Health
Presentation prepared for the V Congreso Economia de la Salud de America Latina y el Caribe November 15-16, 2012, Montevideo, Uruguay
Key Policy Paradigm
¨ Choice
¨ Choice of what?
· Providers – provide services
· Health plans – pay providers
· Sponsors – collect from consumers, pay health
plans
¨ Choice + heterogeneity Incentive to select
¨ Regulations + payment policy reduce
selection
Competition?
Four questions examined for Canada, Chile, Colombia and United States¨ How are payments and contracting arranged in the health
care system?
¨ What choices are allowed?
¨ What are the perceived selection problems?
· Efficiency problems
· Equity/fairness problems
¨ What selection tools are used that worsen or reduce
selection?
¨ Goal is to understand how to better use of risk adjustment,
risk sharing, and regulations
Four agents and five primary contracting relationships
Sponsor Health plans
B
DA
C
E
Consumers Providers
Four agents and six primary contracting relationships
Sponsor Health plans
B
DA
C
E
Consumers Providers
Consumer choice of providers
Sponsor Health plans
B
DA C
E
Consumers Providers
Consumer choice of providers
Sponsor Health plans
B
DA C
E
Consumers Providers
YES:
Canada
Chile public*
Chile private
Colombia*
US private*
US Medicare*
NO:
Provider choice of consumers?
Sponsor Health plans
B
DA C
E
Consumers Providers
YES:
Chile private
Colombia
US
NO:
Canada
Chile public
US Medicare pre 1985
Selection problems
Risk solidarity problem
Patient sorting
problem
Overpaying/underpaying
problem
Health plan choice of provider(Selective contracting)
Sponsor Health plans
B
DA C
E
Consumers Providers
YES:
US private
US Medicare
Chile
Colombia
NO:
Canada
US Medicare pre 1985
Selection problems
Service distortion problem
Wasted administratio
n costs
Provider choice of health plan
Sponsor Health plans
B
DA C
E
Consumers Providers
YES:
US private
US Medicare HMOS
Chile private
Colombia
NO:
Canada
US Medicare pre 1985
Selection problems
Wasted administratio
n costs
Balance billing
problems
Patient sorting
problem
Consumer choice of health plans?
Sponsor Health plans
B
DAC
E
Consumers Providers
YES:
US private
US Medicare
Chile private
Colombia
NO:
Canada
Chile public
US Medicare before 1985
Selection problems
Wasted administratio
n costs problem
Plan turnover problem
Risk solidarity problem
Health plan choice of consumers?
Sponsor Health plans
B
DA C
E
Consumers Providers
YES:
USA private
Chile
Colombia
NO:
Canada
US Medicare
US private after 2014
Selection problems
Wasted administratio
n costs problem
Plan turnover problem
Risk solidarity problem
Consumer Choice of SponsorSponsor Choice of Health Plans
Sponsor Health Plans
B
DAC
E
Consumers Providers
YES:
US Private
Colombia
Chile
NO:
Canada
US Medicare
US private after 2020?
Selection problemsIncomplete insurance
Wasted administratio
n costs problem
Labor market problems
Plan turnover problem
Risk solidarity problem
Income solidarity problem
Free rider problem
Strategies to reduce selection problems
¨ Regulations
¨ Risk Adjustment
¨ Risk Sharing
USA Medicare, 1985:very little choice
Sponsor=Insurer Health plans
Consumers Providers
MEDI-GAP Plans
Hos
pita
ls
Doc
tors
GovernmentTraditional Indemnity
Medicare Enrollees
Ellis and van de Ven, 2003
Selection problems?
Hospital dumping due
to DRGs
Hospital service
distortion due to DRGsRisk solidarity
problem due to MEDIGAP
Income solidarity problem due to
MEDIGAP
USA Medicare, 2004
Sponsor Health plans
Consumers Providers
MEDI-GAP Plans
M+C HMOs
GovernmentTraditional Indemnity
Private FFS
Medicare Enrollees
Dru
gs
Hos
pita
ls
Doc
tors
Ellis and van de Ven, 2003
Selection problems
Wasted administratio
n costs
Plan turnover
Service distortions
DumpingRisk solidarity
problem
Income solidarity problem
USA Privately Employed, 2010
Sponsor Health Plans
BIndemnity Plans
Consumers Providers
Phar-macy Plans
No Insurance
Employees and
families
HMOs
Dru
gs
Hos
pita
ls
Doc
tors
Employer
Ellis and van de Ven, 2003
Selection problemsIncomplete insurance
Wasted administratio
n costs
Labor market problems
Plan turnover
Free rider problem
Service distortions
DumpingRisk solidarity
problem
Income solidarity problem
Canada (Alberta) 2003
Source: Ellis and Van de Ven, 2003
Consumers Providers
All Individuals
Bud
get
Hos
pita
ls
Dru
gs
Doc
tors
Provincial Government
Reg
iona
l Hea
lth
Aut
horit
ies
FF
S C
over
age
Supple-mentary
Plans
Sponsor = Insurer = Health plan
Selection problemsRisk solidarity
problem across regions
SPONSOR = INSURER = HEALTH PLAN = PROVIDER (HOSPITALS)
CONSUMERS PROVIDERS
A D
FIGURE 2: ALBERTA (CANADA):
DO
CTO
RS
DRU
GS
PROVINCIAL GOVERMENT
ALBERTA HEALTH SERVICES
(AHS)
Fee for Service
HO
SPIT
ALS
E
SPONSOR
CONSUMERS
A
FIGURE 3: US MEDICARE (for Aged and Disabled) 1985
PRIVATE PROVIDERS
DC
E DO
CTO
RS
HO
SPIT
ALS
DRU
GS
HEALTH PLAN
B
TRADITIONAL INDEMNITY
GOVERNMENT
Medicare Enrollees
SPONSOR
CONSUMERS
A
FIGURE 4: US MEDICARE (2009)
PRIVATE PROVIDERS
C
E DO
CTO
RS
HO
SPIT
ALS
DRU
GS
HEALTH PLAN
B
TRADITIONAL INDEMNITYGOVERNMENT
Medicare Enrollees
Medicare Advantage
Private FFS
PART
D
(Dru
gs)
D
SPONSOR
CONSUMERS
A
FIGURE 5: US - PRIVATELY INSURED (LARGE FIRMS)
PRIVATE PROVIDERS
DC
E DO
CTO
RS
HO
SPIT
ALS
DRU
GS
HEALTH PLAN
B
EMPLOYERINDEMNITY
HMOs
PPOs Phar
mac
y Pl
ans
SPONSOR
CONSUMERS
A
FIGURE 5: US - PRIVATELY INSURED (LARGE FIRMS) 2010
PRIVATE PROVIDERS
DC
E DO
CTO
RS
HO
SPIT
ALS
DRU
GS
HEALTH PLAN
B
EMPLOYERINDEMNITY
HMOs
PPOs Phar
mac
y Pl
ans
No Insurance
SPONSOR
CONSUMERS
A
FIGURE 5: US - PRIVATELY INSURED after ObamaCare
PRIVATE PROVIDERS
DC
E DO
CTO
RS
HO
SPIT
ALS
DRU
GS
HEALTH PLAN
B
EMPLOYERINDEMNITY
HMOs
PPOs Phar
mac
y Pl
ans
No Insurance
XX
XX
SPONSOR
CONSUMERS
A
FIGURE 6: COLOMBIA
PRIVATE PROVIDERS
C
E DO
CTO
RS
HO
SPIT
ALS
DRU
GS
HEALTH PLAN
B
GOVERNMENT Private EPSs
D
Public EPSsFOSYGA + CRES + Superintendency
SPONSOR = INSURER = HEALTH PLAN = INSTITUTIONAL PROVIDER
CONSUMERS
A
FIGURE 7: CHILE, PUBLIC INSURANCE (LOW INCOME)
General GOVT (Ministry of
Health)
FONASA (National
Health Fund)
DO
CTO
RS
HO
SPIT
ALS
DRU
GS
Regional Health
Services*
EPROVIDERS
* Primary care is provided through the regional governments, called municipalities
PROVIDERS
FFS DRG
HIGHER COST
LOW/NO COST
SPONSOR = INSURER = HEALTH PLAN = INSTITUTIONAL PROVIDER
CONSUMERS
A
FIGURE 8: CHILE, PUBLIC INSURANCE (CONTRIBUTORS)
General GOVT (Ministry of
Health)
FONASA (National
Health Fund)
INST
. DO
CTO
RS
INST
. HO
SPIT
ALS
DRU
GS
Regional Health
Services*
E PRIV
ATE
DO
CTO
RS
PRIV
ATE
HO
SPIT
ALS
DRU
GS
* Primary care is provided through the regional governments, called municipalities
SPONSOR
CONSUMERS
A
FIGURE 9: CHILE PRIVATELY INSURED
PRIVATE PROVIDERS
DC
ED
OCT
ORS
HO
SPIT
AL
DRU
GS
REGULAR COVERAGE
PRIORITIZED (AUGE)
HEALTH PLAN
B
CLOSED ISAPRES (Integrated HMO )EMPLOYER
OPEN ISAPRES
Table 1: Summary of perceived selection problems in different health care systemsAlberta Canada 2010
US Medicare 1985
Chile Public 2010
Colombia 2010
US Medicare 2010 a
Chile Private 2010
US private employers 2010 a
Efficiency Problems
Incomplete insurance – consumer bear too much financial risk X X (X) X (X)
Individual access? Can individuals always find a "fair" plan? (X)
Group access? Can employers always find a "fair" plan? X (X)
Service distortion problem - too much or too little of some services X X X X X
Wasted resources – too much advertising or administration X X (X)
Labor market problems – job frictions X
Patient sorting problem – providers sort patients and offer different qualities X X X X X
Waiting time problems - plans use waiting time to ration care X X
Plan turnover problem – consumers forced to change plans too often X X X
Equity Problems
Risk solidarity problem – High risks pay too much for health insurance X (X)
Income solidarity problem – No subsidy from high to low income consumers X X X (X)
Free rider problem – some people choosing not to be insured Xb (X)
Plan over/underpayment problem – plans paid too much or too little X X X X
Provider over/underpayment problem – providers paid too much or too littleX X X X X X (X)
Simple count of X's 2 3 4 6 7 10 14
Notes:
Ratings reflect subjective valuations by the authors.a Items appearing in parentheses are addressed by the 2010 Health Reform, although not necessarily eliminated.b Choosing not to be insured is illegal, but there is an enforcement problem
Table 2: Summary of choices available in various health care systemsAlberta Canada 2010
US Medicare 1985
Chile Public 2010
Colombia 2010
US Medicare 2010a
Chile Private 2010
US private employers 2010a
Which choices are available to each agent?Sponsor
Choice not to offer insurance? (X)Choice of health plans? (X) X XChoice of benefit features? X X X X XChoice of premium cost sharing? X X X X XFinancial reward for reduced coverage? XChoice of premiums varying by income? X X XChoice of premiums for family versus individual coverage? X XChoice of pay-for-performance incentives? X X X XUse of risk adjustment? X X X X X
Choice of benefits to offer? X X X (X)Choice of demand side cost sharing to consumers? X X X X XChoice of providers with whom to selectively contract? X X X X XChoice of provider payment? X X X X XChoice of geographic area to serve? X X X XChoice of performance measures to providers? X X X X XIs exclusion of preexisting conditions allowed? X X (X)Is underwriting allowed (denying coverage)? X X (X)Is direct advertising allowed? X X X XTie-in sales of alternative insurance policies allowed? X X
Health Plan
Table 2 (continued): Summary of choices available in various health care systems
Alberta Canada 2010
US Medicare 1985
Chile Public 2010
Colombia 2010
US Medicare 2010
Chile Private 2010
US private employers 2010
Which choices are available to each agent?
ProviderChoice of patients when at less than full capacity? X X X X XChoice of balance billing? Xc X X X XIs there a primary care gatekeeper? X X X X X XChoice of specialists without a referral? X X X XChoice of different patient waiting times? X X X X X XCan a hospital refuse to treat if no coverage? XPatient sorting across hospitals and doctors? X X X X X
ConsumersChoice of sponsor? XChoice of whether to be insured? Xb X (X)Choice of health plan? X X X XChoice of which family members to insure? X (X)Choice of different benefit feature? X X XChoice of primary care provider? X X X X X X XChoice of specialist? X X X X X X X
Simple count of X's 5 3 16 21 26 25 32Notes:
Ratings reflect subjective valuations by the authors.a Items appearing in parentheses are addressed by the 2010 Health Reform, although not necessarily eliminated.b Choosing not to be insured is illegal, but there is an enforcement problemc Limited by fee schedule
Table 3: Summary of techniques available that influence selection in different health care systemsAlberta Canada 2010
US Medicare 1985
Chile Public 2010
Colombia 2010
US Medicare 2010
Chile Private 2010
US private employers
2010
Which techniques are available to increase or reduce selection?Consumers
Choose not to become insured until high health costs Xb (X)Choose low benefit plans until needs become great X X (X)
ProvidersUndertreatment of high cost patients X X X (X)
Underprovision of services used by high cost patients X X X X XRecommendations to patients to change plans or providers X X XDelaying visits by high need patients X X X X X
Selective advertising X X X XHigh deductibles and copayments that deter high cost patients X X (X)Differential enrollment based on consumer survey results X X XExclusions for preexisting conditions X (X)
Genetic testing and use of information at enrollment X XCharging higher premiums for high health cost enrollees X (X)Shortage of specialists contracted with X X X XDelayed payments affect high cost enrollees X ? X X
Health plans
Table 3 (continued): Summary of techniques available that influence selection in different health care systemsAlberta Canada 2010
US Medicare 1985
Chile Public 2010
Colombia 2010
US Medicare
2010a
Chile Private 2010
US private employers
2010a
Which techniques are available to increase or reduce selection?
Sponsor
Risk adjustment (bundled payment, set up ex ante) X X XRisk sharing (ex post) X XReport cards and consumer information X X XBenefit plan feature variation X XPremium cost sharing (how premium contributions vary across consumers) X (X)Premium variation by income X X (X)Definition of family for family coverage X ? X (X)
Premium rate restrictions (rate bands, ceilings, or rates of increase) X X X (X)
Supplementary insurance features. X X X X X X X
Ease of referrals X X
Selective contracting in geographic areas with low cost populations X (X) X
c
X
Simple count of X's 1 1 7 12 18 18 23Notes:
a Items appearing in parentheses are addressed by the 2010 Health Reform, although not necessarily eliminated.b Choosing not to be insured is illegal, but there is an enforcement problemc Urban vs rural, based more on private doctor avalability than low risk charateristics
Table 4: Summary of problems, choices, and selection technigues in different health care systemsAlberta Canada 2010
US Medicare 1985
Chile Public 2010
Colombia 2010
US Medicare
2010a
Chile Private 2010
US private employers
2010a
Which selection techniques available?
c
1 1 7 12 18 18 23
a Items appearing in parentheses are addressed by the 2010 Health Reform, although not necessarily eliminated.b Choosing not to be insured is illegal, but there is an enforcement problemc Urban vs rural, based more on private doctor avalability than low risk charateristics
What Choices are available? 5 3 16 21 26 25 32
What problems are there? 2 3 4 6 7 10 14
Key findings from comparisons¨ Countries vary in the choices, problems, and selection tools
available
¨ Objectives vary: Canada values income and risk solidarity
much more than US; Chile and Colombia are in between
¨ Service selection problems arise where there is a selective
contracting or pricing with providers (US, Chile, Colombia)
¨ Sponsorship by employers leads to more selection problems
than sponsorship by a government entity
¨ Risk adjustment and risk sharing are relevant at many
different levels of the health care system.
¨ Regulations are as important as financial incentives.
¨ Paper says nothing about cost and quality efficiency.
Related Documents
