Health Policy
Federalism
Federalism is the distribution or balance of power between the central authority and constituent units. The same geographic area is covered by two levels of government: federal and state. The US Constitution gives the federal government power over what would be considered "natural considerations," such as declaring war, printing money, establishing a postal service, taxation, and interstate commerce (regulating what happens between states, but not within a single state). Federal powers are limited to those listed in the 10th amendment, but the interpretation of the Constitution is sometimes controversial. States have the authority to enact laws regarding public schools, child protection, licensure, elections, etc. Finally, there are also areas where there is overlap between federal state authority, e.g., taxation.
The challenge of the ACA by the states was based on whether the federal government had the authority to regulate health care. However, on June 28, 2012 the U.S. Supreme Court upheld the constitutionality of the ACA.
Health policy includes decisions by the legislature, the executive branch, and the courts in federal, state or local governments. Below is a table giving health care examples of four health policy tools for the state and federal governments.
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State |
Federal |
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Funding |
Medicaid (administered by state, funding is a split) |
Medicare (Medicaid), USDA farm subsidies, school lunch program, federally funded community health centers |
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Provision of Services |
State hospitals, direct services by state health departments |
Veterans Administration (VA), Indian Health Service (HIS) |
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Regulation |
Soda ban, seat belts, medical professional licensing, medical marijuana, MD assisted suicide |
ACA, HIPAA , FDA |
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Taxation |
Cigarette taxes |
Cigarette taxes |
Quality: The Policy Approach
Medicare pays hospitals through DRGs
. Hospitals are paid a lump sum for the admission. If the hospital is able to spend less money than the DRG then the hospital can keep the change. If the hospital over spends, Medicare does not give extra funds and the hospital takes a loss on that admission. Nevertheless, there is concern and evidence that if patients do not receive quality care at a hospital admission that Medicare will incur downstream costs.
Medicare has two strategies to motivate the hospital to provide high-quality care at each admission. The intent is to control Medicare spending.
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Public Reporting: "Hospital Compare"
Hospital Compare has information about the quality of care at over 4,000 Medicare-certified hospitals across the country. You can use Hospital Compare to find hospitals and compare the quality of their care. The information on Hospital Compare:
Learn more in the Guide to Choosing a Hospital. Hospital Compare was created through the efforts of the Centers for Medicare & Medicaid Services (CMS), in collaboration with organizations representing consumers, hospitals, doctors, employers, accrediting organizations, and other Federal agencies. Source: Medicare.gov/Hospital Compare
In theory, transparency will allow for consumers to make choices based comparing quality; hospitals will be able to compare themselves against other institutions and this could motivate quality improvement. In reality, it is unclear how much consumers know about, understand, and use this information. |
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Financial Incentives for Quality
Since 2008 Medicare has refused to pay for certain conditions not present when the patient at admission if these developed during the admission. These include leaving an object in the person during surgery, becoming injured in the hospital, developing a bedsore in the hospital, getting the wrong type of blood (can be fatal), and certain infections. In 2010, the ACA created three programs designed to improve both quality and efficiency using financial penalties and rewards, each of which was phased in over time.
There are criticisms of all three programs, especially from hospitals and other medical organizations. There is some overlap in HVBP and HAC. Safety-net hospitals have been getting penalized more than non-safety net hospitals. A safety-net hospital often has the most vulnerable patients with multiple chronic conditions and social stressors outside of the hospital. Supporters of the penalties believe that these measures are under the control of the hospitals and providers, and that vulnerable patients should be receiving the same quality of care as the rest of the population. Others would say these hospitals need extra funding because of the challenges posed by vulnerable populations. |
Management Approaches to Reducing Readmissions
Hospitals have been trying a wide array of interventions to decrease readmission rates in order to avoid financial penalties from Medicare. Many of the programs in place are working. A recent study from Yale University surveyed 600 hospitals about their readmissions prevention practices. The study identified six elements associated with reduced readmission rates. The most successful hospitals utilized more than one strategy.
Factors Leading to Reduced Admission Rates
- partnering with community physicians;
- partnering with local hospitals;
- assigning responsibility for medication reconciliation to nurses;
- sending patients home from the hospital with an outpatient follow-up appointment already made;
- having a process in place to send all discharge or electronic summaries directly to the patient's primary care physician;
- assigning staff to follow up on test results after the patient is discharged.
The video below from the Robert Wood Johnson highlights successful care transitions programs.
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Solutions: Stopping the Revolving Door of Avoidable Readmissions
Source:The Robert Wood Johnson Foundation
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