The Pathway to Covering America: Ensuring Quality, Value and Access

January 23, 2008

Issue: Healthcare costs continue to rise – making coverage less affordable and increasing the number of people in the United States without health insurance.

Position: BCBSA strongly believes everyone in America should have health insurance.  In achieving this goal, the underlying problems of our current healthcare system must be addressed.  BCBSA supports a pathway that would:  (1) enhance the quality and value of healthcare through a series of initiatives; and (2) expand coverage through tailored solutions.

Blue Cross and Blue Shield Plans strongly believe everyone in America should health insurance.  BCBSA supports a pathway that would:

• Improve healthcare quality and value.  To get to tomorrow's health coverage, we must address serious shortcomings in today's healthcare delivery system – from insufficient knowledge about what treatments work best to the mounting challenge of managing chronic disease.
• Expand coverage.  We need to tailor health coverage plans to capture the diversity of the uninsured population so that no one gets "squeezed out" by cost, "misses out" on available government assistance or "opts out" because they think they do not need coverage.

Improving healthcare quality and value and expanding coverage should begin by undertaking five initiatives:

1. Encourage research on what works:  Researchers and policymakers agree there is insufficient information on what medical treatments work best, often resulting in patients paying more for sub-optimal care.  BCBSA urges the government to:

• Create an independent Comparative Effectiveness Research Institute:  Congress should enact legislation to create a new independent Institute to support research comparing the effectiveness of new and existing procedures, drugs, devices and biologics.  The Institute should be funded by assessments on public programs (e.g., Medicare and Medicaid) as well as private payers (insured and self-funded).  The Institute should prioritize clinical trials and other research necessary to respond to the needs of frontline-providers and patients who need to know which treatments are the most effective. 

2. Change incentives to promote better care:  The incentives in our system must be changed to advance the best possible care, not just more services with little or no care coordination.  BCBSA urges the government to:

• Pay for quality:  The government should continue to incorporate pay-for-quality programs into Medicare and other government programs.   
• Manage chronic illness in Medicare:  Congress should promote management of chronic illness by rejecting funding cuts and preserving and building upon the Medicare Advantage (MA) program.  Several years of efforts to bring vital chronic care management programs available through MA to the traditional Medicare program have been unsuccessful.  Through partnerships with physicians and other caregivers, MA plans are coordinating and improving care for those with chronic conditions.   
• Improve access to generic drugs:  Congress should remove barriers to safe, effective and affordable generic drugs.  For example, Congress should give the FDA authority to approve scientifically feasible and safe generic versions of biological products without imposing inappropriately long periods of market exclusivity for brand biopharmaceutical products.  Congress also should provide the FDA with sufficient resources to reduce the growing backlog of generic applications.
• Enact medical liability reform:  Congress should enact medical liability reform legislation to address rising medical malpractice insurance premiums, which fuel the practice of defensive medicine – increasing utilization of unnecessary, and sometimes harmful, healthcare services.  Congress also should ensure that providers who reasonably rely on the guidelines from the Comparative Effectiveness Research Institute be given safe harbors from punitive and non-economic damages in malpractice cases. 

3. Empower consumers and providers:  Both consumers and providers should have the information and tools needed to make informed decisions about healthcare quality and cost.  BCBSA urges the government to:

• Promote greater transparency:  The federal government should continue to partner with the private sector to promote greater quality and cost transparency for consumers and providers.  Given the significant variation in quality and costs among healthcare providers, it is important this information be made available to consumers in easy-to-understand formats. 
• Encourage adoption of health information technology:   A national health information network – with electronic health records (EHRs) in every doctor's office – should be established to support the exchange of information among providers, payers and consumers.  It should be based on uniform standards used by all stakeholders with strong, uniform privacy and security policies.  As a stepping stone, Blue Plans are moving forward to offer:  (1) portable personal health records (PHRs) to help consumers become more actively engaged in their own healthcare and communicate more effectively with providers; and (2) claims-based clinical records and clinical decision support to providers to give a consolidated view of patients' healthcare services across all providers.

4. Promote health and wellness:  Today's increased healthcare spending is partly due to unhealthy lifestyles by many Americans.  Chronic illness also is a growing problem, with the cost of treating chronic illness estimated to account for 75 percent of healthcare spending.   BCBSA urges the government to:

• Encourage employee wellness programs:  Congress should remove barriers that hinder employers from encouraging healthy employee lifestyles (e.g., requiring employers to give non-smoker discounts to smokers who enroll in, but do not successfully complete, cessation programs).  Congress also should preempt state rules that limit the consideration of smoking and wellness in setting premiums.  Tax incentives also should be provided to encourage employers to adopt smoking bans, promote employee exercise and adopt OSHA workplace best practices.
• Educate children on healthier lifestyles:  The federal government should support school programs that encourage healthy lifestyles such as:  assuring physical education classes for all grades five days per week, providing nutrition, tobacco and health literacy education and implementing BMI screenings.  The nutritional quality of school meals also should be improved and schools should assure vaccinations are provided to all children.
• Provide incentives and education on nutrition and health:  Medicaid should cover smoking cessation programs and incorporate wellness and disease prevention incentives.  In addition, tax incentives should be provided to encourage full-service grocery stores (e.g., selling fresh fruits and vegetables) in underserved neighborhoods.  The food stamp program should provide nutritional counseling and incentives for healthy food purchases as well as health literacy education.

5. Foster public-private coverage solutions:  Whether someone is uninsured because they have difficulty affording coverage within their family budget, is a low-wage worker in a small firm or are confronted with government paperwork – we need to make sure people get the health coverage they need.  BCBSA urges the government to:

• Help those squeezed out by cost:  Approximately 56 percent of the uninsured may have difficulty affording coverage because they are ineligible for public assistance, but earn less than 300 percent of the federal poverty level.  BCBSA recommends:
  
  
  • Providing four new types of tax assistance:  Congress should enact:  (1) a tax credit for low-wage workers in small firms; (2) a refundable tax credit for those whose health premiums represent a large share (e.g., 6 percent) of their income; (3) a refundable tax credit to help those between jobs; and (4) tax deductibility for those without access to employer coverage.
  • Expanding the government safety net:  Public program coverage should be extended to everyone up to the federal poverty level who is not eligible for Medicaid. 
  • Assuring access for individuals with serious medical conditions:  All states should be required to have high risk pools or other mechanisms to ensure that individuals with serious medical conditions have access to affordable, meaningful health insurance, while ensuring stable and competitive individual markets.  Congress should provide targeted grants to states to help support high risk pools and innovative solutions to assure access to coverage for all individuals.
    
    
• Enroll those missing out on public coverage:  Twenty-five percent of the uninsured are eligible for Medicaid or SCHIP under current rules, but are not enrolled.  BCBSA recommends:
  
  
  • Helping states enroll low-income people in Medicaid and SCHIP:  SCHIP should be reauthorized and expanded to ensure children currently eligible are able to enroll.  The federal government also should fund state outreach and enrollment efforts to locate and enroll public program eligibles.
  • Empowering states to enroll Medicaid/SCHIP beneficiaries in employer plans:  States should pay the employee premium for Medicaid/SCHIP-eligible children and parents.  This would increase enrollment by decreasing stigma, expand provider options for public program enrollees and bolster the employer based system. 
    
    
• Attract those opting out of coverage:  Twenty percent of the uninsured may be able to afford insurance, but either:  (1) do not value it because they are young or healthy; (2) are unaware of coverage options and their tax deductibility (for the self-employed); or (3) may overestimate the cost of coverage.  BCBSA recommends:
  
  
• Educating Americans about the importance of being insured:  The public and private sectors should partner on a broad-based educational campaign on the value of insurance.