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Context: There is a widespread belief that the US health care system needs to move \"from volume to value.\" This transformation to value (eg, quality divided by cost) is conceptualized as a two-fold movement: (1) from fee-for-service to alternative payment models; and (2) from solo practice and freestanding hospitals to medical homes, accountable care organizations, large hospital systems, and organized clinics like Kaiser Permanente. Methods: We evaluate whether this transformation is happening quickly, shifting risk to providers, lowering costs, and improving quality. We draw on recent evidence on provider payment and organization and their effects on cost and quality. Findings: Data suggest a low prevalence of provider risk payment models and slow movement toward new payment and organizational models. Evidence suggests the impact of both on cost and quality is weak. Conclusions: We need to be patient in expecting system improvements from ongoing changes in provider payment and organization. We also may need to look for improvements in other areas of the economy or to accept and accommodate prospects of modest improvements over time.

In 1972, through a last-minute provision of the Social Security Amendments, Medicare coverage was extended specifically to people with end-stage renal disease requiring hemodialysis or kidney transplantation — an entitlement that has had significant consequences. In October 1972, Medicare, which had been enacted for the elderly in 1965, was extended to the disabled by the Social Security Amendments. One provision, added at the last minute, declared that persons with chronic renal disease who required hemodialysis or kidney transplantation “shall be deemed to be disabled” for purposes of Medicare Parts A and B. To be eligible for this Medicare coverage, patients had to have paid into the system long enough to be “fully or currently insured” under Social Security or be the spouse or dependent child of someone who was. This near-universal Medicare entitlement for end-stage . . .

By accelerating adoption of provider-payment reforms in the traditional program and increasing competition under Medicare Advantage, Medicare could achieve better results and move the health care system toward higher quality and sustainable costs. Medicare will be under huge pressure in the next few years from the demographic bulge and rising per-enrollee spending. We see this challenge as an opportunity for the program to take more aggressive action to improve care delivery. As the largest payer for most U.S. health care providers, Medicare has the potential to improve the quality and efficiency of U.S. health care delivery overall — but it hasn't used this clout effectively in recent years. As the participants in a recent conference that we organized on “Strengthening Medicare for 2030” 1 concluded, Medicare would be wise to accelerate the adoption of . . .

Is medical commerce a recent phenomenon? Does it distort the patient–physician relationship? Are investor-owned firms the main source of medical commercialism? I contend that medicine has generally been commerce in the United States, that medical commerce is a problem when it creates or worsens physicians' conflicts of interest, and that these conflicts thrive in nonprofit organizations as well as in investor-owned firms. I provide a historical sketch to show that physician entrepreneurialism, rather than commerce generally, is the main source of physicians' conflicts of interest.Thanks are due to Jerome P. Kassirer, Albert R. Jonsen, and Joseph Fins for helpful comments on a draft. The history and themes herein are further developed in a book I am now writing, titled Medical Profession, Market and State in France, the United States and Japan.

Perhaps no single policy topic better illustrates the tensions within American politics at the beginning of a new millennium than does Medicare, the nation's thirty-five year commitment to ensuring senior citizens' financial protection against the costs of acute medical care. Our politics seems nearly overwhelmed by conflicting promises to balance the budget and pay down the national debt, enact tax cuts and protect broadly popular “entitlements.” Medicare, one of the largest of such entitlement programs, has become a lightning rod for conflicts over how to resolve these competing goals. As a result, the nation finds itself in the midst of a bewildering mix of crisis talk, fact throwing and ideological name calling, with all the confusion and distortion one would expect from such a mix.

Despite the potential benefits of telehealth applications, little is known about their overall impact on care. This is critical because rising health care costs and a shortage of primary care providers make it likely that telehealth services will play an increasingly important role in health care delivery. To help fill this gap in knowledge, we describe early experiences with Teladoc, one of the largest telemedicine providers in the United States, which provides care directly to patients over the telephone or via the Internet. We analyzed claims data for a large California agency serving public employees that recently offered Teladoc as a covered service. The 3,701 Teladoc \"visits\" we studied were for a broad range of diagnostic categories, the most common of which were acute respiratory conditions, urinary tract infections, and skin problems. Compared to patients who visited a physician's office for a similar condition, adult Teladoc users were younger and less likely to have used health care before the introduction of Teladoc. Patients who used Teladoc were less likely to have a follow-up visit to any setting, compared to those patients who visited a physician's office or emergency department. Teladoc appears to be expanding access to patients who are not connected to other providers. Future research should assess the impact of Teladoc and other telehealth interventions on the quality and cost of care. [PUBLICATION ABSTRACT]

Analysis of U.S. experience with a pre-Medicaid financing system suggests that Speaker of the House Paul Ryan’s proposal for per capita caps in Medicaid would result in restrictions on coverage and benefits rather than state innovations to reduce program costs. In the summer of 2016, Representative Paul Ryan (R-WI) released “A Better Way,” a wide-ranging proposal that included a plan for reforming Medicaid. Its fate depended heavily on the presidential election, and now that Republicans hold majorities in both the Senate and the House of Representatives and Donald Trump is President, Ryan’s plan seems much more likely to become reality. The proposal would eliminate many aspects of the Affordable Care Act and make fundamental changes to the entire Medicaid program by setting a limit — a per capita cap — on federal Medicaid spending. A per capita cap is intended . . .

In 1997 Congress created the Sustainable Growth Rate (SGR) formula for the payment of physicians under Part B of Medicare. SGR established a target rate of growth for aggregate costs of physician services under Part B, linked to growth in overall GDP. If growth in aggregate Part B costs exceeds the target, the rate at which physicians are paid in the following year is to be reduced by a corresponding amount. In SGR, Congress and the U.S. medical profession jointly confront a policy dilemma with no clear solution. For several years running, Congress has elected to postpone cuts in payment to physicians required under SGR. Absent further Congressional action, in 2013 physicians’ fees under Part B of Medicare will be reduced by more than 30 %. The historical roots of SGR suggest that a potential solution lies in shifting to regional expenditure targets—an approach applied successfully in Canada in the 1970s when Canadian Medicare confronted rising physician fees. The commission that created what was to become SGR was aware of the lessons learned in Canada, and recommended that they also be applied to U.S. Medicare.

In July the Boston Medical Center filed suit in Massachusetts state court challenging the state's Medicaid reimbursement formula. Wendy Parmet writes that this case raises critical questions about the Massachusetts model of health care reform as well as litigation's role in health care reform debates. Nearly 175 years ago, Alexis de Tocqueville wrote in Democracy in America, “There is hardly a political question in the United States which does not sooner or later turn into a judicial one.” If de Tocqueville had it right, it should not be surprising that as we debate health care reform, litigation has commenced. On July 15, 2009, Boston Medical Center (BMC), Massachusetts' largest safety-net hospital, and its affiliated health care plan filed suit in state court challenging the state's Medicaid reimbursement formula. The case raises critical questions about the Massachusetts model of health care reform as well as litigation's . . .

Regulators, who have asymmetric information concerning the technology of regulated firms, often rely on incentive-based regulation. While such a scheme is well known to be vulnerable to the adverse incentives of regulated firms, empirical research that quantifies the magnitude of distortion caused by incentive regulation is scarce. This paper is a progress report of our recent project on target ratcheting with an application to medical devices in Japan. A casual observation of detailed product-level transaction data and reduced-form analyses indicate the existence of pricing distortion in the wholesale market. The paper also proposes a two-period bilateral bargaining model to match the data. A preliminary analysis finds evidence consistent with the hypothesis that target ratcheting distorts the pricing of regulated firms, but the magnitude of the distortion is estimated to be economically small.