Karen Davis

The experiences of people covered by Medicare and those with private employer insurance can help inform policy debates over the federal budget deficit, Medicare’s affordability, and the expansion of private health insurance under the Affordable Care Act. This article provides evidence that people with employer-sponsored coverage were more likely than Medicare beneficiaries to forgo needed care, experience access problems due to cost, encounter medical bill problems, and be less satisfied with their coverage. Within the subset of beneficiaries who are age sixty-five or older, those enrolled in the private Medicare Advantage program were less likely than those in traditional Medicare to have premiums and out-of-pocket costs exceed 10 percent of their income. But they were also more likely than those in traditional Medicare to rate their insurance poorly and to report cost-related access problems. These results suggest that policy options to shift Medicare beneficiaries into private insurance would need to b...

As the country turns toward implementation of the Patient Protection and Affordable Care Act, realizing the potential of reform will require significant transformation of the American system of health care delivery. To that end, the new law seeks to strengthen the nation’s primary care foundation through enhanced reimbursement rates for providers and the use of innovative delivery models such as patient-centered medical homes. Evidence suggests that these strategies can return substantial benefits to both patients and providers by increasing access to primary care services, reducing administrative hassles and burdens, and facilitating coordination across the continuum of care. If successfully implemented, the Affordable Care Act has the potential to realign incentives within the health system and create opportunities for providers to be rewarded for delivering high value, patient-centered primary care. Such a transformation could lead to better outcomes for patients, increase job satisfaction among physicians and encourage more sustainable levels of health spending for the nation.

One key issue in health reform concerns the relative roles of coverage offered through private insurance and public programs. This paper compares the experiences of aged Medicare beneficiaries with those of people under age sixty-five who have private employer coverage. Compared with the employer-coverage group, people in the Medicare group report fewer problems obtaining medical care, less financial hardship due to medical bills, and higher overall satisfaction with their coverage. Although access and bill payment problems increased across the board from 2001 to 2007, the gap between Medicare and private employer coverage widened.

Healthcare managers of the future will need to be prepared to accept greater accountability for the quality and efficiency of healthcare. National and state scorecards on health system performance indicate wide variation across the U.S. and across hospitals and health systems on key dimensions of performance including health outcomes, quality, access, equity, and efficiency. Benchmark data on achievable performance will be useful to healthcare managers in identifying best practices, setting priorities for improvement, and closing gaps in performance. Payment reforms are likely to reward healthcare organizations that serve as patient-centered medical homes, or assume accountability for total acute care, including hospital readmissions and post-hospital care. Health reforms to extend affordable health insurance to all, align financial incentives to enhance value and achieve savings, organize the healthcare system around the patient to ensure that care is accessible and coordinated, assist providers in meeting and raising benchmarks for high-quality, efficient care, and support greater public-private collaboration are needed to set the U.S. health system on a path to high performance.