Proposals for health care reform: How do we evaluate them?

CONCEPTS

health care reform

t'roposals for Health Care Reform" How Do We Evaluate Them? I

From the Prevention Sciences Group, University of California, San Francisco;"~the Division of Emergency Medicine, Highland General Hospital, Oakland, California;~ the Paramax Corporation, Louisiana Medicaid Program,~ and the Emergency Medicine Residency, Louisiana State University, Baton Rouge;~ the Department of Emergency Medicine, St Luke's-Roosevelt Hospital Center, New York, New York;ll the Department of Surgery, Columbia University College of Physicians and Surgeons, New York, New York;~ the Division of Emergency Medicine, Northwestern University, Chicago, Illinois;# and the Governmental Affairs Committee, Society for Academic Emergency Medicine, La~sing, Michigan. **

Robert A Lowe, MD, MPH * t * * Gary Young, MD t * * Gregg A Pane, MD, MPA*§ ** Stephan G Lynn, MD,~** James A Mathews, MD #**

Receivedfor publication December 14, 1992. Accepted for publication December 28, 1992.

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The Society for Academic EmergencyMedicine suggests a systematic approach to evaluating proposals for reform of the medical care system. Described are the three componentsof the problem--access, cost, and quality. Then, goals are proposed for health care reform. With this background,we describe the major questions that reform proposals must address and the potential impact of reform on emergency medicine. Emergencyphysicians must actively support health reform legislation that is in the overall best interest of our patients and our specialty, and work with the new federal administration to evaluate proposed changes. [Lowe RA, Young G, Pane GA, Lynn SG, Mathews J: Proposals for health care reform: How do we evaluate them? Ann Emerg Med May 1993;22:829-840.] iNTRODUCTION Public support for substantive change in the US health care system is at a 40-year high, with polls showing that 60% to 72% of Americans favor a national health plan. 1 However, agreeing on a solution has proven to be far more challenging than identifying the problem, largely because Americans differ in their perceptions of the issues. Physicians and patients are concerned about access, whereas other groups focus on cost or quality of care. 2 Thus, when these different groups attempt to solve the "health care crisis," their differing perceptions of the problem lead to different proposed solutions. Furthermore, discussions about reform often begin with proposals for change. It is easy to focus on these proposals, which are means to an end, without being explicit about the desired ends. We develop a systematic approach to evaluating proposals for reforming the health care system. We begin by describing the three components of the problem--access, cost, and quality. Then, we propose goals for health care reform. With this background, we describe the major questions that reform proposals must address and the impact of reform on emergency medicine.

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THE THREE CHALLENGES: ACCESS, COST CONTAINMENT, AND QUALITY

Comprehensive national health care reform may affect emergency physicians more than any other medical specialists. For moral, ethical, and legal reasons, emergency departments have become the principal source of care for many uninsured patients. 3 EDs provide episodic primary care for many patients without health insurance4 and are the only resource for many acutely ill patients who cannot afford a primary care physician. 5 Thus, EDs are sensitive indicators of the status of the medical care system, and from that perspective, the system is ailing. A 1991 paper from the Society for Academic Emergency Medicine reached five conclusions: "1) While the US spends more [of its gross national product] on health care than any other nation, the federal and state governments are reducing their support of health care for the poor. 2) The private medical community is not prepared to compensate for these cutbacks. 3) Public hospitals are overwhelmed, with some closing and the remainder unable to provide adequate health care for the poor. 4) Poor people in the United States are experiencing serious, preventable morbidity and mortality because of lack of adequate medical care. 5) The medical and economic environment created by these inequities endangers education and research in emergency medicine.'6 The problems continue. In addition to the 35 million Americans without any health insurance, at least 20 million more have inadequate coverage, r Although the most egregious of the financially motivated patient transfers between hospitals s4o have been proscribed, emergency physicians working in private or not-for-profit community hospitals continue to experience problems obtaining specialty consultants and sometimes are forced to transfer patients for lack of an on-call physician willing to admit the umnsured. Public hospital overcrowding is worsening. Because of the financial burden of caring for trauma patients, 44 trauma centers closed between 1987 and 1990, n affecting the quality of care of both insured and uninsured patients. Emergency medical services systems are deteriorating as a result of uncompensated care. ED overcrowding has become a national crisis, jeopardizing quality of care. 12 Many patients are suffering from the actual closure of public hospitals 13 and from reductions in entitlement programs. Residency programs decay and are forced to compromise patient care, teaching, and research for lack of resources. 6 Residents learn a cynical approach to medical practice; they begin to accept a system in which poor patients at public hospitals receive substandard care.

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Although the uninsured and underinsured--and the physicians treating them--see inadequate access to care as the crisis, those who pay for medical care see the rising costs of health care as the more pressing problem. Approximately 13% of the gross national product is spent on health care. A 1989 report reflects some of this desperation: "If present trends continue, total costs will double in six years and triple in 12 years, hitting $1.5 trillion in the year 2000. In that year, health care will consume 15 percent of GNE and this country will spend $5,551 on health care for every man, woman, and child .... By the year 2005 the Medicare program alone will exceed in size either the Social Security or Defense budgets. "2 Cost containment may seem a low priority to clinicians, who see access as the key to improving our patients' health. However, many insured Americans fear losing their coverage due to escalating costs. The high cost of medical insurance produces more uninsured patients, because many small businesses cannot afford to insure their employees. Many government policymakers are unwilling to expand medical entitlement programs unless the cost per person can be decreased. We cannot improve access without containing costs. In discussing cost containment, physicians must confront another issue that some may find threatening: many of the determinants of health have little to do with medical care. Education, employment opportunities, safe highways, clean air and water, food sanitation, and product safety all contribute to the health of our population. Resources consumed by medical care detract from resources available for these other programs. Effective control of medical care costs would not only improve access to care but also free up resources for other projects promoting health. A third challenge for health care reform is to optimize the quality of medical care. The solution to increasing access while controlling costs is to provide "appropriate" care while avoiding "unnecessary" care. For example, studies using carefully developed measures of appropriateness have found that 14% of coronary artery bypass grafts, 32% of carotid endarterectomies, and 17% of gastroscopies are inappropriate. 14-,~ Other studies on geographic variation in use of medical services suggest that although some patients undergo procedures that they do not need, others do not receive indicated procedures, lr However, for much of medical care, "appropriate" indications remain undefined. In emergency medicine, the most basic studies of appropriateness have yet to be conducted. Although we have learned a little about cost-

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effective use of diagnostic studies, 18-23 we cannot even agree on what constitutes an appropriate visit to the ED. With different authors reporting that from 18% to 62% of ED visits are true emergencies, one can infer that the criteria for identifying an emergency remain inadequately defined.24-26 To maintain credibility with health policymakers, emergency medicine must address this key issue. Poor access, high cost, and inadequate understanding of quality combine with societal and demographic factors so make the US population less healthy than the citizens of most economically developed countries. Our life expectancy is lower than that of most industrialized nations, and our levels of sickness and disability are higher. 2r Thus, access, cost, and quality must be considered in evaluating proposals for health care reform. EVALUATING THE PROPOSALS: WHAT ARE OUR GOALS? Most proposals for reform of the medical care system describe means to a goal, leaving the goal implicit. We debate the merits of "pay-or-play" versus "single-payer" plans, failing to recognize that our disagreement stems from disparate long-term objectives. To avoid confusing means with ends, we must begin by discussing long-term goals. A previous paper from the Ethics Committee of SAEM concluded that "A just health care plan must provide equitable access to appropriate preventive, emergency and primary care, curative care with societally defined limits,

and long-term care that includes convalescent care, care for the dying, and the relief of pain and suffering. ''2s The eight choices discussed by the Ethics Committee, describing the value judgments that the reader must make in considering how to reform the medical care system, are given in Table 1.29 We describe these choices in detail, emphasiring their relevance to emergency medicine. The first decision concerns the inclusiveness of population coverage. In a system providing comprehensive health care to all, our patients would have ready access to primary care. They could seek early, preventive care rather than waiting until they required emergency care and hospitalization. Inclusiveness refers not only to the proportion of the population that is covered but also to the extent of segmentation of that coverage. Coverage can range from universal-with all of the population covered by a single program--to extremely segmented, with multiple different insurers and other payers. Our current health care system includes segmentation of payment source (eg, Medicare, Medicaid, employment-based insurance, individually purchased insurance, and uninsured) and segmentation of benefits (which vary among plans). Brown argues that even with coverage of the entire population, any segmented program would lead to inadequate insurance because if the maj ority of Americans were covered by private insurance, they would not be likely to allocate the resources necessary to provide high-quality care in a public plan for the poor. 29

Table 1.

Competing goals of medical care reform* Dimension

Goal

Competing Goal

Inclusiveness of population coverage Maximize number of people covered

Minimize medical care expenditures, leaving resources fer other purposes

Comprehensiveness of benefits

Eliminate price rationing; provide access to the most appropriate level of care

Minimize medical care expenditures, leaving resources for other purposes

Progressivity of financing

Progressive financing to maximize access to care at fair costs

Avoid redistribution of income; avoid disrupting the economy

Role of copayments in reducing use and controlling costs

Minimize copayments and deductibles to avoid discouraging needed care

Increase copayments and deductibles to discourage unnecessary care

Efficiency of resource usage

Eliminate costly inefficiency

Avoid government interference or limitations on medical practice Preserve the role of fiscal intermediaries such as insurance companies

Extent to which resources should be allocated by planning versus market forces

Planning removes "perverse incentives" and makes resource allocation dependent on need; it may decrease interference from profit-oriented insurance companies

Planning removes control from individual providers and from those patients currently able to choose their own sources of care; may inhibit innovation; may threaten the financial stability of insurance companies

Accountability of the medical care system

Improve quality of care; improve responsiveness of providers to consumers' concerns

Maintain providers' independence from government interference

Political feasibility

Incremental change may undermine efforts to achieve broader reforms

Incremental change may be feasible new

*Modifiedfrom reference29.

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Table 2.

Seven questions about means to medical care reform Question

Should everyone be guaranteed a health plan?

How do we provide universal coverage?

Choice

Yes, guaranteed

Health care is a right.

No, voluntary

People should be able to make their own decisions about whether to spend their money for health care or for other items.

Single national health plan

Administratively simple

Pay or play (employers are required or encouraged to provide coverage or pay a tax, with public coverage for the unemployed and those not covered at work.) Requiring or encouraging private purchase of insurance (with tax credits for the poor)

Incremental change from our current system Encourages innovation by preserving multiple options

How will we pay far guaranteed Taxes access te care? Progressive income taxes (with the tax proportional to income, or even greater at higher income levels) Regressive taxes (the same tax regardless of ability to pay) Employment-based financing

Reduce payments

Should Medicaid be retained?

Eliminate Medicaid Retain Medicaid

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Pro

Precedent exists in mandates far car insurance. Those who changed jobs or worked part time would be covered. Does not distort the economy by forcing employers to provide insurance. The pro's and con's depend on the type of tax. Progressive income taxes are fairer to low-income Americans. Regressive taxes (eg, "sin taxes" on tobacco and alcohol) sometimes are attractive politically. No new taxes from the public or from employers already offering coverage Least change from our current system Would remove the unfair competitive advantage due to cost savings enjoyed by firms that do not insure their employees currently Reducing the administrative costs of our current system and implementing effective cost-containment measures could save enough te pay for expanded access. Advocates project no reduction in the net income of health care providers.

Con

Too expensive Forcing employers to provide insurance would threaten the viability of some businesses. Only the sick tend to purchase insurance, a phenomenon that drives up the cost of insurance. Creates cost-shifting to care for the uninsured "free riders" who get care without paying for it

Increased bureaucracy Potential for restriction of physicians' and patients' options Complex Increased administrative and financial burden placed on businesses Inequitable: those not covered by employment-based plans would fall into a government plan, which could become inferior to the private plans. Could interfere with jab decisions: people would be unable to change jobs for fear of losing insurance. Single-family policies are costlier than large-group policies. individuals cannot evaluate quality of care or negotiate contracts for care as effectively as large groups. Tax credits are difficult to administer.

If taxes are perceived as an additional expense rather than a replacement for current medical costs, they may be politically unacceptahre. Progressive taxes may discourage savings and investment, threatening the economy. Regressive taxes are unfair to the poor.

It is unfair to force employers to provide this benefit. Such a policy might lead some firms to decrease their work force, damaging the economy. Currently, the employees who are not insured tend to be low-income emp/oyees. Lost jobs would likely be low-income jobs, so this policy would hurt those who can least afford it. Depending on the implementation, there might be incentives for employers to replace full-time employees with part-time workers to avoid the requirement. Sources disagree as to whether the reduction of administrative waste could yield significant savings. Providers fear cutbacks in fees. Hospitals fear reductions in funds available for capital improvements-which could lead to rationing of care and long waits for treatment.

Abolishes a two-tiered system Paying providers regular rates rather than Medicaid rates would of-health care substantially increase the cost of an expanded system. Less expensive than other Stigmatized, two-tiered system, whose low fees severely limit access systems to care Already in place, known to providers and patients

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Table 2. Continued

Question

Choice

Pro

Con

Replace Medicaid with another If it were not linked to the Costly public program for those not welfare system and if its covered through employment, reimbursement were comparable to the private system, it would be more acceptable. Replace Medicaid with a tax Eliminates the two-tiered Because Medicaid recipients are sicker than the general US population, credit to low-income people system private insurance would be very costly or would offer limited benefits. to purchase insurance. Offers a choice of plans Reduce administrative complexity What health benefits should be Minimal benefits Low cost Would perpetuate "price rationing" of noncavered services covered under the plan? Adequate protection against Would lead to underuse of necessary therapeutic and preventive services catastrophic illness or injury If routine costs of care are not covered, people will not overuse services. Comprehensive benefits (broad Would allow patients to Costly in scope, with elimination of receive the most appropriate Inclusion of long-term care could be extremely costly most copayments and care, without consideration Unless accompanied by measures to reduce unnecessary care, it could lead deductibles) of which care would be to overuse of services. covered by their policy Intermediate benefit package/ Politically feasible Fails to resolve the question of long-term care same as Medicare Perpetuates price rationing of services that are not included How should health care costs Single-payer system (or multiple- Because patients must rely Centralized budgeting will inhibit innovations in health care delivery and be controlled? payer system with all payers on physicians to advise them in technology. using the same payment as to what care is necessary, It also will lead to rationing of care and long waits for oonemergent care. schedule); budgets: payments economic incentives aimed negotiated between payers at patients are inappropriate. and providers, or set Global budgets have effectively unilaterally by government; controlled costs in Canada expenditure targets; global and in many European budgets for hospitals countries. Managed competition: the Making patients share the Patients would not have enough information to make informed decisions government provides cost of care will encourage about competing plans. They could compare the costs but not the benefits incentives to promote them to make cost-effective or the quality of care. managed-care plans and decisions. Established physician-patient relationships would be disrupted by the to make purchasers of health If the selection of a health tendency to change plans frequently in pursuit of tow prices. care more cost conscious. plan is made annually, rather The pressure exerted on physicians by health plans would be disruptive to than when the patient is medical practice and impose an administrative burden on physicians. acutely ill, the patient should In many cases, market incentives run counter to community health care be able to make a general needs, so marketplace competition will not work in health care. decision about cost-effective- Other attempts at deregulation, such as banking and airline industries, have ness rather than a specific, not always succeeded. technical decision about need for a particular treatment. Providing incentives for patients to consider costs would pressure health plans and providers to consider costs without direct government interference with providers. Who should administer the Single administrator Economies of scale Could exert undue pressure on providers national health plan? Bargaining power Could interfere with innovations The administrative agency Assumes that the government can manage competently a complex national could be insulated from the system political pressures. State administration More opportunities for Varied state plans might induce migration of persons with chronic illnesses innovation to high-benefit states or inhibit their migration away from these states More accountable to the people Reproduces the successful Canadian model Multiple private insurers The most pluralistic appreach The least efficient approach ("fiscal intermediaries")

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A health care system offering inclusive, unsegmented coverage would help our patients by fostering universal access to care. All Americans would have access to care through the same system, so all Americans would have an interest in maintaining a high-quality system. Second, we must decide on the comprehensiveness of benefits. A broad package of services would allow more appropriate and less expensive care to be provided. For example, a low-income patient with a toothache could see a dentist rather than an emergency physician, and an elderly patient unable to ambulate because of an ankle fracture could receive home nursing care rather than hospitalization. Currently, most insurance provides restricted benefits, excluding pre-existing illness and long-term care. r Brown states, "If services are needed but not covered by a program, they will tend to be distributed according to ability to pay, not according to need. ''29 Competing with the goals of inclusive coverage and comprehensive benefits is the desire to reduce the growth in medical care expenditures. In an era of constrained resources and rapidly rising health costs, many believe that additional funds should not be allocated for medical care until effective cost-containment mechanisms are implemented. Third, we must consider the progressivity of financing, or whether a patient~ share of medical costs should be proportional to his or her ability to pay If progressive financing improved access, it would decrease ED overcrowding, uncompensated care, and delay of necessary care. Progressive financing would be a major shift from the status quo. The current tax exemption for employerfinanced health insurance provides the greatest benefit to those in the highest tax brackets--a regressive approach. Out-of-pocket expenses also are regressive; in 1977, the 10% of households with the lowest incomes paid 14% of their income in out-of-pocket expenditures for health care compared with 1.9% for the wealthiest 10% of households, r The most progressive approach would be to finance medical care through a graduated tax. Some policymakers believe that progressive financing is more fair than the present system; others are reluctant to change the system, either because they oppose progressive taxation on principle or because they fear that it might disrupt the economy. The fourth decision concerns the role of copayments in reducing use arid controlling costs. Programs with high deductibles or copayments succeed in decreasing consumption of medical services. However, many patients lack the necessary information to determine which services they

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really need, so such copayments reduce use of effective services to the same degree that they reduce use of ineffective services.3O Although programs with high out-of-pocket costs do not diminish the health of most participants, they have an adverse effect on the health status of low-income persons who are in poor health.31, 32 Depending on how deductibles or copayments were structured, they might either increase or decrease use of EDs for minor problems. However, any form of "price rationing" (in which resources are allocated based on ability to pay rather than based on medical need) is likely to cause poor patients to delay getting care, thereby increasing their use of EDs for major illnesses when their health deteriorates. A fifth decision addresses efficiency of resource use. Our present system is very inefficient, with administrative overhead representing 19% to 24% of medical costs) 3 The medicolegal climate encourages providers to overuse diagnostic testing. The law of supply and demand fails to lower prices; in some communities, an oversupply of physicians and hospitals actually leads to price increases as hospitals compete to offer attractive amenities and competing facilities .lose the ability to benefit from large volume efficiencies.34, 35 Although price rationing provides incentives for underuse of necessary medical services by the poor, our tax system creates incentives for overuse of medical services by the wealthy When employers provide health insurance, the premiums are tax deductible. Once the premium has been paid, employees have little incentive to use services judiciously Depending on the design of a reform proposal, it might decrease the incentives for overuse by those who presently are insured or it might extend the incentives for overuse to those who presently are uninsured. Previous attempts at improving efficiency of resource use have included global budgets, capitation, negotiated fee schedules, and health maintenance organizations (HMOs). Physicians and hospitals often have opposed these proposals, fearing income loss or government interference in medical practice. However, there are potential benefits. If efficient use of resources improves patient access, medical practice may become more satisfying by reducing emergency physicians' problems with admissions, consultations, follow-up appointments, and inappropriate transfers. In addition, emergency medicine may benefit financially from the increased proportion of patients who would be able to pay for their care. A sixth decision is the extent to which resources should be allocated by planning rather than by market forces. To understand these two options, one must under-

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stand the economic concept of ~'perverse incentives," in which aspects of the marketplace lead to actions that may be rational from an in.dividual's point of view but are irrational from a societal perspective. Health care reform must include a means of eliminating these perverse incentives. Perverse incentives affect both payers and providers of medical care. Currently, it is economically rational for an insurance company to market its policies to healthy people and to limit coverage to the sick by excluding coverage for pre-existing conditions or by "experience rating" premiums so that employers cannot afford to offer insurance to employees with prior illnesses. Similarly, incentives may encourage specialists to perform elective procedures on wealthy patients while refusing care to uninsured patients with emergency medical or surgical needs. Some of the problems with the current system could be remedied either by market forces or by centralized planning and regulation. 36 Proponents of market interventions argue that behavior can be changed by altering incentives. For example, changes in physician reimbursement have been made under Medicare with the intent of reducing the economic stimuli for undesirable allocation of medical resources, such as the performance of procedures rather than cognitive medicine, specialization rather than primary care, and urban rather than rural practice. 3z-4o Market incentives allow flexibility: the incentives provide a goal, leaving providers and payers with the responsibility of finding an efficient way of reaching that goal. Proponents of centralized planning and regulation argue that market interventions are complex and unpredictable. The very complexity of market-based legislation makes it difficult for laypersons and legislators to understand and enables special-interest lobbyists to modify the impact of the laws with subtle amendments. Centralized planning and regulation may be a more efficient way of achieving objectives. On the other hand, if available resources are limited, regulation might provide a narrower range of choices than users or providers desire. Poor planning could inhibit innovation and promote frustrating bureaucracy However, many emergency physicians find that their clinical options are limited by nonmedical factors, such as preauthorization requirements, restrictive formularies, complex demands varying among payment sources, and inability to obtain consultants or follow-up care for the uninsured. For these physicians, a centrally planned care system providing universal access to comprehensive care might impose fewer constraints. A seventh decision is how to create accountability of the medical care system to ensure quality of care and consumer satisfaction. The traditional means of ensuring

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user satisfaction is to rely on market incentives, by which a dissatisfied patient selects a different physician or hospital. However, the restrictions imposed by HMOs and the limited number of physicians who accept Medicaid have disrupted the ability of patients to walk away from bad medical care. Furthermore, patients rarely have enough information to make rational health care choices. One possibility for reform would be to require that health plans provide data on quality of care. These data would include financial stability, process measures (eg, use, waiting times for appointments, availability of equipment and procedures), and outcome measures (eg, complication and mortality rates). Consumer and provider representation on governing boards may improve accountability One also might consider altering the financial incentives imposed by certain ownership arrangements, such as forprofit hospital and nursing home chains and physicianowned laboratories. An eighth concern is political feasibility. Advocates of incremental change argue with those who fear that small changes will undermine efforts to achieve broader reforms. Perhaps most importantly, we must define our goals and outline reasonable means to those goals before we begin the process of compromise that is characteristic of our political system. Other authors have advocated promoting primary care 4t because of its role in health promotion and screening. Although only 35% of US physicians are in primary care specialties, other industrialized countries have found the optimal proportion to be about 50%, with all individuals having a primary care physician whom they see first for any nonemergency illness. ~l The above goals pertain to delivery of medical care. Broader public health goals include disease prevention and health promotion42, 43 and support for medical education and research.42. 43 Technological innovation should be encouraged in a delicate balance with cost containment and centralized planning. For the teaching of emergency medicine, an essential component is an ED with high patient volume and high acuity Traditionally, public ("county") hospitals have provided many of these training sites. These same public hospitals, in their traditional roles of treating the medically indigent, have developed expertise in caring for the socially disenfranchised. Public hospitals often have special resources for assisting patients who do not speak English, aiding victims of domestic violence, helping the homeless, and dealing with patients whose lives are so disrupted that they are physically or emotionally unable to function within a conventional medical practice. We need to ensure

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that these institutions are not abandoned as patients receive more options under a new system. There must be support to bring these hospitals up to the levels of convenience and comfort offered at community hospitals while preserving their strengths as trauma centers, training institutions, high-volume providers of emergency care, and resources for patients with complex medical and social needs. FINDING THE BEST MEANS TO OUR GOALS

After deciding what goals we want to achieve with health care reform, we are ready to discuss different means of achieving those ends. Blendon and colleagues describe an excellent framework for categorizing proposals. 44 They list seven questions that any complete plan must answer: Should everyone be guaranteed a health plan? How do we provide universal coverage? How will we pay for guaranteed access to care? Should Medicaid be retained? What health benefits should be covered under the plan? How should health care costs be controlled? Who should administer the national health plan? Competing answers and arguments supporting and opposing each answer (drawn from Blendon et al and elsewhere) are summarized (Table 2). Although this table is complex, we hope that it will provide an overview of the proposed solutions and their potential impacts. Many comparisons of plans divide the proposals into four broad groups based on how the plans would provide and finance universal coverage. 45 Although such classifications ignore the solutions that can be achieved by combining different answers to Blendon et al's seven questions, they help the reader to understand the range of proposals. We describe the four groups briefly. The first group of proposals4~-50 are employer mandates to insure workers, with some plans including supplemental government insurance for ineligible workers, the unemployed, and the poor. Plans vary in the eligibility requirements that employees must fulfill for insurance to be required, such as the number of hours a week that the employee must work; whether dependents would be covered; the premium contributions required of employees; the benefits mandated; and the quality of the government programs for those employees who would not be covered under the employer mandates. The second group of proposals,5>55 often called pay or play, encourages employers to provide insurance but allows them to opt out. Employers who elect not to cover their employees are required to pay a tax that funds publicly administered insurance. These plans vary in the ways described for employer mandate plans as well as in the nature of the public insurance.

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The third category, single-payer plans, 56-5s provides for government funding for medical care for all Americans. Everyone would be eligible for the same coverage, regardless of employment, income, or health status. The plan would be administered by the federal government, or the federal government would distribute funds for state-run plans. Plans differ in methods of funding the program and comprehensiveness of benefits. The Canadian national health care program often is cited as an example of a single-payer program. The fourth category, tax credits for the purchase of private insurance,59, 60 offers incentives to individuals to purchase their own coverage. Some plans would remove the current incentives to overinsure upper-income employees, so that patients paying for medical care with their own money would be encouraged to make cost-conscious decisions. Some plans include health insurance reform to make coverage more available and affordable, malpractice reform, and promotion of managed care. These four categories describe means of paying for expanded access to medical care. Within each of these four possible approa.ches, there are two potential ways to control costs. With the first, managed competition,52,6~, 62 the government does not regulate prices or make direct payments to providers. Instead, it attempts to alter the incentives of the free market and to enhance access to information about the quality of the available medical programs, with the goal of improving quality of care and controlling cost. In the words of its proponents, "The market for health insurance does not naturally produce results that are fair or efficient. It is plagued by problems of biased risk selection, market segmentation, inadequate information, etc. In fact, the market for health insurance cannot work at the individual level. To counteract these problems, large employers and Public Sponsors must structure and manage the demand side of this market. They must act as intelligent, active, collective purchasing agents and manage a process of informed costconscious consumer choice of 'managed care' plans to reward providers of high-quality economical care. Tools of effectively managed competition include the annual openenrollment process; full employee consciousness of premium differences; a standardized benefit package within each sponsored group; risk-adjusted sponsor contributions, so that a plan that attracts predictably sicker people is compensated; monitoring disenrollments; surveillance; ongoing quality improvement; and improved consumer information."52 Managed competition plans attempt to correct multiple "perverse incentives"--economic inducements to act in a

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manner that does not meet societal objectives. The plans tend to address each such incentive separately, and multiple solutions have been proposed for each problem with the current market system. For example, a plan may limit the tax-deductible component of health insurance premiums and require copayments and deductibles to make employers and employees more conscious of the cost of health care. It may require that insurance companies and HMOs provide coverage for all employers at the same price to help small employers (whose premiums are often higher than those of large groups) to obtain insurance, or it may require premiums to be risk rated so insurers will not have an incentive to market their plans only to healthy groups. Because of the need to address each problem separately, managed competition plans can become quite complex and difficult for the noneconomist to understand. Although advocates of managed competition tend to favor pay-or-play financing, managed competition can be combined with other means of raising revenues. Managed competition has been proposed in combination with tax credits59,6o and with a public financing system.bS, 63-65 The other means of controlling costs is through centralized budgetary controls. Potential cost controls include regulating the supply of physicians and hospital beds, containing the diffusion of expensive technology, and controlling the price and quantity of medical services. For example, one such proposal56,66 calls for public financing, with a public plan directly reimbursing physicians and hospitals. Hospitals would be paid annual global budgets based on the number and acuity of patients treated the previous year. The government would have to approve hospitals' capital expenditures in advance for them to be reimbursed. Physicians and other providers would be reimbursed according to fee schedules negotiated between provider representatives (ie, medical societies) and the states, with overall physician payments constrained by global caps. Administrative costs would be reduced substantially by eliminating insurance companies as intermediaries and simplifying billing procedures. As this is being written, the political climate appears to be most supportive of managed competition, partly because of its congruity with the American values of free enterprise, individualism, and freedom of choice. Proponents of managed competition argue that it builds on the strengths of the American system--maintaining the flexibility and innovation of private enterprise while creating inceritives to act for the common good. However, short-term political trends do not always reflect wise long-term policy, Advocates of centralized

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budgetary controls point out that the economics of health care are very different from those for most products and services. Physicians influence patients' decisions about health care "purchases" more than do providers of other services, and the role of health insurance distorts incentives. Therefore, no other country has successfully used market forces to control costs and allocate health care resources. In contrast, single-payer systems (and multiplepayer systems with all payers using the same negotiated fee schedule) have succeeded in providing quality care and controlling costs in many nations>r For additional information, the reader is urged to study the article from which Table 2 was derived. 44 IMPACT ON EMERGENCY MEDICINE Although health services researchers have provided much data that help to project the effects of reform on the overall medical care system, there is little research that helps predict the effect on the specialty of emergency medicine. Much of the following is speculative, illustrating the need for further research by emergency physicians. Because of the uncertainties involved, we present an optimistic scenario and then discuss some of the threats to its materialization. In a system providing comprehensive health care to all, ED patients and emergency physicians both would benefit. Although our patient volume might decline, reimbursement could remain stable. The decline in volume would be due largely to patients who currently use the ED for minor problems because of financial barriers to care elsewhere. ~s One recent study of community hospitals reported that 21% of patients were uninsured and only 59% of billed fees were collected; 69 therefore, even if some of the uninsured patients who currently use the ED for primary care went elsewhere and even if a proposal reduced physician fees, reimbursement for emergency services in community hospitals could benefit from universal coverage. The status of emergency medicine would increase. EDs would no longer be viewed as money-losing dePartments that force hospitals to provide uncompensated care. Instead, hosPitals would perceive that the ED provides a large proportion of admissions, enhancing the institutional power of emergency medicine. Many other benefits would accrue. Financially motivated patient transfers would cease. Some hospitals that have been forced to withdraw from regional trauma systems for financial reasons would rejoin. As the payer mix of emergency patients became more favorable, our specialty

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might become more popular among medical students, and teaching hospitals would have further incentives to develop emergency medicine residencies. The increased hospital revenues would generate resources to enhance teaching and research. Burnout might decrease. Emergency physicians are frustrated because they are treating many minor illnesses and disproportionately fewer of the acute emergencies that drew them into the specialty. With improved access to primary care, emergency physicians could use more frequently those skills unique to emergency medicine. However, if emergency physicians do not participate actively in shaping policy, the resulting reform proposals could jeopardize the profession. Under proposals that do not guarantee universal coverage, EDs might remain the primary site for uncompensated care. If "universal access" for the poor were a severely underfunded system like Medicaid, patients still would be forced to seek primary care in the ED. If such a system were combined with strict gatekeeping policies to discourage ED use, ro the resulting barriers to any source of care could severely jeopardize our patients. Emergency physicians could become trapped between gatekeepers who refuse reimbursement for ED services and COBRA regulations that mandate provision of those services. Different gatekeepers may make different decisions as to whether patients can be refused ED care, 26 sometimes with dangerous results, n We must take an active role in defining what ED visits are considered "appropriate." Under managed competition, these gatekeepers would be HMOs; under centralized budgetary controls, government policies might define appropriate ED visits. Either way, we must ensure that these decisions are based on outcomes research and not on arbitrary decisions. If improved access to primary care were combined with managed care systems, the use of EDs for nonemergency problems might decrease. The decreased patient volume could result in ED staffing reductions and closures. Because of staffing reductions, physicians might have to work more night shifts. The administrative requirements associated with cost containment could become even more burdensome. These changes in the practice environment could increase burnout. Public hospitals could be endangered. If outcomes were measured solely in terms of efficiency, policymakers might neglect the role of public hospitals in medical education and in caring for patients with complex medical and social needs. Closure of public hospitals could sacrifice the special strengths of these institutions as trauma centers, resources for socially disenfranchised patients,

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training institutions, and high-volume providers of emergency care. We must consider the practice environment created by various reform proposals. Will we retain the autonomy to practice effectively? Will the practice of medicine be enjoyable, with reduced administrative hassle? Will professional liability reform reduce our fear of being sued and allow us to practice rational, cost-effective medicine? 41 It appears possible to improve physician satisfaction while enhancing access, controlling costs, and ensuring quality-but only if physicians help policymakers understand the matters at issue. SUMMARY

In the debate over reform proposals, the 5ociety for Academic Emergency Medicine encourages emergency physicians to consider the options in a systematic manner. Physicians should consider the ultimate changes desired before comparing the specific mechanisms suggested to effect those changes. Physicians must recognize the benefits and perils to emergency medicine that could be associated with any proposal. We must actively support health reform legislation that is in the overall best interest of our patients and our specialty while working with the new administration to evaluate proposed changes. SAEM believes that the United States must provide universal access to high-quality medical care. Benefits should be comprehensive, with the recognition that cost containment will be essential to expanding access and benefits without diverting resources from other vital social programs. With appropriate physician guidance, such changes can both help our patients and improve the satisfaction that we derive from the practice and teaching of emergency medicine. REFERENCES 1. BlendonRJ, Donelan K: The public and the future of US health care system reform, in Blenden RJ, EdwardsJN (ads): Systemin Crisis: The Casefor HealthCareReform. New York, Faulkner and Gray, 1991, p 173-194. 2. National LeadershipCommissionon Health Care(US}:For the Healthera Nation:A Shared Responsibility. Reportof the NationalLeadershipCommissionon HealthCare.Ann Arbor, Michigan, Health Administration Press, 1989. 3. CrossLA: Pressureon the emergencydepartment:The expandingright to medical care. Ann EmergMed1992;21:1266-1272. 4. PaneGA, FarnerMC, SarnessKA: Health accessproblemsof medically indigent emergency departmentwalk-in patients. Ann EmergMarl 1991;20:730-733. 5. Melnick GA, Mann J, Golan h Uncompensatedemergencycare in hospital markets in Los Angeles County.Am J PublicHealth 1989;79:514-516. 6. Lowe RA, Young GP, Reinke B, et al: Indigent health care in emergencymedicine:An academic perspective. Ann EmergMad 1991;20:790-794. 7. Bodenheimerl: Underinsurancein America. N EWIJ Mad 1992;327:274-278.

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8. Ansell DA, Schiff RL: Transfers to a public hospital: A prospective study of 467 patients. N Engl J Mad 1986;314:552-557.

35. Robinson JC, Luft HL: Competition and the cost ef hospital care, 1972 to 1982. JAMA 1987;257:3241-3245.

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36. Robinson JC, Luft HS: Competition, regulation, and hospital costa, 1982 to 1986. JAMA 1988;260:2676-2681.

10. Kerr HD, Byrd JC: Community hospital transfers to a VA medical center. JAMA 1989;262:70-73.

37. Lee PR, Grumbach K, Jameson W J: Physician payment in the 1990s: Factors that will shape the future. AnnuRevPublicHealth1990;11:297-318.

11. Champion HR, Mabee MS: An American Crisisin TraumaCareReimbursement.Washington, DO,The Washington Hospital Center, 1990.

38. Lee PR, Ginsburg PB:The trials of Medicare physician payment reform. JAMA1991;266:1562-1565.

12. Andrulis DP, Kellermann A, Hintz EA, et al: Emergency departments and crowding in United States teaching hospitals. Ann EmergMad 1991;20:980-986. 13. Bindmen AB, Keane D, Lurie N: A public hospital closes: Impact on patients' access to care and health status. JAMA 1990;264:2899-2904. 14. Chassin MR, Kosecoff J, Park RE, etah Does inappropriate use explain geographic variations in the use of health care services? A study of three procedures. JAMA 1987;258:2533-2537. 15. Winslow CM, Kosecoff JR, Chaesin M, et al: The appropriateness of performing coronary artery bypass surgery. JAMA 1988;260:505-509.

39. Lee PR, Ginsburg PB, LeRoy LB, etah The Physician Payment Review Commission report to Congress. JAMA 1989;261:2382-2385. 40. Blumenthal D, Epstein AM: Physician-payment reform--Unfinished business. N EnglJ Mad 1992;326:1330-1334. 41. Lundberg GD: National health care reform: The aura of inevitability intensifies. JAMA 1992;267:2521-2524. 42. Health system proposals compared to APHA policies. TheNation'sHealthMarch 1990, p 9-10. 43. APHA compares eight health care reform bills to association's policies. TheNation's Health February 1992, p 9-12. 44. B[endon RJ, Edwards JN, Hyams AL: Making the critical choices. JAMA 1992;267:2508-2520.

lB. Winslow CM, Solomon DH, Chassim MR, et el: The appropriateness of carotid endarterectomy. N EnglJ Mad 1988;318:721-727.

45. Blendon RJ, Edwards JN: Caring for the uninsured. Choices for reform. JAMA 1991;265:25632565.

17. Chassin MR, Brook RH, Park RE, et al: Variations in the use of medical and surgical services by the Medicare population. N EnglJ Mad 1986;314:285-290.

46. Kirkman-Liff BL: Health insurance values and implementation in The Netherlands and the Federal Republic of Germany. An alternative path to universal coverage. JAMA 1991;265:2496-2502.

18. Lowe RA, Arst HF, Ellis B K: Rational ordering of electrolytes in the emergency department. AnnEmergMad 1991; 20:16-21.

47. Todd JS, Seekins SV, Krichbaum JA, et al: Health access America--Strengthening the US health care system. JAMA 1981;265:2503-2506.

19. Lowe RA, Wood AB, Burney RE, etah Rational ordering of serum electrolytes: Development of clinical criteria. Ann EmergMed 1987;16:260-269. 20. Singal BM, Hedges JR, Succep PA: Efficacy of the stat serum electrolyte panel in the management of older emergency patients. Mad DecisMaking 1992;12:52-59. 21. Singal BM, Hedges JR, Succop PA: Prediction of electrolyte abnormalities in elderly emergency patients. Ann EmergMeal1991;20:964-968. 22. Hedges JR, Singe1 BM, Estep JL: The impact of a rapid screen for streptococcal pharyngitis on clinical decision making in the emergency department. Marl DecisMaking 1991;11:119-124. 23. Singal BM, Hedges JR, Radack KL: Decision rules and clinical prediction of pneumonia: Evaluation of low-yield criteria. Ann EmergMad1989;18:13-20. 24. Gifford M J, Franaszek JB, Gibson G: Emergency physician's and patients' assessments: Urgency of need for medical care. Ann EmergMad 1980;9:502-507. 25. Haddy RI, Schmaler ME, Epting RJ: Nonemergency emergency room use in patients with and without primary care physicians. J FamPractice1987;24:389-392. 28. Wolcott BW: What is an emergency? Depends on whom you ask. JACEP1979;8:241-243.

48. Rockefeller JD: A call for action: The Pepper Commission's blueprint for health care reform. JAMA 1991;265:2507-2510. 49. Nutter DO, Helms CM, Whitcomb ME, etah Restructuring health care in the United States: A proposal for the 1990s. JAMA 1991;265:2516-2520. 50. Bronow RS, Beltran RA, Cohen SC, et al: The Physicians Who Care plan: Preserving quality and equitability in American medicine. JAMA 1991;265:2511-2515. 51. Davis K: Expanding Medicare and employer plans to achieve universal health insurance. JAMA 1991;265:2525-2528. 52. Enthoven AC, Kronick R: Universal health insurance through incentives reform. JAMA 1991 ;265:2532-2536. 53. Holahan J, Moon M, Welch WP, etah An American approach to health system reform. JAMA 1991;265:2537-2540. 54. The Kansas Employer Coalition on Health Task Force on Long-term Solutions: A framework for reform of the US health care financing and provision system. JAMA 1991;265:2529-2531. 55. Clinton B: The Clinton heaIth care plan. N EnglJ Med 1992;327:804-807. 56. Grumbach K, Bodenheimer T, Himmelstein DU, at al: Liberal benefits, conservative spending: The Physicians for a National Health Program proposal. JAMA 1991;265:2549-2554.

27. Fuchs VR: The best health care system in the world? JAMA 1£92;268:916-917.

57. Fein R: The Health Security Partnership: A federal-state universal insurance and costcontainment program. JAMA 1991;265:2555-2558.

28. Knopp RK, Goldfrank LR, Derse AR, etah An ethical foundation for health care: An emergency medicine perspective. Ann EmergMad 1992;21:1381-1387.

58. Garamendi J: California health care in the 21st century: A vision for reform.

29. Brown ER: Principles for a national health program: A framework for analysis and development. MgbankQ 1988;66:573-617.

60. Sullivan LW: The Bush administration's health care plan. N EnglJ Marl 1992;327:801-804.

30. Siu AL, Sonnenberg FA, Manning WG, etah Inappropriate use of hospitals in a randomized trial of health insurance plans. N EnglJ Mad 1986;315:1259-1566. 31. Brook RH, Ware JE, Rogers WH, etah Does free care improve adults' health? Results from a randomized controlled trial. N EngtJ Mad 1983;309:1426-1434. 32. Shapiro MF, Ware JE, Sherbourne CD: Effects of cost sharing on seeking care for serious and minor symptoms: Results of a randomized controlled trial. Ann InternMed1986;104:246-251. 33. Woolhandler S~Himmelstein DU: The deteriorating administrative efficiency of the US health care system. N EnglJ Mad 1991;324:1253-1258. 34. Robinson JC, Luft HS, McPhee SJ, et al: Hospital competition and surgical length of stay. JAMA 1988;259:696-700.

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59. Butler SM: A tax reform strategy to deal with the uninsured. JAMA 1991;265:2541-2544. 61. Enthoven A, Kronick R: A consumer-choice health plan for the 1990s: Universal health insurance in a system designed to promote quality and econonemy. Ih N EnglJ Mad 1989;320:94-101. 62. Enthoven A, Kronick R: A consumer-choice health plan for the 1990s: Universal health insurance in a system designed to promote quality and econonomy. I. NEnglJMef11989;320:29-37. 63. Grumbach K: California dreaming: Universal health insurance in one state? Health/PACBuff 1990;summer:6-11. 84. Enthoven AC: Consumer-choice health plan {first of two parts): Inflation and inequity in health care today: Alternatives for cost control and an analysis of proposals for national health insurance. N EnglJ Mad 1978;298:650-658. 65. Enthoven AC: Consumer-choice health plan {second of two parts): A national-healthinsurance proposal based on regulated competition in the private sector. N EnglJ Mad 1978;298:709-720.

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66. HimmelsteinDU, WoolhandlerS: A nationalhealthprogramfor the UnitedStates: A physicians'proposal.N Eng/J Meal1989;320:102-108. 67. SaltmanRe: Single-sourcefinancingsystems:A solutionfor the UnitedStates?JAMA 1992;268;774-779. 88. Well TP: Universalaccess:Its potential impacton emergencymedicine.Ann EmergMed 1992;21:1236-124& 69. MitchellTA, RemmelRJ: Levelof uncompensatedcaredeliveredby emergencyphysiciansin Florida.Ann Emery1Med 1992;21:1208-1214. 70. HurleyRE,Freund13A,TaylorDE: Gatekeepingthe emergencydepartment:Impactof a Medicaidprimarycare casemanagementprogram.HealthCareMgmt Rev1989;14:63-71. 71. ShawKN, SelbetSM, Bill FM: indigentchildrenwho are deniedcarein the emergency department.Ann EmergMed 1990;19:59-62.

The authors appreciate the suggestions of the Board of Directors and the president of SAEM concerning this manuscript, and they thank Mary Ann Schropp, executive director, SAEM, for her administrative support. Without implying their support of the opinions expressed, they also thank the following people for their helpful comments on the manuscript: Larry Bedard, MD; Andrew Biodman, MD; Michael Bishop, MD; Lewis Geldfrank, MD; Kevin Grumbach, MD; Robert Koopp, Me; Marcus Martin, MD; Patricia Saiber, MD; Ellen Taliaferro, MD; and Robert Williams MD. Address for reprints:

Robert A Lowe, MD, MPH Society for Academic Emergency Medicine 900 West Ottawa Lansing, Michigan 48915

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