Council of Councils Meeting

July 1, 2010

Common Fund Proposal: Health Economics for Health Care Reform

The Patient Protection and Affordable Care Act of 2010 constitutes the largest change to the health care system in the United States since the creation of Medicare and Medicaid in 1965. In addition to dramatically expanding insurance coverage—an estimated 32 million persons will be covered who otherwise would not have been—the Act creates a new long—term care insurance fund, further expands support for health IT, and provides for the testing of several approaches to controlling growth in health care costs. But reform is a work in progress. Expanding health insurance coverage will increase access to medical care for many. However, slowing the rate of growth in health care costs will pose significant challenges, particularly given our interest in adopting new medical technologies and encouraging technological innovation.

The proposed program would address gaps in existing knowledge to help facilitate the implementation of health care reform. The substance of the program is based largely on ideas generated from a workshop held May 10-11, 2010 in Bethesda. Participants included the nation's leading health economists, NIH staff, senior staff and leaders of CMS and ASPE and VA researchers. A key theme from the workshop was that an NIH program like this one could be a valuable guide to policymakers.

The specific initiatives are as follows:

Initiative 1. Changing Incentives for Consumers, Insurers, and Providers

  • How will consumers respond to the mandate? Will health plans experience adverse selection? What will be the effects on labor force participation, job mobility, and financial security?
  • What barriers prevent insurers from using CE data, and under what circumstances would they use it?
  • How will the supply side of the medical care market—physicians, hospitals, long-term care providers, and others—respond to rising demand resulting from the coverage expansion? How will prices and competition be affected? What will be the effect on technological innovation?

Initiative 2. Science of Structure, Organization and Practice Design in Efficient Delivery of Care

  • What are the trajectories of serially high-cost patients and can we identify timed interventions which might reduce costs, improve patient outcomes, and extend life? Which types of provider system operate most efficiently? Which types distinguish high- versus low-value technologies and how?
  • How can health IT help encourage efficient care delivery?
  • Under what conditions would personalized medicine be adopted effectively?
  • What are the benefits and limitations of medical homes and accountable care organizations?

Initiative 3. Economics of Prevention

  • What types of preventive strategies could improve health while limiting costs? How would those measures need to be targeted achieve those aims?
  • How do we effectively promote healthy behaviors to improve health in a diverse population?

Initiative 4: Data Infrastructure to Enable Research on Health Reform Currently, researchers lack of good data on the Medicaid program and also on health care organizations and provider networks. This initiative would support efforts to improve existing data sources and promote needed linkages. In many cases, the NIH role would be to leverage the efforts of CMS or other agencies, as well as health plans.

NIH-Wide Involvement in the Health Economics for Health Care Reform Program This program proposal was developed by a Planning Committee and larger Working Group with representatives from 20 ICs and the Office of the Director. Activities and announcements would be planned in consultation with other trans-NIH programs, including the Science of Behavior Change Roadmap program, ARRA RFAs on adoption of CER results, and planned collaborations with private health plans and new cohort studies. The program would be overseen by a trans-NIH Working Group, with a "secretariat" staffed by an FTE economist and staff from several ICs working part-time.

This page last reviewed on December 19, 2013