On June 21, the Institute of Medicine (IOM) released a report, suggesting that federal and state governments review and revise public health laws to ensure that they adequately address the current health care landscape.  Created at the request of the Robert Wood Johnson Foundation (RWJF) and presenting the findings of a committee of experts, the report also stresses the importance of evaluating the effects of non-health care legislation, noting that such legislation can have a significant impact on public health.  Finally, the report recommends that states require health agencies to require 10 essential public health services.

From the report:

On June 29, Families USA released a report examining Medicaid cuts outlined under U.S. Rep. Paul Ryan’s (R-WI) $3.5 trillion FY2012 budget proposal, approved by the U.S. House on April 15.  In addition to repealing most provisions of the national health care reform law, the budget would also convert Medicaid into a block grant program beginning in 2013, reducing state payments by 5 percent in 2013, 15 percent in 2014, and 33 percent in 2021.  Based on an economic modeling tool used by the U.S. Department of Commerce to assess the impact of major events on regional economies, Families USA’s analysis finds that the Medicaid cuts would risk a total of 35,210 jobs and $4.2 billion in economic activity.  The report estimates that the cuts would harm program enrollees, reduce business activity, and contribute to job losses.  The report also provides state-level estimates of the impact of each cut on business activity and jobs.

From the report:

The Urban Institute has released a study finding that states will spend $90 billion from 2014 less under the national health care reform law than they would without it.  The authors attribute those savings to reduced uninsured populations and greater federal financing of services that states previously paid for. 

From the report:

This report finds that state governments are likely to spend $92-129 billion less from 2014 to 2019 with implementation of the Affordable Care Act, thanks to provisions reducing the uninsured population and increasing federal support for health care previously financed by states. The authors find that, overall, the federal government would spend $704 to $743 billion more under reform from 2014 to 2019. Even after 2019, when the federal government's share of Medicaid costs declines to its permanent level, states will still come out ahead, realizing net savings in 2020 alone of $12 to $19 billion.

Full report: State Governments Would Spend at Least $90 Billion Less With the ACA than Without It from 2014 to 2019 (PDF | 459.33 KB)

Urban Institute.  (2011).  State governments would spend at least $90 billion less with the ACA than without it from 2014 to 2019.  Buettgenns, M., Dorn, S. and Carroll, C.

The New England Journal of Medicine has published a study finding that Blue Cross and Blue Shield of Massachusetts’ (BCBS) global payment system, the Alternative Quality Contract (AQC), reduced costs in its first year of operation.  Beginning in 2009, BCBS began five-year AQCs with seven provider groups, which assumed spending accountability in return for the potential to receive quality and savings bonuses.  Examining claims data from 2006 to 2009 for participating provider groups and a control group of non-participating provider groups, the study found that costs did not increase as rapidly among participating organizations.  The authors found that savings were achieved through shifting outpatient care to facilities with lower fees, lowering expenditures for medical procedures, and lowering spending on enrollees with the highest expected spending.  In 2009, all participating groups met their budget targets and received savings bonuses.  However, the authors posit that future cost growth reduction under the AQC system will depend on budget targets and provider groups’ ability to further improve efficiency.

Song, Z., et. al.  (2011).  Health care spending and quality in year 1 of the alternative quality contract.  New England Journal of Medicine.  http://www.nejm.org/doi/full/10.1056/NEJMsa1101416#t=abstract

Authors: Zirui Song, Dana Gelb Safran, Bruce Landon, Yulei He, Randall Ellis, Robert Mechanic, Matthew Day and Michael Chernew. 

On July 11, the Robert Wood Johnson Foundation (RWJF) published a brief examining state costs under the national health care reform law.  Citing health reform’s health coverage expansion and increased federal financing for formerly state-funded functions, the authors estimate that, between 2014 and 2019, states will spend up to $129 billion less than they would have without reform.  Over the same period, the brief estimates that the law will reduce overall spending on uncompensated care by 12.5 to 25 percent, saving the federal government $39 billion to $78 billion, while saving states $26 to $52 billion.  The authors estimate that states will be responsible for $14 billion in new Medicaid spending to cover the costs of newly eligible Medicaid enrollees.  The report also projects that expanding Medicaid coverage for individuals with mental illnesses will save states up to $22 billion through 2019. 

From the report:

On July 27, the Kaiser Family Foundation (KFF) released a brief examining states’ progress towards implementing the health insurance exchanges required under national health care reform.  The brief examines challenges states face and summarizes early trends in exchange governance, structure, and financing.  The U.S. Department of Health and Human Services (HHS) recently issued regulations giving states until January 1, 2013 to demonstrate their ability to operate a functional exchange.  To date, more than a third of states have begun working towards implementation.  Required in every state by January 1 2014, HHS will operate exchanges in states that are unprepared or unwilling to operate their own.

From the report: