HHS Announces $840M to Move Health Care from Quantity to Quality

HHS has announced $840 million in funding to support health care strategies that focus on patient health outcomes and care coordination. The funding, which is being made possible through the Transforming Clinical Practice Initiative, will be awarded to applicants who demonstrate strategies to HHS that can be implemented to improve information access and health care outcomes.


According to an HHS release announcing the funding, applicants may include organizations like group practices, health care systems, and medical provider associations. The funding is designed to help these kinds of organizations develop new strategies to provide doctors with better access to patient information, grow the ways in which patients can communicate with those that care for them, improve patient care coordination, and more efficiently use electronic health records. At its essence, the funding is about better care delivery, improved physician payment models, and enhancing information distribution. To become a successful applicant, physicians and practices will need to demonstrate measurable progress towards achieving theses goals. HHS will evaluate evidence of improved outcomes, cost savings, avoided unnecessary hospitalizations, and reduced unnecessary testing when considering applications.


The $840 million initiative will be paid out over the next four years. The initiative will reach its goals by influencing 150,000 clinicians through a combination of incentives, tools, and information. All of the strategies that HHS endeavors to support are designed to encourage doctors to team up and move health care from a volume-driven system to one that is based on value and quality of care.


The Transforming Clinical Practice Initiative is one of the many strategies advanced by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) devoted to changing the structure of health care delivery in the United States. HHS indicates that through other successful programs and initiatives like the Quality Improvement Organization (QIO) Program, Partnership for Patients with Hospital Engagement Networks (HENs), and Accountable Care Organizations (ACOs), the ACA has already positively impacted patient health outcomes. For example, HHS says the ACA “has helped reduce hospital readmissions in Medicare by nearly 10 percent between 2007 and 2013—translating into 150,000 fewer readmissions—and quality improvements have resulted in saving 15,000 lives and $4 billion in health spending during 2011 and 2012.”

United States: Sick, Last, and Late in the Equitable Health Care Race

The United States ranks last in measures of financial access to care when compared to other high-income industrialized countries, according to a 2013 Commonwealth Fund survey published in the New England Journal of Medicine. In part due to what is an unusual lack of universal health coverage in the United States, when compared to other high-income nations, the survey identified striking financial barriers to care that affect all Americans and were shown to have a grossly disproportionate effect on low-income Americans.


The Commonwealth Fund survey examined the significance of financial barriers to care in the United States and ten other high-income countries including: Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom. The survey evaluated the effect that health care costs have on things like willingness to fill prescriptions or visit the doctor. The findings of the survey were presented as comparisons between each of the countries individually and as a comparison between the United States and the averages of the other ten high-income nations.

Cost Barriers

According to the study, low-income Americans were more likely than their counterparts in other high-income countries to report that they had a medical problem but did not see the doctor, skipped doses of medication, did not fill a prescription, did not receive recommended treatments, or did not follow up care due to the costs of those services. The survey revealed that at least 30 percent of lower-income adults in the United States reported encountering such barriers to care, which is significantly higher than the 10 percent of lower-income adults in the ten other countries which reported such barriers.

Delays and Satisfaction

The survey findings suggest the American impression that other high-income countries achieve savings at the cost of rationing care is an unsupported belief. In fact, at least for low-income adults, researchers found that “obtaining timely primary care is a bigger problem in the United States than in other industrialized countries.” Lower income Americans were more likely than low-income individuals in other industrialized countries to report having to wait six or more days to receive medical attention. Additionally, low-income Americans reported more difficulty in attempting to receive care on evening weekends and holidays. It was also more common for low-income Americans than for low-income individuals in other countries to report experiencing at least two hour wait times in emergency rooms. Low-income Americans were also more likely to designate the quality of physician performance as poor or fair when compared to low-income individuals in the other nations.

Income Disparity

The findings become more transparent when above average income individuals are considered. In sharp distinction to the findings relative to low-income Americans, higher-income Americans were not more likely than higher-income individuals in the ten other countries to find difficulty getting appointments. In fact, two or more hour wait times in emergency rooms were reported to be less common for higher-income Americans than for higher-income individuals in the other industrialized nations. However, costs remained a factor for even higher-income Americans. The study found that higher-income Americans were still more likely than higher-income individuals in other countries to report that costs kept them from visiting a doctor to address a medical problem.


The NEJM article summarizing the survey’s findings explains that Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) may impact financial access to care for Americans going forward. At the time of the survey, the only access-related mandate that was in effect was the requirement that insurers allow children to stay on their parents’ health insurance until they turn 26. The researchers believe that the other mandates now in effect as part of the health reform law will increase access to care as more Americans obtain insurance. However, the researchers recognize that the decision of 23 states not to expand Medicaid will significantly lower the ability of the ACA to improve equitable access.


The survey identifies that additional steps need to be taken to make care affordable for all. Funding for community health centers, payment reforms, and care coordination are some of the ways that the researchers believe equitable access can become more of a reality. The survey’s authors suggest that the findings exemplify the need to find novel ways to address the significant economic based health care access disparities in the United States. Additionally, the survey authors indicate that the access disparities represent a disappointing distinction between the U.S. and its industrialized counterparts.

Altruism or ACA-Motivated? LA Restaurants Charge Customers for Health Care

By Lisa A. Weder

When a San Franciscan health care mandate was handed down to local businesses in 2008, Californian restaurant owners took notice. The Bay City’s “pay or play” mandate, which required operating area businesses to provide health insurance coverage for employees or contribute to the city’s “public option” health access program (Healthy San Francisco), has been referenced as an influence on Los Angeles-area (LA-area) restaurant owners to tack on dining surcharges to help pay for employees’ health insurance.  It could be argued, however, that the inspiration comes from the impending tax law changes of 2015 and 2016.

Pre-ACA. Interestingly, the San Francisco mandate preceded the 2010 passage of the large employer mandate of the Patient Protection and Affordable Care Act (ACA) (P.L.111-148). Within two years of the California mandate’s implementation, 67 percent of employers were reported as having offered health care coverage, including businesses that were outside of the San Francisco area. In fact, the Wall Street Journal had reported in 2008 that San Francisco restaurants had begun adding a surcharge to their customers’ dining bills to help cover health expenses for employees. Law suits arose against the city, with questions surrounding rules about state or federal control over employee benefits.

Tick tock. Although the ACA’s “pay or play” mandate was to be enforced in 2014, the Treasury and the IRS issued final regulations in February 2014 to delay its implementation until January 1, 2015, in order to give businesses time to adapt and prepare for its requirements. The ACA mandate will impose penalties during 2015 and 2016 based on employers’ size. Generally, the employer mandate requires that in 2015, any busi­ness with 100 full-time employees or full-time equivalent (FTEs) employees must offer affordable, minimum health coverage or pay a penalty. For 2016, the required amount of employees drops to 50.

Surcharge. Nonetheless, the Los Angeles Times reports that LA-area restaurants have been imposing a three-percent “Healthy LA” bill charge onto customers’ bills. Restaurant owners imply that this surcharge provides much needed health care to their employees, including Josh Loeb, a high-end restaurant owner, who stated that “It’s not because we support Obama or don’t support Obama, or are Democrats or are not Democrats.” He insists that the focus is solely on improving his employees’ lives. Another LA-area restaurant owner noted health care inequities between servers and cooks because servers typically earn higher incomes due to tips.

Jot Condie, chief executive of the California Restaurant Association, conveyed doubts that a health care surcharge would be widely adopted across California, but added that more restaurants might agree to an all-inclusive service fee to fund employee health care costs; the fee would replace tipping.

It is hard to tell whether restaurant owners are grasping at ways to meet the ACA’s mandate provisions or are motivated by altruistic concerns. No matter what the motivation for the surcharges may be, LA-area restaurant employees who struggled to afford care are breathing a sigh of relief.


Numbers Crunched: CHIP Helps Close Health Insurance Gap

Since creation of the Children’s Health Insurance Program (CHIP) in 1997, the number of uninsured children has fallen nationally from 10.7 million (15 percent of all children) to 6.6 million (9 percent of all children), according to a 50-state examination conducted by The Pew Charitable Trusts and the John D. and Catherine T. MacArthur Foundation. The report analyzes spending and enrollment data for CHIP programs in all 50 states plus the District of Columbia, and found wide variation in implementation among the states. It also considered the impact of the Patient Protection and Affordable Care Act (ACA) (P.L 111-148) on CHIP funding.


CHIP is jointly funded by federal and state funds. In total, CHIP covers 8.1 million children in the United States. Federal contributions toward CHIP in each state are capped; states have two years to spend the federal funds allotted to them, otherwise the funds can be distributed to other states. States are given flexibility in structuring their programs and spending designated dollars, which allows for wide variation in how states have chosen to extend health insurance coverage to uninsured children. States must offer benefits above a federally-defined minimum, but may impose cost sharing or cap their CHIP enrollment.

States have three options for administering CHIP services: as an expansion to the state’s Medicaid program; separately from the state’s Medicaid program; or a combination of Medicaid expansion and separate CHIP program that cover different populations with separate eligibility criteria. All states have the option to cover specific populations of low-income individuals other than children; 200,000 such individuals are enrolled in CHIP overall.

Report Findings

The report found that CHIP is a relatively small program for states with regard to spending. State-funded CHIP spending amounted to 0.3 percent of revenue from states’ own sources in 2012; in comparison, Medicaid averaged 16 percent. From 2005 to 2012, CHIP spending experienced an inflation-adjusted compound annual growth rate of 5.5 percent, double that of overall national health expenditures; during that time period, enrollment in CHIP grew 32 percent. Overall numbers can be misleading, however. State spending in Arizona decreased by 27.2 percent, in part due to the state’s decision to freeze CHIP enrollment; conversely, New Mexico’s spending increased by 27.2 percent. There is also a wide variety in spending per child, ranging from under $1,000 in five states to over $2,000 in six states and the District of Columbia.

The ACA included CHIP-related provisions that will impact the program. The law funds CHIP through 2015; it will increase the federal match rate by up to 23 percent in October 2015—the federal share of CHIP funding due to this increase will average 93 percent. As a result, the report predicts that state spending on CHIP will be dramatically reduced or possibly eliminated in some states. The ACA also streamlines eligibility determinations for CHIP, and allows states to expand their CHIP programs to include children of low-income state employees. The report believes that because of these changes, the ACA will have a significant effect on CHIP.