In the constant attention paid to what drives health care costs, only recently has scrutiny been applied to the power that some health care providers, particularly dominant hospital systems, wield to negotiate higher payment rates from insurers. Interviews in twelve US communities indicated that so-called must-have hospital systems and large physician groups--providers that health plans must include in their networks so that they are attractive to employers and consumers--can exert considerable market power to obtain steep payment rates from insurers. Other factors, such as offering an important, unique service or access in a particular geographic area, can contribute to provider leverage as well. Even in markets with dominant health plans, insurers generally have not been aggressive in constraining rate increases, perhaps because the insurers can simply pass along the costs to employers and their workers. Although government intervention--through rate setting or antitrust enforcement--has its place, our findings suggest a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.
This study updates previous estimates of US spending on mental health and substance use disorders through 2014. The results reveal that the long-term trend of greater insurance financing of mental health care continued in recent years. The share of total mental health treatment expenditures financed by private insurance, Medicare, and Medicaid increased from 44 percent in 1986 to 68 percent in 2014. In contrast, the share of spending for substance use disorder treatment financed by private insurance, Medicare, and Medicaid was 45 percent in 1986 and 46 percent in 2014. From 2004 to 2013, a growing percentage of adults received mental health treatment (12.6 percent and 14.6 percent, respectively), albeit only because of the increased use of psychiatric medications. In the same period, only 1.2-1.3 percent of adults received substance use disorder treatment in inpatient, outpatient, or residential settings, although the use of medications to treat substance use disorders increased rapidly.
Spending on mental and substance use disorders will likely grow more slowly than all health spending through 2020. We project that spending on mental and substance use disorders, as a share of all health spending, will fall from 7.4 percent in 2009 ($172 billion out of $2.3 trillion) to 6.5 percent in 2020 ($281 billion out of $4.3 trillion). This trend is the projected result of reduced spending on mental health drugs because of patent expirations, the low likelihood of innovative drugs entering the market, and a slowdown in spending growth for hospital treatment. By 2020 the expansion of coverage to previously uninsured Americans under the Affordable Care Act (ACA), combined with the projected slowdown in Medicare provider payment rates under the ACA and the Budget Control Act of 2011, are expected to add 2.7 percent to behavioral health spending, compared to spending without these changes.
Through an initiative called Transforming Care at the Bedside (TCAB), the Robert Wood Johnson Foundation and the Institute for Healthcare Improvement have created an innovative bottom-up framework for redesigning the work environment on medical-surgical units. The specific purpose of this study, conducted by the University of California Los Angeles/RAND evaluation team, was to examine the number of innovations tested and the association of the volume of tests made and changes in a summary measurement of self-reported vitality at the 13 participating hospitals. The findings of this evaluation yielded several important implications for nurse leaders.
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