It's election time in America. Germany is following the candidates' debates with fascination. Reform of the American healthcare system plays a major role. However, the candidates' various platforms are largely unknown here. And in Germany, too, the political parties are already campaigning, and healthcare reform will be a key issue. At the invitation of Monitor Versorgungsforschung (MVF), Dr. Mark B. McClellan, Director of the Engelberg Center for Healthcare Reform at the Brookings Institution in Washington (see MVF 2/2008) and one of the most influential American healthcare experts, and Professor Dr. Reinhard Busse, Head of the Department of Healthcare Management at the Technical University of Berlin, conducted an expert discussion on the ongoing development of the American and German healthcare systems and the contribution of healthcare research to this development. The discussion was moderated by Prof. Dr. Reinhold Roski, editor of Monitor Versorgungsforschung (MVF).

>> Mr. Busse, the coalition government under Chancellor Merkel is continuing to work on healthcare reform. Financing is generally the primary focus. Do you believe the reforms will have the desired cost-reduction effects?
Busse: As you know, most of the points currently being discussed in the media are already included in the Act to Strengthen Competition in Statutory Health Insurance (GKV-WSG), which has been in effect since April 2007. However, important details of the reform and its implementation have been left open; agreement on these still needs to be reached.
The remaining issues primarily relate to the financing of the system, particularly how the health fund, which organizes the financing of statutory health insurance funds starting in 2009, will be filled, how the money will be distributed among the health insurance funds (via the new morbidity-oriented risk structure adjustment), and what the health insurance funds can—or must—do if the allocated funds are insufficient. A third, related issue, not directly regulated by law, is whether doctors providing outpatient care should receive higher fees. At the end of August, we witnessed the contentious fee negotiations between doctors and health insurance funds. I don't see any cost reductions.

Mr. McClellan, one statistic about the American healthcare system is particularly well-known in Germany: More than 45 million Americans have no health insurance. This issue is playing a particularly significant role in the current election campaign. What chances do you see that insurance coverage will be significantly expanded under a new administration?
McClellan: Closing gaps in health insurance coverage plays a major role in the platforms of both presidential candidates, as they, among other things, limit the overall effectiveness of healthcare in America. The proposed approaches include various combinations of public and private strategies—from tax credits and increased cost transparency to the creation of new purchasing associations and direct subsidies.
However, it is becoming increasingly clear that insurance coverage can only be successfully expanded if this expansion is combined with reforms to reduce overall costs and improve the quality of health care.
The United States already spends approximately $2.2 trillion on healthcare, more than $7,000 per person and 16% of gross domestic product. Given the current budget deficit, long-term financial projections for the Medicare and Medicaid programs, and a potential economic recession, it is unlikely that new sources of funding will be found to finance a significant expansion of insurance coverage through higher taxes. Consequently, a plan to expand insurance coverage must be combined with healthcare reform. The cost of care is therefore high on the agenda of both presidential candidates.
Mr. McClellan, expanding insurance coverage will be costly. And the American healthcare system is already the most expensive in the world. What options are there for expanding health insurance while limiting cost increases and improving the quality of care?
McClellan: The main focus of the current debate in the US is the traditional "pay per service" reimbursement system that dominates the healthcare system. This system is seen as a contributing factor to unnecessary overuse of expensive services and uncoordinated, inefficient treatments. New models are currently being developed to restructure the payment system for providers into one based on outcomes or treatment episodes. Ideally, these new forms of reimbursement will enable physicians and other healthcare providers to improve quality while simultaneously reducing costs, without incurring a net loss of revenue or negatively impacting access to care.
Partial steps in this direction, currently being implemented in pilot projects, allow providers to share in the savings. In the Medicare Physician Group Practice Demonstration, medical groups have the opportunity to retain up to 80% of the savings (above a minimum savings) if they undercut cost trends and improve outcomes and treatment processes. In the first two years, four of the ten participating medical groups undercut cost trends by more than 2% while significantly improving quality. We are now trying to expand this model to a larger number of providers.
Private payers and the federal states would also need to take similar approaches. We should combine federal reforms with existing state-level efforts that rely on both public funding and increased competition. Starting with Massachusetts, several states have begun to form purchasing groups and insurance pools in which competing private health insurers are overseen by the state. Such initiatives could offer affordable insurance options for those without employer-based access to insurance, or for small employers for whom costs are too high. However, I emphasize that these efforts must be coupled with complementary reforms, such as changes in provider reimbursement systems, to improve the actual delivery of care.
Mr. McClellan, can you briefly explain the basic positions of the two presidential candidates on health care reform? Where do they differ, and where are their views similar?
McClellan: Both presidential candidates agree that the American healthcare system needs fundamental reform. However, the visions of John McCain and Barack Obama would take our healthcare system in different directions.
Senator McCain's plans move away from the current employer-based health insurance system and emphasize individual consumer choice in an individual market. Senator Obama wants to expand insurance coverage options through public subsidies and support public health plans. More specifically, Barack Obama's goal is to introduce universal health insurance for all Americans, but without a universal insurance mandate. He proposes that all children must have health insurance and that employers must contribute to the cost of their employees' health insurance. For individuals and families without insurance, the federal government would offer financial assistance to purchase private or newly planned public health insurance plans.
To cover the resulting new costs, Senator Obama aims to increase the efficiency of care and reduce overall costs. This includes increased public reporting of provider outcomes, better treatment coordination, measures to address inequalities, broader use of information technology, and increased prevention and treatment of chronic diseases.
Senator McCain's plans initially focus on general cost containment to make insurance coverage more affordable. His plan eliminates the current unlimited tax deductibility for employer-based insurance premiums and replaces it with a new cap along with deductible tax credits. The current unlimited tax deductibility amounts to nearly $250 billion annually and is criticized by many as a regressive tax policy (mostly benefiting wealthy families with better insurance coverage in higher tax brackets). At the same time, such a tax policy supports less efficient insurance coverage and undermines consumers' interest in keeping insurance costs as low as possible. Since this approach increasingly drives consumers to the individual insurance market, McCain proposes reform steps to create affordable insurance coverage, particularly for patients with chronic diseases. His plans also include proposals to allow people to take their insurance with them when changing jobs and across state lines, and would establish a Guaranteed Access Plan (GAP) to health insurance for those who have not been able to obtain insurance in the past.
To reduce overall costs, McCain relies heavily on some of the same solutions as his opponent, namely public quality reporting, the use of information technology, and better management of chronic diseases. He promises to lower healthcare costs primarily by reducing inefficiencies, increasing competition in the health insurance market, emphasizing healthcare options tailored to the individual consumer, and through medical malpractice reform. In my opinion, this underscores the fact that the need for healthcare reform is now viewed as urgent by both political parties.

Mr. Busse, a key goal of the German healthcare reform was to reduce healthcare costs for both employers and employees. However, other system changes (e.g., disease management, cross-sector integrated care systems) have been introduced or are planned that are intended to improve the quality of care while simultaneously reducing costs. Which of these reform components appear to be more effective and why?
Of course, health policymakers try to reconcile the objectives of cost containment (especially from the late 1970s until around 2000) and quality/effectiveness/efficiency improvement, which have been high on the agenda since the late 1990s.
In my opinion, the reforms to improve quality will not lead to cost reductions. A few examples: 1. Successful benefit assessments of drugs and treatment methods, which we expect from the Federal Joint Committee (G-BA) in collaboration with the Institute for Quality and Efficiency in Health Care (IQWiG), will result in some treatments and drugs no longer being reimbursed. However, this will also lead to other, more effective treatment methods being used more extensively. 2. Effective disease management programs (DMPs) lead to better treatment for patients who would otherwise be treated less effectively. As a result, drug costs and physician fees will rise, although lower hospital costs may offset this.
However, we can hardly estimate whether DMPs are successful in Germany, as their evaluation is only conducted post-intervention, without a control group. While the initial results are promising, the extent of the selection effect is difficult to estimate. There are initial publications with methodologically weak but promising results in favor of DMPs. Corresponding published data on integrated care do not yet exist. In general, this seems to me to be a key difference between Germany and the United States: We simply have too few studies on health services research.

Mr. McClellan, you're calling for improved transparency in the healthcare system to better reform reimbursement systems, promote quality improvement among providers, and help insureds and patients make health decisions. What is being done in the United States to improve transparency, and how effective are these efforts?
McClellan: Transparency in service delivery is crucial for shifting the emphasis from costs to benefits in the healthcare system. Transparency is the foundation for transforming our reimbursement system from one that rewards "quantity" and "intensity" of treatment to one that rewards quality and benefits. Therefore, we must measure both the outputs and quality, as well as the costs at which they are achieved.
We've made significant progress toward greater transparency in recent years, as health insurance companies, hospitals, providers, and other organizations have increasingly been subject to performance measurement. For more than 10 years, health insurance companies have been measured based on a number of criteria—clinical effectiveness, access, and member and patient experience/satisfaction. Employers and consumers use this information to select health insurance companies. Furthermore, the available data shows that health insurance performance in all these areas has increased significantly since the introduction of transparency measurements.
Hospital performance is also measured today by the U.S. federal government, individual states, and the organizations that accredit hospitals. Currently, performance results for more than 30 key performance indicators per hospital are published annually (e.g., at www.hospitalcompare.gov); many more key performance indicators and benchmarks are shared with hospitals through confidential benchmarking initiatives. Here, too, we have seen significant performance improvements, which have been disclosed through transparency.
We are also beginning to use new methods to measure the quality of long-term care services (e.g., nursing homes, retirement homes). At the same time, we are making significant progress in measuring the performance of general practitioners through new methods of data collection and aggregation—both in the private and public sectors.
However, to get policyholders and patients to base their decisions on these performance indicators, we must ensure that the information is reliable and understandable, and that it captures the aspects that matter most to consumers. We have already defined a large number of reliable measures of processes and outcomes. But we need to continue working on the things that matter most to consumers: person-centered measurements that reflect outcomes, satisfaction, and costs, not just specific treatment processes.
Mr. McClellan, you work at the Engelberg Center to coordinate numerous regional initiatives that promote greater transparency among healthcare providers in their respective regions. Why is this important?
The inclusion of public-private partnerships greatly increases the credibility and acceptance of performance measurement and reporting. Regional initiatives comprised of patients, employers, physicians, and health insurance funds are working across the country to achieve greater provider transparency in their respective regions. This is, of course, much better than leaving decisions about the scope and type of performance measurement to a single stakeholder. The Engelberg Center, in collaboration with other partners, is currently working to develop processes and methods to better coordinate these regional initiatives by introducing mandatory and efficient measurement methods and highlighting best practices in quality reporting and reimbursement reforms at the federal level.

Mr. Busse, improving service transparency is also a goal of healthcare reform in Germany. What role does transparency play in our country, and how critical is it for the reform of the German healthcare system?
Busse: This aspect was not properly recognized publicly in the last healthcare reform. Quality improvement is high on the political agenda in order to achieve both increased competition between service providers and strengthen patient sovereignty. The approach of the Federal Office for Quality Assurance (BQS) to monitor statutory quality assurance in hospitals is intended to strengthen competition, as hospitals can compare their results with those of other hospitals. This transparency, even if the names of other hospitals are not mentioned in the comparison, has in some cases drastically improved average results.
The legislature also considered patients and introduced quality reporting by hospitals. However, the first versions of these quality reports contained far too little information. Major daily newspapers such as the "Tagesspiegel" in Berlin and the news magazine "Focus" have taken advantage of this and produced their own major reports, which have met with great success. The public is certainly interested, even if it is uncertain how much patients will use this information when they actually need to visit a hospital. The Federal Joint Committee has now defined almost 30 BQS indicators that must be included in hospitals' annual quality reports. This trend will certainly continue.

Mr. Busse, you are an expert on healthcare reform in an international context. What similarities and differences do you see between healthcare reform ideas in America and Germany? What is the situation in other European countries?
Busse: The problem of the lack of health insurance coverage for a large segment of the population and the debate on expanding health insurance is a uniquely American phenomenon. This problem hardly concerns other European countries, including Germany. The other problems of the healthcare reform agenda—improving care, especially for the chronically ill, measuring and rewarding quality, using information technology, etc.—are very similar. However, the starting points are different. In Germany, we had a relatively uniform system with collective agreements. Only gradually are health insurers and service providers being given the freedom to experiment with different contract forms—albeit embedded in careful regulations, such as the morbidity-based risk adjustment.
In the United States, selective contracts and integrated care models are the norm. The debate there is about how to maintain freedom and flexibility while simultaneously creating innovative regulations that create greater equality between different population groups.

Mr. Busse, Mr. McClellan, you both advocate for more evidence-based decisions in health policy. Can you give examples of where health services research has made decisive contributions to health care reform, in Germany and the United States?
Busse: First, we must recognize that health services research, benefit assessment of treatments, etc., are only one input into the health policy process. As health services researchers, we are sometimes disappointed by this. However, if we compare the decision-making process in the Federal Joint Committee today with how such decisions were made 10 years ago, there has been significant progress.
New drugs are subject to increasingly stringent testing, as the example of insulin analogues demonstrates. We have made considerable progress toward evidence-based health policy decisions; however, there is still a long way to go. The testing of medical devices, for example, is not yet as rigorous as that of pharmaceuticals. In hospitals, all services are reimbursed unless explicitly excluded ("prohibition reservation"), whereas treatments in the outpatient sector must be positively evaluated before they can be reimbursed ("approval reservation"). This is a significant imbalance.
McClellan: Health services research, data collection, and evaluation have made significant contributions to decision-making in American health policy for many years. For example, the federal agency that pays for health services for seniors and the financially disadvantaged (Centers for Medicare & Medicaid Services) has a division that researches critical health services research issues before decisions are made regarding changes to payment and reimbursement policies. Similarly, the Agency for Healthcare Research and Quality (AHRQ) has funded many health services research projects, such as the development of performance measurement methods or techniques to improve patient safety, that are now used nationwide.
Other important research projects have dealt with quality deficits and regional disparities in health care. These research findings underpin the desire of many health policymakers to eliminate deficiencies in health care in light of the current state of medical knowledge. This is happening at the national, state, and market levels. Researchers in the USA and other countries have found many significant variations in health care provision that deviate from the current state of medical knowledge, both in larger and smaller geographical regions. For example, a woman may be twice as likely to receive a hysterectomy in one county than in the neighboring one. Such disparities should certainly be eliminated. These disparities have been demonstrated for almost three decades, and yet they are still getting wider. Therefore, we need better measures of quality and cost. And we need new ways of organizing care.
Politics will always play a significant role in health care decisions. However, the willingness of legislators and other decision-makers to base their health care reform decisions on data and solid evidence has increased significantly over the past 20 years. Many politicians of both parties in the United States recognize the need for health care reform and are advocating for better data to better assess the impact of their decisions.
Mr. McClellan, Mr. Busse, thank you for the interview. <