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The objective of this study was to describe how structural racism and sexism shape the employment trajectories of Black women in the US health care system. Using data from the American Community Survey, we found that Black women are more overrepresented than any other demographic group in health care and are heavily concentrated in some of its lowest-wage and most hazardous jobs. More than one in five Black women in the labor force (23 percent) are employed in the health care sector, and among this group, Black women have the highest probability of working in the long-term-care sector (37 percent) and in licensed practical nurse or aide occupations (42 percent). Our findings link Black women's position in the labor force to the historical legacies of sexism and racism, dating back to the division of care work in slavery and domestic service. Our policy recommendations include raising wages across the low-wage end of the sector, providing accessible career ladders to allow workers in low-wage health care to advance, and addressing racism in the pipeline of health care professions.

The administrative costs of providing health insurance in the US are very high, but their determinants are poorly understood. We advance the nascent literature in this field by developing new measures of billing complexity for physician care across insurers and over time, and by estimating them using a large sample of detailed insurance "remittance data" for the period 2013-15. We found dramatic variation across different types of insurance. Fee-for-service Medicaid is the most challenging type of insurer to bill, with a claim denial rate that is 17.8 percentage points higher than that for fee-for-service Medicare. The denial rate for Medicaid managed care was 6 percentage points higher than that for fee-for-service Medicare, while the rate for private insurance appeared similar to that of Medicare Advantage. Based on conservative assumptions, we estimated that the health care sector deals with $11 billion in challenged revenue annually, but this number could be as high as $54 billion. These costs have significant implications for analyses of health insurance reforms.

The source of the recent slowdown in health spending growth remains unclear. We used new and unique data on privately insured people to estimate the effect of the economic slowdown that began in December 2007 on the rate of growth in health spending. By exploiting regional variations in the severity of the slowdown, we determined that the economic slowdown explained approximately 70 percent of the slowdown in health spending growth for the people in our sample. This suggests that the recent decline is not primarily the result of structural changes in the health sector or of components of the Affordable Care Act, and that-absent other changes in the health care system-an economic recovery will result in increased health spending., (Project HOPE—The People-to-People Health Foundation, Inc.)

Although fundamental reform of U.S. health care is clearly necessary, the obstacles remain daunting. These include the sheer size of the health sector, the multiplicity of powerful groups with conflicting interests, and the factionalized U.S. political system. Because the nation can ill afford to come away empty-handed from another reform effort, it is vital that the new administration focus on achievable steps that will support and encourage a process of reform. Doing so would lay the groundwork for a series of changes that may take a generation, instead of risking everything on the highly unlikely passage of one "big bill."

Innovation in health care requires new ideas and the capital to develop and commercialize those ideas into products or services. The necessary capital is often "venture capital," but the link between public policy and the venture capital industry has not been well examined. In this paper we explore the link between venture capital and innovation in health care, and we present new descriptive data from a survey of health care venture capital fund managers. Respondents generally viewed policy levers (for example, reimbursement and regulations) as important risks to venture capital investments, potentially affecting their ability to raise capital for early-stage investment funds.

As Jin Ma and colleagues observe, an unfettered market approach in China has reduced access to care, increased patients' financial burden, and reduced emphasis on prevention and may have caused declines in quality and outcomes. A major driving force was that perverse incentives altered physicians' behavior toward self-interest at the expense of patients, even where professional ethics dictated otherwise. Other nations, including India, are grappling with the profit motive and its consequences. Chinese leaders are attempting to deal with these problems by expanding public investment and reducing perverse incentives. However, profit motives remain a powerful, potentially offsetting feature of a reformed system.

Health insurance systems in Central and Eastern Europe have evolved in different ways from the centralized health systems inherited from the Soviet era, but there remain common trends and challenges in the region. Health spending is low in comparison to the spending of pre-2004 European Union members, but population aging, medical technology, economic growth, and heightened expectations will generate major spending pressures. Social health insurance is the dominant model in the region, but coverage is uneven. Key3reform issues include identifying ways to encourage additional investment in the health sector; and defining formal benefit packages, copayments, and the role of private insurance.

This paper compares pharmaceutical spending, availability, use, and prices in twelve countries in 2005. Drug spending per capita was higher in the United States than in other countries. The United States had relatively high use of new drugs and high-strength formulations; other countries used more of older drugs and weaker formulations. Thus, whether U.S. overall volume of use is lower or higher depends on the measure of volume and type of product. Comprehensive price indexes show foreign prices to be 20-40 percent lower than U.S. manufacturer prices, but only 10-30 percent lower than U.S. public prices. Generics are cheaper in the United States than in other countries.

President Bush, the World Health Organization, and leading scholars have called for greater price transparency in health care. Prices are transparent when the buyer knows his or her price or knows prices paid by others, in advance. Transparent prices inform consumers of expected costs and reveal when sellers are charging high prices to poor people. Under some conditions, however, price transparency can increase prices paid by the poor, deter business entry in poor markets, reduce competition, lower investment, and mislead if inaccurately measured by a third party. We recommend alternative approaches to lowering prices for the poor and increasing efficiency.

Policymakers have tried to address the problem of the uninsured and to help small businesses with rising premiums by encouraging associations to offer coverage. Although supporters and opponents have made claims about the potential impact of this strategy, the association market has not been studied in depth. Examining current standards might explain why proponents seek changes. This paper discusses states' approaches to regulating health insurance offered by associations, including "self-insurance," as well as existing state exemptions from state insurance laws that otherwise would apply to coverage sold to small businesses, self-employed people, and individual purchasers. We also examine market problems such as insolvency and fraud.

Comparative information about different approaches to treating a disease or condition plays a critical role in the success of any competitive, market-based health care system in achieving quality and value. To ensure that effectiveness studies will be used to stimulate development of important advances in care and not lead to limits in coverage and treatment options, a comparative effectiveness center needs to demonstrate independence from payers; operate with transparent processes; and coordinate, not duplicate, the requirements of the relevant federal agencies. A fully independent, quasi-governmental center is most likely to produce credible, broadly acceptable findings.

This paper summarizes the results from a study of consumer decision making in California's individual health insurance market. We conclude that price subsidies will have only modest effects on participation and that efforts to reduce nonprice barriers might be just as effective. We also find that there is substantial pooling in the individual market and that it increases over time because people who become sick can continue coverage without new underwriting. Finally, we show that people prefer more-generous benefits and that it is difficult to induce people in poor health to enroll in high-deductible health plans.

High profits and high drug costs have brought increased scrutiny of the pharmaceutical industry over the issue of whether the drugs they produce are worth the costs. I examine several related complaints, including the proliferation of me-too drugs and product reformulations, which some argue have little value relative to their cost; the baseless promotion of newer drug classes as more effective than existing, less expensive drugs; legal strategies to extend market exclusivity that result in high brand-name drug prices for an extended period of time; and large promotional expenditures that result in higher prices.

Medicare beneficiaries are now facing advertising from an unprecedented number of health plans that are offering prescription drug coverage. Previous Medicare managed care efforts have been undermined by risk selection, the practice of enrolling healthier and therefore less costly patients. In this study we explore how the content of health plan advertising is related to the competitiveness of the health plan market. We find that increased competition is associated with greater use of advertising that targets healthier patients.

This study builds on earlier work by assessing the long-term impact of a public hospital performance report on both consumers and hospitals. In doing so, we shed light on the relative importance of alternative assumptions about what stimulates quality improvements. The findings indicate that making performance data public results in improvements in the clinical area reported upon. An earlier investigation indicated that hospitals included in the public report believed that the report would affect their public image. Indeed, consumer surveys suggest that inclusion did affect hospitals' reputations.

Although the rapid increase in Medicaid managed care during the early 1990s attracted commercial plans to the program, by the late 1990s commercial plan participation in Medicaid had begun to decline. This study examines the role of Medicaid policies, plan characteristics, and local health care market conditions in a commercial plan's decision to exit. We find that many of the factors that influence commercial plans' decisions to exit Medicaid are within the control of state policymakers and program administrators, including capitation rates, service carve-outs, mandatory enrollment policies, and the number of Medicaid enrollees and areas served by the plan.

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 established regional preferred provider organizations (PPOs) as a new private-plan option for beneficiaries in the Medicare Advantage (MA) program, starting in 2006. Developing network-based Medicare products uniformly priced across statewide or multistate regions presents unprecedented challenges and opportunities for health insurers. We held discussions with local health plan and hospital informants in six of the twelve Community Tracking Study (CTS) communities to obtain their perspectives on key considerations in evaluating whether they can and will offer regional PPO products under the MA program.

As in the market in North America, major barriers to private investment in the development and production of vaccines exist for markets in developing countries. These include the risks of uncertain funding and demand and the difficulties created by historically low pricing. A number of promising and innovative approaches nonetheless are being explored to increase the incentives and reduce the risks of investing in vaccines for developing countries. These innovations are fueled by the growing recognition of powerful stakeholders that vaccines are a critical technology for ensuring global health.

A number of large employers and public purchasers founded the Leapfrog Group in 2000 in an attempt to consolidate the purchaser voice and engage consumers and clinicians in improving health care quality. Drawing on evidence-based medicine, Leapfrog publicly releases information about the extent to which hospitals are adopting three safety "leaps" with the theoretical capacity to prevent thousands of deaths. Although the group has grown rapidly and achieved national recognition, employer-based initiatives historically have struggled to create changes in health care. This paper examines the impact of the Leapfrog Group and its efforts to address the challenges of employer initiatives.

James Robinson uses the Herfindahl-Hirschman Index (HHI) to compute the concentration of commercial health insurance markets in most of the states during the past four years. The HHI is the analytical foundation for the federal antitrust merger guidelines, so we consider his findings from an antitrust perspective. Market concentration provides an important benchmark for antitrust analysis, but it does not, standing alone, indicate the presence of problematic (anticompetitive) behavior or a problem that antitrust law can solve. Even if it did, there are major problems in treating individual states as discrete insurance markets. Unless the market is correctly defined, any analysis of market concentration is thoroughly unreliable.

James Robinson suggests that recent consolidation in the insurance market has been a cause of higher health insurance prices (premiums). Although the recent consolidation among health insurers and rising premiums are indisputable, it is unlikely that consolidation has had any adverse effect on premiums nationwide, and Robinson provides no data that suggest otherwise. Specifically, he does not present data showing an increase in concentration in any relevant market during the past few years, let alone any resulting increase in premiums. Health insurance consolidation in certain local markets could adversely affect premiums, but it seems clear that it is not a major national antitrust issue.

The New Jersey Individual Health Coverage Program (IHCP) was implemented in 1993; key provisions included pure community rating and guaranteed issue/renewal of coverage. Despite positive early evaluations, the IHCP appears to be heading for collapse. Using unique administrative and survey data, we examined trends in IHCP enrollment and premiums. We found the stability of the IHCP to be fragile in light of improving opportunities for job-related health insurance. We also found that it is retaining high-risk enrollees. Institutional realities and the difficulty of identifying a control group preclude attributing causality to the plan's pure community rating and open enrollment provisions.

The "market forces" to which economists ascribe the ability to motivate improvement in quality and efficiency are largely nonexistent in U.S. health care. One thus might ask, "Could market forces be made strong enough to deliver efficient health care systems?" There is some evidence to suggest that the answer is "Yes." This paper offers a short list of some changes that would be needed to create such a health care economy. Continued increases in costs and in the numbers of uninsured people will likely make a universal coverage model based on Medicare a politically popular choice, but such a model would not deliver efficient health care systems because it lacks sufficient incentives for consumers to choose less costly options.

Our paper draws lessons for policymakers from twelve communities as we identify the power and limits of general market-based strategies for improving the efficiency of health systems. The vision of market forces driving our system toward efficiency attracted politicians, policy analysts, and practitioners in the 1990s. Today some policy advocates profess even more faith in unfettered market forces. Market participants in the twelve communities in the Community Tracking Study, however, have become doubtful, and our analysis confirms the logic of their pessimism. Major barriers to efficient market outcomes exist amid growing willingness to consider renewed government interventions.

Rising research and development (R&D) expenditures by pharmaceutical companies are, in part, a consequence of changing industry structure, particularly the rise of the biotechnology sector. The creation of a market for biomedical science and increased vertical competition within the industry are likely to spur innovation and raise productivity, but they also could induce socially wasteful spending and weaken academic science. With innovation increasingly dependent on financially vulnerable firms and complex contractual arrangements, R&D investment might be becoming more sensitive to price controls or other cost containment measures.

An explosion of knowledge and a growing array of tools and technologies have transformed modern drug R&D, while its cost has risen by a sizable amount. At the same time, the unchecked increase in health care and prescription drug spending has spawned cost containment policies that are restricting the demand for drugs in all major markets. This Perspective explores the interplay between technological advances and regulatory policies and their likely impact on the dynamics of the pharmaceutical industry.

Leaders of health insurance companies, hospital systems, and physician organizations believe that when Medicare and Medicaid reduce payment rates to hospitals or physicians, these providers respond by raising prices to private insurers to offset a portion of the loss in revenue. This would mean that payment reductions in public programs contribute to increasing premiums for private insurance. But on both theoretical and empirical grounds, economists have been skeptical about the existence of this "cost shifting." I show that more realistic models of the behavior of hospitals and physicians than exist in basic economics texts provide a conceptual basis for cost shifting.

This study compares average price levels for pharmaceuticals in eight countries--Canada, Chile, France, Germany, Italy, Japan, Mexico, and the United Kingdom--relative to the United States. Our most comprehensive indexes, adjusted for U.S. manufacturer discounts, show Japan's prices to be higher than U.S. prices, and other countries' prices ranging from 6 percent to 33 percent lower than U.S. prices. The decline of the Canadian dollar and rise of the U.K. pound contribute to the finding of lower Canadian prices and higher U.K. prices in 1999 than in 1992. Our findings suggest that U.S.-foreign price differentials are roughly in line with income and smaller for drugs than for other medical services.

The papers by Paul Ginsburg and Jason Lee and colleagues make it clear how far we have come on the issue of cost shifting and how far we still have to go. We have created some new myths, persisted in some old confusion, and largely ignored an enduring reality. That enduring reality is that lack of competition in the health care sector permits cost shifting to occur. Instead of focusing on this causal condition, public discussion has been centered on the symptoms. A number of steps can be taken to deal with causes; this paper discusses several of these steps.

Several recent bills in Congress to add a Medicare prescription drug benefit would allow the use of formularies to control costs. However, there is little empirical evidence of the impact of formularies among elderly and disabled populations. We assess the effect of a closed formulary implemented by the Veterans Health Administration (VHA) in 1997 on drug prices, market share, and drug spending. We find that the VHA National Formulary was effective at shifting prescribing behavior toward the selected drugs, achieving sizable price reductions from manufacturers, and greatly decreasing drug spending.

What can be learned from international experience of efforts to control spending and to improve efficiency and access in pharmaceutical markets? Policymakers tend to reinvent many policies to control the behavior of patients, doctors, and industry, despite a lack of evidence of those policies' cost-effectiveness. There is an emerging consensus that reimbursement in public and private health care systems should be informed by evidence of the cost-effectiveness of treatments and that utilization should be constrained by budget caps and information systems. Whatever the policy chosen, evaluation is as essential as it is rare.

Two papers in this volume review efforts worldwide to control the growth of drug spending and discuss the potential role for the U.S. government with respect to rationing of prescription drugs. I put the roles given to government in the two papers in context by focusing on the role of government as a partner with the pharmaceutical industry. I concentrate on the unique features of the prescription drug market, coupled with the fact that government is a payer, regulator, and provider in the health sector. I conclude that the federal government should exercise caution when attempting to regulate prescription drug prices.

A vexing problem in health policy is getting the right number of physicians in the right specialties in the right locations at the right time. I examine market and public planning approaches to getting the number "right." After discussing the basic premises of the invisible hand of the market and the heavy hand of government regulation, I apply these concepts to a review of the past century of U.S. physician supply and workforce policy. I conclude by examining recent health system trends that make clear the need for a firm regulatory grasp on physician workforce policy.

In our voluntary insurance market, the greatest challenge is maintaining a balance between "healthy" and "sick" enrollees. Affordable coverage is possible only if many healthy persons purchase insurance, thereby cross-subsidizing high-risk persons. This is a particular challenge in the individual market, where healthy enrollees have no employer or tax subsidies to lower their premium costs. A successful individual market requires a delicate balance regarding the risk level of enrollees, the rates charged, and the regulations adopted. Small miscalculations in any of these areas can quickly result in spiraling premiums and plummeting coverage rates.

Policy analysts sometimes imagine that problems in the individual market can be fixed by waving a magic wand that makes the individual market function more like the group market. However, prior studies reveal that purchasing cooperatives fail to achieve substantial economies of scale; market reforms that reduce the impact of medical underwriting are difficult to implement in the individual market; and it may not be as easy as imagined to induce people to purchase over the Internet or from new or smaller companies that are at higher risk for exiting the market. The best solution is to limit the use of subsidies to certain purchasing options, such as with purchasing cooperatives that abide by rating, issuance, and renewability rules. What is not acceptable is to hand people subsidies and send them to the unstructured and relatively unregulated individual market, nor will it work to give people unhindered choice between two basically different market segments.

Consumers should be protected against fluctuations in premiums for private individual health insurance associated with the onset of high-cost chronic conditions. The most commonly discussed way to do so is through community rating, which provides protection but can require a heavy regulatory burden and can create incentives for adverse selection and cream skimming. This paper describes an alternative method of providing the same type of protection: insurance contract provisions that guarantee renewability for the next coverage period at class-average rates. Drawing on recent work in insurance theory, the paper shows that such protection is feasible in competitive insurance markets. Guaranteed renewability, which is required of all individual health insurance by the Health Insurance Portability and Accountability Act (HIPAA) of 1996, is incomplete because the law fails to require that premiums be the same for all insured persons in a rating class. However, the paper reports the results of a recent survey of state insurance regulation, which indicates that all but three state insurance departments report having such a requirement. The paper concludes with a discussion of possible threats to the protection guaranteed renewability provides against risk segmentation.

Are health maintenance organizations (HMOs) less profitable in more competitive markets, and does competition erode unusually high profits over time? To answer these questions, we examined profit rates (as a proportion of revenues) in 1994 and 1997 for all HMOs in 259 metropolitan areas. We found that profits were significantly lower on average in 1994 in markets with more competition, measured alternatively by the number of HMOs or their market concentration. We also found that there was no relationship between a market's relative profit ranking in 1994 and its ranking in 1997; highly profitable markets were not able to preserve their relative standing. Neither the proportion of HMO enrollees in for-profit HMOs nor HMO market penetration was significantly related to profit rates.

Throughout the 1990s health care providers were interested in developing organized delivery systems. However, industry observers have increasingly questioned the sense of these efforts. Using an established taxonomy of health networks and systems, we examined whether there was a nationwide trend away from the vertical and horizontal arrangements that serve as the backbone to organized delivery systems. Studying 1994-1998, we found that both health networks and systems became less centralized in their hospital services, physician arrangements, and insurance product development. We did not find a general pathway to disintegration but instead found considerable experimentation in organizational form.

Despite a flourishing economy and recent growth in employment-based health coverage, forty-three million Americans remain uninsured. Extending coverage to the uninsured is not an intractable public policy problem but could be addressed if the various health care stakeholders could only find common ground. We argue that to win broad-based support from across the ideological and political spectra, a meaningful proposal should achieve a balance between public- and private-sector approaches, focus attention on those who are most in need of assistance (low-income workers), and build on systems that work today. With the aim of pulling together a political coalition, we present a proposal specific enough to attract support but whose details will arise later, in the context of the legislative process.