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pinto

(106,886 posts)
Wed Aug 22, 2012, 08:00 PM Aug 2012

Implementing Insurance Exchanges — Lessons from Europe (New Eng Jour Med)

NEJM weighs in on the pros and cons of exchanges, citing Swiss and Dutch experiences. Interesting read. ~ pinto

http://www.nejm.org/doi/full/10.1056/NEJMp1205832?query=TOC

Implementing Insurance Exchanges — Lessons from Europe

Ewout van Ginneken, Ph.D., and Katherine Swartz, Ph.D.
N Engl J Med 2012; 367:691-693August 23, 2012

State-based health insurance exchanges are a key component of the health care reforms included in the Affordable Care Act (ACA). Starting in January 2014, each state's exchange will provide a marketplace where individuals and small employers can compare and purchase health plans. The idea is both to expand health insurance coverage and to foster competition among insurers, thereby promoting cost containment.

Exchanges are based on economist Alain Enthoven's concept of managed competition, which aims to establish regulated competitive markets in health insurance, health care purchasing, and health care provision. Exchanges are regulated yet competitive health insurance markets, and they usually function in an environment where individuals are required to purchase health insurance. In the exchanges, insurers offer structured choices, compete on the price and quality of their service, and must accept all applicants. The ACA creates a framework focused on these issues, and some states have begun implementing their own adaptations.

But experience in the Netherlands and Switzerland, where insurance exchanges are part of health care reforms that have been ongoing for some time, provides two cautionary lessons. The first is that competitive insurance markets will not contain costs without reforms of the health care purchasing market. In theory, health insurers should negotiate with health care providers on price, volume, and quality of care. Innovative payment methods should result in the purchasing of efficient care. In the United States, there has been little discussion about strengthening the purchasing market, although the ACA intends to promote provider competition by requiring yearly publishing of standard charges for items and services. Experience from the Netherlands and Switzerland shows that such efforts are not enough. Purchasing-market reforms in those countries are a work in progress, but the results so far in terms of cost containment and quality improvement have been negligible.

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Creating exchanges is just the beginning of reforms — involving all three markets (health insurance, health care purchasing, and health care provision) — that are needed to achieve greater efficiency and quality in health care. As the Swiss and Dutch experience demonstrates, these reforms take time and require midcourse corrections, and we should expect them to be a work in progress for many years to come, with uncertain outcomes.

http://www.nejm.org/doi/full/10.1056/NEJMp1205832?query=TOC

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