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Transforming Cancer Care and the Role of Payment Reform

September 17, 2014 Comments off

Transforming Cancer Care and the Role of Payment Reform
Source: Brookings Institution

According to the National Cancer Institute there are more than 13 million people living with cancer in the United States; it is the second leading cause of death in the U.S. It is expected that 41% of Americans will be diagnosed with cancer at some point during their lives. More than 1.6 million new cases of cancer will be diagnosed in 2014; a nearly 22% increase over the last decade.

Cancer care is also expensive. In 2010 it accounted for $125 billion in health care spending and is expected to cost at least $158 billion by 2020, due to population increase. In 2011 Medicare alone spent nearly $35 billion in fee-for-service (FFS) payments for cancer care, representing almost 9% of all Medicare FFS payments overall.

Broadly speaking, problems in complex clinical care fall into two categories: deficits in knowledge (for example, lack of any effective treatment for certain brain tumors) and deficits in execution (for example, failure to treat breast cancer with a standard-of-care protocol). Delivery reform seeks to find opportunity in the latter problem type. Considering cancer care through this lens, there are many opportunities to improve outcomes and potentially lower costs, including better coordination of care, eliminating duplication of services and reducing fragmentation of care. In addition, almost two-thirds of oncology revenue derives from drug sales, and pricing for drugs (calculated by the average sale price plus 6% profit for providers) may incentivize the use of the most expensive drugs rather than equally effective, lower-cost alternatives.

Promising approaches are being developed to deliver high quality care, improve the patient experience, and reduce costs for this condition and other chronic diseases. Care redesign strategies such as adopting team-based models, offering extended practice hours, providing triage to keep patients out of the emergency room, and implementing care pathways help providers address avoidable costs and maximize the value of care. Many of these strategies are not currently reimbursed in the FFS, volume-based payment system.

Consequently, much policy attention is focusing on payment reform. On the heels of the Affordable Care Act (ACA), and numerous quality and payment focused initiatives in the private sector, health care organizations need to enhance the competitiveness and efficiency of their system in the marketplace. Alternative payment models (APMs) such as Accountable Care Organizations (ACOs), bundled payments, and patient-centered oncology medical homes (PCOMH) are just a few of the initiatives supported by public and private payers to align care redesign and payment reform and encourage continuous improvement. This paper provides a comprehensive overview of the complex care associated with oncology and the alternate payment models which help support optimal care and encourage continuous improvement.

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Effects of Income Tax Changes on Economic Growth

September 11, 2014 Comments off

Effects of Income Tax Changes on Economic Growth
Source: Brookings Institution

This paper examines how changes to the individual income tax affect long-term economic growth. The structure and financing of a tax change are critical to achieving economic growth. Tax rate cuts may encourage individuals to work, save, and invest, but if the tax cuts are not financed by immediate spending cuts they will likely also result in an increased federal budget deficit, which in the long-term will reduce national saving and raise interest rates. The net impact on growth is uncertain, but many estimates suggest it is either small or negative. Base-broadening measures can eliminate the effect of tax rate cuts on budget deficits, but at the same time they also reduce the impact on labor supply, saving, and investment and thus reduce the direct impact on growth. However, they also reallocate resources across sectors toward their highest-value economic use, resulting in increased efficiency and potentially raising the overall size of the economy. The results suggest that not all tax changes will have the same impact on growth. Reforms that improve incentives, reduce existing subsidies, avoid windfall gains, and avoid deficit financing will have more auspicious effects on the long-term size of the economy, but may also create trade-offs between equity and efficiency.

8 Facts About U.S. Crude Oil Production

September 10, 2014 Comments off

8 Facts About U.S. Crude Oil Production
Source: Brookings Institution

The skyrocketing growth of unconventional oil and natural gas production in the United States has ignited an intense debate on the impact of energy exports on U.S. energy and economic security and its foreign policy. In “Changing Markets: Economic Opportunities from Lifting the U.S. Ban on Crude Oil Exports,” Charles Ebinger and Heather Greenley worked with National Economic Research Associates (NERA) to examine the economic and national security impacts of lifting the ban on crude oil exports. Learn eights facts about U.S. crude oil production within the key findings outlined below, and download the full report.

The Other Aging of America: The Increasing Dominance of Older Firms

September 9, 2014 Comments off

The Other Aging of America: The Increasing Dominance of Older Firms
Source: Brookings Institution

Like the population, the business sector of the U.S. economy is aging. Our research shows a secular increase in the share of economic activity occurring in older firms—a trend that has occurred in every state and metropolitan area, in every firm size category, and in each broad industrial sector.

The share of firms aged 16 years or more was 23 percent in 1992, but leaped to 34 percent by 2011—an increase of 50 percent in two decades. The share of private-sector workers employed in these mature firms increased from 60 percent to 72 percent during the same period. Perhaps most startling, we find that employment and firm shares declined for every other firm age group during this period.

We explore three potential contributing factors driving the increasing share of economic activity occurring in older firms, and find that a secular decline in entrepreneurship is playing a major role. We also believe that increasing early-stage firm failure rates might be a growing factor.

We are unable to find strong evidence of a direct link between business consolidation and an aging firm structure. Though we document a clear rise in consolidation during the last few decades, it doesn’t appear to be a major contributor to business aging directly—which has been occurring across all firm size classes, and the most in the smallest of businesses.

This leaves some questions unanswered, but it clearly establishes that whatever the reason, it has become increasingly advantageous to be an incumbent, particularly an entrenched one, and less advantageous to be a new entrant.

Why Trade Matters

September 9, 2014 Comments off

Why Trade Matters
Source: Brookings Institution

This policy brief explores the economic rationale and strategic imperative of an ambitious domestic and global trade agenda from the perspective of the United States. International trade is often viewed through the relatively narrow prism of trade-offs that might be made among domestic sectors or between trading partners, but it is important to consider also the impact that increased trade has on global growth, development and security. With that context in mind, this paper assesses the implications of the Asia-Pacific and European trade negotiations underway, including for countries that are not participating but aspire to join. It outlines some of the challenges that stand in the way of completion and ways in which they can be addressed. It examines whether the focus on “mega-regional trade agreements comes at the expense of broader liberalization or acts as a catalyst to develop higher standards than might otherwise be possible. It concludes with policy recommendations for action by governments, legislators and stakeholders to address concerns that have been raised and create greater domestic support.

Student Loan Update: A First Look at the 2013 Survey of Consumer Finances

September 8, 2014 Comments off

Student Loan Update: A First Look at the 2013 Survey of Consumer Finances
Source: Brookings Institution

Earlier this year, Beth Akers and Matthew Chingos released a report aimed at injecting some much-needed evidence into what has become an often-hysterical public debate about student loan debt. Their report, “Is a Student Loan Crisis on the Horizon?” used data from the Survey of Consumer Finances (SCF) administered by the Federal Reserve Board to track how the education debt levels and incomes of young households evolved between 1989 and 2010. The data showed large increases in average debt levels over time, but also revealed some surprising findings.

First, the authors found that roughly one-quarter of the increase in student debt between 1989 and 2010 can be directly attributed to increases in educational attainment, especially at the graduate level. Second, the increases in the average lifetime incomes of college-educated workers appear to have more than kept pace with increases in debt loads between 1992 and 2010. Specifically, the increase in earnings received over the course of 2.4 years would pay for the increase in debt incurred. Third, the monthly payment burden faced by student loan borrowers stayed about the same or even lessened between 1992 and 2010.

One limitation of the June 2014 report is that its authors could only examine data through 2010, the last year of SCF data that was available at the time. Consequently, the analysis could have missed recent trends in borrower well-being. Last week, the Federal Reserve Board released the 2013 SCF data, which enabled Akers and Chingos to extend their analysis to capture a snapshot of education debt through just last year.

In this research brief, the researchers update key indicators from their earlier report with data from the 2013 SCF. In general, the 2013 data paint a broadly similar picture to the 2010 data, and do not reveal any sharp departures from prior trends. Debt levels continued to increase, but at a slower pace than in previous years. Average incomes of borrowers fell slightly, but the decrease was small enough that monthly loan payments as a share of monthly incomes remained the same.

The 2013 data confirm that Americans who borrowed to finance their educations are no worse off today than they were a generation ago. Given the rising returns to postsecondary education, they are probably better off, on average. But just because higher education is still a good investment for most students does not mean that high and rising college costs should be left unquestioned.

The Responsiveness of the Temporary Assistance for Needy Families Program During the Great Recession

September 3, 2014 Comments off

The Responsiveness of the Temporary Assistance for Needy Families Program During the Great Recession
Source: Brookings Institution

The question addressed by this report is how the Temporary Assistance for Needy Families (TANF) program responded to increased unemployment during the Great Recession. Enacted in 1996, the Temporary Assistance for Needy Families (TANF) program replaced the Aid to Families with Dependent Children (AFDC) program, changing the culture of cash welfare by imposing strong work requirements backed by sanctions and a five-year time limit on benefit receipt. In response, the rolls declined in record numbers, both because people left the rolls, most of them for work, and because fewer people entered welfare. Between 1995 and 2000, welfare rolls declined by more than 55 percent nationwide, while poverty among children in single parent families and among black children, both of which groups were disproportionately represented on the TANF rolls, fell to their lowest levels ever.

However, during the Great Recession that officially lasted from December 2007 to June 2009, as unemployment skyrocketed, TANF performance as part of the safety net was held by many advocates, policymakers, and researchers to be inadequate. This report analyzes this claim from a variety of perspectives. In the three studies report here, we examine changes in the TANF rolls in relation to two alternative measures of rising unemployment in each state and in relation to how the AFDC program responded during previous recessions. We show that the increase in the TANF rolls was greater—12 and 30 percent greater under two different methods— when examined during the unique period of rising employment in each state. We also show that TANF increased more in the recession of 2001 and the Great Recession of 2007- 2009 than AFDC did during previous recessions. We also show, as have a number of other researchers, that the nation’s safety net as a whole performed well during the Great Recession and prevented millions of people from falling into poverty.

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