HCFO's Year in Review: 2010

January 2011

When historians write about the significant events of 2010, the passage of health reform legislation will certainly be featured prominently. Enactment of the Patient Protection and Affordable Care Act (ACA) was just step one. The work of implementing the ACA began in 2010 and will continue over the next several years. 

Mindful of our mission to be relevant to policy, HCFO had ample opportunity in 2010 to support health reform implementation. During the past year, we reached out to policymakers to determine how HCFO could best contribute to their short and long term efforts. In the grants we funded, the meetings we conducted, and the publications we supported, HCFO demonstrated its value to policymakers and to the health services research field at large.

HCFO Synergy Informs Policy: Insurance Market Destabilization

A distinctive feature of HCFO is its ability to create synergy across its three main functions: grantmaking, convening, and dissemination. This occurred in 2010 around the ACA provisions requiring medical loss ratios (MLRs) among insurers. In June 2010, HCFO convened a meeting of researchers, federal health policy experts, market analysts, industry representatives, and regulators to discuss the potential for destabilization in the individual insurance market and to identify the warning signs of market destabilization that could inform policymakers’ responses. Following the meeting, HCFO disseminated an issue brief, providing an overview of the discussion, including examples of relevant research and data, issues, perspectives, and topics for future policy and research to support insurance reform.1 In response to a clear need for information and limited existing evidence on how the minimum MLR might affect insurers and beneficiaries, HCFO funded Jean Abraham, Ph.D., University of Minnesota, to analyze the potential impact of the new requirements on individual market insurers across states.2 In December, Dr. Abraham presented initial findings to a group of policymakers at a HCFO grantee briefing in Washington, D.C. These briefings provide an opportunity for grantees to receive “off the record” feedback from researchers, policymakers, and other invited participants on early findings as they prepare journal articles. 

The confluence of HCFO-supported activities around issues related to the MLR provisions of the ACA demonstrate HCFO’s strength in serving both the research and policy communities. 

HCFO Grants Address Reform Issues

In addition to supporting research on the MLR impact, HCFO funded six other grants in 2010, each of which addresses issues with important policy implications. 

Value-based Insurance Design (VBID)

Among the goals of health reform is to encourage consumers to make better, value-based health care choices. The ACA provides that, “The Secretary may develop guidelines to permit a group health plan and a health insurance issuer offering group or individual health insurance coverage to utilize value-based insurance designs.”3 Two HCFO-funded studies are assessing the potential of VBID strategies, findings from which will help inform health reform implementation.

  • Niteesh K. Choudhry, M.D., Ph.D., Brigham and Women’s Hospital, is examining the factors that influence the success of value-based insurance design plans and developing “best practices” for future implementation.4 

  • Matthew Maciejewski, Ph.D., Duke University, is exploring the business case for value-based insurance design in order to inform benefit design changes and cost-containment strategies under consideration by insurers and Medicare.5 

Part D Benefit

Concerns over the affordability of prescription drugs generated discussion about the Part D benefit during the debate over health reform. Two HCFO studies, which took advantage of the release of Part D data, address issues that consider the implications of prescription drug costs in the Medicare program.

  • Cindy Thomas, Ph.D., Brandeis University, is examining two state Medicaid policies—co-payment assistance to reduce Part D beneficiary cost-sharing and beneficiary-centered assignment—and the impact of the policies on health outcomes, beneficiary switching among plans, continuity of drug treatment, and Medicare program costs.6 

  • Jack Hoadley, Ph.D., Georgetown University, is examining the extent of generic drug use in Medicare’s stand-alone drug plans for three classes of drugs—cholesterol drugs, anti-depressants, and hypertension drugs—and whether plan, formulary, and program designs are associated with the use of generics.7 

Physician/Consumer Interaction

Cost control is one of the most critical and complex policy issues. Tiered networks are a potential mechanism to alter both consumer and provide behavior with the goal of increasing the value of care. HCFO is funding the following study which is designed to assess consumer response to differences in cost sharing across providers.

  • Meredith B. Rosenthal, Ph.D., Harvard School of Public Health, is examining the effects of tiered physician networks introduced in six health plans offered to beneficiaries of the Massachusetts Group Insurance Commission. The study will assist employers in assessing the impact of physician tiering on consumer behavior and assess the value to this benefit design feature.8  

Alternative Delivery Systems

Are delivery system models like retail health clinics likely to improve access to primary care or increase utilization and costs?  A HCFO-funded study will shed light on the potential benefits and drawbacks of policies that encourage retail clinic use. 

  • Ateev Mehrotra, M.D., RAND, is examining the impact of retail health clinics on utilization and costs, including whether the entry of these clinics into a community is associated with a change in overall utilization of eight retail-clinic sensitive conditions.9  

Communication Tools to Reach Policy Audiences10 

Grantee Briefings

As noted above, HCFO sponsors grantee briefings to promote timely communication of research to policymakers. While the results presented by grantees are preliminary, policymakers receive an “early look” at evidence that may help to inform their decision-making.  Their direct interaction with grantees provides a connection for policymakers to the researchers who may then serve as an expert resource. 

In 2010, five HCFO grantees presented their findings to invited audiences of policymakers, researchers, and other participants. These briefings are uniformly praised as highly useful events, both from the perspective of the grantee who is able to refine analyses based on feedback from the discussion, as well as from the perspective of those in attendance. The grantees who presented findings this year were:

  • Jean Abraham, Ph.D., Analyzing the Impact of the Medical Loss Ratio Under Health Reform on the Individual Market for Coverage in Each State, December 13, 2010

  • Douglas Conrad, Ph.D., Paying Physician Group Practices for Quality: A Regional Natural Experiment, October 21, 2010

  • Lan Zhao, Ph.D., Extent and Impact of the Use of Observation Services in the Medicare Program, October 7, 2010

  • Kathleen Adams, Ph.D., Reducing Prenatal Smoking: What Role Can State Policies Play?, May 14, 2010

  • J. William Thomas, Ph.D., Measuring the Costs of Defensive Medicine in the United States: Phase II, January 25, 2010


HCFO grantees were highly successful last year in publishing their work; 27 publications appeared in peer-reviewed journals and four in grey literature commonly used by policymakers. To ensure that the work of our grantees reaches a broad range of audiences, staff also prepares briefs summarizing the key findings from HCFO-supported studies. Grantees may also prepare reports for HCFO publication.  In 2010, the following briefs and reports were published on the HCFO website: 

Serving as a Resource

In addition to publishing their findings, HCFO grantees serve as resources and transmit information directly to policymakers and other stakeholders by participating in interviews and in-person and phone communications, conducting commissioned work, providing testimony, synthesizing a body of work, serving on expert panels, and engaging in other activities that create a bridge between research and policy. HCFO grantees have made informal presentations to policymakers at the Office of the Assistant Secretary for Planning and Evaluation and the Centers for Medicare and Medicaid Services, and Congressional support agencies like MedPAC, the United States Government Accountability Office, and the Congressional Budget Office.


As health reform implementation proceeds in 2011, HCFO will continue its grantmaking, convening, and dissemination efforts to provide policy-relevant information on the financing and organization of health care and impacts on cost, quality and access. We will continue to encourage new investigators who seek to build on an existing body of work or develop an innovative line of research to consider HCFO as a funding source. We will also explore new pathways for translating research for policymakers, including social networking tools. 

1 Bernstein, J, “Recognizing Destabilization in the Individual Health Insurance Market,” HCFO Issue Brief, July 2010.  http://www.hcfo.org/publications/recognizing-destabilization-individual-health-insurance-market
2 http://www.hcfo.org/grants/analyzing-impact-medical-loss-ratio-under-hea...
3 Patient Protection and Affordable Care Act, Section 2713(c)
4 http://www.hcfo.org/grants/factors-influencing-success-value-based-insur...
5 http://www.hcfo.org/grants/patient-and-system-benefits-value-based-insur...
6 http://www.hcfo.org/grants/impact-state-policies-supporting-medicare-par...
7 http://www.hcfo.org/grants/generic-substitution-within-class-drugs-medic...
8 http://www.hcfo.org/grants/impact-tiered-physician-network-consumer-beha...
9 http://www.hcfo.org/grants/impact-retail-clinics-overall-utilization-car...
10 See Gold, M., “Evaluation of Effectiveness of AHRQ’s Grant-Supported Research on Healthcare Costs, Productivity, Organization and Market Forces, Mathematica Policy Research Inc., December 8, 2008 (in a comparative analysis of AHRQ, NIH and HCFO, Gold reports, “HCFO’s dissemination activities have led to a number of their studies achieving high visibility among policymakers”) at D.6. http://www.mathematica-mpr.com/publications/PDFs/health/AHRQ_grantsupport.pdf