Equitable Medicare Payments

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Medicare is a national program, but policymakers have long recognized that health care delivery is local. Geographic adjustments to the payments that Medicare provides hospitals and health practitioners are intended to ensure that regional variations in wages, rents, and other costs are covered accurately and equitably.

While the rationale for fine-tuning Medicare payments based on these variations is sound, several fundamental changes to the data sources and methods that the program uses to calculate adjustments are needed to improve the accuracy of the payments. Geographic Adjustment in Medicare Payment, Phase I: Improving Accuracy says that the high rate at which hospitals have been granted exceptions to how their adjustments are calculated strongly suggests that the underlying mechanisms are inadequate. The report also calls for a new approach to geographically adjusting payment to physicians and other practitioners.

Salaries and benefits make up on the largest costs to providing care. The Medicare program should use independent health sector data from the Bureau of Labor Statistics to develop its indexes for calculating wage adjustments for hospitals and providers. Congress will have to revise a section of the Social Security Act to enable this change, the report says. Medicare should also use the metropolitan statistical areas developed by the Office of Management and Budget to calculate adjustments for both hospitals and health practitioners.

The Institute of Medicine study was funded by the U.S. Department of Health and Human Services.

Better Food Labels


A variety of nutrition rating symbols and systems have found their way to the front of food packaging to help shoppers make healthful food decisions. Although their purpose is to simplify the choices of consumers, the number of different "front-of-package" labels may be leading to more confusion than clarity.

Front-of-Package Nutrition Rating Systems and Symbols: Promoting Healthier Choices calls for federal agencies to develop a new nutrition rating system that would apply to all foods and beverages and replace other systems currently being used.

The report envisions a rating system in which food and beverage labels graphically convey calorie amounts and up to three "points" based on the amounts of saturated and trans fats, sodium, and added sugars in products. These nutrients of concern contribute to the risk for chronic diseases such as heart disease and diabetes as well as overweight and obesity. The fewer of these nutrients the product contains, the more points it earns. All foods should prominently display calories per serving described in familiar household measures, such as per slice or per cup. Designed to be a kind of ENERGY STAR equivalent for foods and beverages, the new system will allow nutritional information to be determined at a glance.

The Institute of Medicine study was funded by the Centers for Disease Control and Prevention, Food and Drug Administration, and U.S. Department of Agriculture Center for Nutrition Policy and Promotion.

A New Framework to Evaluate Medical Devices


Most medical devices reviewed by the U.S. Food and Drug Administration before entering the marketplace are cleared for use in a process called premarket notification, or the 510(k) clearance process. The intent of this process is to provide a more expedient way to evaluate moderate-risk (Class II) devices -- such as powered wheelchairs and pregnancy test kits -- than the premarket approval that high-risk (Class III) devices must undergo. Some policymakers and patients wonder whether the 510(k) process is effective, while others say it is too onerous and is delaying important new medical devices from entering the market.

Medical Devices and the Public's Health: The FDA 510(k) Clearance Process at 35 Years says the current 510(k) process, in general, cannot assure that devices reaching the market are safe and effective, and FDA should gather the necessary information to develop a new regulatory framework.

Both premarket clearance and post-market oversight, including improved post-market surveillance of device performance, should be incorporated into a new approach that provides reasonable assurance of the safety and effectiveness of medical devices throughout the duration of their use, the report says. The agency should also ensure that the new process allows devices to reach the market in as rapid and least burdensome a fashion as possible.

The Institute of Medicine study was funded by the U.S. Food and Drug Administration.

Essential Health Benefits

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Certain insurance plans, including those participating in the state-based health insurance exchanges to be established under the Patient Protection and Affordable Care Act (ACA), must cover a set of preventive, diagnostic, and therapeutic services and products in areas that have been defined as essential by U.S. Department of Health and Human Services. Essential Health Benefits: Balancing Coverage and Cost provides HHS with a set of criteria and methods to develop a package of essential health benefits that will cover many health care needs and be affordable to purchasers.

The ACA stipulates that the essential health benefits should reflect the scope of benefits covered by a typical employer plan and include 10 specific categories. Because small employers will be among the main customers for policies in the state-based exchanges, HHS staff should determine what is typical of plans offered by these employers and allow for state-specific variation, the report says. HHS should also determine what the national average premium of typical small employer plans would be in 2014 and ensure that the package's scope of benefits does not exceed this amount to keep the package affordable for small businesses and individuals. Controlling the rate of growth in health care spending across the public and private sectors will be key to keeping an essential benefit package affordable.

Potential services and products should be evaluated using a set of criteria that includes medical effectiveness, safety, and relative value compared with alternative options. The package as a whole should also protect the most vulnerable individuals, promote services that have proved effective, and address the medical concerns of greatest importance to the public.

A data collection and research infrastructure should be developed to update the package and assess the impact on people's health. The Institute of Medicine study was funded by the U.S. Department of Health and Human Services.

Accessible Oral Health Care


More than 30 million Americans live in areas with shortages of dental professionals. Lack of regular oral health care disproportionately affects the poor, minorities, and other vulnerable populations. And this lack of access to care can have serious consequences. Poor oral health is associated with respiratory disease, cardiovascular disease, and diabetes, and it may contribute to the inappropriate use of hospital emergency departments for preventable dental diseases. Health care providers and patients need to ensure that oral health care is treated as an integral component of overall health, according to two reports from the Institute of Medicine.

Improving Access to Oral Health Care for Vulnerable and Underserved Populations says that although all states must provide comprehensive dental benefits for children enrolled in Medicaid or the Children's Health Insurance Program, they are not required to provide such services for adults. The Centers for Medicare and Medicaid Services should fund and evaluate state-based demonstration projects that cover essential oral health benefits for adult Medicaid beneficiaries.

Another report, Advancing Oral Health in America, provides a blueprint for the U.S. Department of Health and Human Services to enhance its leadership role in improving the oral health and oral health care of the nation. The report provides a set of organizing principles for the agency, including emphasizing disease prevention and oral health promotion and exploring new models for payment and delivery of care.

The Institute of Medicine studies were funded by the Health Resources and Services Administration, California HealthCare Foundation, and the U.S. Department of Health and Human Services.

Use of Chimpanzees in Research

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When the National Institutes of Health announced in 2010 that it would move 176 retired chimpanzees from a facility in New Mexico to an active research lab in Texas, a chorus of disapproval came from a number of policymakers, animal activists, and others. The outcry prompted Congress to ask the Institute of Medicine and National Research Council whether chimpanzees are necessary for current or future biomedical and behavioral research.

Chimpanzees in Biomedical and Behavioral Research: Assessing the Necessity says given that chimpanzees are so closely related to humans and share similar behavioral traits, NIH should only allow their use in biomedical research under stringent conditions -- including the absence of any other suitable model and the inability to ethically perform the research on people. Use of these animals should be permissible if forgoing their use will prevent or significantly hinder advances necessary to avoid or treat life-threatening or debilitating conditions. NIH should also limit the use of chimpanzees in behavioral research to studies that provide otherwise unattainable insights into normal and abnormal behavior, mental health, emotion, or cognition, the report says. And animals used in either biomedical or behavioral studies must be maintained in appropriate physical and social environments or in natural habitats.

Other advanced research tools and methods have rendered chimpanzees largely unnecessary as research subjects, the report says. It acknowledged two possible ongoing uses: the development of a limited number of monoclonal antibody therapies already in the pipeline, and development of a vaccine that would prevent infection by hepatitis C virus.

Since the report was released, NIH temporarily banned new studies using chimpanzees and formed a working group to implement the report's guiding principles and criteria. The study was funded by the National Institutes of Health.