Karen Davis is president of The Commonwealth Fund, a national philanthropy engaged in independent research on health and social policy issues.
Dr. Davis is a nationally recognized economist, with a distinguished career in public policy and research. Before joining the Fund, she served as chairman of the Department of Health Policy and Management at The Johns Hopkins School of Public Health, where she also held an appointment as professor of economics. She served as deputy assistant secretary for health policy in the Department of Health and Human Services from 1977-1980, and was the first woman to head a U.S. Public Health Service agency.
Prior to her government career, Ms. Davis was a senior fellow at the Brookings Institution in Washington, D.C., a visiting lecturer at Harvard University, and an assistant professor of economics at Rice University. A native of Oklahoma, she received her Ph.D. in economics from Rice University, which recognized her achievements with a Distinguished Alumna Award in 1991. Ms. Davis is the recipient of the 2000 Baxter-Allegiance Foundation Prize for Health Services Research. In the spring of 2001, Ms. Davis received an honorary doctorate in humane letters from John Hopkins University. In 2006, she was selected for the AcademyHealth Distinguished Investigator Award for significant and lasting contributions to the field of health services research in addition to the Picker Award for Excellence in the Advancement of Patient Centered Care.
Ms. Davis has published a number of significant books, monographs, and articles on health and social policy issues, including the landmark books Health Care Cost Containment, Medicare Policy, National Health Insurance: Benefits, Costs, and Consequences, and Health and the War on Poverty.
She serves on the Board of Visitors of Columbia University, School of Nursing, and is on the Board of Directors of the Geisinger Health System. She was elected to the Institute of Medicine in 1975, has served two terms on the IOM governing Council (1986-90 and 1997-2000), was a member of the IOM Committee on Redesigning Health Insurance Benefits, Payment and Performance Improvement Programs, and was awarded the Adam Yarmolinsky medal in 2007 for her contributions to the mission of the Institute of Medicine. She is a past president of the AcademyHealth (formerly AHSRHP) and an AcademyHealth distinguished fellow; a member of the Kaiser Commission on Medicaid and the Uninsured and a former member of the Agency for Healthcare Quality and Research (AHRQ) National Advisory Committee. She also serves on the Panel of Health Advisors for the Congressional Budget Office.
Why The Health Reform Bill Will Contain Costs Updated at 10:07 a.m. on Nov. 17. Late last week, the Centers for Medicare and Medicaid (CMS) Office of the Actuary (OACT) released a report projecting that total national health expenditures (NHE) would increase by $289 billion under the historic health care reform act recently passed by the U.S. House of Representatives out of the $35 trillion otherwise expected to be spent over the period from 2010-2019. Several commentators have seized on this estimate as evidence that, contrary to the claims of its supporters, the bill will raise costs and allow the… Read more
Resolving Affordability Inequalities Reaching consensus on what constitutes affordability and committing the necessary funds to achieve it are crucial in securing access to essential care for all Under all of the bills now before Congress, new insurance market regulation requiring individual and small business health plans cover everyone and charge the same premium regardless of health status will do a great deal to increase affordability, especially for people with major health concerns. The bills differ, however, on the levels of coverage and assistance offered. The latest version of the House bill, like the HELP bill, would expand Medicaid eligibility up… Read more
The report released by American's Health Insurance Plans (AHIP) on the impact of health reform on the cost of private health insurance coverage argues that higher costs associated with an individual mandate AHIP considers weak, taxes on high-end policies and health sector industries, and slowed growth in Medicare payments will passed along to the consumer in the form of higher health insurance premiums. This doesn't take into account any of the potential benefits from the structural reforms in the health reform proposals. Instead, this report isolates the impacts of only a few provisions, while ignoring many others, such as coverage of the uninsured, insurance market reforms, and… Read more
Providing provider incentives that encourage the development of accountable care organizations is an important strategy for not only achieving improved quality and better outcomes, but also for slowing the growth in health care spending--a key health reform goal. By integrating delivery of health services, accountable care organizations will make it easier for many providers to provide efficient, coordinated care—and payers will reward those providers for it. Savings generated by integrated care would be shared by providers, payers, and patients. It is a win-win for many stakeholders. … Read more
Expanding the safety-net insurance system through Medicaid is critical to reaching a large portion of the nation's uninsured, low-income working individuals and families. Bills from House of Representative committees, the Senate HELP committee, and now Senator Baucus' Chairman's Mark all provide for this essential floor of coverage. Of these, the House Ways and Means Committee proposal goes the farthest to expand coverage, protect states, and improve Medicaid primary care payment. Both the House and the Senate Finance Committee Chairman's Mark would expand coverage to 133 percent of poverty, although the House bill would start in 2013 and the Chairman's mark in 2014. According to the… Read more
The Chairman's Mark released by the Senate Finance Committee takes critical steps towards moving our health system towards one of high performance. It includes important provisions such as an individual mandate, insurance market reforms, the expansion of Medicaid, income-related premium assistance, and the introduction of state-based insurance exchanges, that would offer more Americans accessible health insurance coverage. Provisions to bundle Medicare payment and create a Centers for Medicare and Medicaid Services Innovation Center to test, evaluate, and disseminate new payment approaches would help to slow the growth of health care spending. However, the Chairman's Mark does not take full advantage… Read more
In President Obama's speech, he put on the table the subject of malpractice reform, "proposing that we move forward on a range of ideas about how to put patient safety first and let doctors focus on practicing medicine." Linking patient safety and malpractice reform is constructive and extremely important. A few years ago, my colleague at The Commonwealth Fund, Stephen C. Schoenbaum, M.D., along with Randall R. Bovbjerg, J.D., of the Urban Institute, published a paper in the Annuals of Internal Medicine arguing that as part of medical malpractice reform, physicians and all other health care providers need to… Read more
President Obama made a forceful case for health reform in his address to Congress and the public, stressing the imperative of action on the goals of ensuring stability and security of coverage for those who have it; providing insurance for those who don’t; and slowing the rising health care costs. He paved a centrist path, rejecting extreme solutions from the right and left, but also signaling his openness to the best ideas from all. But most of all he stressed that after a century of inaction, now is the season to act and that failure is not an option.… Read more
Throughout his Senate career Senator Kennedy was an eloquent and effective leader in efforts to ensure access to quality health care for all Americans, and his many significant legislative achievements brought millions of American families into the health care system. While we have lost a valuable voice in efforts to improve health care for all Americans, the legacy of Senator Kennedy is evident in today’s efforts to reform our health care system, which builds on the goals and ideals Senator Kennedy stood for: that health care for all Americans is an economic and well as moral imperative for our… Read more
Certain local cooperative health organizations that provide health insurance as well as an integrated delivery system provide top-quality integrated, coordinated care. But co-ops take years to become established, and more importantly, it is unlikely that such organizations would have sufficient purchasing power in their negotiations with health care providers to control health care costs in the long-term. Whether we are considering a public health insurance plan or nonprofit cooperative plan, if the plan does not link payment to Medicare rates, it loses the advantage of representing the share of enrollees, and therefore provider revenues, needed to obtain lower prices. The Congressional… Read more
Those interested in a terrific read over the August recess should get a copy of "The Cost Conundrum," an article by Atul Gawande that appeared in the June 1 issue of The New Yorker, which President Obama and others have praised. Dr. Gawande's piece explores the dramatic discrepancies in Medicare spending and negligible differences in quality of care between two similarly situated Texas border towns, McAllen and El Paso, and outlines the implications for our health care system--and reform efforts--as a whole. Interestingly, health care problems in Texas essentially parallel those of our nation. Work by researchers at Dartmouth… Read more
Americans who ask how health reform will affect them or their family, friends, coworkers, or neighbors, will find that health reform will ensure that they--or the people close to them--will get the help they need when illness or injury, without having to worry about how that care will be paid for. In short, health reform touches all of us. It helps us know that those who help us every day in so many ways are also helped when they most need it. A recent Commonwealth Fund report, Front and Center: Ensuring That Health Reform Puts People First, details the… Read more
Establishing an independent Medicare Council with authority to make payment and benefit design decisions within parameters established by Congress and subject to review by the President and Congress would help transform Medicare into a more active purchaser of high-value care, bend the growth in national health expenditures, enhance the long-term financial solvency of Medicare, and bring much-needed national leadership and coherence to the U.S. health care system. It should be possible to fashion a new Council in a way that both ensures accountability to the political process and generates significant health system savings. The new entity could be given broad… Read more
While new federal dollars are required to cover the uninsured, the House health reform bill achieves significant savings for the federal government by incorporating productivity improvement provisions into Medicare. It also calls for rapid-cycle testing of innovative health care provider payment pilots in Medicare, with shared savings for medical homes, hospitals, health systems, physician group practices, and accountable care organizations that successfully slow Medicare spending growth. Using the most successful payment innovations as the basis for payment in the public insurance plan would generate additional savings. All of these provisions would bend both the total cost curve and the… Read more
Last week’s announcement that the hospital industry has agreed to do its part in reducing national health expenditures by improving efficiency and realigning incentives is a promising development. For too long, rising hospital costs have contributed to escalating out-of-pocket spending for individuals and families, fueled increases in insurance premiums for American businesses, and placed enormous pressure on the federal budget. The industry commitment to legislative changes will yield genuine and scoreable savings that can be used to finance improved coverage and more far-reaching reform. More importantly, slowing the growth in hospital costs will bring some measure of relief to those struggling to afford health care and bend… Read more
Several of the draft health reform proposals recently released by major Congressional committees contain much-needed provisions to expand affordable insurance coverage to everyone, improve the quality of care that patients receive, and bend the health care cost curve to more sustainable rates of increase. Policymakers and major stakeholders have begun outlining workable policies that offer real hope to American families, businesses, and our country. As the committees begin the process of mark-up, several principles must come to the forefront. First, to ensure long-term fiscal stability, options for financing reform need more attention. To that end, the Administration has offered… Read more
As President Obama has repeatedly stated, health reform is not a luxury that can be postponed, but a necessity that cannot wait. It is important to take bold steps now. Health care spending per capita in the United States is more than twice that of other industrialized countries, with no commensurate return in access, health outcomes, or value. Our inefficient health system places an enormous and growing burden on American families and businesses, weakening our nation's economy, and has put federal and state governments on an unsustainable fiscal path. The new Administration and Congress have already made progress toward… Read more
As the political debate over health reform increasingly focuses on the impact on providers and the insurance industry, it is important to remember the core purpose of reform: ensuring that all people are able to afford health coverage and access needed care. Putting patients and families at the front and center of our system is a goal that needs to guide future deliberations. This strategy enjoys widespread support across income groups, geographic regions, and political affiliation. Nine of 10 adults believe that health reform should improve the quality of care, ensure that everyone has access to affordable care and… Read more
A meaningful public health insurance plan option is a crucial component of any comprehensive strategy to extend affordable coverage to all Americans and lower total national health care expenditures to more sustainable levels. Several of the policy options included in the recent report by Senator Baucus and Senator Grassley show that it is possible to find a reasonable compromise solution that allows for fair competition between public and private plans while safeguarding access, quality, and lower costs. As these proposals continue to develop, it is critical that Congressional leaders keep patients and the public interest at the center of the… Read more
Health care industry groups should be applauded for their commitment to reducing the growth in health care costs by 1.5 percentage points annually over the next decade. If successful, limiting cost increases will bring some measure of relief to the millions of American families struggling to afford rising health insurance premiums, access needed care, and manage medical debt and bill problems. Reining in health care cost growth will also reduce the burden on American businesses, strengthen the foundation of our nation’s economy, and place federal and state governments on a more sustainable fiscal path. While a 1.5 percentage point… Read more
The 2008 Medicare Trustees Report found that Hospital Trust Fund and the Supplementary Medical Insurance Trust Fund expenditures have outpaced the economy's overall growth. With the economic downturn, this will occur even more rapidly in the near-term. The solution to the spiraling costs of Medicare lies in addressing the growth in health care costs overall. The Commonwealth Fund's Commission on a High Performance Health System has recommended that the federal government slow cost growth by better aligning payment with value across all payers; encouraging accessible, coordinated, accountable care delivery that is as effective and efficient as possible; and providing… Read more
With total health care expenditures in the United States now projected to reach 21 percent of gross domestic product in 2020, it is vital that President Obama and Congress examine ways to reduce cost and enhance value in their health care systems. A federal center for comparative effectiveness is one such innovation. The Commonwealth Fund Commission on a High Performance Health System has endorsed the creation of a center for comparative effectiveness in the United States, estimating that it--with policies in place that encourage the use of better information to make better decisions--would save $634 billion over the next decade.… Read more
Meaningful health reform will require initial federal investments, and sources of long-term financing, to make the changes needed to increase health system efficiency and achieve maximum savings. President Obama and the Congress have already begun to invest in the health system. The passage of the American Recovery and Reinvestment Act lays the groundwork for the expansion of health information technology and comparative effectiveness research that will contribute to better value and outcomes for patients and their families. The President’s budget framework includes investments that will yield long-run savings, including bundled payments for post-acute care and expansion of the Quality Improvement… Read more
Changing how the nation pays for health care is critical to improve value, achieve better quality, and slow cost growth. The comprehensive, integrated proposal offered by the Commonwealth Fund Commission on a High Performance Health System known as the "Path" framework includes fundamental provider payment reforms alongside affordable coverage expansion and new systems to promote better decision-making and improve population health. Modeling by the Lewin Group shows that a combination of payment reforms--bundling payments to cover care over a specified period, revising fees to increase compensation for primary care, and offering providers financial incentives to serve as patient-centered medical… Read more
Reinforcing employer-shared responsibility for financing is a crucial element of any comprehensive health reform package in this country. Businesses have historically invested in the health and productivity of the American workforce by contributing to the cost of insurance coverage for employees and their families. To build on this foundation and ensure stability for the millions who currently have job-based insurance, the Commonwealth Fund Commission on a High Performance Health System recommended that firms offer coverage or contribute to a national trust fund. While costs will initially increase for employers who do not presently shoulder some of the responsibility for providing… Read more
Providing Americans with the choice of enrolling in a public health insurance plan or in private plans is central to providing affordable coverage to all and increasing value in our health system. Recent estimates by the Lewin Group show that the establishment of a nationwide insurance exchange with private plans and a public health insurance plan, along with a comprehensive set of coverage and payment reform policies, has the potential to reduce the number of uninsured to less than 1 percent of the population while slowing the growth in national health expenditures by a cumulative $3 trillion over 11… Read more
Office of Management and Budget Director Peter Orzsag noted at last month's Fiscal Summit that the path to fiscal sustainability leads directly to Medicare reform. While there are a number of politically sensitive options--such as cutting benefits, raising the age of eligibility, introducing income-related premiums, and raising payroll taxes--the single most effective way to ensure the long-term fiscal solvency of Medicare is to deal with rising health care costs throughout the entire U.S. health system. As the country's largest purchaser of health services, Medicare is uniquely positioned to effectuate much-needed change and encourage efficiency in our finance and delivery systems.… Read more
Few health policy mistakes have been made by the new Administration and Congress thus far. President Obama and Congress seized their early opportunities to lay the groundwork for more fundamental change with their reauthorization of the Children’s Health Insurance Program (CHIP) and the passage of the American Recovery and Reinvestment Act with health provisions to invest in information technology and comparative effectiveness research. And President Obama's 2010 budget, which set aside $634 billion for health reform over 10 years, demonstrates his commitment to passing health reform legislation this year. President Obama has framed the health care overhaul as an integral… Read more
The President's call to act this year to reign in our nation's unsustainable spending on health care and lay the foundation for affordable coverage for every American should be heeded. A recent report by the Commonwealth Fund Commission on a High Performance Health System shows that if we embark on comprehensive health reform in 2009, it is possible to simultaneously expand coverage and financial protection to all Americans, improve the quality and efficiency of health care, and reduce national health spending by $3 trillion over 11 years. It is critical that we make these investments now to reap significant dividends… Read more
As the President and his top advisors made clear at Monday's Fiscal Responsibility Summit, only comprehensive and far-reaching health reform will spark economic recovery, put the nation back on a path to fiscal sustainability, and ensure that all Americans are able to get the care they need and deserve. The single most important and responsible step we can take now to secure the long-term fiscal solvency of our nation and the feasibility of our entitlement programs is to embark on an ambitious program to bend the curve in health care costs, enhance the quality and efficiency of care, and improve access… Read more
The coverage expansion initiatives in the stimulus package, as well as the recent reauthorization and expansion of Children's Health Insurance Program (CHIP), are important first steps toward helping Americans get the health care they need in a precarious economic environment. The bill's provisions to increase federal funding for Medicaid and to subsidize COBRA premiums will help fill some of the existing coverage gaps. Ensuring stable, affordable health insurance coverage for Americans who still cannot afford COBRA or qualify for Medicaid will require more changes, however. The federal government will need to set the rules for the operation of private markets… Read more
Normal 0 MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} Expanding and strengthening Medicaid is an important strategy to not only avoid an increase in the uninsured during this economic crisis, but ultimately reduce the number of Americans without coverage. While there have been declines in employer-based coverage, Medicaid has already been there to cover some of the lowest-income families. The most recent Census Bureau report shows that the number of uninsured individuals fell to 45.7 million in 2007 from 47 million in 2006;… Read more
Normal 0 MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} SCHIP reauthorization and expansion is key to moving toward near-universal coverage through a mixed private-public group insurance system, a strategy that garners broad, bipartisan support among members of Congress and the general public. Respondents to the most recent Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey strongly support action on SCHIP legislation, with 89 percent favoring or strongly favoring expansion of income eligibility and more than 80 percent seeing timely reauthorization and expansion as… Read more
Normal 0 MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} Investment in national health information technology (IT) infrastructure is a crucial component of the upcoming economic stimulus package--one that will expand employment in the health sector in the short-term and facilitate improvements in the quality of care, gains in efficiency, and lower costs over the long run. Recent analysis of the 2006 Commonwealth Fund Survey of Primary Care Physicians confirms that advances in IT are making it easier for physicians to provide… Read more
As the economic crisis continues and job losses mount, extending the length of COBRA eligibility for American families is an important component of a more comprehensive strategy to restore the health and economic security of the nation. Data from the Commonwealth Fund's 2007 Biennial Health Insurance Survey shows that a large majority of non-elderly working adults would be eligible to purchase their job-based coverage through COBRA if they became unemployed. Extending this protection from 18 to 24 months would provide some relief to workers continuing to look for employment in the harshest economic downturn since the Great Depression. However, simply… Read more
Normal 0 MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} As President-elect Obama, Secretary-designate Daschle, and members of the 111th Congress have repeatedly affirmed, reform of the country’s health care system is integral to economic recovery. As a result, several health care initiatives are likely to be included in the forthcoming stimulus package. Potential provisions include funding for the development of health information technology infrastructure, an enhanced federal matching rate for Medicaid, and coverage expansion efforts. While investments in information technology and… Read more
Normal 0 MicrosoftInternetExplorer4 st1:*{behavior:url(#ieooui) } /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:10.0pt; font-family:"Times New Roman";} There are elements of Sen. Clinton and Sen. McCain's proposals--and former governor Mitt Romney's experiences--that should be incorporated into the upcoming health reform plan. Most significantly, Sen. Clinton's proposal to require everyone to have health insurance coverage with affordable premiums through income-related provisions would go a long way toward ensuring coverage for all Americans--and ensuring healthy people participate. Sen. McCain called for a number of sound prescription drug reforms to control costs, including the safe re-importation… Read more
Permitting adults age 55 to 64 to buy into Medicare and eliminating the two-year waiting period for people will disabilities will improve access to care and reduce financial burdens on older and disabled adults who do not fare well in our current health insurance system. As Sen. Baucus notes, such individuals are rarely able to obtain affordable and adequate private coverage, since insurers in the individual market have a strong financial incentive to restrict enrollment or limit the benefits of older Americans and people with serious health problems. Commonwealth Fund-supported studies show that opening up Medicare to older and disabled… Read more
The creation of a public health insurance plan has the potential to not only help extend affordable coverage to all Americans, but also drive efficiencies and innovative practices throughout the health care system. First, it is estimated that a public plan option modeled on Medicare, offered through a national health insurance exchange, would have 30-percent lower premiums than those for the private plans. Recent analysis conducted by the Lewin Group for The Commonwealth Fund show family coverage under a Medicare-like public plan would be $8,424 annually in 2008, compared to $12,106 in a typical employer private plan. This 30 percent… Read more
In a time of economic crisis, cost considerations are clearly at the forefront as President-elect Obama seeks to capitalize on the broad public support for widespread coverage expansion and comprehensive overhaul of the American healthcare system. While allowing Bush administration tax breaks for higher income households to expire will fund a portion of the ambitious reform initiatives outlined on the campaign trail, these funds will likely not be sufficient to cover the entire federal cost of the plan. Deficit financing in the early years can be justified as part of an economic recovery program as expanded health insurance coverage will… Read more
Strong national leadership will be essential to establishing a high-performing U.S. health care system. The Federal Health Board that Senator Tom Daschle has proposed to fill this void has considerable merit and deserves serious consideration. The proposal calls for a quasi-governmental organization with an independent board of governors appointed by the President and confirmed by the Senate. The board's expert members would therefore be insulated from political pressure, but accountable to elected officials and the American public—and capable of making the complex decisions inherent in health system reform. While many details will need to be sorted out, under Senator Daschle's… Read more
As more people lose employer-sponsored coverage, they are turning to individual health insurance plans, which are the weakest link in our health insurance market. The Commonwealth Fund Biennial Health Insurance Survey found that of 58 million adults under age 65 who sought coverage in the individual insurance market over a three year period, nine of 10 did not purchase coverage, either because they were rejected, they were unable to find a plan that met their needs, or they found the coverage too expensive. A policy establishing minimum requirements on insurers to cover everyone, the sick and healthy alike, at the… Read more
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