The results of the study by Goldman et al. (2001) could inform public policy on ways to decrease excess drug usage when the benefits are less than the cost of the drug.
Goldman is also the founding co-editor of the Forum for Health Economics and Policy and has been on the editorial board of Health Affairs, B.E. Journals of Economic Analysis and Policy, and the RAND Journal of Economics, among others. He is a health policy advisor to the Congressional Budget Office and, in 2009, was elected a member of the Institute of Medicine. He is also the 2009 recipient of the Eugene Garfield Economic Impact Prize, in recognition of his outstanding research on how medical research impacts the economy.
Data from the Centers for Disease Control and Prevention (CDC) revealed that chronic illness affected 133 million people in the United States and accounted for seven out of ten deaths. In relationship to these numbers, the American Society of Health System Pharmacists say Americans spent $307.5 billion on pharmaceuticals in 2010.
The health exchange system will not be the only place where community rating systems are utilized. Centers for Medicare and Medicaid Services (CMS) (CMS) plans to initiate a modified rating system starting in January 2014, this may lead other insurance companies following suit.
Goldman’s 1997 article, "Redistributional Consequences of Community Rating" discusses a study done in California where health insurance premiums were based on community ratings. The Patient Protection and Accountable Care Act (PPACA) has been passed through Congress and implementation has commenced in the U.S. Health care system. Community rating systems will be the basis for health care premiums in the Future exchange system. These ratings, pool people in to demographic groups and charge all members a constant rate. The goal of this system is to prevent medical underwriting and decrease the inequities that occur for clients with higher risks of increased medical utilization present in a risk adjusted system. Goldman et al. conducted a study in California that trialed such clusters of insured clients by pooling at the state level, regional level, and metropolitan level. Results from California’s experiment with such a system conclude that the larger the areas pooled, the greater the transfer of costs.
