Predatory Health Care

Brian Klepper

Posted 11/17/13 on Medscape Connect’s Care and Cost Blog

Recently I was asked to intervene on behalf of a patient who, trapped by circumstance, was paying off an enormous bill for a lithotripsy procedure. What I uncovered wasn’t news, but it drove home how egregious the current system can be, why it so badly needs to be fixed, and how the Affordable Care Act (ACA) helps move us in the right direction.

The patient had health insurance through her husband’s job. But it was cancelled just after the hospital validated it, because the employer failed to pay the premium. The procedure was performed, and the patient was charged as “self-pay.”

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The RUC Is Bad Medicine: It Has To Go

Brian Klepper

Posted 8/12/13 on Medscape Business of Medicine

“One of the biggest mistakes we made … is that we took the RUC … back in 1992 and gave it to the AMA. … It’s incredibly political, and it’s just human nature…the specialists that spend more money and have more time have a bigger impact.”

This was Tom Scully, former Bush II Administrator of the Centers for Medicare and Medicaid Services (CMS), previously the Health Care Finance Administration (HCFA). He was a panelist in a May 10, 2012 Senate Finance Committee RoundTable discussion by former HCFA/CMS Administrators and has become one of the RUC’s most outspoken critics. He was explaining how the American Medical Association’s (AMA) Relative Value Scale Update Committee (RUC), a group that asked if it could help the government by overseeing a valuation process for medical services, came to dominate and distort the pricing used in Medicare, Medicaid and commercial health plans.

Mr. Scully echoed this sentiment recently.

“The idea that $100 billion in federal spending is based on fixed prices that go through an industry trade association in a process that is not open to the public is pretty wild. … Having the AMA run the process of fixing prices for Medicare was crazy from the beginning.”

Gail Wilensky, HCFA Administrator under Bush I, was wistful. “It happened innocently enough.”

It is remarkable and compelling to hear these federal health program ex-stewards express regret about a fiasco they had a hand in. Their “mea culpas” are almost palpable. Mr. Scully, in a recent Washington Post video interview, gave a quick aside, “It’s partially my fault.”

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Implementing Health Reform: Increasing Medicaid Payments for Primary Care Physicians

Timothy Jost

Posted 5/10/12 on the Health Affairs Blog

On May 9, 2012, the Center for Medicare and Medicaid Services released proposed regulations to implement section 1202 of the Health Care and Education Reform Act of 2010. Section 1202 increases Medicaid payments made to primary care physicians for primary care services during the years 2013 and 2014 to Medicare payment rates, with the additional cost covered by the federal government.

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Barking Up the Wrong Tree: Affordability, Not Cost Growth, Is The Real Policy Challenge

Jeff Goldsmith

Posted 5/7/12 on The Health Affairs Blog

A recent spate of commentaries on the continuing health spending moderation raise an important policy question: If the cost curve is well and truly bent, why are we investing so much of our policy energy on bending it further, when the more pressing problem is the declining percentage of Americans that can afford our health system’s astronomical costs?

Health spending the past two reported years (2009 and 2010) have grown in the high 3 percent range, the lowest growth rates since Dwight Eisenhower’s last year in office (1960), five years before Medicare.Medicare’s actuaries have pointed to the recession as a root cause. Yet even Medicare spending growth has subsided to about 5 percent in 2010, a development hard to attribute to recession since so few Medicare patients have first-dollar cost exposure. This analyst’s extensive industry contacts suggest no spending rebound in 2011 and 2012, despite an aging population and fee-for-service’s pernicious volume-increasing incentives in full force.

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A Health Affairs Study on Medicare Spending and the RUC

Chris Fleming

Posted 5/7/12 on the Health Affairs Blog

To calculate physicians’ fees under Medicare—which in turn influence private payers’ decisions on how they will pay doctors—the Centers for Medicare and Medicaid Services (CMS) relies on the recommendations of a controversial advisory panel known as the RUC (the Relative Value Update Committee), which mainly represents a broad group of national physicians’ organizations. In recent years physicians in primary care have expressed concerns that this committee has too little representation from their ranks and is partly responsible for increasing the pay gap between primary care providers and specialists. Other research has shown that increases in physician service prices brought about by committee recommendations contribute to increased costs of services used by Medicare enrollees.

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The Supreme Court and the Mathless Health Care Reform Debate

Eugene Steuerle

Posted 4/10/12 on The Government We Deserve

Regardless of how the Supreme Court decides the constitutionality of the individual mandate, the health care debate is now reignited. If the mandate is sustained, the Accountable Care Act enacted under President Obama still has too many kinks to remain unaltered. If it’s thrown out, a return to the unsustainable system with growing numbers of uninsured is not a solution. Yet no fix is possible as long as elected officials dodge the basic arithmetic of health care.

As for the individual mandate, ignore the constitutional briefs for the moment. Ignore also how a mandate helps address problems that arise if insurance companies must offer coverage regardless of prior conditions and people otherwise are tempted to wait until they are sick to buy it. Instead, let’s see how a mandate fits it into the broader arithmetic of paying for health care.

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Rationing Redux: The Dog That Didn’t Bark

Merrill Goozner

Published 4/10/12 in The Fiscal Times

Last week, physician groups representing nearly half of America’s doctors issued guidelines that would limit Americans’ access to allegedly unnecessary medical tests and procedures. The public reaction was noticeable for the one thing that was missing – a public outcry against rationing.

That was reserved for the floor of the U.S. House of Representatives on a completely separate issue. The Republican majority last week cast another symbolic vote against what it calls rationing in the health care reform law better known as Obamacare.

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Great News! Medicare Tightening Up At Last

Tom Emerick

Posted 4/3/12 on Cracking Health Costs

Good news on the Medicare front. In a few states (FL, CA, MI, TX, NY, LA, IL) they are at last tightening up on unnecessary surgical procedures, according to a news story in Forbes. Hurray!

According to the story, “In 2012 CMS will perform an audit before paying for several big ticket cardiology and orthopedic procedures in certain key states.” All I can say is, at last.

This is huge news. If Medicare takes this seriously, and gets the results it should get, it will be a great step forward in advancing evidence-based medicine in the public sector. Further, it will pave the way for employer-sponsored plans to be more aggressive in dealing with over-surgery. Readers of Cracking Health Costs know that I’ve been tough on Medicare for looking the other way over unnecessary surgery for decades. May the day come when I can take it all back.

Predictably surgeons are unhappy. Most surgeons have had no accountability to anyone for getting diagnoses right or doing surgery only when truly necessary. They will vigorously resist such accountability. However, such accountability is the norm in most industrialized nations. That lack of accountability here is one of the main reasons why we spend so much more on health care than our peer nations but get worse and worse results. Accountability needs to be the norm here too.

Plus Wall Street doesn’t like the idea either. “Reaction to the report on Wall Street was immediate. Hospital and medical device stocks plunged after the report was issued on Friday….” Hmm. My theory is Medtronic’s stock price is inversely related to America’s economic health.

This is a good test to follow as it is a battle between evidence-based medicine and profit-driven medicine. To see the full article, click here.

Another Stent Device Biting The Dust

Tom Emerick

Posted 3/26/12 on Cracking Health Costs

We’re seeing a trend. The FDA approves a stent without proper testing. Death and complication rates with the new stent increase, the FDA is force to review it.

Remember the con troversy over drug eluding stents?

According to an article in the WSJ by Thomas Burton, the so-called Stryker stent…aka the Wingspan device… is increasing rates of death of patients who have received them. Following protocol a panel has been convened. According to the WSJ article, “The FDA had asked the outside panel to advise it on what to do in the wake of a large study last year showing more strokes and deaths in patients with the Wingspan device than among those whose condition was treated using drugs.”

Further, “Researchers in the study concluded the rate of stroke in the patients who got the Wingspan device was ‘substantially higher than the rates previously reported
with the use of the Wingspan stent.’ ”

This is yet another reason for patients to be cautious in agreeing to a stent, and another reason employers need to consider favoring clinics who practise strict evidence-based medicine constructs.

Raise Medicare’s Age? That’s Cost-Shifting, Not Cost Savings

Merrill Goozner

Posted 2/27/12 on Gooz News

Mitt “Two Cadillacs” Romney in his Detroit speech on Friday said he’d like to raise the age on Medicare eligibility to 67 to save the taxpayers money. A Congressional Budget Office report released last month found raising the Medicare eligibility age to 67 from 65 would reduce Medicare spending by $148 billion over the next decade, but people in that age group would pay more for their health care.

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Five Myths About Medicare

Robert Laszewski

Posted 2/26/12 on Health Policy and Marketplace Review

I recommend you read John Rother’s recent op-ed in the Washington Post, “Five Myths About Medicare.”

John argues that each of these statements is a myth:

Medicare is inefficient and fails to control costs–the CBO has projected that per capita spending will grow only 1% more than inflation over the next decade.
The well-off don’t pay enough for their Medicare benefits–working age premiums as well as Part B premiums already vary considerably by income.
Medicare benefits are overly generous–in 2007 Medicare paid an average of only half of the $18,000 the average beneficiary spent.
Cutting Medicare is the only way to save it–changing incentives to providers offers more promise.
Medicare needs fundamental restructuring–“Even the most well-run and efficient program cannot nearly double its enrollment without a matching increase in money.”

And this conclusion:

“Containing health-care cost growth is critical for Medicare’s survival, but it’s impossible to do that for Medicare alone. Payment restraints and incentives that improve value must be applied to the entire health-care system to be effective.”

Read “Five Myths About Medicare in the Washington Post.”

The Self-Care Economy: OTC Medicines in the U.S. Deliver Value to the Health System

Jane Sarasohn-Kahn

Posted 2/7/12 on Health Populi

U.S. health consumers’ purchase and use of over-the-counter medicines (OTCs) generate $102 billion worth of value to the health system every year. Half of this value accrues to employers who sponsor health insurance for their workforce; 25% goes to government payers (e.g., Medicare, Medicaid); and, 25% returns to self-insured and uninsured people.

For every $1 spent on OTCs, $6.50 is saved by the U.S. health system, shown by the chart.

For millions of health consumers, OTCs substitute for a visit to a doctor’s office: most cost-savings generated by OTC use are in saved costs of not visiting a clinician, as discussed inThe Value of OTC Medicine to the United States, published by the Consumer Healthcare Products Association in January 2012.

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Observation Units. All Good. Right?

Bradley Flansbaum

Posted 2/06/12 on the Hospitalist Leader

Would you like to read about some good policy, but bad execution? Browse on.

On the physician side of the ledger, we trust that observation units, i.e., geographic weigh stations to determine fitness of admission or discharge, are a good thing. Earlier discharge, focused resource use, possibly less exposure to hospital badness—all winning strategies to improve efficiency. What is the problem then? From todays WSJ:

The issue arises when a Medicare beneficiary who comes to a hospital is placed in a status called “observation care.” This is supposed to mean that patient is being watched while doctors decide if she can be discharged, or if she is ill enough to be admitted as a true inpatient. Observation is typically supposed to last 48 hours or less.

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The Wyden-Ryan Plan Will Be the Foundation for Serious Medicare Reform—and Maybe More

Robert Laszewski

Posted 2/1/12 on Health Policy and Marketplace Review

In two companion articles in January’s New England Journal of Medicine, Henry Aaron with Austin Frakt, and Joe Antos critique the Wyden-Ryan Medicare reform proposal.

Senator Ron Wyden (D-OR) and Representative Paul Ryan (R-WI) are proposing a hybrid Medicare reform proposal combing both Republican defined contribution free market principles—a premium support scheme—with Democratic defined benefit principles—a baseline guaranteed plan and premium support.

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Lessons from Medicare’s Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

Douglas Elmendorf

Posted 1/18/12 on the Congressional Budget Office Director’s Blog

In the past two decades, Medicare’s administrators have conducted demonstrations to test two broad approaches to enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program.

Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly. Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.

Continue reading “Lessons from Medicare’s Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment” →

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Robert Laszewski

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