Medicare Spending Time Bomb

Tom Emerick

Posted 1/23/12 on Cracking Health Costs

A huge amount of attention is focused on the national debt, and it should be.  The real train wreck in the pipeline is Medicare and Medicaid spending.

According to CBO projections, “Total spending on health care would rise from 16 percent of gross domestic product (GDP) in 2007 to 25 percent in 2025, 37 percent in 2050, and 49 percent in 2082.”  Click here for full report.  One problem with CBO estimates is they are notoriously optimistic, with actual costs coming in sometimes as much as eight times higher than CBO projections.

Sometime between 2025 and 2050, America’s going to…. Oh well, I’ll let you complete the sentence.

To quote Alan S. Blinder from a WSJ editorial on this topic, “So no, America, we don’t have a generalized overspending problem for the long run. We have a humongous health-care problem.”

Our children and grandchildren will resent our generation, perhaps bitterly, if we let this stand. In time historians will puzzle over why we knew this was coming but failed to act.

Important Research From Medicare Demonstration Projects: Almost Nothing Works

Robert Laszewski

Posted 1/23/12 on Health Policy and Marketplace Review

I will suggest that most of us believe the way to control health care costs, and at the same time maintain or improve quality, is to both use the managed care tools we have developed over the years, and perhaps more importantly, change the payment incentives so that both cost control and quality are upper most in the minds of providers and payers.

The Congressional Budget Office (CBO) has just released an important review of Medicare’s results in testing those ideas. The news is not good.

From the CBO’s blog post:

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.

In an issue brief released today, CBO reviewed the outcomes of 10 major demonstrations—6 in the first category and 4 in the second—that have been evaluated by independent researchers. CBO finds that most programs tested in those demonstrations have not reduced federal spending on Medicare.

Continue reading “Important Research From Medicare Demonstration Projects: Almost Nothing Works”

Why Medicare Access Is In Jeopardy In Both Salaried and Physician Owned Settings

Jaan Sidorov

Posted 12/21/11 on The Disease Management Care Blog

Don’t underestimate the physician dismay over the looming “Doc Fix” debacle. Unless some budget compromise gets hammered out, Medicare is about to stick it to a lot of docs.

Ever since the passage of the Balanced Budget Act of 1997, Congress has been repeatedly delaying a yearly mandated cut in Medicare’s physician fees. That statutory reduction has been slowly accumulating through no fault of the physician community and is now estimated to be more than 27%.  Assuming most physicians’ practices are made up by a majority of Medicare beneficiaries, that represents a huge hit to their cash flow. KHN has a good summary of the partisan mutual assured destruction that has led us to this crisis here.

Continue reading “Why Medicare Access Is In Jeopardy In Both Salaried and Physician Owned Settings”

Wyden Covers Ryan’s Retreat on Medicare Vouchers

Merrill Goozner

Published 12/16/11 in the Fiscal Times

Last spring, the House passed on a straight party-line vote Rep. Paul Ryan’s mandatory Medicare privatization plan, which the Congressional Budget Office said would force future seniors to pick up two-thirds of their health care costs with no guarantee that those costs would come down.

On Thursday, Ryan, R-Wis., with a bipartisan boost from Sen. Ron Wyden, D-Ore., offered a revamped version of his plan, dubbed premium support because the government gives beneficiaries cash or a voucher to help them pay for plans sold by private insurance companies. The changes from his earlier plan were stark.

Continue reading “Wyden Covers Ryan’s Retreat on Medicare Vouchers”

Bundle in the Jungle

Bradley Flansbaum

Posted 12/09/11 on The Hospitalist Leader

First, before I discuss bundling as a method of payment for healthcare services, I wish to declare my neutrality on the subject.  The merits are appreciable if providers approach the implementation properly, and conversely, the detriments are equally clear if they (we) bungle it.  Enactment and downstream effects are so murky however, that prognostications are premature.

Second, bundling may not be the preferred payment method for all procedures or diagnoses.  Beyond CMS demonstrations and a scant sampling of commercial side ventures—all procedural—little to no chronic care evidence exists (COPD, CHF, sepsis).

Continue reading “Bundle in the Jungle”

Who Will Pay For the Doc Pay Fix?

Merrill Goozner

Published 11/25/11 in the Fiscal Times

Holiday cheer and bipartisan bonhomie are still possible on Capitol Hill.

For evidence, one need only look at the so-called “doc fix,” where Congress every year overrides a previous effort at health care cost control to ensure physicians get paid at least as much as they did the year before.  Expect another present to arrive at physicians’ offices sometime between Thanksgiving and Christmas, now that the Super Committee has failed to permanently resolve the issue as part of Medicare’s contribution to long-term deficit control.

Continue reading “Who Will Pay For the Doc Pay Fix?”

Accountable Care Organization Regulations – The ACO is a Camel, Not a Unicorn

David Harlow

Posted 10/31/11 on HealthBlawg

232323232-fp53393-nu=3238-235-766-232923585737;ot1lsiThe final Accountable Care Organization regulations are out, the initial flurry of commentary is out (including my own ACO webinar with simultaneous  #ACOchat tweetchat –available for download/replay soon; slides here now: “ACOs, Bundled Payments and the Future of Health Care“), and we can now all catch our collective breath and contemplate the draft vs. final ACO regulation comparisons, the meaning of this new, final set of regulations, guidances and statements from CMS, FTC, DOJ, OIG, and IRS on ACOs and Medicare Shared Savings Programs, and all of the attendant antitrust, antikickback, Stark, and other fraud and abuse matters, and of course tax issues.

So, now that these final regulations are out, and the mythical characteristics of the ACO will soon be dispelled (see under: unicorn), I propose a new animal kingdom metaphor for discussion of Accountable Care Organizations:

The Camel’s Nose is in the Tent.

The definition of a camel, as those of you who tuned into my ACO webinar already know, is a horse designed by a committee.  And, given the nature of the legislative and rulemaking processes, that’s exactly what we have before us – a camel.

Continue reading “Accountable Care Organization Regulations – The ACO is a Camel, Not a Unicorn”

Bracing for More Medicare Cuts

Merrill Goozer

Posted 10/19/11 on Gooz News.

I attended a depressing forum this morning on cost-saving ideas for Medicare to present to the Congressional “Super Committee” charged with coming up with $1.2 trillion in budget savings by the end of the year. The tone was ominous, best summed up by Mark Smith, president of the California HealthCare Foundation. “In times of crisis, meat-axes are taken to whole sectors. If you don’t believe me, ask the people who used to work for Lehman Brothers,” he said.

Here’s the backdrop. President Obama in his mid-September budget reduction plan called for coming up with an additional $320 billion in Medicare savings over the next decade, which would be on top of the half trillion dollars in Medicare cost reductions contained in the Affordable Care Act. The president would get there largely by cutting payments to hospitals and other providers, although the president also called for higher premiums on wealthier seniors for physician and drug coverage.

Continue reading “Bracing for More Medicare Cuts”

The Ryan Health Care Proposals—Not Your Congressman’s Health Plan

Robert Laszewski

First posted 9/28/11 on Health Policy and Marketplace Review

In a speech at the Hoover Institution today, Representative Paul Ryan (R-WI) argued again that his proposal to reform Medicare, and now his tax credit proposal for replacing the Democratic health care law for those under-age 65, would guarantee to citizens “options like the ones members of Congress enjoy.”

His proposals would not give people the guarantees members of Congress, and all other federal employees for that matter, now enjoy.

This is not a small point.

Previously on this blog, I have argued that many of the defined contribution reform proposals, Ryan’s included, should be faulted for putting all of the future risk of health care costs on beneficiaries.

Continue reading “The Ryan Health Care Proposals—Not Your Congressman’s Health Plan”

The Health Leadership Council Medicare Proposal: Too Much Responsibility on Beneficiaries and Not Enough on Providers

Robert Laszewski

First posted 9/27/11 on Health Policy and Marketplace Review

The Health Leadership Council (HLC), a coalition of CEOs from many of the leading health care companies, has created a list of Medicare reform recommendations for the Super Committee tasked with finding at least $1.2 trillion in budget savings.

As we begin the national debate over what to do about Medicare’s unsustainable costs, I will suggest that the HLC proposal gives us one, of what will have to be many, outlines for discussion.
Continue reading “The Health Leadership Council Medicare Proposal: Too Much Responsibility on Beneficiaries and Not Enough on Providers”

Medicare Policy And Politics: The Obama Debt Reduction Plan

Austin Frakt

First posted 9/19/11 on The Health Affairs Blog

Copyright ©2011 Health Affairs by Project HOPE – The People-to-People Health Foundation, Inc. 

Today, President Obama offered his plan to reduce the national debt by $3 trillion over 10 years, relative to current law. Most media attention will focus on his “Buffett rule,” the principle that millionaires should not pay average tax rates below those of the middle class, and on his ultimatum to “veto any bill that takes one dime from the Medicare benefits seniors rely on without asking the wealthiest Americans and biggest corporations to pay their fair share.” However, the plan also includes some proposed changes to health programs.

In broad terms, two important changes for Medicare policy and politics are included in the plan. They are (1) targeted cuts in provider payments (saving $224 billion over 10 years) and (2) 15 percent increases in income-related Parts B and D premiums and the fixing of thresholds so that, in time, one-quarter of beneficiaries are subject to a premium surcharge (generating about $20 billion in revenue over 10 years). The former is consistent with the spirit of the Affordable Care Act (ACA), which also cuts provider payments. The latter is consistent with the Buffett rule, which aims to make wealthy Americans pay a greater share of the cost of social programs.

Continue reading “Medicare Policy And Politics: The Obama Debt Reduction Plan”

50 Years for Medicare Fraud

Pat Salber

First posted 9/19/11 on The Doctor Weighs In

Big dollars attract big fraudsters.  Medicare is no exception.  Medicare fraud is particularly galling, however, because the Medicare trust fund is teetering on the brink of insolvency and many of the proposals to fix the problem seem to focus on cuts and more cuts to the program.  That is why today’s post should make you smile and pound your fist in the air…50 years in jail for Medicare Fraud…way to go!  Here’s the story:

Continue reading “50 Years for Medicare Fraud”

Quick Medicare Factoids

Joe Paduda

First posted 9/08/11 on Managed Care Matters

There’s going to be a LOT coming out in the next two months about Medicare, so it may help to know a few things about the program to help put it in context.

– We spent over a half-trillion dollars on Medicare in 2010.

– That’s fifteen percent of total Federal expenditures.

– 48 million people were covered in 2010.

Continue reading “Quick Medicare Factoids”

Happy Birthday, Dr. Berwick!

Patricia Salber

First posted 9/14/11 on The Doctor Weighs In

Dr. Don Berwick, head of CMS, just turned 65.  He has already turned in his paperwork to get his Medicare coverage.  This is fantastic.  The head of CMS will now receive benefits from the health insurance program that he oversees.

Of course, he is still working, so he still has his employer-sponsored benefits.  But an article on indicates he may only sign up for Part A (hospital coverage) to supplement his existing health plan.  Because he doesn’t need to sign up for Part B (doctors and other non-hospital services) yet, he won’t have to worry about paying a means-tested monthly premium.

Continue reading “Happy Birthday, Dr. Berwick!”