The JAMA study focused on 14 communities around the country, where researchers found that interventions helped to avert about 6,800 hospitalizations and 1,800 re-hospitalizations per year. In a hypothetical average community of 50,000 fee-for-service Medicare beneficiaries, the collaborative effort would have saved Medicare more than $4 million per year in hospitalization costs, while costing less than $1 million to implement, the study authors said. However, the study found no change in the rate of re-hospitalizations as a percentage of all hospital discharges.
Video: What Does Medicare Cost?
CBO: Medicare, Medicaid Spending Growth Slowing by 15%
Healthcare spending on Medicare and Medicaid has grown slower than many have predicted, and the most recent report from the Congressional Budget Office (pdf) shows federal spending for the two programs was 5 percent lower than it estimated in March 2010. The CBO consequently lowered seven-year spending projections for Medicare and Medicaid in 2020 by $200 billion — $126 billion for Medicare and $78 billion for Medicaid, which is roughly a 15 percent decrease for each program. The CBO reduced its 10-year projection of outlays for Medicare by $137 billion, citing the third straight year of below-average growth. Federal spending for Medicare Part A and Part B has risen by an average of 2.9 percent per year since 2009 — far less than the 8.4 percent growth rate from 2002 to 2009 and far less than what the CBO has projected for the past several years. CBO analysts made changes to Medicaid spending outlays for the next 10 years, citing lower expected costs per person through the Medicaid expansion, which will go live in 2014. However, the CBO also said it expects Medicaid enrollment will not be as high as originally thought, saying more people will gain health coverage over the next decade through other sources, mostly employers.
CBO Updates Spending Projections for ACA, Medicare, Medicaid
According to CBO, the new estimate is the result of the American Tax Payer Relief Act, which maintained lower tax rates for U.S. residents with annual incomes below $450,000. The lower rates “reduce the relative attractiveness of employment-based insurance for low-income workers and for their employers.” In essence, offering health coverage as a tax-free form of compensation is less appealing when marginal tax rates are lower and a publicly subsidized option is available. CBO estimated that employers will pay $13 billion more in fines for non-compliance with the ACA’s employer mandate.
Daily Kos: Kaiser report details Medicare options
Medicare cost sharing is relatively high and, unlike most private health insurance policies, Medicare does not place an annual limit on the costs that people with Medicare pay out of their own pockets. Many Medicare beneficiaries have supplemental coverage to help pay for these costs, but with half of beneficiaries having an annual income of $22,500 or less in 2012, out-of-pocket spending represents a considerable financial burden for many people with Medicare.Cost sharing and premiums for Part B and Part D have consumed a larger share of average Social Security benefits over time, rising from 7 percent of the average monthly benefit in 1980 to 26 percent in 2010 (Exhibit I.3). Medicare beneficiaries spend roughly 15 percent of their household budgets on health expenses, including premiums, three times the share that younger households spend on health care costs. Finally, Medicare does not cover costly services that seniors and people with disabilities are likely to need, most notably, long-term services and supports and dental services. Putting the burden of saving Medicare on the beneficiaries, already paying a significant portion of their incomes on health care, isn’t a solution for saving this program, for keeping it’s promise to America’s seniors and disabled. That basic premise should be the starting point for reforms.
Do we really know what is going on with health care spending?
#4: “Looking ahead, Medicare spending is projected climb at a rate the country can’t afford.” Probably true, but maybe the trajectory isn’t quite as worrisome as it used to be—or is it? On one hand, the government report cited earlier, projects that, “The slow growth in spending per beneficiary from 2010 to 2012 combined with the projections of spending growth at GDP+0 for 2012-2022 is unprecedented in the history of the Medicare program. If sustained, the slower growth would improve Medicare’s ability to meet its commitments to seniors and persons with disabilities in future generations.” But the qualifier “if sustained” leaves a lot of room for doubt. The Fiscal Times notes that, “ ‘Even though spending per beneficiary is projected to grow at or below the rate of per capita GDP, the number of Medicare beneficiaries is projected to grow at approximately 3 percent a year,’ the HHS report says. The 50 million beneficiaries today will grow to more than 85 million in 2035. ‘As a result, aggregate Medicare spending will account for a growing share of GDP over the next decade.’”
Change in Billing Option Leads to an Increase in Medicare Spending
The authors of the study caution that their findings do not make any broad statements about the effects of coding changes in general. It is important to realize that the spike in Medicare spending during the year of 2010 could in fact be a one-off anomaly as opposed to a trend. But the researchers were able to conclude that in this particular case of Medicare billing structure alteration, the projected results of the change were out of alignment with the actual real-world repercussions.
GAO Report Looks at Medicare Spending on Part B Drugs
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Join the debate on “Reining in Medicare Costs without Hurting Seniors”
Should we try to spend less on end-of life care? Many say “Yes,” but Zeke Emanuel (a medical ethicist and oncologist who was part of the Obama team during the president’s first term), says “No.” I link to a column where he notes that “It is conventional wisdom that end-of-life care is an increasingly huge proportion of health care spending. . . Wrong. Here are the real numbers: end-of-life care (not just for the elderly, but for all Americans) accounts for just 10% to 12% of total health care spending. This figure has not changed significantly in decades.”
Bundled payments, DMEPOS, regulatory reform, and ESRD
We also announced a major expansion of the Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. In its first year of operation, competitive bidding, where prices are based on suppliers’ bids, saved the Medicare program, and taxpayers, over $202 million, while maintaining access to quality products for Medicare beneficiaries in the nine areas of the country where the program launched. It’s a great example of the Administration’s determination to put the brakes on runaway healthcare costs. With this expansion in the program, Medicare beneficiaries in 91 major metropolitan areas will save an average of 45 percent on certain DMEPOS items beginning in July. Between 2013 and 2022, we estimate that the expansion of the DMEPOS program will save Medicare $25.7 billion, while saving beneficiaries, who pay a percentage for medical equipment and supplies, $17.1 billion through lower prices.
Trudy Lieberman: Is Obama Going To Cut Medicare? Probably
Simpson-Bowles also restricts the amount that insurance companies can reimburse a beneficiary for medical expenses under a Medigap policy—the “skin-in-the-game” method of controlling medical costs, meaning that if seniors have to pay more they will use fewer medical services. Indeed, the Simpson-Bowles document asserts that Medicare’s “benefit structure encourages over-utilization of health-care,” a point state insurance commissioners have found dubious. So to fix this “problem” and make seniors pay more, Medigap policies would be prohibited from covering the first $500 of expenses and only 50 percent of the next $5,000 of expenses a beneficiary racks up.
GAO Report Examines Medicare Costs From Self
A recent GAO report examines the growing prevalence of physician self-referral (referral to the physician’s own practice) for advanced imaging services (e.g., magnetic resonance imaging (MRI) and computed tomography (CT) services) and its effect on Medicare spending. The GAO reports that while the number of both self-referred and non-self-referred advanced imaging services increased from 2004 through 2010, the growth rate was much higher for self-referred services. For instance, the number of self-referred MRI services increased by more than 80% during this period, compared to a 12% growth rate for non-self-referred MRI services. Self-referring providers referred about twice as many MRI and CT services as providers who did not self-refer in 2010, and these differences persisted even after accounting for practice size, specialty, geography, or patient characteristics. The GAO also found that providers’ referrals of MRI and CT services substantially increased the year after they purchased or leased imaging equipment or joined a group practice that self-referred. The GAO estimates that providers who self-referred likely made 400,000 more referrals for advanced imaging services in 2010 than they would have if they were not self-referring, increasing Medicare costs by about $109 million. The GAO points out that any unnecessary referrals “pose unacceptable risks for beneficiaries, particularly in the case of CT services, which involve the use of ionizing radiation that has been linked to an increased risk of developing cancer.” The GAO recommends that CMS take steps to improve its ability to identify self-referral of advanced imaging services and address increases in these services, including: inserting a self-referral flag on Medicare Part B claims form to indicate whether or not an advanced imaging service is self-referred; implementing a payment reduction for self-referred advanced imaging services to “recognize efficiencies when the same provider refers and performs a service”; and determining how to ensure the appropriateness of advanced imaging services referred by self-referring providers.