Is Healthcare Spending About To Accelerate?

Is Healthcare Spending About to Accelerate Money Running JetBend a resilient object and it will spring back with a vengeance once released from your grip. Is that what is about to happen to healthcare spending?
For years now, experts have been debating ways to “bend the cost curve ” – take the sharp rise in healthcare costs, picture a rapidly ascending line on a XY axis, and slow it down, bend it so it moves horizontally to the X axis.
In the last few years, we seem to have bent the curve as we’ve hoped to. Healthcare spending is growing more slowly than it has in decades. The federal government recently reported that: “The Congressional Budget Office now estimates that Federal spending on Medicare and Medicaid in 2020 will be $188 billion below what it projected as recently as August 2010.”
But this good economic news may soon come to an end, and the pent-up energy of the healthcare economy could snap back and break our budgets if we are not vigilant. (To read the rest of this article and leave comments, please visit Forbes.)

Found: Billions of Wasted Medicare Dollars

Found Wasted Medicare MoneyIt is well known that Medicare expenditures threaten the financial solvency of the U.S. government. And it is pretty well agreed upon that some of our Medicare spending goes towards wasteful medical care.
But which medical care is wasteful and how much is such care costing us?  A study in JAMA Internal Medicine provides a sneak peek at answers to these important questions. The research, led by Aaron Schwartz , a graduate student at Harvard, focused on interventions that medical experts deem to provide little or no health benefit. For example, the Choosing Wisely campaign, promoted by medical societies, has concluded that testing people’s lung function prior to low and intermediate-risk surgeries does not improve surgical outcomes. Similarly, the United States Preventive Services Task Force has concluded that colon cancer screenings yield more harms than benefits for elderly patients.
The researchers explored how often Medicare beneficiaries received unnecessary services like this, a list of 26 tests or procedures that medical experts have deemed to be unnecessary. The researchers discovered that Medicare patients, on average, received one such intervention per year. The worse culprit, financially speaking, was stenting (propping open) coronary arteries for people with stable heart disease, which by one of their estimates leads to almost $3 billion per year of wasted Medicare spending. Close behind was another cardiology procedure, stress testing for patients with stable heart disease, which triggered over $2 billion of unnecessary spending. Toss in $200 million per year for unnecessary back imaging, another $200 million for unnecessary imaging tests to evaluate headaches, and the researchers uncovered over $8 billion of Medicare waste, for just these 26 interventions. (To read the rest of the article and leave comments, please visit Forbes.)

How Medicare Is Punishing Hospitals That Care For Poor People

Such a no-brainer: If patients who receive care at Hospital A are more likely to get readmitted to the hospital 10, 20 or 30 days after discharge than patients in Hospital B, then Hospital A must be doing something wrong. Perhaps clinicians at that hospital are less adept at diagnosing and managing patients’ problems. Perhaps the follow-up care at Hospital A is less organized, leaving patients’ problems to spin back out of control. Maybe that hospital’s electronic medical record system is fragmented, making it harder for outpatient clinicians to figure out what happened to their patients when they were in the hospital. Whatever the reason for this shoddy care, we shouldn’t stand by and let it happen. Right?
That has certainly been the view in the Medicare office lately, with the Centers for Medicare and Medicaid services (or CMS) reducing payments to hospitals that have excessive 30-day readmission rates. CMS is trying to use its financial clout to motivate healthcare providers to provide higher quality care. The readmission policy is one of many reimbursement changes built into the Affordable Care Act (aka Obamacare).
But it is a policy that probably needs revision. Evidence is continuing to accumulate that the readmission policy will unduly harm hospitals that care for low income patients. (To read the rest of this post and leave comments, please visit Forbes.)

Healthcare Versus Other Social Spending

Here is another great picture from the people at Vox. It shows the United States in the middle of OECD countries, when it comes to spending on social services, like healthcare, unemployment, and the like. Despite being in the middle, however, the US is better understood as an outlier, on two extremes of this spectrum. We very much outspend everybody on social spending for health care, while spending far less than other countries on other social services.
Healthcare vs Other Social SpendingI would like to see us focus less of our social spending on healthcare services, for which we do not receive an adequate return on investment compared to other countries. But that’s just one man’s opinion.

Inappropriate Medicare Incentives Lead to Unnecessary Subspecialty Procedures

doctor with endoscopeSometimes people flat out need cameras shoved down into their stomachs.  A long history of reflux disease, for example, could prompt a gastroenterologist to perform an “upper endoscopy”—to run a thin tube down the patient’s throat in order to view their esophagus and stomach and look for signs of serious illness.  Medicare has correctly decided that such upper endoscopies are valuable medical tests, and reimburse physicians relatively generously for performing them.  But what should Medicare do when gastroenterologists unnecessarily repeat these tests in patients who do not show signs of serious illness on their first exam?
I became aware of this issue after reading an article in the Annals of Internal Medicine by Pohl and colleagues.  Pohl glanced at billing data from a random sample of almost 1 million Medicare enrollees. (I am pleased with myself when I pull together a study of a few hundred patients.  Perhaps I won’t be so pleased in the future.)
Pohl and colleagues analyzed how many patients received more than one upper endoscopy within a three year period.  They then tried to figure out how often these repeat procedures were necessary, because of abnormalities discovered in the initial exam… (Read more and view comments at Forbes)

Are Bundled Payments the Future of US Healthcare?

usa todayI spoke recently with a reporter from the USA Today, who ended up writing a nice article on bundled payments in healthcare. I promise to return to this topic on future posts. But for now, let me whet your appetite with a bit of her story:
WASHINGTON — Health and policy experts are pushing for a system that pays doctors a lump sum for medical care or allows them to share in savings, saying it will save millions of dollars over current fee-for-service payments that can lead to fraud and over-use of medications.
In the new system, doctors would not be entitled to extra pay should they prescribe costlier medication.
Earlier this month, Sen. Elizabeth Warren, D-Mass., raised the issue of lump sum – or “bundled” – payment plans at a hearing for the nomination of Sylvia Mathews Burwell to become secretary of Health and Human Services. A bundled payment demonstration project at Bay State Health in Massachusetts saved $2,000 per Medicare patient for things like hip transplants, she said… (Read more at USA Today)
 

Look How Much Medicare Spends after Patients Leave the Hospital

As readers of this blog know, Medicare costs loom large in our nation’s future. If we do not find a way to control Medicare spending, it’s hard to imagine any way to remain a solvent nation. As we continue to explore ways of controlling these costs, it is important to remember that a great deal of Medicare spending occurs after people leave the hospital. Consider this picture, reproduced from a February article in the New England Journal of Medicine.

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(Note: COPD is emphysema.)
One reason that post-acute care is so expensive, of course, is that Medicare has put so much pressure on hospitals to hold on their expenses. As students in my health policy class get sick of hearing: “if you squeeze the balloon in one location, it just expands in another.” That’s why I expect to see lots more efforts to “bundle” medical payments, so that when a person gets admitted to the hospital with emphysema, the hospital – actually healthcare system that the hospital is part of – gets money to take care of that patient for the next, say, six or eight weeks. That gives the healthcare providers an incentive to provide the best possible care, in the most efficient manner. If it means an extra day in the hospital will reduce a lot of post-hospital spending, so be it.
I wonder if growing up in Minnesota is what has made me such a fan of bundling up!

Is Medicare Being Too Generous To Rural Healthcare Providers?

 
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If you live in the rural U.S., you probably face relatively limited access to the wonders of American healthcare.  There won’t be as many physicians per capita offering you their services.  This paucity of healthcare professionals will be especially stark for subspecialty care.  There are not many ENT specialists opening up shops in rural Texas when they can find jobs in Houston or San Antonio.
This undersupply of physicians has long caused medical experts to fret that rural patients receive too little medical care.  As a team of researchers pointed out in a recent article in Health Affairs, Medicare has responded by providing a financial incentive to rural healthcare providers, boosting their payment to encourage physicians to locate in such areas…(Read more and view comments at Forbes)

The Biggest Government Health Care Spender Since LBJ Was…Ronald Reagan?

reaganMany readers will recognize Ronald Reagan’s famous maxim that: “Government is not the solution to our problem; government is the problem.”  Some will even recognize his vehement opposition to Lyndon Johnson’s Medicare proposal, before the program was passed into law:

“We are faced with the most evil enemy mankind has known in his long climb from the swamp to the stars.  There can be no security anywhere in the free world if there is no fiscal and economic stability within the United States.”

Reagan even warned at one point:

“If this program passes, behind it will come other federal programs that will invade every area of freedom as we have known it in this country until we wake to find that we have socialism… You and I are going to spend our sunset years telling our children and our children’s children what it was like in America when men were free.”

Pretty overwrought words, and clearly an inaccurate prediction.  But that’s not what I want to write about now.  Instead I want to talk about happened when Ronald Reagan was president, when he passed what David Blumenthal and James Morone describe as “the largest Medicare expansion in decades.”  What was this expansion, and how did Reagan come to embrace it? …(Read more and view comments at Forbes)

Why JFK Failed to Pass Medicare

jfkIn a late night phone call during a foreign policy crisis, Kennedy expressed disdain for domestic policy, showing the kind of attitude that doomed later efforts to reform the U.S. healthcare system:

“It really is true that foreign affairs is the only important issue for a president to handle, isn’t it?  I mean, who gives a shit if the minimum wage is $1.15 or $1.25 in comparison to something like this?”

Need I say more?
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PeterUbel