Tag: Medicare

Near Chicago next week? Meet Todd Park!

Apr 18, 2011• 1

If you’re near or in Chicago next Weds (April 27) and you care about health data, applications or innovation, we highly recommend that you get to a Community Forum on the Health Data Initiative. The formal invite & details follow–Matthew Holt

James M. Galloway, MD, Acting HHS Regional Director and Regional Health Administrator, Region V invites you to a community dialogue hosted in Chicago on the Health Data Initiative with Todd Park, HHS Chief Technology Officer. Todd Park joined HHS as Chief Technology Officer in August 2009. In this role, he is responsible for helping HHS leadership harness the power of data, technology, and innovation to improve the health and welfare of the nation.

One of his priority projects, on behalf of Secretary Sebelius, is the Community Health Data Initiative. The Community Health Data Initiative is a public-private collaboration among federal, state, local and private organizations, that aims to make indicators of health available to a broad array of users. Health indicators represent data from populations or groups of individuals that can be used to reflect health trends or differences in health status, cost, quality, and health system performance.

This is an opportunity for public health officials, businesses, academic institutions, providers, hospitals, health plans, and advocates to learn more about the Community Health Data Initiative, in particular, on the use of health and health care data to improve performance. More information on the initiative can be found at http://www.hhs.gov/open/datasets/communityhealthdata.html.

We hope that you can join us in a community dialogue with Todd Park!

When: Wednesday, April 27^th from 2 – 4 p.m.

Where: The MidAmerica Club (inside the Aon Building)
200 E. Randolph, 80th Floor
Chicago, IL 60601

Why: You can help improve the health of our nation and the reach of this program in our community.

RSVP: Space is limited. Please RSVP for this free event by Friday, April 22^ndto Ms. April Dublin at ap**********@*hs.gov or 312-353-1385

Why Medicare Isn’t the Problem, It’s the Solution

Apr 12, 2011• 200

By ROBERT REICH

I hope when he tells America how he aims to tame future budget deficits the President doesn’t accept conventional Wasington wisdom that the biggest problem in the federal budget is Medicare (and its poor cousin Medicaid).

Medicare isn’t the problem. It’s the solution.

The real problem is the soaring costs of health care that lie beneath Medicare. They’re costs all of us are bearing in the form of soaring premiums, co-payments, and deductibles.

Americans spend more on health care per person than any other advanced nation and get less for our money. Yearly public and private healthcare spending is $7,538 per person. That’s almost two and a half times the average of other advanced nations.

To the Barricades!

Apr 11, 2011• 5

By DAVID DRANOVE

Last week, Republican Congressman Paul Ryan unveiled his plan to save Medicare and Medicaid. Supporters hailed the plan as revolutionary; critics decried the plan as revolutionary. For something so revolutionary, it sure is based on some old ideas.

In 1978, Stanford Business School professor (and my soon to be advisor) Alain Enthoven published an article in the New England Journal of Medicine in which he described his “Consumer Choice Health Plan.” Enthoven proposed tax-funded vouchers that all Americans could use to purchase health insurance. The amount of the voucher would be tied to income and individuals could use their own money to purchase a plan that cost more than their voucher. Enthoven even included some rules limiting the ability of insurers to cream skim healthier enrollees; new and improved versions of these rules are written into the insurance exchanges as part of the Affordable Care Act.

In 1986 I published a paper that described how states were trying to control Medicaid expenses by regulating the prices they paid to hospitals. I pointed out that states had surprisingly little interest in reining in hospital costs because the federal government paid for half or more of the Medicaid bills. The solution was apparent to any economist – convert the “percent of Medicaid spending” formula to a block grant, so that the states are 100% responsible for the costs of Medicaid expansions.Continue reading…

Medicare, Medicaid Get Squeezed in Ryan Plan

Apr 5, 2011• 38

By MERRILL GOOZNER

Everyone agrees that controlling health care costs is the key to bringing long-term federal budget deficits under control. Government spending on Medicare for seniors and Medicaid for the poor has grown nearly twice as fast as the rest of the economy for decades and is by far the largest component of future projected deficits.

But government funded health care programs aren’t unique in that regard. Employer-based coverage for the working population, which is provided through private insurance companies, has grown just as fast. The problem in a nutshell is the cost of health care, not its funding source.

That’s why it’s important to consider how the two separate sides of our health care system – public plans and private plans – will interact should the Medicare privatization plan that Rep. Paul Ryan, R-Wis., touted on Fox News Sunday become law. The House Budget Committee chairman’s alternative budget would turn Medicare over to private insurers for anyone who retired after 2021. Future retirees would receive a capped payment to buy insurance (he called it “premium support,” not a voucher). Medicaid would be turned into a capped block grant – which translates as a fixed sum awarded to states.

Capping expenditures is central to cost-control in the Ryan plan, which is essentially the same plan that he co-authored with former Congressional Budget Office director Alice Rivlin during the fiscal commission deliberations. The plan limits the annual growth in the amount earmarked for either premium support or block grants to one percentage point more than gross domestic product (call it GDP+1).

That’s about half of the actual health care cost outlays in most years. According to Congressional Budget Office projections released in January, federal spending on Medicare and Medicaid is expected to nearly double to $1.6 trillion by 2021, about a 7 percent annual increase. If the primary goal is holding down taxes and spending, capping that rise at GDP+1 provides the upside. With a wave of the legislative wand, government spending on health care for the old and poor would be reduced to more manageable proportions – between 3.5 and 4.5 percent a year depending on how fast the economy grows. Taxpayers could rejoice.Continue reading…

ACO Rules: Where’s the Beef?

Apr 5, 2011

By PAUL LEVY

I’m sorry, but I just don’t get it. Last week, CMS announced proposed regulations about setting up Accountable Care Organizations. Here’s the statutory background and the theory of the case, as set forth in the March 31 Medicare Fact Sheet:

Section 3022 of the Affordable Care Act, added a new section 1899 to the Social Security Act (the Act) that requires the Secretary to establish the Shared Savings Program by January 1, 2012. This program is intended to encourage providers of services and suppliers (e.g., physicians, hospitals and others involved in patient care) to create a new type of health care entity, which the statute calls an “Accountable Care Organization (ACO)” that agrees to be held accountable for improving the health and experience of care for individuals and improving the health of populations while reducing the rate of growth in health care spending. Studies have shown that better care often costs less, because coordinated care helps to ensure that the patient receives the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors.

Here’s the introductory paragraph from the CMS summary:

ACOs create incentives for health care providers to work together to treat an individual patient across care settings – including doctor’s offices, hospitals, and long-term care facilities. The Medicare Shared Savings Program will reward ACOs that lower growth in health care costs while meeting performance standards on quality of care and putting patients first. Patient and provider participation in an ACO is purely voluntary.

How will this work? And, will it work?

Let’s dig in.Continue reading…

The Insanity of Health Care Pricing, aka Alice in Medical Land

Mar 1, 2011• 6

By DAVID E. WILLIAMS

One of the interesting things I learned in business school is that not only is it typical for a business to earn 80 percent of its profits from 20 percent of its customers, but that 75 percent of its customers may represent 120 percent of its profit. In other words, not only are some customers more profitable than others, but a fair fraction of the customer base is unprofitable. This kind of pattern is evident in a normal (i.e., non-health care) business. The main drivers are usually cost of customer acquisition and cost to serve. For example, some customers demand a lot more service than others and some customers that cost a lot to bring on only buy once. Price is usually a secondary factor, with more powerful or shrewder customers negotiating discounts.

Once businesses understand their true costs and profitability by customer segment they can take steps to improve profitability. For example, if customers recruited through advertising on Facebook are unprofitable, the company can advertise elsewhere. If some customers use a lot of service, the company can start charging for service explicitly.

Health care is a lot weirder than that, as Ambulance-Bill Chasing in the Sunday Boston Globe Magazine illustrates. A non-health care person wrote about how he tried to understand the bills for his mother’s ambulance rides to and from the hospital. The more he dug, the more bewildered he became:

As a reporter, I’m used to dealing with complex material, but this drive down one of the countless, curvy roads that merge into the Health Cost Superhighway left me both more informed and more confused. Maybe it really is easier to remain clueless and indifferent about our medical bills. The alternative, as a friend who has spent decades in the health care trenches told me, is “to be clueless and terrified.”Continue reading…

Robert Reich Connects the Dots

Feb 22, 2011• 8

By JANE SARASOHN-KAHN

“I’m not a class warrior. I’m a class worrier,” Robert Reich told a standing-room only crowd of thousands of health IT geeks as he delivered the first keynote address of the annual meeting of HIMSS, the Healthcare Information Management and Systems Society. This year’s crowd will have reached about 31,000 people interested in health information technology’s transformative role in health care. The 31K represents an 18% increase in attendance from last year’s crowd. The HIMSS economy is strong.

Robert Reich warns, however, that the U.S. macroeconomy is far from healthy…and health care costs will be a long-term threat to the nation’s economy unless policymakers slow them down.

Reich, who has served under 3 Presidents, written 14 books, and has been named one of the 10 most successful cabinet members, told the HIMSS audience that not only did “the great recession wear me down,” noting his small stature, but that the “gravitational pull of the great recession wore everything down.”

He noted that “We have two economies” in America: one is doing well, with the Dow hitting 12,000, corporate profits up, and companies sitting on about $2 trillion worth of cash.Continue reading…

Victims of Health Care Reform

Jan 31, 2011• 43

By JOHN GOODMAN, PhD

Who will be hurt the most by the health reform legislation Congress passed last year?

Answer: The most vulnerable segments of society: the poor, the elderly and the disabled. That’s right. Virtually everyone in Congress who is left-of-center voted for a law that will significantly decrease access to care for the people they claim to care most about.

Why isn’t anyone writing about this?

Answer: Because almost all the people who write about health care know almost nothing about economics.

Basically, there are two ways to reform health care. One way is top down. The other is bottom up. The latter is based on the economic way of thinking. The former rejects that way of thinking. The latter gets the economic incentives right for all the individual actors, leaving the social result largely unpredictable. The former starts with a social goal and tries to impose it from above, leaving individuals with perverse incentives to undermine it. The latter depends for its success on people acting in their self-interest. The former depends for its success on preventing people from acting in their self-interest.

I think I can probably count on the fingers of two hands the number of people in health policy who accept the economic way of thinking. All the rest — 99.9% of the total, including a lot of people with “Ph.D., economist” after their names — reject it in spades.

2010 Unplugged

Jan 4, 2011• 4

By BOB WACHTER, MD

For people like me, who, perversely enough, get a certain thrill from studying healthcare policy, there’s never been a more exciting, if also dizzying, year than 2010. Passage of the reform bill last March was only the start – and in some ways merely a marker – of the Shifting of the Paradigms: from provider to system; from pen to keyboard; from pay-for-piecework to pay-for-performance; from secrecy to transparency; from patient as passive actor to patient as star of our show.

I’ve been catching up on my reading during the holidays, so bear with me as I devote this blog – lengthier than usual – to a handful of articles, talks, and experiences that, while seeming unrelated, helped me better understand some of the threads of this vibrant healthcare tapestry we’re now weaving.

For decades, one of the defining characteristics of the American healthcare enterprise has been the remarkably poor value – quality divided by cost – it produces. Most of the changes afoot represent a push by a variety of stakeholders, using the tools at their disposal, to improve this value equation. And much of the push-back can be seen as the predictable acts of those who benefited from the old order. As the late William Safire once observed, when you zap a sacred cow, you need to brace yourself for the ensuing mooing. Welcome to Old MacDonald’s Farm.

Turning the Clock Back Isn’t Enough: The Nasty Surprise Awaiting the GOP on Health Care and the Deficit

Jan 4, 2011• 23

By SCOTT BITTLE and JEAN JOHNSON

The Republicans who will take control of the House this January have made it clear there are two things they hate: deficits and President Obama’s healthcare reform. They’ve promised to reduce the first and repeal (or at least hobble) the second. But if you’re worried about deficits, repealing the Obama plan won’t do any good unless you’ve got a better idea. In fact, the numbers say repealing it could make the government’s budget problems worse.

Despite the outrage over spending on the Wall Street bailout, the stimulus or the Iraq war, at least these costs are temporary. But the combination of an aging population and health costs that keep rising faster than inflation means that spending on Medicare, Medicaid and Social Security are going up – – and they’ll keep going up for years on end. With an aging population, there will be more older people eligible for these programs. The health care they need will cost more on top of it.

When people argue about the costs of an aging America, they often lump Social Security and Medicare together like they were the identical twins of public policy. If they are twins, they’re more like the 1980s movie Twins, featuring Arnold Schwarzenegger and Danny DeVito as the world’s most improbable pair of brothers. Maybe you remember the iconic movie poster. It shows the two dressed alike, but with an enormous Schwarzenegger looming over DeVito. In the budget world, Medicare and Social Security are both problems, but Medicare is definitely played by Arnold. Here’s why.

Health care spending has been rising faster than the inflation rate for decades. In 2007, the Consumer Price Index went up 2.8 percent, and health spending went up 6 percent. In 1997 inflation went up 2.3 percent, and health spending went up 5.4 percent. In 1990, when inflation was 5.4 percent, health spending climbed nearly 11 percent.