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Doing More With Less: Can We Efficiently Reduce Medicare Spending?

On my way to the annual two-day blowout health law seminar put on by Massachusetts Continuing Legal Education (MCLE) on Monday — I was second in the lineup, speaking about post-acute care and some of the innovations in that arena for dual eligibles, among other things — I heard a fascinating piece on NPR on one of the ideas floating around the supercommittee charged with cutting $1.2 trillion from the federal budget.  The idea: increase the minimum age for Medicare eligibility from 65 to 67, and save a bundle for Medicare in the process.

The problem with this deceptively simple idea (Social Security eligibility is migrating from 65 to 67, too, so it seems to be a sensible idea on its face), is that while it would save the federales about $6 billion, net, in 2014, it would cost purchasers of non-Medicare coverage (employers and individuals) about $8 billion, net.  Why?  The 65 and 66 year olds are the spring chickens of Medicare — they actually bring Medicare average costs down, because they’re healthier than the Medicare population as a whole. However, when compared to the working population, they are the older, sicker cohort, so they would drive costs up if insured in the commercial market.

Monday’s post in this space was on the 2012 MPFS (Medicare Physician Fee Schedule) and the continuing Sustainable Growth Rate (SGR) debacle, and it prompted an email from a reader pointing to a predictable but ultimately unsympathetic plea to please not cut THAT program, because it’s Important.

They’re ALL important, folks.

The cold, hard truth is that we need to figure out how to do more with less — in every program, for every worthy cause.  We need to learn how to work collaboratively, tear down the silos, and activate every other cliche in the book.  Collaborative thinking, inspired by changes in the economic drivers — i.e., reimbursement models — that have led to more siloed thinking in the past, is hard to do, but actors in the health care economy need to get better at it – and fast.

The Bundled Payment Initiative, ACOs and sons of ACOs, the Medicare-Medicaid Coordination Office, and more innovations coming out of CMS, driven by the ACA, are all encouraging developments, pushing providers in the direction of collaboration, and while we may have to deal with some unintended consequences a long the way, these are some important experiments that must be conducted.  And the people are with Washington on this one: An RWJF/Harvard School of Public Health survey released this week found that most folks want the federales to grow their role in the health care system.  Not what we might have expected, but an encouraging sign that folks understand that the problem before us is a big one, requiring significant resources in working towards solutions.

*This blog post was originally published at HealthBlawg :: David Harlow's Health Care Law Blog*

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