February 15th, 2009 by Dr. Val Jones in Health Policy
4 Comments »
There is no doubt in anyone’s mind that the U.S. healthcare system, in its current form, is financially unsustainable. Many in Washington believe that 2009 will usher in more sweeping reform than we’ve seen in decades. I attended the Medicare Policy Summit (along with about 100+ industry insiders and one other physician, Dr. Nancy Nielsen) to try to read the “tea leaves” regarding Medicare’s likely reform – and how that will impact the healthcare system in general.
I took 49 pages of notes during the two-day conference, but will spare you the gory details and simply capture (in a series of blog posts) what I found to be the most interesting parts of the discussion. This post is devoted to highlights from Bruce Vavricheck’s lecture, “The President’s Budget and What It Means for Entitlements.”
Bruce Varvichek is the Assistant Director for Health and Human Resources, Congressional Budget Office.
Bruce explained that if we continue on our current healthcare spending path, over 50% of all federal spending will go towards funding Medicare, Medicaid, and Social Security entitlement programs by 2018.
What are the underlying causes for this rapid rate of growth in spending?
1. Chronic Illness. The sickest, top 5% of Medicare beneficiaries account for 43% of all Medicare spending. Cost containment should focus on identifying these 5% early, and intervening so as to prevent advancement of disease where possible. Solution: The “medical home” model may help to identify people who are likely to become sick, and engage them in preventive health programs early.
2. Obesity. Rises in obesity rates is directly related to increased heart disease, diabetes, cancer, and other chronic disease prevalence. The fastest growing segment of the population that is becoming obese is the high income bracket. Bruce concludes: “This can’t just be explained by McDonald’s.”
3. Non outcomes-based spending. Medicare beneficiaries with the same medical conditions receive widely different medical services depending on where they are in the country. More services, however, do not correlate with improved outcomes.
Solution: Comparative Effectiveness Research
What changes in Medicare benefits is the Congressional Budget Office considering?
1. Creating Medicare insurance buy-in for people ages 62-64.
2. Reduce or eliminate 24 month waiting period for disabled people to become eligible for Medicare.
3. Increase the age of eligibility of Medicare beneficiaries to 67. This encourages people to work longer since average lifespan has been steadily increasing.
CBO Strategies to improve quality and efficiency of care:
1. Bundle Medicare payments so that hospital and post-acute care are linked. This will incentivize hospitals to do a better job of follow up once patients are discharged from the hospital.
2. Reduce payments (after risk-adjustment) to hospitals with higher re-admission rates.
3. Offer physicians performance-based payments for managing and coordinating care for their patients (the medical home model).
4. Create incentives and penalties to promote adoption and use of HIT.
CBO strategies to streamline payment structure and benefits:
1. Modify the Sustainable Growth Rate (SGR) formula used to determine payments to physicians. Put a cap on total spending.
2. Change Medicare Advantage program to fee for service.
3. Replace the current beneficiary cost-sharing structure with a unified deductible and uniform cost-sharing plan. Add catastrophic limit for out-of-pocket spending.
4. Require drug manufacturers to pay a rebate to Medicare for drugs covered in Part D.
5. Fill in the “donut hole” in Part D.
***
Next up: Grace Marie Turner and the free market gang debate the merits of a government-run healthcare system.
February 12th, 2009 by Dr. Val Jones in Expert Interviews, Health Policy
1 Comment »
I attended my very first Medicare Policy Summit conference today – and it was truly riveting (wonk alert). I took copious notes and will do my best to summarize some key points in a series of blog posts. This first post is devoted to the presentation by AMA President, Dr. Nancy Nielsen.
Dr. Nielsen began her lecture with an amusing story. She said, “congressional hearings are pure theatre” and described what she’d experienced three months ago at a meeting with Pete Stark. The conversation went something like this:
Stark: I’m sick of rich doctors driving up in their Porsches saying ‘I’m pulling out of Medicare.’
Nielsen: [Thinking to herself: First witness please?] I drive a GEO jeep.
Then Dr. Nielsen looked out at the Medicare Policy Summit audience and asked, “are there any doctors here?” I raised my hand enthusiastically at the back of the room. Then she responded, “Oh thank God. Well, you know we’re in the lion’s den…”
[Parenthetically, I didn’t see anyone else raise their hand – which is the subject for another conversation.]
What Is The AMA’s Current Agenda?
1. To expand coverage for the uninsured
2. To reform the physician payment system
3. To improve the quality and safety of healthcare
4. To improve public health
What Is The Bee In Nielsen’s Bonnet?
Nielsen explained that the sustainable growth rate is unsustainable. She stated:
“We can’t go through the annual death dance with congress over this. There is another 21% across-the-board cut in Medicare reimbursement scheduled for January 2010. And this cut will affect a group of small business owners (aka physicians) whose reimbursement has not increased since 2001 while their costs have increased 20%.”
What Does Nielsen Propose We Do?
1. Reform the system so that it reimburses for care coordination and prevention
2. Craft solutions based around patients’ needs
3. Rebase the SGR
4. Bundle services to increase value and reduce costs
5. Invest in disease prevention and wellness
6. Use comparative effectiveness to inform clinical decision-making (but NOT as a basis for coverage decisions)
7. Bring physicians into the policy decision-making process
Closing High-Five to Nurses
Dr. Nielsen closed with an amusing anecdote about inauguration day. Apparently she was standing in the sidelines of the parade route where Biden got out of his limo to greet the crowd. He gave a big hug to some nurses standing next to her and said, “I love nurses. They’re so much better than doctors.” Dr. Nielsen then had the opportunity to introduce herself to Biden and he responded, “Doctors saved my life, but nurses gave me the will to live.”
February 10th, 2009 by Dr. Val Jones in Health Policy, Medblogger Shout Outs, Opinion
2 Comments »
Dr. Rob Lamberts does an admirable job explaining why physicians are worried about the Recovery Audit Contractor (RAC) approach to identifying Medicare fraud. Complying with Medicare coding and billing rules is so difficult that physicians regularly resort to undercharging for their services, just to avoid the perception of fraudulent practices. Any medical practice that bills more than average is potentially subject to RAC audit, and the auditors themselves are paid a commission for finding “fraud.” In many cases, the “fraud” amounts to insufficient documentation of appropriate and necessary work performed by the physician.
Dr. Rob writes:
The complexity of E/M coding makes it almost 100% likely that any given physician will have billing not consistent with documentation. Those who chronically undercoded (if they are still in business) are at less risk than those who coded properly. Every patient encounter requires that physicians go through an incredibly complex set of requirements to be paid, and physicians like myself have improved our coding level through the use of an EMR. This doesn’t necessarily imply we are over-documenting, it simply allows us to do the incredibly arduous task of complying with the rules necessary to be paid appropriately.
Have I ever willingly committed fraud? No.
Am I confident that I have complied with the nightmarish paperwork necessary to appropriately bill all of my visits? No way.
Am I scared? You bet. The RAC will find anything wrong with my coding that they can – they are paid more if they do.
Dr. James Hubbard writes:
It would be fine if they were truly looking for fraud and abuse, but they look for some technicality or just a different interpretation. Forget about any recourse. A few years ago, I was asked to pay Medicaid back $5000. I protested they were completely wrong with their interpretation of their findings. The auditors said I had to pay it, but could argue for a refund by sending forms and proof to the “review committee”. I did that and received a reply that the $5000 was too small for the review committee to take up. I stopped taking Medicaid.
Sounds like the Spanish Inquisition, doesn’t it?
***
For more excellent analysis of the subject, I strongly recommend Dr. Rich Fogoros’ recent book: Fixing American Healthcare.
November 22nd, 2008 by Dr. Val Jones in True Stories
1 Comment »
I was traveling on an Amtrak train to a dinner meeting in Philadelphia. Two portly business men wedged in next to me and had an animated conversation about which companies do well despite a down economy. Here’s how the conversation went:
Businessman #1: You know, I’ve taken such a beating on the stock market, I just don’t know where to put my money to protect it and grow it. But I was thinking – one thing’s for sure – lots of people are going to continue dying despite the recession.
Businessman #2: So what kind of business insight is that?
Businessman #1: Funeral Homes, dummy. That’s where the action is. People still have to cremate or bury their loved ones, even in tough economic times.
Businessman #2: Nah, that’s not really scalable. I mean, you can’t save on costs with more volume. It’s fixed – a coffin costs what it costs. What you should really get into is Assisted Living facilities. Now THAT’s a growth market.
Businessman #1: No way, people can’t afford to pay for assisted living after the market crash. Their savings won’t last long enough to make it worth my while to take them in. Then when it runs out, what can I do? You can’t put them out on the street so you’re stuck with them till they die.
Businessman #2: You don’t have to be stuck with them, when their cash runs out you can transfer them to a lower quality facility. Then Medicare will pay for it.
