Healthcare update

Who’s Right on Medicare Reform, Ryan and Rivlin or Obama and Gingrich? Cato Institute Praises Paul Ryan's Medicare Voucher Proposal

Another state considers single-payer health system

Patient safety issues threaten hospital's Medicare funding

A Tennessee hospital has learned that patient safety cannot be overlooked. If Mercy Medical Center St. Mary's doesn't improve patient safety measures, it will lose its Medicare funding on June 5, reports the Knoxville News Sentinel.
An inspection by federal regulators found hospital conditions--which were not disclosed by the News Sentinel--that put patient health and safety at risk. If those conditions don't change, the hospital can say goodbye to the federal funds.
"It boils down to the delivery of quality care in a safe environment. Those are the two main parameters," said CMS spokeswoman Lee Millman, in keeping with confidentiality laws.

Specialists question ACO integration, show reluctance to join

Medicare costs slow dramatically, unlike commercial sector

The cost of delivering healthcare in the hospital setting is continuing to rise, but the sector's inflation has been strongly muted, according to data from the S&P's Healthcare Economic Indices.
The slowdown in the hospital Medicare cost index was particularly dramatic, where the annual growth rate was 1.18 percent, compared to 8.3 percent in August 2009.
However, the same index regarding hospital costs as shouldered by commercial payers was much higher, at 8.36 percent, just one point down from its peak of 9.36 percent in May 2010.
"This phenomenon could be the possible result of two things: Costs for Medicare patients are being better contained than those covered under commercial insurance plans and hospitals are using more procedures and services covered under commercial plans, contributing to the increase in total costs," says David M. Blitzer, chairman of S&P's index committee.
As for overall inflation, S&P concluded that healthcare inflation rose at a 5.77 percent annual rate for the 12 months ending March 2011. That's the smallest rate of growth in nearly four years, and one of the lowest rates since the index began in 2005. That rate compares to 8.74 percent annual growth that occurred during the 12 months ending in May 2010.
"While there was some volatility within months, the general trend has been a slowdown across all ... of the indices we publish. Most of the annual growth rates peaked in the late winter/early spring of 2010. Since then, most of these rates have fallen by 2 percentage points or more," 

Age Gap. The GOP’s brilliant generational weapon in the Medicare fight.

If there was ever going to be a generational war in this country, that high school class of ’74 would be its Mason-Dixon line. It’s the moment when Bill Clinton’s promise—“if you work hard and play by the rules you’ll get ahead”—began to lose its value. Today’s seniors and near-seniors spent much of their working lives in that postwar world, with their incomes rising, investments gaining, their health increasingly secure, and their retirements predictable. Everyone 55 and younger spent his or her entire working life in an economy where all those trends had stalled or reversed. To borrow former White House economist Jared Bernstein’s phrase, it was the “You’re On Your Own” economy. Finally, those 55-year-olds are spending several of what should be their peak earning years, years when they should be salting away money in their 401(k)s and IRAs, in a period of deep recession and very slow recovery.
The Ryan plan, in other words, delivers to the older generation exactly what they’ve had all their lives—secure and predictable benefits—and to the next generation, more of what they’ve known—insecurity and risk. It’s hardly the first generational fight the GOP has started. The previous one was just last fall, when they campaigned for Medicare, and against the $500 billion in cuts (mostly by getting rid of the overgenerous subsidies to private insurers in an experimental program) passed as part of the Affordable Care Act. With an off-year electorate that was overwhelmingly older, they could put all their bets on the older side, knowing that seniors would see little benefit from the Affordable Care Act and were naturally worried about any change to the health system they enjoyed.

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This time, the GOP hopes to play both sides of the generational war, gambling that while seniors want security, younger voters never expected the certainty of Medicare, just as they don’t expect reliable pensions or Social Security benefits, and thus will embrace a plan that sounds innovative, flexible, and market-based. Contending that the only alternative to premium support is the end of Medicare entirely, they are offering a generation that is accustomed to getting less than their parents a little bit, rather than nothing.
This strategy is a variation on the generational conflict the Bush Administration tried to launch in 2005 over Social Security privatization. Although it never reached the level of specificity that Ryan achieved, the calculus was the same: Younger voters would welcome the opportunity to take advantage of the stock market for their retirement, rather than the stodgy and predictable system their parents and grandparents liked.

A prescription to fix Medicare

Small steps for paralyzed man, giant leaps for treating spinal cord injuries

The Revolutionary New Birth Control Method for Men

Real world making health-care reforms

Rates, however, aren’t the only driver of spending. Just as important as the cost of MRI or a night in a hospital is how many MRI and hospital nights are utilized. And decades of research have revealed that a surprising amount of that use is unnecessary because it results from avoidable medical errors or failure by doctors and nurses to follow best medical practices.
This insight — that better quality leads to lower cost — has become the focus of the effort to slow the growth in health-care spending.
Medicare kicked things off by requiring that all hospitals begin to collect data on various quality measures. The hospitals screamed and complained the metrics were unfair, but they eventually complied. Now the results are published on the Medicare Web site and are widely used by insurers and private groups to rate the quality and cost-effectiveness of individual hospitals.
For taxpayers, the payoff to all this was written into the new health reform law. Starting in October, Medicare will launch a program it calls “value-based purchasing” in which hospitals can see that their reimbursement rates will rise or fall by one percentage point based on how they do on their quality measures, both in absolute terms and relative to their score the year before. In 2017, the stakes will double, with a two-percentage-point variation allowed in each direction. And because of the way the incentives are structured, there will be a competitive dynamic that drives the benchmarks higher every year — a “race to the top” in hospital quality.
Private insurers are also getting in on the act. Over the past few years, most of the big insurance companies have begun to collaborate with willing hospitals to link annual rate increases to quality improvement. This year WellPoint took all of this one step further by announcing that its contracts will not allow for any increase for any hospital that fails to reach an agreed-upon set of quality benchmarks, with bonuses for hospitals that exceed them. Given that annual rate increases have averaged 8 percent, we’re talking real money here.

Baby boomers fueling boom in knee, hip surgeries

U.S. Objects to New Law on Clinics in Indiana

Health Reform in Massachusetts

Despite all of the bashing by conservative commentators and politicians — and the predictions of doom for national health care reform — the program he signed into law as governor has been a success. The real lesson from Massachusetts is that health care reform can work, and the national law should work as well or even better.
Like the federal reform law, Massachusetts’s plan required people to buy insurance and employers to offer it or pay a fee. It expanded Medicaid for the poor and set up insurance exchanges where people could buy individual policies, with subsidies for those with modest incomes.
Since reform was enacted, the state has achieved its goal of providing near-universal coverage: 98 percent of all residents were insured last year. That has come with minimal fiscal strain. The Massachusetts Taxpayers Foundation, a nonpartisan fiscal monitoring group, estimated that the reforms cost the state $350 million in fiscal year 2010, a little more than 1 percent of the state budget.
Other significant accomplishments:
The percentage of employers offering insurance has increased, probably because more workers are demanding coverage and businesses are required to offer it.
The state has used managed-care plans to hold down the costs of subsidies: per capita payments for low-income enrollees rose an average of 5 percent a year over the first four years, well below recent 7 percent annual increases in per capita health care spending in Massachusetts. The payments are unlikely to rise at all in the current year, in large part because of a competitive bidding process and pressure from the officials supervising it.
The average premiums paid by individuals who purchase unsubsidized insurance have dropped substantially, 20 percent to 40 percent by some estimates, mostly because reform has brought in younger and healthier people to offset the cost of covering the older and sicker.
Residents of Massachusetts have clearly chosen to tune out the national chatter and look at their own experience. Most polls show that the state reforms are strongly supported by the public, business leaders and doctors, often by 60 percent or more.
There are still real problems that need to be solved. Small businesses are complaining that their premiums are rising faster than before, although how much of that is because of the reform law is not clear.
Insuring more people was expected to reduce the use of emergency rooms for routine care but has not done so to any significant degree. There is no evidence to support critics’ claims that the addition of 400,000 people to the insurance rolls is the cause of long waits to see a doctor.
What reform has not done is slow the rise in health care costs. Massachusetts put off addressing that until it had achieved universal coverage. No one should minimize the challenge, but serious efforts are now being weighed.
Gov. Deval Patrick has submitted a bill to the Legislature that would enhance the state’s powers to reject premium increases, allow the state to limit what hospitals and other providers can be paid by insurers, and promote alternatives to costly fee-for-service medicine. The governor’s goal is to make efficient integrated care organizations the predominant health care provider by 2015.
The national reform law has provisions designed to reduce spending in Medicare and Medicaid and, through force of example, the rest of the health care system. Those efforts will barely get started by the time Massachusetts hopes to have transformed its entire system. Washington and other states will need to keep a close watch.