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News Roundup: December 14, 2012

AARP: Any Efforts To Cushion Medicare Eligibility Age Hike Still Not Acceptable

Published by Inside Health Policy
December 14, 2012

AARP officials said at a briefing Wednesday (Dec. 12) that raising the Medicare eligibility age is bad policy and any attempts to soften the proposal would remain unacceptable to the group.

Read the full article at Inside Health Policy.

Co-payments Give Beneficiaries “Skin in the Game,” Drive Medicare Costs

Published by Home Health Care News
Jason Olivia
December 13, 2012

Though allowing Medicare beneficiaries to pay part of the costs of their home healthcare would give them “skin in the game” and alleviate program costs, co-payments could ultimately end up doing just the opposite, according to analysis by the Partnership for Quality Home Healthcare with Avalere Health.

Having “skin in the game” is defined in the study as the full scope of costs that a beneficiary bears while receiving Medicare-covered services.

As Medicare beneficiaries already bear out-of-pocket expenditures by staying in their homes, co-payments would require them to bear additional costs aside from the large share of income dedicated to basic living expenses.

Paying for housing and other living expenses while at home reduces Medicare spending, but a re-introduction of a co-payment could cause the program to bear higher costs of institutionalized care, the study notes.

If a beneficiary were to leave home and instead seek institutionalized care, Medicare would end up footing the bill for treatment, food and housing costs that would otherwise have been assumed by the beneficiary. Receiving care in an institution would in turn lower beneficiaries’ living expenses since the costs are falling mainly to Medicare.

The additional cost resulting from co-payments could even lead to graver scenarios for both Medicare and its beneficiaries as the study suggests co-payments might even be enough to deter home healthcare patients from receiving care in a timely manner.

“A co-payment could lead some low-income beneficiaries to forego needed home health services and end up in an institutional setting as a result, where the cost to Medicare and taxpayers would be higher,” writes the Partnership for Quality Home Healthcare.

Since beneficiaries prefer to remain in their homes to “age in place,” receiving treatment at home instead of an institutional setting would enable Medicare to deliver services in the what the study notes as the “least costly setting.”

Because imposing an additional cost burden on Medicare beneficiaries could lead to increased costs for the program, the Partnership for Quality Home Healthcare and Avalere Health urge policymakers to consider these cost impacts when assessing home healthcare co-payments.

Medicare Silver Bullets: What’s The Best Way To Control Costs?

Published by Kaiser Health News
December 12, 2012

Helen Darling, president and CEO of the National Business Group on Health, a nonprofit organization that represents large employers' perspective on national health policy issues:


If I could make only one change, it would be a massive reform of Medicare’s payment policies. Right now, Medicare payment policies drive overuse, waste, inappropriate and sometimes harmful use of services. There should be a number of changes, such as paying in ways that encourage the use of team-based care, telephone, group and e-visits, more flexibility to allow nurses and other health professionals to operate at “the top of their licenses” with physician oversight and in the most quality and cost-effective ways. The more we can bundle payments to reward improved health (not just health care), and allow providers to self-organize to deliver the greatest benefits for patients and value or payers, the better off we will all be. The most successful providers tend to be integrated delivery systems. Although we will never have enough such systems around the whole country, we can develop and support as many of these as possible and also have payment models that foster virtual integrated delivery systems and reward the best performers, that is, the ones that provide the safest care in the most efficient manner.

Joseph Antos, an economist with the American Enterprise Institute, a private, nonprofit institution dedicated to research and education on issues of government, politics, economics and social welfare:


If we expect to bend the Medicare cost curve, we must change the financial incentives that promote the use of services. The federal subsidy cannot grow without limit, and Medicare’s payment arrangements must make that clear to both consumers and providers. Giving beneficiaries a choice of competing health plans, providing a defined contribution subsidy, and maintaining an appropriate oversight role for the government will promote more vigorous efforts by the health sector to contain costs without sacrificing access to care. The goal should be to get the incentives right to promote system improvement rather than a good budget score created by politically unsustainable spending limits.


Via Skype:
Debra L. Ness
President of the National Partnership for Women & Families, a Washington-based nonprofit organization:


Bruce C. Vladeck, a former administrator of the Health Care Financing Administration; now senior advisor at Nexera, Inc., a health care consulting company:


The single most sensible way to reduce Medicare costs would be to authorize and require Part D Prescription Drug Plans to purchase pharmaceuticals at the Federal Supply Schedule price now used by the Veterans Administration, the Department of Defense, and thousands of health centers, clinics and safety net hospitals. This would significantly lower costs for the government and beneficiaries alike.

Georges C. Benjamin, executive director of the American Public Health Association:


I would take the long view and have Medicare more aggressively promote the new prevention benefits from the Affordable Care Act. I would also find ways to incentivize providers that meet prevention targets for their population of patients. For example, tobacco use costs Medicare as much as $24 billion annually. By emphasizing prevention one can get lower costs and better health.

Robert Laszewski, president of Health Policy and Strategy, LLC, a health policy and marketplace consulting firm:


I would say to the provider community that the fee-for-service payment method would be phased out in four to seven years. And here's what the new budget looks like. There will be no turning back, so be ready!

Moving away from fee for service is the only way to control health care costs in America. Ideas like increasing Medicare eligibility to age 67, you can't do it in the 10-year budget window anyway because you'd have to give people time to plan. Also, it's only shifting cost from the government to the private sector. Increasing Part B premiums or merging deductibles is not going to make diddly squat of a difference in the 10-year window. Medicare needs to go to competitive bidding around a budget.


Via Skype:
Gail Wilensky
Former director of Medicare and Medicaid; senior fellow at Project HOPE


Former Rep. Nancy L. Johnson, R-Conn., now a senior public policy advisor at Baker Donelson, a law firm:


If I could make one change, it would be to provide incentives to seniors to participate in prevention and wellness programs, especially for people with chronic illness and for those faced with complex long recoveries. This policy would have to apply both to fee-for-service Medicare and Medicare Advantage plans. It would require new design freedom for Medicare Advantage plans and new fee-for-service incentives and rewards to stimulate a new level of senior involvement in their health and wellness and the hard work of recovery and long term care management.

Through this approach, patient-physician conversations will enable patients and their caregivers to gain a better understanding of disease processes and be ready to make more responsible end-of-life decisions. Since most Medicare dollars are spent in the last six months of life, only informed patients can preserve the opportunity for all Medicare beneficiaries to have first-class treatment by foregoing costly care that can only preserve existence.

Joe Baker, president of the Medicare Rights Center, a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities:


Any change to Medicare should produce cost savings for the federal government without shifting costs to people with Medicare. Allowing the federal government to directly negotiate drug rebates is an option that would considerably control costs in Medicare. This is a practice that already exists in the Medicaid program, and if it were applied to low-income Medicare beneficiaries, including those dually eligible for both Medicaid and Medicare, an estimated $135 billion in federal savings could be achieved over 10 years. Allowing the government to negotiate rebates for all Medicare beneficiaries with a prescription drug plan could save up to $156 billion in federal spending over the same period of time. At the same time, people with Medicare could save up $27 billion. This is the type of change we need for Medicare—a cost saver, not a cost shifter.

Mark T. Bertolini, chairman, CEO and president of Aetna:


We need to move Medicare away from the current, outdated, fee-for-service model that pays providers for activity and move to a payment model that pays for the quality and value of care delivered. We’ve seen the success that Medicare Advantage has had in delivering higher quality, better coordinated benefits that lead to better outcomes and higher patient satisfaction. We would like to build off of these sorts of successes as a way to better serve Medicare members, continually improve their satisfaction, and deliver the cost savings necessary to ensure the program is sustainable for future generations.


Via Skype:
Paul Levy
Former CEO of Beth Israel Deaconess Medical Center, who writes about health care on his blog Not Running A Hospital


Paul B. Ginsburg, president of the Center for Studying Health System Change, an organization that conducts health policy research and analysis:


The most promising strategy for Medicare is in provider payment reform. Medicare can use its size and credibility to move the entire health care delivery system away from fee for service and towards broader units of payment. Medicare has had a very promising start to piloting accountable care organizations and medical homes, and I am hopeful on bundled payment as well. Efforts to coordinate with private payers and Medicaid programs reflect recognition that payment reform can only succeed if major payers are using consistent approaches. But current initiatives will not yield substantial budget savings because they depend on volunteers. A transition will be needed from pilots to approaches that penalize those providers remaining in fee for service.

Henry J. Aaron, a senior fellow at the Brookings Institution, a nonprofit public policy organization based in Washington, D.C.:


My most preferred change to Medicare would be a fully financed benefit increase—to add full coverage of catastrophic health events -- linked to the elimination of the distinctions among parts A, B and D (unified deductibles and cost sharing) all financed by a premium increase sufficient to make the overall package neutral with respect to the federal budget.

But if you want to focus on cost reducing measures, my first choice would be an increase in Medicare’s administrative budget that could be applied to two purposes: more thorough investigation of fraud; and more careful enforcement of Medicare policy regarding the application of technologies approved for selective health conditions to assure that those technologies are not misapplied to situations where safety and efficacy have not been shown.

Stephen Finan, senior director of policy at the Cancer Action Network, the advocacy affiliate of the American Cancer Society:


We are concerned about shifting the conversation away from Medicare cuts to more efficient use of resources and greater emphasis on health outcomes. We know that in terms of care delivery today, a cancer patient has to see many providers to get care, the providers don’t work together very well and that results in higher costs. When you get more coordinated care, health outcomes are better and costs are lower. There is also more consideration of what patients’ needs are during treatment, which is often very traumatic. Coordinating care is on the table in the discussion about controlling Medicare costs, but it is not as prominent as it should be.

Debra B. Whitman, executive vice president of policy for AARP, a nonprofit organization that advocates for the people who are 50 and older:


Changing the way Medicare pays doctors would accelerate efforts to improve health care outcomes, safety, and efficiency; lead to more collaboration among providers; support care coordination; and achieve greater accountability for the cost and quality of care from the clinical community. While Medicare is just one part of the broader health care system, it plays a leadership role. New payment models, such as episode-based payment, bundled payment and capitated (global) payment, are inherently more patient-centered and would signal Medicare’s readiness to align its payment structure with other payers who have initiated value-based purchasing strategies. Moving away from fee-for-service would enable Medicare to better manage program spending, while incenting care coordination, care management, and unnecessary hospital readmissions. Encouraging value by changing the way Medicare pays is a “triple win” for people on Medicare, taxpayers and the Medicare program itself.

Julius W. Hobson Jr., senior policy advisor at the law firm Polsinelli Shughart PC:


I would increase the Part B copay 25 to 30 percent, increasing 1 percent per year over five years. I think over the years we have sold Medicare to beneficiaries as almost something for nothing, while at the same time cutting providers. And you do get to a point, where if you cut the providers enough, there’s nothing left. I think the system needs more money, so I would do it that way.


Via Skype:
Ethan Rome
Executive director for Health Care for America Now


Robert Moffit, senior fellow at the Center for Policy Innovation of the Heritage Foundation, a Washington-based conservative public policy think tank:


Congress should intensify competition through the adoption of a defined contribution system of financing -- premium support -- giving beneficiaries a generous and income-adjusted contribution toward health plans, including traditional Medicare, of the enrollees’ choice. By compelling health plans to offer catastrophic protection while requiring plans and providers to compete on a level playing field for enrollees’ dollars, as they do today in Medicare Part D, Congress would spur innovation and efficiency, and secure higher productivity and quality in the delivery of medical services. Such intense competition would be the best means to slow the growth of Medicare costs for both beneficiaries and taxpayers.

Lee Goldberg, vice president for health policy at the National Academy of Social Insurance, a nonprofit organization that works to increase public understanding of how social insurance contributes to economic security:


First I would say to wait and see if the demos and pilot programs in the health law actually work. I think there is tremendous potential there to reduce the growth of Medicare’s expenditures and improve quality of care, but right now we’re just not sure yet. The other thing that’s related to that, that’s more proactive is moving Medicare away from the silos, where you have Part A, Part B, and you have a trust fund for Part A and premiums for part B. At some point we are going to need to integrate all that and that’s going to help us with the integration of care coordination. One thing I would definitely not do is increase the age of eligibility. It’s an example of just shifting costs. You may reduce the cost to one place but you are increasing costs in other places. If you shift the age from 65 to 67, those folks’ health care needs don’t go away in those two years -- it’s just not a good idea.

This article was produced by Kaiser Health News with support from The SCAN Foundation.

Study: Higher Patient Satisfaction is Linked to Lower Hospital Readmissions

Published by Becker's Hospital Review
Sabrina Rodak
December 12, 2012

Hospitals with low readmission rates tend to have high patient satisfaction scores, according to a report by Press Ganey Associates.

The report, "The Relationship Between HCAHPS Performance and Readmission Penalties," is the first in a series of studies that will examine aspects of patient experience. Press Ganey used data on hospitals' readmission penalties and hospitals' scores on CMS' Value-Based Purchasing program to determine the connection between patient satisfaction, clinical performance and readmission rates.

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The report showed that while higher scores on the Hospital Consumer Assessment of Healthcare Providers and Systems survey were closely tied to lower readmission rates, performance on clinical measures did not correlate with readmission rates.

Overall HCAHPS scores of 0 to 19 were associated with a 0.4 percent readmission penalty — much higher than the average. In contrast, HCAHPS scores of 80 to 100 were associated with a 0.1 percent readmission penalty — much lower than average.