Medicare Reform

Research & Thoughts

Mental illness is a big driver of Medicaid costs because it is twice as prevalent among beneficiaries of the public insurance program for the poor as it is among the general population. Studies show that enrollees with mental illness, who also have chronic physical conditions, account for a large share of Medicaid spending.Yet many Medicaid programs, including Florida’s, have traditionally contracted with separate companies to provide coverage for mental health services, making coordination more difficult. “We don’t want to have a situation where your brain is in one HMO, your teeth are in a second HMO and your eyes are in a third HMO,” said Florida Medicaid Director Justin Senior. “Your whole head should be in the same organization and that is why we have done this reorganization.”About 140,000 low-income Floridians are expected to be eligible and Magellan predicts about 20,000 will participate voluntarily in the first year.  Medicaid recipients who meet the plan’s criteria will automatically be assigned to it by the state, though they have the option to switch to a different managed care plan within 90 days of enrollment.Coverage begins July 1 in Miami-Dade and Broward counties, then will roll out to other regions by September.

via Florida Shifts Medicaid Mental Health Strategy – Kaiser Health News.

Small Slice of Doctors Account for Big Chunk of Medicare Costs

Top 1% of Medical Providers Accounted for 14% of Billing, Federal Data Show

By CHRISTOPHER WEAVER, TOM MCGINTY and LOUISE RADNOFSKY

Updated April 9, 2014 9:17 a.m. ET

Medicare Payments

A tiny sliver of doctors and other medical providers accounted for an outsize portion of Medicare’s 2012 costs, according to an analysis of federal data that lays out details of physicians’ billings.

The top 1% of 825,000 individual medical providers accounted for 14% of the $77 billion in billing recorded in the data.

The long-awaited data reveal for the first time how individual medical providers treat America’s seniors—and, in some cases, may enrich themselves in the process. Still, there are gaps in the records released by the U.S. about physicians’ practice patterns, and doctors’ groups said the release of such data leaves innocent physicians open to unfair criticism.

Medicare paid 344 physicians and other health providers more than $3 million each in 2012. Collectively, the 1,000 highest-paid Medicare doctors received $3.05 billion in payments.

One-third of those top-earning providers are ophthalmologists, and one in 10 are radiation oncologists. Both specialties were singled out in a late 2013 report by the inspector general for the Department of Health and Human Services urging greater scrutiny of doctors who consistently receive large Medicare payments.

via Small Slice of Doctors Account for Big Chunk of Medicare Costs – WSJ.com.

Nearly 9 million poor and sick Americans are “dually eligible” for both Medicare, the federal health care program for seniors and disabled individuals, and Medicaid, the joint federal health system for low-income people.  They use a lot of health services and their care is often fragmented.

Melanie Bella’s new job is to help fix that.

via When Care Is Split Between Medicare And Medicaid: KHN Interview With Melanie Bella – Kaiser Health News.

As Courts interpret Medicare and Medicaid laws, they ponder the language that the public policy is described in the laws. In todays Wall Street Journal JOE PALAZZOLO, writes about the difficulty in understanding the plain meaning of the enabling laws.

James Madison warned in the Federalist Papers about laws "so voluminous that they cannot be read, or so incoherent that they cannot be understood."

If only he had lived to see the Medicare and Medicaid programs.

via Here's a Funny Idea: Medicare Laws That Are Easy to Read – WSJ.com.

CNN is reporting that  with Medicare reforms Doctors are going broke.  As a counter point, accountable care organizations start this month, Doctors may seek shelter in these practices. ACO may offer more compensation to those providers if they can keep patients  from needing expensive care.  This is part of great effort to rewrite our social contract of care. If all the doctors roll into ACOs and this approach fails then we will start to head in a single provider system.  We will need to keep an eye on this.

Health Care Reform has been attempted by seven presidents.  Obama’s administration with the Affordable Care Act, has put forth meaningful change. Even it’s detractors will state that it is legislation that is significant and can’t be ignored.  There is strong argument that this is a mixed public policy debate on how to spend limited resources and survive in the political arena.

Whoever provides medical care or pays the costs of illness stands to gain the good will of the sick and their families. The prospect of these good-will returns to investment in health care creates a powerful motive for governments to intervene in the economics of medicine. Political leaders since Bismarck . . . have used insurance against the costs of sickness as a means of turning benevolence to power. Similarly, employers often furnish medical care to recruit new workers and instill loyalty to the firm. Unions have used the same means to strengthen solidarity. To be the intermediary in the costs of sickness is a strategic role that confers social and political as well as strictly economic gains. Paul Starr, The Social Transformation of Medicine

The quote above is a bit stale in today’s marketplace of medicine. Health Care services will always follow the streams of payment from whatever sources are available.  With state governments unable to afford federal matching funds for entitlement programs the infrastructure of our community’s health care structure is truly at risk.

As the true cost of this health care infrastructure becomes more of a local government issue, limited funding may cause consolidation at the Hospital Level. Special Taxing Districts may increase to fund Hospitals.  As the debate becomes more local a closer look a medical outcomes and cost of care will be fought at our doorsteps. We need to be watchful of this issue.

In the Tampa Bay Times, Sue Brody the CEO of Bayfront Health System, has written an excellent editorial on health care reform. She states, “health care is experiencing a paradigm shift unrivaled in the last 25 years.”   According to Ms Brody providers have a tough mandate from the community and the government.  While noting that “providers are re-engineering processes to make way for increased access and improved quality at lower costs”, she warns of risks to the community’s quality of care due to drastic cuts from the state budget.  Large amounts of government money provide the funding for the poor who need specialized medical care.  This enables private insurance and their insureds to access medical specialist at their local hospital who were made available due to Medicaid funding. click here

Michael Porter a Harvard professor on strategy looked at Health Care financial waste and suggested that only a few centers of excellence exist and redundant facilities of care be closed.  There are more choices in the public debate, but we need to keep our eyes on this one.

Politifact 2011 Lie of the Year.

When the journalist becomes the story, critics will state the myth of objectivity is exposed.  Politifact named the Lie of the Year Democrats claim of the end of Medicare. However, the program called Medicare will continue. For the Baby Boomers, however Medicare will be nothing like it is today. For a nuanced view, take a look at the NPR posting on the issue. Click Here

Watch carefully as the social contract for care changes to reflect the decision that our great society can not afford the health care we made available to our parents. Personal responsibility will be one of the main terms of the new social contract.  Phrases like “skin in the game” and “medical loss ratio’s”
will cause major shifts in political debate.  Social Media tools will also be exploited.  Fear and extreme examples will define the edges of the debate. 

Contrast with


The Wall Street Journal, today, states on its editorial page the definite and imperative need for Medicare reform in one sentence. “The brutal math is that Medicare spending has been growing about three percentage points faster every year than the overall economy for the last quarter-century and is now the main driver of the financial crisis.”  Legislative leadership is shifting to a stipend approach.  This may cap the Federal Government’s financial exposure.  With a stipend one often finds not enough payment to cover the choice you prefer. 

How will Health Care marketplace respond to this change of focus? How will consumer directed care be better served?

These questions and many others will reframe the debate about health care entitlements.  It is probably time to reframe the debate, the boomers are not their parents elders.  Choices and alternatives to traditional long term care approaches are desired by the boomers.  Life style and personal preferences are key to the boomers making these choices.  As the role of the patient changes into a health care consumer the market place and pricing for care will respond.  The Boomer who desires to create a supportive care environment that does not financial exhaust may find satisfaction with the flexibility that a market driven choice could provide.

Keep you eyes on the ball, the politics of Medicare is an interesting game.

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