Per capita spending growth in Medicare has slowed over the last few years, although economists disagree about whether that trend will continue. Meanwhile, the number of Medicare beneficiaries continues to increase. Medicare has made systematic changes over the course of its first 50 years, addressing everything from benefits and eligibility to quality of care measurement and provider payment.
This event examined innovative efforts in both the private and public sectors to move toward a health system that is more patient-centered, cost-efficient and delivers better outcomes. It will address efforts underway at the Center for Medicare and Medicaid Innovation (CMMI) and other federal agencies to spur innovation and prioritize a shift toward higher quality care, as well as the progress made by the private sector in improving quality and reducing costs through innovation.
Medicare provides health insurance coverage to 54 million people aged 65 and over and younger people with permanent disabilities. In 2013, Medicare spending accounted for 14 percent of the federal budget. This session was especially helpful to congressional staff members new to the issue and a useful review and update for staff working on a broad range of Medicare issues. This Medicare 101 answered basic questions, such as: What services does Medicare provide, and how does Medicare pay for these services? How is Medicare financed? What changes did the Affordable Care Act (ACA) make to Medicare? How fast is Medicare spending growing? What are current proposals to strengthen Medicare for the future, and what are prospects for action in the new Congress?
Efforts are underway throughout the Medicare program to better manage beneficiaries’ chronic conditions, with the goal of improving quality and lowering the costs of care. With an estimated 31 million Medicare beneficiaries suffering from a chronic condition such as cardiovascular disorders, diabetes and cancer, many still do not receive the coordinated services they need to manage their chronic conditions, and beneficiaries with multiple chronic conditions incur higher-than-average spending. However, traditional fee-for-service Medicare, Medicare Advantage, and newer models such as Accountable Care Organizations (ACOs) differ in the tools and methods available to manage chronic care.
Almost three in ten Medicare beneficiaries are enrolled in the Medicare Advantage (MA) program, which offers a choice of competing private health plans – typically managed care plans such as HMOs and PPOs. The Affordable Care Act (ACA) made significant changes to the way Medicare Advantage plans are paid, including tying a portion of payments to a quality star rating system. Despite predictions that MA enrollment would drop in the wake of scheduled payment reductions to the program, the percentage of seniors who are choosing to enroll in MA plans is still growing. However, the impact of upcoming reductions remains the subject of much debate.
While the Patient-Centered Medical Home (PCMH) model has increasingly been embraced by providers and payers as a way to improve health care and lower costs, many questions remain about its effectiveness. Definitions of medical homes vary, but they are generally known as a model that aims to transform primary care through increased coordination and communication among a team of providers. Recent medical home initiatives have encouraged primary care practices to invest in capabilities such as patient registries and electronic health records, and to achieve medical home recognition. Health plans offer to pay more to the practices that achieve recognition.
Preventive services were a priority in the Patient Protection and Affordable Care Act (ACA), which required that a set of services be available to consumers with no cost sharing. This has improved access for some people to some services. But persistent barriers for consumers are limiting the utilization of preventive services. These barriers include the variability of insurance coverage, the affordability of out-of-pocket costs, the challenges of education and outreach, and the funding of public health initiatives.
With the cost of repealing the Sustainable Growth Rate for Medicare Physician Payment lower than ever, many suggest that 2014 is the year that permanent change may finally be realized. This toolkit provides a brief summary of the history of the SGR, including the recent actions by the House Energy and Commerce, House Ways and Means, and Senate Finance committees to repeal and reform the flawed physician payment system.
Congress is as close as it has ever been to scrapping the Medicare sustainable growth rate (SGR) for an alternative system of paying doctors based on the quality – rather than the quantity – of services.
Healthier and Wealthier, or Sicker and Poorer? Prospects for Medicare Beneficiaries Now and in the Future
Although Medicare reform is not currently a front-burner issue, proposals to reduce Medicare spending appear regularly on the policy agenda. Various Medicare savings proposals have recently emerged in the context of efforts to control the national deficit and debt, and could arise in the next few months when Congress considers how to modify Medicare’s physician payment policy to avoid a precipitous reduction in physician fees. The recently passed bipartisan budget deal delayed a reduction in Medicare payments to physicians until April, and any effort to permanently replace the existing system by which Medicare pays physicians will be costly.
Increasingly, hospitals are “observing,” instead of admitting, Medicare beneficiaries, even when they are there for more than 48 hours.
Health care policy leaders are counting on public and private initiatives, such as paying for performance, to improve value in the health care equation in which cost and quality at times seem to be at odds.
More than a third of Pioneer ACOs succeeded in reducing costs in Medicare in their first year, according to a recent Centers for Medicare and Medicaid Services (CMS) report. The program initially saved Medicare about $87 million and cut Medicare spending by 0.5 percent.
Top congressional health care staff members will meet with reporters Wednesday, August 28 to discuss upcoming pressing health care policy topics.
A new Alliance for Health Reform video features two former Medicare administrators — Gail Wilensky and Bruce Vladeck — on their ideas about how to save the program.