In Conservative Arizona, Government-Run Health Care That Works – Kaiser Health News

APACHE JUNCTION, Ariz. – In a low-slung building in the vast desert expanse east of Phoenix, a small school of tropical fish peer out, improbably, from a circular tank into the waiting lounge of the Apache Junction Health Center. The hallways of the nursing home are still. Only half of the rooms are filled, and the men and women who live here seem surely in life’s final season. “These are folks that have chronic cognitive and physical disabilities that are not going to improve,” said George Jacobson, administrator of the nursing home.

That this nursing home is sparsely filled with residents too disabled in mind or body to return home is a stunning achievement for Arizona’s public health insurance agency. A decade ago, 60 percent of Arizonans covered by Medicare and Medicaid, and deemed sick, frail or disabled enough to live in a nursing home, resided in a skilled nursing facility. Today, only 27 percent of them do, and the rest – nearly three out of four– live in assisted living facilities or at home with the help of nurses, attendants and case managers provided by government-paid health plans.

As Congress debates an ambitious and far-reaching effort by the Obama administration to streamline medical care and rein in spending for the nation’s sickest and most expensive patients, Arizona – with its finger-wagging Republican governor and Tea Party enthusiasts – is occupying an unusual place in the national landscape: as a model for how a generously-funded, tightly regulated government program can aid vulnerable, low-income patients.

In Conservative Arizona, Government-Run Health Care That Works – Kaiser Health News

Do Medicare And Medicaid Payment Rates Really Threaten Physicians with Bankruptcy? – Health Affairs Blog

Orthopedists. A 2011 survey revealed that orthopedists enjoy a median salary of $514,000. This is the net physician income after office overhead has been paid. Overhead costs averaged 46.3 percent for orthopedic surgeons in 2000 and accounted for 45 percent of revenue in 2012. (This is slightly better than the 50 percent overhead that my practice averages.) Therefore, the gross practice revenue per orthopedist currently is just over $934,000 with an average overhead cost of $420,000. According to data provided by the American Academy of Orthopaedic Surgeons, orthopedic patients by payer are as follows: Medicare/Medicaid—31 percent; the uninsured—17 percent; commercial insurance—34 percent; and other sources, such as worker’s compensation—18 percent. Essentially, half of the average orthopedist’s payment sources are commercial insurance of some type, one third are Medicare or Medicaid, and one sixth is self-pay; this last category—patients paying for their own care—typically contributes only a small amount to practice revenue.

We can test the claim that physicians lose money on their treatment of Medicare patients or make only $8 an hour treating such patients by substituting Medicare reimbursement for the commercial reimbursements to a doctor’s practice. Would orthopedists truly make $8 an hour or would their practices be bankrupt if all payers used Medicare’s reimbursement schedule? Remember, this is the articulated position of much of the orthopedic community and a common defense against reimbursement reductions.

According to a comprehensive analysis by the consulting firm, Milliman, in 2008, on average, commercial insurance paid 130 percent of Medicare’s reimbursement, or, seen a different way, Medicare paid 78 cents for every dollar of commercial reimbursement for physicians’ work. If we reduce the $467,000 in commercial insurance payments to a typical orthopedist’s practice by 22 percent to reflect lower Medicare payments, we obtain $364,000. Adding this back to the Medicare/Medicaid and self-pay portion of practice incomes yields a new gross revenue figure of $831,000. This would be the average orthopedist’s practice income if Medicare’s pay scale were universally used.

Taking out $420,000 in overhead, we see that an orthopedist surviving solely on Medicare reimbursements would receive $411,000 in take-home pay, or approximately $100,000 less than we actually enjoy with the current mix of insurance payers. While I agree that this is a steep reduction, it is abundantly clear that such reimbursement would by no means bankrupt a practice or yield an hourly wage anywhere close to $8 per hour. Therefore, such statements are gross hyperbole.

Do Medicare And Medicaid Payment Rates Really Threaten Physicians with Bankruptcy? – Health Affairs Blog

How Medicare Fails the Elderly – NYTimes.com

Yet Medicare, which pays for all of the above, does not, except in rare instances, pay for long-term care in a supervised, safe place for frail or demented old people, or for home aides to help with shopping, transportation, bathing and using the toilet.
Nationwide, the median annual cost of a nursing home in 2010 was $75,000; room and board in an assisted living facility, with no additional help, was $37,500; and the most basic category of home health aide, who can perform no medical tasks, like the dispensing of medication, was $19 an hour. These expenses are left to the elderly (and their adult children) to pay for out of pocket until their pockets are all but empty.
Then they are eligible for Medicaid, the state-run safety net for the poor. While Medicare, a federal program, is financed by payroll taxes, and thus is an “earned” benefit, Medicaid is “charity,” in the minds of the formerly middle class who worked their whole lives and never imagined themselves destitute.
In the case of my mother, who died at 88 in 2003, room and board in various assisted living communities, at $2,000 to $3,500 a month for seven years, was not paid for by Medicare. Yet neurosurgery, which I later learned was not expected to be effective in her case, was fully reimbursed, along with two weeks of in-patient care. Her stay of two years at a nursing home, at $14,000 a month (yes, $14,000) was also not paid for by Medicare. Nor were the additional home health aides she needed because of staffing issues. Or the electric wheelchair after strokes had paralyzed all but the finger that operated the joy stick. Or the gizmo with voice commands so she could tell the staff what she needed after her speech was gone.
She paid for the room. My brother and I paid for the private aides and bought her the chair and the “talking board.” What would her life have been like without the skilled care she required and the ability to get around her floor and communicate her needs? I shudder to think. But none of this was Medicare’s responsibility.
Yet Medicare would pay for “heroic” care for a woman who was dying of old age, not a disease that could be treated: Diagnostic tests. All manner of surgery. Expensive medications. Trips to the emergency room or the hospital — had she not refused all of them, in the last year of her life. So, in less than a decade, by my low-ball estimate, my mother spent $500,000 of her own money and uncalculated sums from her two children before winding up what she considered, with shame, “a welfare queen.”
A recent state-by-state study of long-term care, the first of its kind, by a consortium of researchers, has found that this kind of essential help costs anywhere from 166 percent to 393 percent of the average annual income of America’s elderly.

How Medicare Fails the Elderly – NYTimes.com

Medicare SGR sticker shock adds urgency to pay reform campaign – amednews.com

Medicare SGR sticker shock adds urgency to pay reform campaign

The price tag of a one-year Medicare payment patch rises to $25 billion as calls continue for a permanent measure to overhaul the program’s pay system.

Settlement Eases Rules for Some Medicare Patients – NYTimes.com

This is pretty huge, actually!

In a proposed settlement of a nationwide class-action lawsuit, the administration has agreed to scrap a decades-old practice that required many beneficiaries to show a likelihood of medical or functional improvement before Medicare would pay for skilled nursing and therapy services.

Under the agreement, which amounts to a significant change in Medicare coverage rules, Medicare will pay for such services if they are needed to “maintain the patient’s current condition or prevent or slow further deterioration,” regardless of whether the patient’s condition is expected to improve.

Federal officials agreed to rewrite the Medicare manual to make clear that Medicare coverage of nursing and therapy services “does not turn on the presence or absence of an individual’s potential for improvement,” but is based on the beneficiary’s need for skilled care.

Medicare IPAB: Rational or rationing? – amednews.com

A reasonable overview of IPAB, in spite of a little alarmist rhetoric at the beginning…

How the board might work

If the IPAB authority is not repealed, the president will appoint members after consulting with Congress. The positions carry a six-year term and a $165,000 annual salary and are subject to Senate approval.

Board members are expected to be experts in health care finance and economics, actuarial science, management, health insurance, integrated delivery systems and payment models, according to a March Congressional Research Service report. In addition, members should have expertise in certain sectors of the health care system, meaning that a doctor, an expert on drug manufacturing, an employer representative, a third-party payer official or a patient advocate could be a nominee. However, the statute states that a majority of members should not be involved directly in providing Medicare services, limiting the participation of practicing Medicare physicians.

The Centers for Medicare & Medicaid Services chief actuary first would decide in 2013 if IPAB actions are needed. The actuary will calculate a Medicare per-capita growth rate and a target rate defined by statute. Starting in 2018, growth targets will be pegged to gross domestic product plus one percentage point.

IPAB would not be required to act as long as program growth remains under that target rate. If it exceeds the target, the board would be required to submit a cost-savings proposal that Congress must consider under special fast-track rules. The proposal would become law unless Congress passes an alternative with the same level of savings or overrides the proposal with a three-fifths vote in the Senate.

Those spending reductions could go into effect as early as 2015, but government actuaries said that is unlikely. The Congressional Budget Office projects that Medicare spending will not eclipse growth targets for years, and thus IPAB won’t be responsible for drafting a savings plan through at least 2021 if expected trends hold.

What if Medicare’s drug benefit was more like the VA’s? | The Incidental Economist

Medicare’s inability to negotiate program-wide prices and tighten plan formularies is in stark contrast to the VA, which negotiates directly with drug manufacturers and is not bound by the same formulary rules as Part D plans. That’s why the VA has been able to implement a national formulary more restrictive than those of Medicare plans and obtains lower drug prices. If Medicare plans could implement VA-like formularies and obtain commensurately lower prices, our paper shows that enough could be saved to compensate beneficiaries for the loss of choice, with savings to spare.

To repeat, the key findings are:

The VA pays 40% less than Medicare plans for prescription drugs.
Medicare plans cover about 85% of the most popular 200 drugs on average (ranging from a low of 68% to a high of 93%).
The VA’s national formulary includes 59% of the most popular 200 drugs.
If Medicare obtained the same drug prices as the VA, it would save $510 per beneficiary per year or a total of $14 billion per year (2009 prices).
If Medicare plans tightened formularies to the level of generosity available from the VA (59% of top 200 drugs covered), beneficiaries would lose $405 of value per year associated with the loss of choice of drugs. (The right way to interpret this is that the average beneficiary would be precisely indifferent between the loss of drug choice and $405 dollars in cash.)
Because the savings ($510 per beneficiary) exceeds the loss of value to beneficiaries ($405), they could, in principle, be made whole with $105 left over (= $510 – $405).

An Effort To Cut Through Romney-Ryan Doublespeak And Explain What They Really Want To Do | The New Republic

Ryan and Mitt Romney have called for the most profound, radical changes in the program’s history. But rather than clarifying the differences between their position on Medicare and President Obama’s, they’ve done their best to obscure them. They’ve accused Obama of “raiding” Medicare when Ryan’s own budget calls for reducing the program’s funding by the same amount of money. They have insisted they won’t do anything to affect current retirees, even though they have pledged to repeal the Affordable Care Act, which bolsters Medicare’s drug coverage and makes preventative care available without out-of-pocket expenses.

Romney and Ryan have also been less specific than you might have heard. That’s particularly true for Romney, whose “proposal” consists of a fact sheet, plus a few speeches, statements, and op-eds. This allows them to escape responsibility for the inevitable trade-offs that their vision, like every effort to reform Medicare, would require. And it gives them a political advantage over President Obama, who must defend reforms of Medicare in the Affordable Care Act and his latest budget—right down to the last legislative clause and dollar figure.

Yes, I keep reading that Romney and Ryan have been “brave” and “serious” about Medicare, while Obama has ducked hard choices. I would say it’s the other way around.

An Effort To Cut Through Romney-Ryan Doublespeak And Explain What They Really Want To Do | The New Republic

The Republican ticket’s big Medicare myth

Obama’s Medicare reform plan isn’t that hard to find. It’s largely in Title III of The Patient Protection and Affordable Care Act. The basic strategy has three components: First, figure out what “quality” in health care is. Second, figure out how to pay for quality rather than paying for volume. Third, make it easier for Medicare to quickly update itself to reflect both advances in knowledge about what quality is and how to pay for it.

And so, in Title III, you’ll find dozens of different efforts to achieve these goals. The most famous of them is Section 3403, which establishes the Independent Payment Advisory Board (IPAB). But there’s also Section 3021, which creates the Center for Medicare and Medicaid Innovation, and Section 3025, which cuts hospital reimbursements if too many of their patients are readmitted, and Section 3001, which establishes value-based purchasing for hospital services, and Section 3015, which collects data on quality, and Section 3502, which advances the medical home model.

Some of the efforts are outside Title III. The Patient-Centered Outcomes Research Institute is actually in Title VI of the law. And then there are the subsequent reforms the administration has proposed to save more money. Those can be found on pages 33-37 of the president’s 2013 budget proposal. They include expanding IPAB’s mandate such that it can change Medicare’s benefit package and setting a growth cap on Medicare of GDP+0.5 percentage points — which is, by the way, the same growth cap that Rep. Paul Ryan imposes in the latest iteration of his budget.

Truman and the fight for health care – Hawley, PA – The News Eagle

In fact, Medicare enacted only a part of what President Truman had advocated two decades earlier. In the 1940s, Truman was shocked and saddened by the poor state of the nation’s health care, which effectively excluded millions of middle-class Americans from access to the world’s most advanced medical technologies.

“That’s all wrong in my book,” Truman stated, “I’m trying to fix it so people in the middle-income bracket can live as long as the very rich and the very poor.”

Poor health was particularly a problem among young people. Nearly 8.5 million young men and women had been found physically or mentally unfit for military service during World War II – nearly half of those examined for their induction physicals. Truman saw this situation as “a crime.”

Noting that his predecessor, President Franklin D. Roosevelt, had advocated a national health initiative in his “Economic Bill of Rights,” Truman sent Congress a message on Nov. 19, 1945, proposing compulsory health insurance through payroll deductions and other revenue.

Truman supported complex legislation in a bill advanced by Democrats in the U.S. House and Senate. However, the president felt their effort had little chance for success in Congress. He proposed less complicated legislation that called for:

– Prepayment of medical expenses through compulsory insurance premiums and general revenues.

– Protection against lost wages due to illness or disability.

– Expansion of public health, prenatal care and child health services.

– Federal aid for medical schools and research institutions.

– Funding for local hospitals, clinics and medical institutions.

Truman proposed that the U.S. surgeon general set fees and administer the program. Doctors could choose whether or not to participate. He believed his plan would provide insurance for hospital and doctor costs for all working Americans and their families.