Tag: "Medicare"

Reforming Medicare Part D to Improve Access to Medicines

Variety of Medicine in Pill Bottles(A version of this Health Alert was published by Forbes.)

Specialty drugs are typically high-cost prescription drugs used to treat complex chronic and/or life threatening conditions. Many do not have substitutes available at lower costs.  Over the last decade, the Medicare Part D benefit has imposed high out-of-pocket costs as a way to control costs of specialty drugs. This is causing many patients not to fill prescriptions. Some patients may be adding costs to the system by getting drugs more expensively by injection in doctors’ offices, where they are covered by Medicare supplemental insurance.

Misleading Rhetoric on Medicare Cancer Drug Payment Reform

man-in-wheelchairA few weeks ago, Medicare proposed a pilot program to test a new way to pay doctors who inject drugs. Cancer is the big kahuna, cost-wise, when it comes to injected drugs. Medicare payment policy leads to certain industry practices to profit from the status quo. When the status quo is threatened, the “preservatives” immediately form a defensive coalition to stop the change.

Although I do not endorse this precise reform, the campaign to roll it back has become irresponsible and misleading. Currently, physicians who inject drugs are paid by Medicare a margin of 6 percent on top of a reported price called the Average Sales Price (ASP). The concern is that the oncologists make more margin off an expensive drug than a less-expensive drug.

The New Medicare Gold Rush

Cheerful Senior Man Having His Blood Pressure Taken(A version of this Health Alert was published by Forbes.)

Over the next few years, Medicare will significantly change how it pays hospitals, physicians, and other providers. This is sparking a gold rush among investors. BDO, a leading management consulting firm, released a report last month describing significantly increased private equity investment in long-term care facilities, rehabilitation facilities and home health agencies. BDO reported 79 deals in 2015, in which private equity sponsors invested $5.92 billion, up from just $1.67 billion in 2014. The previous high-water mark was $3.58 billion in 2011.

Strong Opposition to Change in Part B Drug Reimbursements

The Center for Medicare and Medicaid Services (CMS) recently proposed a pilot project to test alternative payment methods for drugs under Medicare Part B. These are the drugs administered in hospital outpatient clinics and physicians’ offices.

Medicare Pays for Prevention – Finally!

man-in-wheelchairThe Centers for Medicare & Medicare Services has announced Medicare (that is, taxpayers) will pay for lifestyle-intervention program that prevents type 2 diabetes:

In 2011, through funding provided by the Affordable Care Act, CMS awarded the National Council of Young Men’s Christian Associations of the United States of America (Y-USA) more than $11.8 million to enroll eligible Medicare beneficiaries at high risk for diabetes in a program that could decrease their risk for developing serious diabetes-related illnesses. Beneficiaries in the program attended weekly meetings with a lifestyle coach who trained participants in strategies for long-term dietary change, increased physical activity, and behavior changes to control their weight and decrease their risk of type 2 diabetes. After the initial weekly training sessions, participants could attend monthly follow-up meetings to help maintain healthy behaviors. The main goal of the program was to improve participants’ health through improved nutrition and physical activity, targeting at least a five percent weight loss for each individual.

The results of the Diabetes Prevention Program model are striking:

  • Medicare beneficiaries enrolled in the program lost about five percent of their body weight, which is enough to substantially reduce the risk of future diabetes. Average weight loss was 4.73 percent of body weight for participants attending at least four weekly sessions.  Participants who attended at least nine weekly sessions lost an average of 5.17 percent of their body weight.
  • Over 80 percent of participants recruited attended at least four weekly sessions.
  • When compared with similar beneficiaries not it the program, Medicare estimated savings of $2,650 for each enrollee in the Diabetes Prevention Program over a 15-month period, more than enough to cover the cost of the program.

After years and years of jawboning about preventing disease and reducing health spending by catching health problems early, the federal government has finally approved one intervention that actually appears to achieve this goal!

Four Options for Saving Medicare from Collapsing under its Own Weight

The 50-year old Medicare program is showing its age. Medicare accounts for about one-fifth of medical spending, or about 3.5 percent of gross domestic product (GDP). Over the years Medicare spending per capita has exceeded income growth in the economy. Over the next 75 years the Medicare Trustees estimate Medicare spending as a percentage of GDP will rise anywhere from about 6 percent to just above 9 percent. The Congressional Budget Office baseline put the estimate even higher — about 12.5 percent.

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Whither Obamacare’s Death Panel?

elderly-man-worriedPresident Obama’s nomination of Merrick Garland to the U.S. Supreme Court has not shaken Senate Republicans from their commitment not to hold confirmation hearings for any candidate President Obama might nominate to the Supreme Court in the last eleven months of his second term.

Given the high drama and politics surrounding presidential appointments that require Senate confirmation, it might be a good time to ask why another 15-member “court,” which President Obama himself established in 2010, and which was supposed to deliver its first decision in January 2014, has not yet seen its first member nominated!

This “court” is the almost forgotten “death panel,” officially named the Independent Payment Advisory Board (IPAB). Based on a target rate of Medicare spending per capita, the IPAB was supposed to start cutting Medicare payments to providers in 2015.

Bipartisan Agreement to Destroy Medicare As We Know It, But Not Quickly Enough

care-home_2063592b(A version of this Health Alert was published by Forbes.)

Last week, the Centers for Medicare & Medicare Services announced by it had beat its target of tying 30 percent of Medicare Part A and B payments to “quality of care rather than quantity of services.” That goal was initially set for the end of 2016, but was actually achieved in January.

Initially, this was a goal set only by administrative fiat, in January 2015. However, it soon picked up bipartisan legislative support in the so-called “doc fix” bill of April 2015. The Administration has a goal of tying 90 percent of payments to “quality” by 2018 and it now looks like this is a realistic target.

Another way to describe paying for “quality of care rather than quantity of service” could be “plotting to destroy Medicare as we know it,” although the politicians who brought this about would not use those words. On the contrary, Republican and Democratic politicians accuse each other of plotting to destroy “Medicare as we know it” when campaigning against each other, because they know that is the easiest way to scare granny at the voting booth.

Will Drug Companies’ Price Firewall Melt?

Variety of Medicine in Pill BottlesA recent Kaiser Family Foundation Tracking Poll brings dire news for innovative drug companies: 83 percent of respondents favor a policy “allowing the federal government to negotiate drug prices for Medicare beneficiaries.” That includes 93 percent of Democrats and 74 percent of Republicans.

Despite dramatic headlines about pharmaceutical price increases, they have been in line with price increases for other health goods and services. Medicare payments to doctors and hospitals have been negotiated by government for over half a century, without containing costs.

Nevertheless, we are at a point in the polls where any careerist politician, Democrat or Republican, will likely follow Hillary Clinton’s lead demanding politically fixed drug prices. This teaches a lesson about inviting the government into your business.

Health Care Savings in Obama’s Budget

(A version of this Health Alert was published by The Hill.)index1

In a remarkable move breaching a four-decade precedent and characterized by many as a snub, the Republican chairmen of the House and Senate Budget Committees declined to invite the director of the Office of Management and Budget to present President Obama’s 2017 budget to their committees.

Utterly ignoring the president’s proposed budget is short-sighted, especially since congressional Republicans are disunited on fiscal issues. In January the Congressional Budget Office (CBO) updated its estimate of the cumulative federal deficit for the next 10 years to $8.5 trillion, versus just $7 billion last August.

The reason for the increase is that Republicans, who control both chambers, have won some tax cuts but no spending cuts. Obama’s latest budget offers the opportunity to remedy this, if only to a small degree and only by being very selective.