Charges for some of the most common inpatient procedures surged at hospitals across the country in 2012 from a year earlier, some at more than four times the national rate of inflation, according to data released by Medicare officials on Monday.
Charges for chest pain, for instance, rose 10 percent to an average of $18,505 in 2012, from $16,815 in 2011. Average hospital charges for digestive disorders climbed 8.5 percent to nearly $22,000, from $20,278 in 2011.
In 2012, hospitals charged more for every one of 98 common ailments that could be compared to the previous year. For all but seven, the increase in charges exceeded the nation’s 2 percent inflation rate for that year, according to The Times’s analysis. (NYT)
A publication called “Becker’s Hospital CFO” recently ran a story based on data from a company called DataGen on “The Truth Behind Variation in Episode Payments.” The article claims it will explore “the regional variations in Medicare payments for 90-day episodes of care.” This is to prepare for the new era of bundled payments, which is supposedly right around the corner.
- It completely fails to explain the regional variations it identifies, and
- It illustrates what a poorly thought-through idea bundling is, especially when designed by payers like Medicare.
The article defines four types of episodes that are likely candidates for bundled payment. These all start with an inpatient admission followed by post-acute care treatment –
- Acute Myocardial Infarction (AMI)
- Congestive Heart Failure (CHF)
- Major joint replacement
One consistent argument in favor of expanding government-run health care in the U.S. goes like this: “We’re the richest country in the developed world, so we should be able to provide universal health care like all the other developed countries.”
Well, we are a heck of a lot richer than we were in the 1930s or 1960s, when Social Security, Medicare, and Medicaid rolled out. Despite our significant increase in income, those three programs are bankrupting the nation. And ObamaCare wreaks more fiscal havoc at a significantly faster rate than any of those programs.
With two simple charts, Charles Blahous of the Mercatus Center shows how much more expensive ObamaCare will be than Social Security, Medicare, or Medicaid — just five years after Congress enacted them.
In one chart, Blahous illustrates that the federal deficit will be about 5.5 percent of GDP five years after ObamaCare’s enactment — versus only 3 percent five years after Social Security’s enactment and less than one percent five years after Medicare’s and Medicaid’s enactment.
Source: Mercatus Center.
The editors at Bloomberg explain:
Here’s how the system works: When a doctor administers a drug in his or her office, Medicare pays 106 percent of its average selling price. The doctor keeps the extra as compensation for administering the injection.
What has this got to do with eye doctors? The drug Lucentis, used to treat macular degeneration, cost Medicare almost $2,000 a shot in 2012. Another drug, Avastin, which works just as well, costs about $50. If you were the doctor, faced with a system that pays you 6 percent of the drug’s cost, which would you choose? That Medicare spent a total of about $1 billion on Lucentis in 2012 suggests most ophthalmologists went with the more expensive one.
It gets worse:
This problem goes beyond a single drug. Of the $20 billion Medicare spent on drugs administered by doctors in 2010, 85 percent went to the 55 most expensive ones. In what seems unlikely to be a coincidence, 42 of those drugs also showed an increase in use from 2008 to 2010.