Tag: "Medicare"

When Will We See Fiscally Responsible Health Reform from Congressional Republicans?

(A version of this Health Alert was published by RealClearPolicy on July 16, 2015.)

Just a few weeks ago, Republicans in Congress announced a oint budget resolution, which (if ever enacted) would repeal Obamacare and balance the budget in ten years. That is all well and good. Unfortunately, when they pass health care legislation that actually has a chance of becoming law, they fail to pay for their promises. How can they be trusted to repeal and replace Obamacare with fiscally responsible, patient-centered health reform?

The Congressional Budget Office (CBO) estimates repealing Obamacare would increase the deficit by $353 billion over ten years, before considering the economic growth that would result from repeal. Because repeal would grow the economy, federal tax revenues would increase by $216 billion, resulting in a net deficit of $137 billion. So, when Republicans actually repeal Obamacare, they will still have to cut $137 billion of spending elsewhere.

Yet, they cannot even identify miniscule spending cuts to pay for current health-related bills. The latest is repeal of the medical device excise tax. This is a 2.3 percent excise tax on medical devices – from pacemakers to MRI scanners – to help pay for Obamacare. On June 18, the House of Representatives voted to repeal the tax. Every Republican present voted for it, plus about one fifth of the Democrat members. With those 46 Democrats joining the majority, the votes in favor added up to 280, just eight short of the number needed to override the promised presidential veto. It awaits a vote in the Senate.

Direct-To-Consumer Lab Test Works Fine!

Fellow Forbes contributor and health care entrepreneur Dan Munro has taken advantage of Arizona’s new law allowing patients to buy lab tests directly without a physician’s order. It was a positive experience:

The Theranos process really has removed much of the friction I associate with blood tests I have taken in the past. Access is through a familiar retail facility with pharmacy hours. Billing is a typical retail transaction with credit, debit and HSA cards (or cash/check). The lowest price blood test is $2.70 (Glucose) and Theranos advertises that their pricing is at least 50% below Medicare reimbursement rates for all tests.

The highest price test on the Theranos order form was $59.95 ‒ a comprehensive test for Sexual Health. For comparison purposes, RequestATest (which appears to be an online, front-end for using LabCorp locations around the country), charges $199 for a comprehensive STD test and AnyLabTest Now (with 3 locations in the Phoenix metro) charges $229 for a comprehensive STD test.

Zeke Emanuel Hammers Obamacare Again

Obamacare’s best frenemy, Dr. Ezekiel Emanuel, and his colleagues at the Center for American Progress, gave up on Obamacare last year. In yesterday’s Wall Street Journal, he and Topher Spiro emphasizes that Accountable Care Organizations, which Obamacare established to co-ordinate care and lower costs in Medicare, are failing to achieve either goal:

U.S. Busts 243 Providers for $713 Million Medicare, Medicaid Fraud

man-in-wheelchairThis blog does not often congratulate the Obama administration. However, it has been relatively successful at prosecuting Medicare fraud through old-fashioned, gum-shoe type investigations.

From yesterday’s news:

In Miami, the owners of a mental-health treatment center allegedly billed Medicare for tens of millions of dollars’ worth of intensive therapy that actually involved just moving people to different locations. Some of them had dementia so severe that they couldn’t even communicate.

And in Michigan, another physician allegedly prescribed unnecessary narcotic painkillers in return for the use of his patients’ IDs to generate additional false billings. When they tried to escape the scheme, authorities say, he threatened to cut off the medications, to which his patients were addicted.

In the single largest crackdown in an eight-year campaign against health-care fraud, the Justice Department charged 243 people Thursday with $712 million in false billings to Medicare — the medical insurance program for the elderly — and Medicaid, which serves the poor. (Lenny Bernstein & Sari Horwitz, “Government arrests 243 in largest crackdown on health-care fraud,” Washington Post, June 18, 2015)

Medicare’s Sustainable Growth Rate Was Not Entirely Bad

(A version of this Health Alert was published by RealClearPolicy.)

Supported by health-care interests, Medicare beneficiaries, and an overwhelming bipartisan consensus in Congress, President Obama has signed a law that will change how Medicare pays doctors — for the worse. Critics note the law will dramatically increase federal control of medicine and add $141 billion in deficits through 2025, a violation of Republican and Democratic pledges made since 2010.

The old system, called the Sustainable Growth Rate, was hardly perfect. In fact, in over a decade of working in health policy, I have never heard one person say anything good about it. Now that it is dead, it is time to give the SGR a fitting eulogy — to bury it, but also, for once, to praise it. Whatever its flaws, the SGR was this nation’s only attempt to connect the cost of an entitlement to our ability to afford it.

Hip Replacements in L.A.: $12,457 to $17,609

A short drive in the Los Angeles area can yield big differences in price for knee or hip replacement surgery.

New Medicare data show that Inglewood’s Centinela Hospital Medical Center billed the federal program $237,063, on average, for joint replacement surgery in 2013.

That was the highest charge nationwide. And it’s six times what Kaiser Permanente billed Medicare eight miles away at its West L.A. hospital. Kaiser billed $39,059, on average, and Medicare paid $12,457.

The federal program also paid a fraction of Centinela’s bill — an average of $17,609 for these procedures. (Chad Terhune & Sandra Poindexter, “Price of a common surgery varies from $39,000 to $237,000 in L.A.,” Los Angeles Times, June 2, 2015)

Okay, hospital bills are silly. We already know that. Let me point out two things.

Health Insurance Consolidation Begins With A Bang

Just last Thursday, I wrote about the forthcoming consolidation in U.S. health insurance. My thesis was that only large, centralized, politically powerful insurers could continue to thrive.

With perfect timing, Humana, Inc., announced on Friday that it was putting itself on the block, and the shares rallied about twenty percent. They continue to climb today.

“Because of the Affordable Care Act, the whole insurance market is shifting towards a lower margin model,” said Chris Rigg, an analyst with Susquehanna Financial Group. “Generally speaking, the bigger you are, the better.” (Michael J. de la Merced & Julie Creswell, New York Times DealBook, May 29, 2015)

“Transparency” Will Not Fix Medicare Physician Fees

The Government Accountability Office (GAO) has released a report criticizing the way the federal government sets physicians’ fees in Medicare. It concludes that “Better Data and Greater Transparency Could Improve Accuracy.”

I doubt it. Note the mind-numbing detail of this process: The government delegates its assumed authority to a group of physicians who comprise the Relative Value Scale Update Committee (RUC). The government “reviewed 1,278 RUC work relative value recommendations for about 1,200 unique (new and existing) services)” in the last four years.

Preventive Care Does Not Want To Be “Free”

One conceit behind Obamacare is that if the government mandates preventive care be “free”, people will use it. The notion should appeal to free-market types, too: As the price of a service drops, the quantity demanded should increase.

However, it is not that simple in health care. Let’s take another dive into the always heated and controversial discussions about preventive care for women (such as our recent entry about mammography).

New research shows that women under 65 are over screened for osteoporosis, and women aged 65 and over are under screened, although older women get screened for “free”:

Commonwealth Fund: “Underinsurance” Unchanged Under Obamacare

Yet another pro-Obamacare organization has had to publish a study indicating that Obamacare is failing to achieve its objectives. I recently discussed Families USA’s report that one third of low income families cannot afford care under Obamacare.

This time it is the Commonwealth Fund, inventor of the notion of “underinsurance,” which is defined as out-of-pocket health costs (excluding premiums) comprising at least 10 percent of household income, or five percent if household income is less than 200 percent of the Federal Poverty Level.

In 2014, the proportion of so-called “underinsured”, aged 18-64, was 23 percent – exactly the same as in 2012 and just one percentage point more than in 2010.

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