“The basic benefits package of Medicare — replete with deductibles and coinsurance — long ago began falling short of the promise of financial protection as articulated by President Lyndon Johnson in 1965. In 2019, out-of-pocket spending in traditional Medicare averaged $7,053 among all seniors and $12,315 in the top decile, which was equal to 25% of seniors’ mean after-tax income and to 69% of retirees’ mean Social Security income. [..] Over time, Medicare Advantage has evolved into a conduit for financing coverage expansion that is arguably overdue. Enrollees enjoy substantially lower premiums for supplemental and prescription drug coverage than they … Read More
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“The Medicare Physician Fee Schedule (MPFS) directly determines nearly $200 billion in Medicare spending and indirectly affects an additional $600 billion or more in payments to physicians by other payers. Yet the fee schedule has widely recognized flaws: paying whether the service rendered is medically necessary, is performed efficiently, or meets acceptable quality standards. At its core, clinician fee schedules attempt to pay for clinicians’ time and effort, not whether the care maintains or improves patients’ health. Many hoped that value-based payment models would make MPFS flaws moot. Paradoxically, virtually all the alternative payment models that the Centers for Medicare … Read More
“In 2023, just under 2 million Americans will be diagnosed with cancer. Many will endure multiple CT and MRI studies and intensive medical care, including surgery, radiation, chemotherapy, or immunotherapy. Fortunately, advances in treatment and novel therapies have steadily improved survival following a cancer diagnosis. Cancer death rates have declined by 27% over the past 20 years. Unfortunately, many American cancer patients also face an unexpected adverse effect: financial toxicity. The costs of cancer are literally killing patients. But there is a clear solution. Patients diagnosed with cancer should not be responsible for any deductibles, copays, or other cost-sharing. [..] … Read More
“The high cost of health insurance and health care services now affects not only the uninsured but also middle-class Americans with employment-based health insurance (ESI), enrollees in the Affordable Care Act exchanges, and Medicare beneficiaries. A popular concept in health policy discussions is the “iron triangle”: here, here, here, here, and here. These authors posit that it is impossible to increase access and quality of care while simultaneously reducing spending. That idea warrants further scrutiny. [..] evidence suggests that failure to improve affordability is primarily due not to a mathematical “iron triangle” constraint, but an “iron curtain” of stakeholders who are aware of promising alternatives but oppose their … Read More
Select Key Findings Policy Issues Debating the Future: Does H@H Save Costs and Improve Patient Care? “[..] Recent studies of cost savings from H@H programs range from 20 percent (Reese 2021) to 40 percent (Brigham and Women’s Hospital in Boston, Levine et al. 2020). But these findings are not generalizable as they are based entirely on single case studies of highly structured programs involving small samples of very carefully selected patients. For example, the study of Brigham and Women’s program examined 91 adults who were admitted to the hospital’s ED and randomly assigned to the hospital vs home for treatment. [..] While … Read More
“[Introduction] [..] population-based payment models, as in the Medicare Shared Savings Program or Medicare Advantage (MA) program, can facilitate the resource reallocations necessary to address health care disparities. Risk adjustment is the mechanism by which payment is allocated in these models. Traditionally, risk adjustment has been conceived and executed purely as a predictive exercise. Regression is used to predict total annual per person spending as a function of demographic and clinical characteristics. A person’s predicted spending is converted to a risk score, which is applied to a base regional rate to determine the prospective payment or benchmark for that person. … Read More
“driven by an increasing focus on “total-cost value-based care” — a model in which health care providers are paid to manage the total cost of care for their patients and the size of each patient’s capitated budget may be increased on the basis of the patient’s health risks and the provider’s performance on quality metrics. Though potentially beneficial for certain well-insured patients, the trend of corporate investment in primary care could threaten equitable access to care, raise health care costs, and reduce physicians’ clinical autonomy. [..] As Medicare and commercial payers move toward total-cost value-based payments, such as capitation, and … Read More
“The concept of value-based payment became widespread among U.S. health policymakers and analysts during the 2000s. It collectively refers to interventions that offer doctors and hospitals financial incentives that, in theory, induce them to improve both components of health-care value — cost and quality — without generating the hostility provoked by managed care insurance companies during the HMO [health maintenance organization] backlash of the late 1990s. [The Center for Medicare and Medicaid Innovation reviewed 54 models of value-based payment. Only four were certified to be expanded:] The Home Health Value-based Purchasing Model demonstration cut Medicare spending by 1% with mixed … Read More
“while the U.S. lags behind in adopting value-based agreements, many policymakers are realizing that value-based pricing can be an important, viable solution to the high and rising expenditures that payers lay out for prescription drugs. Developing value-based agreements has never been easier. A large number of value-based agreements are now available and can be used to help payers, manufacturers, and providers develop new ones appropriate to their specific situations. [..] Here are four scenarios for which I believe value-based pricing is appropriate. When expected outcomes for a new treatment are clear and objectively measurable. [..] Treatments with clearly defined, meaningful, … Read More
Like many of my colleagues in the American healthcare system, I have been alternatively hopeful and skeptical about the potential value from pursuing more value-based care initiatives in relation to our current fee-for-service model. Accountable Care Organizations (ACOs) will probably save no more than five percent of total healthcare costs. Eight years into Blue Cross Blue Shield’s Alternative Quality Contract with two-sided risk in Massachusetts showed savings ranging from 2.3% to 11.9% over three years. Bundled payments for joint procedures may save a few percent (primarily from reduced post-acute care utilization). Some have suggested Centers of Excellence to both validate … Read More