December 13th, 2012
Structural reforms to the Medicare and Medicaid programs will be on the table as the debate over entitlement reform intensifies. There are three areas of opportunity for changing our entitlement programs: adding prevention initiatives that truly slow or reduce the growth in chronic disease prevalence; introducing care coordination into the original Medicare program; and reforming how we pay health care providers.
On November 30th, the Centers for Medicare and Medicaid Services (CMS) provided additional information regarding the implementation of the Bundled Payment for Care Improvement (BPCI) initiative. The CMS released a preliminary list of 48 “episodes of care” where providers would be paid a targeted rate lower than actual fee for service payments. The extent of the episodes is notable since they would cover approximately 70 percent of all Medicare expenditures if applied to all providers and to all 48 episodes. Under the initiative, participating providers could identify which of the 48 conditions they were interested in testing.
These reforms could replace the clearly flawed sustainable growth rate formula and provide strong financial incentives to integrate inpatient and post-acute health care services. Over 75 percent of spending in the Medicare program is associated with patients under treatment for 5 or more medical conditions and virtually all the growth in Medicare spending since 1987 has come from patients with multiple chronic health care conditions. Despite these fiscal facts, original Medicare does not provide coordinated care for chronically ill patients. Such care requires “team-based care” that includes transitional care, comprehensive medication management, health coaching, and a care coordinator among other elements.Read the rest of this entry »