Tag Archives: medicare

Prices charged by NYC area hospitals vary widely, new report says

In the New York City area, hospitals with the biggest market share tend to charge the highest prices, according to a new report from the New York State Health Foundation.

The report, prepared by Marlborough, Mass.-based Gorman Actuarial, studied pricing in three regions of the state. In downstate New York, the highest-priced facilities negotiated prices with insurers that were 2.2 to 2.7 times more than what the lowest-priced hospitals fetched.

Facilities that are part of New York-Presbyterian, Northwell Health and Montefiore Health System were consistently among the highest-priced facilities, while NYC Health + Hospitals’ facilities were all in the two lowest-priced tiers, according to the report.

The report also found that safety-net hospitals that rely mostly on Medicare and Medicaid for revenue tended to receive lower reimbursements from commercial insurers as compared with hospitals that treat few publicly insured patients.

The study’s authors received unprecedented access to contracts between hospitals and insurance companies, granted by the state Department of Financial Services, which regulates insurers. They described the hospital industry as one where higher prices don’t necessarily translate into higher-quality care, and complex contracts may hinder insurers’ ability to hold down health care spending.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

IRS Ruling Considered An Obstacle To ACOs

A ruling by the Internal Revenue Service creates a significant obstacle to a new type of health care network that the Obama administration has promoted as a way to provide better care at lower cost, industry lawyers and providers say.

Health care markets are rapidly changing as independent doctors and hospitals race to form networks, known as accountable care organizations, in which they coordinate care for patients. The doctors and hospitals have financial incentives to keep patients healthy and to control costs, and they can share in the savings if they meet performance goals.

The new entities, which now cover more than 28 million people, according to Leavitt Partners, a health care consulting firm, help manage care for Medicare beneficiaries, for people with employer-sponsored insurance and for consumers who buy coverage through online marketplaces under the Affordable Care Act.

In its recent ruling, the I.R.S. denied a tax exemption sought by an accountable care organization that coordinates care for people with commercial insurance. The tax agency said the organization did not meet the test for tax-exempt status because it was not operated exclusively for charitable purposes and it provided private benefits to some doctors in its network.

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Sincerely,

The Big Problem With High Health Care Deductibles

When Bernie Sanders released his long-awaited health care plan last month, it was light on the details. But it did include one major, crowd-pleasing promise: Under his Medicare-for-all proposal, no American would ever have to pay a deductible or co-payment to receive health care again.

Deductibles and other forms of cost-sharing have been creeping up in the United States since the late 1990s. A typical employer health plan now asks an individual to pay more than $1,000 out of pocket before coverage kicks in for most services. The most popular plans on the Affordable Care Act exchanges require customers to pay several times as much. Even Medicare charges deductibles.

People tend to hate these features, but they were not devised to be cruel. Rather, they were fashioned with economic theory in mind

Deductibles and co-payments are intended to make patients behave more like consumers in other parts of the economy. People who have to pay the full cost of magnetic resonance imaging on their knee, for example, might be more likely to shop around and pick the $500 one instead of the $3,000 one. Perhaps, they’ll decide to give their minor knee pain two weeks to see if it gets better on its own, and skip the M.R.I. The hospital offering the $3,000 M.R.I. might lose enough business that it will lower its price.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

As Population Ages, Where Are the Geriatricians?

Ruth Miles, 83, sat in a wheelchair in a small exam room, clutching a water bottle, looking frightened and uncomfortable.

She was submitting to the tender scrutiny of Dr. Elizabeth Eckstrom, who scooted her stool so close that she was knee to knee with her patient.

Ms. Miles had broken her pelvis after tripping on an electric cord in her apartment. The weeks since then had been hellish, she told her doctor. At the rehab center, incapacitated and humiliated, she had cried for help from the bathroom. Her hands were covered with bruises from the blood thinners she was on. She winced as Dr. Eckstrom tugged slightly at a bandage that adhered stubbornly to her left elbow. “We’ll have to get that changed,” Dr. Eckstrom said softly.

Dr. Eckstrom, 51, who spends her days focused on the complex medical needs of older patients, is, like the Central African okapi, a species that is revered, rare and endangered. She is a geriatrician.

Geriatrics is one of the few medical specialties in the United States that is contracting even as the need increases, ranking at the bottom of the list of specialties that internal medicine residents choose to pursue.

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Jeffrey R. Ungvary President

Jeffrey R. Ungvary

The Hidden Financial Incentives Behind Your Shorter Hospital Stay

After one of her operations, my sister-in-law left the hospital so quickly that she couldn’t eat for days; after other stays, she wasn’t discharged until she felt physically and mentally prepared. Five days after his triple heart bypass surgery, my stepfather felt well enough to go home, but the hospital didn’t discharge him for several more days.

You undoubtedly have similar stories. Patients are often left wondering whether they have been discharged from the hospital too soon or too late. They also wonder what criteria doctors use to assess whether a patient is ready to leave.

It’s complicated and depends on more than clinical factors,” said Dr. Ashish Jha, a Harvard physician who sees patients at a Boston Veterans Affairs hospital. “Sometimes doctors overestimate how much support is available at home and discharge a patient too soon; sometimes we underestimate and discharge too late.”

Changing economic incentives — which are not always evident in individual cases — have also played a role in how long patients tend to stay. Recent changes to how hospitals are paid appear to be affecting which patients are admitted and how frequently they are readmitted.

What is clear is that hospital stays used to be a lot longer. In 1980, the average in the United States was 7.3 days. Today it’s closer to 4.5. The difference isn’t because hospitalized patients are becoming younger and healthier; by and large, today’s patients are older and sicker. Yet they’re being discharged earlier.

One big reason for the change came in the early 1980s. Medicare stopped paying hospitals whatever they claimed their costs were and phased in a payment system that paid them a predetermined rate tied to each patient’s diagnosis. This “prospective payment system,” as it is called, shifted the financial risk of patients’ hospitalization from Medicare to the hospital, encouraging the institutions to economize.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Health spending growth rate surges to 5.3% under ACA

The Affordable Care Act expanded health coverage to millions of Americans in 2014. Because more people had insurance to pay for healthcare services, demand and spending predictably went up more quickly.

But the important question for the future remains the same: Will healthcare be able to avoid large spending spikes and move to a more sustainable payment system?

“It’s absolutely no surprise that 2014 had a higher rate of increase because of all the additional people getting coverage,” said Paul Ginsburg, a health economist at the University of Southern California. “The purpose of covering them was allowing them to use more services.”

The 5.3% annual growth rate was the highest since before the 2008 recession. More recently, the U.S. healthcare system recorded historically low growth in expenditures. Many observers believe the recession was a primary driver because the high rates of unemployment battered demand for healthcare services.

Now the tide is slowly turning, although actuaries and experts don’t expect health expenditures will return to the days of double-digit yearly growth.

To read the full story, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Senate Approves Sweeping Changes to Medicare

The Senate on Tuesday overwhelmingly approved sweeping changes in the way Medicare pays doctors, clearing the bill for President Obama and resolving an issue that has bedeviled Congress and the Medicare program for more than a decade.

The 92-to-8 vote in the Senate, following passage in the House last month by a vote of 392 to 37, was a major success for Republicans, who devised a solution to a complex policy problem that had frustrated lawmakers of both parties. Mr. Obama has endorsed the bill, saying it “could help slow health care cost growth.”

The bill, drafted in the House in negotiations between Speaker John A. Boehner and Representative Nancy Pelosi, the Democratic leader, also extends the Children’s Health Insurance Program for two years, through 2017.

Without action by Congress, doctors would have faced a 21 percent cut in Medicare fees on Wednesday or Thursday. Senate leaders cleared the way for final passage by allowing votes on several amendments sought by liberal Democrats and conservative Republicans.

Medicare spent $70 billion last year under the fee schedule used to pay doctors and some other health care professionals. That accounts for about 12 percent of all Medicare spending. Ninety-eight percent of people enrolled in the traditional fee-for-service Medicare program receive at least one physician service during the year.

The legislation moves Medicare in a direction espoused by Mr. Obama and many health policy experts, toward payment based on the quality and value of care, rather than just the volume of services. Organized medicine now accepts that change in principle, and the American Medical Association lobbied strongly for the bill, demanding that Congress “fix Medicare now.”

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Shopping Limited Networks to Save Money

In all the turmoil in health care, one surprising truth is emerging: Consumers seem increasingly comfortable trading a greater choice of hospitals or doctors for a health plan that costs significantly less money.

“Are they willing to trade choice and access for price? There’s no question about that,” said Mark Newton, the chief executive of Swedish Covenant Hospital, a Chicago hospital that recently teamed with an Illinois insurer, Land of Lincoln Health, to offer a health plan.

This year, nearly half of the plans offered on public health care exchanges are so-called narrow network options, which sharply limit the medical providers whose services will be covered, new data shows. Furthermore, nearly a fifth are considered “ultranarrow networks,” which offer even fewer choices. At the same time, more employers are also embracing the plans for their workers, largely as a way to lower health care costs.

The data, gathered by the McKinsey Center for U.S. Health System Reform, is significant, given early criticism from some providers and patients who reacted to these plans last year by arguing they were like the overly restrictive health maintenance organizations, or H.M.O.s, of the 1990s, which were ultimately rejected by consumers.

The financial strategy is relatively simple. Insurers say one way to lower the price of a plan is to limit the number of hospitals and doctors in their networks. They can then ask providers to discount their prices in return for a potentially higher volume of patients; some also say they are trying to pick a select group that provides better care.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Truths and Myths of Obamacare

The Obamacare debate has always been rife with myths, from the infamous “death panels” to the armed IRS agents that would arrest those who don’t buy insurance (really, this was an actual myth).

But as the Affordable Care Act turns five, it appears one myth reigns above them all: the idea that the health-care law has gotten increasingly expensive over time.

A Vox poll conducted by communications firm PerryUndem shows that 42 percent of Americans think Obamacare has cost “more than expected.” Only 5 percent got the right answer: that the Affordable Care Act has actually come in under budget, costing “less than what was estimated.”

Yes, it’s really true: Obamacare has come in under budget. Twice in the past year, the Congressional Budget Office has revised downward projected spending on the Affordable Care Act. In fact, the federal government is expected to spend less on health care now than it predicted in early 2010 — and those predictions didn’t include any spending from Obamacare!

That isn’t just about Obamacare — projections on what we’ll spend on Medicare and Medicaid, the two other big federal health-care programs, went down, too. But it is pretty remarkable that health-care spending is now expected to be lower than projections made before Congress passed a massive health insurance expansion.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary

Medicare Patients Are in for a Surprise

Imagine you’re a Medicare patient, and you go to your doctor for an ultrasound of your heart one month. Medicare pays your doctor’s office $189, and you pay about 20 percent of that bill as a co-payment.

Then, the next month, your doctor’s practice has been bought by the local hospital. You go to the same building and get the same test from the same doctor, but suddenly the price has shot up to $453, as has your share of the bill.

Patients around the country are getting that unpleasant surprise, as more and more doctors’ offices are being bought by hospitals. Medicare, the government health insurance program for those 65 and over or the disabled, pays one price to independent doctors and another to doctors who work for large health systems — even if they are performing the exact same service in the exact same place.

This week, the Obama administration recommended a change to eliminate much of that gap. Despite expected protests from hospitals and doctors, the idea has a chance of being adopted because it would yield huge savings for Medicare and patients.

In the dry language of the annual budget, the White House asks Congress to “encourage efficient care by improving incentives to provide care in the most appropriate ambulatory setting.” In normal English, that means reducing financial incentives that are causing many doctors to sell their practices to hospitals just to take advantage of extra revenue.

The heart doctors are a great example. In 2009, the federal government cut back on what it paid to cardiologists in private practice who offered certain tests to their patients. Medicare determined that the tests, which made up about 30 percent of a typical cardiologist’s revenue, cost more than was justified, and there was evidence that some doctors were overusing them. Suddenly, Medicare paid about a third less than it had before.

To read more, click here.

Jeffrey R. Ungvary President

Jeffrey R. Ungvary