Experts urge revamping of long-term Medicare funding mechanisms

Jul 12 2009

Health policy experts see a major revamp of the long-term Medicare funding mechanisms as a critical part of health reform.

Reuters reports that "Recent industry deals to accept lower costs for the Medicare health program are a first step in health care reform but more substantial payment changes will be needed to shore up the ailing system in the long-term and improve patient care. ... But some experts worry that much of the healthcare reform debate so far has focused on short-term cost cuts. Yet to be tackled is how to restructure incentives and payments to drive doctors, hospitals and others away from frequent, expensive treatments to more efficient, higher-quality care." Reuters reports on several efforts for long-term cost cutting: "One fundamental reform seen as badly needed is to link doctors' pay to improving their patients' health, rather than for each office visit, procedure or hospital admission. That approach would give providers one so-called 'bundled' payment to cover a greater portion of a patient's care. The U.S. healthcare overhaul should also boost payments for primary care. ... In the current system, specialists tend to take home the biggest payments."

Reuters adds, "If those changes were made by the government-run Medicare program, it would go a long way toward reforming the entire U.S. healthcare system. Medicare, the biggest health care payer, covers more than 44 million elderly and disabled Americans and already faces possible bankruptcy in 2017. ... Medicare has already taken steps this year to reduce its annual payment rates for skilled nursing facilities and certain hospitals. Those proposed cuts could save hundreds of millions of dollars, according to the Centers for Medicare and Medicaid Services, the agency that oversees the program. But U.S. lawmakers are hammering out several bills that need to find even more savings to pay for the estimated $1 trillion expansion of care that aims to cover many of the 46 million Americans without health insurance. ... It is not yet clear what specific Medicare changes Congress will include in legislation" (Heavey, 7/9).

Related, the Iowa Independent reports on Iowa's congressional delegation work to change Medicare reimbursement rates from state to state, noting that "under the current system, doctors in some states, including Iowa, are paid less by Medicare for performing the same procedures as doctors in other states." The paper reports on efforts by Democratic Iowa Representatives Bruce Braley and Leonard Boswell to change the existing formula to "not only give rural states like Iowa a fairer shake, but that it would help to eliminate wasteful spending and incentivize higher-quality, more efficient care nationwide" (Waddington, 7/9).