Better use of Medicare data could help cut costs

Sep 30 2009

Economists say better use of Medicare data could help make health care less expensive while the federal program faces some cuts under current legislation. 

NPR reports: "Economists say one reason the health care system wastes so much money is a simple lack of information." Arnold Milstein, who advises the White House on health care economics, "diagnosed the problem as one of relative ignorance: Physicians don't have a clue how they compare with their colleagues. They don't know if they're spending more than another doctor to treat the same condition. There just wasn't any place for them to see comparative statistics." That's what led Milstein to the idea of "tapping Medicare data. Every time someone covered by Medicare goes to the doctor or gets a test done or buys some medication, the government gets a record, because the government pays the bill." He figures this data "could be used by patients to find good doctors, by insurance companies who might want to reward doctors who practice efficiently, and by doctors themselves, who want to know how they compare. Today the Medicare database is widely used by researchers for all kinds of studies — but not to publish information about individual doctors" (Kestenbaum, 9/29).

Related KHN interactive map: Medicare Reimbursements Per Enrollee

Meanwhile, PBS' NewsHour reports on how different legislation could change Medicare spending: "The House bill calls for shaving more than $500 billion off the program's expected growth. That would mean lowering payments to hospitals, nursing homes, and other providers. The Senate version, now in committee, would reduce the program by more than $400 billion." In both cases, Medicare Advantage would be trimmed and "such proposals are causing plenty of anxiety for beneficiaries and providers."

The NewsHour interviewed Joseph Baker of the Medicare Rights Center, an advocacy group, and Gail Wilensky, a former administrator of Medicare. Wilensky said: "The biggest concern they should have is when the Congress makes changes -- and this is clearly one of the biggest they've ever contemplated -- the unintended consequences are very hard to discern. That's my concern about Medicare Advantage is, let's not take the money down so quickly that you throw a lot of people out of plans."

Baker said: "I think there's an untold story here, and that is the money that's being invested back into the Medicare program, as well as into health insurance and other programs for people under age 65. One of the things that both bills do, ... is for the first time whatever savings they're taking are reinvested in the health care system. And since seniors are disproportionate users of the health care system, bolstering the health care system in whatever way I think will help them" (Ifill, 9/28).