Monday, December 14, 2009

Et Tu, Mayo? Medicare Expansion Won’t Get Us There - Mayo Health Policy Center Blog

Medicare Expansion Won’t Get Us There « Health Policy Blog:

A very disappointing post from the Mayo Health Policy Center:

Proposal Would Not Increase Access to Health Care Services or Control Costs
The current Medicare payment system is financially unsustainable. Any plan to expand Medicare, which is the government’s largest public plan, beyond its current scope does not solve the nation’s health care crisis, but compounds it. We need to fix Medicare by moving it to a system that pays for value – quality health outcomes that are affordable over time – and ensure its success, before bringing more people into a broken system.
Expanding this system to persons 55 to 64 years old would ultimately hurt patients by accelerating the financial ruin of hospitals and doctors across the country. A majority of Medicare providers currently suffer great financial loss under the program. Mayo Clinic alone lost $840 million last year under Medicare. As a result of these types of losses, a growing number of providers have begun to limit the number of Medicare patients in their practices. Despite these provider losses, Medicare has not curbed overall spending, especially after adjusting for benefits covered and the cost shift from Medicare to private insurance. This is clearly an unsustainable model, and one that would be disastrous for our nation’s hospitals, doctors and eventually our patients if expanded to even more beneficiaries."

I simply have to call BS on the figure of how much money Mayo loses to Medicare. We know Mayo is one of the high performing providers and so should be doing far better.

From Ezra Klein:

On March 17th, Glenn Hackbarth, the chairman of MedPAC, testified before the House Ways and Means Committee on this very issue. Hospitals, Hackbarth argued, are inefficient. Their costs are too high. And this was backed up in the data. "MedPAC analysis has identified a set of low-cost hospitals that consistently out-perform other hospitals on a series of quality measures, including mortality and readmissions," Hackbarth explained. "Among this set of hospitals, we found that Medicare payments on average roughly equaled the hospitals’ costs." In less "efficient" hospitals, Medicare's payments were below costs.


Among the major differences between "efficient" and "non-efficient" hospitals was that the less-efficient hospitals were not under financial pressure: They made a lot more money from other sources. As such, they spent a lot more money on things like capital expansion. As example, compare the amount a young journalist spends to the amount a young investment banker spends. The banker requires more income to break even on that lifestyle. His "cost" is higher. But he doesn't need that lifestyle. He doesn't need that "cost." And if that banker is being paid on taxpayer dollars, I don't want him to have that lifestyle. I want him to have what he needs, rather than what he wants. Because I'm paying for it.
And so too with Medicare payments. Indeed, what MedPAC found was that hospitals under "financial pressure" -- hospitals that made less money, in other words -- managed to control their "cost" better. Medicare's payments sufficed for them. And their quality outcomes weren't any worse.

This is a remarkably "retro" viewpoint from Mayo, which has taken progressive stands on cost containment, reducing over utilization of procedures and testing, chronic care management and the like. To hear them call Medicare unsustainable is surprising. While I agree that Medicare payment has to be radically changed in some areas, the only thing unsustainable is our current course!

And, regardless of what Mayo "believes" about government run entities (which they disparage in their piece), government run or strictly regulated systems consistently outperform the US system in France, Germany in many other places. The ACP Policy Committee has recognized this for years and has advocated for a single payer system like France or a hybrid system like Germany's for many years.

And one more thing, wouldn't you rather get paid by those expensive 55-65 year olds who don't have insurance instead of eating it (or eating part of it, and bankrupting families)? I realize the Mayo's catchment area has few uninsured, but consider the rest of the country in making pronouncements!

And the Mayo release has been picked up by Fox News for goodness sake! In a fair and balanced piece on Medicare expansion, of course.

Sphere: Related Content

1 comment:

David - Communcations Guy said...

It seems to be easily forgotten that healthcare is a human need. The ability to be self-directive and receive care when needed would increase with an easy taxation system. Doubling the Medicare tax is a fair and equitable solution.

Everyone needs a buy in.

Currently, young Americans are paying for Social Security and Medicare without any assurity they will exist upon their retirement. We have built so many empty social contracts. Yet, we now wish as a society to punish a single mother without the means to purchase a product.

The question becomes: Do we really value labor? If so, isn't it a conflict of interest to allow an able bodied American to become ill-equipped to work when this could be prevented.

Clearly, there are implications for national defense. It seems, though, we are happy to ignore practical utility of nonprofit healthcare.