Medicare Spending Report

While there has been large media coverage about the insurance impacts of the Affordable Care Act (ACA), there has been a smaller amount discussed of the law’s changes to provider reimbursement policy, reforms to the delivery system, and investments in programs to improve the quality of care and constrain long-run growth in health care costs. And yet, the elements included in the ACA directed at cost and quality is possible to affect the practice of care for nearly every provider across the country. Although cost containment policies and initiatives are largely applied through federal health programs which including Medicare and Medicaid; cost containment in these programs has important cost-saving spillover effects to private health care markets through changes in health care practices and pricing across sectors of care.

According to Kurtz (2011) reduced Medicare payments can be made to providers or facilities as the government’s Independent Payment Advisory Board (IPAB) sees fit (Kurtz, 2011). These reductions can be completed without congressional approval and can only be overturned by an act of congress. This practice could lead to many providers or facilities not being able to offer certain treatments due to the financial repercussions, in effect causing a rationing of care (Kurtz, 2011). This rationing will lead to decreased access to care as Medicare and Medicaid beneficiaries are less and less likely to be able to find someone to treat them for such low payments. Further exacerbating this problem is the cuts to Medicare payments outline in the Act, where nearly $750 billion in cuts will be made by the end of 2015 (Turner,

Medicare are getting people more improved and secured benefits every year, and Medicare’s long-term sustainability is stronger as a result of performances, new tools, resources to lessens waste and fraudulence, and a decrease growth in Medicare costs. These significant changes will produce savings for the taxpayers and help to prolong the life of the Medicare Hospital Insurance Trust Fund. These changes will also assist people with Medicare by keeping their premiums and cost sharing lesser than under the law before. , Medicare beneficiaries under the Affordable Care Act will enjoy improved quality care, better access to care, and a more innovative care delivery system that will improve outcomes and reduce

In a two paged letter dated January 20th, 2014 from Debra B. Whitman, Chair of the Leadership Council of Aging Organizations (LCAO) addressed to President Barack Obama the coalition expressed their concerns on the then forthcoming Fiscal Year 2016 budget request with a specified interest in those line items on Medicare. “We urge you to abstain from including proposals in the FY2016 budget, namely those included in the past budgets; that would shift additional health care costs to people with Medicare.” (Whitman, Debra. Letter. 20 January 2014)

The triad of cost, quality, and access has impacted the development of the Affordable Care Act on many levels. The Affordable Care Act aims to improve the quality of healthcare, while maintaining the cost of health care ("Quality of care," n.d.). Under the Affordable Care Act, there is more funding for each state to assist in treating people with chronic illness. The goal is for these patient populations to have high-quality services at an affordable cost (“Quality of care,” n.d.). To ensure that quality of care is provided, the Affordable Care Act requires quality measures to be met in order for organizations to receive reimbursement. Although the United States still needs improvement in providing high quality health care that is accessible

Healthcare spending growth rate trends show astounding estimates. Since 1960, spending has risen from $27 billion ($143 per capita, 5.1% pf GDP) to amazing $1,678.9 billion ($5,670 per capita, 15.3% of GDP, 2003 data) (HHS, 2005). Recent research estimated that by 2013, healthcare spending will be as high as 18.4% of the Growth Domestic Product. It is important to note that the gradual move from hospital to ambulatory setting has resulted in much higher spending on outpatient hospital services and prescription drugs. The spending growth for these two trends is much higher than the overall healthcare cost growth, which, in fact, increases faster than such important economic indicators as GDP growth, inflation growth, and population growth rates.

Medicare is a valuable part of health insurance in the United States. Although it is a popular program, it will face a number of financial issues and challenges in the future.

On July 30, 1965, Medicare was signed into law by then President Lyndon B. Johnson. The President declared “No longer will older Americans be denied the healing miracle of modern medicine (Johnson, 1965). The Medicare act was implemented to provide the older population of U.S. citizens and those with disabilities and end-stage renal disease with financial security, coverage, and access to healthcare. It’s a federal program that most families will eventually rely on. “As the single largest purchaser of medical services in the United States, Medicare is an important source of income for hospitals, physicians, home health agencies, and other medical care providers” (Oberlander p. 119).

Medicare is a program created by the Social Security Act of 1965. It is a federally run medical health insurance program aimed at medical coverage for senior citizens over 65 years of age. Over the years, the program has expanded to cover other beneficiaries such as individuals with disabilities and has also evolved to add prescription drug benefits. The program has been immensely successful in bringing health services to millions of senior citizens and individuals with disabilities. Despite this success, Medicare has faced a myriad of challenges most importantly budgetary projections that predict a rise in Medicare cost due to the “Baby Boomers” becoming eligible while having fewer workers per retiree to fund Medicare. The government has turned to managed care plans in cost saving measures and to bolster the quality and efficiency of their Medicare. While this summary might not exhaustively delve into the complicated web of Medicare but it will highlight what is looming in the horizon; the struggle to find new and innovative ways to finance Medicare for future generations without burdening beneficiaries or taxpayers.

Healthcare costs in the United States (U.S.) have escalated exponentially in recent years due to many factors. The Affordable Care Act was legislation passed in 2010 to attempt to change the delivery of healthcare in the U.S. and circumvent the continued rising healthcare costs. A major factor contributing to healthcare costs is the Medicare population and their readmission rates to the hospital within 30 days of discharge. This factor involves many layers of services and financial implications. This paper will discuss how healthcare quality results in hospital readmission, the fines that are imposed by the government through Health Readmission Reduction Program, the changes implemented by hospitals to decrease readmission

United States has no dearth of highly qualified, well-trained doctors and still the US healthcare quality fails to meet the established industry benchmarks. Institute of Medicine’s (IOM’s) 2001 Report, “Crossing the Quality Chasm”, clearly states that the American healthcare delivery system is in need of a pivotal change. (Committee on Quality of Healthcare in America (Institute of Medicine), 2001). The exasperation level is continuously rising amongst both, the patients and the providers, and yet the problem of delivering and receiving high quality care remains unaffected. In order to address this problem of healthcare quality improvement and affordability, the Patient Protection and Affordable Care Act (PPACA or Obamacare) was signed in the year 2010. The main aim behind PPACA is to improve healthcare quality and accessibility, at the same time keeping it cost efficient. To facilitate its goal PPACA is trying to achieve the cost effectiveness through reducing the Medicare price growth and regulating the quantity of care by encouraging evidence based practices. This new legislation supports the healthcare system in which the goals of both provider and the patients are better aligned with value as opposed to the quantity of services. Overall the reform under PPACA seeks to establish a direct link between the payments made to the healthcare

The U.S government spends about 17% of GDP on healthcare industry which is enormously high as compared to any other industrialized nation. President Obama signed the comprehensive healthcare reform – Patient Protection and Affordable Care Act on March 23, 2010. The law worked on the principles of triple aim to reduce healthcare cost, improve quality and access for the U.S citizens. One of the fundamental component of Affordable Care Act that will affect the caregiving to the U.S citizens is payment cuts to the hospitals if they do not provide quality care to their patients. The reason behind these payment cuts is because Part A Medicare Trust may go bankrupt by 2017. Hence, it is necessary to bring the cost of healthcare under control along with providing quality care to the patients. In order to contain cost, ACA proposed Medicare Readmission Program. Effective October 1, 2012 Medicare will reduce payments to the hospitals that will have higher percentage than the specified amount of preventable readmission rates. Effective fiscal year 2015, Medicare will penalize the hospitals by 1 % that will show higher number of hospital acquired infections (KFF, 2013). CMS has reported that approximated one out of every 5 Medicare patients are admitted back to the hospital within 30 days of their prior inpatient stay. Readmission rates are generally high for hospital that serve more vulnerable population like safety net hospitals. The high readmissions are caused by a

Health care spending in the United States is the highest then in any other country. According to Kane (2012), the Organization for Economic Co-operation and Development (OECD) there are less physicians per person than in other OECD countries. For example there was 2.4 practicing physicians in the U.S. per 1,000 people. The average for OECD was 3.1, the U.S. fell well below. In 2012 $8,233 was spent on health care per year per person, this was “two and a half times more than most of the developed nations in the world”(Kane, 2012). This paper will discuss the level of current national health care spending, whether this spending is too much or not enough, if the nation should add or cut funds, and how the public’s

The economics of health care has changed across the path of history in the United States. In the past year’s health care cost in America have escalated “more than $8,000 per capita or 17% of the gross domestic products (GDP) (Nickitas, 2016). America is paying noticeably more money per capita and percentage of GDP to attain better outcomes. When comes health care economics money is the driving force. Over the past year’s health care funding has changed and began to come predominantly through private providers, hospitals, physician and health insurance companies. Some elements that provided to the evolution of health care progress for example moderate unnecessary health care costs through a variety of procedures, economic incentives for physicians

In responding to the question, in the context of Underuse, over half of the recommended services such as preventive care, chronic care and acute condition are not provided to the Medicare patients. The lack of effectiveness was retrospectively attributed to an absent association between the review process and the identification of ways to improve care. In addition, there was an absence of formal evaluation criteria to guide providers’ decision making, and to adjust payment based on the quality of care. Also involved was the avoidance of unnecessary overuse, inappropriate misuse, and non-indicated underuse of services. The underlying causes of these issues are multilayered and complex. They include a previously observed lack of accountability