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Saturday, June 11, 2011
WaPo: Abercrombie’s Medical Home scheme fails to save money in Medicare
By Selected News Articles @ 2:57 PM :: 5782 Views :: Energy, Environment, National News, Ethics

Will Hawaii be saddled with the second-rate already failed ACO/Medical Home scheme promoted by Gov Abercrombie?  The Washington Post is already debunking this failure before we start:

Accountable Care Organization Experiment Fails to Save Money in Medicare

A key government experiment that set out to lower costs and coordinate care for Medicare patients -- now the blueprint for an innovation the Obama administration is trying to move to a national scale -- has failed to save a substantial amount of money, says the Washington Post.

  • The five-year test enlisted 10 leading health systems around the country and offered financial bonuses if they could save enough by treating older patients more efficiently while providing high-quality care.
  • In 2010, the final year, just four of the 10 sites, all long-established groups run by doctors, slowed their Medicare spending enough to qualify for a bonus.
  • Two sites saved enough to get bonuses in all five years, the evaluation shows, but three did not succeed even once.

The uneven progress is significant because the experiment involves "accountable care organizations" (ACOs), one of the hottest trends in health policy and an idea included in the year-old federal law intended to overhaul the nation's health care system.

Recent studies have shown that when a medical group becomes an ACO, the financial investments it must make in record-keeping and other changes have been higher than the government has predicted, causing it to lose money for at least the first few years.

Source: Amy Goldstein, "Experiment to Lower Medicare Costs Did Not Save Much Money," Washington Post, June 1, 2011.

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Nearly One-Third of Employers to Stop Offering Insurance After 2014

Shubham Singhal, Jeris Stueland and Drew Ungerman of McKinsey & Co., a consulting firm, have conducted a survey of over 1,300 employers across the country and found that "30 percent of employers will definitely or probably stop offering [employer-sponsored insurance] in the years after 2014." Among those with a "high awareness of reform," more than 50 percent will do so, says Avik Roy, an equity research analyst at Monness, Crespi, Hardt & Co. in New York City.

  • McKinsey's numbers jibe with those of the Urban Institute, which published a study fearing that "droves of employees -- potentially tens of millions -- are likely to shift out of employer-provided health insurance over the next decade or two, especially as newer firms and their employees find it more profitable [to do so]."
  • This, despite the fact that the new health reform law forces all employers of 50 or more workers to provide health insurance to their employees, or face a steep fine of $2,000 per worker.

Now, in theory, it's a good thing for more people to buy health insurance for themselves, rather than through their employers. The problem is that, under the new reform law, a huge chunk of the country will be eligible for government subsidies if they buy insurance on their own. If more people attempt to take advantage of those subsidies than the government projects, and employers recognize they will save money by dumping their workers onto the federal dole, the Congressional Budget Office has underestimated health reform's costs by trillions of dollars, says Roy.

Source: Avik Roy, "McKinsey: 30% of Employers to 'Definitely or Probably' Stop Offering Health Insurance after 2014," Forbes, June 6, 2011.

For McKinsey & Co. study: http://www.mckinseyquarterly.com/How_US_health_care_reform_will_affect_employee_benefits_2813

For Urban Institute study: http://www.urban.org/publications/901386.html

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NCPA: What Obamacare Means for Seniors

Last August, the Office of the Medicare Actuary predicted that within nine years Medicare will be paying doctors less than what Medicaid pays. Think about that. In most places around the country Medicaid patients have extreme difficulty finding doctors who will see them. As a result, they end up seeking care at community health centers and in the emergency rooms of safety net hospitals. In a few more years seniors will be in that same position — with this difference. From a financial point of view, the seniors will be perceived as less desirable customers than welfare mothers. Also, by that point one in seven hospitals will have to leave the Medicare system.

As Medicare Chief Actuary Richard Foster (page 282) said in the 2010 Medicare Trustees’ report, “Well before that point, Congress would have to intervene to prevent the withdrawal of providers from the Medicare market and the severe problems with beneficiary access to care that would result.”

But suppose Congress didn’t intervene. Suppose that the law continues on the books exactly as it is written.

Consider people reaching the age of 65 this year. Under ObamaCare, the average amount spent on these enrollees over the remainder of their lives will fall by about $36,000 at today’s prices. That sum of money is equivalent to about three years of benefits. For 55-year-olds, the spending decrease is about $62,000 — or the equivalent of six years of benefits. For 45-year-olds, the loss is more than $105,000, or nine years of benefits.

In terms of the sheer dollars involved, the planned reduction in future Medicare payments is the equivalent of raising the eligibility age for Medicare to age 68 for today’s 65-year-olds, to age 71 for 55-year-olds and to age 74 for 45-year-olds. But rather than keep the system as is and raise the age of eligibility, the reform law instead tries to achieve equivalent savings by paying less to the providers of care.

What does this mean in terms of access to health care? It almost certainly means that seniors will have extreme difficulty finding doctors who will see them and hospitals who will admit them…..

read more

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Analysis Raises Questions On Whether Pay-For-Performance In Medicaid Can Efficiently Reduce Racial And Ethnic Disparities

From Health Affairs

     

Abstract: In 2006 Massachusetts took the novel approach of using pay-for-performance—a payment mechanism typically used to improve the quality of care—to specifically target racial and ethnic disparities in hospital care for Medicaid patients. We describe the challenges of implementing such an ambitious effort in a short time frame, with limited resources. The early years of the program have yielded little evidence of racial or ethnic disparity in hospital care in Massachusetts, and raise questions about whether pay-for-performance as it is now practiced is a suitable tool for addressing disparities in hospital care.

read more

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Examiner: Health Care Compact as alternative to Obamacare

And yes, ACOs and Medical Homes are just two aspects of one thing:

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