Tag: "Medicare"

Who Is Underinsured?

The next time you hear someone talk about how Medicare is a wonderful program and a model for what all of America should be doing, you may want to refer them to a new study from the Kaiser Family Foundation. It found that the average household on Medicare spends 14.1% of its income on health care. This contrasts sharply with the 4.3% spent by non-Medicare households. Of this amount, 62.9% goes to premiums for Part B, Part D, and Medigap, 18.1% goes to prescription drugs, 15.3% to medical services, and 3.8% to medical supplies.

A second Kaiser study showed the median out-of-pocket (OOP) spending for Medicare beneficiaries has grown from 11.9% of income in 1997 to 16.1% in 2005, in spite of the advent of Medicare Part D. Whereas the first study included only the non-institutionalized population, the second breaks out the population in facilities and finds that almost all of their income is spent on health care. The median income of this population is $11,000 and the median OOP spending is $9,776.

Meanwhile, the issue of out-of-pocket spending is considered important enough that the Senate HELP committee held a hearing on it a couple of weeks ago. The argument is that anyone who spends 10% of his income on health care is "underinsured." If that is the case, then Medicare is the source of massive "underinsurance."

Paradoxically, the population least likely to spend more than 10 percent of their income on health care is the uninsured, according to a JAMA study [gated, but with abstract]. Only 10.5% of the uninsured reach the 10 percent threshold, while 18.2% of the privately insured and 19.4% of the publicly insured do. So, if 10 percent of income is used as the standard, the people least likely to be "underinsured," are the uninsured! Go figure.

Mar 13, 2009 | 6 comments | by

How Comparative Effectiveness Works in Medicare

This is from an editorial in the New York Times:

Medicare has proposed not to pay for so-called virtual colonoscopies because there is not enough evidence that they would benefit people aged 65 and older. That may be disappointing for older Americans who would prefer a virtual exam to a real one. But those sort of judgments will be fundamental to any successful health care reform effort.

Lest I mislead, I'm not against Medicare making these decisions. As a taxpayer, I have a self interest in not seeing money wasted. What I'm against is a monopoly health insurer, which gives patients and doctors no alternatives.

Mar 05, 2009 | 3 comments | by

New Dartmouth Results: Disparities are Getting Worse

The New York Times reports that spending differences grow wider, with no apparent effect on outcomes:

Medicare spending [in Miami] rose 5 percent a year from 1992 to 2006, compared with 2.4 percent in San Francisco, according to the Dartmouth group. Medicare spent about $16,000 per enrollee in Miami in 2006, compared with about half as much in San Francisco.

But see below.

Mar 03, 2009 | 4 comments | by

Study Finds More Spending Leads to Higher Quality Care

MoneyBased on broad measures of health system quality and performance, states with more total health spending per capita have better-quality care. This fact contrasts with a previous finding that states with higher Medicare spending per enrollee have poorer-quality care.

One more reason to come to this blog: odds are, you won't hear about this study anywhere else. [gated, but with abstract]

Mar 03, 2009 | 2 comments | by

Free the Doctors

MEMO

To: Kathleen Sebelius, Newt Gingrich, Commonwealth Fund, Robert Wood Johnson Foundation, Center for Studying Health System Change and health reform wannabes everywhere

Subject: The Syllogism

I learned this in high school. Let's see if I can remember how the structure works.

Major Premise:

 Every innovation that improves quality and reduces cost, from the time of Galen to the present day, has been discovered on the supply side of the market (e.g., by Mayo, Intermountain, Geisinger, Minute Clinic, Teladoc, Rx.com, etc., etc., etc., and by doctors here and there all over the country) and not on the demand side (e.g., by Blue Cross, Medicare, Medicaid, CMS, employer plans, etc., etc., etc.). 

 Minor Premise:

 High-quality, low-cost care is a good thing. 

 Conclusion:

 Buyers of care should tell the providers how to practice medicine. 

Whoops. Something's amiss here. Solution below the fold.

httpv://www.youtube.com/watch?v=OpOyy5uOnu8

I Wish I Knew How It Would Feel to Be Free

Read More » »

Feb 27, 2009 | 26 comments | by

Obama’s Speech

During President Obama’s “not-quite-a-state-of-the-union” speech last night, he called for a new era of honesty and accountability in government — “Finally, because we’re also suffering from a deficit of trust, I am committed to restoring a sense of honesty and accountability to our budget.” [link]

Unfortunately, he broke that promise even before he left the podium. In discussing the need for health care reform, he said, “This is a cost that now causes a bankruptcy in America every thirty seconds. By the end of the year, it could cause 1.5 million Americans to lose their homes. In the last eight years, premiums have grown four times faster than wages. And in each of these years, one million more Americans have lost their health insurance. It is one of the major reasons why small businesses close their doors and corporations ship jobs overseas.”

But none of that is true. Let’s look at the claims one at a time.

Read More » »

Feb 26, 2009 | 6 comments | by

Free Market Medicare

Whereas a well-baby visit to a pediatrician might only require a 10-minute office visit and be reimbursed by private insurance paying market rates, a senior enrolled in Medicare who has multiple problems might require an appointment lasting half an hour or more just to monitor all the health concerns. And Medicare pays about 30% less than private insurers, despite the fact the office visit takes twice as long. No wonder doctors run from such patients.

Yet, for upfront fees ranging from $500 to $15,000 per year, patients can now have the undivided attention of physicians willing to allot them all the time they need to navigate the health care system.  Concierge physician practices can do this because they limit their practice to only a few hundred patients willing to pay large, upfront fees. [link]

Feb 24, 2009 | 5 comments | by

It’s Today: Obama’s Summit

Many Democrats (according to the New York Times) are upset that President Obama is even bringing up the issue of elderly entitlements. Will it do any good?

Let's start with the basics. We can begin by recognizing the problem – which too many Democrats (and even some health economists) have been denying for way too long. This may require an "intervention," and maybe even 12 step rehab. But there is no way we are going to get agreement on a solution, until we get agreement on the problem.

According to the Trustees, the unfunded liability in Social Security and Medicare is more than $100 trillion dollars (that's trillion, not billion), or about 6 ½ times the size of the entire US economy. That's the size of our commitments over and above expected premiums and dedicated taxes, measured in current dollars. [link]

Read More » »

Feb 23, 2009 | 8 comments | by

Chronic Care

The problem:

For the 47 percent of Americans with multiple chronic diseases or conditions, health care costs increase dramatically. The average Medicare patient with one chronic condition sees four physicians a year, while those with five or more chronic conditions see fourteen different physicians a year. In 2002, beneficiaries with five or more chronic conditions accounted for 76 percent of Medicare expenditures. [link; gated, but with abstract]

The obvious solution: more conferences, more papers, more research grants. Isn't that how we solve problems in other markets?

See my post at the Health Affairs blog for a description of how some employers are solving the problem with Health Savings Accounts.

Feb 12, 2009 | 5 comments | by

New Numbers on Cost Shifting

A study for America's Health Insurance Plans (hardly a disinterested party) by Milliman finds the total amounts to just shy of $89 billion dollars annually. The cost shift from commercial insurers to compensate for Medicare patients in hospitals was $35 billion in 2006. In 2007, the cost shift from commercial insurers to compensate doctors who treat Medicaid patients was nearly $24 billion. As a result, the average family of four pays nearly 11 percent more than they otherwise would pay, for a cost of $1,788 per year.

Feb 09, 2009 | 3 comments | by
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