Tag: "Medicare"

Medical Marijuana Saves Taxpayers Money

ReeferIn a fascinating article in Health Affairs, Ashley Bradford and David Bradford of the University of Georgia have estimated that medical marijuana has benefited taxpayers:

Using data on all prescriptions filled by Medicare Part D enrollees from 2010 to 2013, we found that the use of prescription drugs for which marijuana could serve as a clinical alternative fell significantly, once a medical marijuana law was implemented. National overall reductions in Medicare program and enrollee spending when states implemented medical marijuana laws were estimated to be $165.2 million per year in 2013. The availability of medical marijuana has a significant effect on prescribing patterns and spending in Medicare Part D.

(Ashley C. Bradford and W. David Bradford, “Medical Marijuana Laws Reduce Prescription Medication Use in Medicare Part D,” Health Affairs, 35 (7) July 2016, pp. 1230-1236.)

Let’s not get carried away, here. The Medicare Part D prescription drug program spent $69 billion on benefits in 2013, of which $59 was funded by taxpayers (not premiums). So, medical marijuana is making an insignificant dent in the burden of this entitlement.

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Jul 26, 2016 | 14 comments | by

Chemotherapy Payment Reform: Medicare Is Missing the Elephant in the Room

cigarettes-2Last May I wrote about the uproar over Medicare’s proposed changes to how it will pay doctors who inject drugs in their offices. This largely concerns chemotherapy. Currently, physicians buy the drugs and Medicare reimburses them the Average Sales Price (ASP) plus 6 percent. The proposed reform would cut the mark-up to 2.5 percent and add a flat fee of $16.80 per injection.

I did not think the reform would have a positive impact, but I also thought criticism was overblown. Well, Medicare has managed to irritate all the affected interest groups to such a degree that it is likely to toss the proposal and go back to the drawing board.

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Jul 25, 2016 | 5 comments | by

Last Year’s Medicare “Doc Fix” Is Already Breaking Down. Here Are Some New Fixes

man-in-wheelchair(A version of this Health Alert was published by Forbes.)

What a difference a year makes! In April 2015, a bipartisan super-majority in Congress overwhelmingly passed a bill to give the federal government even more control over how doctors practice medicine on Medicare beneficiaries. Advertised by Republican and Democratic leaders as a permanent solution to the flawed way Medicare paid doctors, the Medicare Access and CHIP Reauthorization Act (MACRA) was actually Republican politicians’ first vote for Obamacare.

The president himself confirmed this shortly after signing the bill, congratulating leaders of both parties at a White House garden party celebrating the law’s concentration of power within the U.S. Department of Health & Human Services: “I shouldn’t say this with John Boehner here, but that’s one way that this legislation builds on the Affordable Care Act. But let’s put that aside for a second.”

The MACRA was largely pushed the professional societies which claim to represent physicians. Unfortunately, practicing physicians who see patients all day were too busy to pay attention to how the federal government was going to impose itself even more on their practices. In a survey of 600 physicians published earlier this year by Deloitte, half had never heard of MACRA and one third recognized only the name.

That blissful ignorance is dissipating, in the wake of a lengthy rule proposed by the Centers for Medicare & Medicaid Services (CMS) last March. Just the first step in implementing the many technical requirements necessitated by MACRA, the rule has been described as “962 pages of gibberish” by Margalit Gur-Alie, a leading healthcare consultant.

As more practicing physicians have learned about MACRA and the proposed rule, a deluge of comments have forced the Acting Administrator of CMS, Andy Slavitt, to admit its implementation might be delayed beyond its January 2017 start date. This delay provides a window of opportunity to make some changes that could re-direct MACRA in a more positive direction, according to a new report published by the National Center for Policy Analysis.

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Jul 21, 2016 | 1 comment | by

Should Drug Investors Worry About Medicare Revenues?

(A version of this Health Alert was published by Forbes.)

The pharmaceutical sector has held up quite well in this aging bull market. Now, a new political risk is on the horizon: The Independent Payment Advisory Board (IPAB), which was instituted in the 2010 Affordable Care Act. Starting in 2015, the IPAB was empowered to cut Medicare spending if costs increased faster than a certain rate. It quickly faded into the background as the growth in Medicare spending moderated after President Obama signed the Affordable Care Act.

Those days are gone. The latest annual Medicare Trustees’ report, published on June 22, indicates Medicare spending will cross the threshold for IPAB to swing into action in 2017. The 2017 threshold is determined by a target rate of growth which is the average of the change in the Consumer Price Index (CPI) and the medical-care component of the CPI. Estimates of both actual Medicare spending per capita and the target rate are calculated as five-year averages.

Table I, extracted from a recent presentation by Medicare’s Chief Actuary, illustrates why investors are becoming concerned. Table I highlights this year’s Medicare spending per capita will increase 2.21 percent (averaged over the five years, 2014 through 2018). The target rate is 2.33 percent, higher than the estimated actual rate, so the threshold is not crossed. IPAB remains asleep.

20160708 Forbes IPAB TI

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Jul 08, 2016 | 4 comments | by

Reforming Medicare Part D to Improve Access to Medicines

Variety of Medicine in Pill Bottles(A version of this Health Alert was published by Forbes.)

Specialty drugs are typically high-cost prescription drugs used to treat complex chronic and/or life threatening conditions. Many do not have substitutes available at lower costs.  Over the last decade, the Medicare Part D benefit has imposed high out-of-pocket costs as a way to control costs of specialty drugs. This is causing many patients not to fill prescriptions. Some patients may be adding costs to the system by getting drugs more expensively by injection in doctors’ offices, where they are covered by Medicare supplemental insurance.

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Jun 08, 2016 | 9 comments | by

Misleading Rhetoric on Medicare Cancer Drug Payment Reform

man-in-wheelchairA few weeks ago, Medicare proposed a pilot program to test a new way to pay doctors who inject drugs. Cancer is the big kahuna, cost-wise, when it comes to injected drugs. Medicare payment policy leads to certain industry practices to profit from the status quo. When the status quo is threatened, the “preservatives” immediately form a defensive coalition to stop the change.

Although I do not endorse this precise reform, the campaign to roll it back has become irresponsible and misleading. Currently, physicians who inject drugs are paid by Medicare a margin of 6 percent on top of a reported price called the Average Sales Price (ASP). The concern is that the oncologists make more margin off an expensive drug than a less-expensive drug.

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Jun 02, 2016 | Leave a Comment | by

The New Medicare Gold Rush

Cheerful Senior Man Having His Blood Pressure Taken(A version of this Health Alert was published by Forbes.)

Over the next few years, Medicare will significantly change how it pays hospitals, physicians, and other providers. This is sparking a gold rush among investors. BDO, a leading management consulting firm, released a report last month describing significantly increased private equity investment in long-term care facilities, rehabilitation facilities and home health agencies. BDO reported 79 deals in 2015, in which private equity sponsors invested $5.92 billion, up from just $1.67 billion in 2014. The previous high-water mark was $3.58 billion in 2011.

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Jun 01, 2016 | 13 comments | by

Strong Opposition to Change in Part B Drug Reimbursements

The Center for Medicare and Medicaid Services (CMS) recently proposed a pilot project to test alternative payment methods for drugs under Medicare Part B. These are the drugs administered in hospital outpatient clinics and physicians’ offices.

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May 06, 2016 | 4 comments | by

Medicare Pays for Prevention – Finally!

man-in-wheelchairThe Centers for Medicare & Medicare Services has announced Medicare (that is, taxpayers) will pay for lifestyle-intervention program that prevents type 2 diabetes:

In 2011, through funding provided by the Affordable Care Act, CMS awarded the National Council of Young Men’s Christian Associations of the United States of America (Y-USA) more than $11.8 million to enroll eligible Medicare beneficiaries at high risk for diabetes in a program that could decrease their risk for developing serious diabetes-related illnesses. Beneficiaries in the program attended weekly meetings with a lifestyle coach who trained participants in strategies for long-term dietary change, increased physical activity, and behavior changes to control their weight and decrease their risk of type 2 diabetes. After the initial weekly training sessions, participants could attend monthly follow-up meetings to help maintain healthy behaviors. The main goal of the program was to improve participants’ health through improved nutrition and physical activity, targeting at least a five percent weight loss for each individual.

The results of the Diabetes Prevention Program model are striking:

  • Medicare beneficiaries enrolled in the program lost about five percent of their body weight, which is enough to substantially reduce the risk of future diabetes. Average weight loss was 4.73 percent of body weight for participants attending at least four weekly sessions.  Participants who attended at least nine weekly sessions lost an average of 5.17 percent of their body weight.
  • Over 80 percent of participants recruited attended at least four weekly sessions.
  • When compared with similar beneficiaries not it the program, Medicare estimated savings of $2,650 for each enrollee in the Diabetes Prevention Program over a 15-month period, more than enough to cover the cost of the program.

After years and years of jawboning about preventing disease and reducing health spending by catching health problems early, the federal government has finally approved one intervention that actually appears to achieve this goal!

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Apr 12, 2016 | 11 comments | by

Four Options for Saving Medicare from Collapsing under its Own Weight

The 50-year old Medicare program is showing its age. Medicare accounts for about one-fifth of medical spending, or about 3.5 percent of gross domestic product (GDP). Over the years Medicare spending per capita has exceeded income growth in the economy. Over the next 75 years the Medicare Trustees estimate Medicare spending as a percentage of GDP will rise anywhere from about 6 percent to just above 9 percent. The Congressional Budget Office baseline put the estimate even higher — about 12.5 percent.

CBOBaseline

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Apr 11, 2016 | 36 comments | by
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