AHIP Medicare, Medicaid, and Dual Eligibles 2013 Conference

Published Online: December 12, 2013

One might question what sustainable Medicare would look like. Historically, those who received health insurance were covered either by a private employer, or were eligible for coverage under the Medicare and Medicaid programs. Individuals who lacked access to either option fell in a gap. This disparity necessitated the implementation of the Affordable Care Act (ACA), a reform effort which intends to expand Medicaid to include more beneficiaries, and will subsidize private insurance for many others who currently remain uninsured. Yet, the health law remains a highly contested topic in Washington, especially along political party lines. Alice M. Rivlin, co-chair, Bipartisan Policy Center’s Domenici-Rivlin Task Force, and interim director of Brookings’ Engelberg Center for Health Care Reform, provided insight as to what elements are needed to refocus federal energies where they need to be. “It really is a very strange time to be here; the most extreme partisan politics in my memory, and I’m afraid the most broken that I’ve seen our  democratic process,” Ms Rivlin said. “Healthcare and health insurance are caught right in the middle of this dysfunctional situation.”

Ms Rivlin noted that despite the healthcare “fix” being complex, it must be addressed in a diplomatic and urgent way. Healthcare reform has been long overdue. “All this seems to be happening when the whole world is looking to us for stability,” said Ms Riviln. “The network’s broken; we ought to be able to work together across party divisions to make essential services of government work.” Encouraging better-quality, higher-value healthcare as well as supporting the sustainability of the Medicare program in the long term will require a more neutral view of healthcare across party lines. Establishing accountable care organizations (ACOs), Medicare Networks (MNs), and transforming or replacing the Cadillac Tax are just some of the suggestions Ms Rivlin offered. MNs are of special interest, because unlike ACOs, they are enrollment based. Nevertheless, both models provide incentives that would help drive quality based on care guidelines and benchmarks. To control spending, reform efforts must be focused on shifting Medicare from fee-for-service to a premium support program where the government would cap its contribution at a reasonable sustainable growth rate (SGR). Medicare plays a central role in health policy, including the total spending of healthcare, as well as contributing largely to the national debt. However, whether through public or private health plans, there is an opportunity to transform the federal program and increase the efficiency of care delivery. Restructuring Medicare would slow the growth of current total healthcare spending at a national level, while reducing the potential growth of future debt.

Marilyn Tavenner, administrator, Centers for Medicare & Medicaid Services (CMS), also had much to say in regard to how the  Medicare program might operate in 2014 and beyond. Of course, there is the “3-legged stool” of Medicare’s strategic plan: access, cost, and quality. Familiar terms, but what do they really mean? Cost containment comes from a myriad of paths, but aligning  incentives and strategy starts with sharing data. Ms Tavenner suggests that CMS still has a way to go in this emerging area. Reforming existing health systems provides an opportunity for such growth and improvement. “We need to get more value for the dollars we spend,” Ms Tavenner said. In fact, addressing quality and innovation on the front end saves a lot of rework on the back end. As she spoke to the medical professionals and other attendees, Ms Tavenner said she was excited and looking forward to the opening of the health insurance marketplaces in October. CMS has been actively working with the private sector to ensure that the quality of healthcare matches the costs that are being incurred to deliver it. “We’re all going to make a difference, and it’s going to take us a while to get there. What we’re seeing is more transparency, more data, and individuals asking a lot of questions—and for me, that’s what it’s all about.”

Medicare Advantage Plans

Dr Katherine Baicker, professor of health economics, Department of Health Policy and Management, Harvard School of Public Health, says that the 2 main goals of healthcare reform are covering the uninsured and slowing spending growth. She says while it

is easy enough to cut funding in order to slow spending growth, it does little to drive value—quality care costs a significant amount of money. At the same rate, there are parts of the country where we are spending the most, yet patients are not receiving the best quality care because of fee-for-service models. Spending is wasted, and is only exasperated by a failure to coordinate care. Proton beam therapy is a strong example of expensive care that is being used even when its outcomes have no better proven outcomes than other less expensive therapies. Dr Baicker argues that as long as Medicare keeps reimbursing these types of costly treatments, providers will continue to keep using them under the fee-for-service model. “It would be nice to say, ‘Well, save Medicare’s problem by eliminating fraud and abuse and cut out care that had no outcomes,’” said Dr Baicker. Aligning cost sharing with value will require more incentives, like bundled payments and shared savings, as well as integrated plans like ACOs and value- based insurance design. Put simply, Medicare and other public programs cannot cover all care for all people with public money under current reimbursement models.

Paul B. Ginsburg, PhD, president, Center for Studying Health System Change, echoed Dr Baicker’s comments, saying that there are diverse forces affecting the Medicare Advantage (MA) business. Medicare Advantage plans are offered through private companies that contract with Medicare to provide patients with all their Part A and Part B benefits. Dr Ginsburg says there are opportunities for enrollment growth in MA plans due to both the retirement of baby boomers and private exchanges for retirees. There are also many challenges, including potential policy changes that would affect MA plans more than traditional Medicare plans. Long-term success of the MA program requires care delivery innovation, tailored benefits for consumers, and collaborative provider partnerships. Dr Ginsburg also suggests that benefits should be more individualized, and selective about who would be entitled to coverage.

Dual Eligibles

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Issue: December 2013
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