Medicare Pricing Drives Costs of US Healthcare
January 2014 has arrived, and with that Affordable Care Act coverage begins. Over the next 12 months, the administration will thoroughly consider the ways in which it can control the rising costs of healthcare in the United States. This is especially true for the nation's Medicare program.
January 2014 has arrived, and with that Affordable Care Act coverage begins. Over the next 12 months, the administration will thoroughly consider the ways in which it can control the rising costs of healthcare in the United States. This is especially true for the nation’s Medicare program.
“Our results suggest that Medicare’s decisions are far more influential than you may imagine,”
Mr Gottlieb’s research found that a $1 change in the price that Medicare pays is equal to a $1.30 change in what private insurers pay. According to the Congressional Budget Office (CBO), Medicare spending is expected to increase 7% a year. Within 10 years, Medicare spending could reach as high as $903 billion.
“Medicare is a wonderful program, but behaviorally, because of the price-fixing, it’s a mess,” said Tom Scully, a partner in a private equity firm that invests in healthcare.
Medicare pricing vastly influences costs in US healthcare, and because payers save money by letting the government set prices, current payment systems require rethinking. Consider that more than 5.3 million Medicare beneficiaries will be receiving care from accountable care organizations (
“Hospice saves on average about $2,300 in comparison to other patients who are admitted for similar illness” to other facilities like hospitals,
ACOs and other pay-for-performance models in Medicare continue to garner support from stakeholders across the industry.
“The increasing consensus concerning these approaches to reengineering healthcare in the United States, the awareness of savings opportunities, and the threat of resumed growth in healthcare spending provide an opening for constructive, systemic reform that avoids the pain associated with healthcare rationing,”
Around the Web
Medicare Pricing Drives High Healthcare Costs
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