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REPORTS & PAPERS

Browse the latest Medicare research reports and white papers written by thought leaders and industry insiders.
 
PUBLISHED: May 30, 2013
by  Katherine Baicke, Michael Cherne, Jacob Robbins

The authors of this report from the National Bureau of Economic Research conclude that increased Medicare Advantage (MA) enrollment leads to lower hospitalization costs and shorter lengths of stay for Traditional Medicare beneficiaries and other patients as well, suggesting that the MA program can drive down costs throughout the health care system. The authors note that this is partly because the managed care utilized by MA can influence physician practice styles on a broader scale.

The authors analyzed the effect of MA (Part C) enrollment on spending, service utilization and quality of care at the county and hospital levels. Based on data from state inpatient databases in Florida, New York, California, Arizona and Massachusetts, they found that increasing MA monthly payments by $100 would increase the share of Medicare beneficiaries enrolled in MA by just under five percentage points or about 400,000 people in those states. This would make total MA spending go up by $100 per month for all enrollees, amounting to almost $5 billion in total for those states.

Based on trends observed in the data, overall costs in hospital care would drop an estimated 2 percent or $600 million for Traditional Medicare beneficiaries due to the increased MA enrollment. Overall, the decrease in hospital costs for Traditional Medicare beneficiaries would offset the increase in MA spending by more than 10 percent. 

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PUBLISHED: May 20, 2013
by  Zachary Levinso, Anthony Damic, Juliette Cubansk, Patricia Neuman

This report from the Kaiser Family Foundation analyzes two measures of poverty: the traditional Census Bureau “official” measure (created in the 1960s) and the supplemental poverty measure (created by the Census Bureau in 2011 in response to concerns that the first measure did not accurately reflect individuals’ incomes or financial resources). Using polled data from the 2009 to 2011 Current Population Surveys, the analysis found that the share of seniors living in poverty is higher in every state under the supplemental measure than under the official measure and at least twice as high in twelve states. The share of seniors living in poverty under the supplemental measure is 26 percent in Washington, DC; 20 percent in California; 19 percent in Hawaii, Louisiana and Nevada; and 18 percent in Georgia and New York. Additionally, 48 percent of all seniors have incomes below 200 percent of the poverty threshold under the supplemental measure as compared to 34 percent under the official measure, and the share with incomes below 200 percent of poverty is higher in every state using the supplemental measure.   

The supplemental poverty measure bases thresholds on more recent patterns of expenditures on basic necessities and then adjusts them to reflect homeownership and regional differences in housing prices. Among other differences to the official measure, it adds tax credits and in-kind government benefits such as food stamps to income and deducts job-related expenses, taxes, and out-of-pocket expenses of health care from incomes. The supplemental measure was created based on recommendations of a 1995 National Academy of Sciences Panel. Proponents of the measure argue that it is more up-to-date, takes in regional variations, and more accurately conveys available income. Detractors note that medical spending may be discretionary and thus overstated. A broader criticism of both measures is that neither takes into account family assets, the risk of unaffordable medical expenses or the level of an individual’s insurance.

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PUBLISHED: May 06, 2013
by  Ifedayo O. Kuy, Richard G. Fran, Michael McWilliams
The authors of this JAMA Internal Medicine article examined the role of low income Medicare beneficiaries’ cognitive abilities as a possible explanation of why eligible individuals do not utilize the low-income subsidy despite the no-cost drug coverage it offers and Medicare outreach efforts.  Utilizing survey data from the nationally representative Health and Retirement Study from 2006, 2008 and 2010, they looked at how cognitive abilities were associated with self-reported Part D enrollment, and awareness of and application for the low-income subsidy. They also compared out-of-pocket spending on drugs and premium costs between low-income subsidy eligible beneficiaries who did and did not report receiving the subsidy. The authors concluded that poorer cognition and numeracy were associated with lower rates of Part D enrollment and that “current educational and outreach efforts encouraging low-income subsidy applications may not be sufficient for beneficiaries with limited abilities to process and respond to information.”
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PUBLISHED: May 03, 2013
by  HHS Office of Inspector General
This report from the HHS Office of Inspector General examined whether hospice general inpatient care (GIP) was used appropriately in 2011.  Hospice general inpatient care is intended to be short term and is the second most expensive level of hospice care.  It may be provided in a Medicare-certified hospice inpatient unit, a hospital or a skilled nursing facility (SNF). CMS has expressed concern about possible misuse, such as billing for services not provided, unnecessary care and billing for general inpatient care when lower rate services, such as routine home care, were provided.  The study found that Medicare paid $1.1 billion for general inpatient care in 2011, mostly in hospice inpatient units as opposed to hospitals or SNFs. Twenty-three percent of hospice beneficiaries received general inpatient care, and one third of stays exceeded 5 days with 11 percent lasting more than 10 days.  Hospices that used inpatient units provided general inpatient care to more beneficiaries and for longer periods than those that used other settings. The report recommended further review to ensure that general inpatient care is used as intended and providing the appropriate level of care. OIG said it anticipated making recommendations in a separate report after completing a medical record review.
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PUBLISHED: May 01, 2013
by  David M. Cute, Nikhil R. Sahni

Beginning in the early 2000s, growth in U.S. health care spending slowed. In this article for Health Affairs, the authors explore the implications if the trend continues. They found that the 2007–2009 recession accounted for 37 percent of the slowdown between 2003 and 2012, while a decline in private insurance coverage and cuts to some Medicare rates accounted for another 8 percent. They cite additional fundamental changes, including slower development of imaging technology and of new pharmaceuticals, increased patient cost sharing and greater provider efficiency as responsible for an additional 55 percent of the slowdown. If these trends continue for the period of 2013 to 2022, the authors suggest that public sector health care spending could be as much as $770 billion less than predicted.

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PUBLISHED: May 01, 2013
by  CBO

In this May 2013 update to its February 2013 projections, the Congressional Budget Office (CBO) projected that spending for Medicare would remain relatively stable as a share of gross domestic product (GDP) between 2013 and 2023. The CBO further predicted that spending would begin to rise relative to GDP in the final few years of this period, with net Medicare outlays totaling 3.5 percent by 2023.

The spending projection of $85 billion (1.2 percent of GDP) is lower than the initial February projection because of a $143 billion reduction in projected gross spending for benefits, which is partially offset by $48 billion in collections and $10 billion in Medicare savings as a result of the sequestration. This, in turn, is mostly offset by changes in estimated spending for other programs. Additional data caused the CBO to reduce projected spending by about 1 percent for Medicare benefits for 2013 and over the 2014–2023 period. Estimated spending for benefits over the period is lower than the February baseline for all major components of Medicare, including Parts A, B and D.

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PUBLISHED: May 01, 2013
by  Allison B. Rose, Ana Aizcorb, Alexander J. Ry, Nicole Nestoria, David M. Cutle, Michael E. Chernew

The authors of this Health Affairs article explore bundled payments, which is paying a single price for all services delivered as part of an episode of care for a specific condition. Yet, they say, implementing and realizing cost containment from episode-based models is challenging, in particular how to update rates to reflect changes in costs over time. They note that adoption of a fee-for-service type structure of uniform update rates would not work because spending growth is skewed across episodes. Their analysis of U.S. commercial claims data between 2003 and 2007 showed that 10 percent of the episodes accounted for 82.5 percent of spending growth, and within-episode spending growth ranged from a decline of 75 percent to an increase of 323 percent. They also note that episode reimbursement rates do not control either the number of episodes or clinical appropriateness. The authors call for further discussion of bundled payment models and exploration of ways to address variations in spending growth.

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