Featured Research

from universities, journals, and other organizations

Healing cuts for Medicare

Date:
September 4, 2012
Source:
Harvard Medical School
Summary:
Medicare payment reforms mandated in the Affordable Care Act for post-acute care have great potential to lower costs without harming patients. Researchers caution that policymakers will need to be vigilant to ensure that these cuts don't result in one-time savings that revert to rising costs.

Medicare payment reforms mandated in the Affordable Care Act (ACA) for postacute care have great potential to lower costs without harming patients, a new study reports.

However, researchers caution, policymakers will need to be vigilant to ensure that these cuts don't result in one-time savings that revert to rising costs.

"We expect that the Affordable Care Act's dramatic cuts in payments to providers for postacute care will lead to decreased utilization and lower spending," said David Grabowski, Harvard Medical School professor of health care policy and lead author of the study. "Our work suggests that those changes will not have a dramatic effect on outcomes, based on analysis of patient mortality and hospital readmissions under previous cuts."

These findings are reported in the September issue of Health Affairs.

Each year, more than 10 million Medicare beneficiaries are discharged from acute care hospitals into postacute care settings: long-term care hospitals, inpatient rehabilitation facilities, skilled nursing facilities and patients' homes with services from home health agencies.

"These four sectors were among the fastest growing part of the Medicare program during much of the nineties," Grabowski said. Despite several efforts to curb spending, postacute care remains a major driver of rising Medicare costs.

ACA-mandated changes in payments for Medicare postacute care services are intended to contain spending in the long run and help ensure the program's financial sustainability. In addition to reducing annual payment increases to providers, the act calls for bundled payment models, accountable care organizations and other strategies to promote care coordination and reduce spending.

The researchers studied the effects of payment reforms from 1997, 1998 and 2002. The group also analyzed Medicare claims data to measure the impact of reforms on patient mortality and hospital readmissions for postacute care recipients.

Each of these previous payment reforms caused a steep downtick in postacute care costs immediately after implementation. However, expenses quickly resumed their upward trend as reimbursements were renegotiated and providers changed the ways they managed patient care.

The researchers recommend that policymakers will need to be vigilant in monitoring the impact of the ACA reforms and be prepared to amend policies as necessary to ensure that the reforms exert persistent controls on spending without compromising the delivery of patient-appropriate postacute services.

In the mandated demonstration projects, providers and health care systems are experimenting with different models of payment that all aim to lower costs, for example, providing a lump sum per patient per year, or a single fee for a healthy recovery from an illness or injury to be shared among physicians, hospitals and postacute care facilities.

"If it works the way it's meant to, patients will use only those services that are the most efficient," Grabowski said. That could mean moving patients from high-cost skilled inpatient rehabilitation facilities to lower-cost skilled nursing facilities. It could also mean that providers find creative new ways to avoid costly treatments altogether, like inspecting homes for tripping hazards to prevent painful and costly falls. In the current system, there's no incentive for providers to perform these kinds of interventions, he said, since Medicare has no mechanism to reward these kinds of savings.

"The overall goal of these experiments is to find ways to improve overall care and make services more cost effective. In any system this complex, there are always going to be tradeoffs, so monitoring results closely to minimize any issues will be critical," Grabowski said.

Collaborators for this study included Joseph Newhouse, the John D. MacArthur Professor of Health Policy and Management at Harvard University and professor of health care policy, HMS, Peter J. Huckfeldt at the RAND Corporation, Neeraj Sood at the University of Southern California, and José Escarce at the David Geffen School of Medicine at the University of California, Los Angeles, and RAND.

This research was supported by a grant from the National Institute on Aging and a grant from the Agency for Healthcare Research and Quality.

Joseph Newhouse is a director of, and holds equity in, Aetna, which sells Medicare Advantage plans.


Story Source:

The above story is based on materials provided by Harvard Medical School. Note: Materials may be edited for content and length.


Journal Reference:

  1. D. C. Grabowski, P. J. Huckfeldt, N. Sood, J. J. Escarce, J. P. Newhouse. Medicare Postacute Care Payment Reforms Have Potential To Improve Efficiency Of Care, But May Need Changes To Cut Costs. Health Affairs, 2012; 31 (9): 1941 DOI: 10.1377/hlthaff.2012.0351

Cite This Page:

Harvard Medical School. "Healing cuts for Medicare." ScienceDaily. ScienceDaily, 4 September 2012. <www.sciencedaily.com/releases/2012/09/120904162538.htm>.
Harvard Medical School. (2012, September 4). Healing cuts for Medicare. ScienceDaily. Retrieved October 22, 2014 from www.sciencedaily.com/releases/2012/09/120904162538.htm
Harvard Medical School. "Healing cuts for Medicare." ScienceDaily. www.sciencedaily.com/releases/2012/09/120904162538.htm (accessed October 22, 2014).

Share This



More Health & Medicine News

Wednesday, October 22, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Orthodontist Mom Jennifer Salzer on the Best Time for Braces

Orthodontist Mom Jennifer Salzer on the Best Time for Braces

Working Mother (Oct. 22, 2014) — Is your child ready? Video provided by Working Mother
Powered by NewsLook.com
U.S. Issues Ebola Travel Restrictions, Are Visa Bans Next?

U.S. Issues Ebola Travel Restrictions, Are Visa Bans Next?

Newsy (Oct. 22, 2014) — Now that the U.S. is restricting travel from West Africa, some are dropping questions about a travel ban and instead asking about visa bans. Video provided by Newsy
Powered by NewsLook.com
US to Track Everyone Coming from Ebola Nations

US to Track Everyone Coming from Ebola Nations

AP (Oct. 22, 2014) — Stepping up their vigilance against Ebola, federal authorities said Wednesday that everyone traveling into the US from Ebola-stricken nations will be monitored for symptoms for 21 days. (Oct. 22) Video provided by AP
Powered by NewsLook.com
Doctors Help Paralysed Man Walk Again, Patient in Disbelief

Doctors Help Paralysed Man Walk Again, Patient in Disbelief

AFP (Oct. 22, 2014) — Polish doctors describe how they helped a paralysed man walk again, with the patient in disbelief at the return of sensation to his legs. Duration: 1:04 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:

Strange & Offbeat Stories

 

Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins