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Medicare FFS and Inefficient Health Care Delivery. Markets Not Madness: Medicare Reform That Works American Enterprise Institute April 16, 2013. James C. Capretta Visiting Fellow. Medicare’s Size and Influence. Size and payment systems Percentage of total health spend Regulatory influence.
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Medicare FFS and InefficientHealth Care Delivery Markets Not Madness: Medicare Reform That Works American Enterprise InstituteApril 16, 2013 James C. CaprettaVisiting Fellow
Medicare’s Size and Influence • Size and payment systems • Percentage of total health spend • Regulatory influence
Personal Health Expenditures by Payer, 2010 Out-of-Pocket Medicare Medicaid Private Health Insurance Source: Medicare Payment Advisory Commission and NHE Accounts, 2010
Personal Health Expenditures by Age, 2004 65+ 3% of 19-64 Year Olds Claims Were Paid by Medicare Approximately 37% of all personal health expenditures were associated with elderly patients or younger patients with Medicare coverage. Source: National Health Expenditure Accounts, 2004 Gender and Age Tables, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/2004GenderandAgeTables.pdf
Medicare FFS and Volume-Driven Care • FFS insurance with ineffective cost-sharing • History of steady volume and intensity increases
Secondary Insurance Arrangements Other Public Coverage None Medigap Medicaid Medigap + Retiree Wrap-Around Retiree Wrap-Around Source: Medicare Payment Advisory Commission analysis of MCBS, Cost and Use Files, 2005
Volume in the Medicare Physician Setting Source: “Factors Underlying the Growth in Medicare Spending on Physician Services,” Congressional Budget Office, Background Paper, June 2007, p. 15
Implications of FFS and MA Comparisons • Comparison of costs • Recent comparison studies • Spillover and its inverse
MA HMOs vs. FFS: Bids and Payments FFS Costs Source: “A Data Book: Healthcare Spending and the Medicare Program,” Medicare Payment Advisory Commission, June 2012, p. 146
What Would Happen w/Competitive Bidding? All MA Plans Bidding Above FFS Costs Source: “Transforming Medicare Into a Premium Support System: Implications for Beneficiary Premiums,” Gretchen Jacobson, Tricia Neuman, and Anthony Damico, Kaiser Family Foundation, October 2012
Managed Care Spillover +1.0% Medicare HMO penetration rate Annual Spending Per FFS Enrollee -0.9% Source: “Managed Care and Medical Expenditures of Medicare Beneficiaries,” Michael Chernew, Philip DeCicca, and Robert Town, August 2007.
