weekly blog--one for the ages
This blog theme had its start with two people I met last week. One was a health network administrator who complained that Medicare was trying to save money by reducing payments to providers for certain procedures, forcing patients to pay more. Another person complained that he was forced to use a generic brand drug or pay considerably more for the branded version that his doctor prescribed.
The bottom line is that as the cost of healthcare escalates, Medicare continues to play a prominent role in how providers get paid, which ultimately affects how much comes out of the patient’s pocket.
For the last several years, Medicare has led the way in shifting from fee to value-based payment services. As a result, Accountable Care Organizations (ACOs) have become increasingly popular. An estimated 23.5 million Americans are now being served by an ACO through more than 744 health organizations. And there is a good chance that your health provider is an ACO and you don’t even know it.
An ACO is a network of doctors and hospitals that share financial and medical responsibility for providing coordinated care to patients. The focus is on person-centered care with three goals: keep them healthy and out of the hospital, and to reduce unnecessary spending.
Tracking performance in this kind of environment is tricky because Medicare continues to reimburse health systems on a fee basis (FFS); then, at the end of the year, shared savings bonuses are calculated. If an ACO did better than the FFS population, it gets a piece of the savings. If after the first three years it does worse, it may have to pay a penalty.
Another healthcare trend of note identified by a recent article in the Boston Globe: claims for medical services costing $1 million are on the rise because the advanced drugs that are needed cost more, according to Sun Life Financial. The company sells stop-loss insurance that employers buy to protect themselves against expensive medical claims. Cancers are the most costly medical condition followed by kidney disease, birth defects, premature births, and transplant operations.