Did BPCI work?

BPCI is Medicare’s Bundled Payments for Care Improvement initiative.  For selected conditions, hospitals receive bundled payments that can include concurrent physician payments, post acute-care or other arrangements. The question is, does this payment approach improve quality and reduce cost? A study by Dummit et al. (2016) looked at lower extremity joint replacement at a BPCI-participating hospital.  They found the…

The coming U.S. debt crisis

The Congressional Budget Office provides some gloomy news on the fiscal health of the federal government in their recent 2016 Long Term Budget Outlook.  They state: If current laws governing taxes and spending did not change, the United States would face steadily increasing federal budget deficits and debt over the next 30 years, according to projections…

Do ACOs reduce spending?

Medicare’s Shared Savings Program (MSSP) is a program that created accountable care organizations (ACOs).  Providers in get bonuses if they are able to reduce health care costs and also maintain quality.  In theory, the program makes sense, increase reimbursement for high-quality, low-cost providers.  The key question, however, is whether it works. A recent study in NEJM…

“Adjustments” drive variation in Medicare hospital reimbursement rates

In my previous work, I have examined regional variation in Medicare and Medicaid costs through reports to the Institute of Medicine and publications in peer-reviewed journals.  We found significant variation in health care costs across regions, that high-cost regions tended to remain high cost over time, but that a region that is high-cost for treating one medical condition…

Part B drug reimbursement

In the past Medicare has reimbursed physicians that administer Part B drugs–typically injectable medications administered in a physician’s office–at 6% of the drug’s cost.  The 6% aims to cover the cost of purchasing and storing the drug as well as administering it.  Because physician reimbursement is proportional to the cost of the drug, physicians have…

Managing post-acute care cost

Medicare’s move towards bundling payment for acute and post-acute care means that hospitals have an incentive to carefully monitor care received after discharge.  But what are the key drivers of post-acute care cost: hospital readmissions? use of any post-acute care? type of post-acute care used? A paper by Huckfeldt et al. (2016) examines Medicare claims data…

Did Medicare Part D reduce emergency room visits?

In 2006, the Medicare program was expanded to include prescription drug coverage through the Part D program. Previous studies have found that Medicare Part D improved prescription drug coverage rates among seniors (Levy and Weir,2010), increased medication utilization (Duggan and Morton, 2010), decreased out-of-pocket spending (Engelhardt and Gruber, 2011; Ketcham and Simon, 2008), and reduced medication…

Changes in the MSSP program

Medicare’s ACO program–the Medicare Shared Savings Plan (MSSP)–has recently been revised.  AJMC reports that Patrick Conway, MD, MSc, deputy administrator for innovation and quality and chief medical officer at CMS, describes the proposed changes to the Medicare Shared Savings Program and how they will assist accountable care organizations transitioning to tracks with more risks.