Saturday, June 17, 2017

Medicare has problems, too.

Medicare has problems, too. Insurance market rules and Medicaid are the focus of current efforts to repeal Obamacare. But, because of its costs and because of the way it sets the terms under which health care is organized, Medicare will eventually have to be reformed, too, writes James Capretta. A good place to start, he argues, is to recast the Obama administration’s attempts at Medicare “delivery service reform”:
“The centerpiece of the delivery system reform effort is the Accountable Care Organizations (ACO) initiative. These are provider-led organizations aimed at improving the management of care for beneficiaries enrolled in the traditional Medicare fee-for-service program. ACOs that successfully lower costs and meet quality goals are eligible for bonus payments. 
“The ACO effort has fallen short of the lofty goals set for it. In 2015, the ACO effort increased overall program spending by a modest amount instead of reducing it. The basic problem with the ACO program is that it is designed to avoid consumer choice and engagement, which is the opposite of what is needed. Under current rules, beneficiaries are assigned to an ACO if their primary physician participates in it.
“There is a place for a provider-led integrated care option in Medicare, but it should be offered to the beneficiaries as an option for enrollment, alongside the Medicare Advantage (MA) plans and unmanaged fee-for-service. If an ACO is able to cut costs, beneficiaries should be given an incentive to join it through a reduction in their monthly premiums.
“Recasting the ACO program – with a new name, such as Medicare provider networks – should be part of a broader effort to improve and clarify the choices available to the beneficiaries, with the aim of intensifying competition and lowering costs. The Medicare program should ensure that beneficiaries are able to see clearly and easily the overall cost of various combinations of coverage. In particular, beneficiaries should be able to select combinations of basic Medicare coverage, plus a drug benefit, and supplement insurance with a full view of the financial consequences of the various options. That cannot be done today.” [American Enterprise Institute]

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