Believe it or not, Medicare spending
per patient is falling. What lessons can the rest of the health care system
learn?
By DAN DIAMOND
09/12/2018 05:36 AM
EDT
One of the best-kept
secrets in American health care might be that Medicare spending — in important
ways — is going down.
If that surprises
you, it’s probably because you’ve read about Medicare’s budget-busting growth.
And at the top line, that‘s true enough: Medicare’s overall costs have soared,
increasing about 50 percent during the Obama administration alone.
Baby boomers are signing up for Medicare at the rate of 10,000 people per day,
and they‘re expected to live longer, sicker lives than
any previous generation. Medicare’s actuaries estimate that if current trends
hold, the increasing number of beneficiaries will push the system into insolvency in 2026.
But there’s a sliver
of hope buried in federal data: During the Obama era, Medicare’s per-person
spending barely budged, inching up only about 1 percent per year. That’s less
than the rate of inflation, meaning that per-person Medicare costs, when
adjusted for inflation, have been going down.
As a result, even as
policymakers worry that escalating Medicare spending could sink the federal
budget, some researchers are more interested in unlocking what’s behind this
notable success. Key among them is Melinda Buntin, a witty and engaging
economist now at Vanderbilt, who published some of the initial findings about
Medicare’s cost slowdown and has made studying it the center of her work.
One question Buntin
and her colleagues are focused on solving: How did the federal program achieve
lower per-person spending for its mix of retired and disabled patients, even as
private insurers continued to spend more and more on their younger and
healthier customers?
If they can figure it
out, it might just point the way for the rest of the health care system to
finally rein in health care costs on a national scale.
“I’m an optimist,”
says Buntin, who points to data that show — for the first time in decades — the
economy is actually growing faster than Medicare’s per-person spending. “If we
can keep that [Medicare] spending growth below GDP growth, that’s good for
taxpayers too,” Buntin adds.
Solving a mystery
Buntin’s initial
findings appeared in 2013, early in the Obama administration’s second term,
when it became clear that health care cost increases were slowing down — but it
wasn’t clear why.
The slowdown’s
implications were enormous for a slew of policies, such as how much funding was
needed for the Medicare program. The political stakes were also significant;
the Affordable Care Act was being rolled out, and Democrats were jockeying to
claim credit for any positive developments in health care.
“Already, the
Affordable Care Act is helping to slow the growth of health care costs,"
President Barack Obama declared in his February 2013 State of the Union speech.
Medicare officials
had generally settled on a consensus explanation: The historic recession was
causing a one-time drop in spending, and cost growth would soon return to
historic trends. But as Buntin — then a staffer at the Congressional Budget
Office — dug into the data, she developed a theory that challenged that
conventional wisdom. It wasn’t the Great Recession, she concluded, nor was it
Obamacare’s effects. Instead, a perfect storm of changes to how doctors got
paid and how care was delivered, as well as broader effects to control costs,
all hit at about the same time.
“[W]e can say that
the slowdown appears to have been driven in substantial part by factors that
were not related to the economic recession’s effect” on Medicare patients
seeking care, Buntin and her CBO colleague Michael Levine wrote in a paper published
in August 2013, a few weeks after she’d left the government to run Vanderbilt’s
health policy department.
Tucker
Doherty/POLITICO
Buntin’s findings
caused a stir in the policy field and led the CBO to change its projections of
Medicare costs — an important factor in how the office evaluates lawmakers’
plans that affect the program, potentially influencing billions of dollars in
proposed legislation. “She was the one who first put the stake in
the ground,” said Paul Hughes-Cromwick, an economist with the Altarum
Institute, a nonpartisan think tank that studies the health system.
But some key
officials weren’t swayed. Buntin said she presented the findings to Medicare
and Medicaid’s own actuaries, who said they didn’t agree with her conclusions.
“I would call it good-natured skepticism,” Buntin says. (That recollection was
confirmed by other attendees of the meeting.)
Political leaders at
the time essentially ignored the findings, too. “The administration wanted to
play up the angle that the Affordable Care Act had caused [the slowdown],” says
Levine, who was Buntin’s colleague at CBO. “But most of the ACA hadn’t even
gone into effect.”
So, what actually
works?
Since then, however,
other researchers have largely confirmed Buntin’s work, and she’s built on her
own findings.
What’s behind the
successes in cost control? Along with colleagues this summer, Buntin reported that
Medicare has gotten better at managing patients known as “dual-eligibles” — a
subset of low-income elderly patients who qualify for Medicaid as well as
Medicare and have historically been a major cost driver for federal health
spending. She says that other insurers and health providers should study how
Medicare improved at coordinating care for these complex patients, who often
ping-pong around the health system, driving up costs with each hospital
admission or ER visit. “I think you can learn from that,” Buntin says.
Another takeaway is
that Medicare’s value-based care initiatives — essentially, finding ways to
reward hospitals and doctors for delivering high-quality, low-cost care — have
helped shift the system toward more sustainable spending growth. For instance,
a model known as bundled payments encourages hospitals and doctors to combine
their incentives when caring for patients and share in a lump-sum payment,
rather than get paid individually.
Thousands of
hospitals and doctors have voluntarily tried out Medicare’s bundled-payments
system, and the evidence suggests
that the program has been moderately successful. But the Trump administration
has sent mixed signals on whether it’ll stay committed to the idea. Buntin is
frustrated that in August 2017, former Health and Human Services Secretary Tom
Price canceled a plan
to require providers, for the first time, to participate. “That was the lowest
point of my optimism” about controlling health spending, she says.
But there are limits
to how many lessons the data can offer. Buntin cautions that even now — more
than a half-decade since she began digging into the slowdown — she can’t
definitively attribute each piece to specific sources. “I don’t think we will
ever be able to precisely say that we know everything that caused it, and it’s
57 percent this, and 43 percent that,” she says.
“It’s actually a
strength of their work that they weren’t able to put it all on one of the
factors,” adds Hughes-Cromwick, the Altarum economist. “That really means
there’s something more complicated and likely more permanent at work.”
Facing senators in
a hearing this
summer, Buntin encouraged them to keep supporting initiatives like value-based
care. But she also cautioned lawmakers that moving too aggressively
to control costs could eventually hurt patients, such as by denying them access
to needed services.
“The temptation is to
either declare that we’ve accomplished this mission and kept cost growth low or
to try and double down on it,” Buntin says. “I’m not sure either one is the
right answer.”
“We’ve been given a
slight reprieve here,” Buntin adds. “Let’s try and learn from it.”
Dan Diamond is the
author of POLITICO Pulse.
https://www.politico.com/agenda/story/2018/09/12/medicare-spending-cost-budget-000692
No comments:
Post a Comment