KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Medicare Round Up: News Coverage Of Cost Issues And Leadership Gap

The Los Angeles Times reports on Medicare costs and how timely interventions by Medicare Advantage plans can reduce expensive hospital stays: "At 82, Bettie Lowden is about as chronically ill as they come. Besides heart failure, she has diabetes and a history of heart attacks and strokes. Yet Medicare spends less than $1,000 a month on her care, or about half the agency's outlay for the average congestive heart failure patient for hospitalizations alone. Lowden belongs to Cerritos-based CareMore Health Plan Inc., a private Medicare Advantage contractor. Medicare pays CareMore a set monthly fee of $700 to $950 per patient. In turn, CareMore cares for 34,000 Southern Californians through an HMO-style network of physicians, clinics and hospitals."

"A new study found that some Medicare Advantage plans, such as CareMore, which practice what is known as coordinated care, are good at keeping members out of hospitals. Their patients are readmitted 27% less often than those on traditional Medicare, the Johns Hopkins University study said. That helps hold down spending because hospital stays are the most expensive component of medical care. ... The Medicare Advantage program has been criticized because the private plans, on average, cost the government 14% more than traditional Medicare. But a few, including CareMore, beat traditional Medicare in both cost and benefits. In fact, for 86% of the cost of traditional Medicare, CareMore offers premium-free care to most of its members with rich extra benefits, including vision and dental care" (Girion, 9/20).

In a separate story, the Los Angeles Times reports on the "high costs for chronically ill patients in their last two years of life, a time when medical costs are highest."

"The national average for Medicare spending on such patients was $46,412, including outpatient care," the Times reports. "But in Los Angeles County, the average cost was nearly double that, $84,179, according to a Los Angeles Times review of Dartmouth data. In seeking to explain why, some researchers have concluded that doctors in areas such as Los Angeles, with more hospitals and other resources, are more likely to have patients admitted, order tests and schedule visits, largely because they can."

"In fact, the researchers say, medical treatment often has more to do with resources -- available hospital beds, specialists and equipment -- than how sick patients really are. Where resources are abundant, studies show, physicians order more treatment. Possible explanations for this range from physicians' desire to err on the side of caution to doctors ordering discretionary procedures or tests to inflate revenue" (Girion, 9/20).

Related KHN interactive map: Medicare Reimbursements Per Enrollee

The Hill reports on a lack of leadership at The Centers for Medicare and Medicaid Services (CMS): "Nine months into his term, President Barack Obama has yet to nominate someone to head an agency that will play an enormous role in implementing any healthcare reform legislation Congress passes this year. The agency has 4,400 employees, a $676 billion annual budget and a duty to provide healthcare to 44.6 million people enrolled in Medicare, 51 million in Medicaid and 6.3 million in the Children's Health Insurance Program (CHIP). In effect, the nation's largest health insurer has been without a CEO for three years."

"'It's totally bizarre, what's going on,' said Gail Wilensky, a senior fellow at Project HOPE who ran the agency for two years during the George H.W. Bush administration. 'It's a very bad situation, particularly in a year when healthcare reform is such a big issue.' The leadership vacuum at CMS dates back to the George W. Bush administration. The last person to receive Senate confirmation as CMS administrator was Mark McClellan, who resigned on Oct. 15, 2006. ... Since Obama took office in January, veteran CMS official Charlene Frizzera, the agency's chief operating officer, has been filling in as acting administrator" (Young, 9/20).

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