Physicians — especially those of the primary care type — are spared the potential problems that come with cuts in Medicare payments. At least for another month. President Obama has delayed the anticipated 21% cut in reimbursements while Congress has to take the matter up yet again.

Sen. Jim Bunning (R-KY) created a legislative frenzy last week when he placed a procedural hold on the bill that would have extended health care benefits to the unemployed for an additional length of time. That measure would have also allowed taxpayer subsidies to be used for premiums. Bunning relinquished his standoff yesterday, allowing this extension on cuts in payments to be avoided for another 30 days.

Polling, as a result, shows just how far cuts in Medicare payments to providers and provider organizations will go in threatening care delivery to a huge segment of the chronic care patient population — the same demographic responsible for the heaviest utilization of pharma, primary care, and acute care. Approximately two-thirds of primary care physicians polled by Medscape said they would cease to care for Medicare beneficiaries as a result of the cut.

An extension only holds off the inevitable, and although Senate Democrats are looking for ways to delay cuts further, there has to be a day of reckoning. That could come October 1, if senate legislators work to pass another bill [PDF] and try to reverse the SGR formula [PDF], which is responsible to establishing pay cut schedules in Medicare provider reimbursements.

With reform, the current band-aid strategy the Obama administration is using continues on its sloppy course.

Does the higher cost of providing care actually mean better care? In more fiscally flush times, the knee-jerk among patients and providers would probably be a nod toward the affirmative. Today, in the wake of a reform fight which has placed front and center the once-mundane issue of healthcare delivery previously reserved for ivory tower wonkish types; this issue is as bread-and-butter essential to the American public as, say, enormous property tax increases.

Researchers, studying over 3000 hospitals over a two year period (2004-2006), put this question to the test when they compared Medicare beneficiaries who were treated for pneumonia and heart failure. Those treated for the latter condition at “lower-cost” hospitals fared better^[1] chronically with this diagnosis than those treated for the former — essentially calling into question the hypothesis that low-cost hospitals discharge patients earlier but have higher readmission rates (for certain diagnoses) and greater subsequent inpatient care costs. The implications of this trial — no major differences in outcomes between hospitals with longer patient stays and shorter ones — could be far-reaching when setting policy on Medicare reimbursements for acute patient care. | LINK (Study abstract only)

1. using 30-day mortality rates, readmission and six-month costs of inpatient care among two of the most common Medicare-covered inpatient diagnoses [↩]

What could possibly be worse for patients as the current state of reform (tune in tomorrow) is more uncertain than ever? According to a JAMA study [PDF], the fact that more physicians are cutting hours — not just primary care docs, but most physician demos across most specialties. Reasons are myriad, but the one essential kernel remains: the increasing layer of oversight (administrative and managed care constraints) has slowly but steadily gained a prominent foothold into how much time a physician can actually devote to seeing patients. According to one family physician

“It added five or six years onto my practice life – and I love what I do,” [Virginia family physician] Dr. Ellington said. “I couldn’t have continued to do what I was doing. I couldn’t do it physically, emotionally and financially. It had become overwhelming.”

And it will only get worse — at the very least for the primary care physician who is already burdened with heavier admin and paperwork hassles, lower pay, increasing patient loads, and lower Medicare reimbursement schedules. | LINK

Last Februrary, Medicare fraud once again took center stage; a Tampa, FL-based managed care outfit was outed by the federal government for intentionally hiding Medicare payments in a specially created private entity called Harmony Behavioral Health. Citing administrative costs as the reason for diversion, WellCare Health kept for itself state funds meant for mental health services and delivery. If there were any reason in the heat of Obama’s reform rhetoric in 2009 to rail against the government’s mishandling of its own Medicare reimbursement policies (as part of shoddily run MA plans) as being part and parcel of the overall increase in the cost of healthcare delivery — it was quite apparent with this case.

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In the Massachusetts healthcare economy, the balance between employer, employee (policyholder, beneficiary), and health plan (insurer) is getting new scrutiny. Its chief executive, Gov. Patrick, filed a bill calling for the broadening of powers of the state’s insurance commissioner in capping rates for care delivery services by hospitals, doctor groups, imaging centers, and insurers. He cites the crippling effect of higher rates on employers and employees of small businesses.

Of course, in a state rocked by lowered reimbursement schedules, a diaspora of primary care physicians to other practice locales with a secondary shortage in those primary care services — the news of capped payments to docs is not generating a lot of support in that camp for Patrick’s plan. And what do the small businesses think? Cautious optimism rules the day. Smaller acute hospitals (who already are at the mercy of government whims with respect to Medicare and Medicaid payments) fear for their bottom lines amid the potential for layoffs and cuts in healthcare delivery services.

Insurance companies have no problem supporting the governor’s proposal, just as long as negotiations of rates with the other parties don’t cut into their bottom lines. | LINK

I’ve mentioned President Obama’s pay-as-you-go (or, “paygo”) ideal as a means of dealing with deficit spending wrought by his current 2011 budget proposal. Concerning healthcare, Medicare cuts would be exempted under this paygo provision. Buried within the monstrous budget text is the adjustment totaling $371 billion to fend off Medicare cuts to physicians over the next 10 years.

For much of the past decade, physician providers of Medicare-covered services have been granted reprieve after reprieve from threatened cuts to the program. These yearly proposed cuts to Medicare are largely based upon the sustainable growth rate (SGR) — an economic indicator. Of course, these iterations without enactions have only added to the overall national debt. With Obama’s 2011 budgetary blueprint, the adjustment means that come March 1, physicians who see Medicare patients will be granted a temporary fix once again — as the Medicare growth rate is effectively zero percent for the next 10 years. Should Congress just vote to scrap the SGR formula upon which Medicare cuts and their rates are based, saving massive debt increases over that time?

According to the AMA, legislation to do just that would solve everything — advocating less costly alternatives to formulating a permanent fix to Medicare deficit spending as opposed to Obama’s temporary decade-long adjustments. What does the White House say? At this moment, it hasn’t taken an opinion on an SGR repeal effort. | LINK

Higher copays mean a higher incidence of unnecessary acute care visits, thereby placing elderly patients at higher risk for significant medical problems if not caught earlier. This, according to a study just published in the NEJM. This trial sheds light on a phenomenon not adequately studied until now because of numerically inadequate elderly subjects for study and the absence of reliable Medicare claims data.

Patients affected were principally enrolled in Medicare Advantage (MA) plans whose premium copays increased.  They were compared to patient cohorts whose plans did not increase copay amounts for a 5 year period (2001-2006). The shifting of the cost of care burden to the patient resulted in the findings of almost 20 fewer annual outpatient visits per 100 enrollees in the year after the rise in copayments and 13 more annual inpatient days per 100 enrollees of MA.

Although study limitations were quite notable for the lack of randomization among specific medical diagnoses (non-randomized controlled mechanism); the use of primary care versus specialty care measurements; and the lack of the inclusion of the measurements of cost-shifting on future hospital visits — the basic take-home message is the same: increased out-of-pocket healthcare costs for ambulatory (office) visits for elderly patients mean decreased secondary prevention of adverse medical consequences and higher healthcare costs overall, owing to increased use of hospital services. | LINK

The state of Minnesota is doing a better job with preventing deaths in hospitals due to avoidable medical errors, but non-fatal events in other care environments persist.

In all, four people died as a result of “adverse events” at Minnesota hospitals in the 12 months ending October 2009, compared to 18 the year before. That was the fewest deaths since the state began reporting the statistics in 2005. This is also the first year that no hospital reported a fatal fall.

Good news overall in a state which prides itself in using tools designed to keep the lines of communication open in all care settings in which procedure driven interventions comprise the majority of reimbursed care. Of course, it always helps to know that this is an area ripe for reform within Medicare. | LINK

The run up to passage of the health reform bill has left a gaping hole for Obama to fill — that of CMS head. (Tom Daschle obviously didn’t work out.) The NYT has a concise wrap of the apparent indifference the White House has given to the issue of exactly who will be running Medicare, and it goes so far as suggesting that it is an issue that is secondary at the moment. Obama’s lack of attention in this area is yet another indictment, for some, of his lack of key leadership in spite of his commitment to health reform as his number one domestic policy point.

Given that whomever Obama appoints to the position passes Senate confirmation, the enormity of the task leading CMS will require talent health policy watchers have rarely seen in this position. Overseeing the development of multiple insurance exchanges along with the possible formation of payment advisory commissions, oversight bodies and demonstration projects in the midst of the most sweeping federal legislation in decades is not for the faint of heart. Can’t wait to see his appointee’s qualifications. | LINK

The Agency for Healthcare Research & Quality figures in the reform formula quite predominantly. The organization and its rankings are a proxy of sorts for the shifting of funds for acute hospital reimbursements under Medicare. A point of contention in the entire reform debate involved lowered rates of reimbursement for hospital services delivered by high-quality ranked acute care hospitals in favor of those whose overheads were higher, patient populations were greater, and needs were ripe with the potential for waste — namely urban, inner city acute facilities. Needless to say, the addition of debt incurred by so-called charity care and unreimbursable costs at the hands of Medicare beneficiaries were enough to tip the operating costs of some precariously perched hospitals sufficiently in the red to effect closure.

A by-product of reform in Washington intended to subvert this payment inequity among high quality (suburban, community, and semi-rural) and high waste (predominantly urban, inner city) hospitals under the new Medicare reform formula could be creating perverse incentives for hospitals in more favorable geographic locations to garner higher rates of reimbursements, simply because the patient populations served may not require as much cost to deliver that care. This would, in turn, affect hospitals which serve a more medically heterogeneous population and also happen to provide highly ranked quality care

Consequently, systems like Mayo expect to reap millions more under new Medicare reform rules, unlike hospitals of all sizes in major urban cores. | LINK

Healthcare spending in the United States rose just 4.4 percent in 2008. That’s the lowest rate on record, according to CMS. The recession was cited as the major factor; however, spending’s share of the GDP rose to 16.2 percent in last year. A big chunk of the spending comes from acute hospital healthcare delivery.

Of course, the decline in insurance as a mode of delivery was met by increases in outlays to Medicare (greater spending on care to the elderly and disabled) and Medicaid (shifts of government funds to cash-strapped states to finance their care initiatives). Many are correct in tempering enthusiasm for such belt-tightening as government spending with respect to healthcare expenditures rose last year.

If there were any reason Republicans wanted the reform bill’s negotiating and reconciliation sessions transparent, it certainly is that last one. | LINK

For all of the emotional uproar generated by and among both sides in the reform debate over the past year, Americans — according to a recent report — like familiarity, as least as it applies to the largest publicly funded health insurance program. According to the white paper [PDF], the majority of Americans want Medicare “maintained” — even if it meant raising taxes to offset the burgeoning national debt.

In a day-long “Choice-Dialogues” in which Americans from all walks of life considered the pros and cons of a range of choices for reforming Medicare, common ground was found in several key areas.

Those areas of concern? Allowing Medicare to negotiate drug prices; encouraging hospice care as opposed to futile end-of-life-measures; emphasizing personal care/preventive care; and gradually increasing the eligibility age for the entitlement, from 65 to 67. Good responses. Good enough for policymakers and the public to be schooled on an issue already 40+ years in the making, and good enough as a yardstick against which one can measure the true impact of reform made by the Obama administration over the next decade. | LINK

Using the “slippery slope” argument, a vocal minority of Republican lawmakers and constitutional scholars who lean that way are making some noise on Capitol Hill this week, and they are poised to fight the pending reform bill’s conversion into law. These critics of the reform bill are attacking the mandate that individuals (as opposed to employees and recipients of Medicare and Medicaid) must obtain some coverage as part of reform. The coverage mandate aspect of the reform bill has gotten much ink over the past six months, as national sentiment began to turn against the Obama plan. Ultimately, this wave of dissent among lawmakers infected the entire Republican party, leading to a compromise many believe Obama privately anticipated all along — practical dissolution of the public option.

For those on the Right opposing the constitutionality of the reform bill, squelching the public option is not enough. They contend

…that an individual’s inactivity — in this case, the failure to buy health insurance — does not qualify as interstate commerce, and thus Congress does not have the power to regulate it under the Commerce Clause. [Also] … the financial penalty the law would impose goes beyond Congress’s ability to lay and collect taxes.

Naysayers in response quickly point out that Congress has every right to impose a tax that promotes the general welfare of the citizen and that the Supreme Court has ruled “that Congress may regulate activities that ’substantially affect’ interstate commerce”. That the constitutionality of this bill as being seriously challenged at this point is a telling postlude to just how polarizing this issue has become — something many political pundits and even Barack Obama never quite envisioned when it comes to something so intimate to every body as healthcare. | LINK