MedPAC Discusses Access to
Care, Quality Incentives, Medicare Spending
October 18, 2002-The Medicare Payment Advisory Commission
(MedPAC) met Oct. 10 and 11 to review several topics of importance
in preparation of the commission's March 2003 report to Congress.
During the meeting, commissioners reviewed issues including
incentives to improve the quality of care for Medicare beneficiaries;
access to care for Medicare beneficiaries; comparisons of
Medicare spending to other spending indicators; county level
variation in Medicare per capita spending; payment policies
for new technologies; and characteristics of hospitals by
Medicare financial performance.
The commissioners received an updated report that discussed
access to care for Medicare beneficiaries. National survey
data indicates that although beneficiaries overall are satisfied
with their current access, trends indicate that there is variation
based on socio-demographic dimensions. MedPAC is in the process
of developing an ongoing system to monitor beneficiary access
to care that will assist commissioners in: evaluating health
system capacity; evaluating direct access measures; evaluating
Medicare's role; and analyzing policy options. The report
used data collected under this new system through the first
quarter of 2002. Generally, the data show that access problems
occur most frequently for women over age 65, minorities, and
individuals living in rural areas. The commission requested
further study of these issues in order to incorporate a more
informed comment in their March 2003 recommendation.
In another physician related area, MedPAC heard a panel presentation
on using incentives, both financial and non-financial to improve
the quality of care for Medicare beneficiaries. The panelists
included Don Berwick, M.D., M.P.P., of the Institute for Healthcare
Improvement, Brent James, M.D., M.Stat., of the Institute
for Health Care Delivery Research, Intermountain Health Care
and Suzanne DelBanco, Ph.D. of The Leapfrog Group. The panelists
discussed the lack of association between expenditures on
acute care and outcomes. Dr. Berwick presented the results
of a study examining several innovative preventative care
programs ranging from diabetes management to smoking cessation
that showed financial returns to the insurers in capitated
care systems. One problem that was noted in the fee-for-service
approach that is used by Medicare is the exclusion of preventative
care because it is not part of the "core" of treatment.Using
data from major teaching hospitals on cardio infarction outcomes,
as an example, Dr. James showed that attention to quality
has cost reducing effects. The panelists offered suggestions
for MedPAC to study implementing a system that rewards prevention.
The goal is to include a chapter on possible incentives in
the June 2003 report.
The Commission also received a preliminary study on the characteristics
of hospitals by financial performance. Generally, the report
concluded that Medicare inpatient margins vary significantly
using the hospital as the unit of analysis. Further, the report
showed that hospitals receiving disproportionate share (DSH)
or indirect medical education (IME) payments have higher Medicare
margins than other hospitals. For example, in 1999, the average
major teaching hospital receiving DSH had a Medicare margin
of 25.7 percent compared to 23.3 percent for an average teaching
hospital not receiving DSH. The commissioners asked for a
new study using hospital beds rather than the hospital as
a unit of analysis to see if this finding and others would
still be present.
Finally, the commission considered several issues of spending
and payments. These included a discussion of a comparison
between Medicare spending and national trends in health care
spending and variations at the county level in per capita
Medicare spending. It was reported that Medicare spending
grew at a slower rate than the national average over the past
five years (1997-2001). Overall, Medicare spending as a percentage
of personal health care expenditures peaked in 1997 at 22
percent and is expected to settle in at a low of 18 percent
by 2003 where it is expected to remain until 2011 when the
"baby boomers" begin to enter the Medicare system.
The Commissioners also heard a preliminary report on county
level spending that is intended to be a chapter in the March
2003 report. Overall, the preliminary results indicate that
the largest contributor to county level variations in per
capita spending is input prices.
Commissioners also discussed new developments in Medicare+Choice,
coverage and payment for new technologies, current issues
in skilled nursing facility payment policy, and introduction
of the post-acute care episode database.
Information:
Denise Dodero, Associate Vice President
AAMC Health Care Affairs
ddodero@aamc.org
(202) 828-0493
Karen Fisher, Senior Associate Vice President
AAMC Health Care Affairs
kfisher@aamc.org
(202) 862-6140
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