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Tag: Medicare Advantage

Medicare Advantage Quality, Savings, Access and Satisfaction: Can We Have It All?

• 22

By AL LEWIS

Imagine a Medicare Advantage (MA) policy which increases the quality of health care for seniors, saves the government money, brings MA to the few remaining places that don’t have it, and puts checks in the hands of senior citizens. What you are about to read should do all that, in theory. However, I’m sure there are practical issues that I am overlooking, and I am hoping to attract comments noting those issues that, as Woody Allen once said, can take this from being a notion to an idea, and eventually a concept.

First, each county would have a “default” plan that would automatically enroll people on their 65th birthday, rather than have the traditional plan serve as the default option. (Those of us already in an HMO with a Medicare option can stay in it, seamlessly, rather than join the default plan.) Anyone could still opt out into the traditional plan or another MA plan, of course, at any time.

The default plan is chosen based partly on its Stars rating, but partly on a bid process, in which plans offer to pay the government for the right to be this default plan. The payment would be substantial for three reasons:

1. In some highly populous counties, MA is profitable enough to support fifteen or twenty plans, far more than would survive in a competitive market with market-based pricing. Much of this “excess profit” would be bid back to the government by the default plan, in exchange for access to many more enrollees;

2. Member acquisition costs for the default (“opt-out”) plan would be a small fraction of the $500- $1000 that a new member costs in today’s opt-in MA environment. Much of this savings would be included in the bid;

3. The bid would be calculated not based on just on one year’s profit, but rather on the expected lifetime value of a member, taking into account projected member retention and any scheduled or anticipated relative reductions in reimbursement.

Continue reading…

Medicare’s Wild Ride

• 38

By LINDA BERGTHOLD

Most of us breathe a sigh of relief when we reach Medicare age because we think we will have coverage until we die. And we will. But we may not get all the options we want. Medicare Open Enrollment period officially opens Saturday October 15th, but the insurance companies that administer the Medicare program announced their 2012 plans and rates this past weekend. There was good news and bad news.

Whether you are 16 or 66, getting dumped is a humiliating and frustrating experience. Last week, some residents of my county received a letter from their insurance company saying that their Medicare managed care plan will no longer be offered here next year. Yep. Dumped by Anthem Blue Cross.

In some places around the country, there will be no real choice of managed care options in 2012. In my county only one managed care plan will be offered and it will cost $192 a month. Other counties that Anthem dumped will be left without any managed care plans at all. It’s not just California, though. Medicare beneficiaries in Virginia saw Optima drop out of the market for 2012, citing $20 million losses for that managed care business, and 500,000 enrollees in states offering Coventry or WellCare will also see their managed care options reduced.

Will more insurance companies drop their managed care business when they realize they cannot continue to make the same profits they have been making? Perhaps. Even though the number of plans dropping out of the market is small this year, is it a national trend? Actually, so far it is nothing like a national trend.

In fact, earlier this month, federal officials said they expected a 10 percent increase in enrollment in Medicare Advantage plans, and they said premiums will be 4 percent lower on average in 2012 with benefits remaining consistent with 2011 plans. Which is all well and good if you live in a place where there is still a lot of competition for you as a Medicare beneficiary. But if you do not?

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Health Policy Schizophrenia

• 21

By JOHN GOODMAN

The Obama administration has told us how it intends to change Medicare many times and in many places.

It wants to replace fragmented decision making by independent doctors with coordinated care delivered by doctors working in teams, connected to a medical home. It wants Medicare to purchase quality, not quantity. It wants decisions to be evidence-based. It wants electronic records in order to standardize care and reduce errors.

So how does the administration plan to get all this done?  It plans to spend hundreds of millions of dollars on pilot programs to try all these ideas out and then ……

Wait a minute. Aren’t these ideas already being tried out somewhere? Yes. In Medicare, as a matter of fact. How well are they working? As a long-time critic of managed care, I admit the results look pretty good.

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Real Reform For Medicare Advantage

By AL LEWIS

Medicare Advantage (MA) is stuck in a cycle in which the government wants to micromanage MA plans and cut their reimbursement to satisfy deficit hawks, while the health plan industry lobbies for exactly the opposite. The result is a negative-sum game, a stalemate that benefits nobody.

It turns out that this stalemate would be remarkably easy to overcome, in a way that makes money for the government, gives seniors a visibly better deal, reinvigorates the Medicare ACO, and entices many more members into MA. Since MA plans are held to quality standards far beyond what Medicare fee-for-service requires (remember, straight Medicare is a payment system, not an insurance plan), I am going to assert that the increasingly popular MA plan option – especially plans with high Star ratings – provides better care coordination for seniors than fee-for-service (FFS). The government recognizes this implicitly by initiating Medicare ACOs. ACOs are supposed to close that care coordination gap in FFS but it does not look like that is going to happen on a broad scale in the near future.

If one accepts the premise that more care coordination is a worthy goal, here’s a better way of addressing that care coordination gap by getting more seniors into MA, rather than by setting up a parallel universe of ACOs…and do it in a way that clearly saves money for the government and seniors.

Start with the recognition that most 64-year-olds are already in an HMO or PPO. Today’s sign-up procedure for Medicare acts as though neither innovation exists. A senior becomes eligible for Medicare and then (in competitive markets) gets deluged with offers to join one or another MA plan, which requires switching out of FFS — a model that, while called “traditional,” is totally unfamiliar to patients coming out of commercial HMOs. These enticements to seniors are quite costly for the health plans, involving brokers, salespeople, advertising etc.

How about a system in which MA becomes an opt-out instead of an opt-in for 65-year-olds, meaning people would automatically start receiving their Medicare benefit through a health plan instead of FFS? As you read what follows, assume that MA would still be totally voluntary and that people who want the old-fashioned FFS can simply opt into it.Continue reading…

Obama’s Medicare Half-Truth

• 11

By AUSTIN FRAKT

Picture 12

Obama was called a liar during his recent address to a joint session of Congress. Actually, he was not fully truthful about the implications of cuts to Medicare. Obama repeated that his health reform plan includes payment cuts for private Medicare Advantage (MA) health plans:

The only thing this plan would eliminate is the
hundreds of billions of dollars in waste and fraud, as well as
unwarranted subsidies in Medicare that go to insurance companies —
subsidies that do everything to pad their profits and nothing to
improve your care. … So don’t pay attention to those scary stories
about how your benefits will be cut… That will never happen on my
watch. I will protect Medicare.

Obama’s claim that the cuts will trim insurer profits but not Medicare benefits was meant to calm nervous seniors. As I and others have pointed out the proposed cuts will in fact reduce benefits to some degree, contrary to the President’s assertion. But seniors, in general, should not be concerned. First, only about 23% of Medicare beneficiaries are enrolled in an MA plan.

Continue reading…

Obama’s Medicare Half-Truth

• 34

By AUSTIN FRAKT

Picture 12

Obama was called a liar during his recent address to a joint session of Congress. Actually, he was not fully truthful
about the implications of cuts to Medicare. Obama repeated that his
health reform plan includes payment cuts for private Medicare Advantage
(MA) health plans:

The only thing this plan would eliminate is the
hundreds of billions of dollars in waste and fraud, as well as
unwarranted subsidies in Medicare that go to insurance companies —
subsidies that do everything to pad their profits and nothing to
improve your care. … So don’t pay attention to those scary stories
about how your benefits will be cut… That will never happen on my
watch. I will protect Medicare.

Obama’s claim that the cuts will trim insurer profits but not Medicare benefits was meant to calm nervous seniors. As I and others
have pointed out the proposed cuts will in fact reduce benefits to some
degree, contrary to the President’s assertion. But seniors, in
general, should not be concerned. First, only about 23% of Medicare beneficiaries are enrolled in an MA plan.

Continue reading…

Expect to hear a whole lot about this…

• 10

By Matthew Holt

Seniors care about death panels (apparently) but they usually really care about drug prices and costs. Part of the political rationale for the Republicans passing Medicare drug coverage in 2003 was to deny the Democrats the ability to bundle seniors’ desire for drug coverage with a universal coverage bill. So far the Republicans have to say the least muddied the waters as to whether universal coverage is a good thing for Medicare recipients—or at least the ones that don’t care about their kids or grand-kids.

But there’s one minor trick. The deal with big Pharma that’s part of HR 3200 cuts the donut hole in half. That’s real money for seniors.

And when the cuts to Medicare Advantage become apparent, that donut hole is going to affect many more seniors who now are getting good benefits from Medicare Advantage and are pretty unaware about what’s about to happen to those benefits, according to this recent Silverlink/Suffolk University poll. (Hint, many Advantage plans will get much less generous).

In that case, knowing that there is something in the bill that helps them might change some seniors’ minds. Right now the Silverlink/Suffolk poll does not make happy reading for the Administration:

The survey also polled Medicare recipients on healthcare reform. Despite high levels of satisfaction and relatively strong amounts of optimism, nearly half of Medicare recipients polled (48%) say they do not believe the Obama administration is looking out for their best interests when it comes to healthcare reform. The remaining are split, with 28% believing the administration is looking out for them and 24% unsure.

Please, do not ban reference-based pricing

• 4

By Rick Peters, MD & Karl Luber, MD

We were stunned (yes, we're naïve and idealistic) to read in The Kaiser Family Foundation newsletter and The Wall Street Journal article last week that CMS (surprise) and the now former the Bush Administration (no surprise) were proposing a ban on reference-based prescription drug pricing under Medicare Part D.

Health and Human Services Secretary Tom Daschle has said the Obama Administration will work to see that health care “will be guided by evidence and effectiveness, not by ideology.” This proposed ban is in direct opposition to that commitment.

Reference-based pricing drives appropriate clinical decision-making, appropriately decreases health care costs, and appropriately empowers consumers in the health care decision process. It is one of the few rationally applied cost control tools we have. It should be a model – not a pariah.

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Shocker–Karen Ignagni almost tells the truth

• 21

The NY Times’ Robert Pear has an article on the politics of the Obama Administration introducing a public plan as part of FEHBP.

As you might expect a boat load of Republicans who were told in grade school that private is good and public is bad are concerned about this causing the demise of private health plans–even though that would clearly benefit the country. Of course Pete Stark is quite happy to say that it’s not that Medicare underpays (as Charlie Baker said here last week), but it’s that private plans over pay.

So why is that the case? Well you knew that I couldn’t resist the appearance of my favorite lobbyist. Here’s what Karen Ignagni says, and — this is the shocker– it’s half true.

Karen M. Ignagni, president of America’s Health
Insurance Plans, a trade group, said the consolidation of the hospital
industry in the last seven or eight years had increased the market
power of hospitals, thereby reducing the ability of insurers to
negotiate discounts.

Actually it’s been more
like twelve to fifteen years since big players started merging (IFTF’s
Ellen Morrison wrote a great report about that in 1994 called "The Six Americas").
By the late 1990s Sutter, for example, was facing down Blue Cross of
California on price and winning. And of course in Boston Partners was
getting bigger and bigger, and facing down Blue Cross and the other plans. (Leading occasional THCB contributor and Beth Israel Deaconess CEO Paul Levy to become a big whiner, according to Partners Chairman Jack Connors). So Karen is telling the truth.

Continue reading…

The demise of Medicare Health Support

• 4

By Matthew Holt

I guess we knew it, but here’s the confirmation in the analysis of the first 18 months from CMS.

The summary: DM companies in Medicare Health Support enrolled healthier than average populations; they had limited to no impact on improving their patients’ care, satisfaction or outcomes; and didn’t save any money.

I wonder how Disease Management is going to fare in the future. It’s clear that this "occasional remote intervention" model needs to change.