The great thing about reading a study, or a report about a study, showing … well, just for example, that EHRs don’t save any money, or that drinking alcohol is good for you, is that, gosh darn it, there’s always another study that shows the exact opposite.
Since we’re so pressed for time these days, two of the great interpreters of studies on the costs of managed care plans — AHIP (that’s America’s Health Insurance Plans) and the AFL-CIO — have collaborated in cutting down the cycle time for this phenomenon. Today they issued complementary statements regarding a single report: one entitled GAO Confirms That Medicare Advantage Yields Savings for Seniors; the other, GAO: Private Medicare Plans a Bad Deal for Seniors. Can you guess which is which?
Truth is, the newspaper formerly known as the gray lady seemed just as befuddled: the report is cited for the proposition that private Medicare plans often cost beneficiaries more than traditional Medicare, but the article devolves into a whole lot of he said, she said.
So what does the GAO report on Medicare Advantage actually say or mean? (The title is an equivocal "Medicare Advantage: Increased Spending Relative to Medicare Fee-for-Service May Not Always Reduce Beneficiary Out-of-Pocket Costs." Hmm.)
For one thing, it says that rebates paid by CMS to Medicare Advantage ("MA") plans exceed the plans’ cost savings over traditional Medicare. More specifically, the GAO’s own summary says:
Whether the value that MA beneficiaries receive in the form of reduced cost sharing, lower premiums, and additional benefits is worth the additional cost [i.e., the rebates] is a decision for policymakers. However, if the policy objective is to subsidize health care costs of low-income Medicare beneficiaries, it may be more efficient to directly target subsidies to a defined low-income population than to subsidize premiums and cost sharing for all MA beneficiaries, including those who are well off. As Congress considers the design and cost of MA, it will be important for policymakers to balance the needs of beneficiaries and the necessity of addressing Medicare’s long-term financial health.
In commenting on a draft of this report, the Centers for Medicare & Medicaid Services expressed concern that the report was not balanced because it did not sufficiently focus on the advantages of MA plans. GAO disagrees. This report provides information on how plans projected they would use rebates and identified instances in which MA beneficiaries could have out-of-pocket costs higher than they would have experienced under Medicare FFS.
So there may be additional money spent by and/or on behalf of patients enrolled in MA plans, but that’s because they get services above and beyond the traditional Medicare package, right? Well, that’s part of the story. The other part is that some of the less-savory marketing tactics used in connection with some of these plans resulted in folks enrolling in plans with networks that didn’t include their regular providers (read: big out-of-pocket expense).
The bottom line is that it’s less black-and-white than advocates on either side of the issue would have you believe, and that if there’s blame to be laid at anyone’s feet, it’s to be laid at the feet of a variety of parties, including both the regulators (or, in this case, Congress) and the regulated community.
In regards to medicare and it’s prescription ‘benefit’,that was constructed with deliberate design to protect the interests of the pharma industry in particular, with the donut hole and inablilit to negotiate prices. Why can prices be negotiated with other large government health entities, such as the VA (champus), and not medicare? Also, what’s up with the donut hole. That seems to have been mathematically determined, certainly not for the benefit of assuring health for our elderly.
There seems to be a pathologcally intimate relationship that exists with the administration and big business associated with the health care system. And I view this as discouraging and potentially damaging to my fellow citizens, who may lack awareness of this strategy I speculate. Changes should be made for the benefit of others.