Stuart H. Altman Ph.D. Chaikin Professor of Health Policy Heller - - PowerPoint PPT Presentation

The G e Growing g Gap Between een M Med edicare a e and Com Commercial Hos

• spital

al P Payments: s: Should We B e Be e Concer erned ed

Stuart H. Altman Ph.D.

Chaikin Professor of Health Policy Heller School for Social Policy and Management Brandeis University

Original Medicare S System P Paid Hospitals Ba Based On Its Co Costs and Simi milar t to Private Payme ments

Even Under The 1983 Medicare DRG Hospital Payment System---Overall Medicare Payments Similar to Private Payments

Relations nshi hip B p Between H n Hospi pital Cos

• sts a

and M Medicare Paym yments Ch Changed in 2000 2000

And Gap Between Private Payments and Medicare Accelerated

Hospital P Paid Significantly Lower r Am Amounts By Medicare a and Medicaid

106% 125% 160% 175% 100% 90% 90% 85% 0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200% 1996 1998 2000 2002 2004 2006 2008 2010 2012 Pvt Ins. Payt as Percent of Medicare Payments Medicare

• Payt. Growth

Rate

Seiden et al, Health Affairs December 2015

Payments in $2012 and adjusted for patient mix and geography

By 2 2017 A Aver erage P e Private P e Payments ts T To Hospitals ( (Outpatient a and I Inpatient) Wer ere C Clos

• se t

to 180% of

• f Med

edic icare

Recen cent R RAND S Study I Indicated F For a S Sample le

• f
• f Patie

tients i in 25 States S Stu tudie ied---

• --Private

e Insurance P Paid H Hospital O On A Average 240% of

• f

Medicare R e Rates es

SO– Sh Shou

• uld W

We B e Be e Concer erned ned?

The e Growing G Gap B Between en Gover ernmen ent a and P Private P e Paym ymen ents Affects Ho Hospitals Differ eren ently y

Also Ratio of Private to Medicare Hospital Payments Are Significantly Different in Different States

Hospit ital al Tot

• tal

al A All-Payer er M Margin b by U Urban a and Rural L Location a and Critic ical al Access H Hospit itals als 2006 2006-2016 2016

9

SOURCE: MedPAC analysis of Medicare cost report data from CMS, MedPAC June 2018 report.

5.7 5.8 2.1 3.7 5.3 4.7 5.0 4.9 4.8 4.8 4.6 5.3 6.0 1.7 4.3 6.4 6.1 6.6 7.4 7.3 7.0 6.5 4.4 4.9 2.1 2.8 3.3 3.4 3.6 3.6 3.4 4.4 3.6

1 2 3 4 5 6 7 8 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Margin (percent) Fiscal Year Rural Urban Critical Access Hospitals

In Som Some St States RA RAND S Study y Indicated--

• --Private

e Rates es W Were e Over 300% 300% of

• f Medica
• care. Lowest

States es Were 1 e 150--

• -160

160%

Private e Insurance e Relative e to Medicare e Prices es for H r Hospital Care by S State 2017 2017*

156% 169% 178% 186% 208% 217% 219% 221% 225% 228% 229% 229% 234% 235% 236% 237% 241% 243% 244% 269% 277% 279% 283% 302% 311% % 50% 100% 150% 200% 250% 300% 350% MI PA NY KY TN VT KS MO IL MA FL NM NC LA NH WA OH GA TX CO MT WI ME WY IN

Inpatient + Outpatient

Inpatient + Outpatient

Source: RAND Corporation, Priced Paid to Hospitals by Private Health Plans Are High Relative to Medicare and Vary Widely, Findings from an Employer-Led Transparency

• Initiative. Chapin White, Christopher Whaley 2019

*Relative prices are the prices paid by private insurance relative to Medicare for similar type patients.

What t Ab About G t Goi

• ing F

g For

• rward?

If Med edic icare P Payments C Con

• ntin

inue t to

• Be

e Constrained ed a and P

• Pvt. P

Paymen ents G Grow

• w---
• Could T

There B Be Access L Limits f for Medicare Patients?

The Growing Use of Restrictions on Physician Coverage for Medicare Patients--- ”Concierge Care” --- Could be Just The Beginning

Le Let Me Be Be Very Cl Clear---

• --I a

am N NOT Advocating for Highe her Hospital Paymen ents

I Believe as Do Many Economists That Health Care Spending Can Only Be Constrained by Reducing The Growth in Revenues

But S Should Constraints Only Come From Lower r Govern rnment P Payments and Shoul uld d Government Ignore The Growth

• f Relative

ve Pr Private Rates---

• -In T

Two S Sta tates-

• -Maryland and Massachusetts T

The An Answer r is NO! !