Archive for November, 2011


Assessing the Center for Medicare and Medicaid Innovation

Created as a laboratory for new and better ways to improve health care and reduce health care costs, the Center for Medicare and Medicaid Innovation is one of the centerpieces of the Affordable Care Act and health care reform.

Now that the Innovation Center has been in operation for one year, the Commonwealth Fund has summarized its activities to date:  the initiatives it has launched and the range of those initiatives; the areas in which it is pursuing innovation; and how it is going about its work.

Among the areas addressed in the summary are accountable care organizations (ACOs), Medicare bundled payments, payment reform, programs for dual eligibles, and various demonstration programs.

Read this assessment, including a list of the Innovation Center’s initiatives and their current status, on the Commonwealth Fund’s blog.…

Physicians Again Face Major Medicare Payment Cut

Unless Congress acts, Medicare payments to physicians will fall 27.4 percent beginning on January 1, 2012.

This is almost an annual event:  the sustainable growth rate formula that Congress established in a budget law in the 1990s consistently calls for significant reductions in Medicare payments to physicians and Congress consistently intervenes to prevent the cut, which many believe would jeopardize access to care for the nation’s seniors.

This year, it will cost $22 billion to prevent the cut for one year and $35 billion to prevent it for two years.

Fixing the problem for 10 years would cost approximately $300 billion.

Read more about the issue frequently referred to as the “Medicare doc fix” in this Washington Post article.…

Pennsylvania to Create Health Insurance Exchange

Despite the misgivings of the state’s governor, who believes the Affordable Care Act’s individual insurance mandate is unconstitutional, Pennsylvania has decided to move ahead and develop a health insurance exchange.

The exchanges, which would officially begin operations in January of 2014, are designed to offer one-stop shopping to individuals and businesses seeking to purchase health insurance.

States have the option of creating their own health insurance exchanges or using a federal health insurance exchange instead.

Read about Pennsylvania’s plans in this article in the Philadelphia Inquirer.…

Where Will All the New Patients Go?

Once the Affordable Care Act’s Medicaid expansion and health insurance mandate take effect, millions of newly insured Americans will go off eagerly in search of the health care they have not had reasonable access to in years.

But where will they go?  Who will care for them?

While doctors and hospitals and insurers are already planning for the coming onslaught of new patients, one possible way to care for so many new people is to create more community health centers.  Developing such facilities is a challenge, though – especially financing construction.  The November/December edition of the Washington Monthly suggests an interesting new approach to financing new community health clinics in the age of health care reform.  Read about it here.…

Non-Profit Hospitals Would be Hurt Most if Congressional Supercommittee Fails

Non-profit hospitals with weak credit ratings would be hurt most if the congressional “supercommittee” fails to recommend at least $1.2 trillion in cuts to Congress.

If the committee – formally, the Joint Select Committee on Deficit Reduction – fails to recommend cuts to Congress by November 23, an automatic two percent cut in Medicare payments would take effect.  According to Fitch Ratings, each percentage point cut in Medicare payments would cost hospitals 40 basis points in net revenue and would reduce operating profitability by an average of 14 percent.

Fitch’s also noted that non-profit hospitals with weaker credit ratings generally serve more Medicare patients and would be at greater risk of losses.

Read more about the Fitch Ratings report in this Bloomberg article.…