Medicare Bundling

The federal government is concerned about the incidence of Medicare re-admissions.

Typical scenario: an elderly patient is admitted to the hospital for pneumonia and related distress. After a four day stay the patient is discharged to a long-term care facility.

A week later the patient is re-admitted with acute distress, after the nurse requests orders from the patient’s physician. After several days the patient is again discharged to the nursing home.

This cycle is very costly to Medicare, and the feds would like to see it slow down.

(Based on conversations with long-term care nurses and reviews of Minimum Data Set (MDS) summaries, the patients are usually very old, very frail, but not at death’s door quite yet.)

One solution is to ‘train” physicians and families not to be so quick to send the patient back to the hospital. This is tough on families, who often pressure the physician to readmit. Sometimes the patient demands readmission, it is easy for the physician to say yes. This can also be tough on the nursing home, where higher acuities are colliding with the nursing shortage.

A proposed solution is bundling. President Obama mentioned it in his 6/15 speech to the AMA. How does it work? The hospital gets a flat fee per incidence and then has to pay the physician, nursing home, ambulance/transport company, physical therapist, etc.

This requires a lot of administrative work and some intense negotiations, and puts the hospital at significant risk.

Could this work? Maybe. Is it good for Medicare? Probably yes. Good for patients? Unknown. Good for physicians? It depends. Good for the nursing home? Doubtful.

Fast and Furious

No, not the movie - health care reform.

In recent days:

• President Obama, in his Saturday radio address, promised to get hands on the issue.

• Senator Kennedy let draft reform legislation float around, creating the appearance that he is stepping in front of Senator Baucus.

• Senator Kennedy and Senator Baucus issue a statement about how well they are going to work together.

• The possible tax on health care benefits bubbles to the surface once again, as do possible taxes on sodas, beer, wine, and other sinful pleasures; other possibilities include taxes on securities dealers, life insurers and elimination of certain estate planning practices.

• President Obama lets it be known he wants to tax the rich, not working people, possibly via deduction caps (Axelrod and Goolsbee floated this trial baloon on the Sunday talking head shows).

• The House is circulating a proposal with an almost mandatory coverage rule, and penalties for anyone with the means who refuses to buy health insurance (?). All non-group policies would be channeled through a federal policy exchange. A spokesmen for Rep. Waxman made clear the circulating drafts are not the official work product of any committee.

More on this as the trial baloons become more official.

Selling Health Care Reform

President Obama is selling health care reform with the argument that we need to fix health care in order to fix the overall economy.

Economic advisor Christina Romer distributed an op-ed piece today explaining how health care reform would 1) improve family incomes, 2) enhanced GDP, 3) lower budget deficits, 4) lower unemployment, 5) provide greater health care coverage (of course) and a 6) better labor market.

Wow. This is quite a claim.

Full report: http://www.whitehouse.gov/assets/documents/CEA_Health_Care_report.pdf