Submitted by achenault on Wed, 07/29/2015 – 12:00pm
This week, we celebrate the 50th anniversary of Medicare, the national insurance program providing coverage to over 50 million Americans over 65 and people with permanent disabilities.
The Problem:
Our whole health care system is wasteful, inefficient, and less effective than other western nations. We spend almost twice as much per capita than other nations, yet our health outcomes are lower in comparison to other economically developed nations. (Click here for data on health care cost and quality problems.) In the US, most providers get paid for each service they provide, creating incentives to provide more services, whether or not those services actually benefit patients.
Medicare has been a pioneer in changing how we pay for health care so that we pay for better care and better outcomes.
Lowering Health Care Costs:
One of the major drivers of excessive spending in health care is administrative costs, including all the paperwork and bureaucracy. Administrative costs in private insurance run 17% on average, but in Medicare, they hover between 2-3%.
Improving Quality of Care:
Medicare is also the leading driver of improving the quality of health care. Because it is the single largest health care purchaser in the US, Medicare has the purchasing power to improve care and lower costs. The Affordable Care Act contains an array of projects designed to change from more care to better care, which will also curb spending growth. One example is the Comprehensive Primary Care Initiative, which brings together private insurers, Medicare, and Medicaid to strengthen primary care – emphasizing more patient involvement, better care coordination, and other features that will improve the health of people with chronic conditions and other health risks. One of the CPCI regions is in Southwest Ohio.
Read about other Medicare quality initiatives here and here.
Medicare also collects extensive data on quality of hospital and physician care and makes it available to consumers and others on Medicare Hospital Compare.
Leading By Example:
The theory– and it’s proving to be true – is that if Medicare creates incentives for providers to improve care, the rest of health care will follow. For example, several years ago Medicare adopted a program to pay hospitals based on rates of preventable readmissions. As a result, readmission rates in Medicare have been going down.
On the upcoming 50th Anniversary of Medicare, we have a lot to celebrate!
