US House of Representatives Votes to Repeal Medicare Sustainable Growth Rate and Strengthen Medicare Access
We at ACCESS Health have been watching the news closely for the last two weeks. The issue of interest was the vote by the United States (US) House of Representatives on March 26 to repeal the Medicare sustainable growth rate formula and to “strengthen Medicare access by improving physician payments and making other improvements.” The bill can be viewed here.
This event is noteworthy in a few ways. One is that the 392 to 37 vote reveals overwhelming bipartisan support for these changes. Another is that, if passed by both houses of Congress, the bill would change the US healthcare payment system significantly. The bill still needs to be passed by the Senate.
If passed, how will the bill affect healthcare in the US? First, the bill repeals the sustainable growth rate formula used by Medicare. The sustainable growth rate formula pegs provider reimbursements to economic growth, as measured by gross domestic product (GDP). In place of the sustainable growth rate formula, the bill proposes value based payment models such as accountable care organizations and bundled payment. Accountable care organizations link doctors, hospitals, and other health professionals together to develop tailored care plans for Medicare patients. These care plans encompass the entire care process, matching the appropriate service to patients’ needs and reducing duplication of efforts. The bundled payment system reimburses care providers based on expected costs for specific clinical issues. This prevents unexpectedly high costs for patients.
Presently, the US healthcare system uses a fee for service model to pay providers. This means providers are paid for each individual service or operation, regardless of necessity or efficacy. As described in Forbes, “[Fee for service] actually rewards providers financially when patients suffer complications or infections, and pays them more if [providers] order unnecessary tests or procedures.”
Changing this system would remove incentives for healthcare providers to push large numbers of services on patients. Replacing fee for service with value based payment models could improve patient outcomes while reducing costs.
In the future, the high percentage of GDP spent on healthcare in the US may fall. According to World Bank data, the United States spent nearly eighteen percent of its GDP on healthcare in 2012, the highest in the world. GDP savings on healthcare would allow higher spending in other areas, such as education.
However, it is still too early to tell whether the bill will pass the Senate. In addition, there are still many challenges to the change. Many healthcare providers still cling to fees for services models of payment. It is also challenging to define key performance values for providers. Will providers aim to reduce readmission rates or improve life expectancies of patients? At this point, performance values are not standardized. Nevertheless, the strong bipartisan support for the bill shows a consensus that the existing sustainable growth rate model is undesirable.
This movement represents a move toward a capitation payment system, which pays providers a set amount for each patient, regardless of service type. Capitation systems are used by countries like Italy, the United Kingdom, and Denmark. In addition to the US, fee for service is used in countries like Japan, Germany, and Canada.
Interestingly, China has used the fee for service system since the 1980s. China has experienced healthcare cost increases, poor quality, and a questioning of medical ethics. These factors have led to experimental healthcare reforms, since the 2000s. City and local governments were encouraged by the central government to redesign the healthcare system, with wellbeing of patients as a main goal. China tried bundled payment systems, with some success. Jining saw a thirty three percent reduction in expenditure, while Shanghai saw a seven to twelve percent reduction in cost per outpatient visit. However, these initial results are not conclusive of the superiority of a capitation system. China continues to experiment with and review healthcare reforms.
If the US moves forward with the repeal of the sustained growth rate for Medicare, other countries facing challenges with fee for service healthcare models may follow suit. The ripples of this bill are potentially larger than domestic US healthcare policy. What do you think of these policy developments? Tell us your thoughts by leaving a comment.
Ideas sometimes seem so simple and obviously great, so you ask yourself ”Why has nobody come up with that before?!”
I came across the innovative Speaking Exchange project, which is about lightening up the lives of elderly, while at the same time giving Brazilian students the opportunity to practice their English skills. Reports about this case seem to go viral on the web these very days (see links below).
I was so surprised and fascinated when I watched this clip about the Speaking Exchange:
The man shows the boy an old photo. “Is this your dad?” the boy asks. “No, It’s me and my wife when we were young”, he answers. “Oh you were good-looking when you were young”, the boy says – pause – “and you are still good-looking!”.
“I look like I’m only 25”, another man says. He and the boy a are laughing, “but I’m 88”. The two are having a nice conversation. In the end, they share a big, virtual hug.
The school uses its own digital tool for video chatting where conversations are recorded and uploaded privately for teachers to evaluate the talk language-wise.
But there is much more to this than just the language…
It’s fun and warms my heart to listen to their conversations about all the World and his brother.
“I see old people” is how this chapter begins. I’m reading “The new North – The World in 2050” by Laurence Smith. Without having finished the book, I’m excited to share some of the thoughts. This chapter really struck me.
Smith is a young professor in geography and earth and space sciences at UCLA. In his book, he analyzes four key “megatrends” – population growth and migration, natural resource demand, climate change and globalization – and projects how our world could look like in 2050.
The world is filling up with old people. Smith begins by describing the four stages of the demographic transition, which is happening everywhere in the world: 1. High and similar rates of birth and death (e.g., the preindustrial era, with a small and relatively stable total human population); followed by 2. Falling deaths but not births (initiating a population explosion); followed by 3. Falling births (still exploding, but decelerating); and finally 4. Low and similar rates of birth and death (population stabilization at a new, higher total number.
He states that most OECD countries have now passed through these stages – except for those allowing high levels of immigration like the USA – and have stabilizing or even falling populations. Most low- and middle-income countries are still in stage 2 or 3 though.
Smith summarizes that urbanization, modernization, and the empowerment of women push fertility rates downward. In other words, the urbanization of society (if associated with modernization and women’s rights) helps slow the rate of growth (with exceptions). In low-immigration developed countries like Italy and Japan, and regions like Eastern Europe, populations are falling. Consequently, if fertility rates continue to drop as they are now, the world population might be around 9.2 billion in 2050 – the population will still be growing, but about half as fast as today.
One of the most profound long-term effects of women having fewer babies is to skew societal age structure toward the elderly. Of course, improving healthcare also extends our life spans. This aging will hit some places faster and harder than others. Today, Japan is the world’s most elderly country with a median age of 44.6 years. In Pakistan, in contrast, the median age is just 22.1 years. Korea, Russia and China will join Japan as the world’s geriatric nations. Korea, Vietnam, Mexico and Iran will age radically by fifteen years or more. Countries like Afghanistan, Somalia and the Democratic Republic of Congo will still have youthful populations in 2050.
Smith asks: Is an elderly population a good thing or bad? He describes a possibly wiser and less violent society, which at the same time strains healthcare systems, and raises the economic burden on younger workers. The whole concept of “retirement” is about to undergo a major overhaul – people will have to work later in life. Big cultural shifts will be needed in the way we treat and value our elderly. Society must learn that aging and youth should be valued equally.
As the world grays, skilled young people will become a more and more craved resource, Smith concludes. Thus, those countries best able to attract skilled foreign workers will fare best. These young workers might come from Somalia, Afghanistan, Yemen, the West Bank and Gaza, Ethiopia, and much of sub-Saharan Africa, which will offer our world’s youth in 2050 based on current population structures.
Finally, the critical but open question that Smith poses is whether our poorest countries will be able to turn their forthcoming demographic advantages into the new skilled workforces needed to help care for an elderly world. This would require enormous improvements in education, governance and security. Women would have to start attending school and working in places where this is uncommon today. Terrorism would have to be sufficiently quelled. The countries that need young workers would have to accept immigrants from the countries that have them.
Hopefully, these things can be achieved.
PS: Check out Laurence Smith on Vimeo: http://vimeo.com/15715690
I came across this article from the UK about elderly people spending their merry Christmas on their own. I found it interesting, depressing, and even discovered a link to health in the whole dilemma.
While for many people Christmas is the only time in the year when they actually meet family and friends, others are not cared for by anybody or do not care for anybody (anymore). Thus, they spend the celebration of love alone, like a quarter of all people in the UK that are older than 75 and live by themselves – even though the majority of them have children.
Experts say that “family breakdown is fuelling an epidemic of loneliness in old age” and that the fact that two in five marriages fail has serious impacts for the elderly. Young people have to divide their time between parents and step-parents. Besides, ‘silver separations’ are also becoming more common, with latest figures showing that more than 11,500 over-60s were granted a divorce in 2009.
In one of the largest surveys of its kind, the think-tank polled 2,000 over-75s to test how isolated the elderly truly are. ‘I’m 88 and I have nobody at all. I’m on my own’, said one, and ‘some days the only person I speak to is the boy in the shop when I pick up my paper.’
Growing isolation and loneliness makes elderly people particularly vulnerable – also in terms of health. Related mental and physical health conditions include a weakened immune system, sleep deprivation, higher blood pressure, a higher risk of dementia and depression. What to do?
In the UK there is an initiative that involves the police, fire officers conducting home safety checks, as well as social workers who see “warning signs” to connect people to local voluntary groups that can provide companionship. But is that a solution of the problem really?
Chapman J (2011): 250,000 elderly people who’ll be spending their Christmas alone. Available: http://www.dailymail.co.uk/news/article-2078261/250-000-elderly-people-ll-spending-Christmas-alone.html#ixzz2FXDlyfWT
In 1983, the World Health Organization put cancer as a leading cause of death in South Korea. It has an immense impact with 64,000 people dying every year in Korea due to the disease. Luckily, the latest development in cancer treatment is available in Korea: Cyber Knife Radio Surgery. There are currently some hundred cyber knife systems installed in only few countries in the world. Korea was among the first to implement it and today, it has one of the most numbers of installed systems. Compared to UK and US, a cyber knife treatment costs less in Korea.
Cyber knife systems have been used to treat tumors in upper spine, head and neck since 1999 and in the rest of the body since 2001. John Adler invented the system for cancer treatment. It is made to deliver radiotherapy for malign and benign cancer tumors at all stages in specific parts of the body in a non-invasive way. It uses a real-time image guide to find tumors even if the patient is moving, and to deliver radiation with highest accuracy. It eliminates the need for invasive surgeries.
There are various benefits of the technique, e.g. faster procedures in comparison to other radiation methods, no requirement for hospitalization, no need for anesthesia and almost no post-operative care. Cyber knife surgery can even be used for tumors that have already received the maximum dose of radiation. There are no incisions or cuts, and recovery time is not needed. It can even be used for tumors in the spine, which are hard to treat because they are moving while the patient is breathing. The cyber knife can pinpoint the exact location of the tumor and beam into it without damaging other surrounding tissues. That leads to a shorter treatment period and a quick recovery. Treatment can be finished in less than five days on an outpatient basis, without spending a single night at the hospital.
One hospital in Korea is specialized in treating spine cancer. The oncology experts in Korea are highly trained and have years of experience in radiology and cyber knife cancer treatment. Medical staff in Korean hospitals are English speaking and communication will not be a problem when getting medical treatment there.
Cyber knife surgery abroad:
Cyber knife Treatment for Spine Cancer
There seems to be one single, simple best thing to keep our lives healthy and to prevent especially non-communicable diseases: a small, but regular dose of physical activity. This is especially relevant for elderly people as they often suffer from multi-morbidity, but could potentially stay more healthy by changing their lifestyles just a little bit.
Wouldn’t it be easy to put eating and sleeping in 23 and 1/2 hours and keep 30 minutes for physical activit? It doesn’t even have to be on a daily basis, but e.g. going for a 30 minutes walk three times a week has already proven to reduce the risk for arthritis by 47%, for dementia by 50% and for diabetes by 58%.
So how about prescribing physical activity? If doctors did that for their patients – do you think it would have an impact on people’s health?
Check out this video by Michael Evans and Mercury Films Inc. http://www.youtube.com/watch?v=aUaInS6HIGo. It has also been posted by the Swedish Professional Association for Physical Activity. http://www.yfa.se/
Also check out Michael Evans’ blog: http://www.myfavouritemedicine.com/23-and-a-half-hours/
Our teacher once accused us: “You’re incredible! What you guys don’t find on Wikipedia does not exist in your world – or what?”
Trying to find out more about “u-health”, I remembered that and it made me smile. U-health or u-health care cannot be found on Wikipedia (yet) and on the first sight it does not seem to be on many peoples’ minds in today’s world, but dig a little deeper!
U-health stands for ubiquitous health – omnipresent, universal, ever-present health. Sounds big! And there you go with your online-search… [Small note: I found so many interesting aspects that I don’t know where to start now – so let me just give you a basic idea with this blog post and let’s explore the topic further within the following ones.]
On the Congress on Nursing Informatics 2006 in Korea, u-health did cause lively discussions. The Korean Government had started a project on u-health services for the provision of health care services in the country’s rural areas using the advanced broadband infrastructure (NI 2006).
U-health care is a developing area of technology to monitor and improve a patient’s health status. It uses different environmental and patient sensors to gather data on almost any physiological characteristic to diagnose health problems (Brown et al. 2007). U-health should stand out through availability, transparency, seamlessness, awareness and trustworthiness – anytime and anywhere (Cha 2008).
Many industrialized countries are sitting on a demographic time bomb – facing problems in health care that are related to the growing number of elderly. Their limited resources in health need to be used more efficiently and effectively. So especially these societies could benefit from u-health care and its innovations to reach better diagnosis and treatment. It also has a lot of potential in improving hospital administration and patient management with reduction of medical errors, and in enhancing service quality, communication and collaboration. (Chang) However, at the same time, u-health care confronts ethical issues, e.g. when it comes to trust, privacy and liability, or in combining computer and information ethics with medical ethics (Brown 2007).
Hence, the bottom line is that yes, u-health is and will increasingly be on peoples’ minds (and it will probably soon appear on Wikipedia).
Societies as well as individuals will have to make difficult choices in the future.
1 Korea IT Times offers a variety of more interesting articles by Cha Joo-hak on the topic: http://www.koreaittimes.com/source/cha-joo-hak
2 Brown I and Adams A A 2007. The ethical challenges of ubiquitous healthcare. International Review of Information Ethics Vol. 8. www.i-r-i-e.net/inhalt/008/008_9.pdf
3 Cha J-H (2008). Defining the Perfect Ubiquitous Healthcare Information System. Korea IT Times. http://www.koreaittimes.com/story/56/defining-perfect-ubiquitous-healthcare-information-system
4 Cha J-H (2010)Who Shall Live Better? – Health Care and Socioeconomic Choice. Korea IT Times. http://www.koreaittimes.com/story/8559/who-shall-live-better-health-care-and-socioeconomic-choice
5 Chang B-C ().Ubiquitous-Healthcare Changed paradigm after introduction of EHR. Yonsei University. www.health-informatics.kk.usm.my/resources/2_Chang.pdf
6 NI 2006. The 9th International Congress on Nursing Informatics. Seoul, Korea June 2006. http://differance-engine.net/ni2006blog/?p=22