Medicare Cuts: A Zero-Sum Game or Worse

While Congress debates the "doc fix," Medicare has reduced payment to physicians by 21.2 percent.

The Senate passed a bill that would provide a 6-month, 2.2-percent hike in payments instead. The House has not.

If the bill eventually passes, the cost of reprocessing claims is likely to wipe out the physicians'  2.2-percent increase. Medicare would also spend about 30 cents per claim on reprocessing.

The result? A loss of resources and goodwill. And a negative impact on patient care.

Physicians may be inclined to see fewer Medicare patients. Already more than 17 percent restrict the number of Medicare patients in their practice. The rate among primary care physicians is 31 percent. (Based on 9,000 physicians surveyed by the American Medical Association)

Physicians may also change how they treat patients. When Medicare payment rates were reduced for outpatient administration of chemotherapy drugs starting in 2005, physicians responded by switching chemotherapy agents. They were less likely to dispense the drugs with greater cuts in profitability and moved to higher-margin drugs instead, offsetting some of the savings intended by the legislation.

Congress can try to cut costs by reducing payments to physicians. But, in the end, it's likely to be a losing proposition. Real health care reform will come when government chooses to put its trust in physicians, instead of putting its hands in their pockets.

UPDATE: Temporary sanity prevails. From modernhealthcare.com, Friday, June 25:

"... the House passed on a 415-to-1 vote legislation that replaces a 21.2% Medicare physician pay cut with a 2.2% raise through November. The White House announced Friday that President Barack Obama has signed the bill into law."

Another temporary fix. The sad saga continues...



— Tom DeSanto

Sources: Health Affairs, June 17; USA Today; Image: Google Images

Battle on the Front Line of Patient Safety

Nearly 12,000 nurses in the Minneapolis/St. Paul area went on strike on June 10. Their chief complaint was that business decisions are adversely affecting the standards of nursing care and patient safety.

Registered nurses are on the front line for patient safety. Research proves it.

In a study released in the May/June 2010 issue of the Journal of Hospital Medicine, lead author Jeremy Sussman, MD, MS, concludes that "cuts to hospital staffing can hurt interactions between health care providers and patients, threatening robust nurse-to-patient ratios, which have been shown to affect patient safety."

A 2006 study found that hospital with high RN staffing had lower rates of five adverse patient outcomes (urinary tract infections, pneumonia, shock, upper gastrointestinal bleeding and longer hospital stays) than hospitals with low RN staffing.

Another study demonstrated that a 10 percent increase in the proportion of nurses holding a bachelor's degree was associated with a 5 percent decrease in two adverse outcomes: the likelihood of surgical patients dying within 30 days of admission and the odds of failure to rescue.

Mass layoffs of 50 or more hospital employees (with an increasing number of nurses and clinicians) reached a record high in April 2010 according to American Medical News. Nursing strikes, judicial action and lawsuits are running rampant from Pennsylvania to California. Add to this the projected nursing shortage and it's easy to imagine a serious decline in patient safety.

Dr. Sussman and his colleagues suggest that the federal government could connect hospitals' financial stability to patient safety. For example, government stimulus funds could be used to enable hospitals to employ nurse discharge advocates who could help reduce rehospitalization by providing instructions for compliance with medication doses and follow-up visits.

Government funding could also be earmarked to support nurses and clinicians by providing new technologies and methods that have been proven to reduce medical errors. According to the website Dead by Mistake, "every year approximately 200,000 American patients die preventable deaths as tools to make them safer go unused."

The number of innocent casualties is already too high for America not to take bold steps in the battle for patient safety.

— Tom DeSanto

Sources: Sussman, Halasvamani, Davis (2010),"Is the current recession compromising hospital quality?," University of Michigan, Journal of Hospital Medicine, Volume 5, Issue 5; Lovell (2006), "Solving the nursing shortage through higher wages," Washington, DC: Institute for Women's Policy Research; Aiken, Clarke, Sloane, Sochalski, Silber (2002), "Hospital nurse staffing and patient mortality, nurse burnout, and job dissatisfaction," JAMA, 288, 1987-1993; Image: Minneapolis Star Tribune

Beyond the Headlines: U.S. Cancer Costs Double

"US Cancer Costs Double in Nearly 20 Years" was the headline of a recent Associated Press article. At first thought, it's easy to conclude that the major driver is expensive cancer treatment. Maybe not.

The article covered a new study conducted by the U.S. Centers for Disease Control and Prevention. Among the surprising findings:

     - Rising costs were driven by increasing numbers of cancer patients.

     - Costs from inpatient care dropped from 64 percent to 27 percent.

     - The percentage of total U.S. medical costs from cancer treatment remains at 5 percent, unchanged for decades.

 Among caveats for drawing conclusions:

     - Data doesn't include diagnostic tests and scans.

     - The study covers data between 1987 and 2005.

It's likely that the advent of very expensive cancer therapies and greater frequency of cancer screenings over the past five years are contributing to an ongoing rise in costs. Hopefully, this may continue to be offset somewhat by the shift to less expensive outpatient care.

The study also reminds us that demographics will play a significant role. The number of older Americans is increasing rapidly and they're living longer. With age comes the greater possibility of developing cancer.

When we study current costs, will we discover an even greater increase as we multiply a growing number of patients and increasingly more expensive treatment costs? Most likely.

Will cancer patients be able to afford treatment?

Between 1987 and 2005, the proportion of cancer costs paid by private health insurance rose from 42 to 50 percent while out-of-pocket costs fell from 17 percent to 8 percent. That finding was unexpected, but welcome news.

Did that trend continue between 2005 and 2010? Headlines about the increase in personal bankruptcies due to catastrophic medical costs would tell us otherwise.

We can't know for sure until we look beyond the headlines.

— Tom DeSanto

Source: Associated Press article by Mike Stobbe published by google news; Graphic: Tom DeSanto