The Price of Avoiding Death is Steep

I recently talked with Pharmacy Times about the real cost of avoiding death at the end of life. If you'd like to read what I had to say, click here.

5 Keys to Reforming U.S. Healthcare

1. Reform Medical Coding: Coding and physician reimbursement is the cause of most problems in healthcare.

2. Simplify Medicare: Why is Medicare divided into multiple insurance products Part A, Part B, Part C, Part D, and Hospice? Add Medicaid and Veterans insurance and you have needless confusion around government insurance eligibility, funding and administration. These should be a single standard Government insurance policy. This standardization would save billions.

3. Standardize the billing and payment formula for all health insurers - Medicare, Anthem, United, etc. The formula should not promote the volume of care because volume promotes fraud, increases complexity, and increases spending.

4. Eliminate the health insurance requirement for “medical necessity” - it frustrates patients and caregivers and is unnecessary if payment is not based on volume.

5. Reform Hospice: Eliminate the six-month death certification and replace it with a terminal diagnosis, allow curative care in hospice, replace the coding payment formula with expense reimbursement and enhance home care benefits. Evidence demonstrates these reforms will improve care, access, and lower costs.

Time's Running Out for Medicare's Trust Fund

A recent article from MarketWatch brings up an important point: The Medicare trust fund is in trouble, but not for the reasons you might suspect.

The headline is a whopper: Medicare Advantage could get up to $1.6 trillion more [emphasis mine] than it’s entitled to over the next decade, and that will hurt the Medicare trust fund.

Here's a trillion-dollar question--why is Medicare Advantage getting so much money? And why is the federal government promoting this financial insanity?

In theory, Medicare Advantage was meant to demonstrate the private sector's ability to promote competition and lower costs. In practice, that approach has failed over the past two decades. The fact is that healthier Medicare Advantage (MA) members cost the government more per patient than sicker traditional Medicare members on a Per Member Per Month (PMPY) basis.

My perspective is this additional cost is primarily due to coding and risk scoring, and it's no wonder why there are now over 3,000 Part C private insurers cashing in on higher reimbursement rates. Per the MarketWatch article, the Committee for a Responsible Federal Budget (CRFB) believes “these overpayments stem from incentives that lead MA plans to report enrollee diagnoses more completely than physicians billing traditional Medicare. As a result, MA beneficiaries appear sicker than they are relative to traditional Medicare beneficiaries which leads to higher payments."

In short, coding is the culprit here. Using Coding to determine reimbursement enables misleading billing practices that insurers game for their company's gain. As I've argued before, coding is the greatest problem in healthcare (See Code Red Part 2: Improving Healthcare Requires Trade-Offs, Not Solutions).

One might think that draining the Medicare Trust Fund by over a trillion dollars is irresponsible, especially for the sake of a program that was supposed to save money. Being a (Medicare) Trust Fund Baby (Boomer), has me wondering why Medicare and Congress continue to authorize this strategy.