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Declining Quality of Care
November 15, 2007 • Volume 7, Issue 45Since 2003, payments to Medicare private health plans have more than doubled and now top $60 billion per year. The increased funding has boosted insurance company profits and enticed more companies into the Medicare program, but what has it meant for the quality of health care received by older adults and people with disabilities who sign up for these plans?
It has gotten worse.
That sums up the findings of research presented last week to the Medicare Payment Advisory Commission (MedPAC), a nonpartisan expert commission that advises Congress on Medicare issues.
Compared to the period preceding the rapid rise in plan payments (2001-2003), more Medicare private health plans now have enrollees who experienced a sharper decline in health than is expected for people at their age and with the illnesses they have. The period of escalating plan payments (2004-2006) has also been accompanied by a sharp decline in the number of plans that have enrollees whose physical health was better than expected over this time period.
“I fear we are going backwards,” MedPAC Chairman Glenn Hackbarth concluded.
The response of the insurance industry’s spokesman was to suggest that Original Medicare performs even worse than the private plans—a claim that is not supported by any data. At any rate, “What about the other guy?” is not much of a defense for the extra $8 billion a year the private plans are getting above the cost of caring for people in Original Medicare.
Private plans were brought into Medicare on the promise that they would be less expensive—that has proven false—and that they would “manage care” and could thus deliver higher quality care to their members. Now, it seems, that promise is equally false. Every justification put forward for overpayments to the insurance middlemen in Medicare evaporates upon closer inspection.
The potential savings from pegging plan payments to costs under Original Medicare—$54 billion over the next five years—could be better used to improve Medicare coverage of mental health and preventive services, and to make coverage more affordable for low-income people with Medicare.
Medical Record
“We're devolving, and moving away from better care for Medicare beneficiaries, more efficient care” (Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission [MedPAC], MedPAC Public Meeting Transcript, November 8, 2007).
“Payments to Medicare Advantage plans increased from $36 billion in calendar year 2004 to about $60 billion in 2006. CBO projects that those payments will increase to $77 billion in 2007 and $196 billion by 2017 and will total $1.5 trillion over the 2007–2017 period. Because payments to Medicare Advantage plans are higher than payments made to FFS providers, shifts of enrollment to Medicare Advantage plans result in higher net costs for the Medicare program overall. CBO projects that the share of Medicare spending for Part A and Part B benefits that is paid to Medicare Advantage plans will increase from 17 percent in 2006 to 27 percent in 2017” (Peter R. Orszag, director of the Congressional Budget Office, “Testimony on the Medicare Advantage Program before the Committee on the Budget U.S. House of Representatives,” June 28, 2007).
“My client is in a WellCare Medicare plan in Hillsborough County, Florida. He was in a motorcycle accident earlier this year and ended up having to have a leg amputated. During this procedure, it was discovered that he has leukemia. He started receiving treatment right away at the hospital where he was taken after the accident. WellCare told him he had to receive additional treatments at the hospital in his network. He began receiving treatments there, but needed more extensive care, so he was sent to the Mayo Clinic, which was out of network. WellCare eventually approved his out-of-network chemotherapy and radiation treatments, which were scheduled to last five months. Two and a half months into the treatment, WellCare withdrew the authorization, but apparently failed to advise the hospital or the patient. His treatments ended in July 2007, and bills started rolling in in August. He now has over $22,000 in bills for ‘unauthorized services” (Story submitted to the Medicare Private Health Plan Monitoring Project, Medicare Rights Center, September 13, 2007).
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The Louder Our Voice, the Stronger Our Message
Asclepios—named for the Greek and Roman god of medicine who, acclaimed for his healing abilities, was at one point the most worshipped god in Greece—is a weekly e-newsletter designed to keep you up-to-date with Medicare program and policy issues, and advance advocacy strategies to address them. Please help build awareness of key Medicare consumer issues by forwarding this action alert to your friends and encouraging them to subscribe today.
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The Medicare Rights Center (MRC) is the largest independent source of Medicare information and assistance in the United States. Founded in 1989, MRC helps older adults and people with disabilities get good, affordable health care.
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