MedPAC on the Health Care Delivery System

The Medicare Payment Advisory Commission consistently issues reports which have concise analysis and insight into the health care system, with an obvious focus on Medicare implications.  Their latest report discusses various aspects of the health care delivery system.  (MedPAC Report)  One area the Commission looked at is a competitive bid model couple with premium support as an option for the Medicare system.  If the Medicare Advantage reimbursement process were properly designed it would look like this and likely lower costs significantly.  The Commission also examined the issue of payment variations for the same service in different settings, a growing issue because hospitals have been acquiring physicians and moving their services to the hospital outpatient setting where they cost more.  There is no reasons for this and the best solution is pay hospitals the same as physicians get for office-based services.  If hospitals can’t figure out how to provide the services as cheaply as physician offices do, that is the hospitals’ problem.  Services after a hospitalization is an area with significant cost and quality concerns.  Multiple settings may be used, with varying reimbursement formulas and service limits.  The Commission suggests just creating a single bundled episode payment.    In regard to the poorly designed hospital readmission program, the Commission says it is unfairly penalizing hospitals which treat large numbers of poorer patients and also uses the wrong and too few measures and needs to be fixed.  How about scrap the whole thing.  While hospice is a desirable venue for many patients facing end-of-life care, the reimbursement system is flawed and may encourage inappropriate use and lengthy stays.  The Commission also addresses the needs of dual-eligible beneficiaries and ambulance service misuse.  Finally, the Commission says that some geographic adjustment is appropriate for paying health professionals, but the current approach used by CMS is flawed.