A Medicare reform primer

The use of the federal budget process to change Medicare policy is of importance to physician executives because of its impact on the health care delivery system. In particular, changes in Medicare policy, driven by the need to shore up the solvency of a politically popular program, will create changes for other public and private purchasers of health care. Reforming Medicare through the budget process is not new. Physician fees have been frozen, reduced, and selectively increased as a result. In 1983, the hospital reimbursement methodology was changed to prospective payment through this process. The budget process will continue to be used to make policy changes because of the large amount that Medicare occupies of the federal budget. Given the profound impact changes in Medicare can have in other health care sectors, the lack of consensus for a long-term solution would mean those in the health care arena will have to be prepared for significant annual policy changes through the reconciliation process.     

Medicare's ESRD Program, Part 1: Dialysis.

The federal End State Renal Disease (ESRD) program was created by statute in 1972 as a general population entitlement to be administered by Medicare. The program extends all Medicare benefits to patients, regardless of age, who are diagnosed as having ESRD, as long as they are fully insured for old age and survivor insurance benefits (Social Security), are entitled to monthly insurance benefits under the Social Security Act, or are spouses or dependent children of individuals with the foregoing Social Security benefits. About 7 percent of all ESRD patients are excluded from this entitlement by these criteria. The two major therapies embraced by the ESRD program are renal dialysis and kidney transplantation. In this first part of a two-part article, dialysis is the focal point. Kidney transplants will be covered in the May-June issue of Physician Executive.     

Physician self-referral on the fast track

One of the most hotly debated areas of health care fraud and abuse has been the prohibition on physician self-referral. Now, this prohibition is limited to physicians referring patients to clinical laboratories in which they have an ownership interest and for which the services are reimbursed under the Medicare program. However, this law may be expanded to include other health care services to which physicians cannot refer, as well as to other federal programs and private payers. While Congress works toward this end, many state governments have already taken the lead in expanding the prohibition beyond clinical laboratories and the Medicare program. "Health Law" is a regular feature of Physician Executive contributed by Epstein, Becker, and Green. Mark Lutes of the firm's Washington, D.C., offices serves as editor of the column.     

Focus on a necessary benefit

More than 9,000 home health agencies provide services to Medicare beneficiaries. In 1996, 10 percent of Medicare beneficiaries received home health services at a total cost of +18 billion. Rapid growth has forced changes in the structure of the benefit payment system and has made home health an attractive area for fraudulent activities which are now being targeted. Collectively, this important benefit and relatively new industry will face changes in the way they do business and deliver services.     

'90s may be decade for physician payment reform

The '80s in health care were characterized by reform of Medicare payment for hospital services. The '90s are likely to be characterized by reforms in the manner in which physicians are paid for services to Medicare beneficiaries. In this article, the authors examine the steps that are already under way or proposed for reforms in the payment for physician services under Medicare.     

The ethicist

The 1990s seem drawn for major changes in the U.S. health care delivery system. After a quarter century of piecemeal changes to compensate for the cost dislocations caused by passage of the federal Medicare and Medicaid programs, legislators, moved by a high level of demand from buyers, third-party payers, and consumers, are at last positioned for some structural revamping. Nothing is certain, however, as evidenced by the shifting deadline for introduction of the current Administration's approach to solutions. In this article, the author uses a fictionalized scenario to imagine the status of our health care system in the year 2000. As in 1990, much will remain to be done, even if much will have been accomplished.     

Medicare private contracting: increasing patient choice and access?

Congress modified the Medicare program through the Balanced Budget Act of 1997 to expand patient choices for payment to physicians and certain other practitioners by allowing private contracting. This represents a shift in policy that has broad consequences for health care financing and program integrity. The effect of private contracting on quality and access to care remains unknown. Quality and access should be the most important measures of its success or failure. Out of pocket costs to seniors and vulnerable patients must also be watched closely.     

National health reform advocates retrench and prepare for Medicare

With the failure of President Truman's efforts to pass compulsory health insurance for all, national health reform (NHR) advocates began to redirect their political attention to a politically powerful group of Americans who were simultaneously vulnerable from a health care point of view--the elderly. This effort culminated in the passage of Medicare under President Johnson. This article will focus on antecedents to passage of Medicare that can be found in the Eisenhower and Kennedy administrations. It will also discuss other facets of health reform proposals from the Eisenhower administration. While most proposals never became law, the legislative intent of many of them--outlawing cancellation of policies, a minimum standard health benefit package, establishment of regional health authorities, preference for prepayment plans, and establishment of a reinsurance pool administered by the federal government--is currently under active discussion by the Clinton health reform task forces.     

The Effects of Health Insurance and Self‐Insurance on Retirement Behavior

This paper provides an empirical analysis of the effects of employer‐provided health insurance, Medicare, and Social Security on retirement behavior. Using data from the Health and Retirement Study, we estimate a dynamic programming model of retirement that accounts for both saving and uncertain medical expenses. Our results suggest that Medicare is important for understanding retirement behavior, and that uncertainty and saving are both important for understanding the labor supply responses to Medicare. Half the value placed by a typical worker on his employer‐provided health insurance is the value of reduced medical expense risk. Raising the Medicare eligibility age from 65 to 67 leads individuals to work an additional 0.074 years over ages 60–69. In comparison, eliminating 2 years worth of Social Security benefits increases years of work by 0.076 years.     

Modern health care depends on technology, Part 2

The first article in this series presented the principles and vocabulary of technology assessment and described the process used at St. Luke's, a tertiary care hospital in Bethlehem, Pennsylvania. This second article will describe the resources needed to support a technology assessment program. Technology planning, acquisition, and management will also be discussed. Historically, the health care marketplace has welcomed new technologies. In a future in which providers will be accountable for the outcomes of the care they provide, the ability to evaluate new and existing technologies will be essential for success.     

But 'twas a famous victory

The Omnibus Budget Reconciliation Act of 1989 sets forth the basic parameters for physician payment reform. The program requires the Health Care Financing Administration to (1) set (regulate) all physicians' fees for services delivered under Part B of Medicare commencing January 1, 1992, with a four-year phase-in period, (2) limit the dollar amounts of balance billing by tying those amounts to the regulated rates, and (3) establish "Volume Performance Standard Rates of Increase" (previously known as "Expenditure Targets") as a mechanism for attempting to regulate the quantities of services delivered.     

Changes in physician and non-physician relationships

At the end of World War II, one-third of the nation's hospital administrators were physicians. During the 1950's through the mid-1980's a new breed of masters'level administrator, with well-honed coordinating skills, orchestrated a major expansion of new programs, services, and facilities. With the advent of the Medicare prospective payment system (PPS), more governing boards restructured their administrative staffs with corporate titles. Meanwhile, physicians sensed that trustees were becoming far more concerned with bottom line performance to repay a mounting debt that hospitals had incurred to remain technologically competitive. Since mergers and integrated health systems by themselves will be unable to generate significant operating efficiencies, governing boards will be forced to change direction and shift back to recruiting physicians as their CEOs or in other senior positions to assure themselves of the clinical leadership required to implement the managed care concepts of reducing utilization and cost, and simultaneously enhancing quality of patient care.     

Führungskulturen an der Universität: Feedbackinstrumente als Schlüssel zur Personalentwicklung

Management culture at German universities. Guided feedback as an instrument to develop leadership skills In future, universities will be fundamentally more exposed to national and international competition than they are today. The challenges for Germany’s universities arising from this are increased by the reform pressure towards a modernization of the governmental administration. On grounds of these new tasks and challenges, inner-organizational changes as well as the development of a leadership responsibility and further training of the employees’ social skills are necessary. Therefore up-to-date personnel development belongs to a university’s modernization program. At the Berlin University of Technology appraisals by subordinates are practiced in order to design a fair leadership culture. The crucial factor for this is the professor’s and administration manager’s identification with their leadership role. For a further process consultation the adoption of coaching is recommended.     

Medical resource allocation: rationing and ethical considerations--Part I

The United States' system of high-quality but expensive and poorly distributed medical care is in trouble. Dramatic advances in medical knowledge and procedures, combined with soaring demands created by growing public awareness, the cost of private hospital and medical insurance, and Medicare and Medicaid, are burdening the medical care delivery systems. The costs of medical care have reached levels that can no longer be sustained. Government officials, insurance planners, labor leaders responsible for union health care benefits, and ordinary citizens are questioning whether it is acceptable to limit health care based on economic considerations. If health care is deemed a social good, the method of allocation must be addressed. Unless society decides that other priorities of the infrastructure are to be subjugated to health service delivery, difficult decisions will be forced upon us, consciously or by default. The discussion in this two-part article explores the ethical considerations of the more formalized approaches to resource allocation that presently exist in our society.     

The emerging health care landscape. The drivers of health care

Other than hold on tight, how does a health care system successfully weather the turbulent conditions facing the industry? This article focuses on key drivers in the three main segments of the health care market: employer-based, commercial/ERISA, and Medicare and Medicaid. Effectively managing the dynamics within these markets will be vital to a delivery system's success and its ability to withstand the forces of change. Given the market changes that are occurring, how does an academic medical center, emerging hospital-sponsored IDS, or a large physician clinic trying to develop a system determine the necessary components and structure? What kind of system will work best? The considerations are numerous and explored in this article.     

Development of a local Physician Executive Leadership Program

Dramatic changes are occurring at a rapid pace throughout the United States in virtually all aspects of health care delivery. Physicians, hospitals, consumer groups, and others are thus facing new and greater uncertainties and are forced to adapt to a continually shifting environment. Fundamental change of this magnitude has and will continue to result in the formation of new alliances and organizations within which physicians and others will be forced to function. To participate effectively in these processes of change and to maintain influence within these new organizations, physicians will need leadership and management skills. To address the challenges facing current physician leaders and the need to develop more effective leaders, Sharp HealthCare developed its Physician Executive Leadership Program. This article describes the program and summarizes some of the lessons learned regarding the training of physician executives and leaders in today's changing health care environment.     

Cost shifting: the final straw in federalization of health care

While cost controls applied by Medicare and indemnity insurance programs initially helped curtail abusive medical billing practices, creative billing techniques have since resulted in runaway medical costs and rising insurance premiums. Employers have been forced to increase employee's contributions to health care by increasing deductibles, copayments, and coinsurance or by simply dropping health care benefits. If National Health Insurance comes to pass, and that is a cry now coming from major employers, it will be followed in time by federalization of all health care delivery systems, including Workers' Compensation. It is the providers who shift their fees into Workers' Compensation, which pays from the first dollar, who will cause the business community to petition Washington for relief. It will claim the need for cost controls in Workers' Compensation to keep American business competitive in world markets.     

Designing information systems for strategic decisions

In this article the authors argue that recent events have given rise to a need for a new class of information related to strategic decision-making. They describe some of the characteristics of “ideal” systems to meet this need and suggest a program of less sophisticated systems which will develop towards that ideal.