MUSING – Medicare Break Even
PL 111-148-the Patient Protection and Affordable Care Act of 2010-begins the most significant revamping of healthcare since Medicare/Medicaid in 1983. Its impact will play out over the next decade, with a “get ready” period of logistical adjustments between now and 2013, a “get set” phase of market expansion from 2013 to 2017, and a “go” stage that amounts to a restructured, more regulated sector by 2020. Over this ten year period, hospital payment cuts and incentives for Medicare (e.g. financial penalties for excess readmissions beginning in 2012); physician payment increases (e.g. 10% bonus payment for 5 years to primary care physicians for Medicare patients); new insurance rules (e.g. coverage of preventive services mandated); new taxes starting in 2013 (e.g. 2.3% sales tax on medical devices); Medicare payment initiatives/pilots (e.g. “independence at home demonstration projects for chronic diseases” starting in 2012 and grant funding for prevention programs starting now); and Medicaid changes (e.g. Accountable Care Organizations to share in Medicaid cost savings) will be “game changers.” In all this, Medicare is the key, first because declining reimbursement is foreseeable, and second, because private insurers are likely to benchmark their payments to Medicare levels. Private physicians (particularly specialists) and for-profit hospitals may opt out of taking Medicare patients (which has already begun). Not-for-profit hospitals will have to absorb those patients. Consequently, the main buzz in healthcare today is “Medicare break even,” which seems unlikely without telemedicine, automated systems, robotics, informatics and process management that integrates and streamlines healthcare delivery.