Tuesday, August 4, 2009

Invest in the Health Status of Future Medicare Beneficiaries: What a Good Idea

The folks at Healthways are making a good point about another way to 'bend the curve' for Medicare.

Even though this is a 'white paper,' the DMCB believes it passes muster because it would otherwise be good enough to appear in a peer-reviewed journal, there is sufficient transparency in the description of the methods, but most importantly, time is pressing and health reform is nigh.

Basically, the researchers at Healthways downloaded a sample of Medicare beneficiaries' claims data and sorted them into one of three buckets using the very reliable ' CMS Hierarchical Condition Category (HCC)' methodology: persons were either 'high,' 'medium,' or 'low' risk. They then examined the financial impact of modifying the burden of chronic disease so that a) fewer persons were in the higher risk categories at the time they joined Medicare, or b) fewer persons transitioned to higher risk categories after they entered Medicare. Depending on the various scenarios, mind-numbing hundreds of billions, more than a trillion or perhaps even gazillions of dollars were saved. The report also correctly points out the limitations of their analyses and compares the conservative HCC approach to other widely accepted categorizations.

They make a good point because they demonstrate that an approximate 10% shift in either scenario toward lower risk, especially for a better health status of more persons starting Medicare, would generate the kinds of savings necessary to pay for a lot of health reform. Up until now, it hadn't occurred to the DMCB (or perhaps many other policy makers) that Medicare had such a huge stake in reducing the burden of chronic conditions among its future beneficiaries. The Medicare program could therefore reduce its costs if Federal policy promoted the right combination of incentives and penalties in the workplace or in our living spaces to help us all be more healthy when we get that Medicare card. Of course, that would cost and eat into the hundreds of billions of dollars of projected savings, but the idea is worth exploring.

The DMCB wishes it had thought of that idea.

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