As a predecessor to health care Festivus.

If there is any wonder why Seniors are confused over the new prescription drug benefit, please read the Medicare fact sheet

Download Medicare_fact_sheet.doc

which is CMS’ version of a press release that came out on Tuesday.  I have read it 3 times and am having a hard time making sense of their rational for premium increases, fee schedule reductions, who pays and who doesn’t pay and how in the world that Medicare will reduce their cost by an “estimated $7.7 billion over the next five years and $20.8 Billion over the next 10 years.  (but I bet I can guess a few ways they will reduce their costs).

Some highlights that I can understand:

-The 2005 spending for physician fee schedule services slowed compared to trends in recent years, though in 2007 it is expected to about 5%

-The 2007 premium increase (which by the way is the subject of the press release in case you missed it) is held down by a provision in current law that, if unchanged, will require a reduction in fees paid by Medicare to physicians (and PT’s!) of about 5%.  Congress has acted to prevent such physician fee schedule reduction from occurring each of the last 4 years.  Even with fee reduction, however, the volume and intensity of physician services is projected to increase by 4.9% in 2007 (I guess this is what they mean by about 5% from the previous section-see above) resulting in projected continuing pressure towards rising costs (like insurances, taxes, supplies, and other costs that providers and business take on without ability to recapture thru price increases?).

Let’s see, Congress didn’t reduce fees in the past 4 years and by CMS’ own account spending for physician fee schedules slowed compared to trends in recent years.  Don’t they get that there really isn’t a relationship between the two and in fact from worker’s comp fee schedule states we know that reduction in fee schedules causes a disproportionate increase in utilization and spending?

-(on page 4) CMS reiterates the growth in utilization of services and wide variation across providers and geographic areas in the use of services shows that Medicare needs to move away from a system that pays for more services, regardless of quality of those services or their impact on beneficiary health (Huh?).

-CMS reiterates their commitment to P4P thru demonstration projects that pay providers more for better quality, better patient satisfaction, and lower overall health care costs.

Now that really alleviates my confusion.

Thoughts?

Larry