How Hospitals Can Save Medicare Billions

There are more and more issues surrounding saving Medicare money lately, and there are a lot of ideas swirling around to make that happen.  One idea that has come to the fore and was featured in the Boston Globe is a way to help patients on Medicare, give them better service and better outcomes, and, at the same time save Medicare a lot of money – possibly half of its shortfall.  Is it possible to do all these things at once?  According to experts, it is.

One of the highest costs that Medicare is paying for is stays in the hospital.  Most of these stays are necessary, and nobody is questioning this point.  The issue at hand is that many seniors on Medicare come out of the hospital only to return again within 30 days, and in many of these cases, this could be avoided. 

Research has shown that patients return for several main reasons.  One reason is that they acquired an infection while in the hospital and it has reoccurred or flared up.  Another reason is that they are unclear about what to do upon discharge and their condition worsens because they are not following up correctly.  The third reason is that nobody has followed up with them.

Some readmissions are necessary, and nobody is disputing that fact.  However, studies show that if patients were cared for differently when they were in the hospital in the first place, there would be fewer complications, such as infection, and, as a result, a lower number of patients would return.  It has been suggested that if Medicare paid less for readmissions but gave bonuses to hospitals whose readmissions were lower in number, the outcomes for all parties would be better.  In hospitals where this was tested, the patients had less complications and readmissions, the hospitals and Medicare saved money.

In addition, helping patients understand what needs to happen after discharge is a huge factor in whether they return for readmission or not.  Having a discharge nurse or coach with easy and non-confusing instructions regarding medication and other discharge information has helped lower the readmission rate in hospitals that employed this step.  Also, having a nurse follow-up by calling the patient and discussing what is happening with them has lowered readmissions for cardiac patients in one hospital by over 75%. 

The Boston Globe article suggested that Medicare look at how it is rewarding hospitals, and reward them with bonuses when they save money, rather than paying them well to keep their beds full – even on readmissions.

With Medicare funding at question and lawmakers searching for answers, this is an important issue and the Boston Globe article makes some logical points.  Hospitals and lawmakers out there: are you listening?

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Leavitt Asks for Medicare Help from Lawmakers

Mike Leavitt, head of Health and Human Services wrote to lawmakers a few days ago asking for their help in healing Medicare.  In the position he is in, he should know what some of the essential issues are that face Medicare and he has some straightforward ideas as to how to address these issues and begin fixing them.

Leavitt started out by stating that Medicare has done a great deal of good over the years, and this is important for all of us to remember.  Medicare in and of itself is a good program, but the world, the United States, and the economy today is far different than it was 43 years ago when Medicare first began.  In addition, medical costs have skyrocketed for many reasons including new treatments for diseases such as cancer, heart disease, diabetes and others.  Many incredible medical discoveries have been made, however, the costs of caring for individuals with ongoing medical issues – especially critical issues – is much more prohibitive than in the past. 

Today’s Medicare has more beneficiaries and fewer workers to fund the program.  In addition, the costs of the funding will fall to our children and grandchildren, and if lawmakers – on both sides of the aisle – are not moved to fix the problems inherent in the system sooner, rather than later, the burden on the next generations will be overwhelming. 

Leavitt states that in 1970 the cost per Medicare beneficiary was about $2,000 and now, in 2008, it is about $10,000.  To make matters worse, there are over double the amount of Medicare beneficiaries now as there were before.  Add to this the fact that health care costs have doubled but Medicare costs have quadrupled and baby boomers haven’t yet retired, and this is a recipe for disaster.

It is estimated that in the next 20 years the U.S. will be spending more on Medicare each year than on national defense.  Families who are now spending about 23% of their wages on medical care will be spending over 40% of their wages on medical care, and Medicare will account for about 23% of that price tag.  Add to that the fact that in 1970, about 4 workers paid for each Medicare beneficiary, and currently, less than 4 workers pay for each beneficiary.  Then, looking 20 years ahead, only 2 to 2 and 1/2 workers will pay for each beneficiary, which means that workers will carry a heavy burden and the Medicare system may not be able to handle the toll of paying claims for all the beneficiaries enrolled in it.

Mr. Leavitt is urging Congress to consider these critical issues carefully and act on them in a bipartisan effort to fix as much of the problem as possible before it is too late.  After all, it is our children and grandchildren, as well as their children and grandchildren who will be forced to deal with the problem if it is not dealt with now.

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