A Pre-Christmas Proposal to Bring Down Medicare Costs

Bundled payments, also known as episode-based payment, episode payment, episode-of-care payment, case rate, evidence-based case rate, global bundled payment, global payment, global package payment, package pricing, or packaged prices..have been proposed as a strategy for reducing health costs, especially in the Obama administration.

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December 22, 2011- Ekekiel Emanuel, MD, PhD, (born 1957), former associate professor at Harvard Medical School, bioethicist at NIH, and Obama health advisor, and, as of September 2011, a Professor at University of Pennsylvania Medical School and Wharton and regular New York Times contributor, expresses these opinions in a December 19 in a NYT’s Opinionator column entitled “For Medicare, We Must Cut Costs Not Shift Them.”

“The Affordable Care Act already created a mechanism to reduce spending in Medicare to the growth in gross domestic product plus one percentage point. Starting in 2020 the Independent Payment Advisory Board is required to submit proposals to cut Medicare spending if the growth in spending exceeds that level. However, the board is specifically prohibited from rationing care, raising taxes or premiums, increasing cost-sharing, restricting benefits or modifying eligibility — thereby protecting beneficiaries. Its proposals become law unless Congress or the president votes to institute other reforms that save as much money.”

"What should be done about Medicare? To address the root of the cost problem, we must change how we pay doctors and hospitals. We must move away from fee-for-service payments to bundled payments that include all the costs of caring for a patient, thereby encouraging providers to keep patients healthy and avoid unnecessary services. Medicare should announce that it will make this change by Jan. 1, 2022, and that it will begin by switching to bundled payments for cardiac and orthopedic surgery within one year and for cancer patients within five."

"Premium support will not reduce the government’s costs without shifting those costs to older people who can’t afford them. Only a plan that transforms how we pay doctors and other health care providers can do that.”

Tweet: Ekekiel Emanuel, MD, PhD, Obama health advisor, says to cut Medicare costs we pay doctors for episodes of care rather than FFS.