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What Medicare Services to Cut, Now: ‘Dual Eligibles,’ Doubly Expensive

POSTED BY Galen Institute on June 1, 2011.

There are nearly nine million people, representing one in five Medicare beneficiaries, who are eligible for services through both Medicare and Medicaid — often called “dual eligibles.” They are the poorest and often the sickest beneficiaries, many of whom have multiple acute illnesses and long-term care needs.

They consume about 25 percent of Medicare’s spending and nearly half of Medicaid’s — more than $250 billion in 2008. Yet 95 percent of them are stuck in an antiquated 1960s fee-for-service payment model and are bounced back and forth between the two programs. Many patients get lost in a crevice between Medicare and Medicaid where no one is overseeing their total care, leading to gaps, duplication and poor outcomes.

Providing them with truly integrated care could significantly improve their lives and also help reduce health costs by providing timely, appropriate managed treatment.

Melanie Bella, who directs the new Federal Coordinated Health Care Office, recently announced that 15 states have been selected to receive federal grants to develop programs to better coordinate care for dual eligibles. This is a good first step.

Ms. Bella has previously testified that “the most promising option, though not ‘true integration,’ is to promote virtual integration through Medicare Special Needs Plans (S.N.P.s), wherein dual eligibles enroll in the same managed care organization for their Medicare services and, given a contract between the S.N.P. and the state Medicaid agency, their wrap-around acute and long-term care supports and services.”

Many experts on Medicare will suggest that the solution to lower spending is for the government to “negotiate” prices for prescription drugs. But that ignores the evidence that the current prescription drug benefit program is coming in at 41 percent under expected costs because private plans compete to offer the elderly low prices and value.

Others, including President Obama, clearly believe the problem will be solved by the Independent Payment Advisory Board, and he wants to double-down on the board’s price-slashing powers. This is shortsighted, destructive and counterproductive, and it ignores centuries of history of the impact of price controls in creating shortages and reducing quality.

Instead, the focus should be on providing tools and solutions for those who are eligible for Medicare and Medicaid to receive better-coordinated care by contracting with care management plans, a strategy to save money and make these programs work better for vulnerable senior citizens.

Posted on The New York Times: Room for Debate, June 1, 2011.

Filed Under: Uncategorized

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