Medicare Spending 2010

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http://www.kff.org/medicare/upload/7305-05.pdf

1. Hospital Inpatient Services 27%
2. Medicare Advantage Part C 23%
3. Physician Payments 13%
4. Outpatient Prescription Drugs Part D 11%
5. Other Services (?) 10%
6. Outpatient Hospital Services 6%
7. SNFs 5%
8. Home Health 4%

Total hospital services = 33%.
 
Insurer-owned clinics help prevent big hospital bills

May 5, 2011 — 9:44pm ET | By Dina Overland


Health insurers increasingly are opening their own clinics to help save money. The goal is smarter care, not less care. "It's really just trying to make basic routine services a lot more available," says John Gorman, a consultant who works with some plans that are investing in clinics, "so the hospital becomes the provider of last resort."

The strategy is particularly prevalent among private Medicare and Medicaid plans, which receive formula-driven monthly payments from the government. To make money, these plans must hold down costs, especially hospital spending that has risen an average of 7 percent annually from 2000 to 2009, reports Kaiser Health News.

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Bravo Health Advance Care Center in Philadelphia, for example, provides flat screen TVs, 10-minute waits and medical care delivered by doctors it employs at no cost to patients. The insurer launched the clinic in January 2010 and has opened two more since. By providing urgent care, working longer hours, welcoming walk-ins and offering treatment such as IV therapy not available at most doctors' offices, the clinic can keep patients from running up big hospital bills.

"We don't have the revenue lever that commercial plans have" to keep up with those soaring costs, said Jason Feuerman, a senior executive for HealthSpring, which recently acquired Bravo. "They can just raise their premiums."

The company estimates hospital stays have declined by about 10 percent among the 20,000 patients living near the clinic. Bravo doesn't do this by withholding care, Feuerman noted. "It is about driving quality, about driving down the need for unnecessary [medical services] being delivered," he said.

Likewise, Humana operates six urgent care clinics near Philadelphia as a result of its December acquisition of Concentra that give people alternatives to emergency rooms. In Louisiana, People's Health, another Advantage plan, bought the Stanocola Clinic in Baton Rouge at the end of March, and hopes to build or buy at least four more clinics over three years. CareOregon, a nonprofit health plan focused on Medicaid, has launched four clinics since last June and will open another next month.
 
[SIZE=+2]When Geography Influences Treatment Options[/SIZE]
Physicians in Some Regions Are More Likely to Advise Surgery Over Less-Invasive Alternatives
[SIZE=-1] By Gilbert M. Gaul
Washington Post Staff Writer
Sunday, July 24, 2005
[/SIZE]

FORT MYERS, Fla. -- In the past decade, the rate of back surgery among Medicare patients has increased by more than half, driven by factors including new technology to fuse damaged vertebrae, more advanced imaging to diagnose injury, generous federal reimbursements and greater demand.
Yet even as the numbers swell, there is no clear-cut science for treating back pain. Some doctors favor surgery, while others recommend exercise, rehabilitation and other conservative approaches.
The result is a jigsaw pattern of medical care in which the patient's chance of having surgery often is decided by where he or she happens to live.
In Fort Myers, Medicare patients are twice as likely to have back surgery as those in Miami.
Had Fort Myers's surgeons operated at the more conservative Miami rate, there would have been 4,800 fewer back surgeries from 1992 to 2001 and Medicare would have saved millions of dollars, according to an estimate by James N. Weinstein, chairman of the Department of Orthopaedic Surgery at Dartmouth Medical School. Weinstein has tracked variations in the number of spine surgeries in South Florida for a decade.
Medicare patients in Fort Myers underwent spine surgery at a rate of 6.9 per 1,000 in 2001 -- the latest year for which figures were available. In Miami, the rate was 3.2. Nationally, it was 4.5.
Back surgery is a growing cost to Medicare. In 2003, the government paid about $1.6 billion to hospitals for more than 167,353 spine procedures, not including doctors' fees. The average charge per surgery was $40,000.
Dartmouth researchers estimate that as much as one in three dollars spent by Medicare goes to unnecessary care. In that sense, variations in back surgery in South Florida provide a glimpse of Medicare's inefficiencies.
"It's highly improbable that Medicare retirees living in Fort Myers prefer back surgery two times as often as residents of Miami," Weinstein said. "So if it's not the patients, what is it?"
Weinstein points to what he calls the "surgical signature" of doctors -- idiosyncratic patterns in the likelihood of a doctor choosing to operate. The greater the scientific uncertainty in treatment options, Weinstein said, the more variations appear.
Less clear is the role of hospitals. For hospitals that offer spine surgery, the financial rewards can be substantial. In 2001, spine surgery accounted for more than half of all profits from orthopedic procedures in hospitals but only 21 percent of the volume, according to a study done for the American Academy of Orthopaedic Surgeons.
"It can be very profitable, especially at centers with big volumes," said James H. Herndon, past president of the group and a Harvard Medical School professor. One new, aggressive surgeon can increase the rates in a community "if he comes into an area where surgeons are conservative," Herndon said.
In Fort Myers last year, surgeons at the three hospitals that are part of the Lee Memorial Health System performed 447 spine procedures on Medicare patients, generating nearly $2.8 million, according to data provided by the system. Medicare reimbursements to the three hospitals for spine operations have grown by nearly 50 percent in the past five years.
Chuck Krivenko, the system's chief medical officer, said he is hard-pressed to explain the high rates of back surgery. At first, he suggested it must be because of the annual winter influx of elderly visitors. But the Dartmouth researchers account for seasonal visitors by counting their surgeries as though they occurred at their place of year-round residence.
"I can't explain it," Krivenko said. The neurosurgeons who perform spine surgeries at Lee Memorial "are not what I'd call aggressive neurosurgeons. We have a very good group of what I consider conservative neurosurgeons . . . and we have some of the best outcomes," he said.
Nevertheless, Krivenko said, because treatment for back pain remains discretionary, many doctors are going to opt for surgery. "If the only tool you have is a hammer, everything looks like a nail," he said.
Not necessarily, Weinstein contends. At his hospital, Dartmouth-Hitchcock Medical Center in New Hampshire, patients with back pain are given educational materials and allowed to choose. They often opt not to have surgery.
"What we have found," Weinstein said, "is that patients tend to make good decisions when presented with good information."
Medicare data appear to back up Weinstein. In 2001, the rate of back surgery among Medicare patients in his area was 2.3 per 1,000, among the lowest in the nation.