Outline
2009 National Health Policy Conference
Sponsored by AcademyHealth and Health Affairs
Context: fiscal situation
Two different ways to look at Medicare policy re: workforce
Breakout session:
Strengthening the Healthcare Workforce through
Policy and Planning
•
•
Medicare as significant financer of graduate medical
education
Medicare as payor/shaper of delivery system in which
health professionals will work in the future
Jack Ebeler
February 3, 2009
11:30 am – 1:00 pm
Context: fiscal situation: health care (both public
and private) continues to grow as a share of GDP
Context: the federal budget: Medicare and
Medicaid account for higher shares of GDP and
drive the federal budget up as well
80.0%
70.0%
70.0%
60.0%
Rest of health care
Medicaid
60.0%
50.0%
50.0%
Medicare
40.0%
30.9%
Medicaid
40.0%
3.7%
30.0%
30.0%
25.6%
10.0%
19.9%
3.7%
1.4%
2.7%
5.9%
2007
2030
20.0%
10.0%
15.6%
2.5%
0.0%
Medicare
3.1%
11.4%
Social Security
3.1%
15.6%
2.5%
20.0%
9.4%
9.4%
1.4%
2.7%
4.3%
5.9%
6.1%
6.1%
6.4%
9.9%
9.8%
9.7%
9.6%
2007
2030
2050
2082
Other, non interest
0.0%
2050
2082
CBO Long Term Budget Outlook, 2008, Alternative Fiscal Scenario
The federal budget: budget projections far exceed
historical levels of taxation
80.0%
CBO Long Term Budget Outlook, 2008, Alternative Fiscal Scenario
Medicare is substantial supporter of GME
In 2007, Medicare payments for GME totaled $8.9 billion
70.0%
Medicaid
60.0%
50.0%
40.0%
Average tax
revenue base
Medicare
3.7%
30.0%
Social Security
3.1%
15.6%
2.5%
20.0%
10.0%
9.4%
1.4%
2.7%
4.3%
5.9%
6.1%
6.1%
6.4%
9.9%
9.8%
9.7%
9.6%
2007
2030
2050
2082
• $2.9 billion in direct costs for graduate medical education
• $6.0 billion for the indirect costs – the IME adjuster
– About ½ is actual estimate of the costs of care
associated with interns and residents
– About ½ is extra payment on top
Other, non interest
0.0%
(MedPAC, October 2008 presentation)
CBO Long Term Budget Outlook, 2008, Alternative Fiscal Scenario
1
With pipeline for education, look out over ten years
Medicare will provide about $90 billion over the next 10 years
• About $30 billion for direct costs
• About $30 billion for the actual indirect costs
• About $30 billion in addition of indirect costs
Issue is whether/how to shape that funding -- at appropriate
levels -- to support the changes needed
Medicare as payor/supporter/shaper of delivery
system
Problems well known, and driven by general problems with
FFS medicine
• Care coordination is all too rare
• Specialty care favored over primary care
• Quality inadequate and highly variable
• Health care costs high, variable and unsustainable
Need for fundamental reform; improving delivery is focus of
change; need to define payment approaches to support and
incent the changes
(MedPAC June 2008 Report; September Testimony to Senate Finance Committee)
MedPAC direction for payment and delivery reform
Current FFS
payment systems
Payments within
each payment silo
Attention to
updates and drive
for accuracy and
efficiency
Recommended
tools
•Use CE
information
•Link payment to
quality
•Report resource
use
•Bundle services
within a payment
system (e.g. ESRD)
•Create pressure
for efficiency
through updates
Potential system
changes
•Medical home
pilot
•Payments
“bundled” across
existing payment
silos and over time
•Accountable care
organization
Selected MD payment directions
• Promoting primary care
– Fee schedule adjustment for primary care
– Medical home pilot:
• Rigorous standards
• Care coordination for those with multiple chronic
condition
• Monthly fee in addition to FFS payments
– Change RUC process
• Measure and report resource use
• Payment accuracy for imaging
(MedPAC June 2008 Report; September Testimony to Senate Finance Committtee)
Conclusion
• Issue is how to shape health professions education:
– Not to support past or current system
– But to lead and participate in the health delivery system
needed in the future
• Medicare payment policy can help shape that delivery
system, and support and incent the changes in education
• Balancing act: need for clear direction and incentives – a
vector of change - and need for ongoing adaptability within
health professions education
THANK YOU
Jack Ebeler
Jack@EbelerConsulting.com
202-669-5444
2
Growth in federal health spending: “excess cost
growth”, not aging, is the issue
The federal budget: Medicare and Medicaid
account for higher shares of GDP and drive the
federal budget up as well
80.0%
70.0%
Medicaid
60.0%
50.0%
Medicare
40.0%
3.7%
30.0%
Social Security
3.1%
15.6%
2.5%
20.0%
10.0%
9.4%
1.4%
2.7%
4.3%
5.9%
6.1%
6.1%
6.4%
9.9%
9.8%
9.7%
9.6%
2007
2030
2050
2082
Other, non interest
0.0%
CBO Long Term Budget Outlook, 2008, Alternative Fiscal Scenario
CBO, November 2007
Variation: within US (Medicare); International (US
V. OECD)
We see variation both within the
U.S., (Medicare) as well as
among the U.S. and other
nations.
One message is that, within the
U.S. regions and states have
likely achieved health
spending levels well within
the norms of the next highest
nations.
Note: there would undoubtedly
be substantial variation
within other nations as well.
Medicare Variation
28 %
61 %
$7,000
$6,304
$6,000
$5,444
$4,940
$5,000
$4,439
$3,922
$4,000
$3,000
$2,000
$1,000
$0
1 (lowe st)
2
3
4
Medicare Spending Q uintile
5 (highest)
US/International Variation
33%
16%
14.6%
72%
14%
12%
10%
8%
8.5%
7.7%
7.8%
United
Kingdom
Japan
10.9%
11.2%
Germany
Switzerland
9.6%
9.1%
33
6%
4%
2%
0%
OECD median
Australia
Canada
United States
3