MedPAC Got It Wrong (pt 3)

This report acknowledges the record levels of surpluses. Each of those surpluses represents MA costing less than standard Medicare because they come from the capitation and they are absolutely a better use of the Medicare dollar than fee-for-service Medicare gets from spending that same dollar. Plans have created a record number of surpluses each year and they all come from spending fewer dollars per person than standard Medicare. Fee-for-service Medicare is a very poor purchaser of care — and that fee-for-service Medicare program now has its average member each spending more than $5000 in out of pocket costs each year because it is an inferior way to buy care. When we look at the lower amount we are spending on capitation in all of those counties, it is easy to see that MA costs less. We can use that money going forward as our pathway to bringing Medicare spending to much better levels as a country. We don’t need actuarial estimates of relative values of some kind to measure the actual impact of the costs. We can do just like anyone else buying coverage does and measure the difference in actual dollars against the alternative costs of the competing program and we can look at how much the actual dollars go up from year to year for each county in the country. That’s the number we need to bring under control and we can do it by setting the capitation at the right level to achieve that goal. The average per capita costs of fee-for-service Medicare are a very...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Health Policy The Business of Health Care George Halvorson Medicare Advantage MedPAC Source Type: blogs