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Payers & Providers Midwest Edition – Issue of October 16, 2012

Payers & Providers Midwest Edition – Issue of October 16, 2012

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Published by PayersandProviders
Payers & Providers is the Midwest's premier healthcare business journal.
Payers & Providers is the Midwest's premier healthcare business journal.

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Published by: PayersandProviders on Oct 16, 2012
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December 4-5
Calendar 
16 October 2012
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Midwest Edition
E-Mailinfo@payersandproviders.comwiththe details of your event, or call(877) 248-2360, ext. 3. It will bepublished in the Calendar section,space permitting.
Vouchers Could Spike Premiums
 Michigan, Illinois Could See Biggest Increases
The type of proposal championed byRepublicans to overhaul Medicare by givingbene
ciaries a
xed amount of money topurchase insurance could lead to signi
cantincreases in premium costs in some parts of the country, according to anew study.If the plan had been in place in 2010, sixin 10 Medicare bene
ciaries—about 25million people both in traditional Medicareand in private Medicare Advantage plans —would have faced higher premiums if theydidn’t switch to a cheaper plan, according toresearchers at the
Kaiser Family Foundation
.(KHN is an editorially independent program of the foundation.)The study modeled the impact of ageneric version of premium support, underwhich bene
ciaries would receive a de
nedsubsidy, or voucher, to buy health insurance ina competitive market instead of getting aguaranteed set of bene
ts as Medicare hastraditionally provided. That payment would betied to the second lowest cost plan offered inan area or traditional Medicare, whichever islower. This kind of a change is a central part of the House Republican budget written by Rep.
Paul Ryan
of Wisconsin, now the GOP’s vice-presidential candidate, and it has also beenembraced by GOP presidential nominee
MittRomney
. Even a few Democrats have
irtedwith such a plan as a way to leverage marketef 
ciency to rein in the spiraling cost of Medicare.The new study estimated how the planwould have worked in 2010 by looking at thecost of traditional Medicare and privateMedicare Advantage plans around the country.The study’s authors emphasized that
!
theirmodel was not an exact replica of any existingproposal for a variety of reasons, includingthat most plans, among them Ryan’s, wouldn’tphase in for a decade and even then wouldaffect only new Medicare bene
ciaries.The study found that 59 percent of Medicarebene
ciaries would have paid higherpremiums in 2010 unless they shifted into acheaper plan. In California, Michigan, New Jersey, Nevada and New York, average extrapremiums would exceed $100 a month, andin Florida they would exceed $200 a month,the study calculated.Medicare spends vastly different amountsper bene
ciary around the country, rangingfrom less than $500 a month per bene
ciaryin some places to more than $900 a monthper bene
ciary elsewhere. That’s oftenbecause people in some areas of the countryare sicker and need more care; it’s alsobecause providers in some places favor moreinterventions and more expensive ones. Inthose high-cost areas, bene
ciaries would seesigni
cant monthly increases in premiums if 
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Continued on Next Page
 
WEBINAR Thursday, October 25, 2012 Noon, CDT
MEDICAID EXPANSION: 2014 AND BEYOND
Please join
Lucien Wulsin
, Executive Director of the Insure the Uninsured Project, and ElizabethBenson Forer,
CEO of the Venice Family Clinic
, to discuss the challenges of Medi-Cal expansionunder the ACA.
a HealthcareWebSummit Event
co-sponsored by
PAYERS & PROVIDERS
 
 
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Payers & Providers
Page 2
Top Placement...Bottomless Potential
Advertise Here
(877) 248-2360, ext. 2
In Brief 
Hospital EmployeesCost More To TreatThan Other Workers
A study by an Ann Arbor, Mich.-based research firm concluded thathealthcare spending is much higheron hospital employees than thegeneral population.The study examined healthcaredata for 740,000 hospital workersnationwide during 2010, andcompared them to data for workersin other professions.According to the study by
Truven Health Analytics
, formerly apart of Thomson Reuters,healthcare spending is 9% higheron hospital employees than thegeneral population. They are athigher risk for chronic conditionssuch as depression and diabetes,and are 5% more likely to behospitalized than the population atlarge.Moreover, the averagecommunity hospital expends 4% of its operating revenue on healthcarebenefits. Those benefits alsoconsume about 68% of alloperating profit for thoseinstitutions.“Hospitals and health systemshave a compelling opportunity toimprove the health of theirworkforce,” said
Michael Taylor
,M.D., vice president and nationalbusiness medical leader for TruvenHealth Analytics and co-author of the study. “In doing so, they willstrengthen their businessperformance and set the standardfor the broader community.
Meridian Enters Dual-Eligible Market
Continued on Page 3
NEWS
Continued on Next Page
MEET YOUR FELLOW READERS
Need to promote a conference? Or your brand?
Payers &Provider 
!   
e-mail list for all editions is available for yourmarketing needs. Reach out to more than 12,000healthcare professionals who read our publications. Callour advertising director
Claire Thayer
at (503) 226-9850,or e-mail her atclairet@mcol.com.
Vouchers
(Continued from Page One)
they remained in traditional Medicare. Thestudy found people in Los Angeles would havepaid $260 more and people in Miami wouldhave paid $492 more, for instance.In other regions where Medicare costswere low—such as Alaska, Delaware, Hawaii,Wyoming and Washington, D.C.— people intraditional Medicare would not pay more, butpeople in many private Medicare Advantageplans would face higher premiums if theydidn’t want to change to traditional Medicare.People in Portland, Ore., for instance, wouldhave paid $211 more a month and people inHonolulu would have paid $254 a month tostay in their preferred private plan. About onein every four Medicare bene
ciaries are nowenrolled in these private plans, some of whichare preferred provider organizations whileothers are HMOs.Overall, premiums would increase 27%nationwide. Although many Midwest stateswould see lower premiums increases, thestudy projects a 43% rise for Michigan and a41% boost for enrollees in Illinois.Although the
ght over premium supportoften has been characterized as a battlebetween defenders of traditional Medicare andproponents of private health plans, the studyfound that it could have a substantial impacton people who enrolled in MedicareAdvantage plans. Nationwide, 88% of thosebene
ciaries would have paid more to stay intheir plans, averaging $87 more per month, if it had been in place in 2010.Of course, getting many bene
ciaries toswitch to less expensive plans is how thearchitects of premium support envision savingmoney. They say it will bring pressure oninsurers, doctors and hospitals to offer lowerprices. The study noted, however, that suchshifts might mean signi
cant changes in thetype and quality of care for bene
ciaries.In some regions, the low cost plans might beHMOs, which have tightly controllednetworks of doctors and hospitals. If bene
ciaries switched from traditionalMedicare to HMOs,
!
they might not be able tokeep seeing their regular doctors or go to theirpreferred hospital. In other areas, bene
ciaries–perhaps people in private plans thatcoordinate care – might not like shifting intoless costly traditional Medicare."Bene
ciaries' preferences and planchoices are not purely driven by premiums,and some bene
ciaries may not view the low-cost plan, whether a private plan or traditionalMedicare, as optimal for meeting theirindividual needs and circumstances," wrotethe authors, led by analyst
GretchenJacobson
.Other studies have found that only asmall portion of Medicare bene
ciaries switchtheir Part D prescription drug or MedicareAdvantage plans each year, even when doingso could save them money. "There aretradeoffs involved in making changes and weknow from Part D and Medicare Advantagethat people don’t really change very often,"said
Tricia Neuman
, who oversees thefoundation’s Medicare analyses.In addition, the new study noted thatsome low-cost plans might not be able tohandle an in
ux of new bene
ciaries. Aparticularly glaring example is in Los AngelesCounty, where fewer than 10,000bene
ciaries are enrolled in one of the twolowest-cost plans, while more than 900,000bene
ciaries are enrolled in traditionalMedicare or other plans.The study did not estimate how muchmoney the plan would have saved Medicare.In a statement, the Romney campaignsaid: "As the authors stress, this is not a studyof the Romney-Ryan plan. Our plan wouldalways provide future bene
ciaries guaranteedcoverage options with no increase in out-of-pocket costs from today's Medicare." The
 
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Page 3
Payers & Providers
Longer ALOS!*
Advertise Here
(877)248-2360, ext. 2
*For our ads, not your hospital
NEWS
In Brief 
Chicago-based
Meridian Health Plan
 is entering the dual-eligible market inIllinois, covering individuals enrolledin both the Medicare and Medicaidprograms.Meridian will offer coverage fordual-eligibles in Knox, McHenry,Mercer and Warren Counties.“The State of Illinois iscommitted to making peoplehealthier. We are honored to be anintegral part of reaching this goal,”said
Vijay Kotte
, President of Medicare Operations for MeridianHealth Plan. “Given the tremendousgrowth in the Medicare
eld, this isan exciting opportunity for Meridian.I'm thrilled to be able to contribute tothis growth.”Meridian covers about 300,000Medicaid enrollees in Illinois.
Neurosurgeon MakesDocumentary AboutU.S. Healthcare System
A Michigan neurosurgeon hasproduced a documentary discussingwhat ails the U.S. healthcare system. 
Vivek Palavai
, M.D., conductedinterviews, worked the camera andperformed much of the research for“Bitter Pill,” which is being shown inselect venues in the Midwest.The documentary examines whythe American healthcare systemspends far more on care than in theEuropean countries, but whosecitizens do not live as long. The trailerfor the documentary said the
lm isexamining healthcare spending fromall points of view, including hospitals,health plans, the pharmaceuticalindustry, and from patientsthemselves.Palavali, who was trained at the
University of Chicago
and practices inFlint, Mich., made the documentarywhile operating his practice full-time.“As much as I enjoy making
lms, Ihave no plans to give up my day job,"Palavali said.
ACO Savings May Be Overstated
Study Rebuts Hopes For Reform of Care Delivery
One aspect of the Affordable Care Act createdto curb costs is the Shared Savings Program.Providers who form an accountable careorganization serving Medicare patients andmeet quality standards will receive
nancialincentives. Those who meet the marks willshare in any savings Medicare receives due toreduced costs from things like hospitalreadmissions and better managing chronicconditions.But a new study recently published in
Health Affairs
found that these cost savingsmight not be as viable as initially thought.The authors simulated the effects of thesavings program by examining Medicare costsfor people ages 65-75 with Type 2 diabetes.To receive a portion of the shared savings,providers must realize savings of at least 2%before they see a return.The study’s authors found that a 10%performance improvement would reduceadverse events such as strokes, heart attacksand vascular complications by about 4%.These changes, however would likely onlyreduce costs by 1.22% on average. That’sbelow the threshold for providers to share inthe savings.If the cost of tests and extra visits toimprove performance are factored into theequation, the net effect for providers isreduced – and some may even see increasesin costs.Costs would be seen in other areas aswell. CMS estimates start-up costs for an ACOto be about $1.7 million. And many of theinterventions for diabetics require medication,which will need to be paid through MedicarePart D.According to the study’s authors, the
Centers for Medicare & Medicaid Services
expects that during the
rst three years of theShared Savings program, ACOs will receive anaverage savings of $800 million – or $2.5million annually per organization taking partin the ACO.
– TAMMY WORTH
Vouchers
(Continued from Page One)
Obama campaign trumpeted the study, sayingit "demonstrates how hollow" is Romney’sclaim that the elderly would retain the optionof enrolling in traditional Medicare undertheir plan.
Joe Antos
, a healthcare expert at the
American Enterprise Institute
, said that thestudy is "the best technical study so far of thissort," although he expected a premiumsupport market would be much morecompetitive than the current MedicareAdvantage market is, since the latter isguaranteed a certain payment by the federalgovernment."The competition would be even moreintense," he said, especially since mostMedicare bene
ciaries would not be able toafford anything more expensive than thebenchmark plan, and thus insurers wouldcompete to meet those prices.
!
"You just can'thave high costs if people can’t pay it," he said.
– JORDAN RAU, Kaiser Health News
!
is an editorially independent program of the
Henry J. Kaiser Family Foundation
 , a nonpro
 
t, nonpartisanhealth policy research and communicationorganization not af 
 
liated with
Kaiser Permanente
.
Contexo Media is an independent provider of revenue-enhancing solutions for medical practices to maximize their coding, reimbursement and compliance efforts. Thousands of health careprofessionals rely on Contexo Media’s coding books, software, eLearning and educational workshops to stay on top of critical updates across the fast-changing medical landscape.
 To learn more about our products and services, visit our website atwww.contexomedia.com
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