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The Palm Beach Post's veteran Washington correspondent, Larry Lipman, tracks policy makers and interest groups who are shaping the future of the federal health insurance program for the elderly.Medicare Web Resources
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Medicare is the federal health care system that covers about 36 million people age 65 and older, plus 7 million disabled. It has four parts:
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Financed by Medicare and beneficiary premiums, which vary among plans.
The plans are private and financed by Medicare and beneficiary premiums, which vary among plans.
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Home > Medicare Monitor > Archives > 2008 > April > 29 > Entry
Leavitt: ‘How much for that knee replacement?’
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| Photo by Kimberly Smith/AJC |
At a briefing with reporters this morning, Leavitt noted that Medicare pays for about 255,000 knee replacement surgeries a year but there is no set price on how much it costs, nor is there any competition in terms of cost or quality. He’d like to see that changed.
What if everyone involved in a knee replacement surgery received a lump sum for the procedure and then divided that payment among themselves? The surgeon would get so much, the anesthesiologist would get so much, the radiologist would get so much, the hospital would get so much….
Then, what if groups that did knee surgeries competed against each other? Which group offers the best price and who has the best reputation for quality? Leavitt says if Medicare paid for services that way, it would go a long way toward reducing the cost of health care because Medicare sets the pace for how medicine is paid for.
If you bought a new car the way you buy a surgical procedure, Leavitt said, you’d go to the hospital with no idea how much the car would cost. A few weeks later you’d begin to get the bills for the car’s chassis, the paint job, the transmission, the salesman’s fee, the showroom fee … and don’t forget some exorbitant payment for the coffee you thought was complimentary.
Leavitt hopes to spearhead a demonstration project in bundling Medicare payments for some high-volume surgical procedures before the Bush administration ends next January. The Medicare Payment Advisory Commission recommended a similar course at a meeting three weeks ago to bundle payments to doctors and hospitals. MedPAC is expected to formalize the recommendation in June.
Comments
By Bill Cole
May 29, 2008 9:51 PM | Link to this
Lump Sum payment is not just theory. It’s live. I represent a company that has Lump Sum/ Episode of Care pricing. Procedures include Knee Replacement suregery, Bypass surgery(CABG), and cancer surgery. Its a program that can be added to any Existing self-funded plan. Employee can stay In-Network, where quality can be good or bad - a crapshoot; or they can come to one of our hospitals where quality is more consistent.Our hospitals are FocusFactories and are top ranked in terms of outcomes data. The employee must travel to the hospital, but for major surgery that is already a common occurence. As an incentive, the employee has no deductible and coinsurance; and receives up to $4,000 recovery benefit. (All hospitals located in the USA). The current system is based on Discounts. Providers & Insurers are so addicted to pricing based on Discounts that they have never bothered to measure clinical outcomes. Lump Sum payment is all about measuring outcomes. When outcomes are measured, outcomes can improve, and the market can work. For example, with our program: Employer saves on average $20,000 per surgery. Employee receives care from a FocusFactory.