PORTLAND — U.S. Sen. Ron Wyden announced a new bill this week, aimed at reforming Medicare.
Called “The Better Care, Lower Cost Act of 2014,” it would create a voluntary coordinated care option for the estimated two-thirds of all Medicare patients who suffer from more than one chronic condition, such as diabetes, heart disease or cancer.
“Coordinated care” is a term familiar to Oregonians who are following the state’s efforts to overhaul Medicaid, a public health insurance program for low-income people. In fact, the Oregon Democrat’s proposal was based, in part, on changes being made to the Oregon Health Plan, the state’s version of Medicaid.
But Wyden’s bill is different, both in the way it works and in whom it works for. Wyden’s proposal applies only to Medicare, a public insurance program for seniors.
According to Ken Willis, a spokesman for Wyden, the senator has spent the past year speaking with caregivers and healthcare experts across the country to identify places where patients are receiving better care at lower costs.
Willis says this bill aims to “remove barriers” and expand “this kind of care so that wherever you live in America, this would be available to you.”
Participation in the new plan would be voluntary, both for patients and for hospitals or clinics. To participate, clinics would have to be certified as part of a “Better Care Program,” and offer individualized care plans for patients who sign up.
The way Medicare works now, doctors and nurses are paid for each procedure they perform. A clinic submits an insurance claim that contains a billing code for each procedure, and the Medicare office reviews the claims, then reimburses the clinic a set fee per code. This system is called “fee for service,” and it’s the way almost all medicine in the United States is practiced.
Under Wyden’s new proposal, clinics that opt to participate would instead get paid based on a patient’s health outcome. The result, according to Willis, is a clear incentive for clinics to provide patients with coordinated, efficient healthcare.
Instead of being paid per procedure, a clinic would receive a lump sum based on the expected cost of treating a patient under the old system. That means that a patient would no longer have to come in and visit a physician for the clinic to get paid.
In fact, it could be cheaper and more effective for the clinic to hire a nurse care coordinator, for example, to call patients following doctors’ visits, to make sure they’ve picked up prescriptions and to answer lingering questions. The idea is for practices such as these to improve primary care and stave off costly emergency room visits.
“The only way (for the clinic) to get that full amount would be to produce quality results,” Willis said.
In some cases, he added, Wyden’s office found clinics that have adopted care coordination measures have saved 20 percent or more.
The exact savings under Wyden’s new plan have not been calculated, according to Willis. But an informational packet distributed by Wyden’s office states that if the bill can save even 5 percent in costs among high-needs patients, that would amount to $25 billion in annual savings nationwide.
The new bill targets Medicare patients who are suffering from at least two chronic conditions. In 2010, 68 percent of Medicare beneficiaries had two or more chronic health conditions and accounted for 93 percent of all Medicare spending, or roughly $487 billion, according to the Centers for Medicaid and Medicare Services.
That year, the average spending per Medicare patient was $9,738 — a figure that leaped upward with each chronic condition. The average cost for a Medicare patient with six or more chronic conditions in 2010 was $32,658.
Wyden is co-sponsoring this bill with a fellow senator from across the aisle, Johnny Isakson, R-Ga., and two counterparts in the U.S. House: Rep. Erik Paulsen, R-Minn., and Rep. Peter Welch, D-Vt.
Bipartisan support in both chambers of Congress certainly gives the bill a boost. But it remains to be seen whether the bill can appeal to a majority.
Any attempt to change Medicare is likely to draw criticism, as Wyden knows from past experience. In 2011, he teamed up with House Budget Committee Chairman Paul Ryan, R-Wis. — who later joined the Republican presidential ticket as Mitt Romney’s running mate in 2012 — to draft a controversial plan that gave seniors a choice between keeping their Medicare plans or opting for subsidized alternatives in the private market. The proposal was especially controversial because it called for a cap on per-person spending. Wyden eventually backed away from the plan, which was never formally introduced as a bill.
Since then, Wyden has lamented the lack of substantive debate over Medicare. He recently told The Washington Post: “Much of the Medicare debate is: Are you going to cut people’s benefits? Or are you going to stand pat?”
The new bill offers a third option.
“It’s very simple to cut the cost of Medicare if you simply cut benefits,” said Willis. “This bill doesn’t do that. This cuts cost by providing better care … using what has been successful in the private sector and in other parts of the country.”
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