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Hospitals raise alarm over sicker Medicare population

Changes to the entitlement program’s care delivery and payment are needed to manage the growing number of seniors with multiple chronic diseases, analysts say.

By Charles Fiegl — Posted Dec. 31, 2012

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More Medicare patients are getting sicker and need higher-level treatments to manage their multiple chronic diseases, according to recent studies.

The trends mean that Medicare beneficiaries are consuming costlier services, in particular those delivered during inpatient hospital stays. Four out of five Medicare patients had at least one chronic condition in 2008, researchers with the American Hospital Assn. detailed in a December report. Two-thirds of beneficiaries had at least two chronic conditions.

Some of the trends are caused by lifestyle issues such as obesity, said Caroline Steinberg, AHA vice president of trends analysis. The percentage of obese seniors between 65 and 74 rose to 43% of men in 2009-10 from 24% in 1988-94. A similar increase, 45% up from 27%, was found in women in the same age bracket.

Having patients with more chronic conditions will mean more care management. For example, when patients come in for hip replacement procedures, physicians and health professionals also must manage their hypertension and diabetes.

The hospital association has continued to raise questions about the accuracy of Medicare payments for inpatient care in light of the trends report. In 2008, the Centers for Medicare & Medicaid Services implemented a new pay system designed to measure severity of illness and account for complications. At the time, the policy was implemented in a budget-neutral environment, meaning that no additional funding was committed. Inpatient payments are inaccurate, and the system should be improved, Steinberg said.

“Policymakers should carefully consider the trends of increasing acuity in the Medicare patient population as they seek changes to payment policy,” the report stated.

Profit margins for services have dropped, and hospitals are forced to look to private payers to make up the difference, Steinberg said. The system needs to account for new innovations.

“Instead of nickel-and-diming on each individual service, we’re seeing movement to accountable care organizations or bundled payments so hospitals can manage care — before a patient comes to the hospital and after — so resource use can come down,” she said.

Almost all of Medicare spending is dedicated to treating the chronically ill, said Kenneth E. Thorpe, PhD. Thorpe, a professor of health policy at Emory University in Atlanta, spoke with reporters during a Dec. 13 conference call to discuss his research paper on Medicare Advantage. There is a significant coverage gap in Medicare for lifestyle-related preventive benefits, which would aim to reverse the trend of chronic illnesses plaguing seniors, he said.

Innovations in Medicare Advantage to reduce costs and improve quality should be added to traditional Medicare, Thorpe said. For instance, care transition, high-risk case management and health coaching services have been used to coordinate care by the private health plans. Measures such as diabetes prevention could save Medicare billions of dollars, he said.

In 2013, traditional Medicare will include new coverage of postdischarge transitional care management services, which were championed by the American Medical Association and other organized medicine groups. The new service will include activities such as discussion of care plans and support for ongoing treatment following discharge from facilities.

DID YOU KNOW:
Two-thirds of Medicare beneficiaries have at least 2 chronic conditions.

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ADDITIONAL INFORMATION

How costly can chronic illness be?

Health care costs rise for patients with multiple chronic conditions. Health policy officials want Medicare to adapt by adopting new services to improve care coordination and prevent illness.

Chronic conditions Average Medicare spending per capita
0 $1,081
1 $2,844
2 $5,074
3 $7,761
4 $10,414
5+ $14,768

Source: “Chronic Care: Making the Case for Ongoing Care,” Robert Wood Johnson Foundation, Johns Hopkins Bloomberg School of Public Health, February 2010 (link)

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