Johns Hopkins Professor Melinda Buntin on the question of why Medicare spending is outpacing the federal budget.

Digital Health

What’s Behind the Medicare Slowdown?

Since Medicare coverage first took effect almost six decades ago, the program’s runaway spending has played a leading role in the story of the federal budget. Now, the end of that growth is stealing the spotlight.

An excellent piece in The New York Times highlighted how Medicare’s unsustainable climb reached a turning point in 2011, and for reasons that aren’t exactly clear.

In 2011, Medicare spending per beneficiary (MSPB) reached $13,159, nearly double the level it was at near the turn of the century.

• If historical growth had sustained beyond that point, we’d currently be sitting at roughly $22,006 MSPB. Luckily, that’s not what happened.

• Spending leveled out, and we now find ourselves at $12,459 MSPB, a nearly $4 trillion gap compared to previous projections… yet the underlying cause remains a mystery.

The trillion dollar question: what changed? The authors call out obvious shifts in Medicare policy, namely the Affordable Care Act in 2010, and its reduced Medicare payments to hospitals and payors with private Medicare Advantage plans.

• While ACA was certainly a contributor, most of the reductions are attributed to a category that the budget office calls “technical adjustment,” which describe changes to a wide base of topics such as the expansion of cholesterol and blood pressure medicines.

The NY Times concludes that the true reason for the change is a hard problem that remains unsolved, but the smart folks on social media were quick to pick up where they left off, floating possibilities such as:

• As MA lives increased, the types of MA plans also improved due to the phasing out of inefficient plan designs
• Age of death increases stopped around this time, so US citizens aren’t living to older ages with increasingly complicated health issues 
• The rise of ACOs started in 2012, although we just covered why that factor probably doesn’t account for a huge share of cost reductions

The Takeaway

Savings attribution has always been a fundamental challenge for the healthcare industry, underpinning many of the issues with value-based care and other alternative models. Now that we’ve found ourselves at an inflection point where Medicare spending is slowing but still outpacing the federal budget, the solution to that savings attribution problem will also be what lets us identify the levers that will keep the trend heading in the right direction.

Patient-Centered Design for Diabetes Care

Glooko’s recently overhauled Mobile App makes it easier than ever for diabetes patients to organize, log, visualize, and share their data. Head over to this conversation with Glooko’s product and design team for a behind-the-scenes look at how patient-centered design is improving diabetes outcomes.

Clinical Documentation Integrity For VBC

The growing use of risk-adjusted reimbursement in outpatient settings means clinical documentation needs to keep up, or health systems risk leaving revenue on the table. Check out Nuance’s new blog to learn how shifting reimbursement models make clinical documentation excellence more important than ever, and how AI can help you achieve it.

Successful RPM Through End-to-End Support

From needs assessments and program deployment to security enhancements and call center monitoring, Clear Arch Health offers fully customizable support services to help you get the most from your RPM solution.

The Wire

• CTE Prevalence in Young Athletes: New research in JAMA Neurology, well-timed for the start of the NFL season, found evidence of brain injury in 41.4% of athletes who played contact sports and died before age 30. Nearly all of those with brain damage had early stages of chronic traumatic encephalopathy (CTE), and this was the first study to confirm CTE in younger athletes as well as the first diagnosis in a female athlete. Brain bank studies don’t represent the wider population (donations are made because of suspected brain damage), but they definitely help press the issue of safety in sports.

• PE Firm Acquires NextGen: Private equity firm Thoma Bravo is acquiring EHR vendor NextGen Healthcare in a take-private transaction that’s expected to close during Q4. NextGen has over 100k provider clients including ACOs, independent practices, and managed service organizations, with Medicare and Medicaid accounting for a third of its covered lives. For its part, healthcare comprises just 9% of Thoma Bravo’s investments, but it’s recently made moves to push deeper into the industry with an investment in pharmacy software company BlueSight.

• Better Outcomes From Female Surgeons: A study in JAMA Surgery found that your chances of a poor postoperative outcome, including death, are significantly lower if your surgeon is female. Of the one million patients included in the study, those treated by the 2,306 male surgeons were a whopping 25% more likely to die within 90 days than those treated by the 700 female surgeons. The difference seemingly stems from differences outside the OR, such as women better-preparing patients for surgery, “as suggested by their elective patients having better outcomes than emergent patients.”

• Healthcare’s Revolving Door: One-third of political appointees to the Department of Health and Human Services go work for the industry they oversaw immediately after their tenure, according to the first study to quantify that metric in Health Affairs. Of people appointed to the HHS between 2004 and 2020, over half of departing appointees at the CDC and CMS went straight to industry. The authors point out that these people carry policy expertise that makes them attractive candidates, but it still raises concern over potential conflicts of interest.

• FDA to Modernize 510(k) Rules: The FDA said it is planning to modernize its 510(k) program, one of the most popular regulatory paths for new digital health solutions to take to market. The agency issued draft guidances in three areas: 1) selecting a predicate device for 510(k) submissions, 2) using clinical data in applications, and 3) evidentiary expectations for 510(k) implant devices. The FDA also noted that starting October 1, all 510(k) applications must be submitted electronically with its eSTAR process.

• DiMe Regulatory Needs Assessment: In other regulatory news, DiMe released findings from a thorough industry needs assessment to identify the drivers of successful digital health product development / adoption and the policy changes needed to facilitate those drivers. FDA alignment with downstream payor decision makers unsurprisingly topped the list of industry needs, with “clear alternate pathways to market” following close behind. The full report seems pretty close to required reading for anyone navigating these questions.

• Obesity-Related CVD Deaths: The obesity drug breakthroughs that we frequently cover are poised to have some major mortality implications, with new research in JAHA showing that obesity-related cardiovascular disease deaths tripled in the U.S. between 1999 and 2020 from 2.2 to 6.6 deaths per 100k people. Black Americans saw the highest obesity-related CVD death rates, especially Black women and those living in urban neighborhoods, even though men and rural populations had the most obesity-related CVD deaths within other racial groups.

• AI Predicts Missed Care: GE HealthCare and Mass General Brigham have co-developed an AI algorithm to predict which patients are most likely to miss a healthcare episode like a doctor’s appointment, lab test, or screening exam. The missed care opportunity (MCO) solution showed impressive accuracy as high as 96% in preliminary tests, and is first being deployed as part of the schedule predictions dashboard in GE’s Radiology Operations Module before expanding to other use cases.

• EHR Oligopoly: The Big 3 pharmacy benefit managers get a lot of flack for being an oligopoly with a heavy grip on the market (CVS Caremark, Cigna Express Scripts, UnitedHealth OptumRx), but a recent investigation from Definitive Healthcare shows that the same argument could be made for inpatient EHRs. Looking at EHR installs by hospital, Epic (40%), Oracle Cerner (23%), and MEDITECH (13%) control over three-quarters of the overall market – not exactly an optimal landscape for consumer choice.

• KeyCare + Parkview: Parkview Health is the latest system to provide around-the-clock virtual care through KeyCare’s Epic-native platform, which allows patients to schedule visits directly through their MyChart portal. The end-to-end Epic integration angle is clearly working for KeyCare, which has notched $28M in funding and similar partnerships with WellSpan Health, Memorial Healthcare, and Allina Health since launching this time last year.

• Global Surge in Under-50 Cancer: There’s been a 77% surge in new cases of cancer in people under age 50 from 1990 to 2019, with breast cancer leading the way. An analysis in BMJ Oncology showed that while cancer remains more common in older people, new cases are rising in younger populations for breast, windpipe, lung, stomach and bowel cancer. The study points to diet, alcohol consumption, and tobacco use as factors driving the growth, although physical inactivity and obesity aren’t helping the matter.

Goodbye Staffing Shortages, Hello Peace of Mind

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Medallion Elevate is Where Innovation Meets Healthcare

As the leader in all-in-one provider network management, Medallion kicks off a premier one-day virtual conference on September 20th. Hear from industry leaders like Hims & Hers, Equip Health, and Optum, spotlighting groundbreaking healthcare operations strategies and tactics. With over 1,000 professionals attending last year, this year promises to be even more transformative. Secure your spot today.

The New Standard for Prescription Safety

Synapse Medicine’s quick-deploy Prescription Assistance API and components can be up and running in less than a day and instantly connect your HCPs to real-time drug data and prescribing support. Find out how easy it can be to equip your providers with the tools they need to ensure prescription safety and precision for their patients.