Thank you to Chairman Brady for calling this hearing. I appreciate your willingness to approach the topic of Medicare post-acute care in a true bipartisan fashion. I suspect there is much that we can agree upon here.
Post-acute care is a broad clinical term for all the activities that comes after acute hospitalization. Your health is stable… now what are we going to do with you? And it’s something that everyone in this room has or will have to deal with at some point. It can be messy. It can be the road to the end.
My experience was with my parents. There’s no handbook for this kind of thing; you can find yourself stumbling around trying to navigate our system while you watch someone you love declining.
But we all want the same thing for our parents, and any other loved ones who end up needing it: the best care. We want them to have the highest quality we can get them, but it also has to be efficient. When we talk about reform, we have to remember the people behind it.
This sector has a lot of challenges.
Double-digit Medicare margins in several post-acute settings indicate that Medicare payments far exceed costs. Some parts of the country report unusually high use of post-acute care, so there are concerns about utilization patterns and even fraud. Providers operate in silos, creating disincentives to coordinate care and improve transitions between settings. I’m sure our witnesses will discuss this more, so I won’t belabor the point
We can be happy that the Affordable Care Act has put Medicare on a path towards post-acute reform. CMS is now testing the concept of bundled payments, which could break down silos and encourage better coordinated and more efficient delivery of care. Providers are starting down the path towards value based purchasing, with pay-for-reporting and demonstration projects to test the concept. The ACA also provided new fraud tools to weed out unscrupulous providers and took steps to recoup and rein in overpayments.
But more can and should be done. Right now, there are billions of dollars of savings to be had by further reconfiguring payments to better match actual costs. And that will help us address the extremely high Medicare margins of some post-acute providers. These are viable savings that could go toward a Medicare physician fix rather than loading more costs onto beneficiaries with average incomes of $22,500.
We can also find longer term reforms, and I look forward to hearing those ideas from CMS and MedPAC. While there are many interesting policy ideas in this arena, we need to learn from the ACA efforts underway and provide enough time to ensure the models work in a way that doesn’t compromise access to high quality services for our beneficiaries.
Finally, I’d like to address something that the majority has raised. While we agree on the need for post-acute reform, and much of the problem, I have to take issue with the notion that Medicare is going broke and that post acute reform is the simple fix. This reform is a worthy goal in and of itself; let’s not cloak it in alarmist rhetoric about the program’s finances. Medicare’s finances are strong. The Trustees just announced its solvency has been extended yet another two years, until 2026. Medicare spending per beneficiary grew at the low rate of 1.7 percent from 2010 to 2012 and projected spending growth will continue to be slower than the overall economy.
Let’s agree that changes to the post-acute system are needed; that that they can improve quality for our parents loved ones as well as rein in overpayments. We don’t need hyperbolic and partisan statements to motivate us into action.
