Trump is Improving Medicare – Part II


In Part I of this series, I began a discussion of the many ways the Trump administration is improving Medicare. This new Trump policy is based on the idea of promoting choice, competition, and market prices.It seeks to do that in Medicare by:

  • Liberating telemedicine
  • Liberating Accountable Care Organizations (ACOs)
  • Ending payment incentives to hospital-based physicians
  • Promoting hospital price transparency
  • Deregulating paperwork
  • Increasing transparency in the market for prescription drugs

In Part I we discussed Liberating telemedicine. Today we’ll continue this discussion.

Liberating ACOs

Accountable Care Organizations were created by ObamaCare to encourage the private sector to find innovative ways to reduce costs and improve quality – generally through integrated, coordinated, managed care. It sounds good on paper but has largely failed in practice.

John C. Goodman, writing in The Wall Street Journal, says the original plan for ACOs was one of progression – evolving from shared savings to more savings for plans that take more risks to fixed payment for each patient in return for delivering all medical care. The Trump administration is making changes to facilitate this end goal. It is allowing Next Generation ACOs:

  • More freedom to communicate with patients
  • Rewarding patients for meeting compliance measures
  • Offering additional benefits patients must forgo if they go “out of network”
  • Broad freedom to utilize telemedicine
  • Full capitation in some cases


Equalizing Physician Fees

There has been a recent rush by hospitals to employee physicians. In 2010, 27.7% of primary care physicians were employed by hospitals. In 2016 the number jumped to 43.5%. Current numbers are unavailable but could be significantly higher.

The reason for this change is simple – physician fees for the same service are paid much higher by Medicare if performed in a hospital setting.

According to the Ambulatory Surgery Center Association, Medicare pays almost twice as much for hospital-based outpatient services as it pays for the same services in a free-standing facility. For example, Medicare pays hospitals $1,745 for outpatient cataract surgery but pays surgery centers only $976. There is no rational reason for this discrepancy.

The Trump administration says Medicare will be moving toward parity over the next two years for billing codes covering about 50% of outpatient services. According to CMS, current Medicare payment for a typical hospital-based clinic visit is approximately $116, with an average beneficiary copayment of $23. After two years, the payment rate for the clinic visit will fall to $46 and the beneficiary copay to $9, thus saving patients an average of $14 each visit.

As expected, the American Hospital Association is suing to block the rule change. Goodman points out this illustrates the influence of powerful special interests. Many of the reforms described here would have been done by Congress – except for these special interests. When Congress tries to reform healthcare institutions, these special interests stop the reforms in committee. But the Trump administration is pushing forward with these needed reforms, forcing the special interests to resort to the courts.

(More on the changes to Medicare next week in Part III.)

Trump is Improving Medicare – Part I


Republicans have gotten a bad rap on healthcare reform. Democrats would have you believe that only they can be trusted with your healthcare. Since ObamaCare has more than doubled your healthcare premiums and deductibles, and it was passed without a single Republican vote, it’s hard to understand why Democrats aren’t blushing.

To be sure, Republicans failed to deliver on their 2016 promises to repeal and replace ObamaCare. With zero support from Democrats and just enough Republican defectors, the Trump administration was unable to get passed the legislation they wanted. This probably accounts for the impression that Republicans “have no plan for healthcare reform.”

But the Trump administration is certainly not remaining idle. They have already implemented some significant improvements in ObamaCare (see Winning the Healthcare Debate) and now they are finding ways to improve Medicare.

John C. Goodman, writing in The Wall street Journal, says the Trump administration has taken great strides toward making Medicare better – while saving billions of dollars of taxpayers and patients’ money. It’s all detailed in a 124-page document from the Department of Health and Human Services called Reforming America’s Healthcare System Through Choice and Competition. Unlike the last 50 years of health policy thinking that believed the flaws were in the private sector, this document believes most problems arise because of government failure.

This new Trump policy is based on the idea of promoting choice, competition, and market prices.It seeks to do that in Medicare by:

  • Liberating telemedicine
  • Liberating Accountable Care Organizations (ACOs)
  • Ending payment incentives to hospital-based physicians
  • Promoting hospital price transparency
  • Deregulating paperwork
  • Increasing transparency in the market for prescription drugs

Today I’ll begin this discussion and then we’ll continue next week.

Liberating telemedicine

You may not realize that the world of medicine is changing fast. What was unthinkable just a few years ago is now happening.

For example, in my specialty of orthopedic surgery, it was not long ago when a total hip or knee replacement was a 5-7 day hospitalization. Now these procedures are often only an overnight stay – and in some cases are done as an outpatient in an ambulatory surgery facility. Many of these patients are then transported to a rehab facility, nursing home, or even their private home. Nurses can often observe them by video cameras and check on them when needed.

It can be even more remote. A nurse at Mercy Virtual Hospital in St. Louis may monitor a patient by camera in a hospital room in North Carolina. If the IV bag needs changing, she can notify the nurse in North Carolina to make the necessary change. Telemedicine cameras make this possible and microphones can even pick up patient coughs, gasps, and groans.

There’s just one problem for these advances in telemedicine. Medicare won’t pay for this service. Since private insurance tends to follow Medicare’s example, most of them will also deny coverage. Even though this service could save Medicare billions, the current system denies these claims.

Current Medicare policy is that doctors can examine, consult with and treat patients remotely only in rural areas and even there, patients cannot be treated in their own homes. Just as irrational is the policy that home nursing and physical therapy won’t be paid unless the patient is hospitalized for three days first.

As of January 1 this year, doctors in Medicare Advantage and Accountable Care Organizations (ACOs) can now bill Medicare if they use the phone, email, Skype and other technologies to consult with patients remotely to determine if they need an in-office visit. Doctors can also bill Medicare to review and analyze medial images patients send them, and they can bill for telemedical consultations with other doctors.

(In Part II we’ll continue this discussion.)

Public Option Kills Private Insurance


Former Vice President Joe Biden thinks you’ve forgotten all the broken promises of ObamaCare. In an attempt to distinguish himself from the rest of the Democratic presidential candidates, he’s polishing up his old lines from the Obama – Biden days and hoping you won’t notice.

Biden recently repeated the biggest lie of the Obama presidency – the one Politifact called “the lie of the year.” You remember, “If you like your doctor, you can keep your doctor”and “if you like your plan, you can keep your plan.” He wants you to believe his healthcare plan will deliver what the Obama plan never did.

What’s more, he wants you to believe, again, in the “Public Option.” This would be a government-run insurance product that competes with private insurance. That’s the same idea that was voted down by the Democratic Congress of President Obama. But Uncle Joe still thinks it’s a good idea.

Scott W. Atlas, writing in The Wall Street Journal, says Joe is wrong, again. Even though 57% of Americans reject the idea of eliminating private health insurance, Biden wants to do just that – but in a sneaky way. Rather than admit up front his plan will eliminate private health insurance, he wants to push the “Public Option” – which will achieve the same ultimate result.

Atlas says, “Government insurance options mainly erode, or “crowd out,” private insurance, rather than provide coverage to the uninsured. Jonathan Gruber, the MIT economist credited with designing ObamaCare, showed in 2007 that when government insurance expands, six people go off private insurance for every 10 people who go on public insurance. The same thing is happening with Medicaid expansion. (see Medicaid Expansion Woes)

For example, in Hawaii, only seven months after offering Keiki Care in 2008, the country’s only statewide universal child health insurance, the state ended its optional program. Some 85% of those who signed up already had private insurance. Those costs were suddenly shifted to the taxpayers.

The Public Option would cause premiums for private insurance to skyrocket because of underpayment by government insurance compared with costs for services. According to the American Hospital Association, annual underpayment by Medicare and Medicaid surged to nearly $76.8 billion in 2017, nearly doubling once ObamaCare’s regulations came into play. That resulted in an increase in private insurance premiums of more than $1500 per family.

A Public Option is a slow, but steady, path to single-payer healthcare – socialized medicine. It will guarantee the government will eventually control all healthcare.

The Wall Street Journal editorial board puts it this way: “Joe Biden’s new healthcare plan is supposed to show his moderation, not that this is a virtue to progressives. Hence the back and forth this week between Mr. Biden and Bernie Sanders about single payer. But cut through the spin, and the only debate Democrats are having is whether to eliminate private health insurance in one blow or on the installment plan.”

If you go back to the days before ObamaCare, it was clear that Democratic leaders including Obama, Biden, Nancy Pelosi, and Harry Reid were all in favor of single-payer systems. The only reason they didn’t push for it then was they didn’t have the votes even in their own party. They knew the country wasn’t ready for it.

Therefore, they pushed through ObamaCare and hoped it would fail, thereby setting the stage for a single-payer solution to the crisis. Today’s Democrats now think their time has come. Biden hopes to appear like the moderate in this scenario but he’s really just pushing the same agenda by another name.