Citation URL: http://www.urban.org/CristinaBoccuti

As Medicare beneficiaries double over the next 30 years, controlling per enrollee spending growth becomes increasingly more important. Cost containment, therefore, is a major feature of most Medicare reform discussions. When assessing private and public approaches, a careful comparison of spending growth between Medicare and private insurers can shed light on which sector is better able to control per enrollee spending in the long run. This research note discusses some recent relevant studies and the important data limitations of this type of analysis.

Over the past three decades both Medicare and private insurers have initiated cost containment mechanisms to control the growth of spending on personal health care. To compare spending growth between these two payers, we present four measurement principles that should be implemented when drawing such comparisons, and we apply them to the National Health Accounts data files. We attribute Medicare's ability to equal--and using our measures, actually exceed—the private sector in controlling the rate of health spending growth to Medicare's ability to price aggressively for the services it covers. (Health Affairs, March/April 2003; 22(2): 230-237). [view the corresponding press release.]

Most Americans facing death are Medicare beneficiaries, yet Medicare's hospice benefit, which provides coverage for palliative care services, is a relatively small program, serving only 20 percent of beneficiaries. Using the Medicare Current Beneficiary Survey, we found that non-whites, low-income individuals, and nursing home residents are less likely than their counterparts to choose hospice care. Drug coverage, insurance status, and treatment protocols can influence an individual's decision to choose hospice care. Some modest changes to the current Medicare program, such as hospice eligibility and improved physician training in palliative care can improve end-of-life care received by dying Medicare beneficiaries.

Despite offering a standard benefit to all enrollees, Medicare encounters wide geographic differences in spending per beneficiary. Area reimbursement discrepancies have become more visible with capitated payments to health care providers and managed care plans. This issue brief explores the known sources of regional variation in per capita Medicare spending and discusses some relevant policy issues for Medicare reform raised by these differences. Ultimately, policymakers asked to consider across-the-board Medicare payment changes based on national averages face thorny problems because improvements to some areas necessarily carry disadvantages to others.

The Balanced Budget Act of 1997 required Medicare prospective payment systems and fee schedules to be implemented for post-acute and outpatient rehabilitation providers. These policy changes may increase the use of cost-reducing practices in rehabilitation, including the use of group therapy, “concurrent” therapy, and assistants to furnish care in lieu of therapists. To assess the minimum requirements under which rehabilitation services must be furnished, this paper analyzes Federal and state regulations regarding physical therapists (PTs) and the use and supervision of their assistants. Medicare requirements for supervision of PT assistants vary by provider type; regulations also vary by state. As background, the paper also describes the educational training requirements, current socio-demographic characteristics, and 1990-2000 national employment estimates regarding PTs relative to PT assistants. (Published by the Centers for Medicare and Medicaid Services; 2002 April.)

Return to list of authors