At 40 percent of Medicare's and of Medicaid's costs, the 9 million dual eligibles who receive benefits from both programs, are a focus of efforts to slow growth in entitlement spending. But, given the two programs' responsibilities, policy-makers are relying far too heavily on states to find the solution. Dollars spent on dual eligibles are overwhelmingly federal; potential savings come from better management of Medicare-financed acute care services; and enhanced state, rather than federal, responsibility for overall spending increases the risk of cost-shifting to Medicare and may undermine quality of care for vulnerable beneficiaries.
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The federal government is
overwhelmingly responsible for
spending on dual eligibles, and
improvements in Medicare-financed
services—at the core of the Affordable
Care Act’s (ACA’s) payment and delivery
reform—are the most direct path to
better care at lower costs.
- The federal government pays the bulk
of care costs for dual eligibles. Of the
$319.5 billion estimated as spent on
duals in 2011, 80 percent ($256.6
billion) are federal dollars, more than
two-thirds of which flowed through
- Improvement in Medicare-financed
care is the key to spending control.
Prevention of unnecessary hospital
use—almost fully financed by
Medicare—is widely recognized as
the most immediate target for both
spending reductions and quality
improvements in care for dual eligibles.
- Dual eligibles experience far higher
rates of “potentially preventable
hospital admissions” than other
Medicare beneficiaries: more than
twice as high for pressure ulcers,
asthma and diabetes; 52 percent
higher for urinary tract infection;
and over 30 percent higher for
chronic obstructive pulmonary
disease and bacterial pneumonia.
- Estimates of potentially avoidable
rehospitalizations of nursing
home residents—which shift costs
from Medicaid-financed nursing
benefits to Medicare-financed
hospital and skilled nursing facility
(SNF) benefits—range from 18
percent to 40 percent.
- The ACA charges Medicare with
improving medical care. Better
coordination of Medicare-financed
care for beneficiaries at high risk
of hospitalization is at the heart of payment and delivery reforms
promoted by the ACA. Reporting
on the experience from Medicare
care coordination demonstrations,
Randy Brown emphasized that
significant reductions in hospital
use (from 17 to 24 percent) and in
Medicare costs (by 10 to 20 percent)
were achieved by interventions
that targeted beneficiaries at risk of
preventable admissions; emphasized
in-person patient-coordinator contact;
collected and responded to timely
information on hospital admissions
and emergency room visits, established
close relationships between care
coordinators and primary care
physicians; and actively promoted
training in self-management skills.
End of excerpt. The entire brief is available in PDF format.