2 simple ways to reduce Medicare costs

Compared to the past few years, costs associated with Medicare have been on a precipitous rise. However with the implementation of some changes which can already be seen as taking place, this increase can be dealt with and two developments can be carried out which can be of great help.

The first consists of hospitals which are beginning to screen nursing and other associated facilities in a manner which is more aggressive, for the treatment of discharged patients. Secondly, Medicare actuaries are now acknowledging evidence which is available and which shows that is actually possible for spending to be reduced simply by bringing about a change in the form of payment and not simply by making simple cost cuts.

Insurance companies as well as policy makers have been constantly putting in the effort to pay health care providers in terms of the quality of the healthcare they provide rather than simply paying them for the amount of care that they have provided. One example consists of making use of accountable care organizations which provide hospitals as well as other providers an incentive in financial terms along with the responsibility to come up with a comprehensive treatment plan for patients.

Hospitals however do seem to be looking at options for making cuts on spending which isn’t needed. In an analysis conducted by the Institute of Medicine in 2013 suggested that the main reason behind the varying cost of Medicare is because of the spending which goes into outpatient care. A more recent analysis which was conducted went on to show that increased spending on the patient after he was discharged was also leading to harm. Facilities which spent a great deal of money on outpatients resulted in worse outcomes which included higher rates of mortality in comparison to lower cost facilities. The biggest offender was seen to be skilled nursing facilities which are where almost 1/5th of Medicare patients go once they have left the hospital.

Such findings state that a great deal of spending which is unnecessary can be cut once a patient has left the hospital and this could have a further positive effect on the quality of care provided. Thankfully, hospitals have begun to realize this and are working on fixing the problem. Signs are present which suggest that scrutiny is being done on the skilled nursing facilities as well as efforts being made to send patients to those facilities which have better outcomes.

The other development which is seen as encouraging is that Medicare actuaries have certified that costs are being held down through accountable care organizations. One such organization helped in saving $385 million for Medicare in the first 2 years it existed and while this isn’t considered as being a large amount, other organizations have also led to more reductions in costs.


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