The Boston Globe recently ran an article discussing layoffs at Baystate Health, a large health system in Western Massachusetts. The system is planing to lay off 300 employees to try to close a $75M deficit. According to the Globe, the deficits are mainly driven by declining Medicaid reimbursement, but, more interestingly, by a $23M hit to Medicare revenue driven by a mistake made by Partners Healthcare, a health system on the other side of the state.
Here’s the fascinating backstory.
The Spring 2016 Medpac report on Medicare payments is out. This annual report to Congress (put together by the 17 members of the Medicare Payments Advisory Committee) provides an assessment of the way Medicare pays for care, and offers recommendations for how to modify payments going forward. It’s a fascinating snapshot:
Here is an interesting exercise and an unfortunate lesson in the law of unexpected consequences:
Pop Quiz: Your elderly Granny comes from overseas without insurance and suddenly needs her gallbladder taken out. You call around the hospitals in town and they agree to extend to you the same rates as they would charge Medicare. (This is hypothetical, of course. They would treat Granny and stick you with the rack rate….. but bear with me.)
Would you expect to get the best deal at:
- The prestigious university affiliated teaching hospital
- A nice community hospital in a fancy part of town
- A large safety-net hospital downtown
- The for-profit community hospital that admits a lot of Medicaid patients in a tough part of town?
In previous posts, I’ve discussed the inevitable squeeze that high cost/ low quality physicians will feel from payers as the system becomes more discriminating about paying more “reasonable” rates and only for performance.
There now seems to be evidence that we are seeing the largest health insurers get tough by trimming their networks of the physician value outliers, in some cases doing this en-masse with entire physician groups barred from participating in several Medicare Advantage programs.
This week, the Boston Globe ran a prominent piece on United Healthcare’s recent decision to cut 700 Massachusetts physicians from participating in the UHC Medicare Advantage program. Continue reading