Medicare Spending vs. Private Insurance

Healthcare Finance reported on a University of Michigan study that concluded “the Medicare system spends far more than it probably needs to on post-hospital care.” Looking at post-hospital care provided at home, in skilled nursing facilities, and inpatient and outpatient rehabilitation facilities for six common procedures including hip replacement surgery, researchers compared payment by Medicare and by private insurance. “For almost every condition and every form of post-hospital care, there was significantly more spending for Medicare patients than privately insured patients,” noted the report. The Centers for Medicare and Medicaid Services has started to incentivize more judicious use of post-acute care in Medicare through the introduction of alternative payment models. For instance, it has established bundled payment programs that pay hospitals a set amount for the entire range of care that a hip or knee replacement patient needs, including post-hospital care. Full story.