4 ms·

I don't think you are understanding the mechanism here. This is not costing $15B because they are consuming $15B worth of health care. Medicare calculates what

I don't think you are understanding the mechanism here. This is not costing $15B because they are consuming $15B worth of health care. Medicare calculates what it costs to cover an average beneficiary by region, age, etc, and then private insurance companies can sell Medicare Advantage (MA) plans to people in place of standard Medicare coverage, and Medicare reimburses them for providing that coverage. Medicare is essentially saying "it costs $10K/year to provide standard Medicare benefits, if you guys think you can do it cheaper we'll give you the $10K as long as you provide the exact same coverage". What are they reimbursed is also risk-adjusted so that if any given plan covers a sicker than average population, they get reimbursed more. What is happening here is these plans are adding superfluous and questionable medical diagnoses to drive up that risk score and get higher payments from Medicare. The theory behind it is if having condition X means you cost an average of 10% more than an average beneficiary, and every person who buys an MA plan from a given company has condition X, they get reimbursed 1.1X the average. They are adding these dubious diagnoses to drive that number ever higher. What this has led to in practice is MA costs the government much more than standard Medicare. And this is despite the fact that MA plans tailor their offerings to attract a healthier than average population, but then they goose the risk score so the financial effect is the opposite.

DataDive 2y ago
I admit I don't understand the mechanism - but this just sounds like they created an a flawed system that has nothing to do with nurses or patient or even health care. An improperly devised system that can be easily circumvented. It is not relevant to the subject matter of health care, it is not different than corn subsidy or whatever.
- blactuary 2y ago
  It's not a flawed system, it simply needs to be managed and rules need to be enforced. It may very well be true that private insurers could provide coverage for cheaper than standard Medicare. I have personally worked with health insurers who were able to outperform benchmarks by implementing care management programs, reaching out to insureds to make sure they are taking medications and getting ongoing care from their physician, etc. They can also develop close relationships with local providers, and/or have their own captive providers like the HMO model. It's not all free market dogma that there is potential for savings there, because standard Medicare is somewhat of a convoluted mess that needs modernizing. But instead of doing that, they realized that they could just pressure providers to up-code and goose the risk score and make more money. MA is relatively new. We needed many years of experience to see how the market would play out. But now we've known for a decade or so that it is clearly costing way more than it should and offering no additional benefits to justify the cost. Unfortunately we have not yet had the political will to fix it, and the handful of massive companies making bank on it will fight tooth and nail to keep the gravy train rolling. The lesson from MA is that people will figure out how to game the rules, so we need to be reactive and flexible and able to update the rules accordingly. But because health care is a complicated and personal subject, people are wary of change, and we have very little political will to fix this. This will get even harder with the recent Chevron decision, which will serve to make it even harder for CMS to fix the regulation of MA without new legislation.
- marcuskane2 2y ago
  > I admit I don't understand the mechanism I'll simplify it for you: The government pays health care providers for providing healthcare. It is very easy to defraud the government by billing for fake work, so fraud is common and costly. The actual details are irrelevant. There are some extra steps involved, but functionally it's the same as a nurse sending a bill that says "I treated patient X for condition Y" and the government going "Sounds good, here's some taxpayer money"

DataDive 2y ago

I admit I don't understand the mechanism - but this just sounds like they created an a flawed system that has nothing to do with nurses or patient or even health care. An improperly devised system that can be easily circumvented. It is not relevant to the subject matter of health care, it is not different than corn subsidy or whatever.

blactuary 2y ago
It's not a flawed system, it simply needs to be managed and rules need to be enforced. It may very well be true that private insurers could provide coverage for cheaper than standard Medicare. I have personally worked with health insurers who were able to outperform benchmarks by implementing care management programs, reaching out to insureds to make sure they are taking medications and getting ongoing care from their physician, etc. They can also develop close relationships with local providers, and/or have their own captive providers like the HMO model. It's not all free market dogma that there is potential for savings there, because standard Medicare is somewhat of a convoluted mess that needs modernizing. But instead of doing that, they realized that they could just pressure providers to up-code and goose the risk score and make more money. MA is relatively new. We needed many years of experience to see how the market would play out. But now we've known for a decade or so that it is clearly costing way more than it should and offering no additional benefits to justify the cost. Unfortunately we have not yet had the political will to fix it, and the handful of massive companies making bank on it will fight tooth and nail to keep the gravy train rolling. The lesson from MA is that people will figure out how to game the rules, so we need to be reactive and flexible and able to update the rules accordingly. But because health care is a complicated and personal subject, people are wary of change, and we have very little political will to fix this. This will get even harder with the recent Chevron decision, which will serve to make it even harder for CMS to fix the regulation of MA without new legislation.
marcuskane2 2y ago
> I admit I don't understand the mechanism I'll simplify it for you: The government pays health care providers for providing healthcare. It is very easy to defraud the government by billing for fake work, so fraud is common and costly. The actual details are irrelevant. There are some extra steps involved, but functionally it's the same as a nurse sending a bill that says "I treated patient X for condition Y" and the government going "Sounds good, here's some taxpayer money"