Medicare Reform - the first volume in a new series sponsored by the George Bush School of Government and Public Policy at Texas A&M University - tackles the current Medicare predicament head-on, delving into the fundamental issues surrounding the reorganization of the system: whether to allocate Medicare's growing financial load to current workers in the form of higher taxes, shift the onus to future generations, or shortchange both the expectations and care of present recipients by substantially cutting benefits. This volume assembles a group of the most highly respected analysts of health issues to consider the economic forces impacting the surging health care market.
Written for the general reader and offering innovative ideas for policy revision along with critical new data on health care economics, this comprehensive volume provides a timely and thoughtful deliberation on the precarious future of Medicare.
Available as NBER working paper 6642.
Medical Necessity was not a problematic issue when remote third party payers rarely challenged physicians' decisions and reimbursed physicians for whatever procedures they chose to order and perform. Over the past several decades, the term medical necessity has served as an innocuous placeholder, enabling insurance plans and physicians to make judgments about coverage that were usually unchallenged. The fact that individual physicians practiced differently and that some practice variation may be inappropriate was revealed by the path breaking work of John Wennberg, MD and colleagues at Dartmouth Medical School. Awareness of these differences, combined with rising costs, drew attention to the way decisions were being made. Until recently, neither consumers nor their physicians were fully aware of the power of the term medical necessity to deny care. The idiosyncratic way that coverage decisions are made in health care organizations has led to variation that creates inequity for consumers, greater cause for appeal of denials, and more litigation.
The California HealthCare Foundation funded research at Stanford University's Center for Health Policy to help clarify the coverage decision making process and to identify variation in the way medical necessity is defined and used in making coverage decisions in California. This information was intended to help promote greater clarity and consistency in decision making and to reduce conflict and litigation.
This preliminary report analyzes the spread of health technology in 16 nations with widely divergent health care systems, using treatment of heart attacks as a case study.
For this report, the Technology Evaluation Center, an AHCPR Evidence-based Practice Center of the Blue Cross and Blue Shield Association, conducted a systematic review of the evidence from randomized controlled trials on the relative effectiveness of alternative strategies for androgen suppression as treatment of advanced prostate cancer.
Prostate cancer is a disease of older men, and is second only to lung cancer in cancer mortality for men. For 1998, it was estimated that 184,500 new cases of prostate cancer would be diagnosed, and 39,200 men would die of prostate cancer that year.
In 1994, the total Medicare expenditure for treatment of prostate cancer was $1,411,687,900. Of the total, $477,851,000 was for androgen suppression therapy using luteinizing hormone-releasing hormone (LHRH) agonists. The prevalence of prostate cancer, and the expenditures for its treatment, are likely to increase with the aging of the population and the trend to earlier detection of the disease.
Three key issues are addressed in the report:
Two supplementary analyses were also conducted for each key question:
As Medicare's share of federal spending and gross domestic product (GDP) rises, the program may have increasingly important consequences not only for the health of Americans but also for their net income and financial well-being. We use incidence analysis to study payments and benefits in Medicare to various generations and income groups. We find that Medicare actually provides larger net dollar transfers to wealthier beneficiaries, although the "insurance value" of these dollars is greater for low-income households. We then evaluate a range of proposed Medicare reforms with regard to their impact on the distribution of both health care and disposable income.