A report by the Center for Economic Policy and Research (CEPR) advocates allowing Medicare and Medicaid beneficiaries to move to other countries and buy into their health insurance systems using U.S. vouchers.  The CEPR says the system would reduce U.S. health care costs while improving quality.  Under the proposed system, the government and the beneficiaries would split the savings obtained from using the non-U.S. systems, which spend, on average, nearly half of the $6,714 that the U.S. health care system spends per-person on health care and achieve longer life expectancies.  In addition, the program would give the provider country a premium above their costs to ensure their participation in the program.  The report estimates the cost savings of such a program based on several projected levels of participation.

From the introduction:

There are large differences between the per-person cost of providing health care in the United States and the per-person cost in other countries with comparable health care outcomes. In 2006, the per-person cost of health care in the United States was $6,714, while the average cost in the 26 countries with longer life expectancies was $2,964. This gap suggests the potential for substantial gains from trade.

This paper outlines a mechanism for taking advantage of these potential gains from trade: a globalization of the Medicare and Medicaid programs. Since most of the beneficiaries of Medicare are retirees, as are a substantial portion of the beneficiaries of Medicaid, they need not live near a workplace. Many beneficiaries have family or other ties to other countries. The globalization mechanism proposed in this paper would allow beneficiaries of these programs to have a voucher that would allow them to move to other countries and buy into their health care systems, with the government and the beneficiaries splitting the gains. To provide an inducement for other countries to participate, they would receive a premium (e.g. 10 percent) above their costs to ensure that they benefit from this process as well.

Center for Economic Policy and Research. (2009). Free trade in health care: the gains from globalized Medicare and Medicaid. Dean Baker and Hye Jin Rho.

Full report: http://www.cepr.net/documents/publications/free-trade-hc-2009-09.pdf

This Kaiser Family Foundation (KFF) brief, updated November 2009, and compiled in conjunction with researchers at Georgetown University and the National Opinion Research Center at the University of Chicago, examines the Medicare Prescription Drug Benefit Program (Part D) stand alone plans available in 2010.  The brief examines plans based on region, premiums, and benefit design and offers an analysis of key plan changes since 2006.

Full brief: http://www.kff.org/medicare/upload/7986.pdf 

Kaiser Family Foundation. (2009). Part D plan availability in 2010 and key changes since 2006. Jack Hoadley, Juliette Cubanski, Elizabeth Hargrave, Laura Summer, and Tricia Neuman.

A Goldman Sachs Group Inc. analysis found that, if the Senate Finance Committee’s health care reform legislation is enacted, Medicare cuts will reduce the five major health insurance companies’ earnings by 50 percent.   Of the five major companies—UnitedHealth Group Inc., Humana Inc., Cigna Inc., WellPoint Inc., and Aetna Inc.—Humana will be the most affected while Cigna will be the least affected because of its low number of Medicare enrollees.  Goldman Sachs also estimates that the legislation would halve profit margins on individual and small-group policies to 3 percent over 10 years but double the number of enrollees to 20 million.

Full article: http://www.bloomberg.com/apps/news?pid=20601087&sid=ajUZG_1UTWm8

According to SK&A Healthcare Information Solutions’ (SK&A) Physician Office Acceptance of Government Insurance Programs Report, 83 percent of physicians’ offices accept Medicare and 65 percent accept Medicaid.  In addition, this report found that Medicare and Medicaid acceptance varied by size, ownership, location, and specialty of physicians’ practices.  Larger practices are more likely to accept Medicare patients than smaller practices, while hospital-owned practices are more likely to accept Medicaid than non-hospital-owned practices.

Press release: http://www.pr.com/press-release/188966

This study published in Health Affairs examines Medicare Prescription Drug Benefit Program (Part D) selection in 2006, finding that enrollees in stand-alone prescription drug plans had higher baseline costs and poorer health than enrollees Medicare Advantage (MA) prescription plans.  The authors speculate that such patterns could adversely affect Medicare costs in the future. 

Riley, G. F., Levy, J.M., Montgomery, M. A. (2009). Adverse selection in the Medicare prescription drug program. Health Affairs, 28(6), 1826-1837. DOI: 10.1377/hlthaff.28.6.1826 http://content.healthaffairs.org/cgi/content/abstract/28/6/1826 

Authors: Gerald F. Riley, Jesse M. Levy, Melissa A. Montgomery.

The Urban Institute explores the possible impacts that accountable care organizations (ACOs) could have on the cost-effectiveness and quality of care delivered by Medicare funds.

From the abstract:

Experts agree that the way health care is currently paid for in the United States, especially in the traditional, fee-for-service Medicare program, does not support coordinated care that is high quality and cost-efficient. To address these problems, policy-makers are taking a close look at accountable care organizations (ACOs).

This policy brief explores what ACO are, how they compare to previous reform concepts such as Health Maintenance Organizations and Provider Sponsored Organizations, key design and implementation issues, and opportunities and challenges.

The authors conclude that ACOs are no real game changers in the short term, but are nevertheless important to try.

The Urban Institute. (2009). Can accountable care organizations improve the value of health care by solving the cost and quality quandaries? Devers, Kelly & Berenson, Robert A.

Full report: http://www.urban.org/publications/411975.html