The Obama administration has been trying to get a handle on wasteful Medicare spending for years, and has recently discovered large discrepancies when it comes to after hospital and home care.
Numbers are not adding up when it comes to services patients receive after they leave the hospital, be it home healthcare, nursing homes or other.
According to researchers investigating the problems, huge discrepancies have been found in different areas of the country for the same services.
As an example, the results show that Medicare spends $8,800 on each Louisiana patient receiving home health care, $5,000 more than it spends on the average New Jersey senior, the Washington Post reports.
Similar situations take place in Chicago, where one out of four Medicare beneficiaries receive additional services after leaving the hospital — three times the rate in Phoenix.
And in Connecticut, Medicare beneficiaries are more than twice as likely to end up in a nursing home as they are in Arizona, regardless if they need the benefit or not.
The Post reports that last year, $62 billion or $1 in every $6 Medicare spent in these services went to nursing and therapy for patients in rehabilitation facilities, nursing homes, long-term care hospitals and in their own homes, according to a congressional advisory panel.
Experts say that incentives offered to service providers, some of whom earn double digits as a result, makes for wasteful and unnecessary spending.
Records indicate that in several states, around a quarter of their Medicare spending was related to post-acute care in 2011.
Researchers say hospitals, who are the last defense in wasteful spending, often disregard cost of recommended services after patients are discharged from their care.
Anne Tumlinson, a consultant at Avalere Health in Washington, says:
“They have not had to think remotely about costs or quality or anything except where’s a bed available. Often doctors have very little to do with the discharge decision. Largely it has to do with the supply of providers and type of providers in the area.”
Medicare is currently testing new payment methods in which hospitals and post-acute providers would be allotted a lump sum to care for a patient.
President Obama believes this will force them to become more efficient if they want to be profitable.
“It’s going to be a fairly ugly transition to get to a more efficient, streamlined system,” says Stephen Parente, a health-care economist at the University of Minnesota. “It’s going to be a consultant’s bonanza.”
Do you think the proposed Medicare reforms will help reduce wasteful spending?