By Elizabeth S. Rowe, Ph.D., M.B.A.
MedPAC finds High Hospital Charges and Costs, NOT Higher Volume, makes US Healthcare more expensive than the rest of the world.
This year’s agenda for MedPAC (The Medicare Payment Advisory Commission, which advises Congress on Medicare Policy) includes an analysis of the high hospital charges and costs in the US compared to other countries, and what policy changes in Medicare can be made to ameliorate these high costs. The presentation by staff at a recent public meeting (MedPAC Presentation) included the results of their research, which showed that American high hospital charges and costs for Medicare are 50% higher than those of the closest comparable country, as a percentage of GDP. Commercial hospital costs are 100% higher in the US. However, the reason was traced to higher costs, NOT greater utilization; in fact the average length of stay and number of admissions per capita are lower in the US.
The analysis only considered hospital costs, and it includes costs of hospital employed physicians. Since private physicians are paid less than hospital employed physicians for comparable services, this data suggests that private practice independent physicians in the US are NOT overpaid compared to these other countries.
The presentation listing of possible actions that could be taken to correct Medicare payment policy include introducing site neutral payments which “removes incentives to move lower priced services to hospitals where overhead is higher.” Site neutral payments policy for hospital employed and private practice physicians was officially recommended last year also (see March 2014 Report, at www.medpac.gov). A second possible action would be to simplify quality reporting, since “complexity” was one of the reasons identified for US hospitals having higher overhead than the compared hospitals.
This meeting is the first of several public meetings where this topic is being discussed by the Commission, and the data details and resulting official positons and recommendations will be presented as a chapter in the March 2015 Report to Congress. The presentations and transcripts of the discussions for all of the MedPAC public meetings are posted online at www.Medpac.gov This entry was posted in Featured News, Healthcare Advocacy. Bookmark the permalink.
