Medicare's payment system was designed in the mid-1980s, after inflation had been "slayed" and as a way to rein in the overly generous cost-plus payment system. Since then overall health care inflation has never seen a down day. Providers have proven very nimble at practices that allow them to extract Medicare payments beyond what was anticipated or desired.
Post-COVID, that game is going to be harder than usual. Scaling of revenue that typically accompanies inflation is not readily available under the reimbursement systems in U.S. health care. Patient characteristics or practices will need to change. For hospitals the ongoing increases in acuity due to delayed care and other factors will help enormously. Provider types paid through bundle or package system will have fewer options.
The challenges presented by the Medicare reimbursement system will be felt most acutely by providers overly levered to Medicare payments and those paid through a bundle or package arrangement. For this analysis we pick what are probably the most at-risk: DVA, EHC and CHE, although a similar framework can be constructed and applied to other less impacted providers across the health care ecosystem.
You can listen to the entire replay here.
Audio only here.
Timestamps:
|
0:00 - 10:00 Macro overview: wage expenses, drug and supply costs 10:01 - 12:45 Sequestration: a problem on top of a problem 12:45 - 16:05 Three providers at risk: DVA, EHC, CHE 16:05 - 27:41 DVA 27:41 - 34:00 EHC 34:00 - 39:48 CHE 39:49 - 45:31 Q & A |
Emily Evans
Managing Director – Health Policy
Twitter
LinkedIn
