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Health care reform is once again a hot topic, as House Speaker Newt Gingrich announced recently that in order to administer Medicare more efficiently, he wants to abolish the federal agency in charge of that program.
The Health Care Financing Administration (HCFA), which administers Medicare, already has been experimenting with some ways to hold down rising costs.
In a number of states, particularly in the Northeast, managed care organizations have contracted with HCFA to provide managed care options for older Americans who choose them.
While managed care is not yet a Medicare option in Wisconsin, a University of Wisconsin-Extension health policy specialist says managed competition is one potential way to save money and provide quality health care without direct government intervention in health care reform.
The government is the largest single health care purchaser in the U.S. -- 43 percent of all health care bills in 1993 were paid by the government.
"Medicare alone pays for 17 percent of all medical bills, and Medicaid, or Medical Assistance in Wisconsin, pays 13 percent," said Roberta Riportella-Muller.
"Because Medicare is a fee-for-service program, it is difficult to control costs. It is hard to plan for costs when there is variation in the number of doctor visits and other health care decisions made by physicians. Costs also are a problem for the patient because Medicare doesn't always cover the full cost of services."
She said in many instances, older Americans pay costs above set fee schedules out of their own pockets. Others purchase supplemental insurance or qualify for another government program that pays the balance.
When the federal government contracts with managed care organizations, Riportella-Muller said it can better budget costs for a given year.
Most managed competition in Medicare works like this: Instead of paying a bill each time a Medicare patient goes to the doctor or stays in the hospital, HCFA pays a managed care organization a yearly flat fee for each older adult who enrolls.
The older adult chooses a primary care physician from a list provided by the managed care organization. Names of specialists also are provided. Depending upon covered benefits, the organization also pays most medical costs approved by the primary care physician and any referring physicians.
Riportella-Muller said many older adults have been wary of managed care because they don't want to be limited to the physicians in any one plan. They also may be concerned that a doctor must consult the managed care's administration for approval before ordering tests and services.
In the Northeast, where an increasing number of Medicare patients have chosen managed care, it has been a popular option for relatively healthy older adults.
Riportella-Muller said managed care may have some definite advantages for Medicare patients, including:
Riportella-Muller says she believes HCFA may make a decision this year to contract with managed competition organizations across the country, including Wisconsin. Medical Assistance already contracts with some managed care organizations in the state.
(written Feb. 1995)
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