Home > Hospital and Medical Practice Management > Disease Management,Value-Based Payment Programs Fail to Cut Medicare Costs

Disease Management,Value-Based Payment Programs Fail to Cut Medicare Costs

The non-partisan Congressional Budget Office and Department of Health and Human Services have come out stating that programs designed to cut Medicare spending have failed. Disease management coordination demonstrations and value-based payment demonstrations have not reduced Medicare costs one bit. The 34 disease management coordination programs specifically have had no affect on the reduction of hospital admissions. Value-based payment demonstrations, which allowed large multi-specialty physician groups to share in savings or offered bonuses for meeting quality metrics, created no Medicare savings at all. A complete report of CBO’S findings can be found here: http://www.cbo.gov/ftpdocs/126xx/doc12663/01-18-12-MedicareDemoBrief.pdf

Medicare and Medicaid spending/costs are dramatically rising. According to CMS, medicare spending will reach $1.038 billion by 2020. Medicaid spending will reach $458 billion by 2020 as well. Medicare and Medicaid spending is expected to grow at 7% between 2012-2020. Expect to see HHS Secretary Kathleen Sebelius authorize and implement cuts to the programs as deep as 30% starting January 2012. The cuts are the only option Secretary Sebelius has since the programs failed to produce savings.

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