Healthcare Financial News

Under a healthcare reform proposal currently being considered by Congress, hospitals that accept Medicare and public plan payment would see payments for services reduced by an average of 32 percent below what private insurers pay for the same treatment. This projection is included in The Lewin Group’s analysis of the draft legislation introduced in the U.S. House of Representatives earlier this month, America’s Affordable Health Choices Act of 2009.

Other key findings in the report about the impact of the draft legislation include the following: 

• The number of uninsured Americans would be reduced by 32.6 million.
• Payments for physician services would be reduced by an average of 14 percent below what private insurers reimburse for the same treatment.
• Premiums for a public plan would be an average of 20 percent less than private insurance premiums for families, and 25 percent less for individuals.

The Lewin Group’s analysis examines two scenarios that would result from a Commissioner’s determination of eligibility for the public plan option. It concludes that costs to federal, state and local governments would vary significantly, depending on eligibility limitations.

The objective of the analysis was to understand how alternative proposals for enacting the legislation would affect various public and private stakeholders. The 61-page report includes a discussion of the Act and its effects on each stakeholder.

Funding in the form of grants and loans will be awarded by the U.S. Department of Agriculture’s Rural Utilities Service to build and improve hospitals, clinics and other facilities in low-income rural areas. The funds, totaling $1.19 billion, were authorized by the American Recovery and Reinvestment Act of 2009, and will be awarded on a rolling basis through Sept. 30, 2010. Contact the USDA rural development office in the state where the project is located for more information.

Read the notice in the July 23 Federal Register.

According to a new commentary from the Center for Studying Health System Change (HSC), until consumers are motivated to use quality information to choose providers, the main value of public quality reporting will be to motivate providers to improve their performance. Unlike price transparency—where consumer needs vary greatly depending on their insurance coverage and benefits—theoretically, all consumers can benefit from the same information on the quality of care provided by individual physicians, medical groups, hospitals, and other providers. However, most Americans still rely on recommendations from friends, family members, and physicians when choosing doctors or hospitals. Effective quality reporting needs to reflect different consumer abilities to understand and use information, according to the commentary, entitled Health Care Quality Transparency: If You Build It, Will Patients Come? For example, layering information would allow consumers to choose whether they want to access broad quality assessments or drill down to detailed information about specific facets of performance. Providers should also realize that communicating their beliefs about flaws in quality data or analyses to consumers undermines consumers’ willingness to rely on the information.