The next President and Congress will face many fiscal and policy challenges from the $436 billion Medicare program. Following my earlier quick primers on Medicaid policy making and Medicare and Medicaid waivers, here is a similar briefing on the primary vehicles of Medicare policy making. As a federal health program operating nationwide, Medicare policies are made through: Federal Medicare Statutes:...

Many of my clients ask me how Medicaid policy is made, particularly for coverage, reimbursement, and managed care and other delivery systems. The $360 billion Medicaid program is highly complex and there are many nuances and exceptions, but here is a high-level primer on the basics. Given the Medicaid program's shared federal-state funding and governance, underlying complexity, and variability across...

Federal waivers are powerful tools to demonstrate Medicare or Medicaid reforms, including new payment methods, benefit packages, and delivery systems. The business and policy opportunities are considerable. Here's a quick primer. Demonstration Waivers: Historically, federal policymakers have understood the need to test new ideas in the complex Medicare and Medicaid programs. Research and demonstrations projects - whether initiated by states,...

Are you curious or mystified by the intricucies and vagaries of Medicaid financing or federal Medicaid waivers? If so, please check out my new podcasts courtesy of Sellers Dorsey, the influential Medicaid and health reform consultancy. Medicaid Financing 101: Concise review of Medicaid financing and the many opportunities available to find solutions to Medicaid budget needs. To listen, click here...

Serious and costly performance problems riddle U.S. health care. Because of overuse, under use, and misuse of health care, researchers at the Juran Institute and elsewhere estimate that about 30 percent of health care costs are generated by poor quality. Therefore, poor quality medical care will cost about $720 billion in 2008 (30% of $2.4 trillion). Poor quality also reduces...

The Medicare Payment Advisory Commission (MedPAC) - the influential independent Congressional agency charged with advising Congress on a wide range of Medicare policy issues - has released its Medicare payment policy recommendations for 2009. The 355-page report includes a weath of information for those tracking Medicare provider or health plan issues, particularly annual provider payment updates, reforms to Medicare Advantage,...

Enrollment in Medicare Advantage plans has jumped 63 percent since 2005. Over 22 percent of all Medicare beneficiaries - 8.8 million total - now receive their Medicare Part A and Part B benefits through a private health plan instead of the traditional fee-for-service system. About 88 percent of all Medicare Advantage plan enrollees also receive their Part D drug benefits...

More purchasers and payors are moving away from simplistic cost-driven drug benefit designs to formularies and cost sharing based on value. The impact of value-based drug benefit designs on manufacturers will depend on how quickly individual firms adapt their business thinking and communications strategies. Until recently, the path to success for a drug manufacturer was based largely on product novelty,...

The latest issue of the American Journal of Managed Care has several interesting articles on diabetes, demonstrating several opportunities to improve outcomes and reduce costs: How Managed Care Organizations Contribute to Improved Diabetes Outcomes: Patricia Salber, MD, chief medical officer and SVP at Universal American, a large Medicare health and drug plan, outlines how MCOs are improving outcomes for patients...

The journal Medical Care has published series of outstanding articles on emerging methods and tools to compare the effectiveness of medical therapies, prescription drugs, and devices. The peer-reviewed articles are an outgrowth from a symposium on comparative effectiveness research sponsored by the Agency for Healthcare Research and Quality (AHRQ). Here are links to the individual articles in PDF format: Emerging...

The Medicare Payment Advisory Commission (MedPAC), the savvy nonpartisan shop that advises Congress on Medicare program issues, has updated its excellent series of primers. Extremely complex and changing constantly, Medicare payment policy will drive $479 billion in health spending in 2008. MedPAC's primers, typically four crisply-written pages, explain the basic steps and methodologies Medicare uses to reimburse fee-for-service providers, Medicare...

The 10-year old, extremely popular, and reasonably successful State Children's Health Insurance Program (SCHIP) expires in six weeks. Congress and the White House must agree on a reauthorization bill, and so far the parties are far apart. Here are some key resources to understand the radically different House and Senate bills. Most notably, the House bill is far more expansive...

The well-regarded industry trade journal Biotechnology Healthcare has an excellent article by Patrick Mullen on The Arrival of Average Sales Price. In it, Mr. Mullen interviews several top industry experts (yes, including me) on the rationale for and impact of Average Sales Price (ASP) and how health plans are following Medicare's lead: Health plans are beginning to adopt the average...

In the Deficit Reduction Act (DRA), Congress made major, controversial, and technically complex changes to Medicaid prescription drug pricing and pharmacy reimbursement. The policy changes, which are expected to save the feds and states $8.4 billion over the next five years, present significant challenges to both drug manufacturers and retail pharmacies. To implement the DRA changes, the Center for Medicare...

The Carlyle Group, a large private equity firm, announced today that it is buying Manor Care, a large operator of nursing homes and long-term care services, for $6 billion. This got the good folks at Marketplace Radio to ask why private equity firms seem to be so interested in buying up health care companies. And the resulting radio story broadcast...