Coordinated care does not equal Medicare savings

One often expressed suggestion for controlling public health care costs is for Medicare to adopt a strategy of the private insurance industry by assigning a care coordinator to the patient. This coordinator could, theoretically, identify care overlap, unnecessary procedures, lower-cost alternatives, and coach the patient toward a healthier life style, all to the end of providing better care at a lower cost. Unfortunately, a clinical trial of over 18,000 patients has shown that this is not a viable strategy.

The study assigned nurses trained as care coordinators to a group of people with serious health issues such as coronary disease and diabetes,who were racking up Medicare bills of $1,535, on average,per month, three times that of the average Medicare recipient. For the test, the managed care staff was paid $235 per patient to guide, educate and support the test subjects regularly, primarily via phone contact. Meanwhile, the control group received the typical Medicare services.

The results? Of the 12 largest programs, only two showed any significant change in hospital admission, and one of those was an increase of 19%. When the cost of the care coordination is included, the total Medicare expenditures actually increased by 8-41% in most of the groups studied. Disappointingly, those patients with diet and exercise needs did not benefit from the managed care.

The study organizers concluded that, in order to have an impact on the patient's well being and Medicare expenses, in-person contact was necessary, and that a team-based approached, rather than the single-coordinator strategy, had a better chance of success. It also found that closer contact with the patient's physician, for which he/she should be provided a financial motivation, was a key to reducing expenses.

Thanks, Sarah Rubenstein, Wall Street Journal

Learn about investing from the comfort of your own home.

Portfolio Basics

Take the first steps to building your portfolio.

View Course »

Investment Strategies

Learn the strategies you need to build a winning portfolio

View Course »

Add a Comment

*0 / 3000 Character Maximum