Medicare Bill Promises Lower Cost, Higher Value

There is a radical and bipartisan bill making its way to Congress that could change the future of Medicare. The bill, known as “The Better Care, Lower Cost Act of 2014,” functions as a shared-savings program. It caps out-of-pocket costs for seniors in need of the most care, but sets the cap high enough that care teams can focus on reducing hospital admissions and controlling overall costs under the cap. To draft the bill, its crafters—Senator Ron Wyden (D-OR), Senator Johnny Isakson, (R-GA), Representative Erik Paulsen (R-MN), and Representative Peter Welch (D-VT)—used feedback from professionals who actually provide Medicare services to beneficiaries.

In addition, unlike Accountable Care Organizations (ACOs), Better Care Programs (BCPs) are designed to target the chronically ill, and they offer risk-adjusted payments which might encourage providers to take on Medicare patients with multiple chronic conditions. In fact, Mr Wyden has labeled the initiative “chronic disease reform.”

“Medicare is now dominated by cancer, diabetes, heart disease, and other chronic conditions,” Mr Wyden said in a statement. “Medicare reform must be built around offering better quality, more affordable care for these seniors. Fortunately, there are pioneering practices and plans that are paving the way. The point of our bipartisan legislation is to break government’s shackles on innovation so that these providers are the norm rather than the exception.”

Dr A. Mark Fendrick, director of the University of Michigan Center for Value-Based Insurance Design, and co—editor-in-chief at the American Journal of Managed Care, identified the bill as the first to include “clinically nuanced” principles that acknowledge a healthcare service has different value depending on who's receiving it, who's delivering it, and where it’s being delivered.

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