FLORIDA HEALTH INSURANCE

September 27, 2007

Medicare Coverage & Cancer

A 2003 overhaul of Medicare that changed the way oncologists are reimbursed for their services did not alter cancer patients' perceptions of their quality of care, a new survey found.

The poll also found that cancer patients are waiting the same amount of time for chemotherapy treatments to begin and traveling the same distance to a treatment location as they did before 2003.

"In 2003, Congress changed the way Medicare charges for oncology therapy, and following that there was a lot of controversy and concern that, in fact, patients would be denied access," said study co-author Dr. Kevin Schulman.

"But at least in terms of what we found in this survey, there is no evidence that that has occurred," he said. "We did find some evidence that patients who didn't have supplemental insurance might have some negative changes -- more difficulty with access. But it was a really small number of people -- too small to say that definitively."

Schulman is a professor of medicine and director of the Center for Clinical and Genetic Economics at Duke University's Clinical Research Institute. His team's finding were published online Oct. 8 in the journal Cancer and were expected to be published in the Nov. 15 print issue.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 is widely considered the most sweeping change made to the government-run health insurance program since its inception in 1965.

Key alterations included adding a new prescription drug benefit and expanding subsidies for rural hospitals. At the same time, however, Medicare reimbursements to oncologists for cancer treatments were cut by 30 percent to 40 percent -- raising fears of service cuts, staff lay-offs, facility consolidations, and a resulting drop in patient access to timely quality care, the study authors said.

To gauge how close those fears match reality, Schulman and his colleagues began an Internet survey of cancer patients in 2006.

Approximately 1,400 men and women participated, drawn from every Medicare jurisdiction in the United States. The majority were female and white, with an average age of 60. About one-quarter came from rural areas, and about half said they had private, employer-based health insurance when they began treatment -- insurance that supplemented their Medicare coverage for those 65 and older.

About half the patients had started and finished their chemotherapy treatment between January 2003 and January 2005; the other half began their treatment in February 2005 and continued on.

Patients were asked about their type of cancer, insurance status, income, educational background, race/ethnicity, waiting time for treatment, travel time to treatment facility, changes in facilities or physicians, and overall satisfaction with their care and ability to handle out-of pocket costs.

The study authors found that among those 65 and older, the wait time for chemotherapy treatment following diagnosis was the same both before and after 2003: three weeks.

Most patients 65 and older on either side of the Medicare changes said it took about 30 minutes to get to their treatment center. And only 12 percent of both groups of patients said their health-care location had changed during their treatment regimen.

Sixty-five percent of all patients 65 and older said they were "very satisfied" with their oncologist's services, and 76 percent said they were "very satisfied" with staff service at their place of chemotherapy treatment.

Among younger patients, the number who were "very satisfied" with their oncologist actually rose from 58 percent pre-2003 to 67 percent post-2003.

However, when it came to out-of-pocket costs, the post-2003 picture wasn't as rosy. While 46 percent of those 65 and older said they had money left over after paying out-of-pocket expenses before the Medicare changes of 2003, less than 26 percent said the same was true after 2003.

Rural patients now appear to be waiting nearly a week longer for treatment to begin -- almost four weeks, compared with three -- since the changes were put into place.

But, patients without any private insurance to supplement their Medicare said there was virtually no change in waiting times -- an average of 4.3 weeks before 2003, compared with four weeks after 2003.

While the authors called for additional research to continue monitoring the impact of the Medicare changes, they concluded that physician reimbursement reductions have not yet had a major impact on patient care.

"Given the amount of controversy at the time the changes took place, I think our findings were surprising to us," Schulman said. "But, at some level, I think the good news is that the policy process seems to have been responsive to the expressed concerns and helped to mitigate them."

Others took issue with Schulman's evaluation, suggesting that the Medicare glass is actually half empty, not half full.

"I'm surprised that the finding is neutral. I would've expected that the findings would be better," said Robert M. Hayes, president of the Medicare Rights Center, an independent, nonprofit national consumer service organization. "And they should be so much better given the amount of public money invested. But there's no sign of improvement."

"So, I'd say that this is another call for structural reform of Medicare," Hayes added. "Putting tens of billions of dollars into a program that seems not to be having any improved impact on very sick people raises obvious concerns about how well designed the program is. And this is another piece of evidence suggesting that we could be getting so much more positive outcome than we are."

Medicaid Spending Jumps

Medicaid spending has started to soar again, a sharp reversal from last year when costs unexpectedly fell for the first time since the program began in 1965. The state-federal health care program for the poor experienced a 10.7% jump in costs during the first six months of the year, according to a USA TODAY analysis of Bureau of Economic Analysis data. That's the biggest increase since 2001 and puts Medicaid on pace to spend a record $330 billion in 2007.

"States are going to have to make some tough decisions on who receives care, what care they get and what the limitations are," says Robert Campbell, vice chairman of Deloitte & Touche USA, an accounting and consulting firm that works with state and local governments.

He expects costs to continue to rise for the foreseeable future as states try to reduce the number of the uninsured amid rising medical costs.

Higher Medicaid spending could squeeze state finances at a time when revenue growth in many states is being slowed by the slumping housing market. State tax collections have grown about 5% this year, down from 9% growth in 2005, according to Bureau of Economic Analysis data. Medicaid recently surpassed education as the biggest item in state budgets.

The Medicaid spending burst may signal the end of a two-year period when costs seemed to be coming under control. Costs grew 5.1% in 2005 and declined 1.7% in 2006.

Spending fell last year because a variety of cost controls — such as moving patients from nursing homes to lower-cost home health care — produced unexpectedly large savings. Also, Medicaid shifted some costs into the new Medicare prescription-drug benefit program. Medicare, the federal program for the elderly, will cost about $440 billion this year.

Medicaid and the related Children's Health Insurance Program are state-run health insurance plans for the poor. States pay 43% of the cost. The federal government pays the rest and sets broad rules. Medicaid pays nursing home costs for seniors who have exhausted their savings.

It's not clear why Medicaid costs have started to rise again. Possible causes:

•Efforts to cover the uninsured. States have won federal approval to expand coverage to groups that don't normally qualify for Medicaid, Campbell says. These high-profile efforts to reduce the uninsured population rely heavily on the federal government paying costs through the Medicaid and children's health programs. The Bush administration had encouraged these efforts until recently but now is expressing concerns about costs. President Bush last week vetoed expanding the child health program, saying it has gone too far beyond its mission of insuring low-income children.

•Enrollment growth. Medicaid temporarily bumped tens of thousands of qualified people from the program last year because Congress imposed tougher proof-of-citizenship requirements. Now, the application backlog is being cleared and retroactive payments made for medical costs incurred in 2006.

•Paying doctors and hospitals more. Boosted by strong tax collections, many states have increased what they pay for Medicaid services. In most states, Medicaid pays less than private insurance or Medicare.

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