Three-quarters of the total cost increase for patients with a heart attack was incurred for services between the 31st and the 365th day, according to a new study of Medicare cost trends in 1998-2008.
Medicare's system for paying for heart attack care based on diagnosis has led to relatively low cost increases during the first 30 days after patient admissions, but from the 31st day to the 365th day, costs under the fee-for-service system skyrocketed.
That's according to a report analyzing Medicare cost trends from 1998 to 2008, published Monday in JAMA Internal Medicine by University of Michigan and Dartmouth Institute researchers. The finding comes even though fewer Medicare beneficiaries required hospital admission for heart attack.
With current Medicare payment policies, "we're focused on [reducing costs within] the first 30-day period, and unless we really restructure the way we pay for patient care, all we're going to do is squeeze one end of the balloon while the other end expands," says Donald S. Likosky, PhD, the study's lead author, who is an associate professor in the University of Michigan's Department of Cardiac Surgery.
"This suggests to me that we really need to think fundamentally about how we manage our patient and how we also pay for these services to care for them," Likosky told HealthLeaders Media. He suggests that Medicare should consider bundling payments for services beyond the acute care episode, perhaps for as long as 90 days or even a year.
"What was most surprising was that the payment strategy we currently have in place is not effective when you look beyond the traditional 30-day window. So what we need to do now, the challenge, is to revisit how we pay for services. Our current strategy is ineffective when we look out at the one–year time horizon," he says.
The researchers found that costs per Medicare beneficiaries requiring hospitalization due to heart attack increased from $20,856 to $22,416 during first 30 days of treatment, or 7.5% (including the time the patient was in the hospital). But from the 31st day to the 365th, costs rose from $16,171 to $20,705, up 28%.
During that 335-day period beyond the 30-day window, costs attributed to home health agency, hospice, and durable medical equipment almost doubled, from $1,423 to $2,825, and costs attributable to skilled nursing facility care went up 81.3% from $1,299 to $2,355 per beneficiary. About 75% of the total cost increase for patients with a heart attack was for services between the 31st and the 365th day.
For example, after the index admission bundled period, costs for other services such as durable medical equipment went up 82.7%, from $602 to $1,100 per beneficiary between 1998 and 2008. Physician evaluation and management (E&M) payments rose 12.7% and imaging rose $14.3%.
Likosky says that the research period did not extend beyond 2008, when new payment policies from the Centers for Medicare & Medicaid Services attempted to reign in ambulatory spending for imaging, and benefits for hospice care were limited.
In an accompanying commentary, Ashish Jha, MD, professor of health policy and management at the Harvard School of Public Health, noted that "the additional spending went toward paying for more skilled nursing facilities, physician's visits, home health care, and durable medical equipment. Although readmission rates in the late period remained stable, the spending per readmission went up—with little evidence that patients benefited."
Jha also noted that not only are these post-acute episode services expensive to Medicare "but to the beneficiaries as well," prompting them to incur "substantial out-of-pocket costs."
Likosky's report, Jha wrote, "should be a wake-up call for federal policy makers" to focus on cost reductions beyond 30 days, and is "a timely reminder of the importance of research and data for policy making."