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J U N E 2 0 1 2
A DATA BOOK
Health Care Spending
and the
Medicare Program
J U N E 2 0 1 2
A DATA BOOK
Health Care Spending
and the
Medicare Program
Introduction
MedPAC’s Data Book is the result of discussions with congressional staff members regarding
ways that MedPAC can better support them. Some of the information it contains is derived from
MedPAC’s March and June reports to the Congress; other information presented is unique to the
Data Book. The format is condensed into tables and figures with brief discussions. Website links
to MedPAC publications and other websites are included on a “Web links” page at the end of
each section.
The Data Book provides information on national health care and Medicare spending, as well as
Medicare beneficiary demographics, dual-eligible beneficiaries, quality of care in the Medicare
program, and Medicare beneficiary and other payer liability. It also examines provider settings—
such as hospitals and post-acute care—and presents data on Medicare spending, beneficiaries’
access to care in the setting (measured by the number of beneficiaries using the service, number
of providers, volume of services, length of stay, or through direct surveys), and the sector’s
Medicare profit margins, if applicable. In addition, it covers the Medicare Advantage program
and prescription drug coverage for Medicare beneficiaries, including Part D.
Several charts in this Data Book use data from the Medicare Current Beneficiary Survey
(MCBS). We use the MCBS to compare beneficiary groups with different characteristics. The
MCBS is a survey, so expenditure amounts that we show may not match actual Medicare
expenditure amounts from CMS’s program offices or the Office of the Actuary.
Changes in aggregate spending among the fee-for-service sectors presented in this Data Book
reflect changes in Medicare enrollment between the traditional fee-for-service program and
Medicare Advantage. Increased enrollment in Medicare Advantage may be a significant factor in
instances in which Medicare spending in a given sector has leveled off or even declined. In these
instances, fee-for-service spending per capita may present a more complete picture of spending
changes.
We produce a limited number of printed copies of this report. It is, however, available through
the MedPAC website: www.medpac.gov.
iii
Table of contents
Introduction .............................................................................................................................. iii
Sections
1 National health care and Medicare spending .............................................................. 1
1-1 Aggregate Medicare spending among FFS beneficiaries, by sector, 2000–2010 ................................... 3
1-2 Per capita Medicare spending among FFS beneficiaries, by sector, 2000–2010 .................................... 4
1-3 Medicare made up over one-fifth of spending on personal health care in 2010...................................... 5
1-4 Medicare’s share of total spending varies by type of service, 2010 ........................................................ 6
1-5 Health care spending has grown more rapidly than GDP, with public financing making
up nearly half of all funding ...................................................................................................................... 7
1-6 Trustees project Medicare spending to increase as a share of GDP ........................................................ 8
1-7 Changes in spending per enrollee, Medicare and private health insurance ............................................. 9
1-8 Trustees and CBO project Medicare spending to grow at an annual average rate of
around 6 percent over the next 10 years ................................................................................................ 10
1-9 Medicare spending is concentrated in certain services and has shifted over time ................................ 11
1-10 FFS program spending is highly concentrated in a small group of beneficiaries, 2008 ...................... 12
1-11 Medicare HI trust fund is projected to be insolvent in 2024 under actuaries’
intermediate assumptions ....................................................................................................................... 13
1-12 Medicare faces serious challenges with long-term financing ............................................................... 14
1-13 Average monthly SMI premiums and cost sharing are projected to grow faster than the
average monthly Social Security benefit ............................................................................................... 15
1-14 Medicare HI and SMI program payments and cost sharing per beneficiary in 2010........................... 16
Web links ................................................................................................................................................. 17
2 Medicare beneficiary demographics ........................................................................... 19
2-1 Aged beneficiaries account for the greatest share of the Medicare population and
program spending, 2008 ......................................................................................................................... 21
2-2 Medicare enrollment and spending by age group, 2008 ....................................................................... 22
2-3 Beneficiaries who report being in poor health account for a disproportionate share of
Medicare spending, 2008 ....................................................................................................................... 23
2-4 Enrollment in the Medicare program is projected to grow rapidly in the next 20 years ..................... 24
2-5 Characteristics of the Medicare population, 2008 ................................................................................. 25
Web links ................................................................................................................................................. 26
3 Dual-eligible beneficiaries ............................................................................................ 27
3-1 Dual-eligible beneficiaries account for a disproportionate share of Medicare spending, 2008 ........... 29
3-2 Dual-eligible beneficiaries are more likely than non-dual eligibles to be disabled, 2008 .................... 30
3-3 Dual-eligible beneficiaries are more likely than non-dual eligibles to report
poorer health status, 2008....................................................................................................................... 31
v
3-4 Demographic differences between dual-eligible beneficiaries and non-dual eligibles, 2008 .............. 32
3-5 Differences in spending and service use rate between dual-eligible beneficiaries and
non-dual eligibles, 2008 ......................................................................................................................... 33
3-6 Both Medicare and total spending are concentrated among dual-eligible beneficiaries, 2008 ............ 34
Web links ...................................................................................................................................... 35
4 Quality of care in the Medicare program................................................................... 37
4-1 In-hospital and 30-day post-discharge mortality rates improved from 2007 to 2010 .......................... 39
4-2 Hospital inpatient patient safety indicators improved or were stable from 2007 to 2010 .................... 40
4-3 Risk-adjusted SNF quality measures show mixed results since 2000 .................................................. 41
4-4 Home health quality measures show limited change in 2011 ............................................................... 42
4-5 Dialysis quality of care: Some measures show progress, others need improvement ........................... 43
4-6 Medicare Advantage quality measures show improvement between 2010 and 2011 ......................... 44
Web links ................................................................................................................................................. 46
5 Medicare beneficiary and other payer financial liability ......................................... 49
5-1 Sources of supplemental coverage among noninstitutionalized Medicare beneficiaries, 2009 ........... 51
5-2 Sources of supplemental coverage among noninstitutionalized Medicare beneficiaries,
by beneficiaries’ characteristics, 2009 ................................................................................................... 52
5-3 Total spending on health care services for noninstitutionalized FFS Medicare beneficiaries,
by source of payment, 2009 ................................................................................................................... 53
5-4 Per capita total spending on health care services among noninstitutionalized FFS
beneficiaries, by source of payment, 2009 ............................................................................................ 54
5-5 Variation in and composition of total spending among noninstitutionalized FFS beneficiaries,
by type of supplemental coverage, 2009 ............................................................................................... 55
5-6 Out-of-pocket spending for premiums and health services per beneficiary,
by insurance and health status, 2009...................................................................................................... 56
Web links ...................................................................................................................................... 57
6 Acute inpatient services ............................................................................................... 59
Short–term hospitals
6-1 Annual changes in number of acute care hospitals participating in the
Medicare program, 2000–2010 .............................................................................................................. 61
6-2 Percent change in hospital employment, by occupation, 2008–2010 ................................................... 62
6-3 Growth in Medicare’s FFS payments for hospital inpatient and outpatient services, 1999–2010 ...... 63
6-4 Proportion of Medicare acute care hospital inpatient discharges by hospital group, 2010 .................. 64
6-5 Major diagnostic categories with highest volume, fiscal year 2010 ..................................................... 65
6-6 Cumulative change in total admissions and total outpatient visits, 1999–2010 ................................... 66
6-7 Cumulative change in Medicare outpatient services and inpatient discharges per
FFS beneficiary, 2004–2010 .................................................................................................................. 67
6-8 Trends in Medicare inpatient and non-Medicare inpatient length of stay, 1999–2010 ........................ 68
6-9 Share of inpatient admissions preceded by emergency department visit, 2005–2010 ......................... 69
vi
6-10 Share of Medicare Part A beneficiaries with at least one hospitalization, 2000–2010 ........................ 70
6-11 Hospital occupancy rates, 1999–2010 ................................................................................................... 71
6-12 Medicare inpatient payments, by source and hospital group, 2010 ...................................................... 72
6-13 Medicare acute inpatient PPS margin, 1999–2010 ............................................................................... 73
6-14 Medicare acute inpatient PPS margin, by urban and rural location, 1999–2010 ................................. 74
6-15 Overall Medicare margin, 1999–2010 ................................................................................................... 75
6-16 Overall Medicare margin, by urban and rural location, 1999–2010 ..................................................... 76
6-17 Hospital total all-payer margin, 1999–2010 .......................................................................................... 77
6-18 Hospital total all-payer margin, by urban and rural location, 1999–2010 ............................................ 78
6-19 Hospital total all-payer margin, by teaching status, 1999–2010 ........................................................... 79
6-20 Medicare margins by teaching and disproportionate share status, 2010 .............................................. 80
6-21 Financial pressure leads to lower costs .................................................................................................. 81
6-22 Change in Medicare hospital inpatient costs per discharge and private payer
payment-to-cost ratio, 1987–2010 ......................................................................................................... 82
6-23 Markup of charges over costs for Medicare services, 1999–2010........................................................ 83
6-24 Number of critical access hospitals, 1999–2012 ................................................................................... 84
Specialty psychiatric facilities
6-25 Medicare payments to inpatient psychiatric facilities, 2002–2011 ....................................................... 85
6-26 Number of inpatient psychiatric facility cases has fallen under the PPS, 2002–2009 ......................... 86
6-27 Inpatient psychiatric facilities, 2003–2009 ............................................................................................ 87
6-28 One diagnosis accounted for almost three-quarters of IPF cases in 2009 ............................................ 88
6-29 IPF discharges by beneficiary characteristics, 2009 .............................................................................. 89
Web links ................................................................................................................................................. 90
7 Ambulatory care .......................................................................................................... 91
Physicians
7-1 Medicare spending per FFS beneficiary on physician fee-schedule services, 2001–2011 ................. 93
7-2 Volume growth has raised physician spending more than input prices
and payment updates, 2000–2010.......................................................................................................... 94
7-3 Most beneficiaries report that they can always or usually get timely care, 2011 ................................. 95
7-4 Medicare beneficiaries report better ability to get timely appointments with physicians,
compared with privately insured individuals, 2008–2011 .................................................................... 96
7-5 Medicare and privately insured patients who are looking for a new physician report
more difficulty finding one in primary care, 2008–2011 ...................................................................... 97
7-6 Access to physician care is better for Medicare beneficiaries compared with privately insured
individuals, but minorities in both groups report problems more frequently, 2011 ............................. 98
7-7 Differences in access to new physicians are most apparent among minority Medicare
and privately insured patients who are looking for a new specialist, 2011 .......................................... 99
7-8 Growth in volume of physician fee schedule services per beneficiary, 2000–2010 .......................... 100
7-9 Changes in physicians’ professional liability insurance premiums, 2004–2011 ................................ 101
Hospital outpatient services
7-10 Spending on all hospital outpatient services, 2001–2011 ................................................................... 102
7-11 Most hospitals provide outpatient services .......................................................................................... 103
7-12 Payments and volume of services under the Medicare hospital outpatient PPS,
by type of service, 2010 ....................................................................................................................... 104
vii
7-13 Hospital outpatient services with the highest Medicare expenditures, 2010 ...................................... 105
7-14 Medicare coinsurance rates, by type of hospital outpatient service, 2010 .......................................... 106
7-15 Effects of hold-harmless and SCH transfer payments on hospitals’
outpatient revenue, 2008–2010 ............................................................................................................ 107
7-16 Medicare hospital outpatient, inpatient, and overall Medicare margins, 2004–2010......................... 108
7-17 Number of observation hours has increased, 2006–2010 ................................................................... 109
Ambulatory surgical centers
7-18 Number of Medicare-certified ASCs increased by 33 percent, 2004–2011 ....................................... 110
Imaging services
7-19 Medicare spending for imaging services under the physician fee schedule, by type of
service, 2010 ......................................................................................................................................... 111
7-20 Rapid growth in the number of CT and MRI scans per 1,000 beneficiaries, 2000-2010 ............ 112
Web links .............................................................................................................................................. 113
8 Post-acute care ........................................................................................................... 115
8-1 Number of post-acute care providers increased or remained stable in 2011 ...................................... 117
8-2 Medicare’s spending on home health care and skilled nursing facilities fueled growth
in post-acute care expenditures ............................................................................................................ 118
Skilled nursing facilities
8-3 Since 2006, the share of Medicare stays and payments going to freestanding SNFs and
for-profit SNFs has increased............................................................................................................... 119
8-4 Small declines in SNF days and admissions between 2009 and 2010 ............................................... 120
8-5 Case mix in freestanding SNFs shifted toward highest rehabilitation case-mix groups
and away from other categories ........................................................................................................... 121
8-6 Freestanding SNF Medicare margins have exceeded 10 percent for seven years, and
have increased steadily since 2005 ...................................................................................................... 122
8-7 Freestanding SNFs with relatively low costs and relatively high quality
maintained high Medicare margins...................................................................................................... 123
Home health agencies
8-8 Spending for home health care, 1997–2011 ........................................................................................ 124
8-9 Provision of home health care changed after the prospective payment system started...................... 125
8-10 Trends in provision of home health care ............................................................................................. 126
8-11 Margins for freestanding home health agencies .................................................................................. 127
Inpatient rehabilitation facilities
8-12 Most common types of inpatient rehabilitation facility cases, 2011 ................................................... 128
8-13 Volume of IRF FFS patients declined slightly in 2010 ....................................................................... 129
8-14 Overall IRFs’ payments per case have risen faster than costs since implementation
of the PPS in 2002 ................................................................................................................................ 130
8-15 Inpatient rehabilitation facilities’ Medicare margin by type, 2002–2010.......................................... 131
viii
Long-term care hospitals
8-16 The top 25 MS-LTC-DRGs made up nearly two-thirds of LTCH discharges in 2010 ..................... 132
8-17 LTCH spending per FFS beneficiary continues to rise ....................................................................... 133
8-18 LTCHs’ per case payments rose more quickly than costs in 2010 ..................................................... 134
8-19 LTCHs’ aggregate Medicare margin rose in 2010 .............................................................................. 135
8-20 LTCHs in the top quartile of Medicare margins in 2010 had much lower costs................................ 136
Web links .............................................................................................................................................. 137
9 Medicare Advantage.................................................................................................. 139
9-1 MA plans available to virtually all Medicare beneficiaries ............................................................ 141
9-2 Access to zero-premium plans with MA drug coverage, 2006–2012............................................. 142
9-3 Enrollment in MA plans, 1994–2012 .............................................................................................. 143
9-4 Changes in enrollment vary among major plan types ..................................................................... 144
9-5 MA and cost plan enrollment by state and type of plan, 2012 ........................................................ 145
9-6 MA plan benchmarks, bids, and Medicare program payments relative to FFS spending, 2012 ... 146
9-7 Enrollment in employer group MA plans, 2006–2012 ................................................................... 147
9-8 Number of special needs plan enrollees, 2007–2012 ...................................................................... 148
9-9 Number of SNPs and SNP enrollment rose from 2011 to 2012 ..................................................... 149
9-10 Twenty most common condition categories among MA beneficiaries, defined in
the CMS–HCC model, 2008 ............................................................................................................ 150
9-11 Distribution of MA plans and enrollment by CMS overall star ratings, April 2012 ...................... 151
Web links .............................................................................................................................................. 153
10 Prescription drugs ...................................................................................................... 155
10-1 Medicare spending for Part B drugs administered in physicians’ offices or
furnished by suppliers .......................................................................................................................... 157
10-2 Top 10 Part B drugs administered in physicians’ offices or furnished by suppliers,
by share of expenditures, 2010............................................................................................................. 158
10-3 In 2010, about 90 percent of Medicare beneficiaries were enrolled in Part D plans or
had other sources of creditable drug coverage .................................................................................... 159
10-4 Parameters of the defined standard benefit increase over time ........................................................... 161
10-5 Characteristics of Medicare PDPs ....................................................................................................... 162
10-6 Characteristics of MA–PDs ................................................................................................................. 163
10-7 Average Part D premiums .................................................................................................................... 164
10-8 Number of PDPs qualifying as premium-free to LIS enrollees remained stable in 2012 .................. 165
10-9 In 2012, most Part D enrollees are in plans that charge higher copayments
for nonpreferred brand-name drugs ..................................................................................................... 166
10-10 In 2012, use of utilization management tools continues to increase for both PDPs and MA–PDs ... 167
10-11 Characteristics of Part D enrollees, 2010............................................................................................. 168
10-12 Part D enrollment trends, 2006–2010 .................................................................................................. 170
10-13 Part D enrollment by region, 2010....................................................................................................... 171
10-14 The majority of Part D spending is incurred by fewer than half of all Part D enrollees, 2010 .......... 173
10-15 Characteristics of Part D enrollees, by spending levels, 2010 ............................................................ 174
10-16 Part D spending and utilization per enrollee, 2010.............................................................................. 175
ix
10-17 Part D risk scores vary across regions, by plan type and by LIS status, 2010 .................................... 176
10-18 Top 15 therapeutic classes of drugs under Part D, by spending and volume, 2010 ........................... 178
10-19 Generic dispensing rate for the top 15 therapeutic classes, by plan type, 2010.................................. 179
10-20 Generic dispensing rate for the top 15 therapeutic classes, by LIS status, 2010 ................................ 180
Web links .............................................................................................................................................. 181
11 Other services ............................................................................................................. 183
Dialysis
11-1 Number of dialysis facilities is growing and share of for-profit and freestanding
dialysis providers is increasing ............................................................................................................ 185
11-2 Medicare spending for outpatient dialysis services furnished by freestanding and
hospital-based dialysis facilities, 2005 and 2010................................................................................. 186
11-3 Dialysis facilities’ capacity increased between 2006 and 2010 .......................................................... 187
11-4 Characteristics of Medicare fee-for-service dialysis patients, 2010.................................................... 188
11-5 The ESRD population is growing, and most ESRD patients undergo dialysis .................................. 189
11-6 Diabetics, middle-aged and the elderly, Asian Americans, and Hispanics are among
the fastest growing segments of the ESRD population ....................................................................... 190
11-7 Aggregate margins vary by type of freestanding dialysis facility, 2010............................................. 191
Hospice
11-8 Medicare hospice use and spending grew substantially from 2000 to 2010 ...................................... 192
11-9 Hospice use increased across beneficiary groups from 2000 to 2010 ................................................ 193
11-10 Number of Medicare-participating hospices has increased, largely driven by for-profit hospices.... 194
11-11 Hospice cases and length of stay, by diagnosis, 2009 ......................................................................... 195
11-12 Long hospice stays are getting longer, while short stays remain virtually unchanged,
2000 and 2010 ...................................................................................................................................... 196
11-13 Hospice average length of stay among decedents, by beneficiary and hospice
characteristics, 2009 ............................................................................................................................. 197
11-14 Hospice aggregate Medicare margins, 2003–2009 ............................................................................. 198
11-15 Medicare margins are higher among hospices with more long stays, 2009 ....................................... 199
11-16 Hospices that exceeded Medicare’s annual payment cap, selected years........................................... 200
11-17 Length-of-stay and live discharge rates for above- and below-cap hospices, 2009 ........................... 201
11-18 Margins are higher among hospices with a greater share of their patients in
nursing facilities, 2009 ......................................................................................................................... 202
Clinical laboratory
11-19 Medicare spending for clinical laboratory services, 2002–2011 ........................................................ 203
Web links .............................................................................................................................................. 204
x
SECTION
National health care and
Medicare spending
Chart 1-1. A e are
Aggregate Medica spen mong FFS
nding am S
ries, by sector, 2
beneficiar s 2000–20110
160
36.1
13
140 132.7
25.9
12 128.8
122.7 122.1
Medicare spending (dollars in billions)
120 14.3
11
108.5 patient
Hospital inp
102.3 Physician
100 9
93.9 Post-acute care
86.6 Hospital ouutpatient
sychiatric hosp
Inpatient ps pital
80 ASC
62.5 64
4.5
57.7 58.2 58.9
5 60.8
60 54.1
5
48.3 46
4
4
42.0 44.8 44.8
3
38.8 40.8
37.0 35.4 36.4
40 29 32 31.9
27.8 26.6
21.2 2
22.2 20.2 21.2 22
2.8 23.7
15.3 17.7
20 12.8 13.3
9.3
3.3 3.5 3
3.8 4.0 4.0 4
4.1 4.2 4.2 4
4.3
3.2 3.5
0
1.1 1.3 1.5 1.8 2
2.0 2.2 2.3 2
2.3 3.0 3.2 3
3.4
-20
2000 2
2001 2002 2003 004
20 2005 2006 007
20 2008 2009 010
20
Note: FS ce),
FF (fee-for-servic ASC (ambulatory surgical ce e nding only and do not include
enter). Dollars are Medicare spen o
eneficiary cost sh
be g dvantage enrolle is not include in these aggre
haring. Spending for Medicare Ad ees ed egate totals.
Source: e port ds f rust Funds.
CMS Office of the Actuary and the 2012 annual rep of the Board of Trustees of the Medicare Tr
• Medicare spendin among FFS beneficia
ng F strongly in most sectors f
aries grew s from 2000
through 2004. Sp pending grow slowed slightly from 2005 to 200 rebounding briefly in
wth s 07, n
t
2008 and 2009, then modera 0. ng
ating in 2010 The slowin in aggreg ng 5
gate spendin from 2005 to
2007 is partially attributable to a decline in the numb of FFS be
a t ber ber
eneficiaries as the numb
of Me
edicare Adva antage enrollees increas sed.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 3
Chart 1-2. a are
Per capita Medica spend S
ding among FFS
ries, by sector, 2
beneficiar s 2000–20110
00
4,50
00
4,00 3,707
3,791
3,655
3,545
3
3,332
2 3,373
Medicare spending (dollars per capita)
00
3,50
3,130
3,025 atient
Hospital inpa
24
2,92
00
3,00 2,768 Physician
2,638 Post-acute ccare
Hospital outppatient
00
2,50
ychiatric hospit
Inpatient psy tal
ASC 1,862
00
2,00 1,751 1,786
1,608 1,658
1
7
1,567
1,481 1,446
1,50
00 1,28
81 1,346 1,280
1,238 1,175
1,128 1,092
1
962 1,006 967
9
809 876
00
1,00 3
793 760
645 656 642 682
549 586
0
380 426 485
50
00 283 377
98 104 109 111 115 121 120 118
98 97 100
0
0
34 38 3
43 49 55 59 64 65 86 91 9
99
00
-50
2000 2001 02
200 2003 2004 2005
5 2006 2007
2 2008 2009 010
20
Note: FS ce), enter). Dollars are Medicare spen
FF (fee-for-servic ASC (ambulatory surgical ce e o
nding only and do not include
eneficiary cost sh
be haring.
Source: e port ds f rust Funds.
CMS Office of the Actuary and the 2012 annual rep of the Board of Trustees of the Medicare Tr
• Medicare spendin per bene
ng steadily in most sectors f
eficiary in FFS Medicare increased s from
2000 through 200 with som sectors sl
09, me lowing in 20 10.
4 nal a s
Nation health care and Medicare spending
Chart 1-3. M p
Medicare made up over on of ding on
ne-fifth o spend
are 010
personal health ca in 20
on
Total = $2.19 trillio
health
Other h
ance
insura
progrrams
4%% care
Medic
23%%
o
Out of pocket
1
14%
Medicaid
17%
vate health
Priv
nsurance
in
34%
Other third-party
payers s
8%
Note: c d d
Out-of-pocket spending includes cost sharing for both privately and publicly insured individuals. Per rsonal health car re
pending includes spending for clin
sp s nical and profess eceived by patie nts. It excludes a
sional services re administrative coosts
nd
an profits. Premiu d
ums are included with each program (e.g., Medic urance) rather tha in the out-of-p
care, private insu an pocket
ategory. Other he
ca p
ealth insurance programs include the Children's H
e e
Health Insurance Program, Depa se,
artment of Defens and
Deepartment of Vet O
terans' Affairs. Other third-party payers include w
p are, e
worksite health ca other private revenues, India an
Heealth Service, woorkers' compensation, general as nal
ssistance, matern and child hea ehabilitation, other
alth, vocational re
se
federal programs, Substance Abus and Mental He ealth Services A cal
Administration, ot her state and loc programs, and
chool health.
sc
Source: al diture Accounts, 2012.
CMS Office of the Actuary, Nationa Health Expend
• Of the $2.19 trillio spent on personal he
e on ealth care in the United SStates in 2010, Medicare e
accouunted for 23 percent, or $525 billion (as noted a
above, this aamount includes direct
patient care spen nding and ex ain
xcludes certa administ business cos
trative and b re
sts). Medicar is
argest single purchaser of health car in the Uniited States. Thirty-four p
the la e o re percent of
ugh h
spending was financed throu private health insura ance payers and 14 perc m
cent was from
consuumer out-of- nding.
-pocket spen
• Medicare and private health insurance sp m ons
pending incllude premium contributio from
enrollees.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 5
Chart 1-4. M ’s spending varies by type of
Medicare’ share of total s
ervice, 2010
se 2
0
100
90
0 18
Share of spending (in percent)
0
80
46
53
0
70
69
9 68 69
37
0
60
0
50
0
40 32
19
0
30
8 12 8
20
0 45
28
10
0 2
22 22 20 23
0
al
Hospita an
Physicia and Home health Nur
rsing home Durable on
Prescriptio
cal
clinic medical drugs
services equipment
care
Medic SCHIP
Medicaid and all S Other
Note: CHIP (State Children’s Health Ins
SC m). alth for
surance Program Personal hea spending inclludes spending f clinical and
rofessional servic received by patients. It excludes administrativ costs and pro
pr ces p ve not
ofits. Totals may n sum to 100 ppercent
ue
du to rounding. “O p surance, out-of-p
Other” includes private health ins te ending.
pocket spending, and other privat and public spe
Source: al diture Accounts, 2012.
CMS Office of the Actuary, Nationa Health Expend
• The level and dis s ffer n and y
stribution of spending dif between Medicare a other payers, largely
because Medicar covers an older, sicke population and does n cover se
re n er n not ervices such as
long-term care.
• In 2010, Medicar accounted for 28 perc
re d ding on hosp
cent of spend 2
pital care, 22 percent of
physi nical service 45 percent of home h
ician and clin es, ces, 22 percent of nursin
health servic ng
e
home care, 20 pe ercent of durrable medica equipmen and 23 pe
al nt, escription dru
ercent of pre ugs.
6 nal a s
Nation health care and Medicare spending
Chart 1-5. H ding has grown m
Health care spend pidly than
more rap
G h f arly half of
GDP, with public financing making up nea
ll
al funding
25
T
Total health spending rivate spendin
All pr ng
A nding
All public spen ng
Mediicare spendin
Health spending as a percent of GDP
Projected
20
ctual
Ac
15
10
5
0
1966 1971 1976 981
19 1986 1991 19
996 2001 2006 11
201 2016
Note: estic product). To health spending is the sum of all private and p
GDP (gross dome otal f ding is
public spending. Medicare spend
ne f
on component of all public spending.
Source: al diture Accounts, 2012.
CMS Office of the Actuary, Nationa Health Expend
• Total health spen mes
nding consum an incre easing propo
ortion of nat rces, accoun
tional resour nting
for a double-digit share of GD annually since 1982.
t DP .
• As a share of GD total hea spending has increa sed from ab
DP, alth g nt
bout 6 percen in 1965 too
about 18 percent in 2010, an is projecte to reach 2 percent o GDP in 20
t nd ed 20 of 020. Health
spending’s share of GDP was stable thro
e ch 90s
oughout muc of the 199 due to s slower spendding
growt associate with great use of ma
th ed ter e s
anaged care techniques and higher enrollment in
mana nomy.
aged plans, as well as a strong econ
• Medicare spendin has also grown as a share of the economy fr
ng e an
rom less tha 1 percent
when it was start in 1965 to about 3.6 percent toda Projectio suggest that Medica
n ted t ay. ons are
cent of GDP by 2020.
spending will make up 4 perc
• In 2010, all public spending made up abo 45 perce of total health care spending and
c m out ent d
privat spending made up 55 percent. By 2020, thos percentag are proje
te 5 y se ges 49
ected to be 4
ent p
perce and 51 percent, resp pectively.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 7
Chart 1-6. M e crease as a
Trustees project Medicare spending to inc
hare of GDP
sh G
8
Part D
7 Part B 7
6.7
6.5
Part A 6.2
6 6.3
6.0
6
3
5.3
Share of GDP (percent)
5
4.0
4 3.6
3
2.3
1.9
2
3
1.3
1 0.7
0
1970 80
198 1990 2
2000 2010 2020 203
30 2040 2050
2 2060 2070 0
2080
Note: estic product). These projections are based on the trustees’ interm
GDP (gross dome a e sumptions.
mediate set of ass
Source: 012 rt o e t
20 annual repor of the Boards of Trustees of the Medicare Trust Funds.
• are g
Over time, Medica spending has accounted for an inc are From less tha 1
creasing sha of GDP. F an
ent t d 7 GDP in 2080
perce in 1970, it is projected to reach 6.7 percent of G 0.
• Nominal Medicare spending grew on avera 9.1 perce per year over the per
e age ent 80
riod from 198 to
2010, considerabl faster than nominal gro
, ly n conomy, which averaged 5.7 percent per
owth in the ec d
o me e.
year over the sam time frame Future Medicare spend cted to contin growing f
ding is projec nue faster
G
than GDP, averag 10 0 with
ging 5.5 percent per year between 201 and 2080 compared w an annua al
age ate
avera growth ra of 4.6 per rcent for the economy as a whole. In o other words, Medicare
spend cted to contin rising as a share of G
ding is projec nue e.
GDP, but at a slower pace Medicare’s s
e p
share of GDP is projected to reeach 6.7 per 0.
rcent in 2080
• Begin 0, o boom genera tion, an expe
nning in 2010 the aging of the baby-b se
ected increas in life
expec t e t o e
ctancy, and the Medicare drug benefit are likely to increase the proportion of economic c
resou d e,
urces devoted to Medicare growing fr rom 3.6 perce of GDP in 2010 to 6.0 percent of G
ent n 0 GDP
040. Additiona factors, su as innova
by 20 al uch gy
ation in medi cal technolog and the w se
widespread us of
ance (which shields individuals from facing the ful l price of serv
insura f e
rvices), will also contribute to
ases in health care spend
increa ding.
8 nal a s
Nation health care and Medicare spending
Chart 1-7. C
Changes in spend e, are
ding per enrollee Medica and
ealth insurance
private he
25
nual percent ch
Average ann od
hange by perio
Medicare HI
PH
20 970-2010
19 8.8 9.9
970-1993
19 11.0 12.9
993-1997
19 7.3 3.7
Per enrollee change (percent)
997-1999
19 -0.3 6.2
999-2002
19 6.4 9.4
15 002-2010
20 6.4 6.2
10
5
0
-5
1970 975
19 80
198 1985
5 1990 1995 2000 2005 2010
Note: PH (private health insurance). For the most part, during this period Medicare and PHI did not cove the same services.
HI h r d d, er
Medicare expendit th e
tures include bot fee-for-service and private planns.
Source: al diture Accounts, 2012.
CMS Office of the Actuary, Nationa Health Expend
• Altho f
ough rates of growth in per capita sp
p Medicare and private ins
pending for M d surance often
r o rm e e
differ from year to year, over the long ter they have been quite similar. How wever, this
comp ensitive to the end points of the time one uses fo calculating average
parison is se e s or g
th M o e of
growt rates. Also, private insurers and Medicare do not buy the same mix o services, a and
Medicare covers an older population that tends to be more costly. In addition the data d
t e n, do
s ent
not allow analysis of the exte to which these spend were affected by change in
ding trends w es
the generosity of covered benefits and, in turn, chan ges in enrollees’ out-of-
f n -pocket
spending.
• Differ ear ced
rences appe to be more pronounc since 19 gan
985, when Medicare beg introduci ing
p
the prospective payment sys pital inpatien services. S
stem for hosp nt sts
Some analys believe t that,
since the mid-198
e are g
80s, Medica has had greater succ aining cost g
cess at conta growth than
te y
privat payers by using its larger purchas sing power. Others main ntain that, since the 19770s,
b surers have expanded a cost-sha
benefits offered by private ins and aring requireements declined.
These factors ma the comparison prob
ake blematic, as Medicare’s benefits cha over
anged little o
the same period.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 9
Chart 1-8. O t are
Trustees and CBO project Medica spend ding to
e f nt
grow at an annual average rate of around 6 percen
ver n y
ov the next 10 years
1200
T gh
Trustees - hig al
Actua ojected
Pro
T ermediate
Trustees - inte
1000
C
CBO
T w
Trustees - low
800
Dollars (in billions)
600
400
200
0
1980 1984 1988 1992 96
199 2000 2004 008
20 2012 2016 2020
2
Note: nal e). rogram outlays (m
CBO (Congression Budget Office All data are nominal, gross pr administrative
mandatory plus a
xpenses) by cale
ex endar year.
Source: 20 annual repor of the Boards of Trustees of the Medicare Trust Funds; CBO M arch 2012 baseline.
012 rt o e t
• Medicare spendin has grow 14-fold ov the past three decad
ng wn ver 7
des, from $37 billion in 1980
to $522 billion in 2010 (see Chart 1-3; the data inc
C ese t and
clude benefit payments a
administrative ex xpenses).
• Medicare spendin increased significantly after 2006 with the int
ng d 6 f
troduction of Part D,
Medicare’s volun ent tion drug ben
ntary outpatie prescript nefit.
• CBO projects tha mandatory spending fo Medicare will grow at an average annual rate of
at y or e t e e
6.1 percent between 2011 an 2021. The Medicare t
nd e ermediate projections fo
trustees’ inte or
2011 to 2021 also assume 6.1 percent average annu growth. F
ual Forecasts of future Medicare
f
spending are inherently unce an m
ertain, and differences ca stem from different a assumptions
about the econom (which af
my er
ffect provide payment a out
annual updates) and abo growth in then
volum and inten
me ed are
nsity of services delivere to Medica beneficia g
aries, among other factors.
10 onal health care and Medicare spending
Natio e e
Chart 1-9. M ng
Medicare spendin is con ed rtain
ncentrate in cer
ervices and has shifted o
se a e
over time
al 2 b
Tota spending 2001 = $251 billion ending 2011 = $549 billio
Total spe on
SNF SNF
5% Inpatient Presscription 6%
Other al
hospita drugs provided tient
Inpat
12% 38% er
unde Part D pital
hosp
12%
1 24%
Othe
er
tal
hospit
5% r
Other
9% Home
DME
health
2%
4%
Otherr Hospice
hospita
al 3%
6%
DME
D
Physician fee 1%
schedule Home health
h
17% Hospice %
3% Physician fee
P Managed care
Managed 1% schedule 23%
care 12%
15%
Note: NF ng
SN (skilled nursin facility), DME (durable medica equipment). Sp
al s
pending amounts are gross outla at
ays, meaning tha they
f
include spending financed by bene s ude y
eficiary premiums but do not inclu spending by beneficiaries (or spending on their
be nts
ehalf) for cost-sharing requiremen of Medicare-c s.
covered services Values are rep basis
ported on a fiscal year, incurred b
nd e
an do not include spending on pro cludes carrier lab other carrier, in
ogram administration. “Other” inc b, ntermediary lab, and
ot y. t
ther intermediary Totals may not sum to 100 perc cent due to roundding.
012 B fice of the Actuar 2012.
Source: 20 President’s Budget; CMS Off ry,
• d o mong service has chan
The distribution of Medicare spending am es ntially over time.
nged substan
• re out on fit
In 2011, Medicar spent abo $549 billio for benef expenses. Inpatient hospital servi ices
ategory (24 percent), folllowed by ma
were the largest spending ca p e
anaged care (23 percent t),
servic reimburs under th physician fee schedu le (12 perce
ces sed he n ent
ent), outpatie prescripttion
s t), r
drugs provided under Part D (12 percent and other fee-for-serv vice settings (9 percent).
• Altho nt
ough inpatien hospital seervices still made up the largest spe
m e ending categ ng
gory, spendin
s
for those services was a sma care spendin in 2011 th it was in
aller share of total Medic ng han n
m t ent.
2001, falling from 38 percent to 24 perce Spendin g on benefic ged
ciaries enrolled in manag
care plans has gr rown from 15 percent to 23 percent over the same period. C
o Current Meddicare
mana aged care ennrollment is higher than it was a deccade ago.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 11
ram spending is highly c
Chart 1-10. FFS progr rated in a
concentr
mall
sm group of be ies, 2008
eneficiari 8
00
10
Most xt
Nex 4%
Nex 5%
xt 14
90
9 costly 1%
xt
Nex 15%
8
80
24
7
70
d
Second quartile
6
60 81
8
Percent
17
5
50
4
40
30
3 26
c
Least costly half
2
20
10
1 14
5
0
Percent of beneficiaries nt m
Percen of program spending
Note: FS ce). eneficiaries with any group health enrollment durin the year.
FF (fee-for-servic Excludes be a h ng
Source: re ficiary Survey, C ost and Use files
MedPAC analysis of 2008 Medicar Current Benef s.
• Medicare FFS sp oncentrated among a sm number of beneficia
pending is co mall 8,
aries. In 2008
the costliest 5 pe neficiaries ac
ercent of ben r
ccounted for 38 percent of annual M Medicare FFS S
spending and the costliest qu
e uartile accouunted for 81 percent. By contrast, the least costl
ly
half of beneficiari accounte for only 5 percent of F
o ies ed FFS spendin ng.
• Costly beneficiaries tend to in e
nclude those who have multiple chro ons, are usin
onic conditio ng
inpatient hospital services, are dually elig
l dicare and M
gible for Med Medicaid, an are in the last
nd
year of life.
12 onal health care and Medicare spending
Natio e e
M projected to be insolvent
Chart 1-11. Medicare HI trust fund is p t
n nder actu
in 2024 un ntermediate assu
uaries’ in umptions
Yea costs
ar HI
Year H trust
Estimate excee income
ed s
fund assets exhausted
High 2
2008 2017
ate
Intermedia 2
2008 2024
Low 2
2008 Neve
er*
Note: ance). Income includes taxes (pa
HI (Hospital Insura s
ayroll and Social Security benefits taxes, railroad retirement tax
ansfer), income from the fraud an abuse program and interest fr
tra f nd m, rom trust fund asssets.
U ost t ncrease in 2014 a continue to i
* Under the low-co assumption, trust fund assets would start to in and increase throughhout
the projection period.
Source: 012 rt o e t ary.
20 annual repor of the Boards of Trustees of the Medicare Trust Funds; CMS Office of the Actua
• The Medicare pro
M ogram is fina
anced throug two trust funds: one f HI, which covers ser
gh for h rvices
ded
provid by hosp her s
pitals and oth providers such as sk g and
killed nursing facilities, a one for
Supp M uch and
plementary Medical Insurance (SMI) services, su as physician visits a Medicare e’s
presccription drug benefit. Ded roll n
dicated payr taxes on current wor y
rkers largely finance HI
spending and are held in the HI trust fund The HI tru fund can be exhaust if spending
e d. ust ted
excee payroll tax revenues and fund re
eds t s eserves. Geeneral revenu finance roughly 75
ues
ent
perce of SMI se ervices, and beneficiary premiums f ut nt.
finance abou 25 percen (General
revennues are fedderal tax dollars that are not dedicate to a partic
ed ut e
cular use, bu are made up
come and other taxes on individuals and corpora
of inc n ations.)
• The SMI trust fun is finance with general revenues and benefiiciary premiu
S nd ed s ums. Some
ysts believe that the leve of premiu
analy t els neral revenues required to finance
ums and gen
ng s uld
projected spendin for SMI services wou impose a significant b burden on M
Medicare
d i e
beneficiaries and on growth in the U.S. economy.
• e
HI’s expenses ex 008. In 2012 Medicare t
xceeded its income in 20 2, der
trustees report that, und
ntermediate assumptions the HI trus fund will b exhausted in 2024. U
the in s, st be d Under high-co ost
assum e nd e as
mptions, the HI trust fun could be exhausted a early as 2017. Under low-cost
assum w n y s y.
mptions, it would remain able to pay full benefits indefinitely
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 13
M erious ch
Chart 1-12. Medicare faces se ong-term
hallenges with lo m
financing
8
Total expenditures
7 Actual P
Projected
6
HI defiicit
5
Percent of GDP
General rev
venue transfers
4
State t d
transfers and drug fee
3
Premiums
2
1 Payroll taxe
es
efits
Tax on bene
0
1966 1976 1986 96
199 2006 2
2016 2026 2036 46
204 2056 2066 6
2076
Note: GDP (gross dome ed es’
estic product), HI (Hospital Insurance). These projjections are base on the trustee intermediate s ofset
ssumptions. Tax on benefits refer to the portion of income taxes that higher incom individuals pa on Social Sec
as rs me ay curity
enefits that is des
be dicare. State transfers (often calle the Part D “cla
signated for Med ed o
awback”) refer to payments called for
wi re D
ithin the Medicar Prescription Drug, Improvemen and Moderniz
nt, 03 s
zation Act of 200 from the states to Medicare forr
ssuming primary responsibility for prescription dru spending. The drug fee refers to the fee impos in the Patien
as ug e sed nt
Prrotection and Aff ct
fordable Care Ac of 2010 on man nufacturers and iimporters of brannd-name prescription drugs. These
d
fees are deposited in the Part B ac ccount of the SMI trust fund.
Source: 012 rt o e t
20 annual repor of the Boards of Trustees of the Medicare Trust Funds.
• Unde an interme
er ediate set of assumption trustees p
f ns, pending will g
project that Medicare sp grow
ent
rapidly, from about 3.6 perce of GDP to percent by 2
oday to 6.0 p 2040 and ab cent
bout 6.7 perc
by 20
080.
14 onal health care and Medicare spending
Natio e e
A m
Chart 1-13. Average monthly SMI prem miums aand cost sharing
re cted to grow fast than t aver
ar projec g ter the rage
m S ecurity b
monthly Social Se benefit
000
3,0
Actual P
Projected
Monthly amounts per person (in 2011 dollars)
500
2,5 age urity benefit
Avera Social Secu
age um haring
Avera SMI premiu plus cost sh
age t
Avera SMI benefit
000
2,0
500
1,5
000
1,0
5
500
0
1970 198
80 1990 2000 2010 2020 20
030 2040 2050 0
2060 2070 080
20
Note: MI MI
SM (Supplementary Medical Insurance). Average SM benefit and ave um ring
erage SMI premiu plus cost-shar values are for a r
be d fter nding on outpatien prescription dru before 2006 is not
eneficiary enrolled in Part B and (af 2006) Part D. Beneficiary spen nt ugs s
cluded.
inc
Source: 20 annual report of the Boards of Trustees of the Medicare Trust Fun
012 t M nds.
• nd e
Between 1970 an 2010, the average mo al sted for inflation)
onthly Socia Security benefit (adjus
increased by an annual avera rate of 1.6 percent. Over the sa
a age 1 ame period, average SM MI
ost g a age
premiums plus co sharing grew by an annual avera of 5.2 pe f
ercent, and the value of the
rage of 6.3 p
total SMI benefit grew by an annual aver percent.
• Grow over time in Medicare premiums and cost sh
wth e e ontinue to ou
haring will co th
utpace growt in
al ncome. Medicare trustee project th at between 2010 and 20 the aver
Socia Security in es 040 rage
Socia Security benefit will gr
al rcent annual ly (after adju
row by 1 per flation),
usting for inf
comppared with abbout 1.9 perrcent annual growth in av
verage SMI premiums p aring.
plus cost sha
• Most Medicare beneficiaries pay their Pa B premium by having it withheld f
art m g from their
monthly Social Security bene ecember 201 cost-of-liv
efits. The De 12 ment for Social
ving adjustm
Security benefits is projected to be 1.8 pe
d er ate
ercent unde intermedia assumpti ions.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 15
M S
Chart 1-14. Medicare HI and SMI prog yments a
gram pay and cost
haring per benef
sh p n
ficiary in 2010
Average pro ent
ogram payme Average cost-s
A unt
sharing amou
d
(in dollars) ollars)
(in do
HI $
$4,954 437
$4
SMI 4,811 242
1,2
Note: ance), SMI (Supp
HI (Hospital Insura plementary Medi Average program payments and cost-sharing am
ical Insurance). A m mounts
re vice Medicare on and do not inc
ar for fee-for-serv nly clude Part D. Me edicare program payments repres sent unadjusted
mounts paid for covered services incurred during a calendar year under Medicare fee-for-service o
am c s e only and excludee
ayments for managed care servic
pa ces. Program pay m
yments differ from benefit payme ct nterim
ents, which reflec estimates of in
nd
an retroactive adjustments made to institutional providers, as welll as payments fo r managed care..
Source: dicaid Statistical Supplement 201 CMS Office o Information Se
Medicare and Med 12, of ervices.
• In calendar year 2010, the Medicare prog
M ayments and
gram made $4,954 in HI program pa d
$4,81 in SMI pro
11 ogram paymments on ave eneficiary.
erage per be
• e r, es $1,679 in Medicare cost sharing for HI
In the same year beneficiarie owed an average of $ t r
S
and SMI.
• Most Medicare beneficiaries have supple
emental cove gh
erage throug former em mployers,
medig policies, Medicaid, or other sources that fill in much of Medicare’s c
gap o g
cost-sharing
requirements.
16 onal health care and Medicare spending
Natio e e
inks. Nat
Web li ealth care and Me
tional he e spending
edicare s g
• The Trustees’ Re
T es on nancial opera
eport provide informatio on the fin ations and actuarial status of
M ogram.
the Medicare pro
http:/
//www.cms.g ch-Statistics-
gov/Researc -Data-and-Sy tistics-Trends-and-
ystems/Stat
Repo TrustFunds/index.html?r
orts/ReportsT eportsTrustF
redirect=/Re Funds/
• The National Hea Expendi
N alth iture Accoun develope by the Off
nts ed MS
fice of the Actuary at CM
provid information about spending for health care in the United States.
de h n
//www.cms.g
http:/ ch-Statistics-
gov/Researc -Data-and-Syystems/Stattistics-Trends-and-
Repo orts/NationalHealthExpendData/inde rect=/Nation
ex.html?redir nalHealthExp pendData/
• The Medicare & Medicaid Sta
M M atistical Sup
pplement dev
veloped by C es l
CMS provide statistical
mation about Medicare, Medicaid, and other CM programs
inform MS s.
https://www.cms. rch-Statistics
.gov/Resear s-Data-and-SSystems/Staatistics-Trends-and-
Repo eMedicaidSt
orts/Medicare tatSupp/inde careMedicaid
ex.html?rediirect=/Medic dStatSupp/
• CMS statistics lis ata
sted in its Da Compend e n dicare
dium provide information about Med
beneficiaries, pro zation, and spending.
oviders, utiliz s
http:/
//www.cms.g ch-Statistics-
gov/Researc -Data-and-Sy tistics-Trends-and-
ystems/Stat
Repo mpendium/in
orts/DataCom ndex.html?re aCompendiu
edirect=/Data um/
• MedP h
PAC’s March 2012 Repo to the Co
ort vides an ove
ongress prov U.S.
erview of Medicare and U
pter ext
health care spending in Chap 1, Conte for Medic ent
care Payme Policy.
http:/ pters/Mar12_
//www.medpac.gov/chap _Ch01.pdf
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 17
SECTION
Medicare beneficiary
demographics
Chart 2-1. A neficiarie account for the greatest share of
Aged ben es e
he care population a
th Medic and proggram speending,
008
20
o ries
Percent of beneficiar ent ding
Perce of spend
Disabled AAged Disabled
Agedd 15.7% 15.5%
9.5%
79
%
83.5%
D
ESRD
0.8% SRD
ES
.0%
5.
Note: SRD (end-stage renal disease). The aged catego refers to bene
ES T ory eficiaries age 65 or older without ESRD. The disa abled
ategory refers to beneficiaries und age 65 witho ESRD. The E
ca der out ESRD category re aries with ESRD.
efers to beneficia
esults include fee
Re e-for-service, Meedicare Advantag community dw
ge, welling, and inst neficiaries. Totals may
titutionalized ben s
ot
no sum to 100 pe ercent due to rounnding.
Source: ciary Survey, Cos and Use file, 2
MedPAC analysis of the Medicare Current Benefic st 2008.
• In 2008, aged be 6 r RD ed
eneficiaries 65 and older without ESR compose 83.5 perc cent of the
beneficiary popul ccounted for 79.5 perce nt of Medica spending Beneficiar
lation and ac r are g. ries
under 65 with dis b s D aining popula
sability and beneficiaries with ESRD accounted for the rema ation
and spending.
s
• e s r y 88.
In 2008, average Medicare spending per beneficiary was $10,18
• te M
A disproportionat share of Medicare exp penditures is devoted to Medicare b
s o s
beneficiaries with
D.
ESRD On average, these be i more than six times great
eneficiaries incur spendiing that is m x ter
than aged beneficiaries 65 yeears or older (without ESSRD) and be eneficiaries under age 665
with (non-ESRD) disability. In 2008, $65,
( ) n ,256 was sp RD ary
pent per ESR beneficia versus
76 out and 0
$9,67 per aged beneficiary 65 years or older (witho ESRD), a $10,010 per benefic ciary
under age 65 enr o
rolled due to disability.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 21
Chart 2-2. M ent spending by age group,
Medicare enrollme and s e
008
20
o ries
Percent of beneficiar ent ding
Perce of spend
85+ Under Under 65
85+
12.7% 65 18.0%
16.5%
1
16.1%
75-84
27.9%
4
75-84
%
33.0% 65--74
5%
32.5
65-74
43.4%
Average per capita = $
e $10,188
Note: esults include fee
Re e-for-service, Me
edicare Advantag community dw
ge, titutionalized ben
welling, and inst s
neficiaries. Totals may
ot
no sum to 100 pe nding.
ercent due to roun
Source: ciary Survey, Cos and Use file, 2
MedPAC analysis of the Medicare Current Benefic st 2008.
• For th aged pop
he pulation (65 or older), pe capita exp
o er ncrease with age. In 200
penditures in 08,
per capita expenditures were $7,626 for beneficiarie s aged 65 to 74, $12,07 for those 75 to
e o 77
84, and $13,219 for those 85 or older.
5
• In 2008, per capita expenditu
ures for Med er nrolled due to
dicare benefiiciaries unde age 65 en o
end-s d re
stage renal disease or disability wer $11,426.
22 icare beneficiar demographics
Medi ry
Chart 2-3. B o being in poor he
Beneficiaries who report b ealth
ccount for a disp
ac f onate sh
proportio hare of
M ng,
Medicare spendin 2008
o ries
Percent of beneficiar ent ding
Perce of spend
Poor Exceellent Poorr
Excellentt h
health or v
very health
or very 8
8.4% go
ood %
18.7%
good he alth
health 21 .9%
40.7%
Good o or ood
Go or
fair fair
f
health ealth
he
50.9%% 9.4%
59
Average per capita = $10,188
e
Note: esults include fee
Re e-for-service, Me
edicare Advantag community dw
ge, titutionalized ben
welling, and inst s
neficiaries. Totals may
ot
no sum to 100 pe nding.
ercent due to roun
Source: ciary Survey, Cos and Use file, 2
MedPAC analysis of the Medicare Current Benefic st 2008.
• In 2008, most beneficiaries re wer percent repo
eported fair to excellent health. Few than 10 p orted
poor health.
• Medicare spendin is strongl associated with self-re
ng ly d n
eported health status. In 2008, per
capita expenditur were $5,
a res ,437 for thos who repo rted excellent or very go health,
se ood
$11,7 for those who report good or fair health, a $22,612 for those w reported
795 e ted and 2 who d
poor health.
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 23
Chart 2-4. nt re am ojected t
Enrollmen in the Medicar progra is pro to
grow rapidly in the next 20 years
0
120
Historic Projected 110.5
1
103.2
100
0 .1
96.
90.3
87.2
80.6
8
Beneficiaries (in millions)
0
80
63.7
0
60
47.1
39.3
0
40 33.7
2
28.0
20.1
0
20
0
1970 980
19 1990 2000 2010 2020 2
2030 2040 2050 60
206 2070 2080
2
Note: nrollment numbe are based on Part A enrollment only. Beneficia
En ers nly not
aries enrolled on in Part B are n included.
Source: CMS Office of the Actuary, 2012.
• The total number of people enrolled in th Medicare program willl increase fr
t r e he on
rom 47 millio in
n
2010 to 81 million in 2030.
• The rate of increa in Medic
r ase care enrollm
ment will acce ore s
elerate until 2030 as mo members of
g ecome eligib at which point it will increase mo slowly af
the baby-boom generation be ble, h ore fter
boom genera
the entire baby-b come eligibl e.
ation has bec
24 icare beneficiar demographics
Medi ry
Chart 2-5. C ristics of the Med
Character f opulation, 2008
dicare po
Percent of the Percent of the
Medic
care Medicare
Character
ristic ation
popula eristic
Characte population
Total (46,
,048,125) 100
0% g nt
Living arrangemen
tution
Instit 5%
Sex Alonne 29
Male 5
45 Spou use 49
Female
e 5
55 Otheer 18
Race/ethnicity ation
Educa
White, non-Hispanic
c 8
78 high school diiploma
No h 25
African American, High school diploma only
h 31
non-Hispanic 9 me
Som college or m more 44
Hispanic 8
Other 5 Incom status
me
ow
Belo poverty 17
Age –125% of pov
100– verty 9
<65 6
16 –200% of pov
125– verty 19
65–74 3
43 –400% of pov
200– verty 31
75–84 8
28 r verty
Over 400% of pov 24
85+ 3
13
emental insu
Supple urance status
Health status Med icare only 9
Excelle or very good
ent 41 Man aged care 23
o
Good or fair 51 Empployer 33
Poor 8 Med igap 16
Med igap/employe
er 4
Residencce Med icaid 14
Urban 6
76 Othe
er 1
Rural 4
24
Note: Urban indicates be g ndicates benefic
eneficiaries living in metropolitan statistical areas (MSAs). Rural in ciaries living outside
MSAs. In 2008, po ed ple and or
overty was define as income of $10,326 for peop living alone a as $13,030 fo married couples.
To g. ype
otals may not sum to 100 percent due to rounding Some beneficiiaries may have more than one ty of suppleme ental
insurance.
Source: MedPAC analysis of the Medicare Current Benefic st 2008.
ciary Survey, Cos and Use file, 2
• e arter of bene
Close to one-qua e as.
eficiaries live in rural area
• nty-nine perc
Twen M pulation lives alone.
cent of the Medicare pop s
• eneficiaries have no high school dip
One-quarter of be ploma.
• upplemental insurance.
Most Medicare beneficiaries have some source of su
A Data Book: Health care spe
H ending and the Medicare prog
gram, June 2012 25
inks. Medicare beneficiar demographics
Web li ry s
• CMS Data Comp ntains historic, current, a projected data on Me
pendium con and d edicare
enrollment.
http:/ gov/DataCom
//www.cms.g mpendium/
• The CMS website provides in
C e o
nformation on Medicare enrollment by state.
http:/ gov/Medicare
//www.cms.g eEnRpts
• The CMS website provides in
C e nformation about the Me
a edicare Curr iary Survey, a
rent Benefici
urce on the demographic characteris
resou d c stics of Med icare beneficiaries.
//www.cms.g
http:/ gov/mcbs
26 icare beneficiar demographics
Medi ry
SECTION
Dual-eligible
beneficiaries
Chart 3-1. D eficiaries accoun for a
Dual-eligible bene s nt
dispropor s f re
rtionate share of Medicar spend 08
ding, 200
ent or-service be
Perce of fee-fo eneficiaries Percent of fe
P ce
ee-for-servic spending
Dual
eligible
17% Dua al
ble
eligib
29% %
Non-d ual
ble
eligib
Nonn-dual 71% %
igible
eli
8
83%
Note: eficiaries are desi
Dual-eligible bene ey dicaid exceed the months they qualify
ignated as such if the months the qualify for Med
for supplemental insurance. Spend Current Beneficia Survey Cost and Use file from
ding data reflect 2008 Medicare C ary m
CMS.
Source: MedPAC analysis of the Medicare Current Benefic st 2008.
ciary Survey, Cos and Use file, 2
• Dual- e o both Medica and Medicaid. Medic
-eligible beneficiaries are those who qualify for b are caid
oint a
is a jo federal and state pro gned to help low-income persons ob
ogram desig e d
btain needed
health care.
• -eligible beneficiaries ac
Dual- d of
ccount for a disproportio nate share o Medicare expenditure es:
7 re
As 17 percent of the Medicar fee-for-se ervice popula epresent 29 percent of
ation, they re
egate Medic
aggre service spen
care fee-for-s nding.
• On av
verage, dual-eligible ben ncur twice as much annu fee-for-service Medic
neficiaries in s ual care
spending as non--dual-eligible beneficiaries: $16,395 is spent per dual-eligible beneficiar
e 5 ry,
and $8,161 is spe per non-
$ ent e y.
-dual-eligible beneficiary
• e
In 2008, average total spending⎯which includes Me dicaid, supplemental
edicare, Med
insurance, and out-of-pocket spending across all pay
t ual-eligible beneficiaries was
yers⎯for du
about $29,600 pe beneficiar twice the amount for other Medic
er ry, care benefici iaries.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 29
Chart 3-2. D eficiaries are mo likely than
Dual-eligible bene s ore
s
non-dual eligibles to be disabled, 2008
ble aries
Dual-eligib beneficia eligible bene
Non-dual-e eficiaries
85+ 85+ Under 65
14% 12% (disabled)
Under 655 12%
(disabled)
43%
75-84
19%
4
75-84
29%
65--74
7%
47
65-74
24%
Note: eneficiaries who are under age 65 qualify for Med
Be 6 hey d.
dicare because th are disabled Once disabled beneficiaries rea ach
ge c
ag 65, they are counted as aged. Dual-eligible be ch
eneficiaries are d esignated as suc if the months they qualify for
t
Medicaid exceed the months they qualify for suppleemental insuranc ce.
Source: rrent Beneficiary Survey, Cost an Use file, 2008
MedPAC analysis of Medicare Cur nd 8.
• -eligible beneficiaries are more likely than non-d
Dual- e y es
dual-eligible beneficiarie to be undeer
6
age 65 and disabbled. Forty-th t gible benefic
hree percent of dual-elig nder age 65 and
ciaries are un
bled, compar with 12 percent of th non-dual-
disab red p he -eligible popuulation.
30 -eligible benefi
Dual- iciaries
Chart 3-3. D
Dual-eligible bene s ore
eficiaries are mo likely than non-
bles to re
dual eligib eport po alth statu 2008
oorer hea us,
ble aries
Dual-eligib beneficia eligible beneficiaries
Non-dual-e
Exceellent Pooor
Poor
v
or very heaalth
health
ood
go Excelle
ent %
7%
18%
heaalth y
or very
188% good
h
health
44%
ood
Go or
r
fair health
49%
4
od
Goo or
h
fair health
644%
Note: eficiaries are desi
Dual-eligible bene ey dicaid exceed the months they qualify
ignated as such if the months the qualify for Med
for supplemental insurance.
Source: MedPAC analysis of the Medicare Current Benefic st 2008.
ciary Survey, Cos and Use file, 2
• Dual- e y
-eligible beneficiaries are more likely than non-d es
dual-eligible beneficiarie to report
er
poore health staatus. Most reeport good or fair status, but 18 perc ual-eligible
cent of the du
population report being in poor health (c
ts compared w 7 percen of the non-dual-eligible
with nt e
population).
• Dual- e y ognitive impa
-eligible beneficiaries are more likely to have co airment and mental
a
disorders. They also have hig pulmonary disease, stroke, and
gher rates of diabetes, p
eimer’s disea than do non-dual-eligible benefiiciaries.
Alzhe ase
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 31
Chart 3-4. D
Demograp erences between dual-el
phic diffe n ligible
ries and non-dua eligible 2008
beneficiar al es, 8
Percent of duaal- f
Percent of non-dual-
ristic
Character aries
eligible beneficia eneficiaries
eligible be
Sex
Male 39% 46%
Female 61 54
Race/ethn nicity
n
White, non-Hispanic 57 81
A
African American, non n-Hispanic 20 8
Hispanic c 13 7
Other 10 4
ns
Limitation in ADLs
No ADLs 45 71
1–2 ADL Ls 23 20
3–6 ADL Ls 32 9
Residence
Urban 69 77
Rural 31 22
Living arr rangement
on
Institutio 20 2
Alone 29 28
Spouse 16 54
n, s,
Children nonrelatives others 34 15
Education n
No high school diplomma 50 20
High sch o
hool diploma only 25 31
Some co e
ollege or more 22 48
Income st tatus
Below poverty 58 10
5%
100–125 of poverty 20 7
0%
125–200 of poverty 16 19
0%
200–400 of poverty 5 35
Over 400% of poverty y 1 27
Suppleme ental insurance status
re
Medicar or Medicare e/Medicaid only 90 11
re
Medicar managed ca are 3 26
Employe er 2 39
Medigap p 1 19
Medigap p/employer 0 5
Other* 3 1
Note: DL ly
AD (activity of dail living). Dual-elig
gible beneficiaries are designated a such if the mon
s as for eed
nths they qualify f Medicaid exce the
y
months they qualify for other supplem . ng
mental insurance. Urban indicates beneficiaries livin in metropolitan statistical areas
(M
MSAs). Rural indic s
cates beneficiaries living outside MSAs. In 2008, pov d
verty was defined as income of $10 0,326 for people living
one les. ot
alo and $13,030 for married coupl Totals may no sum to 100 per ding and exclusion of an “other” category.
rcent due to round
ncludes public pro
*In he f
ograms such as th Department of Veterans Affairs and state-sponso ored drug plans.
Source: o ent urvey, Cost and U file, 2008.
MedPAC analysis of Medicare Curre Beneficiary Su Use
• Dual- -eligible beneficiaries qu ualify for Med
dicaid due to low income Fifty-eigh percent liv
o es: ht ve
w y 00 of
below the poverty level, and 94 percent live below 20 percent o poverty. C Compared with
non-d dual-eligible beneficiarie dual-eligible beneficia
es, ore be
aries are mo likely to b female; to beo
an n c; h
Africa American or Hispanic to lack a high school d diploma; to hhave greater limitations in
r
side in a rura area; and to live in an institution. T
activities of daily living; to res al ss
They are les
y
likely to have sou urces of supplemental co er
overage othe than Med dicaid.
32 -eligible benefi
Dual- iciaries
Chart 3-5. D es ending a
Difference in spe ice
and servi use r rate
d gible ben
between dual-elig es on-dual
neficiarie and no
el
ligibles, 2008
ble
Dual-eligib Non-dual-eligible
Service beneficiaries beneficia
aries
ayment for all beneficiarie
Average Medicare pa es
Total Med
dicare payments $16,699
9 $9,140
Inpatient hospital
h 4,971 2,869
a
Physician 2,873
3 2,339
nt
Outpatien hospital 3
1,833 927
Home hea alth 641 406
b
ursing facility
Skilled nu 1,120
0 424
Hospice 9
509 175
c
Prescribed medication 4
4,424 995
Percent of beneficiaries using service
o
Percent using any type of service
e 9%
95.9 87.1%%
Inpatient hospital
h 8
25.8 17.5
a
Physician 1
91.1 83.6
nt
Outpatien hospital 1
74.1 60.4
Home hea alth 9
10.9 8.1
b
ursing facility
Skilled nu 6
8.6 3.7
Hospice 1
4.1 1.6
c
Prescribed medication 8
73.8 41.2
Note: ot
No restricted to be eneficiaries in fee-for-service. Du
ual-eligible benef gnated as such i the months the
ficiaries are desig if ey
qu id
ualify for Medicai exceed the mo y tal
onths they qualify for supplement insurance. Sp pending totals deerived from the
vey n
Medicare Current Beneficiary Surv (MCBS) do not necessarily m S,
match official esti mates from CMS Office of the A Actuary.
otal ms
To payments may not equal the sum of line item as some mino r items have bee omitted. Spen en t
nding data reflect 2008
vey e
Medicare Current Beneficiary Surv Cost and Use file from CMS.
a
y
Includes a variety of medical serv t,
vices, equipment and supplies.
b
erm r
Individual short-te facility (usually skilled nursing facility) stays for the Medicare Cu y
urrent Beneficiary Survey populatiion.
c
C e or
CMS changed the methodology fo collecting presc a 07,
cription drug data in the MCBS in 2007. Before 200 all prescription drug
ata o
da were based on information collected in the surv vey; however, sta MS
arting in 2007, CM began collecting prescription d drug
ata S A
da for the MCBS from Medicare Advantage–Presc ns on
cription Drug plan and prescriptio drug plans.
Source: ciary Survey, Cos and Use file, 2
MedPAC analysis of the Medicare Current Benefic st 2008.
• age ta s e es an
Avera per capit Medicare spending for dual-eligible beneficiarie is more tha 1.8 times that
on-dual-eligib beneficiar
for no ble ries⎯$16,69 compared with $9,140.
99 .
• For each type of service, avera Medicar per capita spending is higher for du
s age re ual-eligible
benef neficiaries.
ficiaries than for non-dual-eligible ben
• Highe average pe capita spe
er er ending for dual-eligible be s of
eneficiaries is a function o a higher
ce han n-dual-eligible counterpar
servic use rate th their non e rts.
• -eligible bene
Dual- eficiaries are more likely to use each t
t care-covered service than
type of Medic d n
dual-eligible beneficiaries.
non-d b
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 33
Chart 3-6. B dicare and total s
Both Med g
spending are con ed
ncentrate
mong du
am ble
ual-eligib benef ,
ficiaries, 2008
100
5
90
15 27
2
31
80
70
30
60
Percent
36
3
50 35
40
30
50 28
2
20 25
10
8 9
0
Medicare spending for dual- S
Share of dual-e ligible Total spending for dual-eligible
T g
e
eligible beneficiaries es
beneficiarie ficiaries
benef
Note: otal
To spending inc cludes Medicare, Medicaid, suppllemental insuran nce, and out-of-p ocket spending. Dual-eligible
eneficiaries are designated as such if the months they qualify for M
be d d ey
Medicaid exceed the months the qualify for
upplemental insu
su ay 00 o
urance. Totals ma not sum to 10 percent due to rounding. Spen t
nding data reflect 2008 Medicare
ry
Current Beneficiar Survey Cost and Use file from CMS.
Source: ciary Survey, Cos and Use files, 2008.
MedPAC analysis of the Medicare Current Benefic st
• ual e s ed
Annu Medicare spending is concentrate among a small numb of dual-e ber eligible
beneficiaries. The costliest 20 percent of dual eligible account f 66 percent of Medica
e f es for are
spending and 63 percent of total spendin on dual-e
t ng ficiaries. In c
eligible benef e
contrast, the
least costly 50 pe
ercent of dua eneficiaries a
al-eligible be only 8 perce of Medica
account for o ent are
spending and 9 percent of to spending on dual-elig
p otal g ciaries.
gible benefic
• On av or
verage, total spending fo dual-eligib beneficia
ble e n-dual-eligib
aries is twice that for non ble
beneficiaries—$2
29,600 comp pared with $14,700.
34 -eligible benefi
Dual- iciaries
inks. Dua
Web li le iciaries
al-eligibl benefi
• Chap 3 of the MedPAC Ju 2012 Re
pter une Congress pr
eport to the C mation on dual-
rovides inform
ble
eligib beneficiaries.
http:/
//www.medpac.gov/chap _Ch03.pdf
pters/Jun12_
• Chap 5 of the MedPAC Ju 2011 Re
pter une Congress pr
eport to the C rovides inform
mation on dual-
ble
eligib beneficiaries.
//www.medpac.gov/chap
http:/ _Ch05.pdf
pters/Jun11_
• Chap 5 of the MedPAC Ju 2010 Re
pter une Congress pr
eport to the C rovides further informatio on
on
dual-eligible bene
eficiaries.
//www.medpac.gov/chap
http:/ _Ch05.pdf
pters/Jun10_
• K ly on i on
The Kaiser Famil Foundatio provides information o dual-eligiible beneficiaries.
http:/ g/medicare/r
//www.kff.org ual-eligibles .cfm
resources-du
• Furth informatio on dual eligibles is av
her on e m Medicare–Medicaid
vailable from the CMS M
Coord ice.
dination Offi
http:/
//www.cms.ggov/Medicare Coordination
e-Medicaid-C n/Medicare-aand-Medicaid-
Coord dicare-Medic
dination/Med nation-Office
caid-Coordin e/index.html
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 35
SECTION
Quality of care in the
Medicare program
Chart 4-1. n-hospita and 30
In al st-discharge mo
0-day pos ates
ortality ra
mproved from 20 to 2010
im 007
usted rate
Risk-adju sted rate
Risk-adjus Directional
0
per 100 eligible per 100 eeligible change in rate,
Condition or procedure
e ges, 2007
discharg es,
discharge 2010 2007–20 010
In-hospital mortality
m
Acute myocardial infa arction 9
9.31 7.33 Better
Conges stive heart failure 4
4.41 3.54
4 Better
Stroke 1.72
11 10.00 Better
cture
Hip frac 3
3.23 3.09 No differ
rence
Pneumo onia 4
4.73 3.73 Better
30-day po ge
ost-discharg mortality
m
Acute myocardial infa arction 3.29
13 11.38 Better
Conges stive heart failure 0.98
10 9.56 Better
Stroke 4.90
24 23.10 Better
Hip frac
cture 8
8.59 4
8.24 No differ
rence
Pneumo onia 0.65
10 9.10 Better
Note: Ra ted e
ates are calculat based on the discharges eligi ed ure.
ible to be counte in each measu Rates do not include deaths in
noon–inpatient pros nt als
spective paymen system hospita or Medicare A es
Advantage plans . “Better” indicate that the risk-
ad reased by a statis
djusted rate decr stically significan amount from 2
nt ng
2006 to 2009 usin a p ≤ 0.01 crit ence”
terion. “No differe
c te
indicates that the change in the rat was not statist t 009
tically significant from 2006 to 20 using a p ≤ 0 0.01 criterion.
Source: re
MedPAC analysis of CMS Medicar Provider Analy w ncy d
ysis and Review data using Agen for Healthcare Research and
Q s with s
Quality Inpatient Quality Indicators Version 4.1b (w modifications for 30-day mort ations).
tality rate calcula
• Our most recent analysis of several inpatient quality indicators s
m s shows gener rally positive
trends. We analy yzed five of the Inpatient Quality Indiicators deve
t e
eloped by the Agency for r
Healtthcare Research and Qu Q) re al ay
uality (AHRQ to measur in-hospita and 30-da post-disch harge
ality T
morta rates. Trends in risk k-adjusted in ortality rates are used to assess
n-hospital mo s o
ges
chang in the qu e
uality of care provided to Medicare b
o s
beneficiaries during inpa for
atient stays f
c T
certain medical conditions. Thirty-day po e
ost-discharge mortality ra the
ates reflect t quality of
care transitions and post-hos
a spital care fo beneficiariies in the criitical period during and
or
short after disch
tly a
harge from an inpatient stay.
• In-ho
ospital and 30-day post-d s y ally
discharge mortality rates declined by a statistica significannt
unt o
amou for four of the five co m
onditions monitored. From 2007 to 22010, both ty ality
ypes of morta
rates declined by a statistically significan amount for acute myocardial infarction, conge
y nt r estive
heart failure, stro
t oke, and pneeumonia as measured by the AHRQ methods. T in-hospit
m y Q The tal
3 ality
and 30-day morta rate for patients adm hip also declined but not by a
mitted with h fracture a d, y
stically signif
statis nt.
ficant amoun
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 39
Chart 4-2. H t ndicators improv
Hospital inpatient patient safety in s ved
or were st om to
table fro 2007 t 2010
djusted rate
Risk-ad sted rate
Risk-adjus Directional chaange
00
per 10 eligible eligible
per 100 e in rate,
s or
Patient safety indicato discha
arges, 2007 s,
discharges 2010 2007–2010 0
Death am al w
mong surgica inpatients with 10.16
1 45
11.4 Worse
e mplications
treatable serious com
orax
Iatrogenic pneumotho 0.07 2
0.02 Better
Postoperative respiratory failure 1.75 8
0.88 Better
D
Postoperative PE or DVT 1.01 1
0.41 Better
Postoperative wound dehiscence 0.27 2
0.22 Better
tal o
Accident puncture or laceration 0.28 4
0.14 Better
Note: E
PE (pulmonary em mbolism), DVT (d bosis). “Better” in
deep vein thromb ndicates that the risk-adjusted rate decreased by a
cant amount from 2007 to 2010 using a p ≤ 0.01 c
statistically signific m u criterion.
Source: MedPAC analysis of CMS Medicar Provider Analy
re w ncy d
ysis and Review data using Agen for Healthcare Research and
Quality (AHRQ) Pa 4
atient Safety Indicators Version 4.1b.
• a d
We also analyzed six of the AHRQ Patie Safety Ind
A ent dicators (PS measure the
SIs), which m
entially preve
frequency of pote entable adveerse events that can occ during an inpatient s
cur n stay,
such as the deve p ve y n
elopment of postoperativ pulmonary embolism or deep vein thrombosis s
(deve
elopment of a blood clot that can sud ruct an arter or vein) or a patient’s
ddenly obstr ry r
h able surgical complicatio
death from treata es software from
ons. The rate are calcullated using s m
Q
AHRQ and Medic nt
care inpatien hospital discharge da ta.
• Rates improved from 2007 to 2010 for fiv of the six PSIs we an
s f o ve uding iatroge
nalyzed, inclu enic
pneumothorax (in o e vity
ntroduction of air into the pleural cav during a medical pro ocedure, which
apse), posto
often causes the lung to colla operative res ure,
spiratory failu postope erative
pulmoonary embolism or deep p-vein thrombosis, posto operative wo ound dehisce g
ence (parting of
the sutures of a surgical wou
s und), and acc cidental punncture or lace d
eration. The PSI that did not
impro from 200 to 2010 was the rate of deaths am
ove 07 w mong surgic inpatients with treatable
cal s
serious complications.
• ion b ed
Cauti should be used in interpreting all the reporte PSI rates. The PSIs m es
measure rate of
very rare events, and—even across all in npatient pros yment system (IPPS)
spective pay m
hospitals—it is di ally nt
ifficult to detect statistica significan changes in these indi icators. The
reliab e ted
bility of some of the PSI rates can also be affect by variat iders’ coding
tions in provi g
practtices. Noneth m
heless, we monitored se ends in sele
ector-level tre as
ected PSIs a indicators, ,
gh ce,
thoug not definitive evidenc of increas and decses ates of harm to patients
creases in ra
result eir c
ting from the medical care that can be avoided if providers adhere to k
n d s known cliniccal
y
safety practices.
40 lity he ogram
Qual of care in th Medicare pro
Chart 4-3. R y res w
Risk-adjusted SNF quality measur show mixed
esults since 2000
re 0
30
25.5 26.0 26.0 26.1
24.3 4.4
24 24.8 24.8 25.0 5.0
25
25
20
Percent
14.0 4.2
14 14.1 14.2 14.2 4.2
14 14.2 14.1 14.3 14.2
15
10
5
0
2000 001
20 2002 2003 2004 200
05 2006 2007 2008 09
200
hospitalization for any of 5 conditions
Reh n ommunity disc
Co charge
Note: NF ng
SN (skilled nursin facility). Increaases in rates of discharge to the co e ty.
ommunity indicate improved qualit The five conditions
e
include congestive heart failure, res n, ection, sepsis, an electrolyte imb
spiratory infection urinary tract infe nd es
balance. Increase in
ehospitalization fo the five conditio indicate wors
re or ons sening quality. Ra ed
ates are calculate for all facilities with 25 or more stays.
Source: ates calculated by MedPAC base on a risk adjustment model de
Ra b ed Division of Health Care Policy an
eveloped by the D nd
esearch, Univers of Colorado at Denver and Health Sciences C
Re sity a Center.
• C
The Commission’s quality me easures for skilled nursin facility car continue to show mixe
s ng re o ed
ts. 00,
result Since 200 risk-adjus f
sted rates of community discharge s ht
showed sligh improveme ent,
f ents with any of five pote
while the rates of rehospitalization of patie y dable conditio
entially avoid ons
bited almost no change. Both measur showed almost no ch
exhib n B res een
hange betwe 2008 and
2009.
• 2
The 2009 risk-ad a
djusted rate at which Med
dicare-cover SNF pat
red rehospitalize for
tients were r ed
poten able conditio was 14.2 percent, al most the sa
ntially avoida ons 2 ame as in 2000. The 200 09
adjusted rate of commun discharg was 26 pe
risk-a e nity ge ess
ercent, up le than 2 pe ercentage po oints
from 2000.
• ss
Acros facilities, the risk-adjuusted measu ures varied c y n).
considerably (not shown For exam mple,
ties with the highest rate of rehospi
facilit es f
italization of Medicare ppatients with any of five
poten able conditio (the top 10th percen
ntially avoida ons ntile) were more than dou uble those oof
ties with the lowest rates (the lowest 10th perce ntile).
facilit s t
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 41
Chart 4-4. H alth sures show limite chang
Home hea quality meas ed ge
n
in 2011
Functiona measures
al 2004 2005 2006 200
07 2008 2009 2010 2011
2
Improvem
ments in:
Transfe
erring 50% 51% 52% 53
3% 53% 54% 54% 53%
5
Bathing 59 61 62 63
3 64 64 65 64
6
Walking
g N/A N/A N
N/A N/A
A N/A N/A N/A 55
5
tion managem
Medicat ment N/A N/A N
N/A N/A
A N/A N/A N/A 46
4
anagement
Pain ma N/A N/A N
N/A N/A
A N/A N/A N/A 66
6
Note: /A e).
N/ (not applicable The measure for walking, me
es gement, and pain management ch
edication manag n hanged in 2011, and
1 a ble prior years.
therefore the 2011 results shown are not comparab to data from p
Source: e d nd ealth Compare d
MedPAC analysis of OASIS, home health standard analytic file, an CMS Home He data.
• Medic care publishes risk-adjus y anges in the
sted home health quality measures that track cha
functiional abilities for patients who receive home heallth care. The measure are reported
s s e ese es
th t
for all home healt episodes that do not te erminate with a hospitalization.
• Since 2004, the rates of funct
e vement have generally held steady o slightly
tional improv e or
impro ear.
oved each ye For exam mple, the rat of patients demonstrat
te s ovement in t
ting an impro their
y as
ability to bathe ha increased from 59 per percent.
rcent to 64 p
• ding hospital
Avoid lization is an important outcome for many home health patie
n o e e
ents, and the
Comm t he
mission has developed a measure that tracks th rate of ho ns
ospitalization during the e
ode fter ge me he
episo and up to 30 days af discharg from hom health. Th most rece data ent
able for this measure are for 2007–2
availa e r adjusted rate of
2009. Under this measure, the risk-a e
hospitalization de p 007 ercent in 200 (not show on
eclined slightly from 27 percent in 20 to 25 pe 09 wn
t).
chart
42 lity he ogram
Qual of care in th Medicare pro
Chart 4-5. D q f show
Dialysis quality of care: Some measures s
, n
progress, others need imp ent
proveme
Outcome measure 2003 2007 009
20 2010
2
Percent of in-center he
o atients:
emodialysis pa
e
Receiving adequate dialysis 94% 94% 95% 95%
Anemia measures
a
Mean hemoglobin 10–12 g/dL
n 48 49 62 68
Mean hemoglobin ≥ 13 g/dL*
n 15 14 7 5
Mean hemoglobin < 10 g/dL*
n 6 6 6 7
ed V
Dialyze with an AV fistula 33 47 53 56
o d nts:
Percent of peritoneal dialysis patien
e
Receiving adequate dialysis N/A 89 89 89
Anemia measures
a
Mean hemoglobin 10–12 g/dL
n 45 48 57 58
Mean hemoglobin ≥ 13 g/dL*
n 21 18 12 11
Mean hemoglobin < 10 g/dL*
n 7 7 10 11
o ts
Percent of prevalent dialysis patient
wait-listed for a kidney 15 17 17 N/A
N
nsplant rate per 100 dialys
Renal tran p sis
patient years 4.8 4.4 4.1 N/A
N
nt
Annual mortality rate per 100 patien years* 21.4 19.2 18.0 N/A
N
missions per patient year*
Total adm p 2.0 1.9 1.8 N/A
N
d ent
Hospital days per patie year 13.7 12.9 11.9 N/A
N
Note: /dL
g/ (grams per de ,
eciliter of blood), AV (arterioveno
ous), N/A (not av
vailable). Data on dialysis adequa
n as,
acy, use of fistula and
nemia management represent pe
an s s
ercent of patients meeting CMS’s clinical performa ance measures. United States R Renal
ata sts nd
Da System adjus data by age, gender, race, an primary diagn osis of end-stage renal disease.
e
Lower values sug
*L ggest higher quality.
Source: ompiled by MedP
Co PAC from the Ela Project Repor Fistula First, a the United St
ab rt, and a
tates Renal Data System.
• q ysis s
The quality of dialy care has improved fo some meas
or modialysis pa
sures. All hem e
atients require
ular
vascu access— he b
—the site on th patient’s body where b ved
blood is remov and returned during
sis.
dialys Between 2003 and 20 010, use of ar fistulas, cons
rteriovenous f est
sidered the be type of
ular t nt
vascu access, increased from 33 percent to 56 percen of hemodia ts.
alysis patient Between 2 2003
2
and 2010, overall adjusted mor ut
rtality rates decreased, bu remained h high among d nts.
dialysis patien
• The quality of dialy care has remained st
q ysis s me 003
teady for som measures. Between 20 and 2010 the 0,
ortion of hemo
propo ng
odialysis patients receivin adequate d ained high. Ov
dialysis rema of
verall rates o
mained steady at about tw admissions per dialysis patient per y
hospitalization rem wo s s year.
• Other measures suggest that im
r s
mprovements in dialysis q ill We
quality are sti needed. W looked at
ss on eatment optio for
acces to kidney transplantatio because it is widely bellieved that it iis the best tre on
duals with en
individ al
nd-stage rena disease. Th proportion of dialysis p
he n pted on the k
patients accep kidney
transp l off ansplantation is partly due to a
plant waiting list remains low. The fallo in the rate of kidney tra
decre rgan donation during this period.
ease in live or ns s
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 43
Chart 4-6. M age sures sho
Medicare Advanta quality meas ow
mprovem
im ween 201 and 2
ment betw 10 2011
s
Measures HMO average
H es cal ages
Loc PPO avera
010
20 2011 010
20 20011
HEDIS® administrativ measures
a ve
Breast caancer screenin
ng 9.1
69 68.5
5 66 b
6.1 66 b
6.1
a
Glaucoma testing 2.1
62 63.8
8 64.2
6 65.5
Monitoring of patients taking long-ter medications
rm s 9.1
89 90.2a
2 8
89.7 90 a
0.7
At least one primary ca doctor visit in the last yea
o are t ar 93
3.7 94.0
0 95 b
5.6 95 b
5.6
Osteopor rosis managem ment 20
0.7 20.7
7 18 b
8.1 18.7
Rheumatoid arthritis ma anagement 72
2.3 72.8
8 76 b
6.9 78 b
8.3
HEDIS® hybrid measu
h ures
Colorecta cancer scree
al eningc 4.7
54 57.6a
6 a
41 c
1.3
a
Cholester screening for patients wit heart disease
rol f th 88
8.4 88.5
5 87 b
7.1
ng
Controllin blood press sure 59
9.7 61.9a
9 a
55 b
5.8
a
Cholester screening for patients wit diabetes
rol f th 87
7.3 87.9
9 86 b
6.3
a
m
Eye exam to check for damage from diabetes 3.5
63 6
64.6 62
2.7
Kidney fuunction testing for members with diabetes 88
8.5 89.2a
2 a
87 b
7.3
erol
Diabetics with choleste is under co ontrol 49
9.9 52.2a
2 a
45 b
5.9
a
Diabetics not controlling blood sugar (lower rate be
g etter) 8.1
28 25.9
9 34 b
4.3
d
s
Measures from HOS
Monitoring physical acttivity 6.9
46 47.9a
9 48 b
8.1 47.6
Improving bladder cont
g trol 35
5.4 36.0
0 37 b
7.9 36.6
Reducing the risk of falling
g 8.2
58 60.5a
5 54 b
4.4 55 b
5.1
easures base on HOS
Other me ed
g ng ealth
Improving or maintainin physical he 66
6.6 4
66.4 67.3
6 66.1
Improving or maintainin mental health
g ng 76
6.9 77.5
5 77.7
7 78 b
8.5
Measure from CAHPS®
es
Annual flu vaccine
u 64
4.3 67.9a
9 6
65.3 68 a
8.6
nia
Pneumon vaccine 5.1
65 67.0
0 67.0
6 68.5
Ease of getting needed care and see
g d s
eing specialists 83
3.8 84.7a
7 84 a
4.8 85 b
5.9
a
Getting appointments and care quick kly 3.8
73 75.1a 7
74.1 76 ab
6.7
ating of health care quality
Overall ra 83
3.9 85.5a
5 8
84.6 86 ab
6.1
Overall ra
ating of plan 83
3.3 85.7a
7 8
81.8 84 ab
4.2
®
Note: PO
PP (preferred pr rovider organization), HEDIS (He veness Data and Information Set a registered
ealthcare Effectiv d t,
®
tra N tee
ademark of the National Committ for Quality As ssurance), HOS (Health Outcom es Survey), CAH HPS (Consumer r
As ssessment of He ers
ealthcare Provide and Systems, a registered tra ademark of the AAgency for Health hcare Research a and
ed e
Quality). MA plan types not include in the data are regional PPOs , private fee-for-s service plans, coontinuing care
®
reetirement commu e
unity plans, and employer-directed plans. Cost-reiimbursed HMO p plan results are included. HEDIS
addministrative mea asures are calculated using administrative data, s encounter data, p
such as claims, e pharmacy data, aand
ce r m e cal
ertain electronic records; hybrid measures involve sampling medic records to de etermine a rate.
a
S ficant difference in performance between 2010 an 2011 on this m
Statistically signif b nd measure for this plan type (p <.05).
b
S ficant difference in performance in 2011 between HMO and PPO results (p < .05)
Statistically signif i n ).
c
PPO results not reported for hybr measures for 2010 because it was the first yea in which PPOs were able to us
P r rid t ar s se
medical record rev view to report rat for such measures. For the co
tes olorectal cancer screening measure, CMS specif fically
exxcludes PPO res ng ds
sults in determinin star threshold for plans beca ause of the speci fication of the meeasure, which includes
a nine-year look-b back period to confirm whether a person has rece ived a colonosco opy.
d ®
R or
Results shown fo HEDIS measu ures taken from HOS (the three m ) for
measures listed) include scores f plans not repo orting
®
ot a ts e
ther HEDIS data in 2010. Result may therefore differ from those shown in other MedPAC reporting of these scor res.
Source: MedPAC analysis of CMS HEDIS public use files for HEDIS measu
M f easures based on HOS
ures, and star ra tings data for me
an for CAHPS measures.
nd
ontinued nex page)
(Chart co xt
44 lity he ogram
Qual of care in th Medicare pro
Chart 4-6. M age sures sho
Medicare Advanta quality meas ow
mprovem
im ween 201 and 2
ment betw 10 ntinued)
2011 (con
• The chart display the simple averages across all pla in each category (H
c ys e a ans HMOs and local
s) y
PPOs for each year.
• HMO had statistically signifi
Os icant improv 2 measures sh
vement for 12 of the 25 m hown in the
t,
chart with no meeasures decl portionately, for the
lining in the 2-year time period. Prop ,
categ n, est
gories shown the greate improvem ment was am mong the pat ence measur
tient experie res
v m
and vaccination measure collected through the CAH PS survey ( six
(with five of s improving g).
o S
Half of the HEDIS hybrid mea wed
asures show improve ement (four o of eight), as did two of
out ,
e c rough HOS. Only one of the six HED administ
three measures collected thr DIS sures
trative meas
e wed
in the chart show improvem en d
ment betwee 2010 and 2011.
• For lo t
ocal PPOs, the same HEEDIS admini asure that im
istrative mea mproved among HMOs a also
impro al
oved for loca PPOs (mo ients taking long-term m
onitoring pati .
medications). Four of sixx
meas sures collect through the CAHPS survey also had statistic
ted t cant improve
cally signific ement
amon local PPO between 2010 and 20
ng Os 011. Other mmeasures traacked in both 2010 and 2011
h
show no statistically significant change
wed e.
• Apart from the HEDIS hybrid measures, 9 of 17 mea
t wed ally
asures show statistica significan nt
rences betwe HMO av
differ een verages and local PPO a with Os
averages, w local PPO better on six n
meas sures and HM o
MOs better on three me easures. As o 2010, PPO began re
of Os ults
eporting resu
ybrid measures using medical record reviews, w
for hy d which PPO p not o
plans were n allowed to do
prior to 2010. For the hybrid measures, lo
r are g ults
ocal PPOs a reporting poorer resu than HM MOs,
but th may be because the medical rec
his b cord–based r relatively ne for PPOs and
reporting is r ew
b t medical recor informatio from non-
also because of the possible difficulty of obtaining m rd on
ork
netwo providers.
• In 2011, CMS be egan making bonus paym n atings, giving
ments to pla ns based on their star ra g
plans an incentiv to improve their perfor
s ve e rmance on q quality meas measures shown
sures. The m
e rt res d
in the above char include all the measur collected through HE PS
EDIS, CAHP and the H HOS
that are included in determining a plan’s star ratings, except for t
a , two measure (recording of
es
body mass index a hybrid measure that was new as of 2010, an a measur of hospita
x, m s nd re al
readmmissions, wh roduced in 2011).
hich was intr 2
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 45
inks. Quality of care in th Medic
Web li c he gram
care prog
• Chap nd h
pters 3, 4, an 6 through 9 of MedPA rt
AC’s March 2012 Repor to the Congress includ de
mation on the quality of care provide by inpatie hospitals physicians and other
inform c ed ent s, s
ambu o
ulatory care providers, outpatient dia es, ursing facilities, home he
alysis facilitie skilled nu ealth
agencies, and inp cilities.
patient rehabilitation fac
//www.medpac.gov/chap
http:/ _Ch03.pdf
pters/Mar12_
//medpac.gov/chapters/M
http:/ Mar12_Ch04 4_CORREC TED.pdf
//www.medpac.gov/chap
http:/ _Ch06.pdf
pters/Mar12_
//www.medpac.gov/chap
http:/ _Ch07.pdf
pters/Mar12_
//www.medpac.gov/chap
http:/ _Ch08.pdf
pters/Mar12_
//www.medpac.gov/chap
http:/ _Ch09.pdf
pters/Mar12_
• pter e M he formation on the
Chap 12 of the MedPAC March 2012 Report to th Congress includes inf n
qualit of care in Medicare Advantage plans.
ty
//www.medpac.gov/chap
http:/ _Ch12.pdf
pters/Mar12_
• Chap 13 of the MedPAC March 2012 Report to th Congress includes inf
pter e M he n
formation on
ormance met
perfo dicare Part D plans (pres
trics for Med scription drug plans and Medicare
Adva g
antage–Prescription Drug plans).
http:/ pters/Mar12_
//www.medpac.gov/chap _Ch13.pdf
• Chap 6 of the MedPAC Ma
pter arch 2010 Report to the Congress includes a se of
R e et
mmendations on comparing the qua
recom between Medicare fee-fo
ality of care b nd
or-service an
tage and am
Medicare Advant are ge
mong Medica Advantag plans.
http:/ pters/Mar10_
//www.medpac.gov/chap _Ch06.pdf
• pter une
Chap 4 of the MedPAC Ju 2007 Re eport to the C
Congress dis icy to
scusses poli options t
ove
impro the quality of home health servic he
ces, and Ch apter 8 of th same report provides
mation on the quality of care provide by skilled nursing fac
inform c ed cilities.
http:/ pters/Jun07_
//www.medpac.gov/chap _Ch04.pdf
//www.medpac.gov/chap
http:/ _Ch08.pdf
pters/Jun07_
• pter
Chap 4 of the MedPAC Ma R e
arch 2005 Report to the Congress o tegies to
outlines strat
ove ough pay-for
impro care thro ce mation technology.
r-performanc incentive s and inform
//www.medpac.gov/publications/congressional_r
http:/ 05_Ch04.pd
reports/Mar0 df
• The CMS website provides in
C e nformation on several of the Medica quality an value-bas
o f are nd sed
hasing initiat
purch tives.
http:/ gov/Medicare
//www.cms.g ment-
e/Quality-Initiatives-Pati ent-Assessm
uments/QualityInitiatives
Instru sGenInfo/inddex.html?red GenInfo/
direct=/QualiityInitiativesG
46 lity he ogram
Qual of care in th Medicare pro
• es
Medicare provide public com n
mparative information on selected quality measu ures for hospital,
nursing facility, home health agency, and dialysis fac
d website.
cilities on its consumer w
Hosp re:
pital Compar http://www ompare.hhs. gov/hospitall-search.asp
w.hospitalco px
ing
Nursi Home Compare: http p://www.med NHCompare/
dicare.gov/N /Home.asp
e
Home Health Compare: http: ://www.medicare.gov/Ho omeHealthC Compare/sea arch.aspx
Dialysis Facility Compare: http://www.me
C /Dialysis/Hom
edicare.gov/ me.asp
• CMS makes avai ilable downlooadable data he easures and other
abases of th quality me d
inform c
mation underlying the four provider comparison databases ccited above.
http:/ care.gov/Dow
//www.medic wnloadDB.as
wnload/Dow sp
• Medicare Advanttage plan qu re
uality measures are avai lable through a Medicar consumer r
webs (the Med
site F m -to-plan com
dicare Plan Finder) that makes plan- mparisons within a speciffied
omparisons with Medica fee-for-se
geographic area, including co are ts n
ervice result on certain
meas
sures.
https://www.medicare.gov/fin me.aspx
nd-a-plan/questions/hom
• CMS makes avaiilable a downloadable da the e e y
atabase of t Medicare Advantage plan quality
sures underlying the Medicare Plan Finder and t star ratin of plans.
meas the ngs
http:/ care.gov/Dow
//www.medic wnloadDB.as (select “Plan Ratings Data” from t
wnload/Dow sp the
drop- u)
-down menu
• Curre and past editions of the National Committee for Quality A
ent t t (NCQA)
Assurance (
cation The State of Health Care Qua
public S ailable from t NCQA w
ality are ava the website.
//www.ncqa.org/tabid/83
http:/ spx
36/Default.as
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 47
SECTION
Medicare beneficiary and
other payer financial liability
Chart 5-1. o
Sources of supple ge
emental coverag among g
utionalized Medic
noninstitu neficiarie 2009
care ben es,
No supplemental
s
c
coverage
7.3% Mediggap
3%
21.3
care managed
Medic d
care
27.3%
c
Other public sector
0.7% mployer-
Em
ponsored
sp
aid
Medica 31.3%
%
12.0%
Note: eneficiaries are assigned to the supplemental cov
Be a s the ld
verage category that applied for t most time in 2009. They coul have
ad d her r” al
ha coverage in other categories during 2009. “Oth public sector includes federa and state programs not include ined
ther categories. Analysis includes only beneficiari not living in in
ot A s ies as es.
nstitutions such a nursing home It excludes
eneficiaries who were not in both Part A and Part B throughout the enrollment in 2009 or who had Medicare as a
be eir
econd payer.
se
Source: MedPAC analysis of Medicare Cur nd 9.
rrent Beneficiary Survey, Cost an Use file, 2009
• Most beneficiarie living in th communit have cove
es he ty erage that suupplements or replaces the
Medicare benefit package. About 93 perc
A eficiaries hav suppleme
cent of bene ve ental coverage or
partic dicare mana
cipate in Med aged care.
• ut t
Abou 53 percent have privat
te-sector sup
pplemental c
coverage su as medig (about 2
uch gap 21
ent)
perce or emplooyer-sponso c bout 31 perc
ored retiree coverage (ab cent).
• ut t c-sector sup
Abou 13 percent have public coverage, priimarily Medicaid.
pplemental c
• Twennty-seven peercent participate in Med
dicare manag care. Th care inclu
ged his are
udes Medica
Advaantage, cost, and health care prepay . es ements gene
yment plans. These type of arrange erally
replace Medicare fee-for-se
e’s age en
ervice covera and ofte add to it.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 51
Chart 5-2. o
Sources of supple ge
emental coverag among g
utionalized Medic
noninstitu care ben es,
neficiarie by
ries’ cha
beneficiar tics, 200
aracterist 09
Number of f Employerr- Medicare Other
beneficiaries ed
sponsore Medigap managed public dicare
Med
(thousands) e
insurance insurance
e Medicaid care sector only
All beneficciaries 40,197 %
31% 21% 12% 27% 1% 7%
Age
Under 65 5 6,047 15 4 41 21 2 17
65–69 9,260 37 20 8 27 0 8
70–74 8,142 32 24 7 31 1 5
75–79 6,512 32 25 7 31 1 4
80–84 5,281 34 26 6 29 1 4
85+ 4,954 35 29 7 24 0 4
Income sta atus
Below po overty 6,139 11 12 44 25 0 7
100% to 125% of poverrty 3,636 12 16 29 30 1 12
125% to 200% of poverrty 7,993 23 21 11 32 2 12
200% to 400% of poverrty 12,565 39 24 1 29 0 6
0%
Over 400 of poverty 9,807 48 26 1 22 0 3
s
Eligibility status
Aged 33,905 34 24 7 29 1 6
Disabled d 5,848 15 4 40 21 2 17
ESRD 398 17 24 43 9 1 6
Residence
Urban 30,639 31 20 11 31 1 6
Rural 9,546 31 27 16 14 1 11
Sex
Male 17,970 33 19 12 26 1 9
Female 22,227 30 23 12 28 1 6
Health stat tus
Excellennt/very good 17,118 36 25 5 27 0 5
Good/fai ir 19,896 29 19 15 29 1 8
Poor 2,859 19 14 32 22 2 12
Note: ES B e e
SRD (end-stage renal disease). Beneficiaries are assigned to the supplemental co ry
overage categor that applied for the
ve
most time in 2009. They could hav had coverage in other categoriies during 2009. Medicare managed care include es
Medicare Advanta ealth care prepay
age, cost, and he her r” al
yment plans. “Oth public sector includes federa and state programs
ot her n w nd
no included in oth categories. In 2009, poverty was defined as $ 10,289 for peoplle living alone an $12,982 for m married
ouples. “Urban” indicates benefic
co stical areas (MSA “Rural” indicates beneficiarie living
ciaries living in metropolitan statis As). es
utside MSAs. Analysis includes beneficiaries living in the commun
ou b beneficiaries who were not in bot Part
nity. It excludes b o th
ughout their enro
A and Part B throu ollment in 2009 or who had Medic care as a second ber
dary payer. Numb of beneficiaries
dface categories because we exc
differs among bold cluded beneficiar rs
ries with missing values. Number may not sum d todue
ounding.
ro
Source: MedPAC analysis of 2009 Medicar Current Benef
re ficiary Survey, C ost and Use file.
• Benef onsored supp
ficiaries most likely to have employer-spo ose
plemental coverage are tho who are above
ve nt er
age 64, are higher income (abov 200 percen of poverty), are eligible due to age, and report bette
than poor health.
p
• gap
Medig is most co a
ommon among those who are age 70 or older, are mid r
ddle or higher income (aboove
125 percent of pove ible due to age or ESRD, a rural dwelling, are female, and report
erty), are eligi are t
excellent or very go health.
ood
• caid coverage is most comm among th
Medic e mon 5,
hose who are under age 65 are low incoome (below 125
percent of poverty), are eligible due to disability or ESRD, a rural dwelling, and repo poor health
d are ort h.
• o ( verage only) is most comm among be
Lack of supplemental coverage (Medicare cov mon eneficiaries wh ho
nder age 65, have income below 200 percent of pove rty, are eligiblle due to disability, are rura
are un h b al
oor
dwelling, are male, and report po health.
52 icare beneficiar and other pa
Medi ry iability
ayer financial li
Chart 5-3. n rvices for
Total spending on health care ser
utionalized FFS M
noninstitu e
Medicare beneficciaries,
y e
by source of paym 09
ment, 200
P capita total spending = $13,751
Per
Public
supplementts
6%
Private
supplements
16%
aries'
Beneficia
direct spending
14%
Medicare
M
64%
Note: FS ce).
FF (fee-for-servic Private supp plements include employer-spons chased coverage.
sored plans and individually purc
ublic supplement include Medica Department of Veterans Affa
Pu ts aid, ublic coverage. D
airs, and other pu Direct spending is on
Medicare cost sha aring and noncov Analysis includes only FFS
vered services, but not suppleme ntal premiums. A s
eneficiaries not living in institution such as nursin homes.
be ns ng
Source: rrent Beneficiary Survey, Cost an Use file, 2009
MedPAC analysis of Medicare Cur nd 9.
• ng
Amon FFS bene of re
eficiaries living in the community, th e total cost o health car services
(defin as beneficiaries’ dire spending as well as expenditure by Medicare, other pu
ned ect g, s es ublic-
or a
secto sources, and all privat te-sector souurces on all health care goods and s services)
avera aged $13,75 in 2009. Medicare is the largest s ource of pay
51 M t ys nt
yment; it pay 64 percen of
the health care costs for FFS beneficiarie living in th communiity, an avera of $8,845 per
S es he age
beneficiary. The level of Med dicare spend from the leve in Chart 2-1
ding in this c hart differs f el
because this cha excludes beneficiaries in Medicar Advantage and those living in
art s re e
institu e r
utions, while Chart 2-1 represents all Medicare b beneficiariess.
• Priva sources of supplemental coverag
ate o ge—primarily employer-s
y sponsored r rage
retiree cover
m aid ent ts, ge 9
and medigap—pa 16 perce of beneficiaries’ cost an averag of $2,259 per benefic ciary.
• Beneeficiaries paid 14 percent of their hea care cos out of po
d alth sts erage of $1,8
ocket, an ave 877
b
per beneficiary.
• Public sources of supplemen coverage
f ntal y —paid 6 perce of
e—primarily Medicaid— ent
beneficiaries’ hea care cos an avera of $769 per beneficiiary.
alth sts, age
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 53
Chart 5-4. a pending on healt care s
Per capita total sp th services
mong no
am oninstitu ed beneficia
utionalize FFS b aries, by
ource of paymen 2009
so f nt,
000
70,0
42
65,64
edicare
Me
000
60,0 upplemental payers
Su p
ut
Ou of pocket
000
50,0
000
40,0
Dollars
000
30,0
21,781
000
20,0
9,853
000
10,0
4,477
1
1,951
91
39
0
< 10
1 10-25 25-50 50-75 75-90 0
> 90
Groups of beneficiaries ranked by t
b s ng
total spendin (percentile ranges)
Note: FS ce).
FF (fee-for-servic Analysis exc o hose living in inst
cludes those who are not in FFS Medicare and th titutions such as
ursing homes. Out-of-pocket spending includes Medicare cost sha
nu M vered services.
aring and noncov
Source: rrent Beneficiary Survey, Cost an Use file, 2009
MedPAC analysis of Medicare Cur nd 9.
• Total spending on health car services varies drama
re v ng
atically amon FFS bene eficiaries living in
the community. Per capita sp
P t ent
pending for the 10 perce of benefic the
ciaries with t highest t total
spending averages $65,642. Per capita spending for the 10 perc
s r cent of bene h
eficiaries with the
lowes total spending averages $391.
st
• ng
Amon FFS bene eficiaries living in the community, M edicare pays a larger pe ercentage ass
s
total spending inccreases, and beneficiaries’ out-of-po
d ocket spending is a smaaller percentaage
as tot spending increases. For example Medicare pays 64 per
tal g e, or
rcent of total spending fo all
beneficiaries but pays 75 per l or
rcent of total spending fo the 10 percent of ben ith
neficiaries wi
the highest total spending. Beneficiaries’ out-of-pock spending covers 14 p
s ’ ket g otal
percent of to
spending for all beneficiaries but only 9 percent of to spendin for the 10 percent of
b s, otal ng
beneficiaries with the highest total spend
h t ding.
54 icare beneficiar and other pa
Medi ry iability
ayer financial li
Chart 5-5. V c
Variation in and composit otal
tion of to spen nding
mong no
am utionalize FFS b
oninstitu ed aries,
beneficia
y f
by type of supplemental c e,
coverage 2009
0
25,000
0
20,000
1,390
1,768
11
2,115
0
15,000
654
Dollars
1,883
432 2,1
198 3,436
2,471
476
10,000
0 3,289 543
1,5
2,251 3,123
16,762
1,032 22 62
5,000
0 10,482
8,530 197
9,1
6,763 7,207
0
er-
Employe Med
digap Medigap & Medicaid No supplemental Othe er
ed
sponsore e
employer coverage ector
public se
Medicare lemental
Private suppl Public supplem
P mental Out of pocket
Note: FS ce). t al
FF (fee-for-servic Beneficiaries are assigned to the supplementa coverage categ for
gory that applied f the most time in
009. They could have had coverag in other catego
20 h ge 9.
ories during 2009 “Other public s ederal and state
sector” includes fe
rograms not included in the other categories. “Priva supplementall” includes employer-sponsored pl
pr c ate lans and individually
urchased coverag “Public supple
pu ge. emental” includes Medicaid, Depa
s ans
artment of Vetera Affairs, and ot age.
ther public covera
nalysis excludes beneficiaries who are not in FFS Medicare or live iin institutions suc as nursing hom
An o ch mes. It excludes
eneficiaries who were not in both Part A and Part B throughout their enrollment in 20 or had Medic
be w P r 009 care as a second payer.
Out-of-pocket spennding includes Meedicare cost sharring and noncove t tal
ered services, but not supplement premiums.
Source: rent Beneficiary Survey, Cost and Use file, 2009
MedPAC analysis of Medicare Curr S
• defined as be
The level of total spending (d ket g,
eneficiaries’ out-of-pock spending as well as
expenditures by Medicare, ot
M sector source and all p
ther public-s es, or n
private-secto sources on all
health care goods and servic ces) among FFS benefic ciaries living in the comm s
munity varies by
the ty of supple
ype emental cov h
verage they have. Total s r
spending is much lower for those
h
beneficiaries with no supplemmental cover rage than fo r those bene ho
eficiaries wh have
supplemental cov verage. Beneficiaries with Medicaid coverage have the high hest level of total
spending, 98 per rcent higher than those with no supp
w plemental co overage.
• Medicare is the la ce nt ach
argest sourc of paymen for benefi ciaries in ea supplem ance
mental insura
categ gest source of payment differs. Amo those with employer
gory, but the second larg ong r-
sponssored, medigap plus emmployer, Med other public, supplement coverage
dicaid, and o tal e
cover c e
rage—public and private combined— the seco largest s
—is ond ayment. Amo
source of pa ong
e o ap,
those who have only mediga suppleme ental covera ge and out o pocket are about equal.
of e
ng
Amon those who have Medicare-only co overage, be out-of-pocke spending is
eneficiaries’ o et
the second largest source of payment.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 55
Chart 5-6. O
Out-of-po ending fo premiums and health
ocket spe or d
ervices per bene
se p by ance and health
eficiary, b insura d
tatus, 20
st 009
8,000
ums paid by beneficiaries
Premiu
7,000 Out-of-pocket spend
ding by benefficiaries
6,000
3,548
3
5,000 1,813
3,38
82
Dollars
1,900
4,000
2,985
1,631
1
3,000 3,446
2,4
444
2,501
2,000 1,64
43 3,927 4,138
3
3,19 3,264
91
2,354
2,341 2 2,081
1,000
1,128 1,07
79 789 1,014 1,195
21
12 151
0
- + - + - + - + - + - +
e
Medicare only I
ESI Me
edigap Medigap Medicaid Other
& employer
s ey p
- Beneficiaries who report the are in fair or poor health
+ Beneficiarie who report they are in good, very good, or e
es excellent health
Note: SI onsored supplem
ES (employer-spo ).
mental insurance)
Source: rrent Beneficiary Survey, Cost an Use file, 2009
MedPAC analysis of Medicare Cur nd 9.
• tes ket n
This diagram illustrat out-of-pock spending on services and premiums by b supplemental
beneficiaries’ s
insurance and health status. For ex
h ciaries who hav only traditio nal Medicare c
xample, benefic ve coverage (Medicare
a o
only) and report fair or poor health had an average of $1,128 in out-of-pocket sspending on pr remiums and $3,446
on ser w
rvices. Those who have Medic erage and repo rt good, very g
care-only cove ent
good, or excelle health had aan
ge
averag of $1,079 in out-of-pocket spending on premiums and $ $1,643 on serv vices.
• ance that supple
Insura are
ements Medica does not sh hield beneficiar
ries from all ou sts.
ut-of-pocket cos Beneficiariees
eport being in fair or poor hea spend more out of pocket for health serv
who re f alth e t se
vices than thos reporting good,
ent
very good, or excelle health regar ype e
rdless of the ty of coverage they have to supplement Me edicare.
• te
Despit having supplemental cover rage, beneficiaries who have ESI or mediga have out-of-pocket spendin that
ap ng
mparable to or more than those who have on coverage un
is com m nly edicare only). T
nder traditionall Medicare (Me This
neficiaries who have ESI or m
result likely reflects the fact that ben o medigap have h s y
higher incomes and are likely to
have stronger prefere
s th
ences for healt care.
• b t es overage. For th
What beneficiaries actually pay out of pocket varie by type of s upplemental co igap,
hose with medi
-pocket spending generally re
out-of- miums and cost of services n covered by Medicare.
eflects the prem ts not y
Benefi SI ket re
iciaries with ES usually pay less out of pock for Medicar noncovered services than those with med digap,
but ma pay more in Medicare deductibles and co sharing.
ay ost
56 icare beneficiar and other pa
Medi ry iability
ayer financial li
inks.
Web li M
Medicare benefici ayer
iary and other pa
l
financial liability
• pter
Chap 1 of the MedPAC Ma R e provides more informatio on
arch 2012 Report to the Congress p on
m .
Medicare program spending.
http:/ pters/Mar12_
//www.medpac.gov/chap _ch01.pdf
• Chap 1 of the MedPAC Ma
pter R e provides more informatio on
arch 2011 Report to the Congress p on
m .
Medicare program spending.
http:/ pters/Mar11_
//www.medpac.gov/chap _ch01.pdf
• Chap 1 of the MedPAC Ma
pter R e provides more informatio on
arch 2010 Report to the Congress p on
m .
Medicare program spending.
http:/ pters/Mar10_
//www.medpac.gov/chap _ch01.pdf
• Chap 1 of the MedPAC Ju 2012 Re
pter une eport to the C
Congress dis nefit design i
scusses ben in
or-service Medicare.
fee-fo M
//www.medpac.gov/chap
http:/ _ch01.pdf
pters/Jun12_
• Chap 3 of the MedPAC Ju 2011 Re
pter une Congress dis
eport to the C neficiaries’
scusses ben
supplemental cov t nd re well am
verage, cost sharing, an health car use, as w as progra spending g.
http:/ Jun11_ch03.pdf
//medpac.gov/chapters/J
• Chap 2 of the MedPAC Ju 2010 Re
pter une Congress dis
eport to the C scusses the effect
supplemental cov o aries’ cost sh
verage has on beneficia haring, their health care use, and
progr ng.
ram spendin
//www.medpac.gov/chap
http:/ _ch02.pdf
pters/Jun10_
• endix B of the MedPAC June 2004 Report to the Congress a Chapter 1 of the
Appe e J R e and r
PAC June 20 Report to the Congr
MedP 002 t e mation on Medicare
ress provide more inform
o f bility.
beneficiary and other payer financial liab
//www.medpac.gov/publications/congressional_r
http:/ e04_AppB.p
reports/June pdf
//www.medpac.gov/publications/congressional_r
http:/ 2_Ch1.pdf
reports/Jun2
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 57
SECTION
Acute inpatient services
Short-term hospitals
Specialty psychiatric facilities
Chart 6-1. A
Annual ch er ute
hanges in numbe of acu care h s
hospitals
ting in th Medicare prog
participat he 00–2010
gram, 200
90
85
ed
Opene d
Closed
80
73
69
70 65
63 63
Number of hospitals
60
48
8 49
50 46
44
39
40 37
34 35
32 32
30
30 28 28 27
24
20
10 7
0
2000 001
20 2002 2003 2004 2005 2006 07
200 2008 2009 2010
ear
Calendar ye
.
Note: Openings and clos ospitals convertin to critical acce hospitals, an beginning in 2006 hospitals
sures exclude ho ng ess nd
co -term care hospitals were also ex
onverting to long- es ary ary
xcluded. Closure include volunta and involunta terminations. .
Source: MedPAC analysis of the Provider of Service file fro CMS.
o om
• n
The number of ho nings exceed the num
ospital open ded mber of closures for the eeighth
ecutive year In 2010, 30 acute care hospitals b
conse r. 0 e ipating in the Medicare
began partici e
ram and 7 te
progr erminated it.
• In 2010, 4,824 ac ospitals (inclu
cute care ho spitals) participated in
uding critica l access hos
Medicare.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 61
Chart 6-2. c n al oyment, b
Percent change in hospita emplo by
on,
occupatio 2008– –2010
T
Total U.S. U.S.
Total U nge
Percent chan in
mployment
em employyment yment
total employ
May
(M 2008) (May 22010) (2008–20010)
al
All hospita occupations 5
5,096,190 ,860
5,159, %
1.2%
Physician assistant 16,820 ,710
18, 11.2
Diagnostic sonographe
c er 28,930 ,830
31, 10.0
r
Computer and math sc cience 52,180 ,820
56, 8.9
Managem ment 175,390 ,430
189, 8.0
sical, and soci science (sc
Life, phys ial cience) 25,550 ,160
27, 6.3
Pharmacist 55,530 ,680
58, 5.7
Business and finance 92,160 ,960
96, 5.2
Registere nurse
ed 1,458,520 ,400
1,521, 4.3
y
Radiology technician 125,640 ,750
129, 3.3
ans
HC clinicia and technical 2
2,712,350 ,610
2,782, 2.6
Internists 8,100 ,280
8, 2.2
Surgeons s 5,730 ,830
5, 1.7
LPN or LV VN 163,360 ,130
145, –11.2
Note: LP (licensed practical nurse), LVN (licensed voca
PN ational nurse).
Source: MedPAC analysis of Bureau of Lab Statistics, Oc
bor ployment Statistic data set as of September 2011
ccupational Emp cs 1.
• In general, chang reported here contin trends w observed last year.
ges d nue we
• From May 2008 to May 2010 hospital em
m t 0, By
mployment i ncreased 1.2 percent. B the end of this
e early 5.2 mil lion individu
period, the hospital industry employed ne uals.
• The number of ph
n sistants emp
hysician ass eased more r
ployed by hospitals incre rapidly than any
other occupation from 2008 to 2010, at 11.2 percent Growth wa also well a
r t t. as above avera age
nographers, at 10.0 perc
for diagnostic son cent.
• n omputer and math scien staff at h
The number of co d nce reased rapid from May
hospitals incr dly y
2008 to May 2010, at 8.9 per th cupation may reflect hos
rcent. Growt of this occ y spitals’
imple o rd
ementation of electronic health recor systems.
• s w g
LPNs and LVNs were among the few occ cupations to experience a decline in the numbe of
o e n er
individuals emplo pitals from 2008 to 2010 declining b 11.2 perc
oyed by hosp 2 0, by cent. During the
e d, er
same time period the numbe of register nurses e
red y
employed by hospitals inncreased 4.33
ent r
perce (62,880 registered nurses), sugg mploying nur
gesting a shiift toward em rses with a
er aining.
highe level of tra
62 e vices
Acute inpatient serv
Chart 6-3. G n
Growth in Medica S nts
are’s FFS paymen for hospital
npatient and outp
in services, 1999–20
patient s 010
200
ent
Outpatie
180
Inpatient
160 35 3
37
31 32
28 29
140 25
Billions of dollars
22
120 21
20
18 18
8
100
80
140 143 146
1
127 34
13 135 136
60 114 120
97
7 106
95
40
20
0
1999 00
200 2001 2
2002 2003 2004 20 005 2006 2007 8
2008 2009 010
20
Calendar y
year
Note: FS ce).
FF (fee-for-servic Analysis includes inpatient services covered by the acute inp ve
patient prospectiv payment syste em
PPS); psychiatric, rehabilitation, lo
(P ren’s hospitals a nd units; outpatie services covered
ong-term care, cancer, and childr ent
y P o
by the outpatient PPS; and other outpatient service Payments inc
es. clude program ou utlays and benef ng.
ficiary cost sharin The
gr g
rowth in spending was slowed in 2006 by large increases in the nu are
umber of Medica Advantage en e
nrollees, who are not
a
included in these aggregate totals. .
Source: CMS, Office of the Actuary.
e
• egate Medic
Aggre care FFS inp
patient spend
ding was $14 billion an outpatient spending w
46 nd t was
b 09 ending increased about 2 percent, w
$37 billion in 2010. From 200 to 2010, inpatient spe while
atient spending increase about 6 percent.
outpa ed
• eze e
A free in inpatient payment rates in the Balanced B of
Budget Act o 1997 redu uced inpatient
spending growth from 1999 to 2000. Spe
t ending increaased substa een
antially betwe 2001 an nd
2004, but reverte to relative slow grow from 200 to 2007 b
ed ely wth 05 because a large number of
beneficiaries swit
tched from traditional FF Medicare to the Medicare Advan
FS e am.
ntage progra
More rapid paym
e r 2
ment growth resumed in 2008 for inpa atient and outpatient services.
• Outpa ding has incr
atient spend al based spend
reased as a share of tota hospital-b ding in the last 12
years In 1999, outpatient spending acco
s. rcent of all hospital
ounted for al most 16 per
0, t g e
spending; in 2010 outpatient spending grew to more than 20 pe al
ercent of tota hospital
spending.
• atient spend
Outpa S y 010, up from approximately
ding per FFS beneficiary was about $1,181 in 20 m
f ercent.
$590 in 1999, an increase of over 100 pe
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 63
Chart 6-4. on dicare ac
Proportio of Med e al ent
cute care hospita inpatie
es spital gr
discharge by hos 10
roup, 201
Hospitals discharges
Medicare d
Nuumber
g
Hospital group ber
Numb Sh
hare of total usands)
(thou total
Share of t
All PPS hospitals 4,6
636 100.0% 10,721 .0%
100.
and CAHs s
PPS hosp
pitals 332
3,3 71.9 10,331 .4
96.
Urban 410
2,4 52.0 8,913 .1
83.
Large urban 319
1,3 28.5 4,903 .7
45.
Other urban 091
1,0 23.5 4,010 .4
37.
Rural (exc s)
cluding CAHs 922
9 19.9 1,418 .2
13.
Rural reeferral 1
123 2.7 384 .6
3.
Sole community 3
385 8.3 588 .5
5.
Medicar dependent
re t 195
1 4.2 208 .9
1.
ural
Other ru <50 beds s 91 2.0 48 .5
0.
ural
Other ru >50 beds s 128
1 2.8 189 .8
1.
Voluntary 945
1,9 42.0 7,356 .6
68.
Proprietar
ry 8
818 17.6 1,651 .4
15.
Governme ent 5
569 12.3 1,323 .3
12.
Major teac
ching 2
268 5.8 1,584 .8
14.
ching
Other teac 7
751 16.2 3,730 .8
34.
Nonteaching 313
2,3 49.9 5,017 .8
46.
CAHs 304
1,3 28.1 390 .6
3.
Note: PP (prospective payment system CAH (critical access hospital). Analysis include all hospitals c
PS m), a . es covered by Medic care’s
ng s
inpatient PPS alon with CAHs. Maryland hospitals are excluded. L as ons
Large urban area have populatio of more than 1 n
ching hospitals ar defined by a ratio of interns an residents to be of at least 0.
million. Major teac re nd eds .25. Other teachiing
ho atio h
ospitals have a ra below 0.25. Data are limited to providers with complete cost r MS
reports in the CM database. Se ee
re
Chart 6-24 for mor information ab to
bout CAHs. Numbers may not su m to totals due t rounding. Sam mple of hospitals limited
to those with comp st 0.
plete hospital cos reports in 2010
Source: MedPAC analysis of PPS impact files and Medicar cost report dat from CMS.
re ta
• ospitals prov
In 2010, 3,332 ho m arges under Medicare’s acute inpatie
vided 10.3 million discha ent
prosp
pective paym s
ment system (IPPS) and 1,304 CAHs provided a 00
about 400,00 discharge es.
The number of PPS discharg declined from 2009 t 2010, prim
n ges to o
marily due to a shift in
ces e o ent
servic from the inpatient to the outpatie setting.
• Appro 5 s d
oximately 15 percent of all hospitals are covered by three special paym ons
ment provisio
l nters (RRC), sole community hospita (SCHs), and small ru Medicar
(rural referral cen , als ural re-
)) o
dependent hospitals (MDHs) intended to help rural f AHs; these
facilities that are not CA
facilit an nt
ties account for more tha 11 percen of all disccharges. The number of these hospit
e tals
increased approx ximately 1 peercent from 2009 to 201 0.
• ut t
Abou 90 percent of rural hos spitals were CAHs, SCH MDHs, or RRCs in 2010. Collect
Hs, tively,
these four types of hospitals provide 87 percent of alll rural disch
e p harges.
64 e vices
Acute inpatient serv
Chart 6-5. M
Major diag c highest v
gnostic categories with h volume,
scal yea 2010
fis ar
Share of e
Share of
MDC are
Sha of all medical surgical
number MDC name
e disc
charges discharges discha
arges
5 y
Circulatory system 24% 23% 6%
26
4 ry
Respirator system 15 19 3
8 Musculosk
keletal systemm 12 4 5
35
ective tissue
and conne
6 Digestive system 11 11 0
10
1 Nervous system
s 8 9 5
11 Kidney and urinary trac
ct 7 8 4
18 c
Infectious and parasitic diseases 5 6 2
10 Endocrine nutritional, and
e, a 4 5 2
metabolic diseases and d
disorders
7 Hepatobiliary system 3 3 4
reas
and pancr
9 Skin, subccutaneous 3 3 2
d
tissue, and breast
Total 92 91 3
93
Note: MDC (major diagn ot due
nostic category). Numbers may no sum to totals d to rounding.
Source: MedPAC analysis of MedPAR data from CMS.
a
• cal c
In fisc year 2010, 10 major diagnostic categories a or t
accounted fo 92 percent of all
disch spitals paid under the ac
harges at hos cute inpatien prospectiv payment system.
nt ve
• Circu
ulatory system cases acc a quarter of me
counted for about one-q urgical cases.
edical and su
• Resp em ccounted for nearly 20 p ercent of me
piratory syste cases ac arges.
edical discha
• Musc es d cent of surgiical discharg
culoskeletal system case accounted for 35 perc ges.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 65
Chart 6-6. C ve ge al nd
Cumulativ chang in tota admissions an total
010
outpatient visits, 1999–20
35
To admission
otal ns 31.5
To outpatient visits
otal t 29.6
30
26.0
25
21.8
21.0
20 8.0
18
Percent
15.4
15 13.7
12.3
10.5
5
9.3 9.2 9.8
10 8.7 8.4 8.
.9 8.6
8
7.5
6.5
5.3
3
4.5
5
2.3
3
0.0
0
1999 00
200 2001 2
2002 2003 2004 200 05 2006 2007 8
2008 2009 010
20
ar
Fiscal yea
Note: Cumulative change is the total per om h
rcent increase fro 1999 through 2010. Data are admissions (all payers) to and
ou t mmunity hospital
utpatient visits at about 5,000 com ls.
Source: Am HA
merican Hospital Association, AH Hospital Statistics.
• Hosp se
pital outpatient service us grew muc more rap
ch 999
pidly from 19 to 2010 t nt
than inpatien
ce al
servic use. Tota hospital ou its d
utpatient visi increased about 31 ppercent from 1999 to 20110.
s nt
Total admissions grew by over 10 percen between 1 1999 and 20008, but have declined ssince
2008.
• e m atient visits and approxim
There were 651 million outpa a sions to
mately 35 million admiss
munity hospi
comm itals in 2010.
• The cumulative percent chan in total outpatient vis increase by nearly 2 percentag
c p nge o sits ed ge
s m
points from 2009 to 2010, or nearly 10 million visits.
• The cumulative percent chan in inpatie admissio decreased by 1.2 pe
c p nge ent ons oints
ercentage po
from 2009 to 2010, or nearly 380,000 admissions. It was the larg year decreas in
gest single-y se
the la 10 years. Inpatient ad
ast eclined slight less from 2008 to 200
dmission de tly 09.
66 e vices
Acute inpatient serv
Chart 6-7. C ve ge
Cumulativ chang in Med es
dicare outpatient service
nd charges per FFS benefici
an inpatient disc iary,
004–2010
20
30
8.0
28
utpatient services per
Ou
25 FS
FF beneficiaryy 23.2
patient discha
Inp arges per
20 FF beneficiary
FS y 18.2
14.8
15
Percent
10 8.5
4.1
5
0.0 0.3 0.2
-1.1
0 -2.1
-4.8
-6.0
-5
-10
2004 2005 2006 2007 2008 2009 2010
Calendar ye
ear
Note: FF (fee-for-servic Data are for short-term gene and surgical hospitals, includ
FS ce). eral ss s
ding critical acces and children’s
ospitals.
ho
Source: MedPAC analysis of MedPAR and hospital outpatient claims data f
d from CMS.
• From 2004 to 2010, the number of Medic
m nt es
care inpatien discharge per FFS b beneficiary
ned
declin 6.0 perc 2
cent. From 2004 to 2006 inpatient v
6, beneficiary w relatively flat,
volume per b was y
2 olume of disc
but beginning in 2007, the vo gan
charges beg to declin ne.
• From 2004 to 2010, the number of outpa
m es beneficiary in
atient service per FFS b 8
ncreased 28
ent.
perce
• Toge wo
ether these tw trends su
uggest a shif in services from the in
ft s he t
npatient to th outpatient
ng.
settin
A Data Book: He
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2 67
Chart 6-8. re ent dicare
Trends in Medicar inpatie and non-Med
npatient length of stay, 19
in o 999–2010
6
5.41 5.31 5.23 5
5.20 5.13 5.06 5.0
00 4.93 4.91 4.89
9
5 4.78 4.67
4
3.97 3.96 3.95 3.95
3 3.96 3.91 3.9
91 3.90 3.91 3.95
5 3.96 3
3.93
4
Inpatient days
3
2
1 beneficiaries
Medicare b
s
Non-Medicare inpatients
0
1999 0
2000 2001 002
20 2003 2004 200
05 2006 2007 8
2008 2009 2010
2
ar
Fiscal yea
Note: ength of stay is calculated from discharges and patient days for m
Le c hospitals covered by the acute in
more than 3,000 h d npatient
rospective payme system. Excludes critical access hospitals.
pr ent
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• age o
Avera length of inpatient stay for Medicare benefic
s nearly 1 day longer than for
ciaries was n y n
Medicare inp
non-M 010.
patients in 20
• age o
Avera length of inpatient stay for Medicare benefic
s ciaries fell ne rcent, from 5
early 14 per 5.41
4 10, e
days in 1999 to 4.67 days in 2010. From 1999 to 201 Medicare length of s d
stay declined at
an av ual
verage annu rate of ap y t.
pproximately 1.3 percent Over the c course of the decade, the
e
ne t een
declin was most rapid betwe 2008 an 2010, dec
nd ore
clining at mo than 2 pe ear.
ercent per ye
• age o are ts hanged at 3.93
Avera length of stay for all non-Medica inpatient remained nearly unch
999
days between 19 and 2010 0.
68 e vices
Acute inpatient serv
Chart 6-9. i t
Share of inpatient admisssions pre by
eceded b
mergenc depar
em cy 5–2010
rtment visit, 2005
5
75
69.4 69.9
70
0 68.5
66.7
6 66.5 66.4
65.1 .4
65. 65.7
65
5 63.9
6
.7
62. 66.1 65.9
Percent
62.2 65.3
63.5
6
0
60 61.6 .2
62.
5
55
0
50
2005 06
200 2
2007 2008 2009 2010
Fiscal ye
ear
A pitals
All IPPS hosp Urban hospitals pitals
Rural hosp
Note: IPPS (inpatient prospective payment system).
Source: sis d
MedPAC analys of MedPAR data from CMS.
• The share of inpa
s ded
atient admissions preced by an em mergency department v ed
visit increase
ely ent
from approximate 62 perce to 66 perc 005 , e
cent from 20 to 2010, an increase of
appro p
oximately 4 percentage points.
• The share of inpa
s ded
atient admissions preced by an em mergency department v visit is
consiistently higher for rural hospitals tha urban hos
h an ncreased at approximate
spitals, but in ely
same rate from 2005 to 2010 In 2010, approximately 70 percent of inpatient admissions
e 2 0. y s
ded ere
provid at rural hospitals we preceded by an eme ergency dep partment visit. By contrasst,
oximately 66 percent of inpatient admissions pro
appro 6 ban ls
ovided at urb hospital were prec ceded
n y nt s
by an emergency departmen visit. The share of inpa ded
atient admissions preced by an
emerrgency department visit increased be nd
etween 4 an 5 percent tage points f both rural and
for
n
urban hospitals.
• s
The share of inpa ded
atient admissions preced by an em mergency department v ed
visit increase
faster between 2005 and 201 at nonpro hospitals than at for-profit hospita (not show in
10 ofit als wn
Chart 6-9). For nonprofit hospitals, the sh
t hare of inpat sions preced by an
tient admiss ded
emer rgency department visit increased fro 63 perce to 67 per
om ent rcent from 2005 to 2010 For
0.
for-prrofit hospitals, the share of inpatient admissions preceded b an emergency depart
e t s by tment
visit increased fro 62 perce to 64 per
om ent rcent from 20 to 2010. Therefore, as nonprofit
005 t
hospitals experie enced a 4 pe ercentage po increase for-profit hospitals exp
oint e, nly
perienced on a
2 per rcentage point increase.
A Data Book: He
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2 69
M e th st
Chart 6-10. Share of Medicare Part A beneficiaries wit at leas
on,
one hospitalizatio 2000––2010
0
25.0
24.0
0 23.4 23.5 23.4
23.3 3
23.3 23.3
2
23.0 22.9
2
23.0
0 22.6
21.8
0
22.0 1.5
21
0
21.0
Percent
0
20.0
0
19.0
0
18.0
0
17.0
0
16.0
0
15.0
2000 2001 2
2002 2003 2
2004 2005 2006 007
20 2008 2009 010
20
Fiscal ye
ear
Note: An
nalysis excludes Medicare Advan d –inpatient prospe
ntage claims and claims for non– ystem hospitals, such
ective payment sy
s h n
as critical access hospitals and hospitals located in Maryland.
Source: MedPAC analysis of MedPAR data from CMS.
a
• s
The share of Med dicare benefficiaries with Part A cove
h had one
erage who h at least o inpatien nt
ar b age
hospitalization in a given yea declined by 2 percenta points fr o 010,
rom 2005 to 2010. In 20
21.5 percent of Medicare ben
M one t ed art
neficiaries had at least o inpatient stay covere under Pa A.
• Since 2005, the decline in the share of Medicare Par A beneficiaries using i
e d e M rt spital
inpatient hos
ble pid
care may be in part attributab to the rap shift of s es
surgical case from the inpatient sett ting
to the outpatient setting. In th inpatient setting, the number of s
e he s es
surgical case per
ned m s 5
beneficiary declin more rapidly than medical cases from 2005 to 2010, at 12.7 percen nt
and 5.6 percent, respectively
5 y.
70 e vices
Acute inpatient serv
H o s, 2010
Chart 6-11. Hospital occupancy rates 1999–2
80
68 68 69
9 69 68 69 68
70 6
67 67
7
64 65 65
60 65 66
6 65 65 66 65
64 64
4
Occupancy rate (percent)
62 6
63
61 61
50 53
3
51 5
51 52 52 52 51
49 50 50 49 9
49
40
30
20
Urban PPS
U
10 Rural PPS
R
All
A hospitals
0
1999 2000
0 2001 002
20 2003 2004 200 05 2006 2007
2 2008 2009 2010
Fiscal yea r
Note: PS m).
PP (prospective payment system Hospital occup pancy rate is me s tal
easured as total iinpatient days as a percent of tot
av s o ays e
vailable bed days in the hospital over the reporting period. Bed da available are based on beds that are set up a and
nt he n ay d t
staffed for inpatien service (i.e., th units are open and operating), but the beds ma not be staffed for a full patient load
g
in each unit on a given day. Hospit entire 1999–2010 period are base on their status at the
tals’ group designations for the e 0 ed s
nd
en of 2010.
Source: MedPAC analysis of data from the American Hospital Association A
e of
Annual Survey o Hospitals.
• e , es en
In the aggregate, hospital occupancy rate have bee relatively stable over the last deccade,
d y
but have edged down slightly in more rec In
cent years. I 2010, occ es
cupancy rate were 64
ent
perce across all hospitals, returning to levels obser o
rved prior to 2004.
• Occu s
upancy rates are generally higher for urban than rural hospit
r n 0, y
tals. In 2010 occupancy
rates stood at 67 percent for urban hospitals and 49 percent for rural hospita an 18
als,
entage point difference.
perce t
• Occu s
upancy rates may unders upancy levells because t
state overall facility occu they do not
de nt on
includ outpatien observatio cases, wh hich are often placed in b
n ed
beds counte as inpatie ent
s
bed space.
A Data Book: He
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Medicare progr
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2 71
M nt ents, by s
Chart 6-12. Medicare inpatien payme and hosp
source a pital
group, 2010
ments
Percent of total paym
Tota al
dditional rural
Ad payme ents
g
Hospital group Base IME DSH Outlier hospital* (millions)
All hospitals 80.9% 5.0% 9.7% 3.2% 1.3% $111,057
Urban 80.5 5.5 10.2 3.5 0.4 99,701
Rural 84.9 0.7 5.2 0.9 8.9 11,356
Large urban 78.6 6.7 10.7 4.0 0.0 57,790
ban
Other urb 82.9 3.9 9.6 2.7 1.0 41,911
ferral
Rural ref 89.3 1.1 8.1 1.6 0.0 3,212
SCH (fedderal rate) 87.1 3.2 8.5 1.1 0.0 1,190
SP
SCH (HS rate) 76.7 0.1 0.0 0.2 22.9 3,957
e
Medicare dependent 84.2 0.0 8.2 0.8 6.9 1,428
ral
Other rur <50 beds 91.6 0.2 7.5 0.7 0.0 284
ral
Other rur >50 beds 91.2 0.5 7.4 0.9 0.0 1,285
y
Voluntary 81.8 5.3 8.8 2.9 1.3 79,761
ary
Proprieta 84.3 1.4 11.4 2.3 0.6 15,837
Governmment 73.0 7.1 12.4 5.7 2.0 15,459
aching
Major tea 65.8 16.1 12.4 5.6 0.1 25,234
aching
Other tea 82.9 3.8 9.7 2.8 0.9 40,249
Nonteaching 87.5 0.0 8.1 2.3 2.3 45,574
Note: ME cal
IM (indirect medic education), DSH (disproportion H ty
nate share), SCH (sole communit hospital), HSP (hospital specific c
paayment [rate]). Inc als
cludes all hospita covered by Me edicare’s acute in npatient prospect tive payment syst tem (PPS). Includ des
oth d ts
bo operating and capital payment but excludes direct graduate me edical education payments. Simul lated payments re eflect
20 payment rule applied to actual number of cas in 2010. Exclu
010 es ses ess
udes critical acce hospitals and their special pay yments.
ent
Medicare-depende hospital categ er
gories include facilities paid at eithe the hospital sp ws
pecific rate or the federal rate. Row may
no sum to 100 per
ot rcent due to rounding.
Additional rural ho
*A ospital payments are the total paym ments made to h the
hospitals beyond t federal base rate. This catego ory
-on ch
includes rural add- payments suc as the SCH ad dd-on, the Medica are-dependent ho ospital (MDH) add-on, and the low w-
vo e
olume add-on (the enhanced low-v volume adjustme did not start un fiscal year 2011). For SCHs pa the hospital s
ent ntil aid specific
ate, e r
ra this category also includes the payments they received indirectly attributable to t costs associa
y the ated with residenccy
prrograms, low-inco d not e
ome patients, and outlier cases. These SCHs are n eligible for the operating IME, DSH, and outlier r
po Hs al e
olicies, while SCH paid the federa rate are eligible for these three policies. The add pital
ditional rural hosp payments ca ategory
oes w
do not include wage index adjust a
tments or critical access hospitals’’ (CAHs’) cost-ba ased payments. A few SCHs are lo ocated
in urban areas.
Source: MedPAC analysis of claims and im om
mpact file data fro CMS.
• are
Medica inpatient pay t
yments in 2010 to hospitals cove ered by the acut inpatient pros
te spective paymen system totaled more
nt d
111 ut 90 s an o
than $1 billion. Abou $100 billion (9 percent) was paid to hospitals located in urba areas and $11 billion went to rural
als. d t
hospita This figure does not reflect the $2.7 billion in payments to C
n nt ased reimbursem
CAHs for inpatien care. Cost-ba ment
Hs a
for CAH amounts to an increase of ap 300 e
pproximately $3 million above the standard IP PPS rate.
• Specia payments—wh include indirect medical edu
al hich ,
ucation, disprop ortionate share, and outlier payyments as well as
o H
additional payments to rural hospitals through the SCH and MDH prog nt
grams—accoun for 19 percent of all inpatient
payme rtion is higher for urban (19.6 pe
ents. This propor rural hospitals (1
ercent) than for r 15.7 percent).
• r
Outlier payments acco ercent of total inp
ounted for 3.2 pe ts
patient payment in 2010. The legislative mandate for the level of
ulation, displayin outlier payme
outlier payments uses a different calcu ng f
ents as a ratio of outlier payments to base paym ments
plus ou o o
utlier payments. Measured in this way, CMS’s outlier share ratio was 4.7 percen in fiscal year 2
nt wer
2010, slightly low
he
than th annual goal of 5.1 percent.
72 e vices
Acute inpatient serv
M npatient P
Chart 6-13. Medicare acute in rgin, 199
PPS mar 99–2010
15
13.7
12
2.0
10.3
10
6.6
Margin (percent)
5
2.4
0
-0.3 -0
0.5
-2.2 -1
1.7
-2.3
-5 -3.7
-4.8
-10
1999 2000 2001 2002 2003 2004 20
005 2006 2007 8
2008 2009 010
20
Fiscal ye ar
Note: PP (prospective payment system A margin is ca
PS m). alculated as reve
enue minus costs divided by reve
s, enue. Data are bbased
n wable costs and exclude critical access hospitals. Medicare acute inpatient margin includes service
on Medicare-allow e n es
overed by the acute care inpatien PPS.
co nt
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• e m ts s for
Medicare’s acute inpatient margin reflect payments and costs f services c covered by
Medicare’s inpati e
ient hospital prospective payment sy argin may be
ystem. The iinpatient ma e
influe w a
enced by how hospitals allocate overhead costs across serv vice lines. Only by comb bining
r an ate e out
data for all major services ca we estima Medicare costs witho the poten ce
ntial influenc of
how overhead co
o osts are alloc C
cated (see Chart 6-15).
• Follow plementation of the Bala
wing the imp n et 97,
anced Budge Act of 199 inpatient margins
ned e ars percent aver
declin over the next 10 yea as costs rose faster than the 3 p rage annual
care paymen In 2010, the margin was –1.7 pe
increase in Medic nts. , ercent, up slightly from
2009.
• Medicare inpatien margins vary widely. In 2010, one
nt v ad
e-quarter of hospitals ha Medicare
inpatient margins that were 8.4 percent or higher, an another quarter had in
s 8 o nd npatient margins
that were –16.3 percent or lo
w p nt ve
ower. Forty-three percen of hospitals had positiv inpatient
Medicare margins in 2010.
A Data Book: He
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Medicare progr
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2 73
M npatient P
Chart 6-14. Medicare acute in rgin, by u
PPS mar nd
urban an
ural
ru loca 99–2010
ation, 199
20
ban
Urb
14.6
15 Rural
12.9
11.1
10
Margin (percent)
7
7.2
5
6.0 2.6
4.1 3.8 0.6
0.5 2
0.2
0 1
1.6
0.7 -1.6 -1.6
-0. 6 -2.6
-0.4 -3.2
-2.2 -2.4 -2.0
-
-5 -3.8
-4.9
-10
1999 2000 2001 002
20 2003 2004 200
05 2006 2007 2008
8 2009 2010
2
ar
Fiscal yea
Note: PP (prospective payment system A margin is ca
PS m). alculated as reve
enue minus costs divided by reve
s, enue. Data are bbased
n wable costs and exclude critical access hospitals. Medicare acute inpatient margin includes service
on Medicare-allow e n es
overed by the acute care inpatien PPS.
co nt
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• Urban hospitals historically had higher Medicare inpa
h h M al but
atient margins than rura hospitals, b
this difference be
d egan to narro in 2002, and today u rban hospita margins are lower th
ow als’ han
e
those of rural hosspitals. In recent years, Medicare inp gins of rural hospitals ha
patient marg ave
n ban
been higher than those of urb hospitals.
• The gap between urban and rural hospita Medicar inpatient m
g n als’ re s
margins was wide betwe een
O n as had
1999 and 2001. One factor in this gap wa that urba n hospitals h greater success in
contr g ast
rolling cost growth, at lea partly in response to pressures f ed
from manage care. Fro om
2001 to 2004, the difference narrowed, and from 200 to 2010, r
e a 04 als’
rural hospita inpatientt
margins were slig f
ghtly higher than those for urban ho spitals. In 20 al
010, the margins of rura and
n w
urban hospitals were 0.6 per rcent and –2.0 percent, rrespectively. The narrow wing between
e s s sult
these two groups of hospitals as of 2001 was the res of payment policies targeted at
ng
raisin rural hosp pital paymen as well as growth in the number of critical ac
nts, a r ccess hospittals,
h m
which removed many rural ho ospitals with low margin from the p
h ns prospective ppayment sysstem.
74 e vices
Acute inpatient serv
O 010
Chart 6-15. Overall Medicare margin, 1999–20
8
6.3
6 3
5.3 5.2
4
2.2
Margin (percent)
2
0
-2 -1.2
-4 -3.0 3.1
-3
-4.6 -4.5
-6 -5.1
-6.0
-7.1
-8
1999 00
200 2001 2
2002 2003 2004 20 005 2006 2007 08
200 2009 2010
ear
Fiscal ye
Note: A margin is calcula ated as revenue minus costs, div e. d
vided by revenue Data are based on Medicare-al nd
llowable costs an
exxclude critical acc O the
cess hospitals. Overall Medicare margins cover t costs and pay tient,
yments of acute inpatient, outpat
ric
inpatient psychiatr and rehabilitat n and
tion unit, skilled nursing facility, a home health services, as well as graduate medical
ed d
ducation and bad debts.
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• o es s for
The overall Medicare margin incorporate payments and costs f acute inp patient,
outpa d ome health care, and inp
atient, skilled nursing, ho c rehabilitative
patient psychiatric and r e
ces, as well as direct gra
servic on
aduate medical educatio and bad d debts. The ooverall margin
ws t dicare inpatie margin.
follow a trend similar to that for the Med ent
• The overall Medicare margin in 1999 was 6.3 percen In fiscal y
o s nt. year 2010, it was
–4.5 percent.
• In 2010, one-quaarter of hospitals had ove are of ,
erall Medica margins o 4.6 percent or higher, and
anoth quarter had margins of –15.8 pe
her h wer. n
ercent or low Between 2000 and 2 2008, the
rence in perf
differ formance be op om
etween the to and botto quartile w m
widened from 17 percentage
s
points to 22 percentage points, but narroowed to 20 p points in 2010. About 37
percentage p 7
perce of hospitals had posi
ent itive overall Medicare m argins in 2010.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 75
O n
Chart 6-16. Overall Medicare margin, by urban and rural
ocation, 1999–2010
lo
10
8 7.3 ban
Urb
6.3 6.0 ral
Rur
6
4 2
2.8
Margin (percent)
2
0
-2 -0.5 -0.9 -3.0 -2. 8 2.6
-2
-1.5
-2.2 2.3
-2 -4.4
-4 -4.4
-3.3 -3. 1 -5.1
-3.8 -6.0
-4.7 -4
4.8
-6 -5.2
-6.1
-8 -7.3
-10
1999 0
2000 2001 002
20 2003 2004 200 05 2006 2007 8
2008 2009 010
20
ar
Fiscal yea
Note: A margin is calculaated as revenue minus costs, div e. d
vided by revenue Data are based on Medicare-al llowable costs annd
ex cess hospitals. Overall Medicare margins cover t costs and pay
xclude critical acc O the nt,
yments of acute hospital inpatien
utpatient, inpatient psychiatric and rehabilitation unit, skilled nursin facility, and h ome health services, as well as d
ou u ng direct
raduate medical education and ba debts.
gr ad
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• As with inpatient margins, ov are
verall Medica margins historically wwere higher for urban
hospitals than for rural hospit
r ce erall Medicar margins fo rural hosp
tals, but sinc 2005 ove re or pitals
have gradually be htly t ban
egun to sligh exceed those for urb hospitals.
• The difference in overall Med
d dicare margins between urban and r als
rural hospita grew betw ween
1997 and 2000, but has since narrowed. In 1997, the overall ma
b e e argin for urba hospitals was
an
11.6 percent, com t
mpared with 6.1 percent for rural ho spitals. In 20010, the ove re
erall Medicar
margin for urban hospitals wa –4.8 perc
as cent, compa red with –2.6 percent fo rural hospitals.
or
y m M
Policy changes made in the Medicare Pr Drug, Improv
rescription D vement, and Modernizati ion
o
Act of 2003 targeeted to rural hospitals heelped to impr ative financia position of
rove the rela al f
ation to assi rural hosp
rural hospitals. Further legisla ist mplemented after 2008.
pitals was im
76 e vices
Acute inpatient serv
H t payer ma
Chart 6-17. Hospital total all-p 999–2010
argin, 19 0
10
9
8
7 6.4
6.0
Margin (percent)
6 5.4
5 4 .8
4.3 4.3 4.2
9
3.9 3.7 3.7
4 3.6
3
1.8 *
8
2
1
0
1999 2000 2001 2
2002 2003 2004 20
005 2006 2007 2008 2009 2010
2
ar
Fiscal yea
Note: A margin is calcula m
ated as revenue minus costs, divid by revenue. T
ded udes all patient c
Total margin inclu ded
care services fund by
all payers, plus non s
npatient revenue. Analysis excludes critical access hospitals.
*T significant dro in total margin includes investm
The op n ment losses stem mming from the de 2008.
ecline of the U.S. stock market in 2
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• The total hospital margin for all payers⎯
t ⎯Medicare, M her
Medicaid, oth governm ment, and priivate
payers⎯reflects the relations ospital reven
ship of all ho ospital costs including
nues to all ho s,
inpatient, outpatie post-acute, and non
ent, vices. The to margin a
npatient serv otal s
also includes
nonpatient revenue, such as investment revenues. O of we
Other types o margins w track,
Medicare inpatien margin an overall Me
nt nd edicare mar rgin, are opeerating margins that do n
not
includ investment revenue.
de
• m 07,
From 1999 to 200 total mar rgins increas to the hiighest level in a decade. In 2008, th
sed he
ined to 1.8 percent, its lo
total margin decli p owest level s patient prosp
since the inp ment
pective paym
syste was imple
em he
emented. Th 2008 dec U.S. stock market resulte in signific
cline of the U ed cant
inves als,
stment losses for hospita which re correspondin decline in total margin. In
esulted in a c ng n
4 he
2010, total margin increased again to 6.4 percent, th highest it has been in over a deca ade.
• In 2010, 75 perce of hospit
ent tals had positive total ma total margin varied much
argins. The t
less than the Med
t ient or overa Medicare margin. In 2
dicare inpati all 2010, one-qu uarter of
prosp ment system hospitals ha total mar
pective paym ad ere ent
rgins that we 9.0 perce or higher r,
e
while another one ad hat or ro,
e-quarter ha margins th were at o below zer a spread of roughly 9
perce ts
entage point compared with a 25 pe ercentage p point spread for Medicare inpatient
e
margins and a 20 percentage point sprea for overa ll Medicare m
0 e ad margins.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 77
H t payer ma
Chart 6-18. Hospital total all-p y and rural
argin, by urban a l
ocation, 1999–2010
lo
10
9 ral
Rur
ban
Urb
8
7 6.5
6.0 6.0
Margin (percent)
5.7
6
5.1 5.1 5.1
6.0
5 4.5 4.3 4.3
5.3 5.5
3.9
3
4 4.7
4.2 4.2
3 3.7 3.6 3
3.6 2.4*
4 3.6
3.4
2
1.7 *
1
0
1999 0
2000 2001 20
002 2003 2004 200 05 2006 2007 2008
8 2009 2010
2
ar
Fiscal yea
Note: A margin is calculaated as revenue minus costs, div e. ncludes all patien care services f
vided by revenue Total margin in nt funded
y s
by all payers, plus nonpatient reve estment revenue Analysis exclu
enue such as inve es. ess
udes critical acce hospitals.
Significant drop in total margin inc
*S n nt ng
cludes investmen losses resultin from the U.S. stock market dec cline of 2008.
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• In 2009 and 2010 urban hos
0, h all-payer) margins than rural hospita
spitals had higher total (a als.
In 2010, total margins were 6.5 percent for urban ho spitals and 5 percent f rural
6 f 5.5 for
hospitals. The growth in marg 9
gins in 2009 and 2010 r cost growth and increasing
reflects low c
privat payer reim
te t
mbursement rates.
• al n e t al
In 2008, both rura and urban hospitals experienced their lowest level of tota (all-payer)
margins in the las 15 years. Hospitals’ to margin iincludes all patient care services fun
st otal nded
l us nt
by all payers, plu non-patien revenue, such as inve
s estment reveenues. The 2 e
2008 decline of
U
the U.S. stock ma ed ant ent or
arket resulte in significa investme losses fo hospitals, which in tur rn
ted
result in a corr d tal s
responding decline in tot margins. Other types of margins we track,
nt nd
Medicare inpatien margin an overall Me rgin, are ope
edicare mar erating margins that do n
not
includ investment revenue.
de
78 e vices
Acute inpatient serv
H t payer ma
Chart 6-19. Hospital total all-p y ng s,
argin, by teachin status
999–2010
19
10
onteaching
No
ther teaching
Ot
8 Major teaching
6.8 6.9
6.2
5.9
6 5.1 5 .2 6.6
5.3
Margin (percent)
4.9 4.7 4.9 4.9
4.6 5
4.5
5 .2 5.2 5.3
4.9 4.6 4.9
4 4.5
4.2 4.3
3 4.3 4.4 2.9*
9
3 .5
2 3.0
2.3
3 2.4 2.2 *
2 2.4
1.6
1.1 1.3
0
-0.4 *
4
-2
1999 0
2000 2001 2
2002 2003 2004 20 005 2006 2007 2008 2009 2
2010
ar
Fiscal yea
Note: Major teaching hospitals are define by a ratio of in
ed ents to beds of 0
nterns and reside while other teaching
0.25 or greater, w
ho atio an as s
ospitals have a ra of greater than 0 and less tha 0.25. A margiin is calculated a revenue minus costs, divided b by
evenue. Total ma
re vices funded by a payers, plus n
argin includes all patient care serv all nonpatient reven nue. Analysis exccludes
ritical access hos
cr spitals.
Significant drop in total margin inc
*S n nt ng
cludes investmen losses resultin from the U.S. stock market dec cline of 2008.
Source: MedPAC analysis of Medicare cos report data from CMS.
st m
• p tal b e f n
The pattern of tot margins by teaching status is the opposite of the pattern for the
nt all he
Medicare inpatien and overa Medicare margins. Th total marg or
gins for majo teaching
hospitals have coonsistently been lower th those fo other teaching and nonteaching
b han or
hospitals. In 2010 the total margin for major teachin g hospitals s
0, m stood at 5.3 percent
comppared with ot g
ther teaching hospitals and nonteac
a als
ching hospita at 6.9 pe .6
ercent and 6.
ent,
perce respectiv vely.
• In 2010, major te
eaching hosp all-payer) ma
pitals’ total (a hed n
argins reach their highest point in
more than two de
e T us me
ecades, at 5.3 percent. Their previou high cam in 2007, w otal
when their to
ns 5 n
(all-payer) margin reached 5.2 percent. However, in 2008, this trend was in y
nterrupted by a
steep decline in their investm
p t ment revenue es.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 79
M s ching and dispro
Chart 6-20. Medicare margins by teac d ate
oportiona
hare stat
sh 0
tus, 2010
Share off
Medicaree Medicare
M Overall
are
Sha of inpatient npatient
in Medicar
re
Hospital group
g spitals
hos paymentss margin
m n
margin
als
All hospita 00%
10 100% –1.7% %
–4.5%
Major teac
ching 8 23 7.5 –0.1
ching
Other teac 2
23 36 –2.3 –4.4
Nonteaching 6
69 41 –6.4 –7.0
Both IME and DSH 2
27 54 2.7 –1.8
IME only 4 6 –9.8 –10.9
DSH only 5
53 32 –3.2 –4.9
Neither IM nor DSH
ME 1
16 9 –17.5
– –14.3
Note: IM (indirect medi
ME D umbers may not sum to totals due to rounding.
ical education), DSH (disproportionate share). Nu
Source: MedPAC analysis of 2010 Medicar cost report data from CMS.
re
• Major teaching hospitals had the highest Medicare in
d t d
npatient and overall Med ins
dicare margi in
2010. Their bette financial performance was largely due to the a
er p y ayments they
additional pa
receiv from the IME and DSH adjustments.
ved e D
• Hosp ceived neithe IME nor DSH paymen had the llowest Medicare margin In
pitals that rec er D nts ns.
are
2010, the Medica inpatient margins of these hospit bout 25 percentage points
tals were ab
below those of major teachin hospitals, and overall Medicare m
w m ng e
margins were nearly 15
entage point lower.
perce ts
80 e vices
Acute inpatient serv
re to
Chart 6-21. Financial pressur leads t lower costs
ssure, 2005–2
Level of financial pres 2009
h
High pressure Low pres
ssure
n-Medicare
(non Meedium (non-Medicare
margin ≤ 1%) pressure margin > 5%)
Number of hospitals
o 742 438
4 1,712
2
l
Financial characteristics, 2010 (mmedians)
Non-Medi icare margin
e, u
(private Medicaid, uninsured) –3.6% 3.3% 4%
12.4
Standardized cost per discharge
re
(as a shar of the natioonal median)
fit
For-prof and nonpro ofit 90 97 5
105
Nonprofit hospital 89 97 6
106
For-prof hospital
fit 92 96 1
101
rowth in cost per
Annual gr p
e,
discharge 2007–2010 3.3% 3.3% 7%
3.7
Overall 20 Medicare margin (med
010 e dians) 5.5% –1.6%
– 2%
–9.2
cs
Patient characteristic (medians)
pital discharges in 2010
Total hosp 4,500 728
7,7 5
7,475
Medicare share of inpaatient days 44% 41% 2%
42
Medicaid share of inpaatient days 12 12 0
10
Medicare case mix index 1.31 1.42 8
1.48
Note: St ts or
tandardized cost are adjusted fo hospital case mix, wage index, outliers, transfe cases, interest expense, and th
m , er t he
ffect of teaching and low-income Medicare patients on hospital co
ef a e spitals that had
osts. The sample includes all hos
omplete cost repo on file with CMS by August 2011.
co orts C 2
Source: MedPAC analysis of Medicare cos report and claim files from CM
st ms MS.
• er p nds o s rge.
Highe financial pressure ten to lead to lower cost growth and lower costs per dischar
Hosppitals with low volume, lower case mix, and hig
wer aid are
gher Medica charges a more like toely
nder financia pressure.
be un al
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 81
C n are
Chart 6-22. Change in Medica hosp sts
pital inpatient cos per
e yer
discharge and private pay paym ment-to-c o,
cost ratio
987−2010
19
12 0
1.40
1.36
10 9.1 5
1.35
1.32
Percent change in cost per discharge
8.6
8.1 1.30
1.29
8 1.27
7 0
1.30
1.28
Payment-to-cost ratio
1.2
24 5.6
6 5.3 5.1 5.5 5
1.25
1.22 1.22
1.19
4 0
1.20
1
1.16 2.4 2.2
2 0.8 1.1 5
1.15
1.16
0 0
1.10
-2 -1.2 5
1.05
-4 0
1.00
19
987 1989 1991 1993 1995 1997 1999 200 01 2003 005
20 2007 2009
scal year
Fis
ange in Medicare acute inpatient costs per discha
Cha e arge cost ratio
Payment-to-c
Note: Da are for comm
ata a
munity hospitals and cover all hos
spital services. Im
mputed values w were used for mis t
ssing data (about one-
third of observations). Data for 200 e
06–2010 exclude Medicare and M ed
Medicaid manage care patients from the private
ayment-to-cost ra
pa t elf-pay patients. If we excluded s
atio. The private payment-to-cost ratio includes se ,
self-pay patients, the
ayment-to-cost ra for 2010 wou be higher, at approximately 1 .42.
pa atio uld
Source: MedPAC analysis of Medicare Cos Report files fro CMS and CM
st om e ment
MS’s rules for the acute inpatient prospective paym
sy sociation Annual Survey of Hosp itals.
ystem and American Hospital Ass
• The pa h
attern of growth in Medicare costs per disch
c pitals have resp
harge makes it clear that hosp ly
ponded strongl to
centives posed by the rise and fall of financial pressure fro private paye over three d
the inc om ers s
distinct periods
between 1987 and 2010.
• During the first period 1987–1992, private payers payments ros much faster than the cost of treating their
g d, s’ se r
patients (seen in the chart as a stee increase in the payment-to
ep o-cost ratio). Th result suggests an almost
his t
complete lack of pres vate payers. Me
ssure from priv per
edicare costs p discharge r nt ing
rose 8.3 percen per year duri
ge ar
these years, more than 3 percentag points a yea above the inc crease in Mediicare’s market basket index.
• MOs and other private insurers exerted more pressure duri ng the second period, 1993–
As HM s e ate
–1999, the priva
payer payment-to-co ratio droppe substantially The rate of co growth plum
ost ed y. ost mmeted to an a y
average of only 0.8
nt t age ow e he
percen per year, which was more than 2 percenta points belo the average increase in th market bask ket.
• essure from priv
As pre vate payers wa
aned after 1999 the private p
9, -to-cost ratio ro sharply, an
payer payment- ose nd
wth ket
hospital cost growth exceeded grow in the mark basket by 2 percentage po n he
oints a year. In 2005–2007, th
growth in private pay profit margins slowed, and in 2007, cost growth more c
h yer d closely matched the market basket.
d
• p
In 2010, the private payer payment ncreased as co growth was lower than pay
t-to-cost ratio in ost yment rate
increases. The slow cost growth in 2010 may refle financial pre
ect essure stemmiing from 2008 investment por
rtfolio
s c see
losses and economic uncertainty (s Chart 6-17).
82 e vices
Acute inpatient serv
M f es costs for Medicar servic
Chart 6-23. Markup of charge over c re ces,
999–2010
19
250
218
207
200 19
93
181 185
176
167
7
157
150 139
Percent
125
114
104
100
50
0
1999 20
000 2001 2002 2003 2004 2 2005 2006 2007 008
20 2009 2010
year
Fiscal y
Note: nalysis includes all community ho
An ospitals.
Source: Am nual Survey of Hospitals.
merican Hospital Association Ann H
• The markup of ch
m f 104 218 in
harges over costs rose from about 1 percent in 1999 to 2 percent i
2010. Charges now exceed costs by more than a fac of 3.
c ctor
• d c
Rapid growth in charges may have little impact on ho
y i ospital financial performmance, becau use
p c wth
few patients pay full charges. However, charge grow may sign ect
nificantly affe uninsured d
patients, who ma pay full ch
ay e wth es o
harges. More rapid grow in charge (relative to growth in
costs may reflec hospitals’ attempts to maximize re
s) ct a evenue from private payers (who oft ten
struct ayments as a discount of charges). The unusua large incr
ture their pa ff ally reases in
charg in 2002 and 2003 may have resulted from s
ges als
some hospita manipula ating Medica are
outlie payments. Toward the end of fisca year 2003 Medicare revised its o
er e al 3, outlier policy in
an atttempt to cur hospitals’ opportunity to increase their outlier payments th
rb hrough
exces ssive increases in charg
ges.
• m
The markup of ch harges over costs is gen
nerally highe for urban h
er hospitals (23 percent in
36 n
2010) than for rural hospitals (179 percent in 2010).
s
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 83
o s als, –2012
Chart 6-24. Number of critical access hospita 1999–
1,400
1,306 1,324 1,329
1 ,280 1,283 1,291 1,302 1
1,200
Number of critical access hospitals
1,055
1,000
8
875
800 722
600 563
400 341
200 39
13
41
0
000 2001 20
1999 20 004 2005 2
002 2003 20 2008 2009 2
2006 2007 2 2010 2011 2012
r
Calendar year
Source: R exibility Program and CMS.
The Medicare Rural Hospital Fle
• n
The number of cr ritical access hospitals (CAHs) grew rapidly from 1999 to 20
s w m s
006, but has
since leveled off at approximately 1,300 facilities.
e
• The increase in CAHs is in part due to a series of leg
C anges that m
gislative cha sion
made convers
to CA status ea
AH panded the services tha qualify for cost-based reimbursem
asier and exp s at ment.
ently, CAHs are paid the Medicare costs plus 1 percent for inpatient se
Curre eir r ervices,
atient service (including laboratory and therapy services), a post-acu services in
outpa es g y and ute
g
swing beds.
• Befor 2006, a hospital could convert to CAH status if it was (1) 35 miles by primary roa or
re d y ad
15 miles by secondary road from the nea
f arest hospita or (2) the state waived the distance
al,
requirement by declaring the hospital a “necessary p
d e arting in 200 states co
provider.” Sta 06, ould
no longer waive the distance requiremen While mo st existing C
t e nt. e est,
CAHs fail the distance te
they are grandfat
a . ave
thered into the program. Among sm all rural hospitals that ha not
conve w m
erted, most would not meet the distaance require
ement. There efore, we exxpect the nummber
AHs
of CA to remain fairly cons stant.
84 e vices
Acute inpatient serv
M nts patient ps
Chart 6-25. Medicare paymen to inp ric ies,
sychiatr faciliti
002–2011
20
5.0
4.5 4.2 4.3
4
4.0 4.1 4.0 4.0 4.1
4.0 8
3.8
3.5 3.5
3.5
Dollars (in billions)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2002 2003 04
200 2005 2006 2
2007 8
2008 2009 2010 2011
ear
Fiscal ye
Source: CMS, Office of the Actuary.
e
• The inpatient psy tive paymen system sta
ychiatric facility prospect nt ry
arted Januar 1, 2005.
• Medicare program spending for beneficia
m n acilities grew an
aries’ care in inpatient psychiatric fa w
estim
mated 2.3 percent per ye between 2002 and 20
ear 011.
• Inpat atric care furn
tient psychia n e
nished in scatter beds in acute care hospitals and paid under
the acute care inpatient prospective paym m uded in this c
ment system is not inclu chart.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 85
o ent
Chart 6-26. Number of inpatie psych acility ca
hiatric fa ases has
allen und the PPS, 2002
fa der P 2–2009
Average Aveerage
A
TEFRA PPS nual
ann annnual
ange
cha ange
cha
2002 2004 2006 2
2008 2009 2002––2004 2004–2009
Cases 464,780 4
483,271 74,417
47 44 2,759 431
1,276 2.0%
2 2.3%
–2
1
Cases per 1,000 FFS
es
beneficiarie 13.3 13.2 13.1 12.5 12.3 0.2
–0 1.5
–1
p
Spending per FFS
y
beneficiary $90.6 $96.8 $
$104.7 $ 109.5 $1
111.3 3.4
3 2.8
2
er
Payment pe case $6,822 $7,328 $
$7,989 $ 8,742 9,080
$9 3.6
3 4.4
4
er
Payment pe day $570 $627 $677 $728 $
$763 4.9
4 4.0
4
tay
Length of st (in days) 13.0 12.7 13.0 13.1 13.1 1.2
–1 0.6
0
Note: PS m), E Act
PP (prospective payment system TEFRA (Tax Equity and Fisca l Responsibility A of 1982), fee e-for-service (FFS S).
s
Numbers of cases and patients ref FS services furnishe in inpatient ps
flect Medicare FF utilization of s ed s
sychiatric facilities
PFs). Scatter bed cases and spending are exclud
(IP d s for
ded, as are cases and spending f beneficiaries enrolled in Medicare
Addvantage plans.
Source: MedPAC analysis of MedPAR data from CMS.
a
• e tive payment system for IPFs was im
Since a prospect t mplemented in January 2 2005, the
ber s out ent .
numb of cases in IPFs has fallen, on average, abo 2.3 perce per year. Controlling for
the number of be e e, s rcent per yea
eneficiaries enrolled in FFS Medicare IPF cases fell 1.5 per ar
betwe 2004 an 2009.
een nd
86 e vices
Acute inpatient serv
npatient psychiat facili
Chart 6-27. In tric 03–2009
ities, 200
Aveerage
TEFRA S
PPS nual
Ann annual
ange
cha ange
cha
Type of IP
PF 2003 200
04 2005 2006 2007 2008 2009
2 2003– –2009
–2004 2004–
All 1,703 1,657 1,623 1,590 4
1,584 1,564 1,536 2.7%
–2 1.5%
–1
Urban 1,298 1,277 1,283 1,267 1,262
2 1,251 1,210 1.6
–1 1.1
–1
Rural 405 378 340 323 322
2 313 326 6.7
–6 2.9
–2
Freestandding 353 352 366 396 412
2 420 426 0.3
–0 3.9
3
based units
Hospital-b 1,350 1,305 1,257 1,194 1,172
2 1,144 1,110 3.3
–3 3.2
–3
Nonprofit 974 949 910 878 849
9 831 802 2.6
–2 3.3
–3
For profit 349 327 344 343 359
9 352 368 6.3
–6 2.4
2
Governme ent 380 381 369 369 376
6 381 366 0.3
0 0.8
–0
Note: PF
IP (inpatient psyc
chiatric facility), TEFRA (Tax Equ and Fiscal Re
T uity t ment
esponsibility Act of 1982), PPS (prospective paym
ystem). Numbers are facilities tha submitted valid Medicare cost r
sy s at d ven
reports in the giv fiscal year.
Source: MedPAC analysis of Medicare cos report files from CMS.
st m
• nd e g
Between 2003 an 2004, the number of freestanding IPFs rema teady. Begin
ained fairly st nning
in 2005, when the IPF PPS began to be implemente d, the numb of freesta
e b ber anding IPFs grew
an avverage of 3.9 percent pe year. By comparison, the number of distinct-p psychiat
9 er part tric
units in acute car hospitals fell by 3.3 pe
re een nd
ercent betwe 2003 an 2004, a d decline that
nued after th PPS was implemente Much of the decline in psychiatric units occu
contin he ed. urred
amon nonprofit and rural fac
ng cilities.
• The drop in the number of ps
d n sychiatric units likely has several cau
s uses. Psych may
hiatric units m
ble o p
not be as profitab as they once were, particularly w when compa ared with other acute car re
ors,
hospital services. Other facto such as the availabiility of psych rovide on-ca
hiatrists to pr all
servic in hospital emergency departme
ces ute
ents, may al so affect acu care hos spitals’ decissions
ose
to clo their psy s.
ychiatric units
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 87
O
Chart 6-28. One diagn d ost e-quarter
nosis accounted for almo three rs
f ses
of IPF cas in 20009
MS–DRG s
Diagnoses Percentage
885 Psychosis 73.
.1%
057 Degenerat s ders without M
tive nervous system disord MCC .5
7.
884 Organic disturbances & mental retarrdation .8
5.
897 Alcohol/dru abuse or dependency, no rehabilitat
ug d tion, without MMCC .2
4.
881 e
Depressive neurosis .3
3.
882 e
Neurosis except depres ssive .1
1.
895 ug d w
Alcohol/dru abuse or dependency with rehabilita ation, without MCC .9
0.
056 Degenerat s ders with MCC
tive nervous system disord C .8
0.
880 ustment reaction & psychos
Acute adju social dysfun ction .7
0.
886 Behavioral and develop ders
pmental disord .5
0.
883 Disorders of personality & impulse co
y ontrol .5
0.
894 Alcohol/dru use—left AMA
ug A .2
0.
896 ug d w
Alcohol/dru abuse or dependency without rehab bilitation, with MCC .2
0.
876 OR proceddure with principal diagnos of mental i llness
sis .1
0.
887 ntal
Other men disorders .1
0.
081 atic c
Nontrauma stupor & coma without MCC t .1
0.
080 atic c
Nontrauma stupor & coma with MC CC .0
0.
Nonpsychi RGs
iatric MS–DR .9
0.
Total .0
100.
Note: PF chiatric facility), MS–DRG (Medic
IP (inpatient psyc M care severity–dia
agnosis related g ajor or
group), MCC (ma comorbidity o
omplication), AMA (against medic advice), OR (operating room) .
co A cal (
Source: a
MedPAC analysis of MedPAR data from CMS.
• e a
Medicare patients in IPFs are generally assigned to 1 of 17 psyc icare severit
chiatric Medi ty–
diagnnosis related groups. In 2009, the most frequent occurring IPF diagnosis—accoun
d 2 tly nting
3
for 73 percent of IPF dischar The st
rges—was psychoses. T next mos common d discharge,
accou most 8 perce of IPF ca
unting for alm ent ases, was deegenerative nervous sysstem disordeers.
88 e vices
Acute inpatient serv
PF y ciary cha
Chart 6-29. IP discharges by benefic stics, 200
aracteris 09
ristic
Character otal arges
Share of to IPF discha
s*
Current eligibility status
Aged 34.9%
Disabled 65.0
o
ESRD only 0.1
rs)
Age (year
<45 28.3
45–64 36.4
65–79 21.1
80+ 14.6
Race
White 77.1
African American 17.3
Hispanic 2.7
Other 2.9
Note: PF chiatric facility), ESRD (end-stage renal disease). Numbers may n sum to totals due to rounding
IP (inpatient psyc E e . not s g.
Some aged bene
*S o
eficiaries are also disabled.
Source: MedPAC analysis of MedPAR data from CMS.
a
• PFs or e f
Most Medicare beneficiaries treated in IP qualify fo Medicare because of a disability. As a
result IPF patien tend to be younger and poorer th the typic fee-for-se
t, nts e han cal ervice
beneficiary.
• Diagn ns
nosis pattern differed by age and ra
b g
ace. Among the top Meddicare severrity–diagnosis
ed
relate groups in 2009, dege rvous system disorders, such as dementia, were
enerative ner m e
h mon r hile ses ore
much more comm in older patients, wh psychos were mo common in younger
patients.
• A ma neficiaries ad
ajority of ben PFs and
dmitted to IP are duallly eligible for Medicare a Medicaid. In
t e east one IPF discharge w
2009, 59 percent of Medicare beneficiaries with at le F were dually
eligib for at leas one month of the year
ble st h r.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 89
inks. Acu inpat
Web li ute vices
tient serv
ls
Short-term hospital
• Chap 3 of the MedPAC Ma
pter arch 2012 Report to the Congress p
R e ditional detai
provides add iled
mation on ho
inform ospital margins.
//www.medpac.gov/chap
http:/ _Ch03.pdf
pters/Mar12_
• MedP PAC provide basic information about the acute inpatient pr
es e tem
rospective payment syst
asics series.
in its Payment Ba .
http:/ uments/MedPAC_Payme
//www.medpac.gov/docu _11_hospital
ent_Basics_ l.pdf
• formation on the hospita market ba sket.
CMS provides inf n al
http:/ gov/Medicare
//www.cms.g atesStats/do
eProgramRa fo.pdf
ownloads/inf
• CMS published th acute inpa
he ective payme system r
atient prospe ent rule for fiscal year 2011 in the
l
Fede Register.
eral .
http:/ gov/Medicare
//www.cms.g vice-Paymen
e/Medicare-Fee-for-Serv atientPPS/FY
nt/AcuteInpa Y-
2011-IPPS-Final- e-Page-Items
-Rule-Home s/CMS12379 907.html
ic
Inpatient psychiatri facilities
• Chap 6 of the MedPAC Ju 2010 Re
pter une Congress pr
eport to the C mation on
rovides inform
inpatient psychiatric facilities.
//www.medpac.gov/chap
http:/ _Ch06.pdf
pters/Jun10_
• PAC provide basic information about the inpati ent psychiat facility pr
MedP es tric rospective
ment system in its Payme Basics series.
paym ent
http:/ uments/MedPAC_Payme
//www.medpac.gov/docu _11_psych.p
ent_Basics_ pdf
• CMS provides inf n ospective pa
formation on the inpatient psychiatriic facility pro em.
ayment syste
http:/ gov/Inpatient
//www.cms.g PPS/
tPsychFacilP
• u he p facility prosp
CMS describes updates to th inpatient psychiatric f ment system for
pective paym
the ra year beg
ate ginning July 1, 2011, in the January 27, 2011, Fe ster.
ederal Regis
//edocket.acc
http:/ ov/2011/pdf/2
cess.gpo.go pdf
2011-1507.p
90 e vices
Acute inpatient serv
SECTION
Ambulatory care
Physicians
Hospital outpatient services
Ambulatory surgical centers
Imaging services
Chart 7-1. Me s g
edicare spending per FFS benefi n
iciary on physician
e-schedu servi
fee ule 01–2011
ices, 200
2,400
Aged
d 2,181
2,200
abled
Disa 1,964
2,000 883
1,8
Spending per beneficiary (dollars)
1,837
1
1,800 1,724
0
1,650
1,600 1,485
5 1,495
1,374 1,404
1,400 1,274
1,160
1,200
1,000
800
600
400
200
0
2001
1 003
20 2005 2007 2009 2011
Note: FS ce). M not
FF (fee-for-servic Dollars are Medicare spending only and do n include benef ficiary coinsurance. The categoryy
disabled” exclude beneficiaries who qualify for Medicare because they have end-
“d es w e aries
-stage renal disease. All beneficia
ge e
ag 65 or over are included in the aged category.
Source: 011 nnual reports of th Boards of Tru
20 and 2012 an he dicare trust funds
ustees of the Med s.
• Physicians and other health professional perform a broad range of services in the Med
o ls e s dicare
physi hedule, inclu
ician fee sch v cal es,
uding office visits, surgic procedure and a va ariety of
nostic and th
diagn herapeutic seervices furnished in all h settings. In a
health care s addition to
physi e m ded r
icians, these services may be provid by other health prof fessionals (ee.g., nurse
titioners, chir
pract a l
ropractors, and physical therapists). .
• FFS spending pe beneficiary for physician fee-sche
s er y es
edule service has increa lly.
ased annual
m e p
From 2001 to 2011, Medicare spending per FFS ben these servic grew 58
neficiary on t ces
ent.
perce
• Grow in spendi on physician fee-sch
wth ing hedule servic is one of several con
ces f o
ntributions to
Part B premium increases ov this time period.
ver
• Per capita spend
c bled beneficiaries (unde r age 65) is lower than p capita
ding for disab per
spending for aged beneficiar ries. In 2011, for exampl e, per capita spending f disabled
a for
s
beneficiaries was $1,883 com mpared with $2,181 for aaged benefic ciaries.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 93
Chart 7-2. V as d cian spen
Volume growth ha raised physic ore
nding mo
han yment up
th input prices and pay 2000–2010
pdates, 2
70
63
3.7
nding per benef
Spen ficiary 57.5
60
MEI
51.0
50 ates
Upda 45.7
Cumulative percent change
42.8
40 37.0
.2
31.
30
2.1
22
19.0 20.3
18.4
20 16.2
14.4
12.0 12.4
10.0 10.
.4
7.9 6.6 8.0
10 5.4 4.9 4.9
9 5.5
0
5.0 4.7
1.7 2
3.2
0.0 0.0
0
4
2.4
-10
2000 2001 2002 2003 04
200 2005 2006 07
200 2008 2009 2010
Note: MEI (Medicare Economic Index).
Source: 011 rt o e bal hrough fourth quarter of
20 annual repor of the Boards of Trustees of the Medicare trust funds, IHS Glob Insight data th
010, and data fro the Office of the Actuary.
20 om t
• From 2000 to 2010, Medicare spending for physician services—
m e f n iary—increased
—per benefici
4
by 64 percent.
• This spending grew much mo rapidly over the peri od than both the payme rate upda
s ore o h ent ates
t ysician fee schedule pay
and the MEI. Phy s tes nd
yment updat totaled 8 percent, an the MEI
rcent.
increased 22 per
• Grow in the vol
wth lume of serv
vices contributed much m
more to the r se are
rapid increas in Medica
spending than paayment rate updates. Bo factors—
oth d
—updates and volume gro owth—comb bine
to inc ician revenues.
crease physi
94 Ambulatory care
Chart 7-3. M
Most bene s y ways or
eficiaries report that they can alw
sually ge timely care, 20
us et y 011
8
88
Overall
91
Beneficiary characteristic
8
88
A ars
Aged (65 yea or older)
92
85 Routine
Disabled (under 65)
86
gent
Urg
89
8
White
92
82
n
African American
86
80
Hispanic
7
87
0 20 40 60 80 100
Percent of responden ts who repor
f rted that they
"a usually" got care as soon as they wa
always" or "u anted
Note: tine care refers to appointments in doctors’ offices or clinics that a not for care n
In the survey, rout o s are needed “right awaay.”
s onapplicable respondents (e.g., t
Urgent care refers to care needed “right away” for an illness, injury , or condition. No those
ho r s e
wh did not seek routine or urgent care in the last six months) were excluded.
® ®
Source: ment of Healthca Providers and Systems ) for f
MedPAC analysis of CAHPS (Consumer Assessm are d fee-for-service
Medicare, 2011.
• all, ent are
Overa 88 perce of Medica beneficia aries who reeported makiing an appointment for
routin care at a doctor’s office or clinic said that the always or usually got care as soon as
ne s ey
w r es
they wanted. For beneficiarie who repor rted needing urgent care in a clinic, emergency
g e
s p
room, or doctor’s office, 91 percent repor rted that the always or usually got care as soon as
ey
w
they wanted.
• Comp b o
pared with beneficiaries age 65 or older, those u under age 6 and eligible for Medica
65 are
isability were less likely to report tha they alway or usually got routine or
on the basis of di e at ys y e
urgen care as so as they wanted.
nt oon w
• Smaller percenta an n nic
ages of Africa American and Hispan beneficia ed
aries reporte that they
alway or usually got care as soon as the wanted, c
ys y s ey with
compared w White be eneficiaries.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 95
Chart 7-4. Medicare beneficia
M port bette ability to get
aries rep er
timely app nts
pointmen with p physicians, comp pared with
privately insured individua 2008–
i als, –2011
edicare (age 65 or older)
Me 6 ce
Private insuranc (age 50–64)
uestion
Survey qu 2008 2009 2
2010 201 1 8
2008 2009 2010 011
20
d
Unwanted delay in ge etting an apppointment: Am mong those w needed a appointme “How ofte did
who an ent, en
anted to get a doctor’s app
you have to wait longer than you wa pointment?”
For routine care
Never 76%a 77%a 75%a 74% a
% 69%a
% 71%a 72%a 71%a
Somettimes 17a 17a 17a 18a 24a 22a 21a 21a
Usually 3a 2ab 3a 3 5a 3a 4a 4
Always
s 2 2 2 2a 2 3 3 3a
For illne or injury
ess y
Never 84a 85ab 83a 82 79a 79a 80a 79
Somettimes 12a 11ab 13a 14a 16a 17a 15a 17a
Usually 1 2 2 2 2 2 2 2
Always
s 1a 1 1a 1 2a 2 2a 1
Note: Numbers may not sum to 100 perc cent due to round sponses (“Don’t K
ding. Missing res Know” or “Refuse sented.
ed”) are not pres
zes up d ed) n 0
Overall sample siz for each grou (Medicare and privately insure were 3,000 in 2008 and 4,000 in years 2009, 2010,
nd e
an 2011. Sample sizes for individ dual questions vaaried.
a
S
Statistically signi t el)
ificant difference (at a 95 percent confidence leve between the M amples
Medicare and privately insured sa
in the given year.
b
S t el) hin
Statistically significantly different (at a 95 percent confidence leve from 2011 with the same insurance coverage e
caategory.
Source: ed rveys, conducted in 2008, 2009, 2010, and 2011.
MedPAC-sponsore telephone sur d .
• Most Medicare beneficiaries have one or more docto appointme
r or ents in a given year.
There
efore, one access indica we exam
ator hedule timel appointme
mine is their ability to sch ly ents.
• Medicare benefic rt
ciaries repor better acce to physic
ess pointments c
cians for app compared w with
privat a 4. ple, ,
tely insured individuals age 50 to 64 For examp in 2011, 74 percent of Medicare e
beneficiaries and 71 percent of privately insured indiividuals repo
d ” wait
orted “never” having to w
er
longe than they wanted to get an appoin outine care.
ntment for ro
• Medicare benefic r r llness compared
ciaries also report more timely appoiintments for injury and il
with their privatel insured co
t ly ounterparts.
• xpected, app
As ex cheduling for illness and injury is bet than for routine care
pointment sc r tter e
r rivately insur individua
appointments for both Medicare beneficiaries and pr red als.
96 Ambulatory care
Chart 7-5. M vately ins
Medicare and priv atients w
sured pa who are
ooking fo a new physicia repor more d
lo or an rt difficulty
ne mary car 2008–
finding on in prim re, –2011
edicare (age 65 or older)
Me 6 ce
Private insuranc (age 50–64)
uestion
Survey qu 2008 2009 2
2010 201 1 8
2008 2009 2010 011
20
f hysician: “In the past 12 months, have y tried to get a new …?” (Percent answer
Looking for a new ph t m you ”
“Yes”)
an
Primary care physicia 6% 6% 7% 6%
% %
7% 8% 7% 7%
Specialist 14a 14a 13a 14a 19a 19a 15a 16a
Getting a new physic t ed
cian: Among those who trie to get an a with
appointment w a new ph w
hysician, “How
s p d alist who woulld treat you? W it…”
much of a problem was it finding a primary care doctor/specia Was
y cian
Primary care physic
No pro
oblem 71 78b 79ab 65 72 71 69a 68
Small problem 10 10 8 12 13 8b 12 16
Big pro
oblem 18 12ab 12b 23a 13 21a 19 14a
Specialist
No pro
oblem 88 88 87a 84 83 84 82a 86
Small problem 7 7 6a 8 9 9 11a 8
oblem
Big pro 4 5 5 7 7 7 6 6
Note: Numbers may not sum to 100 perc cent due to round sponses (“Don’t K
ding. Missing res Know” or “Refuse sented.
ed”) are not pres
zes up d ed) n 0
Overall sample siz for each grou (Medicare and privately insure were 3,000 in 2008 and 4,000 in years 2009, 2010,
nd e
an 2011. Sample sizes for individ dual questions vaaried.
a
S
Statistically signi t el)
ificant difference (at a 95 percent confidence leve between the M Medicare and privately insured saamples
in the given year.
b
S t el) hin
Statistically significantly different (at a 95 percent confidence leve from 2011 with insurance coverage category y.
Source: ed rveys, conducted in 2008, 2009, 2010, and 2011.
MedPAC-sponsore telephone sur d .
• In 2011, only 6 peercent of Med privately insu
dicare beneficiaries and 7 percent of p als
ured individua
repor or
rted looking fo a new primmary care ph
hysician. This finding sugg
s ost
gests that mo people ar re
r th ent ave o
either satisfied wit their curre physician or did not ha a need to look for one e.
• e o
Of the 6 percent of Medicare beneficiaries who were lo
b new primary c
ooking for a n an
care physicia in
, g
2011, 35 percent reported problems finding one—23 pe ercent reportting their problem as “big”
1
plus 12 percent re r ough this number amoun to about 2
eporting their problem as “small.” Altho nts
ent al p
perce of the tota Medicare population re eporting prob lems, the Co ommission is concerned a about
ontinuing tren of greater access prob
the co nd r blems for primmary care.
e o nsured individ
Of the 7 percent of privately in ere or mary care
duals who we looking fo a new prim
physician in 2011, 30 percent reported pro g ting their pro
oblems finding one—14 percent report oblem
ig”
as “bi plus 16 peercent report ting their problem as “smaall.”
• For 2011, Medicare beneficiar ately insured individuals w
ries and priva kely to report
were more lik t
proble
ems accessing a new primary care ph hysician commpared with a new specialist.
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 97
Chart 7-6. A o ian r
Access to physici care is better for Med dicare
ries com
beneficiar mpared w ately insu
with priva ured
ndividuals, but minorities in both groups report
in m s h
problems more fre y,
equently 2011
edicare (age 65 or older)
Me 6 rivate insuran (age 50–6
Pr nce 64)
uestion
Survey qu All e
White Minority
y All
A hite
Wh ority
Mino
d
Unwanted delay in ge etting an apppointment: Am mong those w needed a appointme “How ofte did
who an ent, en
anted to get a doctor’s app
you have to wait longer than you wa pointment?”
For routine care
Never 74%a
% 75% 72%a 71%a 72 b
2% 64%ab
%
Somettimes 18a 19 18a 21a 21b
1 a
25ab
Usually 3 4 3 4 4 4
Always
s 2a 2ab 3ab 3a 3ab 6aab
For illne or injury
ess y
Never 82 83b 75b 79
9 81b
1 75b
Somet times 14a 13ab 17b 17a
7 16a
6 19
Usually 2 2 2 2 2 3
Always s 1 1b 2b 1 1b 2b
Note: Numbers may not sum to 100 perc cent due to round sponses (“Don’t K
ding. Missing res Know” or “Refuse sented.
ed”) are not pres
zes up d ed) n
Overall sample siz for each grou (Medicare and privately insure were 4,000 in 2011. Sample s ual
sizes for individu
quuestions varied.
a
S ificant difference (at a 95 percent confidence leve between the M
Statistically signi t el) Medicare and privately insured
poopulations in the given race categ gory.
b
S ificant difference (at a 95 percent confidence leve by race within the same insura
Statistically signi t el) n ance category.
Source: ed rveys, conducted in 2011.
MedPAC-sponsore telephone sur d
• re
In 2011, Medicar beneficiar ess cians for app
ries reported better acce to physic pointments
comppared with prrivately insured individua age 50 to 64.
als o
• y m ore an o ess
Access varied by race, with minorities mo likely tha Whites to report acce problems in
both insurance ca 3 White Medic
ategories. For example, in 2011, 83 percent of W care
beneficiaries repo r” w than they wa
orted “never having to wait longer t anted to get an appointm
ment
for an illness or in
n njury compa minority bene
ared with 75 percent of m eficiaries.
• Althoough minorities experienced more ac
ccess proble ems, minoritiies with Med
dicare were less
likely to experience problems than minor
y s nce.
rities with priivate insuran
98 Ambulatory care
Chart 7-7. D es
Difference in acccess to n
new phys are
sicians a most t
pparent among minority Medicar and pr
ap m re rivately
nsured patients who are looking for a new
in p w w
pecialist 2011
sp t,
6
Medicare (age 65 or older) rivate insuran (age 50–6
Pr nce 64)
uestion
Survey qu All e
White Minority
y All
A hite
Wh ority
Mino
f hysician: “In the past 12 months, have y tried to ge a new …?”
Looking for a new ph t m you et ”
y an
Primary care physicia %
6% 6% 6% 7%
7 6%
6 %
6%
a b ab a b
ist
Speciali 14 16 9 16
6 7
17 13a
ab
cian: Among those who trie to get an a
Getting a new physic t ed with
appointment w a new ph w
hysician, “How
s p d alist who woulld treat you? W it…”
much of a problem was it finding a primary care doctor/specia Was
y cian
Primary care physic
oblem
No pro 65 67 57 8
68 2
72 58
Small problem 12 10 19 16
6 5
15 19
Big pro
oblem 23a 23a 23 14a
4 12a
2 18
Specialist
No pro
oblem 84 86b 65ab 86
6 88b
8 78aab
Small problem 8 7 11 8 8 10
Big pro
oblem 7 6b 19b 6 5b 11b
Note: Numbers may not sum to 100 perc cent due to round sponses (“Don’t K
ding. Missing res Know” or “Refuse sented.
ed”) are not pres
zes up d ed) n
Overall sample siz for each grou (Medicare and privately insure were 4,000 in 2011. Sample s ual
sizes for individu
quuestions varied.
a
S ificant difference (at a 95 percent confidence leve between the M
Statistically signi t el) Medicare and privately insured
poopulations in the given race categ gory.
b
S ificant difference (at a 95 percent confidence leve by race within the same insura
Statistically signi t el) n ance category.
Source: ed rveys, conducted in 2011.
MedPAC-sponsore telephone sur d
• ng e e
Amon the small percentage of Medicare beneficiariies and priva d
ately insured individuals
ng w m ere
lookin for a new specialist, minorities we more lik kely than Wh rt
hites to repor problems
ng e
findin one. For example, in 2011, 86 pe ercent of Wh ite Medicare beneficiarie reported “no
e es
problem” finding a new speci ared with 65 percent of m
ialist, compa minority beneficiaries.
• Altho ccess proble
ough minorities experienced more ac ems, minoritiies with Med
dicare were less
likely to experience problems than minor
y s nce.
rities with priivate insuran
A Data Book: He
ealth care spen
nding and the M
Medicare progr
ram, June 2012
2 99
Chart 7-8. G n e
Growth in volume of phys e ule
sician fee schedu services
ficiary, 20
per benef 000–2010
100
Imaging 89.4
8
90 86.4
Tests 81.7 80.7
8
80 75.9
7 85.3
es
Other procedure
Cumulative percent change
69.4
70 valuation & ma
Ev anagement 65.1 65.1
6
73.6
ajor es
Ma procedure 59.5
60 66.1
6 56.5
63.2
50.0
5
46.8
50 52.7 42.9
39.4
40 43.7
32.2 33.6
29.5
28.5
30 2
25.1 35.5
3
21.8 32.0 22.6 31.7
19.2
17.5 15.9 26.9
20 23.6
2
11.3 20.7 21.6
12.0 12.2 18.4
10 8.6 8.0 14.4
5.5 11.0
0.0 4.7 7.8
0 3.5
2000 001
20 2002 2003 004
20 2005 2006 007
20 2008 2009 2010
Note: Vo ed e schedule. Volume for all years is
olume is units of service multiplie by relative value units from the physician fee s e
measured on a co th u
ommon scale, wit relative value units for 2010. V or
Volume growth fo evaluation and management is
y y
through 2009 only due to change in payment policy for consultation ns.
Source: or f ficiaries.
MedPAC analysis of claims data fo 100 percent of Medicare benef
• me
From 2000 to 2010, the volum of some se shed by phys
ervices furnis other
sicians and o
ssionals grew much more than others
profes w e s.
• The volume of tes grew by 89 percent, th volume of imaging gre by 81 perc
v sts 8 he f ew cent, and thee
me p (
volum of “other procedures” (procedures other than m ures) each grew by 65
major procedu
ent. wth m
perce The comparable grow rate for major procedu t.
ures was only 35 percent While we c could
alculate the volume growth rate for ev
not ca v d ent
valuation and manageme (E&M) thr rough 2010
use nge ent r ns, &M
becau of a chan in payme policy for consultation the growth rate for E& through 2 2009
s or cedures and, therefore, w much low than the r
was similar that fo major proc was wer s,
rates for tests
er
imaging, and othe procedures s.
• e d
While the volume of imaging decreased by 2.5 percent from 2009 to 2010, this d
y t o small
decrease is s
o ses o
when compared to the increas that had occurred pre m
eviously. From 2000 to 20009, cumulative
th ng 5
growt in the volume of imagin totaled 85 percent.
• Volum growth inc
me creases Med dicare spending, squeezin other prio
ng orities in the f et
federal budge
payers and beneficiaries to contribute more to the Medicare pr
and requiring taxp t rogram. Overrall
me
volum increases translate dir wth art ng
rectly to grow in both Pa B spendin and premiums. They a are
onsible for the negative up
also largely respo e red
pdates requir by the suustainable gro owth rate
ula.
formu Rapid vo e an
olume growth may be a sign that some services in the physicia fee schedu ule
m
are mispriced.
100 mbulatory care
Am
Chart 7-9. C rofessional liability
Changes in physicians’ pr
nsurance premiums, 2004
in e 4–2011
25
22.8
21.6
7
19.7
20
15 14.3
9.5
10
Percent
5.1
5
1.5
0
-1.3 -1.2 -1.0
-
-2.1
-2.7 -2.8 -3.2 -3.6
-5 -4.0
-10
04
200 05
200 6
2006 2007
7 2008 2009 2010 2011
Note: ars f cent change.
Ba represent a four-quarter moving average perc
Source: e a P bility Physician P
CMS, Office of the Actuary. Data are from CMS’s Professional Liab Premium Survey.
• essional liabi insuranc (PLI) acco
Profe ility ce 3
ounts for 4.3 percent of total payments under thhe
physi hedule. PLI premiums ge
ician fee sch p enerally follo a cyclicall pattern, alternating
ow
een
betwe periods of low prem miums—char y
racterized by high investtment returns for insurer
rs
v
and vigorous com mpetition—and high premmiums—cha by
aracterized b declining investment
ns ket
return and mark exit.
• ases in PLI premiums be
After rapid increa p 2
etween 2002 and 2004, premium gro d
owth slowed in
2005 and 2006, becoming ne
b 007
egative in 20 and rem ative through 2011.
maining nega h
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 101
g outpatien servic
Chart 7-10. Spending on all hospital o nt ces,
001–2011
20 1
45
iciary cost sha
Benefi aring
40
am
Progra payments
9.0
9
35
8.2
8.2
Dollars (in billions)
30
8.1
8
8.1
25 8.4
8 8.0
8.2
20
7.8
8.0 8
8.1
15 31
1.9
27.3 29.1
23.0 4.7
24
10 20
0.2 21.4
17.5
13.1 15.0
12.7
5
0
2001 002
20 2003 2004 005
20 2006 2007 008
20 2009 2010 011*
20
Note: pending amounts are for services covered by the Medicare outpa
Sp s s e m d
atient prospective payment system and those paid on
eparate fee schedules (e.g., ambulance services and durable med
se dical equipment) or those paid on a cost basis (e.g.,
) n
orneal tissue acq
co v d ayments for clinic laboratory services.
quisition and flu vaccines). They do not include pa cal
Estimate.
*E
Source: CMS, Office of the Actuary.
e
• all g
Overa spending by Medicar and benef
re hospital outp
ficiaries on h ces
patient servic (excluding
y ar
clinical laboratory services) from calenda year 2001 to 2011 inc 98
creased by 9 percent,
reachhing $41.0 billion. The Office of the Actuary proj ects continu growth in total spend
O A ued n ding,
averaaging 9.2 percent per ye from 2008 to 2013.
ear
• ospective payment syste (PPS) for hospital ou
A pro em r vices was im
utpatient serv mplemented in
ust u
Augu 2000. Services paid under the ou utpatient PPS represent most of the hospital
S
atient spending illustrate in this cha about 91 percent.
outpa ed art,
• In 200 the first full year of the outpatient PPS, spendiing under the PPS was $
01, e e $19.0 billion,
ding $11.3 billion by the program and $7.6 billion in beneficiary cost sharing. Spending
includ p y
ent
under the outpatie PPS repr p he on ng
resented 92 percent of th $20.7 billio in spendin on hospita al
outpa es y
atient service in 2001. By 2011, spen nding under t outpatien PPS is exp
the nt e
pected to rise to
3 .0
$37.3 billion ($29. billion prog ng; on ry
gram spendin $8.3 billio beneficiar copaymen nts), which is 91
ent 1.0 s
perce of the $41 billion in spending on outpatient se 011. The outp
ervices in 20 patient PPS
accou out t
unted for abo 5 percent of total Med dicare spending by the prrogram in 2011.
• eficiary cost sharing unde the outpa
Bene s er s or tors,
atient PPS is generally higher than fo other sect
t hart
about 22 percent in 2010. Ch 7-14 pro ovides more detail on cooinsurance.
102 mbulatory care
Am
M pitals pr
Chart 7-11. Most hosp utpatient service
rovide ou t es
cent offering
Perc
Outpatient Outpatient
O Emerrgency
Year Hospita
als services surgery vices
serv
2002 0
4,210 94% 84% 3%
93
2004 2
3,882 94 86 2
92
2006 1
3,651 94 86 1
91
2008 7
3,607 94 87 1
91
2010 8
3,518 95 90 9
89
2012 3,503
3 95 91 93*
3
Note: Includes services provided or arran nged by short-term hospitals. Exc m,
cludes long-term Christian Scien nce, psychiatric,
ehabilitation, child
re ccess, and alcoho
dren’s, critical ac ol/drug hospitals .
The w c
*T data source we used in this chart changed the variable for ide mergency services. We
entifying hospital s’ provision of em
be a
elieve this change in variable definition makes it appear that the p percentage of hos spitals providing emergency serv vices
increased sharply from 2010 to 2012, but question whether such a large increase a actually occurred.
Source: r s
Medicare Provider of Services files from CMS.
• n
The number of ho t vices under Medicare’s o
ospitals that furnish serv outpatient prospective
paym 002
ment system (PPS) declined from 20 through 2 y
2006, largely due to gro
owth in the
ber
numb of hospit ng
tals convertin to critical access hos ws on
spital status, which allow payment o a
b e n
cost basis. Since 2006, the number of ou utpatient PP S hospitals has been more stable. In
cent of hospitals providin outpatien services re
addition, the perc ng nt emained stable; the perccent
offering outpatien surgery ha steadily in
nt as nd ent
ncreased; an the perce offering e emergency
servic has dec
ces htly 02
creased sligh from 200 through 2 2010. The inc e
crease in the percent
providding emerge es o ble
ency service in 2012 is likely due to a change iin the variab that
deter her al
rmines wheth a hospita offers eme rvices.
ergency serv
• ost als
Almo all hospita in 2012 provide outp
p ces cent). The va majority
patient servic (95 perc ast
de nt nd cy
provid outpatien surgery an emergenc services.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 103
s
Chart 7-12. Payments and vol services under th Medic
lume of s he care
o nt by of e,
hospital outpatien PPS, b type o service 2010
ents
Payme Volume
Separately sts
Tes
paid s-through
Pass %
11%
drugs/blood Tests
4% d
drugs
products 1% Pass-through
12%
Separately p aid drugs
drugs/bloodd 2%
Evaluation & Procedures
s products
management t 52% 35%
14% Proced
dures
19%
Imaging
18%
%
Imaging
Evaluation & 16%
management
17%
Note: PS m).
PP (prospective payment system Payments incl am d t
lude both progra spending and beneficiary cost sharing, but do not
o ouped into evalu
include hold-harmless payments to rural hospitals. Services are gro uation and manag ures,
gement, procedu
maging, and tests according to th Berenson-Egg
im s, he gers Type of Serv CMS. Pass-throu
vice classificatio n developed by C ugh
dr tely paid drugs and blood produc are classified by their paymen status indicator Percentages m not
rugs and separat cts nt r. may
um nt
su to 100 percen due to roundin ng.
Source: MedPAC analysis of the 5 percent standard analytic file of outpatie claims for 201
ent 10.
• Hosp e
pitals provide many different types of services in their outpat
f n ments, includ
tient departm ding
rgency and clinic visits, imaging and other diagn
emer c es,
nostic service laboratory tests, and d
ulatory surge
ambu ery.
• The payments for services are distributed differently than volume For exam
p d e. ures
mple, procedu
unt ercent of pay
accou for 52 pe yments, but only 19 perc me.
cent of volum
• Proce es, s, musculoskelletal procedu
edures (e.g., endoscopie surgeries skin and m nt
ures) accoun for
the greatest shar of paymen for servic (52 perc
re nts ces ed ng (18
cent), followe by imagin services (
perce and eva
ent) nt (14
aluation and managemen services ( percent).
• In 2010, separate paid drug and blood products a
ely gs d or t ts.
accounted fo 12 percent of payment
104 mbulatory care
Am
H o nt ces hest
Chart 7-13. Hospital outpatien servic with the high
M
Medicare expendi itures, 20010
e
Share of Volume yment
Pay
APC Title ents
payme (thoussands) rate
r
Total 6%
46
All emergency visits 6 589
11,5 $$188
v
All clinic visits 4 110
20,1 73
c
Diagnostic cardiac cath heterization 3 479
4 2,677
2
C
CT and CTA with contr rast composit te 3 522
1,5 627
p w
Cataract procedures with IOL insert t 2 528
5 1,633
1
ain pt
Level I pla film excep teeth 2 890
15,8 45
o
Insertion of cardioverte r
er-defibrillator 2 31 21
1,909
Lower gas strointestinal endoscopy 2 116
1,1 612
Level II ex xtended assessment & ma anagement co omposite 2 920
9 704
Transcath ent
heter placeme of intracor ronary drug-e
eluting stents 2 86 7,449
7
Insertion/r replacement/repair of card brillator leads
dioverter-defib 2 20 7,728
27
Coronary or noncorona angioplasty and percut
ary taneous valvu uloplasty 1 192
1 3,408
3
IMRT trea atment deliver ry 1 189
1,1 420
d y
Computed tomography without cont trast 1 482
2,4 195
Level II caardiac imaging 1 638
6 773
Level II ec m
chocardiogram without con ntrast 1 083
1,0 450
Level I up pper gastrointe estinal proceddures 1 938
9 588
C
CT and CTA without co ontrast compo osite 1 085
1,0 418
Transcath ent
heter placeme of intravas scular shunts 1 74 6,542
6
Level II laparoscopy 1 135
1 3,150
3
n
Level III nerve injection ns 1 876
8 484
Level III cystourethoscopy and othe genitourinar procedures
c er ry s* 1 264
2 1,716
1
m
MRI and magnetic reso onance angio out
ography witho contrast m material 1 027
1,0 349
m
MRI and magnetic reso onance angio ography
without contrast follo owed by contr rast 1 607
6 534
Insertion/r replacement/c f d
conversion of permanent dual chamber r 1 34 9,559
9
pacema aker
Average APCA 349
3 149
Note: PC
AP (ambulatory payment classific cation), CT (com mputed tomograp hy), CTA (compu y
uted tomography angiography), IOL
ntraocular lens), IMRT (intensity-modulated radiat
(in RI rates
tion therapy), MR (magnetic res onance imaging). The payment r
y c w es
for “All emergency visits” and “All clinic visits” are weighted average of payment ra PCs. The percent
ates from five AP tages
PCs o b
for the specific AP do not add to the total of 46 because of round ding.
Did n
*D not appear on the list for 2009 9.
Source: alytic files of outp
MedPAC analysis of 5 percent ana r 2010.
patient claims for calendar year 2
• ough the outp
Altho patient prosp
pective paym
ment system covers thou
m ervices,
usands of se
ed
expenditures are concentrate in a handful of catego ave
ories that ha high volu ume, high
paymment rates, or both.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 105
M
Chart 7-14. Medicare coinsura ype ospital
ance rates, by ty of ho
e,
outpatient service 2010
35
30
27
26
25 23
22
22
Coinsurance rate
20 20 20
15
10
5
0
E d
Evaluation and Imaging Procedures T
Tests ass-through
Pa Separately paid
S
management drugs drugs/blood
products
ype ce
Ty of servic
Note: ervices were gro
Se ouped into catego ories of evaluatio and managem
on rocedures, and te
ment, imaging, pr o
ests according to the
erenson-Eggers Type of Service classification de
Be S.
eveloped by CMS Pass-through d drugs and separrately paid drugs and
e
blood products are classified by their payment status indicators.
Source: MedPAC analysis of the 5 percent standard analytic files of outpati ent claims for 20
010.
• re e
Befor CMS began using the outpatient prospective payment sy ystem (PPS), beneficiaryy
surance paym
coins ospital outpa
ments for ho es ed tal
atient service were base on hospit charges,
e p ere
while Medicare payments we based on hospital co
n pital charges grew faste
osts. As hosp s er
than costs, coinsurance repre arge share o total payments over tim
esented a la of me.
• In adopting the outpatient PP the Cong
PS, the
gress froze t dollar am mounts for cooinsurance.
Conssequently, be s e
eneficiaries’ share of total payments will decline over time.
• The coinsurance rate is different for each service. So
c h es, maging, hav
ome service such as im ve
vely high rat of coinsu
relativ tes her
urance—27 percent. Oth services, such as ev d
valuation and
mana agement ser e 2
rvices, have coinsurance rates of 22 percent.
• rage coinsur
In 2010, the aver w 2
rance rate was about 22 percent.
106 mbulatory care
Am
f
Chart 7-15. Effects of hold-haarmless a H er ents
and SCH transfe payme
on hospit patient re
tals’ outp 010
evenue, 2008–20
2008 2 009 2010
Share of Share of Share oof
p
payments payments paymen nts
from Number from Number r from
Number of ho harmless
old of hold harmlesss of hold harm
mless
roup
Hospital gr ospitals
ho and SCH transfer hospitals and SCH transsfer s
hospitals and SCH trransfer
als
All hospita 3,197 0.2% 3,161 0.3% 4
3,094 4%
0.4
Urban 2,271 –0.4 2,245 –0.4 2
2,212 3
–0.3
Rural SCHHs 381 5.8 383 7.2 3
363 7
7.7
00
Rural <10 beds 394 3.0 386 2.9 3
373 1
3.1
al
Other rura 149 –0.4 146 –0.4 5
145 3
–0.3
Major teac
ching 271 –0.3 270 –0.3 7
267 3
–0.3
ching
Other teac 714 –0.1 713 –0.2 2
712 1
–0.1
Nonteaching 2,210 0.6 2,177 0.8 4
2,114 0
1.0
Note: CH unity hospital). Nu
SC (sole commu ue
umbers may not sum to totals du to rounding.
Source: st om
MedPAC analysis of Medicare Cos Report files fro CMS.
• Mediccare implemented the ho ospital outpaatient prospe ent
ective payme system (P PPS) in 2000 0.
Previously, Medic r tpatient serviices on the b
care paid for hospital out pital costs.
basis of hosp
Recoognizing that some hospit eceive lower payments under the out
tals might re tpatient PPS than
under the earlier system, the Congress es ansitional co
stablished tra orridor payments. The
corrid
dors were deesigned to make up part of the differeence betwee payments that hospita
en als
d ved he
would have receiv under th old payme system a those un
ent and w
nder the new outpatient PPPS.
• Trans dor ts r
sitional corrid payment expired for most hospiitals at the end of 2003. However, soome
ceive a speci category of transitiona corridor pa
rural hospitals continue to rec ial al led
ayments call
Q
“hold harmless.” Qualifying ho eive the grea of the pa
ospitals rece ater y
ayments they would havee
receiv from the previous sy
ved e atient PPS p
ystem or the actual outpa payments.
• Hosp alified for hold-harmless payments in 2004 and 2
pitals that qua n ed
2005 include SCHs loca ated
in rur areas and other small rural hospita (100 or fe
ral d als ewer beds). After 2005, small rural
hospi ed -harmless pa
itals continue to be eligible for hold- t
ayments, but SCHs no lo ed.
onger qualifie
Howe 6,
ever, in 2006 CMS imple emented a policy (the “S
p ”)
SCH transfer” that increaased outpatieent
paym .1
ments to rural SCHs by 7. percent ab bove the sta . eutral
andard rates. This policy is budget ne
by reducing paym ments to all other hospitals by 0.4 per
o rcent. Finally the Congre reestablished
y, ess
hold-harmless pa S ave
ayments for SCHs that ha 100 or fe n
ewer beds in 2009, and e extended hoold-
harmless paymen to all SCH in 2010.
nts Hs
• Hold--harmless pa d
ayments and the SCH tra ansfer repres
sented 0.2 p tal
percent of tot outpatient t
or H e e
PPS payments fo all hospitals in 2008. However, the percentage of total outp patient paymments
from these policie was 5.8 percent for ru SCHs an 3.0 percen for small r
es ural nd nt rural hospitals.
Data from 2009 and 2010 ind
a er
dicate transfe and hold-hharmless pay ural
yments to ru SCHs we ere
7.2 percent of the outpatient revenue in 2009 and 7.7 percent in 2010. Small rural hospit
eir t tals
contin efit
nued to bene from hold d-harmless payments in 2009 and 20
p 010. These ppayments we ere
eir atient payme
2.9 percent of the total outpa cent in 2010
ents in 2009 and 3.1 perc 0.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 107
M l ent, inpa
Chart 7-16. Medicare hospital outpatie nd all
atient, an overa
M s,
Medicare margins 2004–2 2010
0
10.0
Inpatient margin
Overalll Medicare margin
0
5.0
tient margin
Outpat
-0.3 -0.5
0
0.0
Margin (percent)
-2.2 -2.3 -1.7
-3.7
-4.8
0
-5.0 -3.0 -3.1
-4.6 -5.1 -4.5
-6.0
-7.1
0
-10.0
-9.1 -9.6
-10.7 -11.0 -10.7
-11.5
-15.0
0 -12.7
0
-20.0
2004 2005 2006 2007 2008 2009 2010
Note: A margin is calcula ated as revenue minus costs, div e. d
vided by revenue Data are based on Medicare-alllowable costs.
nalysis excludes critical access hospitals. Overall Medicare margiins cover the cos and payment of hospital inpa
An h l sts ts atient,
utpatient, psychia
ou not he ayment system); hospital-based skilled
atric and rehabilitation services (n paid under th prospective pa ;
ursing facilities and home health services; and gra
nu education.
aduate medical e
Source: st m
MedPAC analysis of Medicare cos report data from CMS.
• Hosp v
pital outpatient margins vary. In 2010 while the a
0, margin was –
aggregate m t,
–9.6 percent 25
ent r had
perce of hospitals had margins of –20.7 percent or lower, and 25 percent h margins of s
2.8 percent or hig tient margins also differe widely ac
gher. Outpat s ed al s.
cross hospita categories
• n
Given hospital acccounting pr rgins for hos
ractices, mar s
spital outpatiient services must be
consi e M
idered in the context of Medicare pa d
ayments and hospital co ull
osts for the fu range of
ces d re
servic provided to Medicar beneficiar als
ries. Hospita allocate ooverhead to all services, so
we geenerally con a nts
nsider costs and paymen overall.
• The improved ouutpatient mar rgin in 2010 may be due to relatively low cost gr
e y rowth. After
increasing from 2004 to 2005 the outpat
2 5, cting a chang in
tient margin declined in 2006, reflec ge
Medicare’s reimb or ugs end
bursement fo Part B dru and an e to hold-h harmless payments to S SCHs
(whic were rees
ch stablished in 2009). The margin decllined again iin 2007 and 2008, which h
may be partly due to lower ho s s ualify for them.
old-harmless payments for hospitals that still qu
The improved ma 9 ue st n
argin in 2009 may be du to low cos growth and expansion of hold-
harmless paymen to sole community hospitals.
nts c
108 mbulatory care
Am
o vation ho
Chart 7-17. Number of observ s sed,
ours has increas
006–2010
20
45
40 39
6
36
Observation hours (millions)
35
31
30 27
25 23
20
15
10
5
0
2006 2
2007 2008 200
09 2010
Source: he spective paymen system, 2006–
MedPAC analysis of Limited Data Set claims for th outpatient pros nt –2010.
• Hosp are mine whethe r a patient s
pitals use observation ca to determ ospitalized fo
should be ho or
inpatient care or sent home.
• Medicare began providing se eparate paymments to hos ome observa
spitals for so es
ation service on
April 1, 2002. Pre e n were package into the p
eviously, the observation services w ed r
payments for the
emer m sits ur
rgency room or clinic vis that occu with obser rvation care..
• The number of ob
n bservation hours (both packaged an separately paid) has increased
h p nd
subst tantially from about 23 million in 200 to 39 milliion in 2010. Before 2006 it was difficult
m m 06 6,
o use
to count the total number of observation hours becau hospitals were not r required to
recor on claims the number of hours for packaged o
rd r r observation hours.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 109
o are-certif
Chart 7-18. Number of Medica Cs ased by
fied ASC increa
3 nt, –2011
33 percen 2004–
2004 2
2005 2006 2007 2008 2009 2010 2011
p ons
Medicare payments (billio of dollars) $2.5 $2.7 $2.8
8 $2.9 $3.1 $3.2
2 $3.3 $3.5
Number of centers 4,033 4
4,328 7
4,567 4,838 5,045 7
5,157 5,252 5344
New centers 367 354 8
328 345 281 8
218 189 153
enters
Exiting ce 81 59 9
89 74 74 6
106 94 61
nt
Net percen growth in num mber
f y
of centers from previous year 6.7% 7.3% 5.5
5% 5.9% 4.3% 2%
2.2 1.8% 1.8%
Percent of all centers that are:
t
For profit 96 96 6
96 96 96 6
96 97 97
Nonprofitt 4 4 4 4 4 3 3 3
Urban 91 91 1
91 91 91 91 91 91
Rural 9 9 9 9 9 9 9 9
Note: SC s
AS (ambulatory surgical center). Medicare payme ents include prog and ASC
gram spending a beneficiary cost sharing for A
y change. Totals m not sum to 1 percent due
facility services. Payments for 2011 are preliminary and subject to c may 100
to rounding.
Source: MedPAC analysis of provider of se yment data are f
ervices files from CMS, 2011. Pay e
from CMS, Office of the Actuary.
• s s h al ht
ASCs are entities that furnish only outpatient surgica services not requiring an overnigh
p om e, ust
stay. To receive payments fro Medicare ASCs mu meet Med dicare’s conditions of
coverrage, which specify mini y
imum facility standards.
• In 2008, Medicar began using a new pa
re em at
ayment syste for ASC services tha is based oon
the hospital outpaatient prospeective payment system. ASC rates a less than hospital
are n
outpa t SC
atient rates. In contrast to the old AS system, wwhich had only nine procedure grou
ups,
h
the new system has several hundred pro ups.
ocedure grou
• Total Medicare payments for ASC servic increase d by 4.9 per
r ces ar,
rcent per yea on average,
from 2004 throug 2011. Pay
gh f ary 5.3
yments per fee-for-servi ce beneficia grew by 5 percent per
year during this period. Betw
p nd al s 4
ween 2010 an 2011, tota payments rose by 3.4 percent and
paym ew
ments per beneficiary gre by 2.5 peercent.
• The number of Medicare-cer
n M rtified ASCs grew at an a
average ann 4.1 from
nual rate of 4 percent f
11. ar 4
2004 through 201 Each yea from 2004 through 20 011, an aver rage of 279 n are-
new Medica
certified facilities entered the market, while an avera ge of 80 closed or merg with othe
e ged er
ties.
facilit
110 mbulatory care
Am
M ng
Chart 7-19. Medicare spendin for imaging se under the
ervices u e
n by e,
physician fee schedule, b type of service 2010
Imaging ET
PE
dures
proced %
4%
5%
% CT
%
20%
graphy
Echocardiog
11% al
Tota = $10.9 billion
ne
Nuclear medicin
8%
ard
Standa
%
21%
Other echography
sound)
(ultras
5%
15
MRI
15%
Note: T
CT (computed tom (
mography), MRI (magnetic resona ance imaging), P PET (positron emmission tomograp maging
phy). Standard im
includes chest, mu s.
usculoskeletal, and breast X-rays Imaging proced dures include ste y elivery
ereoscopic X-ray guidance for de
f py, or
of radiation therap fluoroguide fo spinal injection and other interv
n, ogy
ventional radiolo procedures. M Medicare payme ents
include program spending and ben aring for physicia fee schedule iimaging services Payments inclu
neficiary cost sha an s. ude
ca es, r
arrier-priced code but exclude radiopharmaceut y 0
ticals. Totals may not sum to 100 percent due to rounding.
Source: MedPAC analysis of 100 percent physician/supplie procedure sum
p er CMS, 2010.
mmary file from C
• Over one-third of Medicare spending for imaging und the phys
f s der 010
sician fee schedule in 20
was for CT and MRI studies.
f M
• Medicare and beneficiaries spent a total of $10.9 billlion for imag
s s
ging services under the
physi hedule in 2010. Spendin declined f
ician fee sch ng from $11.6 b billion in 2009 (–5.4 perccent).
d
The decline in sppending was largely due to the creattion of new ccomprehens sive codes foor
myoc g n
cardial perfusion imaging (a type of nuclear med ),
dicine study) CMS’s ado option of moore
ent e w s,
curre practice expense data from a new survey of practitioners and an inc e
crease in the
pment use ra assumption for expensive imagin equipmen such as M and CT
equip ate ng nt, MRI
machhines.
• ough spendin for imagin services declined from 2009 to 2010, this decrease is sm
Altho ng ng d m mall
comppared with th increases that occurre over the prior decade From 2000 to 2009,
he s ed e.
cumu th g
ulative growt in imaging spending to
otaled 80 pe
ercent (67 pe ee-for-servic
ercent per fe ce
beneficiary).
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 111
R owth in th numb of CT and MR scans
Chart 7-20. Rapid gro he ber T RI
iaries, 20
per 1,000 benefici 0
000-2010
0
600
551 548
Number of scans per 1,000 fee-for-service beneficiaries
2000
500
0 2009
2010
0
400
0
300
258
2
207 205
0
200
144 141
112
100
0 82 79
7
64
6
45
0
CT: head her
CT: oth n
MRI: brain MRI: other
Note: T mography), MRI (magnetic resona
CT (computed tom ( ance imaging). D
Data include phys ule vices.
sician fee schedu imaging serv
Source: p er mmary files from CMS, 2000, 200 and 2010.
MedPAC analysis of 100 percent physician/supplie procedure sum 09,
• n C s
The number of CT and MRI scans per 1,000 fee-for- ew rom
-service beneficiaries gre rapidly fr
2000 to 2009. De ht om 2010, the nu
espite a sligh decline fro 2009 to 2 0
umber of studies in 2010 was
still much higher than the lev in 2000.
m vel
• For example, the number of CT scans of parts of the body other than the he more tha
e e C f e r ead an
00
doubled from 200 to 2010 (f er
from 258 pe 1,000 bene te rop
eficiaries to 548), despit a slight dr
from 2009 to 2010.
• arly, the num
Simila p body other th the brain more than
mber of MRI studies of parts of the b han n
00
doubled from 200 to 2010.
112 mbulatory care
Am
inks. Am
Web li y
mbulatory care
ans
Physicia
• m tion on Medic
For more informat ent or e
care’s payme system fo physician services, see MedPAC’s
Paym s
ment Basics series.
/www.medpac
http:// ents/MedPAC
c.gov/docume Basics_11_P
C_Payment_B Physician.pdf
• pter M rch port
Chap 4 of the MedPAC Mar 2012 Rep to the Co ongress and Appendix A of the June
p tional informa
2012 Report to the Congress provide addit sician service
ation on phys es.
/www.medpa
http:// ers/Mar12_C
ac.gov/chapte Ch04_CORR ECTED.pdf
/www.medpa
http:// ers/Jun12_A
ac.gov/chapte AppA.pdf
• MedPPAC’s congre andated repo Assessing Alternative to the Sustainable
essionally ma ort, g es
wth R) e e
Grow Rate (SGR System, examines the SGR and an nalyzes alter hanisms for
rnative mech
olling physici expenditu
contro ian M
ures under Medicare.
/www.medpa
http:// ments/Mar07_
ac.gov/docum dated_report
_SGR_mand t.pdf
• stimony by th chairman and executiv director of MedPAC dis
Congressional tes he a ve f scusses
ment for physi
paym s m.
ician services in the Medicare program This includes:
Paym cted fee-for-s
ments to selec 5,
service providers (May 15 2007)
/www.medpa
http:// ac.gov/documments/051507 7_WandM_T MedPAC_FFS
Testimony_M S.pdf
ons ve s s 007)
Optio to improv Medicare’s payments to physicians (May 10, 20
/www.medpa
http:// ments/051007
ac.gov/docum 7_Testimonyy_MedPAC_p ayment.pdf
physician_pa
Asses atives to the sustainable growth rate s ystem (Marc 6, 2007)
ssing alterna s g ch
/www.medpa
http:// ac.gov/docum ments/030607 7_W_M_test timony_SGRR.pdf
Asses atives to the sustainable growth rate s ystem (Marc 6, 2007)
ssing alterna s g ch
/www.medpa
http:// ac.gov/docum ments/030607 7_E_C_testi mony_SGR.pdf
Asses atives to the sustainable growth rate s ystem (Marc 1, 2007)
ssing alterna s g ch
/www.medpa
http:// ac.gov/docum ments/030107 7_Finance_t testimony_SGGR.pdf
MedP mendations on imaging se
PAC recomm n 18,
ervices (July 1 2006)
/www.medpa
http:// ments/071806
ac.gov/docum 6_Testimony df
y_imaging.pd
Medic nt 2
care paymen to physicians (July 25, 2006)
/www.medpa
http:// ac.gov/documments/072506 y_physician.p
6_Testimony pdf
• The 2011 Annual Report of the Boards of Trustees of t he Hospital I
2 e T nd
Insurance an Supplemeentary
cal e
Medic Insurance Trust Funds provides de torical and pr
etails on hist nding on
rojected spen
s.
physician services
/www.cms.go
http:// rustFunds/do
ov/ReportsTr 011.pdf
ownloads/tr20
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 113
• G t
The Government Accountabi ort t t
ility Office issued a repo in August 2009 about access to
ician service within Medicare.
physi es
//www.gao.gov/new.item
http:/ df
ms/d09559.pd
• C
The Center for St
tudying Hea System Change also conducts r
alth C o research on patient acce
ess
to health care.
http:/ ange.org
//www.hscha
Hospital outpatient services
l
• m
For more informat
tion on Medic
care’s payme system fo hospital ou
ent or utpatient serv
vices, see
MedP ent
PAC’s Payme Basics se eries.
/www.medpa
http:// ments/MedPA
ac.gov/docum t_Basics_11_
AC_Payment _opd.pdf
• pter M
Chap 3 of the MedPAC Mar 2012 Rep to the Co
rch port ongress prov vides informa ation on the
s epartments in
status of hospital outpatient de ncluding sup ply, volume, profitability, and cost groowth.
/www.medpa
http:// ers/Mar12_C
ac.gov/chapte Ch03.pdf
• on
Sectio 2A of the MedPAC Ma eport to the C
arch 2006 Re Congress pro mation on the
ovides inform
h a
current status of hold-harmless payments and other sp hospitals.
pecial payments for rural h
/www.medpa
http:// cations/congr
ac.gov/public ports/Mar06_
ressional_rep _Ch02a.pdf
• pter e
Chap 3A of the MedPAC March 2004 Report to the C Congress pro ation
ovides additional informa
ospital outpat
on ho s, o ansitional cor
tient services including outlier and tra rridor payments.
/www.medpa
http:// cations/congr
ac.gov/public ports/Mar04_
ressional_rep _Ch3A.pdf
• More information on new technology and pass-through payments c be found in Chapter 4 of
p h can
M ch port
the MedPAC Marc 2003 Rep to the Co ongress.
/www.medpa
http:// cations/congr
ac.gov/public ports/Mar03_
ressional_rep _Ch4.pdf
Ambulat al
tory surgica centers
• m
For more informat
tion on Medic
care’s payme system fo ambulatory surgical ce
ent or ry enters, see
MedP ent
PAC’s Payme Basics se eries.
/www.medpa
http:// ments/MedPA
ac.gov/docum t_Basics_11_
AC_Payment _ASC.pdf
• Chap 5 of the MedPAC Mar 2012 Rep to the Co
pter M rch port vides additional informatio
ongress prov on
mbulatory sur
on am s.
rgical centers
/www.medpa
http:// ers/Mar12_C
ac.gov/chapte Ch05.pdf
114 mbulatory care
Am
SECTION
Post-acute care
Skilled nursing facilities
Home health agencies
Inpatient rehabilitation facilities
Long-term care hospitals
Chart 8-1. Number of post-acute care providers increased or
remained stable in 2011
Average
annual
percent
change Percent
2003- change
2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2010–2011
Home health
agencies 7,342 7,804 8,314 8,955 9,404 10,040 10,961 11,654 12,026 6.4% 3.2%
Inpatient
rehabilitation
facilities 1,207 1,221 1,235 1,225 1,202 1,202 1,196 1,179 1,165 –0.4 –1.2
Long-term
care hospitals 334 366 392 398 406 425 435 437 436 3.4 –0.2
Skilled nursing
facilities 15,144 15,156 15,185 15,178 15,207 15,190 15,190 15,207 15,161 0.1 –0.3
Note: The skilled nursing facility count does not include swing beds.
Source: MedPAC analysis of data from certification and Survey Provider Enhanced Reporting on CMS’s Survey and Certification’s
Providing Data Quickly system for 2003–2011 (home health agencies, long-term care hospitals, and skilled nursing
facilities) and CMS Provider of Service data (inpatient rehabilitation facilities).
• The number of home health agencies has increased substantially since 2003. The number
of agencies increased by over 350 in 2011. The growth in new agencies is concentrated in a
few areas of the country.
• The number of inpatient rehabilitation facilities (rehabilitation hospitals and rehabilitation
units) declined slightly in 2011.
• In spite of a moratorium on new long-term care hospitals (LTCHs) beginning in October
2007, the number of these facilities continued to grow through 2010. The number of LTCHs
declined by one facility in 2011.
• The total number of skilled nursing facilities has remained about the same since 2003, but
the mix of facilities continues to shift from hospital-based to freestanding facilities. Hospital-
based facilities make up 6 percent of all facilities, down from 9 percent in 2003.
A Data Book: Health care spending and the Medicare program, June 2012 117
Chart 8-2. Medicare’s spending on home health care and
skilled nursing facilities fueled growth in post-acute
care expenditures
70
All post-acute care 63.5
Skilled nursing facilities 58.0
60 55.7
Home health agencies
Inpatient rehabilitation hospitals 51.9
48.6
50 Long-term care hospitals
43.5
Dollars (in billions)
42.1
40 37.5
34.3
32.6 31.8
30 26.6 25.8 27.0
24.2
22.4
18.6 19.6 18.8 19.4 19.6
20 16.7 16.9
14.8 15.0 15.4
12.1 12.6 13.0
10.8
9.6 10.1
10 8.0 6.3 6.1 6.0 6.0 6.3 6.7
5.7 6.2 6.4 6.5
4.5
2.0 2.5 3.0 3.6 4.4 4.6 4.7 4.8 5.1 5.3 5.4
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Note: These numbers are program spending only and do not include beneficiary copayments.
Source: CMS Office of the Actuary.
• Increases in fee-for-service (FFS) spending on post-acute care have slowed in part due to
expanded enrollment in managed care, whose spending is not included in this chart.
• Despite the slower growth, spending on all post-acute care still grew close to 9 percent
between 2010 and 2011, fueled primarily by increases in skilled nursing facility
expenditures.
• Fee spending on inpatient rehabilitation hospitals has declined since 2005 and 2008,
reflecting policies intended to ensure that patients who do not need this intensity of services
are treated in less intensive settings. However, spending on inpatient rehabilitation hospitals
has increased since 2009.
• FFS spending on skilled nursing facilities increased sharply in 2011, reflecting providers’
responses to the implementation of the new case-mix groups (resource utilization groups,
version IV) beginning October 2010.
118 Post-acute care
Chart 8-3. Since 2006, the share of Medicare stays and
payments going to freestanding SNFs and for-profit
SNFs has increased
Facilities Medicare-covered stays Medicare payments
Type of SNF 2006 2010 2006 2010 2006 2010
All SNFs 100% 100% 100% 100% 100% 100%
Freestanding 92 94 89 93 94 96
Hospital based 8 6 11 7 6 4
Urban 67 70 79 81 81 83
Rural 33 30 21 19 19 17
For profit 68 70 67 70 73 74
Nonprofit 26 25 29 25 24 22
Government 5 5 4 3 3 3
Note: SNF (skilled nursing facility). Totals may not sum to 100 percent due to rounding or missing information about facility
characteristics.
Source: MedPAC analysis of the Provider of Services and Medicare Provider Analysis and Review files 2006–2010.
• Freestanding SNFs made up 94 percent of facilities in 2010.
• Freestanding SNFs treated 93 percent of stays (up 4 percentage points from 2006) and
accounted for 96 percent of Medicare payments.
• For-profit facilities made up 70 percent of facilities in 2010. Between 2006 and 2010, for-
profit SNFs’ share of Medicare-covered stays increased 3 percentage points and payments
increased 1 percentage point.
• Urban SNFs’ share of facilities, Medicare-covered stays, and payments increased between
2006 and 2010.
A Data Book: Health care spending and the Medicare program, June 2012 119
Chart 8-4. Small declines in SNF days and admissions between
2009 and 2010
Change
2008 2009 2010 2009–2010
Volume per 1,000 fee-for-service beneficiaries
Covered admissions 73 72 71 –1.4%
Covered days 1,977 1,963 1,938 –1.3
Covered days per admission 27.0 27.3 27.1 –0.7
Note: SNF (skilled nursing facility). Data include 50 states and the District of Columbia.
Source: Calendar year data from CMS, Office of Research, Development and Information.
• Between 2009 and 2010, covered days and admissions declined. The decline in admissions
is expected because inpatient hospital stays, which are required for Medicare coverage of
skilled nursing facility services, also declined. Despite the reductions, covered days and
covered days per admission were higher than in 2006 (not shown).
120 Post-acute care
Chart 8-5. Case mix in freestanding SNFs shifted toward
highest rehabilitation case-mix groups and away
from other categories
100
90
80 37
47
56
Share of Medicare days
70
65
60 76
50
39
40
32
30 29
23
20
15
10 24 20 16
11 9
0
2002 2004 2006 2008 2010
Days assigned to ultra and very high rehabilitation case-mix groups
Days assigned to low, medium, and high rehabiliation case-mix groups
Days assigned to non-rehabilitation case-mix groups
Note: SNF (skilled nursing facility). Days are for freestanding SNFs with valid cost reports. Totals may not sum to 100 percent
due to rounding.
Source: MedPAC analysis of freestanding SNF cost reports.
• In 2010, rehabilitation resource utilization groups (RUGs) accounted for 91 percent of all
Medicare days in SNFs. The two highest payment rehabilitation case-mix groups (ultra high
and very high) made up 76 percent of all days (compared with 37 percent in 2002). Days not
classified into a rehabilitation case-mix group declined from 24 percent in 2002 to 9 percent
in 2010.
• Some of the growth in total rehabilitation days may be explained by a shift in the site of care
from inpatient rehabilitation facilities to SNFs. It also could reflect the payment incentives to
furnish the services necessary to get patients classified into higher paying rehabilitation RUGs.
A Data Book: Health care spending and the Medicare program, June 2012 121
Chart 8-6. Freestanding SNF Medicare margins have exceeded
10 percent for seven years, and have increased
steadily since 2005
Type of SNF 2004 2005 2006 2007 2008 2009 2010
All 13.7% 13.1% 13.3% 14.7% 16.6% 18.0% 18.5%
Urban 13.2 12.6 13.1 14.5 16.3 17.9 18.5
Rural 16.1 15.2 14.3 15.5 18.0 18.7 18.4
For profit 16.1 15.2 15.7 17.2 19.1 20.2 20.7
Nonprofit 3.5 4.5 3.5 4.1 6.9 9.6 9.5
Government* N/A N/A N/A N/A N/A N/A N/A
Note: SNF (skilled nursing facility), N/A (not applicable).
*Government-owned providers operate in a different context from other providers, so their margins are not necessarily
comparable.
Source: MedPAC analysis of freestanding SNF cost reports.
• Although aggregate Medicare margins for freestanding SNFs have varied over the past 7
years, they have exceeded 10 percent every year since 2001 (early years not shown).
• Aggregate Medicare margins increased from 2009 to 2010 due to costs per day growing
more slowly than payments per day. The growth in payments reflected the increased share
of days classified into the highest paying resource utilization groups.
• Examining the distribution of 2010 margins, one-half of freestanding SNFs had margins of
18.9 percent or more (not shown). One-quarter had Medicare margins at or below 9 percent
and one-quarter had margins of 26.9 percent or higher.
122 Post-acute care
Chart 8-7. Freestanding SNFs with relatively low costs and
relatively high quality maintained high Medicare
margins
SNFs with relatively low
costs and good
Characteristic quality (10 percent) Other SNFs
Performance in 2009
Relative* community discharge rate 1.38 0.95
Relative* rehospitalization rate 0.83 1.02
Relative* cost per day 0.90 1.02
Medicare margin 22.0% 18.2%
Performance in 2010
Relative* cost per day 0.92 1.01
Medicare margin 22.0% 18.9%
Total margin 5.1 3.8
Medicaid share of facility days 59% 63%
Note: SNF (skilled nursing facility). SNFs with relatively low costs and good quality were those in the lowest third of the
distribution of cost per day, in the top third for one quality measure, and not in the bottom third for the other quality
measure. Costs per day were standardized for differences in case mix (using the nursing component relative weights) and
wages. Quality measures were rates of risk-adjusted community discharge and rehospitalization for five conditions
(congestive heart failure, respiratory infection, urinary tract infection, sepsis, and electrolyte imbalance) within 100 days of
hospital discharge. Increases in rates of discharge to the community indicate improved quality; increases in
rehospitalization rates for the five conditions indicate worsening quality. Quality measures were calculated for all facilities
with more than 25 stays.
*Measures are relative to the national average.
Source: MedPAC analysis of quality measures for 2006–2009 and Medicare cost report data for 2006–2010.
• Freestanding SNFs can have relatively low costs and provide good quality of care while
maintaining high margins.
• In 2009, compared with average SNFs, relatively efficient SNFs had community discharge
rates that were 38 percent higher and rehospitalization rates that were 17 percent lower.
• In 2010, relatively efficient SNFs had costs per day that were 8 percent lower than average
SNFs. Relatively efficient SNFs had median Medicare margins in 2010 of 22 percent
compared with a median margin for other SNFs of 18.9 percent.
• Relatively efficient SNFs were more likely to be located in a rural area and more likely to be
nonprofit than other SNFs (not shown).
A Data Book: Health care spending and the Medicare program, June 2012 123
Chart 8-8. Spending for home health care, 1997–2011
25
20 19.4 19.6
18.8
18.0
16.9
Dollars (in billions)
15.4
15 13.9
12.6 13.0
10.8
9.6 10.1
10 9.0 9.2
8.0
5
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: CMS, Office of the Actuary, 2012.
• Medicare home health care spending grew at an average annual rate of 20 percent from
1992 to 1997. During that period, the payment system was cost based. Eligibility had been
loosened just before this period, and enforcing the program’s standards became more
difficult. Providers delivering billing for fraudulent or uncovered services were also a
significant factor in the increase in expenditures.
• Spending began to fall after 1997, concurrent with the introduction of the interim payment
system (IPS) based on costs with limits, tighter eligibility, and increased scrutiny from the
Office of Inspector General.
• In October 2000, the prospective payment system (PPS) replaced the IPS. At the same
time, eligibility for the benefit broadened slightly.
• Home health care has risen rapidly under PPS. Spending has risen by about 10 percent a
year between 2001 and 2009, but growth slowed in 2010 and 2011.
124 Post-acute care
Chart 8-9. Provision of home health care changed after the
prospective payment system started
Percent change
1997 2001 2010 1997–2001 2001–2010
Number of visits (in millions) 258 74 125 –71% 69%
Visit type (percent of total)
Home health aide 48% 25% 16%
Skilled nursing 41 50 52
Therapy 10 24 33
Medical social services 1 1 1
Visits per home health patient 73 33 36 –55 9
Note: The prospective payment system began in October 2000. Totals may not sum to 100 percent due to rounding.
Source: Home health Standard Analytic File; Health Care Financing Review, Medicare and Medicaid Statistical Supplement, 2002.
• The types and amount of home health care services that beneficiaries receive have
changed. In 1997, home health aide services were the most frequently provided visit type,
and beneficiaries who used home health care received an average of 73 visits.
• CMS began to phase in the interim payment system in October 1997 to stem the rise in
spending for home health services and implemented a prospective payment system (PPS)
in 2000 (see Chart 8-8). By 2001, total visits dropped by 72 percent, and average visits per
user had dropped to 33. The increase in visits per user between 2001 and 2010 reflects
home health users getting more episodes. The mix of services changed as well, with skilled
nursing and therapy visits now accounting for over 80 percent of all services. Since PPS
was implemented, the number of users and episodes has risen rapidly (see Chart 8-10).
A Data Book: Health care spending and the Medicare program, June 2012 125
Chart 8-10. Trends in provision of home health care
Average annual
percent change
2002 2005 2010 2002–2010
Number of users (in millions) 2.5 3.0 3.4 3.9%
Percent of beneficiaries who
used home health 7.2% 8.1% 9.6% 3.6
Episodes (in millions) 4.1 5.2 6.8 6.6
Episodes per home health patient 1.6 1.8 2.0 2.6
Visits per home health patient 31 32 36 2.2
Average payment per episode $2,335 $2,465 $2,839 2.5
Source: MedPAC analysis of the home health Standard Analytic File.
• Under the prospective payment system, in effect since 2000, the number of users and the
number of episodes have risen significantly. In 2010, 3.4 million beneficiaries used the home
health benefit.
• The number of home health episodes increased rapidly from 2002 to 2010. The number of
beneficiaries using home health has also increased since 2002, but at a lower rate than the
growth in episodes.
• The number of visits per home health patient increased from 31 in 2002 to 36 in 2010. This
increase is primarily due to a rise in the number of home health episodes per patient.
126 Post-acute care
Chart 8-11. Margins for freestanding home health agencies
Percent of
agencies
2009 2010 2010
All 18.2% 19.4% 100%
Geography
Mostly urban 18.5 19.4 86
Mostly rural 17.0 19.7 14
Type of control
For profit 19.8 20.7 87
Nonprofit 13.0 15.3 13
Volume quintile
First 8.9 9.9 20
Second 10.2 11.6 20
Third 14.9 13.9 20
Fourth 18.1 18.2 20
Fifth 20.3 22.1 20
Note: Agencies characterized as urban or rural based on the residence of the majority of their patients. Agencies with outlier
payments that exceeded 10 percent of Medicare revenues are excluded from the reported statistics.
Source: MedPAC analysis of 2009–2010 Cost Report files.
• In 2010, about 80 percent of agencies had positive margins (not shown in chart). These
estimated margins indicate that Medicare’s payments are above the costs of providing
services to Medicare beneficiaries for both rural and urban home health agencies (HHAs).
• These margins are for freestanding HHAs, which composed about 85 percent of all HHAs in
2010. HHAs are also based in hospitals and other facilities.
• HHAs that served mostly urban patients in 2010 had an aggregate average margin of 19.4
percent; those that served mostly rural patients had an aggregate average margin of 19.7
percent. The 2009 margin is consistent with the historically high margins the home health
industry has experienced under the prospective payment system. The aggregate average
margin from 2001 to 2009 averaged 17.5 percent, indicating that most agencies have been
paid well in excess of their costs under prospective payment.
• For-profit agencies in 2010 had an aggregate average margin of 20.7 percent, and nonprofit
agencies had an aggregate average margin of 15.3 percent.
• Agencies that serve more patients have higher margins. The agencies in the lowest volume
quintile in 2010 have an aggregate average margin of 9.9 percent, while those in the highest
quintile have an aggregate average margin of 22.1 percent.
A Data Book: Health care spending and the Medicare program, June 2012 127
Chart 8-12. Most common types of inpatient rehabilitation
facility cases, 2011
Type of case Share of cases
Stroke 19.8%
Fracture of the lower extremity 13.9
Major joint replacement 10.5
Debility 10.4
Neurological disorders 10.3
Brain injury 7.5
Other orthopedic 7.0
Cardiac conditions 5.1
Spinal cord injury 4.3
Other 11.1
Note: Other includes conditions such as amputations, major multiple trauma, and pain syndrome. Numbers may not sum to 100
percent due to rounding.
Source: MedPAC analysis of Inpatient Rehabilitation Facility–Patient Assessment Instrument data from CMS (January through
June of 2011).
• In 2011, the most frequent diagnosis for Medicare patients in inpatient rehabilitation facilities
(IRFs) was stroke, representing close to 20 percent of cases, up from 2004, when stroke
represented fewer than 17 percent of cases.
• Major joint replacement cases represented close to 11 percent of IRF admissions in 2011,
down from 24 percent of cases in 2004, when major joint replacement was the most
common IRF Medicare case type.
128 Post-acute care
Chart 8-13. Volume of IRF FFS patients declined slightly in 2010
Average
annual percent Percent
change change
2004 2008 2009 2010 2004–2009 2009–2010
Number of IRF cases 495,000 356,000 364,000 359,000 –6.2% –1.3%
Unique patients per 10,000 123.0 91.5 93.0 91.1 –5.8 –2.1
FFS beneficiaries
Payment per case $13,290 $16,646 $16,552 $17,085 5.2 3.2
Medicare spending
(in billions) $6.43 $5.95 $6.03 $6.32 –0.3 4.8
Average length of stay
(in days) 12.7 13.3 13.1 13.1 0.6 0
Note: IRF (inpatient rehabilitation facility), FFS (fee-for-service). Numbers of cases reflect Medicare FFS utilization only.
Source: MedPAC analysis of MedPAR data from CMS. Total Medicare spending for IRF services from CMS Office of the Actuary.
• IRF volume is measured by the number of IRF cases and the number of unique patients per
10,000 beneficiaries, which controls for changes in FFS enrollment.
• IRF volume declined after 2004 when enforcement of the compliance threshold (60 percent
rule) was renewed.
• Medicare FFS spending on IRFs declined between 2004 and 2008 as more IRFs complied
with the 60 percent rule and more Medicare beneficiaries enrolled in Medicare Advantage
plans.
• The number of IRF cases increased between 2008 and 2009. This increase was due to an
increase in both the number of unique beneficiaries receiving IRF care and an increase in
the number of beneficiaries with more than one IRF stay in a year.
• In 2010, the number of IRF cases declined slightly by 1.3 percent. This decline may in part
be due to the revised coverage criteria for an IRF stay that went into effect in January 2010.
The revised coverage criteria did not change, but more clearly defined, which Medicare
beneficiaries are appropriate for IRFs. Therefore, some patients that IRFs would have
admitted previously might not have met the more specific coverage criteria in 2010.
A Data Book: Health care spending and the Medicare program, June 2012 129
Chart 8-14. Overall IRFs’ payments per case have risen faster
than costs since implementation of the PPS in 2002
60
Payment per case
Cost per case 50.5
50 47.2 47.6
44.9
41.8
Cumulative percent change
40.1 39.3
40 37.8
31.8 32.7
30 27.3
24.9
22.3
20 17.6
11.3
10 6.5
2.6
0.3
0
2002 2003 2004 2005 2006 2007 2008 2009 2010
Note: IRF (inpatient rehabilitation facility), PPS (prospective payment system). Data are from consistent two-year cohorts of
IRFs. Costs are not adjusted for changes in case mix.
Source: MedPAC analysis of cost report data from CMS.
• Since implementation of the PPS in 2002, overall Medicare payments per case have
increased faster than costs, even when costs per case grew rapidly between 2004 and 2006
as a result of enforcement of the compliance threshold.
• These trends in Medicare per case payments and costs are reflected in IRFs’ Medicare
margins, shown in Chart 8-15.
130 Post-acute care
Chart 8-15. Inpatient rehabilitation facilities’ Medicare margin
by type, 2002–2010
2002 2004 2006 2008 2009 2010
All IRFs 10.8% 16.7% 12.4% 9.5% 8.4% 8.8%
Hospital based 6.1 12.2 9.7 4.1 0.4 -0.2
Freestanding 18.5 24.7 17.5 18.2 20.3 21.4
Urban 11.3 16.9 12.6 9.7 8.6 9.1
Rural 5.9 13.9 10.6 7.6 6.3 5.5
Nonprofit 6.5 12.8 10.7 5.6 2.3 2.0
For profit 18.5 24.4 16.3 16.7 19.0 19.8
Note: IRF (inpatient rehabilitation facility).
Source: MedPAC analysis of cost report data from CMS.
• The aggregate Medicare margin increased rapidly during the first two years (2002–2004) of
the IRF prospective payment system (PPS). Aggregate margins rose from just under 2
percent in 2001 to almost 17 percent in 2004.
• From 2004 to 2009, margins declined, but remained high. This decline was largely due to
reductions in patient volume over this time period that resulted in fewer patients among
whom to distribute fixed costs. The 2007 to 2009 margin decrease was mainly a result of a
zero update to the base rates for half of 2008 and for all of 2009 that resulted in Medicare
payment rates remaining at 2007 levels.
• Margins increased in 2010 from 8.4 percent in 2009 to 8.8 percent in 2010.
• Freestanding and for-profit IRFs had substantially higher aggregate Medicare margins than
hospital-based and nonprofit IRFs, continuing a trend that began with implementation of the
IRF PPS in 2002.
A Data Book: Health care spending and the Medicare program, June 2012 131
Chart 8-16. The top 25 MS–LTC–DRGs made up nearly two-
thirds of LTCH discharges in 2010
MS-LTC Change
DRG Description Discharges Percentage 2008-2010
207 Respiratory system diagnosis with ventilator support 96+ hours 16,024 11.9% 6.9%
189 Pulmonary edema and respiratory failure 11,148 8.3 27.5
871 Septicemia or severe sepsis without ventilator support 96+ hours
with MCC 7,474 5.5 15.3
177 Respiratory infections & inflammations with MCC 5,067 3.8 16.8
592 Skin ulcers with MCC 3,568 2.6 –10.9
949 Aftercare with CC/MCC 3,046 2.3 –18.8
208 Respiratory system diagnosis with ventilator support <96 hours 2,851 2.1 14.7
193 Simple pneumonia and pleurisy with MCC 2,847 2.1 5.6
190 Chronic obstructive pulmonary disease with MCC 2,654 2.0 3.8
539 Osteomyelitis with MCC 2,415 1.8 26.9
573 Skin graft and/or debridement for skin ulcer or cellulitis with MCC 2,059 1.5 7.7
862 Postoperative and post-traumatic infections with MCC 2,033 1.5 21.6
314 Other circulatory system diagnosis with MCC 1,983 1.5 33.4
919 Complications of treatment with MCC 1,950 1.4 17.5
682 Renal failure with MCC 1,937 1.4 11.4
166 Other respiratory system OR procedures with MCC 1,911 1.4 12.9
559 Aftercare, musculoskeletal system and connective tissue with MCC 1,877 1.4 –3.4
291 Heart failure and shock with MCC 1,821 1.4 7.9
4 Tracheostomy with ventilator support 96+ hours or primary 1,656 1.2 17.1
diagnosis except face, mouth, and neck without major OR
593 Skin ulcers with CC 1,646 1.2 –36.4
178 Respiratory infections and inflammations with CC 1,644 1.2 –16.3
602 Cellulitis with MCC 1,593 1.2 40.0
870 Septicemia or severe sepsis with ventilator support 96+ hours 1,592 1.2 47.7
603 Cellulitis without MCC 1,432 1.1 2.3
194 Simple pneumonia and pleurisy with CC 1,285 1.0 –22.3
Top 25 MS–LTC–DRGs 83,513 62.0 8.5
Total 134,683 100.0 2.9
Note: MS–LTC–DRG (Medicare severity long-term care diagnosis related group), LTCH (long-term care hospital), MCC (major
complication or comorbidity), CC (complication or comorbidity), OR (operating room). MS–LTC–DRGs are the case-mix
system for LTCHs.
Columns may not sum due to rounding.
Source: MedPAC analysis of MedPAR data from CMS.
• Cases in LTCHs are concentrated in a relatively small number of MS–LTC–DRGs. In 2010,
the top 25 MS–LTC–DRGs accounted for nearly two-thirds of all cases.
• The most frequent diagnosis in LTCHs in 2010 was respiratory system diagnosis with
ventilator support for more than 96 hours. Ten of the top 25 diagnoses, representing 35
percent of all cases, were respiratory conditions.
132 Post-acute care
Chart 8-17. LTCH spending per FFS beneficiary continues
to rise
Average annual change
2003− 2005– 2009−
2003 2004 2005 2006 2007 2008 2009 2010 2005 2009 2010
Cases 110,396 121,955 134,003 130,164 129,202 130,869 131,446 134,683 10.2% -0.5% 2.5%
Cases per 10,000 30.8 33.4 36.4 36.0 36.3 37.0 37.1 38.4 8.8 0.5 3.5
FFS beneficiaries
Spending (in billions) $2.7 $3.7 $4.5 $4.5 $4.5 $4.6 $4.9 $5.2 29.1 2.2 6.0
Spending per $75.2 $101.3 $122.2 $124.3 $126.5 $130.2 $138.3 $148.1 27.5 3.1 7.1
FFS beneficiary
Payment per
case $24,758 $30,059 $33,658 $34,859 $34,769 $35,200 $37,465 $38,582 16.6 2.7 3.0
Length of stay
(in days) 28.8 28.5 28.2 27.9 26.9 26.7 26.4 26.6 –1.0 –1.6 0.8
Note: LTCH (Long-term care hospital), FFS (fee for service)
Source: MedPAC analysis of MedPAR data from CMS.
• Between 2009 and 2010, the number of LTCH cases per FFS beneficiary rose 3.5 percent.
Medicare LTCH spending per fee-for-service beneficiary rose more than twice as much over
the same period (7.1 percent).
A Data Book: Health care spending and the Medicare program, June 2012 133
Chart 8-18. LTCHs’ per case payments rose more quickly than
costs in 2010
50
Payments per case 43.4
41.4
Cost per case
40
36.0 36.0
34.6
32.0
Cumulative percent change
30 32.5 33.4
30.2
22.5 28.1
20 24.2
18.2
9.4
10 12.1
3.5
1.6
-4.0 2.8 3.5
0
-3.9
0.4
-2.1 TEFRA PPS
-5.6
-10
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Note: LTCH (long-term care hospital), TEFRA (Tax Equity and Fiscal Responsibility Act of 1982), PPS (prospective payment
system). Percent changes are calculated based on consistent two-year cohorts of LTCHs.
Source: MedPAC analysis of Medicare cost report data from CMS.
• Payment per case increased rapidly after the PPS was implemented, climbing an average
16.6 percent per year between 2003 and 2005. Cost per case also increased rapidly during
this period, albeit at a somewhat slower pace.
• Between 2005 and 2008, growth in cost per case outpaced that for payments, as regulatory
changes to Medicare’s payment policies for LTCHs slowed growth in payment per case to
an average of 1.4 percent per year.
• After the Congress delayed implementation of some of CMS’s recent regulations, payments
per case climbed 5.3 percent between 2008 and 2009, about twice as much as the growth in
costs. However, between 2009 and 2010, payment growth slowed to 2 percent, while cost
growth was held under 1 percent.
134 Post-acute care
Chart 8-19. LTCHs’ aggregate Medicare margin rose in 2010
Share of
Type of LTCH discharges 2003 2004 2005 2006 2007 2008 2009 2010
All 100% 5.2% 9.0% 11.9% 9.8% 4.8% 3.5% 5.6% 6.4%
Urban 96 5.2 9.2 11.9 10.0 5.1 3.8 5.9 6.7
Rural 5 4.5 2.6 10.1 4.9 –0.7 –3.3 –2.8 –0.5
Freestanding 70 5.6 8.4 11.3 9.3 4.4 3.1 4.7 5.6
Hospital within hospital 30 4.2 10.6 13.1 10.8 5.8 4.4 7.6 8.1
Nonprofit 16 1.7 6.9 9.1 6.4 1.3 –2.5 –0.6 –1.2
For profit 83 6.3 10.0 13.1 10.9 5.9 5.1 7.2 8.0
Government 2 N/A N/A N/A N/A N/A N/A N/A N/A
Note: LTCH (long-term care hospital), N/A (not available). Share of discharges column groupings may not sum to 100 percent
due to rounding or missing data. Margins for government-owned providers are not shown. They operate in a different
context from other providers, so their margins are not necessarily comparable.
Source: MedPAC analysis of cost report data from CMS.
• After implementation of the prospective payment system, LTCHs’ Medicare margins
increased rapidly, from 5.2 percent in 2003 to 11.9 percent in 2005. Margins then fell as
growth in payments per case leveled off. In 2009, however, LTCH margins began to
increase again, reaching 6.4 percent in 2010.
• Financial performance in 2010 varied across LTCHs. Margins increased between 2009 and
2010 for all types of LTCHs except nonprofits, whose margins fell from –0.6 percent to –1.2
percent. The aggregate Medicare margin for for-profit LTCHs (which accounted for 83
percent of all Medicare discharges from LTCHs) was 8.0 percent. Rural LTCHs’ aggregate
margin was –0.5 percent, compared with 6.7 percent for their urban counterparts. Rural
providers account for about 5 percent of LTCHs discharges, caring for a smaller volume of
patients on average, which may result in poorer economies of scale.
A Data Book: Health care spending and the Medicare program, June 2012 135
Chart 8-20. LTCHs in the top quartile of Medicare margins in
2010 had much lower costs
High-margin Low-margin
Characteristics quartile quartile
Mean Medicare margin 20.9% –11.3%
Mean total discharges (all payers) 576 444
Medicare patient share 68% 64%
Medicaid patient share 8 5
Occupancy rate 74 62
Average length of stay (in days) 26 27
Adjusted CMI 0.9743 0.8981
Mean per discharge:
Standardized costs $26,660 $36,251
Total Medicare payment* $38,557 $38,157
High-cost outlier payments $1,316 $5,005
Share of:
Cases that are SSOs 26% 34%
Medicare cases from primary-referring ACH 35 41
LTCHs that are for-profit 90 64
Note: LTCH (long-term care hospital), CMI (case-mix index), SSO (short-stay outlier), ACH (acute care hospital). Includes only
established LTCHs—those that filed valid cost reports in both 2009 and 2010. Top margin quartile LTCHs were in the top
25 percent of the distribution of Medicare margins. Bottom margin quartile LTCHs were in the bottom 25 percent of the
distribution of Medicare margins. Standardized costs have been adjusted for differences in case mix and area wages.
Adjusted case-mix indices have been adjusted for differences in SSOs across facilities. Average primary referring ACH
referral share indicates the mean share of patients referred to LTCHs in the quartile from the ACH that refers the most
patients to the LTCH. Government providers were excluded.
*Includes outlier payments.
Source: MedPAC analysis of LTCH cost reports and MedPAR data from CMS.
• A quarter of all LTCHs had margins in excess of 20.9 percent, while another quarter had
margins below –11.3 percent.
• Lower per discharge costs, rather than higher payments, drove the differences in financial
performance between LTCHs with the lowest and highest Medicare margins. Low-margin
LTCHs had standardized costs per discharge that were 36 percent higher than high-margin
LTCHs ($36,251 vs. $26,660). Low-margin LTCHs served more patients overall and had a
lower average occupancy rate; thus, they benefit less from economies of scale.
• High-cost outlier payments per discharge for low-margin LTCHs were almost four times
those of high-margin LTCHs ($5,005 vs. $1,316). At the same time, SSOs made up a larger
share of low-margin LTCHs’ cases. Low-margin LTCHs thus cared for disproportionate
shares of patients who are high-cost outliers and patients who have shorter stays.
136 Post-acute care
Web links. Post-acute care
Skilled nursing facilities
• Chapter 7 of MedPAC’s March 2012 Report to the Congress provides information about the
supply, quality, service use, and Medicare margins for skilled nursing facilities. Chapter 7 of
MedPAC’s June 2008 Report to the Congress provides information about alternative designs for
Medicare’s prospective payment system that would more accurately pay providers for their
skilled nursing facility services. Medicare payment basics: Skilled nursing facility payment
system provides a description of how Medicare pays for skilled nursing facility care.
http://www.medpac.gov/chapters/Mar12_Ch07.pdf
http://www.medpac.gov/chapters/Jun08_Ch07.pdf
http://www.medpac.gov/documents/MedPAC_Payment_Basics_11_SNF.pdf
• The official Medicare website provides information on skilled nursing facilities, including the
payment system and other related issues.
http://www.cms.gov/medicare/medicare-fee-for-service-payment/SNFPPS/
Home health services
• Chapter 8 of MedPAC’s March 2012 Report to the Congress provide information on home health
services. Medicare payment basics: Home health care services payment system provides a
description of how Medicare pays for home health care.
http://www.medpac.gov/chapters/Mar12_Ch08.pdf
http://www.medpac.gov/documents/MedPAC_Payment_Basics_11_HHA.pdf
• The official Medicare website provides information on the quality of home health care and
additional information on new policies, statistics, and research as well as information on home
health spending and use of services.
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/HomeHealthPPS/index.html
Inpatient rehabilitation facilities
• Chapter 9 of MedPAC’s March 2011 Report to the Congress provides information on inpatient
rehabilitation facilities. Medicare payment basics: Rehabilitation facilities (inpatient) payment
system provides a description of how Medicare pays for inpatient rehabilitation facility services.
http://www.medpac.gov/chapters/Mar12_Ch09.pdf
http://www.medpac.gov/documents/MedPAC_Payment_Basics_11_IRF.pdf
• CMS provides information on the inpatient rehabilitation facility prospective payment system.
http://www.cms.gov/medicare/medicare-fee-for-service-payment/InpatientRehabFacPPS/
A Data Book: Health care spending and the Medicare program, June 2012 137
Long-term care hospitals
• Chapter 10 of MedPAC’s March 2011 Report to the Congress provides information on long-term
care hospitals. Medicare payment basics: Long-term care hospital services payment system
provides a description of how Medicare pays for long-term care hospital services.
http://www.medpac.gov/chapters/Mar12_Ch10.pdf
http://www.medpac.gov/documents/MedPAC_Payment_Basics_11_LTCH.pdf
• CMS also provides information on long-term care hospitals, including the long-term care hospital
prospective payment system.
http://www.cms.gov//medicare/medicare-fee-for-service-payment/LongTermCareHospitalPPS/
138 Post-acute care
SECTION
Medicare Advantage
Chart 9-1. M le ually all Medicar
MA plans availabl to virtu re
ries
beneficiar
CPs
CC
HMO Any e
Average plan
or local gional
Reg Any MA offerings per
PPO PPPO CCP PFFS plan counnty
2005 67% N
N/A 67% 45% 84% 5
2006 80 87 98 80 100 2
12
2007 82 87 99 100 100 0
20
2008 85 87 99 100 100 5
35
2009 88 91 99 100 100 4
34
2010 91 86 99 100 100 1
21
2011 92 86 99 63 100 2
12
2012 93 76 99 60 100 2
12
Note: MA (Medicare Adv vantage), CCP (c coordinated care plan), PPO (pre
e organization), PF
eferred provider o FFS (private fee--for-
ervice), N/A (not applicable). These data do not in
se t re d
nclude plans that have restricted enrollment or ar not paid based on
ng cial ns, y
the MA plan biddin process (spec needs plans, cost-based plan employer-only plans, and cert on
tain demonstratio
plans).
Source: ata
MedPAC analysis of plan finder da from CMS.
• e pes ch s. cal
There are four typ of plans, three of whic are CCPs Local CCPs include loc PPOs and d
ve
HMOs, which hav comprehen er and
nsive provide networks a limit or d se
discourage us of out-of-
ork s. se
netwo providers Local CCPs may choos which indiv CPs
vidual countiies to serve. Regional CC
onal plans are required by statute to be PPOs) cov entire sta
(regio e y b ver ate-based reg ave
gions and ha
netwo y han s
orks that may be looser th the ones required of local PPOs. Since 2011, PFFS plans s,
h w
which previously were not CCPs, are required to have networks in a wo
areas with tw or more C CCPs.
eas ere wo C ot o
In are where the are not tw or more CCPs, PFFS plans are no required to have netwo orks
e a e
and enrollees are free to use any Medicare provider.
• Local CCPs are available to 93 percent of Medicare be
a 3 n
eneficiaries in 2012—up f ent
from 67 perce in
.
2005. Regional PP p
POs are available to 76 percent of be The ity
eneficiaries. T availabili of MA PFF FS
s d p n
plans has declined from 100 percent of beneficiaries in 2010 to 60 p eneficiaries in
percent of be n
. e
2012. The decline is due to rec quirements in most of the country. For the
cent provider network req n e
s 0 M
past seven years, virtually 100 percent of Medicare ben ave
neficiaries ha had MA plans availab ble,
om nt
up fro 84 percen in 2005.
• The number of pla from which beneficiar
n ans oose in 2012 is about the same as las
ries may cho st
neficiaries ca choose fro an averag of 12 plan operating i their count
year. In 2012, ben an om ge ns in ties.
n d
This number has decreased after peaking in 2008 and 2009, reflectting CMS’s 2 o
2010 effort to
ce er d ment and the network
reduc the numbe of duplicative plans and plans with small enrollm e
rements for PFFS plans.
requir P
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 141
Chart 9-2. A o remium p
Access to zero-pr th rug
plans wit MA dr
overage, 2006–2012
co ,
100
2006 2007 08
200 2009 2010 11
201 2012
90 88 88
85
80 76
73
7
70 68
Percent of beneficiaries
66
60
52
50 48
46
40
32
29
9 30
30 28
25
2 26 5
25
22
20 15
11
10
0
HMO PPO
P PFFS onal PPO
Regio n
Any MA plan
Note: vantage), PPO (p
MA (Medicare Adv er ee-for-service).
preferred provide organization), PFFS (private fe
Source: f
MedPAC analysis of bid and plan finder data from CMS.
• ss ypes, the ava
Acros all plan ty zero-premiu m” plans—p
ailability of “z o
plans with no premium
ments other than the Med
paym t dicare Part B premium— d
—has ranged from 85 pe ercent to 94
ent 07.
perce since 200 Most beneficiaries can obtain a Medicare Ad dvantage–P Drug
Prescription D
(MA– hat g for e
–PD) plan, an MA plan th includes Part D drug coverage, f which the enrollee pa ays
remium for either the dru coverage or the cove
no pr e ug erage of Med dicare Part A and Part B
ces. In 2012 88 percent of Medicare beneficiariies have acc
servic 2, t e cess to at least one MA– –PD
w mium (beyon the Medic
plan with no prem nd premium) for the combin coverage
care Part B p r ned
m
(and no premium for any non n-Medicare-c nefits include in the ben
covered ben ed e),
nefit package
comp 0
pared with 90 percent in 2011.
• Seveenty-six percent of benef e D
ficiaries have zero-prem ium MA–PD HMOs available. MA–P PD
s
PPOs without pre emiums are less widely available, bu are availa
ut ercent of
able to 46 pe
2 m
beneficiaries in 2012, up from 30 percent in 2011. Ho owever, zero o-premium r Os
regional PPO
are le available than they have been in the past. P
ess e h n PFFS plans o o and
offering zero premiums a
Part D drug cove erage are ava 0 beneficiaries in 2012.
ailable to 30 percent of b s
• In mo cases, MA plan enro
ost M ollees continu paying th Medicare Part B pre
ue heir e emium, but some
PD
MA–P plans use rebate dol ce ate rollees’ Part B premium
llars to reduc or elimina their enr
ation.
obliga
142 dicare Advanta
Med age
Chart 9-3. nt 12
Enrollmen in MA plans, 1994–201
14
12.8
12 11.7
1
11.0
10.5
Beneficiaries (in millions)
10 4
9.4
8.1
8
6.9
6
6.4 6.3
6.1
6 5
5.5
5.2
4.9 4.9
4.6 4.7
4.1
4
3.1
2.3
2
0
996 8 001 3 2006 2007 2008 2009 2010 2
1994 1995 19 1997 1998 1999 2000 20 2002 2003 2004 2005 2 2011 2012
Note: MA (Medicare Adv
vantage).
Source: ed r thly summary rep
Medicare manage care contract reports and mont ports, CMS.
• Medicare enrollm te ans an
ment in privat health pla paid on a at-risk ca is
apitated basi is at an all-
time high at 12.8 million enro ercent of all M
ollees (26 pe Medicare be eneficiaries). Enrollment rose
.
rapidly throughou the 1990s peaking at 6.4 million e
ut s, t hen
enrollees in 1999, and th declined tod
a low of 4.6 millio enrollees in 2003. MA enrollment has increas steadily since 2003.
w on A t sed .
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 143
Chart 9-4. C lment va amon major plan typ
Changes in enroll ary ng r pes
Total enrollees
housands)
(in th
F
February February Februa
ary Febrruary Percentage ch
P hange
Plan type 2009 2010 1
2011 20012 2011–2012
Ps
Local CCP 7,625 8,534 3
9,993 382
11,3 14%
Regional PPOs 377 760 2
1,132 930
9 –18
PFFS 2,353 1,657 588
8 5
518 –12
Note: CP O n), e ). clude
CC (coordinated care plan), PPO (preferred provider organization PFFS (private fee-for-service) Local CCPs inc
ealth maintenanc organizations and local PPOs.
he ce .
Source: CMS health plan monthly summary reports.
m y
• llment in local CCPs gre by 14 per
Enrol ew he t
rcent over th past year. Enrollment in regional
s FS
PPOs and in PFF plans dec clined. Combined enrollmment in the three types of plans gre by
ew
ercent from February 2011 to Februa 2012.
10 pe F ary
144 dicare Advanta
Med age
Chart 9-5. M ment by s
MA and cost plan enrollm d
state and type of
2
plan, 2012
Medicare eligibles
M s enrollees by plan type
Distribution (in percent) of e n
State (in thousands) HMO Local PPO Regional PPO PFFS Cost otal
To
US total 48,799 17% 6% 2% 1% 1% 27%
2
Alabama 871 14 6 1 0 0 22
2
Alaska 68 0 0 0 0 0 1
Arizona 959 34 3 1 1 0 38
3
Arkansas 547 7 3 3 4 0 16
1
California 4,934 35 1 0 0 0 37
3
Colorado 655 26 3 0 1 4 34
3
Connecticu ut 581 16 4 1 0 0 21
2
Delaware 155 3 1 0 0 0 5
Florida 3,470 25 2 7 0 0 35
3
Georgia 1,296 6 10 4 4 0 24
2
Hawaii 215 15 12 14 0 4 45
4
Idaho 239 10 16 0 3 1 31
3
Illinois 1,889 6 3 0 0 0 10
1
Indiana 1,037 2 9 7 2 0 19
1
Iowa 527 6 6 1 1 2 14
1
Kansas 444 4 5 0 3 0 12
1
Kentucky 784 3 7 6 1 1 17
1
Louisiana 709 22 1 2 1 0 26
2
Maine 273 9 6 0 0 0 16
1
Maryland 815 3 2 0 0 3 9
Massachus setts 1,092 15 2 1 0 0 18
1
Michigan 1,709 11 13 1 1 0 26
2
Minnesota 811 15 5 2 0 26 47
4
Mississippi i 511 5 3 2 2 0 11
1
Missouri 1,029 15 5 1 2 0 23
2
Montana 175 0 9 1 7 0 16
1
Nebraska 285 6 3 1 3 1 13
1
Nevada 372 27 3 2 1 0 33
3
New Hamp pshire 228 1 2 0 2 0 5
New Jersey 1,364 13 1 0 0 0 14
1
New Mexic co 325 19 8 0 1 0 28
2
New York 3,067 23 7 2 1 0 32
3
North Caro olina 1,546 11 4 2 3 0 19
1
North Dako ota 110 0 1 0 3 7 11
1
Ohio 1,949 15 16 4 0 1 37
3
Oklahoma 619 11 3 0 2 0 16
1
Oregon 644 21 20 0 0 0 42
4
Pennsylvan nia 2,329 24 14 0 1 0 39
3
Puerto Rico o 685 63 7 0 0 0 70
7
Rhode Isla and 187 33 1 2 0 0 36
3
South Caro olina 807 3 6 5 3 0 18
1
South Dako ota 140 0 5 1 2 4 12
1
Tennessee e 1,094 22 5 1 1 0 28
2
Texas 3,137 15 4 2 1 1 23
2
Utah 295 20 11 0 4 1 36
3
Vermont 116 0 1 1 4 0 7
Virgin Islan
nds 9 1 0 0 - 0 1
Virginia 1,186 3 4 1 4 1 15
1
Washington 1,013 21 6 0 1 0 28
2
Washington D.C. 80 2 1 0 0 7 10
1
West Virgin nia 389 1 15 2 2 3 23
2
Wisconsin 938 15 11 1 2 3 32
3
Wyoming 83 0 1 0 3 1 6
Note: A
MA (Medicare Adva eferred provider organization), PFF S (private fee-for-
antage), PPO (pre ans
-service). Cost pla are not MA plans;
ports to CMS rath than bids. Tota may not sum d to rounding.
they submit cost rep her als due
Source: MS a,
CM enrollment and population data 2012.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 145
Chart 9-6. M b
MA plan benchma Medicare program
arks, bids, and M m
s e ng,
payments relative to FFS spendin 2012
ns
All plan Os
HMO Loca PPOs
al POs
Regional PP FS
PFF
Benchmarks/FFS 112% 112%
% 1 14% %
107% 112%
Bids/FFS 98 95 08
10 100 10
06
Payments
s/FFS 107 106 1 13 105 110
Note: vantage), FFS (fe
MA (Medicare Adv ee-for-service), PPO (preferred p
P ation), PFFS (priv
provider organiza vice).
vate fee-for-serv
Source: ober 2011.
MedPAC analysis of plan bid data from CMS, Octo
• e
Since 2006, plan bids have pa mined the Me
artially determ edicare paym eceive. Plans bid
ments they re
er d
to offe Part A and Part B cove erage to Med ciaries (Part D coverage is bid
dicare benefic
separ b p and MS e
rately). The bid includes plan administrative cost a profit. CM bases the Medicare
paymment for a priv ts
vate plan on the relationship between its bid and it applicable benchmark.
• b s
The benchmark is an administ tratively dete
ermined biddiing target. Le tablished the
egislation est e
ula,
formu being pha 017, for calcu
ased in by 20 hmarks in ea county, b
ulating bench ach based on
entages (rang
perce % o
ging from 95% to 115%) of each coun nty’s per-capiita Medicare spending.
• If a pllan’s bid is above the ben
nchmark, the the plan re
en eceives the b s
benchmark as payment fro om
Medic care, and enrollees have to pay an addditional premmium that equals the diffe plan’s
erence. If a p
bid is below the be he plus a “rebate defined by law as a
enchmark, th plan receives its bid, p e,” y
perce b p d
entage of the difference between the plan’s bid and its benchm rcentage is b
mark. The per based
e d 2014 it will ra
on the plan’s quality rating and is phased in so that in 2 ange from 50 percent to 770
ent.
perce (In 2011, all plan reba ates were set at 75 perce n
ent.) The plan must then rreturn the rebbate
s l wer
to its enrollees in the form of supplemental benefits, low cost sharing, or lower premiums.
• We estimate that MA benchma e nt
arks average 112 percen of FFS speending when weighted by MA
lment. The ra varies by plan type, because diffe
enroll atio y b erent types of plans tend to draw
f
lment from different types of areas.
enroll s
• s’
Plans enrollment--weighted bid average 98 percent of FFS spending. We estim
ds 9 f MOs
mate that HM
n o ding, while biids from othe plan types average at l
bid an average of 95 percent of FFS spend er least
p FS
100 percent of FF spending. These numb t
bers suggest that HMOs can provide the same
ces ere end
servic for less than FFS in the areas whe they bid, while other plan types te to charge e
more.
• We project that 20 MA paym
012 t
ments will be 107 percent of FFS spen kely this num
nding. It is lik mber
ecline signific
will de he
cantly over th next few years as ben
y e
nchmarks are gradually re ve
educed relativ to
l et nts
FFS levels to mee requiremen under the Patient Pro
e Affordable Ca Act of 20
otection and A are 010.
• r nding varies b the type o Medicare A
The ratio of payments relative to FFS spen by of Advantage pllan.
HMOs and regional PPO paym e nt
ments are estimated to be 106 percen and 105 pe S,
ercent of FFS
ectively, while payments to PFFS and local PPOs will average 110 percent and 113 per
respe e t t rcent
of FFS, respectiveely.
146 dicare Advanta
Med age
Chart 9-7. nt ployer gr
Enrollmen in emp A 2006–201
roup MA plans, 2 12
2.5
0
0.00
PFFS
CCP 0
0.00
2.0
Enrollment (in millions)
0.42
1.5 0.72
0.54
0.03 0.30 2
2.32
1.0 8
2.08
1.48
0.5 1.00 1.02 1.11
0.93
0.0
May-06 Nov-07 Feb-08 Feb-09
9 Feb-10
0 11
Feb-1 Feb-12
Note: vantage), PFFS (private fee-for-s
MA (Medicare Adv ( oordinated care p
service), CCP (co plan).
Source: CMS enrollment data.
• e p
While most MA plans are ava residing in a given area,
ailable to any Medicare beneficiary r ,
e a e
some MA plans are available only to retir rees whose Medicare co overage is s ed
supplemente by
their former empl on. ans ed r
loyer or unio These pla are calle employer group plans. Such plan ns
are usually offere through in
ed ed s
nsurers and are markete to groups formed by e or
employers o
ns, an
union rather tha to individual beneficia aries.
• Enrol mployer group plans has more than d
llment in em p ce A
doubled sinc 2006, while overall MA
enrollment grew by about 82 percent. As of February 2012, abou 2.3 million enrollees w
s y ut n were
mployer group plans, or about 18 per
in em a MA
rcent of all M enrolleess.
• er
Unde a requirem
ment in the Medicare Imp
M s ers
provements for Patients and Provide Act of 20008,
oyer group plans were required to have network and after 2010 could no longer be
emplo p r h ks e
S
PFFS plans.
• Our analysis of MA bid data shows that employer gro plans on average have bids tha are
a M s e oup n at
er
highe relative to FFS spending than indi s,
ividual plans meaning tthat group pl lans appear less
ent
efficie than indi s.
ividual market MA plans Employer g group plans bid an averrage of 108
ent c or
perce of FFS, compared with 96 percent of FFS fo individual p plans (not sh art
hown in cha
above e).
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 147
Chart 9-8. o al rollees, 2
Number of specia needs plan enr 12
2007–201
0
1,400
1,188
0
1,200
1,069
Number of special needs plans
1,000
0 967
9
8
918
829
0
800
670
0
600
0
400
265
214 201
80
18 170
0
200 143 136 119
93 98 0
80
47
0
2007 200
08 2009 2010 2011 2
2012
Dual C
Chronic stitutional
Ins
Source: MS ensive reports, May 2007, April 20
CM special needs plans comprehe M April 2010, April 2
008, April 2009, A 2011, and April 2012.
• C al
The Congress created specia needs pla (SNPs) a a new Me
ans as edicare Adva )
antage (MA) plan
type in the Medic ption Drug, Improvemen and Mode
care Prescrip nt, ct o
ernization Ac of 2003 to
provid a commo framewor for the existing plans s
de on rk serving spec needs beneficiaries and
cial
ess
to expand beneficiaries’ acce to and ch g
hoice among MA plans.
• SNPs were origin
s nally authoriz for five years. SNP authority wa extended, subject to n
zed y as new
y d, n 7,
requirements, by the Medicare, Medicaid and SCHI P Extension Act of 2007 the Medica are
Improovements for Patients an Providers Act of 2008 and the P
nd s 8, Patient Protection and
dable Care Act of 2010. Absent congressional a
Afford A action, SNP authority will expire at th
he
o
end of 2014.
• CMS approves th o
hree types of SNPs: dua SNPs enro only bene
al oll ally
eficiaries dua entitled t to
Medicare and Me onic SNPs enroll only be
edicaid; chro who
eneficiaries w have ce c
ertain chronic or
disab ons; and inst
bling conditio nly
titutional SNPs enroll on beneficiaries who res side in
utions or are nursing home certified.
institu e .
• llment in dua SNPs has grown cont
Enrol al s d
tinuously and is about 1.2 million in 2012.
• llment in chr
Enrol ronic SNPs has fluctuate as plan re
h ed s ged.
equirements have chang
• llment in institutional SN has decl
Enrol NPs y.
lined steadily
148 dicare Advanta
Med age
Chart 9-9. o a P ment rose from 20
Number of SNPs and SNP enrollm e 011
o
to 2012
600 00
1,60
SNP enrollment (in thousands)
00
1,40
500 201
115 1,20
00 1 70 47
Number of SNPs
400 92 80
8
70 00
1,00
65
300 00
80
00
60 1,188
200 069
1,0
8
298 322 00
40
100
00
20
0 0
April 2011 April 2012 Aprill 2011 April 2012
o ondition
Chronic or disabling co or condition
Chronic o disabling c
nal
Institution nal
Institution
ble
Dual eligib Dual eligible
Note: NP ds
SN (special need plan).
Source: ds hensive reports, April 2011 and 2
CMS special need plans compreh 2012.
• The number of SNPs increas by 11 pe
n sed April 2011 to April 2012, and the number
ercent from A o ,
NP s b t.
of SN enrollees increased by 9 percent
• In 2012, most SN (64 perc
NPs cent) are for dual-eligible beneficiaries, while 23 percent are for
e 3 e
beneficiaries with chronic con
h d t
nditions, and 14 percent are for ben ho
neficiaries wh reside in
institu c b
utions (or reside in the community, but have a s of
similar level o need).
• Enrol wn ay t 1.4 n
llment in SNPs has grow from 0.9 million in Ma 2007 (not shown) to 1 million in
April 2012.
• The availability of SNPs has changed slig
a ghtly and va e needs popula
aries by type of special n ation
serve In 2012, 78 percent of beneficiar
ed. o n re rve
ries reside in areas wher SNPs ser dual-elig gible
beneficiaries (up from 76 per 1), e
rcent in 2011 41 perce nt live where SNPs serv ve
institu b s m t),
utionalized beneficiaries (down from 47 percent and 45 pe ercent live where SNPs
e es ns om
serve beneficiarie with chronic condition (down fro 46 percen nt).
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 149
wenty most com
Chart 9-10. Tw m mmon con categorie amon
ndition c es ng
M
MA benef CMS–HCC model,
ficiaries, defined in the C C ,
008
20
nt
Percen of
Conditions (defined by HCCs) aries
beneficia
Diabetes without comp
plications %
13.0%
Breast, pr ectal, and oth cancers
rostate, colore her 7.0
rculatory manifestation
Diabetes with renal or peripheral cir 3.8
CHF 3.0
Diabetes with neurolog or other sp
gic festation
pecified manif 2.7
COPD 2.5
Rheumato arthritis
oid 2.3
Specified heart arrhyth
hmias 2.3
Vascular disease
d 2.2
pressive, bipo
Major dep olar, and paranoid disorder
rs 2.2
ectoris/old my
Angina pe rction
yocardial infar 1.6
mologic or uns
Diabetes with ophthalm nifestation
specified man 1.5
Polyneuro
opathy 1.3
c, n nd or
Lymphatic head and neck, brain, an other majo cancers 1.2
rostate, colore
Breast, pr ancers; plus diabetes
ectal, other ca d
omplication
without co 1.2
plication; plus CHF
Diabetes without comp 1.1
Diabetes with neurolog or other sp
gic festation;
pecified manif
plus polyn
neuropathy 0.9
Renal failure 0.9
art as
CHF and specified hea arrhythmia 0.9
rculatory manifestation;
Diabetes with renal or peripheral cir
plus polyn
neuropathy 0.8
Total 52.3
3
Note: MA (Medicare Adv vantage), HCC (h dition category), C
hierarchical cond e COPD (chronic
CHF (congestive heart failure), C
bstructive pulmon
ob t ue
nary disease). Numbers may not sum to totals du to rounding.
Source: a men
MedPAC analysis of Medicare data files from Acum LLC.
• el
CMS uses the CMS–HCC mode to risk adjust capitated p MA e
payments to M plans. The CMS–HCC uses
ficiaries’ cond
benef e to
ditions that are collected int HCCs to addjust the capitated payments.
• C
The CMS–HCC inc cludes 70 HCCCs, which rep oad s. 70
present a bro spectrum of conditions Five of the 7
HCCs represent diabetes categories that var by severity .
s ry
• H rt
The five diabetes HCCs are par of 7 of the 20 most comm HCC com
2 mon Other common
mbinations. O n
tions are cong
condit nic e disease, and various canc
gestive heart failure, chron obstructive pulmonary d cers.
150 dicare Advanta
Med age
D on A and enro
Chart 9-11. Distributio of MA plans a by
ollment b CMS
verall sta rating April 2
ov ar gs, 2012
umber of star
Star rating: nu rs
Plans and Any sttar
enrollment 5 4.5 4 3.5 3 2.5 2
rating
All plan typpes
Number of plans 9 46 51 119 144 65 13
1 47
44
t
Enrollment (in
thousands) ) 146
1,1 1,314 1,267 4,408 3,415 1,080 36
3 65
12,66
ent
As perce in
ans
rated pla 9% %
10% 10% 35% 27% 9% .3%
0. 0%
100
HMOs
Number of plans 9 38 39 73 87 51 4 01
30
Enrollment t 146
1,1 1,152 1,076 2,854 1,712 845 29 8,814
ent
As perce of
HMO enr rollees 13% 13%
% 12% 32% 19% 10% 0.3%
0 0%
100
Local PPOs s
Number of plans 0 8 11 43 40 10 2 114
Enrollment t 0 162 190 1,528 684 136 6 2,70
07
ent
As perce of
local PPOO
s
enrollees N
N/A %
6% 7% 56% 25% 5% 0.2%
0 0%
100
Regional PP POs
Number of plans 0 0 0 1 9 2 0 12
Enrollment t 0 0 0 21 856 36 0 914
ent
As perce of
regional PPO
s
enrollees N
N/A N/A N/A 2% 94% 4% 0% 100
0%
PFFS
Number of plans 0 0 1 2 8 2 0 13
Enrollment t 0 0 <1 4 163 63 0 22
29
ent
As perce of
PFFS en nrollees N
N/A N/A 0.1% 2% 71% 28% 0% 0%
100
Note: MA (Medicare Adv vantage), PPO (p er ee-for-service), N (not available For
preferred provide organization), PFFS (private fe N/A e).
urposes of this ta
pu M
able, a plan is a Medicare Advant hich can consist of several option with different b
tage contract, wh ns benefit
ackages that are also referred to as “plans.” Numbers may not ad to 100 percent due to rounding
pa dd t g.
Source: MedPAC analysis of CMS star ratings and enrollment data, 2012.
• s
The star rating sy
ystem is a co
omposite me sses and out
easure of cliinical proces ient
tcomes, pati
experience meas sures, and measures of a plan's adm
m ministrative p e.
performance The overaall
star rating measu
r mance on Pa C measur and Part D measure
ures perform art res t es.
• The average ove
a erall star ratin across all plans is 3.3 or 3.57 o an enrollm
ng 36, on ment-weightted
s. w 0
basis There are 115 plans, with 548,000 enrollees, t have a star r
that do not h use
rating becau
a nsufficient in
they are too new to be rated or there is in on
nformation o which to b g.
base a rating
ontinued nex page)
(Chart co xt
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 151
D on A and enro
Chart 9-11. Distributio of MA plans a by
ollment b CMS
verall sta rating April 2
ov ar gs, ontinued)
2012 (co
• Unde a program
er m-wide demo onstration, be 2012, plans with ratings at 3 stars or
eginning in 2
e
above receive bo nts rm
onus paymen in the for of an incr rease in theiir benchmarrks. Plan star
gs
rating also deter vel e
rmine the lev of rebate dollars, tho ough the demmonstration does not ch hange
the st visions spec
tatutory prov cifying the rebate levels f different star ratings.
for .
• Unde the statuto provision that introd
er ory ns y
duced quality bonus pay yments, only plans at 4 s
stars
bove would have receive bonuses. Under the d
or ab h ed on,
demonstratio only 10 p percent of
p ceiving quality bonuses (
enrollees are in plans not rec star
(2.5- and 2-s plans), wwhereas und der
the st visions 71 pe
tatutory prov n ot
ercent of enrollees woul d have been in plans no receiving a
ty
qualit bonus.
• HMO are the on plan type for which th
Os nly e tar he tar
here are 5-st plans. Th highest st rating
ned
attain by any lo as st n one
ocal PPO is 4.5, wherea the highes rating for a PFFS plan is 4.0 (for o
ghest rating achieved by any regiona PPO is 3.5 (one plan)
plan), and the hig y al ).
Unde the statuto bonus pr
er ory rovisions, no regional PP
o S uld
POs or PFFS plans wou have rece eived
P
bonus payments. For local PPOs, 87 per ollees would have been in plans not
rcent of enro t
receiv p
ving bonus payments.
• The criteria for de
c p ngs o
etermining plan star ratin change from year to year. Plan ratings acro oss
s ore,
years are, therefo not entirely compara d ria
able. Betwe en 2011 and 2012, star rating criter
were changed an a weightin approach was used, with the result that, in 2012, 62 perc
nd ng h cent
of the weight of measures reflects Part C and D clini cal quality m
e m ompared to 4
measures, co 49
ent
perce in 2011.
152 dicare Advanta
Med age
inks. Medicare Advantag
Web li A ge
• Chap 12 of Me
pter edPAC’s Ma arch 2012 Re
eport to the C rovides infor
Congress pr rmation on
tage plans.
Medicare Advant
//www.medpac.gov/chap
http:/ _Ch12.pdf
pters/Mar12_
• More information on the Med
e n dicare Advan
ntage progra payment system can be found in
am n n
PAC’s Medic
MedP nt
care Paymen Basics se eries.
http:/ uments/MedPAC_Payme
//www.medpac.gov/docu _11_MA.pdf
ent_Basics_
• CMS provides inf n
formation on Medicare Advantage a other Me
A and naged care p
edicare man plans.
http:/ gov/Medicare
//www.cms.g ans/HealthPllansGenInfo
e/Health-Pla o/index.html
http:/ gov/Researc
//www.cms.g -Data-and-Sy
ch-Statistics- tistics-Trends-and-
ystems/Stat
Repo vPartDEnrolData/index.h
orts/MCRAdv html
• CMS star ratings for Medicar Advantage plans can be found at
re e t
http:/ gov/Medicare
//www.cms.g on-Drug-
e/Prescriptio
Cove riptionDrugC
erage/Prescr CovGenIn/Pe Data.html
erformanceD
• The official Medic
o e nformation o n plans avaiilable in specific areas a
care website provides in and
the benefits they offer.
http:/ care.gov/
//www.medic
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 153
SECTION
Prescription drugs
M ng art gs
Chart 10-1. Medicare spendin for Pa B drug admin nistered in
ns’ es nished b suppliers
physician office or furn by
0
15.0
Medicare spending (dollars in billions)
12.0
0 11.5
1
10.9 11.0 11.1
10.6 10.
.7
10.3 10.1
1
9.0
0 8.5
6.4
0
6.0 5.1
2.8
0
3.0
0
0.0
1997 2
2000 2001 2002 200
03 2004 2
2005 2006 2007 08
200 2009 2010
2
Note: ata s n ces g., rugs
Da include Part B–covered drugs administered in physicians’ offic or furnished by suppliers (e.g certain oral dr
nd cal D ude hed
an drugs used with durable medic equipment). Data do not inclu Part B–cove red drugs furnish in hospital
utpatient departm
ou ments or dialysis facilities.
Source: MedPAC analysis of Medicare claims data.
• Spen rt dministered in physician s’ offices or furnished by suppliers
nding for Par B drugs ad y
totale about $11 billion in 2010, up 4.3 percent fro the 2009 level.
ed 1.5 3 om 9
• Medicare spendin on Part B drugs incre
ng e cent per year
eased at an average rate of 25 perc r
03. t e
from 1997 to 200 In 2005, the Medicare payment r d
rate changed from one bbased on thee
age ale o ce.
avera wholesa price to 106 percent of the avera ge sales pric With the move to the e
p
new payment sys d n ce
stem, spending declined 8 percent in 2005. Sinc then, spe ending has
increased modes age per ce
stly, growing at an avera rate of 2 .7 percent p year sinc 2005.
• ent a or r
In addition to the new payme system, another facto contributing to slower growth in P Part
ug u
B dru spending is reduced use of darbe and al
epoetin alfa a epoetin alfa. Annua Part B
se d $1
spending on thes products declined by more than $ billion bet tween 2005 and 2010 as use
s
of the products decreased in response to changes in Food an Drug Adm
ese s e s nd ministration
ing S
labeli and CMS coverage policy. Exclu uding these two product Part B dru spending has
ts, ug g
grown at an aver rage rate of 5.4 per year since 2005 .
5 r
• t ot
This total does no include dr rugs provide through o utpatient de
ed of or
epartments o hospitals o to
patients with endd-stage renal disease in dialysis facillities. MedPA estimate that paym
AC es ments
(inclu haring) for se
uding cost sh rovided in ho
eparately billed drugs pr ospital outpaatient
departments equ $ n at ing
ualed about $4.1 billion in 2010. We estimate tha freestandi and hosp pital-
based dialysis facilities billed Medicare an additional $3.0 billion for drugs in 2010.
d a
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 157
art d
Chart 10-2. Top 10 Pa B drugs administered in phys sicians’
ffices or furnishe by su
of r ed e
uppliers, by share of
xpenditu
ex ures, 20110
Allowed
Charges nt
Percen of k
Rank in
me
Drug nam nical indications
Clin (in millions) Competit
tion ding
spend 2009
mab
Ranibizum e-related
Age $1,119 Sole sour
rce 7%
9.7 2
macular degeneration
b
Rituximab mphoma, leuk
Lym kemia, $849 rce
Sole sour 4
7.4 1
ritis
rheumatoid arthr
mab
Bevacizum ncer, age-rela
Can ated $766 rce
Sole sour 6
6.6 3
macular degeneration
Infliximab Rhe hritis,
eumatoid arth $647 Sole sour
rce 6
5.6 4
ohn’s disease
Cro
stim
Pegfilgras Can
ncer $553 Sole sour
rce 8
4.8 5
etin
Darbepoe alfa emia
Ane $374 Sole sour
rce 2
3.2 6
Epoetin alfa Ane
emia $327 Multisourrce 8
2.8 7
biologic
xed
Pemetrex ng
Lun cancer $276 Sole sour
rce 4
2.4 ted
not list
Docetaxel Can
ncer $269 Sole sour
rce* 3
2.3 9
us
Tacrolimu Preevent organ $259 Multisour
rce 2
2.2 10
nsplant rejection
tran
Note: Da do not includ Part B drugs fu
ata de urnished in hosp
pital outpatient de alysis facilities. A
epartments or dia Allowed charges
p nts ary ons
include Medicare program paymen and beneficia cost-sharing. Clinical indicatio may include on- and off-label use. l
*D ole 09,
Docetaxel was so source in 200 but generic ve ce
ersions have sinc become availlable.
Source: MedPAC analysis of Medicare claims data from CM and informatiion on drug and biologic approva information from the
MS al
Fo and Drug Ad
ood dministration webbsite (http://www.fda.gov).
• ely patient drugs under Part B, but spen
Medicare covers approximate 600 outp s t y
nding is very
conce he ugs 7 rug
entrated. Th top 10 dru account for about 47 percent of all Part B dr spending g.
• bizumab, a biologic for age-related macular deg
Ranib b a m was t h
generation, w the Part B drug with the
test Medicar expenditures in 2010, exceeding $
great re $1.1 billion.
• The seven highest expenditu products are biologic
s ure cs.
• tment for can
Treat ncer dominaates the list (7 of the top 10 drugs tre cancer o the side ef
( eat or ffects
ciated with chemotherap because most cance drugs mus be administered by
assoc c py) er st
icians, a req
physi r o
quirement for coverage of most Part B drugs.
• ministered in physicians’’ offices or fu
Data reflect Part B drugs adm n urnished by suppliers.
158 escription drugs
Pre s
n a care ben
Chart 10-3. In 2010, about 90 percent of Medic es
neficiarie
w
were enro P ans r s
olled in Part D pla or had other sources of
reditable drug co
cr e overage
No creditable coverage
10%
ces
Other sourc of
verage*
creditable cov
4%
y
Primary coverage
gh
throug FEHB,
RE,
TRICAR VA, or IS
Non-LI enrollees in PDPs
P
w
active worker with PDPs 38%
3
Medicare as secondary 21%
p
payer
1
13%
enrollees in PDP
LIS e Ps
17%
mary coverage
Prim
t
through employers that
eceive RDS
re rollees in
Non-LIS enr
14% MA-PDDs
%
17%
lees in MA-
LIS enroll
PDs
P
4%
4
M
MA-PDs 21%
Note: LIS (low-income subsidy), PDP (pr p
rescription drug plan), MA–PD (M age–Prescription Drug [plan]), RDS
Medicare Advanta n
etiree drug subsi
(re eral H
idy), FEHB (Fede Employees Health Benefits p program), VA (D epartment of Veterans Affairs).
TRRICARE is the he or s ndents.
ealth program fo military retirees and their depen
Creditable covera means drug benefits whose value is equal to or greater than t
*C age v that of the basic Part D benefit.
Source: nt
CMS Managemen Information Inte ory, agement; Depart
egrated Reposito February 16 , 2010; Office of Personnel Mana tment
f rtment of Veteran Affairs; CMS Coordination of B
of Defense; Depar ns C se;
Benefits Databas CMS Creditaable Coverage
Daatabase.
• f e at are
As of February 2010, CMS estimated tha 34 million of the 46 million Medica beneficia aries
p e ned art or
(73 percent) were either sign up for Pa D plans o had presc cription drug coverage
d er s n
through employer-sponsored plans unde Medicare’s RDS. (If an employer a agrees to
de d ge
provid primary drug coverag to its retir enefit value t
rees with an average be that is equal to or
great in value than that of Part D (calle creditable coverage), Medicare provides the
ter t P ed e
emplo t
oyer with a tax-free subs sidy for 28 percent of ea eligible individual’s d
p ach hat
drug costs th
w
fall within a speci o
ified range of spending.) )
• ut s
Abou 10 million beneficiaries (nearly 22 percent) rec D’s
ceive Part D LIS. Of th hese individuuals,
m ually eligible to receive Medicare and all Medica benefits o
6.4 million are du M d aid eir
offered in the
5
state. Another 3.5 million qua alified for ext help eith er because they receive benefits
tra e
through the Medi gs o
icare Saving Program or Suppleme ental Securit Income Program or
ty
because they app y ial
plied directly to the Soci Security A on. all
Administratio Among a LIS
beneficiaries, abo 8 million (17 percent of all Medic
out t ciaries) are e
care benefic tand-
enrolled in st
alone PDPs and 2 million (4 percent) are in MA–PD plans.
e e
c ext
(Chart continued ne page)
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 159
n a care ben
Chart 10-3. In 2010, about 90 percent of Medic es
neficiarie
w
were enro P ans r s
olled in Part D pla or had other sources of
reditable drug co
cr e overage (continu
ued)
• Other enrollees in stand-alon PDPs num
n ne mbered 9.7 m
million, or 21 percent of all Medicare
1 f e
es ent)
beneficiaries. Another 7.9 million enrollee (17 perce are in M MA–PD plans or other private
s
Medicare health plans. Individuals whose employers receive Me
e s DS
edicare’s RD numbered 6.4d
millio or 14 percent. Those groups of beneficiaries directly affe Medicare program
on, b ect e
spending.
• b s
Other Medicare beneficiaries have credit overage, but that covera does no
table drug co age ot
t p
affect Medicare program spe e 2 neficiaries (13 percent)
ending. For example, 6.2 million ben
ve
receiv drug cove gh B, E,
erage throug the FEHB TRICARE VA, or curr rent employers because the
e
a orker. CMS estimates tha another 1.6 million ind
individual is still an active wo e at dividuals havve
r
other sources of creditable co overage.
• stimated 4.7 million bene
An es 7 eficiaries (10 percent) h ave no creditable drug c
0 coverage.
160 escription drugs
Pre s
ers e d rd fit ase
Chart 10-4. Paramete of the defined standar benef increa
ver
ov time
2
2006 2009
2 2
2010 2011 2012
2
Deductible e $2550.00 $2295.00 $3310.00 $3310.00 $3220.00
erage limit
Initial cove 250.00
2,2 700.00
2,7 2,8
830.00 840.00
2,8 30.00
2,93
Annual ou hreshold
ut-of-pocket th 600.00
3,6 4,3
350.00 550.00
4,5 550.00
4,5 00.00
4,70
Total cove ered drug spe ending at annual
out-of-ppocket thresho old 5,100.00 153.75
6,1 6,4
440.00 447.50
6,4 57.50
6,65
m ost
Maximum amount of co sharing in the n
ge
coverag gap 2,8
850.00 453.75
3,4 3,6
610.00 607.50
3,6 27.50
3,72
Minimum cost sharing above the an nnual
out-of-ppocket thresho old
y
Copay for generic/p preferred
mul g
ltisource drug 2.00 2.40 2.50 2.50 2.60
y
Copay for other pre escription drugs 5.00 6.00 6.30 6.30 6.50
Note: Under Part D’s defined standard benefit, the enrollee pays the deduuctible and then 25 percent of co nding
overed drug spen
75 b ug
(7 percent paid by the plan) until total covered dru spending reac overage limit (ICL). Before 2011,
ches the initial co
nrollees exceedin the ICL were responsible for paying 100 perce of covered dr spending up to the annual ou
en ng p ent rug ut-of-
ocket threshold. Beginning in 201 enrollees face reduced cost s
po 11, e sharing in the cov verage gap. The amount for 2012 2
$6,657.50) is for an individual with no other source of supplemen coverage fillin only brand-na
($ a h es ntal ng g
ame drugs during the
overage gap. Cos sharing paid by most sources of supplemental coverage does n count toward this threshold. T
co st b not d The
nrollee pays nom
en g
minal cost sharing above the limit..
Source: e
CMS, Office of the Actuary.
• M
The Medicare Pre ug,
escription Dru Improvem ment, and Mo odernization Act of 2003 sspecified a
ed
define standard benefit struct 2, 20 e, t
ture. In 2012 it has a $32 deductible 25 percent coinsurance on e
red til ee
cover drugs unt the enrolle reaches $2 ug ,
2,930 in tota l covered dru spending, and then a
coverrage gap until annual out- pending reac
-of-pocket sp ual d.
ches the annu threshold Before 2011,
lees were res
enroll r
sponsible for paying the full discounte price of co
f ed s g
overed drugs filled during the
coverrage gap. Beecause of cha nt n
anges made by the Patien Protection and Afforda t
able Care Act of
, ace c ed
2010, enrollees fa reduced cost sharing for drugs fille in the cov verage gap. In 2012, the ccost
ng t se
sharin for drugs filled during the gap phas is 50 perc cent for brand s
d-name drugs and 86 per rcent
eneric drugs. Enrollees with drug spen
for ge nding that exxceeds the an old ay
nnual thresho would pa the
o p o
greater of $2.60 to $6.50 per prescription or 5 percent ccoinsurance. .
• p o d enefit structu increase over time at the same rat as
The parameters of this defined standard be ure te
nnual increas in average total drug expenses of Medicare be
the an se e e eneficiaries.
• Within certain limits, sponsorin organizations may offe Part D plan that have the same
n ng er ns
arial value as the defined standard ben
actua efit
nefit, but a d ifferent bene structure. For example a e,
m ed nts an nt ce.
plan may use tiere copaymen rather tha 25 percen coinsuranc Or a plan may have no o
deduc se ng
ctible, but us cost-sharin requireme o er
ents that are equivalent to a rate highe than 25
ent. d ns s
perce Both defined standard benefit plan and plans that are act valent to the
tuarially equiv
ed
define standard benefit are known as “basic benefits.” ”
• Once a sponsoring organizatio offers one plan with ba
e on e scription drug
asic benefits within a pres g
r y nhanced ben
plan region, it may also offer a plan with en nefits—basic and supplem mental coveraage
combbined.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 161
C ristics of Medica PDPs
Chart 10-5. Character f are s
2011 2
2012
ollees as of
Enro as
Enrollees a of
Plans bruary 2011
Feb Plans February 20012
Number Number
Number Percent (in millions) Percent
t r
Number Percent ercent
(in millions) Pe
Total 1,109 100% 17.0 100% 1,041 100% 17.5 100%
1
Type of orrganization
Nationala 851 77 13.9 82 838 80 14.9 85
Other 258 23 3.0 18 203 20 2.6 15
Type of beenefit
Defined standard 133 12 1.3 8 95 9 1.0 5
b
Actuarially equivalent 474 43 12.6 74 446 43 13.2 75
Enhanceed 502 45 3.0 18 500 48 3.3 19
Type of deeductible
Zero 464 42 7.3 43 488 47 7.3 42
Reduced d 197 18 2.1 13 108 10 1.8 11
Defined standardc 448 40 7.6 45 445 43 8.3 48
Drugs covvered in the ga ap
Some ge enerics but
nd-name drugs
no bran 259 23 2.2 13 197 19 0.8 4
Some ge enerics and som me
name drugs
brand-n 106 10 0.3 2 73 7 0.3 2
None 744 67 14.4 85 771 74 16.4 94
Note: DP
PD (prescription drug plan). The PDPs and enroll lment described here exclude em ns ered in
mployer-only plan and plans offe
xcluded plans have 2 million enro
U.S. territories. Ex n totals
ollees in 2012 an d had 1.6 million in 2011. Sums may not add to t
ue
du to rounding.
a
R mbers of plans fo organizations with at least 1 PD in each of the 34 PDP region
Reflects total num or w DP e ns.
b
ally
Includes “actuaria equivalent st asic
tandard” and “ba alternative” b benefits.
c
$ d
$310 in 2011 and $320 in 2012.
Source: ape, premium, an enrollment dat
MedPAC analysis of CMS landsca nd ta.
• wer ne the 012 011. Plan sponsors
Part D drew about 6 percent few stand-alon PDPs into t field for 20 than in 20
ffering 1,041 PDPs in 2012 compared wi 1,109 in 20
are of P ith 011.
• 12, a y
In 201 80 percent of all PDPs are offered by sponsoring o least 1 PDP in
organizations that have at l n
P al l
each of the 34 PDP regions. Plans offered by those nationa sponsors account for 85 percent of all PDP
enrollment.
• Spons ing
sors are offeri about the same number of PDPs with enhanced b c
benefits (basic plus
emental coverage) for 2012 and fewer PDPs with actu
supple 2 P alent benefits
uarially equiva s—having the same
average value as th defined sta
he t, ernative benef designs. Most enrollees (75
andard benefit but with alte fit
percent) are in actu alent plans.
uarially equiva
• A sma on
aller proportio of PDPs inc
clude some be
enefits in the c p bout
coverage gap for 2012 than in 2011. Ab
ans e ge rics
27 percent of all pla with some gap coverag offer gener and brand s,
d-name drugs compared w with
about a third in 201
t 11.
• 12,
In 201 94 percent of PDP enro r al he gap.
ollees are in plans that offer no additiona benefits in th coverage g
Howe es he
ever, because of the change made by th Patient Pro Affordable Car Act of 2010
otection and A re 0,
beginning in 2011, beneficiaries no longer fac 100 percen coinsurance in the covera gap (see Chart
ce nt e age
10-4). In addition, many PDP enrollees receiv Part D’s low
. m ve w-income sub bsidy, which efffectively
nates the cove
elimin erage gap.
162 escription drugs
Pre s
C ristics of MA–PD
Chart 10-6. Character f Ds
2011 2012
nrollees as of
En of
Enrollees as o
Plans ebruary 2011
Fe ans
Pla February 2012
Number Number
Number ercent
Pe (in millions) Percent
t Number Percent (in millions)
n ercent
Pe
Totals 1,506 00%
10 8.6 100% 1,541 100% 8.5 100%
1
Type of org
ganization
MO
Local HM 909 60 5.7 66 951 62 5.9 69
PO
Local PP 421 28 1.7 20 430 28 1.5 18
PFFS 137 9 0.5 5 125 8 0.4 5
l
Regional PPO 39 3 0.7 8 35 2 0.7 8
Type of benefit
Defined standard
s 42 3 0.1 1 37 2 0.1 1
Actuarially equivalent* 108 7 0.6 7 86 6 0.5 6
Enhanceed 1,356 90 7.9 92 1,418 92 7.9 94
Type of deductible
Zero 1,320 88 7.8 91 1,372 89 7.5 88
Reducedd 110 7 0.5 6 98 6 0.8 9
s
Defined standard** 76 5 0.2 3 71 5 0.2 2
ered in the gap
Drugs cove p
enerics but no
Some ge
name drugs
brand-n 441 29 3.0 36 373 24 2.1 25
enerics and som
Some ge me
name drugs
brand-n 350 23 1.6 19 397 26 2.3 27
None 715 47 3.9 46 771 50 4.0 48
Note: e
MA–PD (Medicare Advantage–Pre plan]), HMO (hea maintenance organization), P
escription Drug [p alth e PPO (preferred
rovider organizat
pr ate ce).
tion), PFFS (priva fee-for-servic The MA–PD plans and enrol lment described here exclude
mployer-only plans, plans offered in U.S. territorie 1876 cost pla
em d es, ds
ans, special need plans, demons art
strations, and Pa B-
nly
on plans. Sums may not add to to nding. In previous years, we have treated differen segments of an MA–
otals due to roun s e nt n
D ose t he n
PD as separate plans for the purpo of reporting the number of pl ans available. Th figures shown above no longe er
en
distinguish betwee different segm ments of a plan.
Benefits labeled actuarially equiva
*B a t MS
alent to Part D’s standard benefit include what CM calls “actuari ially equivalent
sic b
standard” and “bas alternative” benefits.
**$310 in 2011 and $320 in 2012.
Source: ape, premium, an enrollment dat
MedPAC analysis of CMS landsca nd ta.
• e m
There are slightly more MA–PD plans in 2012 than in 2011. S
p t 1
Sponsors are offering 1,541 MA–PD planns
compa 06
ared with 1,50 the year beffore (about 2 percent more) HMOs rema the domina kind of MA–
p ). ain ant –PD
, 2 ll 2012. The num
plans, making up 62 percent of al (unweighted) offerings in 2 ues
mber of PFFS plans continu to
n n ed al al
decline, from 137 in 2011 to 125 in 2012. The number of dru g plans offere by both loca and regiona
rred provider organizations decreased slig
prefer o d ghtly between 2011 and 201 12.
• A–PD plans th stand-alon prescription drug plans (P
A larger share of MA han ne n nhanced bene
PDPs) offer en efits
(comp -6 1 , f d
pare Chart 10- with Chart 10-5). In 2012, 48 percent of all PDPs had enhanced beenefits compared
M
with 92 percent of MA–PD plans. In 2012, enha D ed t
anced MA–PD plans attracte 94 percent of total MA–P PD
ment.
enrollm
• M
Most MA–PD plans have no deductible: 89 perc D 012
cent of MA–PD offerings in 20 and 88 pe .
ercent in 2011. MA–
ans eductible attrac
PD pla with no de p al
cted about 88 percent of tota MA–PD enro 2.
ollment in 2012
• PD m
MA–P plans are more likely than PDPs to pro ovide some ad fits erage gap. In 2
dditional benef in the cove 2012,
PD ded p 24 h
50 percent of MA–P plans includ some gap coverage—2 percent with some gener and-
rics, but no bra
name drug coverage and 26 perc e d
cent with some generics and some brand- overage. Thos
-name drug co se
2 M
plans account for 52 percent of MA–PD enrollmment.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 163
A P remiums
Chart 10-7. Average Part D pr s
Average monthly Average moonthly Perce
entage
20 premium
011 mium
2012 prem change in
2011 w
weighted by 2012 weighted by weighted
enrollment 2011 enrollment 2012 lar
Doll aver
rage
n
(in millions) enrollment (in millions) enrollme nt nge
chan mium
prem
PDPs
overage
Basic co 13.9 $33 14.1 $33 $0
$ 0%
Enhanceed
coveraage 3.0 63 3.3 58 –4.5 –7
–
Any coveerage 17.0 38 17.5 38 –0.6 –1
–
MA–PDs s,
g
including SNPs*
overage
Basic co 1.1 27 1.3 27 –0.1 –1
–
Enhanceed
coveraage 7.5 12 8.0 12 0.1 1
Any coveerage 8.6 14 9.3 14 0.3 2
All plans
s
Basic cooverage 15.0 33 15.5 33 –0.1 0
Enhance ed
coveraage 10.6 26 11.3 26 –1.0 –4
–
Any cove erage 25.5 30 26.8 30 –0.5 –2
–
Note: PD (prescription drug plan), MA–
DP A
–PD (Medicare Advantage–Presc an]), SNPs (special needs plans). The
cription Drug [pla .
DPs
PD and enrollm ere ed
ment described he exclude employer-only plans and plans offere in U.S. territor D
ries. The MA–PD plans
nd
an enrollment de clude employer-o
escribed here exc territories, 1876 c
only plans, plans offered in U.S. t cost plans,
emonstrations, and Part B-only plans.
de
Reflects the portio of Medicare Advantage plans’ total monthly pr
*R on A remium attributa ble to Part D ben hat
nefits for plans th
ffer
of Part D covera age. MA–PD preemiums reflect re
ebate dollars (bet nt t
tween 67 percen and 73 percent of the difference e
etween a plan’s payment benchm
be p f t
mark and its bid for providing Part A and Part B seervices in 2012) that were used to
ffset Part D prem
of mium costs. Lowe average premiums for enhance MA–PD plans reflect a different mix of sponso
er ed s oring
rganizations and counties of oper
or PD
ration than MA–P plans with ba asic coverage.
Source: MedPAC analysis of CMS landsca data.
ape, plan report, and enrollment d
• The average prem
a b ained stable at around $ per mont in
mium paid by Part D enrollees rema $30 th
2012.
• The average prem
a miums for be PDP remained flat in 2012 at $38 pe
eneficiaries enrolled in P er
se an
month, a decreas of less tha $1.
• MA–P plans can lower the part of their monthly pre
PD emium attribu art ebate
utable to Pa D using re
rs—a portion (between 67 percent and 73 perce in 2012) of the difference betwee
dollar n 6 a ent en
the plan’s payme benchma and its bi for providiing Part A and Part B se
ent ark id –PD
ervices. MA–
plans may also enhance their Part D ben
s e bate dollars. Many MA–P plans use
nefit with reb PD e
te
rebat dollars in these ways, resulting in more enhan gs
nced offering and lower average
premiums compa DPs.
ared with PD
• The portion of Me
p edicare Advaantage prem
miums attribu escription dru benefits
utable to pre ug
ained flat (inc
rema ss h
crease of les than $1) in 2012, with the average MA–PD en ng
nrollee payin
p
$14 per month.
164 escription drugs
Pre s
o q ng
Chart 10-8. Number of PDPs qualifyin as pre ree S
emium-fr to LIS
nrollees remaine stable in 2012
en ed e 2
umber of PDPs t
Nu that have zero
er
Numbe of PDPs S
premium for LIS enrollees
on
PDP regio )
State(s) 2011 2012
2 ence
Differe 011
20 2012 Difference
1 ME, NHH 30 28 –
–2 7 8 1
2 A,
CT, MA RI, VT 34 30 –
–4 12 10 –2
3 NY 33 29 –
–4 11 12 1
4 NJ 33 30 –
–3 6 9 3
5 E,
DC, DE MD 33 31 –
–2 12 13 1
6 PA, WVV 38 36 –
–2 12 12 0
7 VA 32 30 –
–2 10 10 0
8 NC 33 30 –
–3 11 9 –2
9 SC 34 32 –
–2 15 12 –3
10 GA 32 30 –2
– 14 12 –2
11 FL 32 33 1 4 3 –1
12 AL, TN 34 32 –2
– 11 12 1
13 MI 35 34 –1
– 12 12 0
14 OH 34 33 –
–1 8 8 0
15 IN, KY 32 31 –1
– 14 13 –1
16 WI 32 29 –
–3 10 10 0
17 IL 35 33 –
–2 10 10 0
18 MO 32 30 –
–2 5 8 3
19 AR 34 30 –
–4 17 15 –2
20 MS 32 30 –
–2 14 12 –2
21 LA 32 30 –
–2 10 12 2
22 TX 33 33 0 12 13 1
23 OK 33 30 –
–3 10 9 –1
24 KS 33 31 –
–2 12 10 –2
25 IA, MN, MT, ND,
D,
NE, SD WY 33 33 0 10 9 –1
26 NM 32 30 –2
– 8 6 –2
27 CO 31 28 –3
– 7 5 –2
28 AZ 30 30 0 9 10 1
29 NV 31 29 –2
– 4 2 –2
30 OR, WA A 32 30 –2
– 8 9 1
31 ID, UT 35 33 –2
– 11 12 1
32 CA 33 33 0 5 6 1
33 HI 28 25 –3
– 6 10 4
34 AK 29 25 –4
– 5 4 –1
Total 1,109 1,041 68
–6 332
3 327 –5
Note: PD (prescription drug plan), LIS (low-income subsidy).
DP (
Source: MedPAC based on 2012 PDP land
n ded
dscape file provid by CMS.
• umber of stand-a
The nu alone PDPs decreased by 6 per e The
rcent around the country, from 1,109 in 2011 to 1,041 in 2012. T
n ns ch ed
median number of plan offered in eac region in 2012 is 30 compare with 33 in 20111.
• i d
Hawaii and Alaska had the fewest stan
nd-alone PDPs with 25; the Pen
w st n with
nnsylvania–Wes Virginia region had the most w 36.
• 2, o
In 2012 enrollees who receive Part D’ LIS have abou the same num
’s ut for ch
mber of options f PDPs in whic they pay no
um. 7 d
premiu In 2012, 327 PDPs qualified to be premium- nrollees, compar with 332 in 2
-free to those en red 2011.
• ast nrollees at no pre
Each region has at lea two PDPs available to LIS en gions have subs
emium; most reg zero
stantially more z
um
premiu plans availab ble.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 165
n m t
Chart 10-9. In 2012, most Part D enrol e s
llees are in plans that
harge higher cop
ch ts
payment for nonpreferr red
brand-nam drugs
me s
100
1
90
80
47
4 47
70
60
Percent
50
40
30 4
48
50
20
10
1
6 1
0
200
06 2007 2008 2009 20 010 2011 20
012 006
20 2007 008 2009 20
20 010 2011 2012
ees
PDP enrolle es
MA-PD enrollee
Other tier structure
eric
Two gene and two bran nd-name tiers
p ed
Generic, preferred brand, and nonpreferre brand-name ti ers
a
Generic and brand-name tiers
25% coins surance
Note: DP
PD (prescription drug plan), MA– –PD (Medicare Advantage–Presc
A an]). Calculations are weighted by
cription Drug [pla s y
nrollment. All calc
en e ns ddition, MA–PD p
culations exclude employer-only groups and plan offered in U.S . territories. In ad plans
xclude demonstra
ex cost plans. Sums may not add to totals due to rou
ation programs, special needs plans, and 1876 c unding.
Source: ed N wn
MedPAC-sponsore analysis by NORC/Georgetow University/Soc and Scientifiic Systems analy
cial es
ysis of formularie
ubmitted to CMS.
su
• In 2012, 48 perce of PDP enrollees are in plans tha distinguis between p
ent e e at sh preferred and
nonpreferred brand-name drugs; another 47 percent are in plans with two ge
t s wo
eneric and tw
brandd-name tiers In 2006, only 59 perce of PDP e
s. ent with
enrollees were in plans w such
nctions. Near all (97 pe
distin rly ercent) MA–P enrollees are in such plans in 20
PD s h m
012, up from 73
ent
perce in 2006.
• e P
For enrollees in PDPs that diistinguish be
etween prefe
erred and no
onpreferred b brand-namee
drugs the median copay in 2012 is $41 for a preferre brand an $93 for a nonpreferred
s, 2 f ed nd
d. an r ugs or
brand The media copay for generic dru is $5. Fo MA–PD en nrollees, in 2
2012, the
an
media copay is $42 for a pr nd, ed nd
referred bran $84 for a nonpreferre brand, an $6 for a
generic drug.
• Most plans, exce those tha use the de
ept at efined standa benefit’s 25 percent coinsurance for
ard s e
all drugs, also us a specialty tier for drugs that have a negotiate price of $
se y e ed $600 per month
or mo In 2012, median cos sharing fo a specialty tier drug is 30 percent among PDP
ore. st or y s Ps
3 a PD
and 33 percent among MA–P plans. En nrollees may not appeal cost sharing for drugs i
y in
speci ialty tiers.
166 escription drugs
Pre s
n u ilization management too
Chart 10-10. In 2012, use of uti ols
ontinues to incre
co s DPs and M
ease for both PD s
MA–PDs
PDPs Ds
MA-PD
40 0
40
2007 2008 2009 0
2010 2011 2012 2007 2008
2 2009 2010 2011 2012
35 5
35
30 0
30
25 5
25
Percent
20 0
20
15 5
15
10 0
10
5 5
0 0
Prior Step Quaantity Any Prior Step Q
Quantity Any
A
authorization
a t
therapy lim
mits utilization authorization therapy limits utiliz
zation
managem ment manag gement
Note: DP
PD (prescription drug plan), MA– –PD (Medicare Advantage–Presc
A an]). Calculations are weighted by
cription Drug [pla s y
nrollment. All calc
en e ns ddition, MA–PD p
culations exclude employer-only groups and plan offered in U.S . territories. In ad plans
xclude demonstra
ex ation programs, special needs plans, and 1876 c cent of listed che
cost plans. Value s reflect the perc emical
ntities that are su
en on an rior
ubject to utilizatio management, weighted by pla enrollment. Pr authorization means that the
nrollee must get preapproval from the plan before coverage. Step therapy refers to a requirement that the enrollee try
en m e p o e
pecified drugs firs before moving to other drugs. Quantity limits m
sp st g of
mean that plans liimit the number o doses of a dru ug
vailable to the en
av nrollee in a given time period.
Source: ed N wn cial ysis of formularie
MedPAC-sponsore analysis by NORC/Georgetow University/Soc and Scientifiic Systems analy es
ubmitted to CMS.
su
• n
The number of dr o
rugs listed on a plan’s fo
ormulary doe not neces
es esent benefic
ssarily repre ciary
ss
acces to medica s’ s
ations. Plans processes for nonform mulary excepptions, prior authorization
approval from plan befor coverage) quantity lim (plans li
(prea m re ), mits mber of doses of a
imit the num s
cular drug co
partic g
overed in a given time pe eriod), and s
step therapy requiremen (enrollee
y nts es
must try specified drugs befo moving to other drug can affec access to certain drugs.
d ore o gs) ct
For example, unlisted drugs may be cove
e h
ered through the nonforrmulary exce eptions proceess,
h
which may be rel y
latively easy for some pl lans and mo burdenso
ore ers.
ome for othe Alternati ively,
ormulary drug may not be covered in cases in w
on-fo gs b i n
which a plan does not ap or
pprove a prio
autho s e ncludes drug
orization request. Also, a formulary’s size can be deceptively large if it in gs
a er
that are no longe used in co ommon pract tice.
• In 2012, the aver e -alone presc
rage enrollee in a stand- some form o
cription drug plan faces s of
ation manag
utiliza 6 f d s
gement for 36 percent of drugs listed on a plan’s formulary, compared w with
31 pe e M art
ercent for the average MA–PD plan enrollee. Pa D plans ty ypically use quantity limits or
e
prior authorization to manage enrollees’ prescription drug use.
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 167
C ristics of Part D e
Chart 10-11. Character f s,
enrollees 2010
All Plan type Subsidy status
S
Medicare Part D PDP D
MA–PD LIS LIS
Non-L
Beneficiarie a (in millions)
es 49.9 29.7 18.9
9 10.6 3
11.3 4
18.4
o
Percent of all Medicare 100% 60% 38
8% 21%% 23% 7%
37
Gender
Male 45% 41% 40%
% 43% 39% 43
3%
Female 55 59 0
60 57 61
6 7
57
Race/ethnicity
on-Hispanic
White, no 77 74 76
6 71 58
5 4
84
A
African American,
non-His spanic 10 11 11 11 20 6
Hispanic 8 10 8 14 15 7
Asian 3 3 3 3 5 2
Other 2 2 2 1 2 1
s)
Age (years
<65 22 23 7
27 17 4
42 2
12
65–69 24 22 0
20 26 14 7
27
70–74 18 18 7
17 20 13 21
75–79 14 14 3
13 16 11 6
16
80+ 22 22 3
23 21 20 4
24
yb
Urbanicity
Metropolitan 78 79 4
74 88 77
7 0
80
Micropoli
itan 12 12 5
15 7 13 1
11
Rural 8 9 11 4 10 8
Average ris scorec
sk 1.062 1.117 1.137
7 1.083 1.217 5
1.055
elative to all Part D
Percent re 100% 102%% 97% 1099% %
94%
Note: DP
PD (prescription drug plan), MA– –PD (Medicare Advantage–Presc
A an]), LIS (low-inco
cription Drug [pla ome subsidy). To otals
00 o
may not sum to 10 percent due to rounding.
a
F
Figures for Medic i
care and Part D include all benef east one month o enrollment in the respective pro
ficiaries with at le of ogram.
assified as LIS if that individual re
A beneficiary is cla ar.
eceived Part D’s LIS at some poiint during the yea For individual who ls
sw d o
witch plan types during the year, classification into plan types is ba er
ased on a greate number of months of enrollment.
Ab t to
bout 200,000 enrollees could not be classified int a plan type du e to missing data a.
b
U nd
Urbanicity based on the Office of Management an Budget’s core al
e-based statistica area. A metrop politan area conta ains a
ore f e
co urban area of 50,000 or more population, and a micropolitan a t ut
area contains an urban core of at least 10,000 (bu less
than 50,000) popu p are s
ulation. About 1 percent of Medica beneficiaries were excluded due to an uniden sed
ntifiable core-bas
signation.
statistical area des
c
P he ory
Part D risk scores are calculated by CMS using th prescription d rug hierarchical condition catego model develo oped
beefore 2006. Risk scores shown he are not adjus
ere tatus (multipliers)
sted for LIS or in stitutionalized st ).
Source: rt r tment System file from CMS.
MedPAC analysis of Medicare Par D denominator and Risk Adjust es
• re
In 2010, 29.7 million Medicar beneficiar cent) enrolled in Part D a some poin in
ries (60 perc at nt
the ye Most of them (18.9 million) wer in stand-a
ear. f re alone PDPs, with 10.6 m –PD
million in MA–
s. er eceived Part D’s LIS.
plans A little ove 11 million enrollees re
ontinued nex page)
(Chart co xt
168 escription drugs
Pre s
C ristics of Part D e
Chart 10-11. Character f s, (continue
enrollees 2010 ( ed)
• Comp he M pulation, Part D enrollees are more likely to be
pared with th overall Medicare pop rt s
female and non-W PD s kely to be dis
White. MA–P enrollees are less lik eficiaries und
sabled bene der
6 e ompared with PDP enrolllees; LIS en
age 65 and more likely to be Hispanic co h nrollees are more
likely to be female, non-White and disab
y e, mpared with n
bled beneficiiaries under age 65 com non-
e
LIS enrollees.
• erns of enroll
Patte lment by urbbanicity for Part D enrolle were sim
P ees milar to the o
overall Medicare
7 n an
population with 79 percent in metropolita areas, 12 percent in mmicropolitan areas, and the
rema cent in rural areas.
aining 9 perc a
• The average risk score for PDP enrollees is higher ( 1.137) than the average for all Part D
a k s e
enrollees (1.117) while the average risk score for MA
), a r
A–PD enrolllees is lower (1.083).
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 169
t 010
Chart 10-12. Part D enrollment trends, 2006–20
2006 2007 2008 2009 2010
nrollment, in millions*
Part D en m
Total 24.5 26.1 27.5 28.7 29.7
t
By plan type
PDP 17.7 18.3 18.6 18.7 18.9
MA–PD D 6.8 7.8 8.9 10.0 10.6
dy
By subsid status
LIS 10.2 10.4 10.7 10.9 11.3
Non-LIS 14.3 15.7 16.9 17.8 18.4
ethnicity
By race/e
White, non-Hispanic 17.2 19.4 20.5 21.4 22.0
n
African American, non-Hispanic 2.6 2.9 3.1 3.2 3.3
Hispannic 2.2 2.5 2.7 2.8 3.0
Other 2.5 1.3 1.3 1.3 1.4
By age (y
years)
<65 5.6 6.1 6.4 6.6 6.9
65–69 5.0 5.4 5.9 6.3 6.6
70-79 8.3 8.7 9.0 9.3 9.6
80+ 5.6 6.0 6.3 6.4 6.6
Enrollme growth, in percent
ent
Total — 7% 5% 4% 4%
By plan type
t
PDP — 4 2 <1 1
MA–PD D — 14 14 12 6
dy
By subsid status
LIS — 2 2 2 4
Non-LIS — 10 8 6 3
By race/e
ethnicity
White, non-Hispanic — 13 5 4 3
African American, non-Hispanic
n — 13 5 4 4
Hispannic — 14 6 6 6
Other — –49 6 <1 6
years)
By age (y
<65 — 8 6 4 4
65–69 — 8 8 7 5
70–79 — 5 4 4 3
80+ — 7 4 3 2
Note: DP d
PD (prescription drug plan), MA–P (Medicare Adv
PD vantage–Prescrip ), me
ption Drug [plan]) LIS (low-incom subsidy).
Figures include all beneficiaries with at least one month of enrollmen A beneficiary is classified as LI if that individua
*F nt. IS al
eceived Part D’s LIS at some point during the year. If a beneficiary w enrolled in bo a PDP and an MA–PD plan du
re L t was oth n uring
the year, that individual was classified into the type of plan with a gre
o eater number of m ment. About 200,0
months of enrollm 000
en t o e . not due
nrollees could not be classified into a plan type due to missing data. Numbers may n sum to totals d to rounding.
Source: MedPAC analysis of Medicare Par D denominator file from CMS.
rt r
• een d PD
Betwe 2006 and 2010, MA–P plan enroll lment grew fa
aster (by more than 10 per
e rcent per yearr
een y
betwe 2006 and 2009, and by 6 percent be etween 2009 and 2010) co h s
ompared with growth rates of
han d The
less th 5 percent per year for prescription drug plans. T number o f enrollees re eceiving the LIS
remai y n 009, while the number of n
ined relatively flat between 2006 and 20 e non-LIS enrolllees grew by 10
ent
perce in 2007, 8 percent in 20 9. er
008, and 6 percent in 2009 The growth in the numbe of LIS and non-
LIS en d r
nrollees was 3 percent and 4 percent, respectively, b 9
between 2009 and 2010.
170 escription drugs
Pre s
t on,
Chart 10-13. Part D enrollment by regio 2010
Percent of
P ollment
Perce nt of Part D enro
are
Medica enrollment Plan type Subsidy status
PDP
region State(s) Part D RDS PDP
P –PD
MA– LIS n-LIS
Non
1 ME, NH 56% 12% 8
85% 1 5% 49% 51%
5
2 CT, MA, RI, VT 59 18 6
69 31
3 43 57
5
3 NY 60 18 5
55 45
4 46 54
5
4 NJ 53 22 8
81 19 35 65
6
5 DE, DC, MD 47 17 8
86 14 41 59
5
6 PA, WV 63 13 5
56 44
4 33 67
6
7 VA 53 10 7
78 22
2 37 63
6
8 NC 60 16 7
75 25
2 43 57
5
9 SC 55 16 7
77 23
2 45 55
5
10 GA 61 10 6
69 31
3 43 57
5
11 FL 61 13 5
53 47
4 35 65
6
12 AL, TN 61 13 6
65 35
3 47 53
5
13 MI 48 31 7
73 27
2 40 60
6
14 OH 55 23 6
63 37
3 36 64
6
15 IN, KY 60 14 8
80 20
2 39 61
6
16 WI 55 15 6
63 37
3 33 67
6
17 IL 56 19 8
87 13 38 62
6
18 MO 63 11 6
69 31
3 35 65
6
19 AR 61 9 8
80 20
2 45 55
5
20 MS 65 6 8
88 12 54 46
4
21 LA 62 13 6
65 35
3 49 51
5
22 TX 57 15 6
69 31
3 45 55
5
23 OK 60 8 7
79 21
2 38 62
6
24 KS 63 7 8
85 15 29 71
7
25 IA, MN, MT, NE,
ND, SD, WY 66 9 73
7 2
27 27 73
7
26 NM 62 8 6
62 38
3 39 61
6
27 CO 59 13 4
49 51
5 29 71
7
28 AZ 61 12 4
45 55
5 32 68
6
29 NV 56 13 4
48 52
5 29 71
7
30 OR, WA 59 11 5
59 41
4 31 69
6
31 ID, UT 58 10 5
56 44
4 28 72
7
32 CA 70 9 5
51 49
4 39 61
6
33 HI 66 4 4
44 56
5 29 71
7
34 AK 39 26 9
99 1 62 38
3
Mean 60 14 64
6 3
36 38 62
6
Minimum 39 4 4
44 1 27 38
3
Maximum 70 31 99
9 5
56 62 73
7
Note: DP S
PD (prescription drug plan), RDS (retiree drug suubsidy), MA–PD ((Medicare Advan on LIS
ntage–Prescriptio Drug [plan]), L
ow-income subsidy). Definition of regions based on PDP regions u
(lo f o used in Part D.
Source: MedPAC analysis of Part D enrollm C
ment data from CMS.
• ng n t
Amon Part D regions, in 2010, between 39 percent and 70 perc Medicare
cent of all M
beneficiaries enro
olled in Part D. Beneficia more likely to enroll in Pa D in regio
aries were m o art ons
where a low take
e as . ple, n
e-up rate for the RDS wa observed. For examp in Region 32 (Califor rnia)
R
and Region 33 (HHawaii), the shares of Medicare ben nrolled in Pa D were 70
neficiaries en art 0
ent p
perce and 66 percent, resp t egions, fewe than 10 pe
pectively. In these two re er ercent of
olled in emp
beneficiaries enro ployer-spons sored plans t d
that received the RDS.
• de w nrollees who enrolled in PDPs and M
A wid variation was seen in the shares of Part D en o MA–
PD plans across PDP regions. The patte of MA–P D enrollmen is generall consistent with
ern nt ly t
enrollment in Medicare Advantage plans.
(Chart co xt
ontinued nex page)
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 171
t on, ued)
Chart 10-13. Part D enrollment by regio 2010 (continu
• s rt s t ged
The share of Par D enrollees receiving the LIS rang from 27 p Region 25 (Io
percent in R owa,
Minne D
esota, Montana, North Dakota, Neb h nd g)
braska, South Dakota, an Wyoming to 62 perc cent
egion 34 (Ala
in Re DP LIS es or
aska). In 26 of the 34 PD regions, L enrollee account fo 30 percen to nt
ercent of enr
50 pe t (Mississippi) and Region 34 (Alaska
rollment. In two regions, Region 20 ( ) n a),
e count for mo than half of Part D en
LIS enrollees acc ore nrollment.
172 escription drugs
Pre s
art
Chart 10-14. The majority of Pa D spe s ed wer
ending is incurre by few
han ollees, 20
th half of all Part D enro 010
100
4
5
90
30
80 19
70
14
60 74
Percent
50
48 l
Annual spending on n
31 ription drugs
prescr
40
≥ $10,000
30
440-$9,999
$6,4
20 830-$6,439
$2,8
24 25 10-$2,829
$31
10
$0-$309
1
0
nt aries
Percen of beneficia pending
Percent of sp
Note: cent due to round
Numbers may not sum to 100 perc ding.
Source: MedPAC analysis of Medicare Par D prescription drug event data from CMS.
rt
• ed
Medicare Part D spending is concentrate among a subset of be eneficiaries. In 2010, 28
perce of Part D enrollees had annual spending of $
ent h s $2,830 or more, at which point enrollees
e rcent of the cost of the d
were responsible for 100 per c drug until the spending reached $6,
eir ,440
under the defined standard benefit. Thes beneficiar
d b se ted
ries account for 74 pe al
ercent of tota
Part D spending.
• The costliest 9 pe
c t rug
ercent of beneficiaries, those with dr spending above the catastrophic
t s
threshold under the defined standard ben nefit, accoun percent of to Part D
nted for 44 p otal
spending. Slightly over three-quarters of beneficiarie with the highest spend
y es e
ding receive Part
D’s lo s e 5). g
ow-income subsidy (see Chart 10-15 Spending on prescrip is
ption drugs i less
conce P
entrated than Medicare Part A and Part B spend 0, est nt
ding. In 2010 the costlie 5 percen of
beneficiaries acc 3 f
counted for 38 percent of annual Me dicare fee-fo FFS) spendin
or-service (F ng,
and the costliest quartile accounted for 81 percent of Medicare F
t 8 f FFS spendin ng
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 173
C
Chart 10-15. Character f enrollees by spe
ristics of Part D e s, ending
evels, 2010
le
g
Annual drug spending
$2,830
<$ $2,830–$66,440 >$6,440
Sex
Male 42% 38% 39%
Female 58 62 61
Race/ethnnicity
n
White, non-Hispanic 74 75 71
A
African American, non-Hispanic 11 11 14
Hispanicc 10 9 10
Other 5 5 5
rs)
Age (year
<65 21 22 44
65–69 24 19 14
70–74 19 18 13
75–80 14 15 11
80+ 21 26 19
LIS status
s*
LIS 31 46 77
Non-LISS 69 54 23
e**
Plan type
PDP 61 70 80
MA–PD 39 30 20
Note: LIS (low-income subsidy), PDP (pr p
rescription drug plan), MA–PD (MMedicare Advanta n
age–Prescription Drug [plan]). A small
umber of benefic
nu uded from the an
ciaries were exclu of
nalysis because o missing data. Totals may not s ent
sum to 100 perce due
to rounding.
A a ual t e e
*A beneficiary is assigned LIS status if that individu received Part D’s LIS at some point during the year.
w oth a
**If a beneficiary was enrolled in bo a PDP and an MA–PD plan d that individual wa classified in th type
during the year, t as he
f ater m
of plan with a grea number of months of enrollm ment.
Source: rt a nominator file from CMS.
MedPAC analysis of Medicare Par D prescription drug events data and Part D den m
• aries with an
In 2010, beneficia s more than $2,830 were more likely t be
nnual drug spending of m to
female than beneeficiaries with annual spending below $2,830 (62 percent an 61 percen
w nd nt
comp 8
pared with 58 percent).
• Bene h
eficiaries with annual spe
ending great than $6,4 are more likely to be disabled
ter 440 e e
der
beneficiaries und age 65 and receive the LIS comp hose with an
pared with th nnual spending
below $2,830.
w
• Most beneficiarie with spend
es r 0 ed alone PDPs (80
ding greater than $6,440 are enrolle in stand-a
perce compare with MA–
ent) ed –PD plans (2 percent). On the othe hand, beneficiaries wit
20 er th
annual spending below $2,83 are more likely to be in MA–PDs compared w those w
30 with with
highe annual spending (39 percent com
er p 20 g e
mpared with 2 percent). This finding reflects the fact
m rollees are more costly on average a are in P
that most LIS enr m o and PDPs.
174 escription drugs
Pre s
ending and utiliz
Chart 10-16. Part D spe a er ee,
zation pe enrolle 2010
Plan type LIS status
Part D DP
PD PD
MA–P LIS Non-LIS
oss
Total gro spending (billions) $77.7 $56 .7 $20.9
9 $43.3
$ 34.4
$3
Total num criptionsa
mber of presc
1,406 44
94 2
462 629 777
7
ns)
(million
Average spending per prescription
n $55 60
$6 $45
5 $69 $44
$
Per enroollee per monnth
Total spending $231 65
$26 $172
2 $348
$ $163
Out-of--pocket spend b
ding 40 4
41 7
37 8 59
abilityc
Plan lia 138 54
15 111 197 103
Low-inc haring subsidy
come cost sh y 53 7
70 3
23 142 N/A
N
tionsa
Numbe of prescript
er 4.2 4 .4 8
3.8 5.1 3.7
Note: DP
PD (prescription drug plan), MA– –PD (Medicare Advantage–Presc
A cription Drug [pla ome subsidy), N/ (not
an]), LIS (low-inco /A
ap ug r
pplicable). Part D prescription dru event (PDE) records are class ypes based on the contract identif
sified into plan ty fication
n or
on each record. Fo purposes of cl lassifying the PD records by LIS status, monthly LIS eligibility in
DE S y rt
nformation in Par D’s
de w
enominator file was used. Estima ates are sensitive to the method u
e used to classify P PDE records to e nd
each plan type an LIS
m
status. Numbers may not sum to to nding.
otals due to roun
a
N
Number of prescriptions standard y
dized to a 30-day supply.
b
O
Out-of-pocket (OOP) spending includes all payme oward the annua OOP spending threshold.
ents that count to al
c
P udes plan payments for drugs cov
Plan liability inclu vered by both baasic and supplem d)
mental (enhanced benefits.
Source: rt nd file
MedPAC analysis of Medicare Par D PDE data an denominator f from CMS.
• 10,
In 201 gross spe ugs
ending on dru for the Pa D program totaled $77 billion, wit roughly thr
art m 7.7 th ree-
ers
quarte ($56.7 bil ted
llion) account for by Meedicare benef .
ficiaries enrolled in PDPs. Part D enrollees
ving the LIS accounted for about 56 pe
receiv a 3 he
ercent ($43.3 million) of th total.
• The number of pre
n led otaled 1.41 billlion, with abo 67 percen
escriptions fill by Part D enrollees to out nt
m unted for by PDP enrollee The 38 pe
(944 million) accou P es. ollees who re
ercent of enro IS
eceived the LI
unted for abo 45 percen (629 million of the total number of pr
accou out nt n) rescriptions ffilled.
• Medic aries enrolled in Part D plans fill 4.2 pr
care beneficia d at month on aver
rescriptions a $231 per m rage.
ve
PDP enrollees hav higher ave and ed
erage monthly spending a more prescriptions fille compared with d
PD
MA–P plan enrollees.
• a
The average mont ility PD
thly plan liabi for MA–P enrollees ($111) is con wer
nsiderably low than that of
154), while av
PDP enrollees ($1 hly
verage month OOP spen ees
nding is similar for enrolle in both typpes
ans $
of pla ($37 vs. $41). The ave e g
erage monthly low-income cost sharing subsidy is m or
much lower fo
PD
MA–P enrollees ($23) compa P $70).
ared with PDP enrollees ($
• Avera monthly spending per enrollee for an LIS enrolllee ($348) is more than do
age s r ouble that of a
LIS
non-L enrollee ($163), while the average number of pr filled per mon by an LIS
rescriptions f nth
lee
enroll is 5.1 com 3
mpared with 3.7 for a non- . es h
-LIS enrollee. LIS enrollee have much lower OOP
spend rage, than non-LIS enrolle ($8 vs. $5 Part D’s LIS pays for most of the c
ding, on aver ees 59). cost
ng aging $142 per month.
sharin for LIS enrollees, avera p
A Data Book: Health care spendi and the Me
D ding edicare program June 2012
m, 175
s cross reg
Chart 10-17. Part D risk scores vary ac y
gions, by plan type
nd S
an by LIS status, 2010
Perccent Perc
cent of rage risk score (RxHCC)
Aver e
ed
enrolle in art
Pa D
PDP s
PDPs vs. ollees
enro
region State(s) MA–P PDs ving LIS
receiv Pa D
art DP
PD D
MA–PD LIS Non-LIS
Average absolute risk score
All regions 1 .117 1.137 1.083 1.217 1.055
Average nor core (mean = 1
rmalized risk sc 1.0)
1 ME, NH 85% 49% 0
0.974 971
0.9 0.925 0.956 0.962
2 T
CT, MA, RI, VT 69 43 1 .009 008
1.0 1.001 1.007 0.995
3 NY 55 46 1 .029 1.0
055 1.007 1.015 1.019
4 NJ 81 35 1 .036 1.0
038 0.981 1.032 1.045
5 DE, DC, MD 86 41 1 .028 1.0
016 1.025 1.028 1.021
6 PA, WV 56 33 1 .008 015
1.0 1.008 1.009 1.018
7 VA 78 37 1 .000 0.9
993 0.991 1.003 0.999
8 NC 75 43 1 .020 1.0
017 1.008 1.024 1.004
9 SC 77 45 1 .026 1.0
009 1.058 1.011 1.021
10 GA 69 43 1 .027 1.0
025 1.023 1.018 1.020
11 FL 53 35 1 .058 1.0
067 1.060 1.061 1.062
12 AL, TN 65 47 1 .047 1.0
031 1.076 1.033 1.034
13 MI 73 40 1 .016 033
1.0 0.950 1.030 1.002
14 OH 63 36 1 .029 1.0
042 1.009 1.057 1.018
15 IN, KY 80 39 1 .013 011
1.0 0.987 1.016 1.008
16 WI 63 33 0
0.954 968
0.9 0.930 0.991 0.945
17 IL 87 38 0.988
0 981
0.9 0.949 0.988 0.988
18 MO 69 35 0
0.999 006
1.0 0.975 1.023 0.992
19 AR 80 45 0.997
0 985