Medicare's midlife crisis

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John O'Connor, editorial director, McKnight's Long-Term Care News
John O'Connor, editorial director, McKnight's Long-Term Care News
The Medicare program just marked its 47th anniversary. Whether that milestone is a cause for celebration or concern is open to debate.

What's not in doubt is that the program has profoundly improved healthcare for our nation's seniors. And any long-term care operator who views the program as anything less than a blessing could rightly be accused of being a first-rate ingrate.

Medicare is now the second-largest funding source for this field. And thanks to a massive influx of Medicare-paid rehab services in recent years, it has actually taken over the No. 1 spot at quite a few facilities.

Providers have spent a lot of time in the past year grousing about Medicare funding adjustments. In many cases, the concerns have been legitimate. But let's put things in perspective. Yesterday, the Centers for Medicare & Medicaid Services made it official with an announcement that Medicare payments would rise by 1.8% next year, or $670 million.

When 2% of your revenue from one stream is around $700 million, you really need to be careful about how much you complain. That is, unless you can find a better deal someplace else. Good luck with that.

But for all of its bounty to the field, Medicare has a bit of a midlife crisis to deal with. In their annual report a few months ago, the trustees of the Medicare program predicted that the program now has less than a dozen years of solvency remaining.

Others caution that such a timeline is overly optimistic. They argue Medicare will go bankrupt by 2016 if the healthcare reform law's tax increases and spending cuts are counted honestly.

In one section of the Medicare trustees' report, Richard Foster (who is the independent actuary for CMS) noted that the new healthcare law could hasten Medicare's demise.

“While the Affordable Care Act makes important changes to the Medicare program and substantially improves its financial outlook, there is a strong likelihood that certain of these changes will not be viable in the long range,” Foster wrote.

“Without unprecedented changes in healthcare delivery systems and payment mechanisms, the prices paid by Medicare for health services are very likely to fall increasingly short of the costs of providing these services,” he added.

In other words, providers can look forward to a Medicare program that increasingly looks and acts like the Medicaid program. That's a birthday surprise we can all live without.

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Daily Editors' Notes

McKnight's Daily Editors' Notes features commentary on the latest in long-term care news and issues. Entries are written by Editorial Director John O'Connor, Editor James M. Berklan, Senior Editor Elizabeth Newman and Staff Writer Marty Stempniak.

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