‘It’s called cost shifting and it’s bad for Americans’

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09/15/2017

A wrote a blog a few weeks back called “Head banging” about the share of Medicare spending on DME, and the concentration of Medicare spending in different areas of health care. The source was the Medicare Payment Advisory Commission’s “A data book: Health care spending and the Medicare program.”

A reader emailed me this week to point out another data point of interest in this whopping 214-page report (I told you I didn’t read it all).

Chart 6-18 features data on the “discharge destination of Medicare fee-for-service beneficiaries served in acute care hospitals, 2006-15.”

As you can see the percentage of patients whose destination was home self-care dropped from 52.3% in 2006 to 45.5% in 2015.

The reader wrote: “That means about 13% more patient are discharged to skilled nursing and home health with organized health care. Much more expensive. That’s what you get with a watered down DME industry. I ran a DME company for 28 years and we all saw this coming. It’s called cost-shifting and it’s bad for Americans.”

I wrote back: “Great point. This stat further surprises me because of all the efforts in recent years to shift care into the home. I guess 2015 was a little early for that to start having an impact, though. Will be interesting to see what the 2016-17 numbers show.”

Though I will say, now that I’ve thought about it further, those efforts I mentioned have focused on post-acute care services, which runs the gamut of anything outside the hospital, not necessarily in the home. But this reader is taking things a step further, saying everything but the home is more expensive and if discharges to the home are decreasing, health care is moving in the wrong direction.

The reader wrote back again: “We were clinical respiratory until around 2006. Reimbursement was good for oxygen and competition demanded that your services be excellent. We had a registered respiratory therapist visit our oxygen patients every three months. They checked the concentrator, they discussed portability, they took a pulse oximetry, blood pressure, etc. If the patient’s oxygen saturation was good without oxygen, we contacted physician and D/C'd oxygen. Competition and fair reimbursement allowed DME companies to keep patients from more expensive home health care agencies and skilled nursing. Now the data is proving it.  DME expenses have dropped 50% over the last 11 years—2% to 1%? I suppose congratulations to CMS for saving 50% on the smallest segment, DME. Real head smasher.”

Indeed.