New York Times Examines Increase in Number of Specialty Hospitals in United States
The New York Times on Sunday examined how the Medicare payment system for inpatient care "with its emphasis on procedures and its weak ties to the actual costs of providing care" has led to growth of specialty hospitals to treat conditions with higher Medicare reimbursement rates. There is a "building boom" for centers to provide cardiac, surgery and orthopedic care, but psychiatric, preventive and case management services "get the short shrift," according to the Times. The current Medicare payment system tracks data from hospitals and sets reimbursement rates based on average prices for medical services. Because charges "often bear little relation to a hospital's actual costs" and hospitals rarely lower prices even if costs fall, Medicare "frequently pays too much for some kinds of care and too little for others," the Times reports. Although no provisions in legislation to add a prescription drug benefit to Medicare directly addresses hospital payments, lawmakers are considering a measure that would make it more difficult for physicians to invest in and refer patients to specialty hospitals. According to the Times, lawmakers "focus on small fixes" because efforts for larger reforms have "been blunted by the unwillingness of Congress to better analyze the cost of care." Some critics have said that allocating a greater share of Medicare's budget to program administration would allow more funding for cost research. CMS Administrator Tom Scully said that "prices are being fixed" by the government, adding that private insurers are better equipped to set payment schedules and deliver care (Abelson, New York Times, 10/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.