Obama Cutting Medicare Payments For Bad Hospitals: A Step In The Right Direction


Do you want to improve the care provided by hospitals? Cutting the Medicare reimbursement rate based upon patient care is a good start!

President Obama finalized plans to reward hospitals that provide good care that changes the way that the federal government pays for health care. Under the initiative, Medicare will pay more to hospitals scoring well on a series of patient care measures and pay less to those institutions that do not score well. This is new for the nation’s hospitals, who previously got paid regardless of the quality of care they provided.

Hospitals who fail to meet the patient quality standards can lose as much as 1 percent of what Medicare would pay them in 2013. Not so bad, right? Actually, hospitals receive $150 billion in Medicare payments from the federal government. 1% of $150 billion is how much? Well, you get the point.

Medicare provides insurance to 50 million elderly and disabled Americans and paid for 12.4 million hospitalizations in 2009, according to the Centers for Medicare and Medicaid Services. Many of these paient receive poor care, which increases the costs by requiring additional hospital stays and more treatment. A recent study by the journal, Health Affairs, estimated that 1 in 3 hospital patients had an “adverse event”, such as being given the wrong medication acquiring an infectin or receiving the wrong surgical procedure.

The report card for hospitals will include 12 process measures, whch tracks patient quality care measures, such as how quickly heart attack victims are given anti-clotting medications and how quickly surgical patients receive antibiotics after surgery to reduce infections. In 2014, the Obama administration will expand the report card to include outcome measures, such as mortality rates for patients after they leave the hospital and the prevalence of hospital-acquired infections and pressure sores.

At a time when our nation is at risk of having its credit rating lowered, these steps are a great step in reducing Medicare expenses and improving the quality of care at hospitals. Nice work, President Obama!

If you have any opinions on this subject (good or bad), I will appreciate your comments. Thank you for taking the time to read this blog.