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Bundling payments may make biggest dent in health care spending

Having a single flat rate for an episode of patient care -- rather than a separate charge for the various services received -- is the strategy with the most potential to reduce health system costs, according to a paper published online in the New England Journal of Medicine Nov. 11. "There are a lot of potential savings," said Peter S. Hussey, PhD, a policy researcher at the RAND Corp. Researchers analyzed data on eight options for controlling the amount of money spent on health care. Bundling payments has the potential to reduce the total cost of medical care nationally by 5.4% if used in both the inpatient and outpatient setting, and if expenses related to avoidable complications can be cut by between 25% and 50%. If bundling is applied only to hospital services, the expense reduction would be 0.1%. "Hospitals are the most feasible place to start, but it is not where the significant savings are," Hussey said. This proposal is controversial, however, and attempts by variou ...

Medicare, Medicaid spent $54 billion too much in 2009, White House says

Washington -- Improper payments for health care made up a large portion of the $98 billion the federal government spent inappropriately in fiscal 2009. This total was an increase of $26 billion over the previous year, according to a report issued by the White House Office of Management and Budget. The Nov. 17 report concluded that Medicare fee for service improperly spent $24 billion in fiscal 2009, a rate equivalent to 7.8% of total outlays, and Medicaid improperly spent $18 billion, a rate of 9.6%. Medicare Advantage improperly spent $12 billion in 2009, a rate of 15.4% of total outlays on the private plans. The Medicare fee-for-service error rate was just 3.6% in 2008. The Dept. of Health and Human Services attributed some of the stark increase in improper payments to a new, more rigorous method of calculating error rates, in keeping with President Obama's stated commitment to reducing fraud and waste. "Through a more stringent review of Medicare claims, we've been able ...

Aetna's Tricare contract under review for

The U.S. Government Accountability Office said it found that Aetna created the appearance of an unfair advantage in its pursuit of the Tricare contract it was awarded earlier this year. The GAO is recommending that the government re-evaluate the contract bids. Tricare is the Dept. of Defense's health plan for current and retired military service members, their families and survivors. Tricare management is split into three regions: South, North and West. The new North contract, originally awarded to Aetna, would be worth an estimated $16.7 billion over five years. The GAO upheld a contract award protest by Health Net, which holds the current Tricare contract for the North region. The partially redacted decision and recommendations were released to the public Nov. 17. Among several reasons it listed to uphold Health Net's protest, the GAO found that Aetna "created the appearance of impropriety" in its pursuit of the contract by hiring a former chief of staff for the Tricare M ...