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Medscape
7 minutes ago
- Medscape
Medicare at 60: Good for Doctors, Patients?
Sixty years ago, Congress passed legislation that created Medicare . In 1966, its first year of implementation, there were 19.1 million enrollees. Almost a decade later, enrollment had grown to 22.5 million. Today, 68.8 million Americans have Medicare coverage, with about half enrolled in Advantage plans. The original idea for this insurance program was even bigger, with President Harry Truman endorsing universal coverage in 1945. As Medicare turns 60, Medscape convened an expert panel to discuss the successes — and shortcomings — of this landmark insurance program. Jen Brull, MD: For everyone on the panel, how might Medicare use AI (artificial intelligence) more generally over the next 50 years? Jonathan Gruber, PhD: As with many things, there's a right level of prior authorization, and we need to let data inform that. We need to be collecting a lot of data on who's using prior authorization, how it's being used, and how productive it is. And we need to recognize that the right answer is not "zero" or "every single visit." It's somewhere in between. We need to be putting more resources into studying that and figuring out what the right level is. I want to take a slightly more optimistic view of AI in two senses. One is, I think that right now a fundamental problem in healthcare is that not all people are practicing at the top of their professional abilities. We have doctors taking blood pressure in some places; doctors should never take a blood pressure. We have nurses who are unable to give pills in some places, and nurses should be perfectly qualified to give pills. I think AI can give us more confidence in allowing people to practice at the very top of their professional abilities. The other is long-term care. Elder loneliness is a huge problem in our country; proper long-term care is a huge problem. The attacks on immigration in this country — and there are attacks — are going to make the problems worse, because many of the caregivers in the United States are immigrants. My hope is that AI can play a productive role in helping provide care for our nation's elderly and disabled. So I have a slightly optimistic view of how AI can maybe make our healthcare system better. Improving Diagnosis Norman Ornstein, PhD: Let me give a slightly optimistic view. I have regularly read in the health and science sections in the Washington Post and The New York Times these stories about people who have horrendous health issues that go on for years that are undiagnosed or misdiagnosed until somebody realizes it's some rare thing that they had never encountered before, or you find a physician who'd encountered it once and they managed to deal with it and cure it. You can imagine AI being an enormous boon to physicians, allowing them to put in symptoms that somebody's having and a little bit of history and end up finding things that siloed physicians otherwise would not see. On the other hand, you can see AI being used, and sometimes misused, by insurance companies for billing purposes or to try to find ways to save money, but also to substitute for physicians — whether that will be a good thing or a bad thing. Claudia M. Fegan, MD: I think Jon made some very important points, that there are opportunities to use AI to assist physicians in diagnostic approaches. It also would be very beneficial in terms of identifying patients. We have a lot of patients who we are not touching, and there are preventive measures that we could take. Given a certain family history, given the vital signs, their weight and their background, you could anticipate certain problems that are not addressed. And I think that can push us to make better, data-driven decisions. It's an advantage that AI can provide, and we can easily put it in the hands of clinicians who are on the front line to make good decisions about patients going forward. But I think the threat here is insurance companies who may misuse it for other purposes, whether to deny coverage to people or to try to avoid expensive treatments that might be appropriate. Brull: Certainly, as one of the two primary care specialists in this group, I would say I'm very optimistic about AI and I see that it could be a team member. I also often say that I've never seen a chatbot give a hug to a patient. And as far as I know, patients don't just come to the doctor to plug their finger in and find out what's wrong. They come to partner, and so I think all of us see optimistic futures let's start with our two nonphysicians on the panel for this question. A Public Good Do you think Medicare has been good to the American people financially? Doctors complain all the time about reimbursement rates, but do you think those rates are reasonable? Let's start with you, Dr Ornstein. Ornstein: I think physicians in many instances have found ways around the lower reimbursement rates, which has often led to many unnecessary tests or other procedures so that they can get compensated adequately. I am very fearful, going back to a point that I made earlier, if these sequesters, this is the statutory Pay-As-You-Go plan that requires big cuts in Medicare because of the deficits being run up in the reconciliation bill, they limit them to 4% a year. But you know, that could even cut reimbursement rates more, and that will create a big problem. It may mean more physicians who decline to take Medicare, and that is going to create a burden for an awful lot of people along the way. Gruber: In terms of your specific question, what has it meant for the financial health of Americans, it has unambiguously been incredible. Amazing studies show that the introduction of Medicare led to massive reductions in the financial uncertainty facing elderly Americans with their medical spending. Has it been good for doctors? Unambiguously. It has been a huge boon to their business. One thing we know from every health economic study is, if you lower prices, more people use more medical care. Medicare did that. They lowered prices and people use more medical care. It's been a huge boon to the medical industry. I think the big question going forward is how to set the rates and in a way that balances our fiscal needs against the needs to have qualified physicians participate in Medicare. Quite frankly, it seems like the direction of that is clear: Medicare overpays subspecialists and underpays primary care doctors. And that's because the panel that set Medicare rates has been politically captured by the subspecialists. I find it hard to believe that if orthopedists made $700,000 instead of $1 million per year, they'd quit Medicare. But it is plausible that a primary care physician making $150,000 or $250,000 might actually quit Medicare. These are people who could go into other lucrative professions. I want to second Claudia's call for more data. We need to really understand how physicians will respond to reimbursements, and we need to set reimbursements in a way which balances these two needs. Ornstein: Let me add one thing. Just do a thought experiment. What if we'd never had Medicare? What if we didn't have any program with government support for a population of older Americans? The number of people who would've died prematurely, the number who would've used up every portion of their assets trying to cover just basic medical care, would've been enormously high. Society would've been so much poorer overall if there had been no Medicare. And if we see assaults on these programs, we're going to go back to having bankruptcies and people who won't get the care because they can't afford it. Brull: Dr Fegan, as a physician, what are your thoughts? Fegan: I think Medicare has made a tremendous difference. And if you just want to look at the data on life expectancy for Americans compared to other wealthy nations: If you look at the top 17 wealthiest countries in the world, we are really near the bottom up until age 65. And the dramatic change that occurs after 65 in terms of life expectancy in the United States, compared to other wealthy nations, is that we shoot to the top. And this is because Medicare has provided access to care for people who didn't have access to care. For physicians, and it really depends on the population of physicians you're talking about, it guaranteed that they were going to be compensated for patients that they may have been taking care of without appropriate compensation. The majority of hospitals in this country would not survive without Medicare. The majority of patients in hospitals in the United States are Medicare recipients. I would say that prior to the Affordable Care Act, 80% of our outpatients were unfunded and 56% of our inpatients were unfunded. Now we bounce between 60% and 65% of all our patients being funded, which made a tremendous difference for us. Medicare has made being a primary care physician feasible, whereas previously it was a financially precarious situation for many of them, in terms of being compensated for the services that they were providing. They might provide services for a chicken or for a free meal, as opposed to knowing that they would be paid at the end of the day, and they would know the rate they were going be paid. The challenge with Medicare is that it pays different rates within the city. I live in Chicago, and if you have an office downtown, the rate you receive is different from if you're on the South Side or West Side. We have to look at how we make those kinds of decisions. What We Pay Our Doctors Brull: Dr Ornstein, legislation in 1993 set targets for spending growth in physician services but did not account for inflation in practice costs. Why can't Congress seem to take care of the so-called doc fix? Ornstein: I think there are two reasons. One is obviously money. It means a lot more money, and they have been at least cognizant of the problems with the solvency of the program, looking at the long run. The second is that doctors have really not been a very effective lobby. To circle back to Medicare Advantage, I'd say the prime reason reimbursement rates are 130% or whatever, when they were supposed to be 90%, is because of the effectiveness of the insurance lobby with Congress. Congress could have stepped in and done something about that. If you look even, for example, at the Affordable Care Act, it was actually then-Senator Al Franken [D-Minn.] who said, 'If you're providing coverage under the Affordable Care Act, 85% of the money that you take in has to go back to patients.' There are ways for Congress to deal with this, but they respond to the lobbying that they get and the effectiveness that they've seen. And frankly, physicians have not been very effective. The physician community was extremely effective in keeping Medicare from being enacted for decades when the [American Medical Association] was an extraordinarily powerful lobby, until the Great Society and these enormous numbers of Democrats coming into Congress in 1964 enabled it to happen. But, if we're looking at weakness in lobbying efforts, physicians are in the top 10. More Pay Cuts Brull: Another one for you, Dr Ornstein. The recently passed budget reconciliation bill includes cuts in government spending. The Congressional Budget Office projected that this will include about $500 billion in mandatory reductions in Medicare spending between 2026 and 2034, or about a 4% reduction in payments to hospitals and physicians. Congress could act to block the cuts. Do you project that they will do so? And if they do not, what may be the effect on physicians and the program over the next decade? Ornstein: It's kind of interesting. We've had these so-called pay-go rules — pay-as-you-go — in one form or another since 1990 and the budget agreement that then-President George Herbert Walker Bush enacted with Congress, which was highly controversial because it violated the 'Read my lips: no new taxes" pledge. It has worked reasonably effectively, at least at different times. But in the past, when we have seen pay-go implemented, Medicare is one of the prime elements that gets these cutbacks or sequesters. Whenever it's happened, Congress has then stepped in and ameliorated it because they saw that it was going to have a bad effect. I'm not 100% sure it's going to happen this time. And the fundamental reason is that we know Republicans, certainly going back at least to the Newt Gingrich era in the House, have wanted to take over the Medicare program. Medicare as we know it would not exist if they had had their way. It would be in some other form. The sequesters don't allow cuts in Medicaid, but they have these big cuts in Medicare, and I think it's a dicey proposition. But let's just note, Jen, that if we do see these cuts, they will hit the reimbursement rates for hospitals and for physicians. Just start with hospitals for a minute, where we know the Medicaid cuts are going to have a devastating effect, especially on rural hospitals that have already been reeling even without these cuts. What we know is that if any hospital closes, it puts enormous pressure on other hospitals, and the other hospitals are not going to get the money. They're going to cut back on services. We've seen in Atlanta, for example, where an urban hospital had to close, and every other hospital found that their emergency room services were suddenly just completely overloaded. This system looks like it's separate parts private care, Medicare, Medicaid, but they're all interrelated, and it's like a set of dominoes. If one begins to fall, the others are affected by it. These cuts would be catastrophic if they are allowed to take place, and whether enough Republicans will join with Democrats to ameliorate that, which of course then means bigger deficits, we don't know for sure.
Medscape
31 minutes ago
- Medscape
Could Direct Primary Care's Popularity Be on the Rise?
Recent budget reconciliation legislation allows health savings accounts (HSAs) to cover Direct Primary Care (DPC) services. Here are the pros and cons. DPC Basics Unlike the setup of a traditional medical practice, DPCs provide services by charging membership fees. Historically, if an individual chose to be a DCP patient, they would pay membership fees on their own, with membership skewing towards those with the financial means to join. DPC Upsides for Providers and Patients DCP patient loads are smaller, allowing more timely, personalized care for patients. Those factors, along with unlimited access to their provider and the coverage of routine medical needs, are big upsides for members. A DCP practice enables providers to move away from the challenges associated with traditional healthcare models. DCP and HSA The new budget reconciliation law, in accordance with IRS guidelines, recognizes DCP memberships as a medical expense that HSA funds can pay for. Will DCP Become More Popular? Individuals previously unable to afford DPC memberships may now find value in utilizing their HSA funds for a more customized healthcare experience, especially if dissatisfied with their current care. Effects on the Traditional Healthcare System Shifts toward DCPs could increase the expenses involved in traditional practice, resulting in higher financial burdens for remaining patients who do not have an HSA, and therefore do not have the option to switch. The new law may also entice physicians to leave their current situation, which would leave practices with fewer providers. Bottom line: Now that HSA funds can be used for DCP memberships, a shift away from traditional practices is possible. The impact could be negative for some and beneficial for others.
Yahoo
36 minutes ago
- Yahoo
Why Centene (CNC) Stock Is Trading Up Today
What Happened? Shares of health coverage company Centene (NYSE:CNC) jumped 5.9% in the afternoon session after the company reported second-quarter results that missed earnings estimates, but the stock rallied as investors looked past the disappointment as sales came in ahead of expectations. Centene posted its first quarterly earnings miss in four years, swinging to an adjusted loss per share of $0.16, a stark contrast to the profit recorded in the same quarter last year. The company also set its 2025 earnings guidance significantly below analyst expectations, citing worse-than-expected cost trends in its Affordable Care Act (ACA) Marketplace business. Despite the profitability issues, total revenues for the quarter came in strong at $48.7 billion, handily beating expectations. While the stock initially dropped sharply in pre-market trading on the earnings miss, it reversed course and rallied during the company's earnings call. This turnaround suggested investors may have gained confidence from management's commentary and their stated plan to address the cost issues and restore profitability. Is now the time to buy Centene? Access our full analysis report here, it's free. What Is The Market Telling Us Centene's shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move we wrote about was 7 days ago when the stock dropped 3.9% as several negative developments weighed on the sector. Weakness in managed care providers was a significant factor, with companies like Elevance Health and Humana seeing declines due to an analyst downgrade and a lost lawsuit regarding Medicare bonus payments, respectively. Additionally, some pharmaceutical and biotech companies experienced sharp drops following unfavorable news; for instance, Sarepta Therapeutics plunged after a report indicated another patient death tied to its experimental gene therapy, and GSK's blood cancer drug dosage was voted against by the FDA advisory committee. Broader market sentiment, including concerns about rising costs and inadequate pricing for 2025 plans among health insurers, also contributed to the downward pressure on healthcare equities. Centene is down 53.3% since the beginning of the year, and at $28.29 per share, it is trading 64.7% below its 52-week high of $80.23 from September 2024. Investors who bought $1,000 worth of Centene's shares 5 years ago would now be looking at an investment worth $420.47. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.
