Nearly half of all healthcare spending in the U.S. is controlled by federal, state and local governments. Medicare is by far the dominant payer.
In 1997, $507 billion, or 46.4%, of all healthcare spending came from public sources. The balance, or 53.6%, came from myriad private sources.
Not surprisingly, efforts to control national healthcare spending start with the two largest public payers: Medicare and Medicaid.
And maybe the best way to control Medicare and Medicaid spending is not with price controls, such as DRGs, but through attention to the health status of the elderly and the poor. A look at the most common reasons for Medicare admissions makes that statement ring true.
The most frequent reason Medicare beneficiaries are admitted to the hospital is heart attack. More than 700,000 heart attack admissions were recorded by Medicare in 1996. A distant second was pneumonia, with more than 430,000 admissions in 1996.
In many cases, both heart disease and pneumonia can be traced to lifestyle issues, such as diet, exercise and living conditions. That's why experts believe a little more spending on prevention could go a long way in controlling Medicare and Medicaid spending growth.
The Top 20 Medicare DRGs are just one list in this chapter on Medicare and Medicaid. The others include:
* A top-100 list of cardiac surgery hospitals in the country, based on outcomes data from Medicare. Keep the list just in case the diet and exercise advice is ignored.
* A state-by-state breakdown on Medicaid expenditures and enrollment. New York spent more than $21 billion on Medicaid in 1997, including federal matching funds. Hawaii spent zero. Did you know it had no Medicaid program?
* In an effort to improve access to healthcare services for children, Congress created the Children's Health Insurance Program. Under the program, which was established as part of the Balanced Budget Act of 1997, states receive federal grants to create health insurance programs for children who don't qualify for Medicaid. Has your state taken advantage of the program?
* And if it hasn't, this chapter contains a list of whom to complain to. By the Numbers lists the names and telephone numbers of health department secretaries in each state.
* Efforts to control Medicare spending by moving beneficiaries into managed-care plans have produced mixed results. A number of contracting plans have pulled out of the program, citing low payment rates from the government. We offer a list of the biggest players still in the Medicare risk-contracting game.