Tuesday, August 03, 2010

Lower hospital operating margins may help keep Medicare solvent longer; Lewin, Dobson, other companies active in analyzing Medicare-based businesses

An AP story by Ricardo Alonso-Zaldivar, printed in the Washington Post on Tuesday Aug. 3 on p A2, (link) indicates that the Obamacare law will help Medicare stay solvent, and save Medicare $8 billion through 2011.

Spending cuts associated with the Affordable Care Act will help seniors reduce their supplemental Medicare premiums by $200 a year by 2018.

The Obama administration report contradicts “inconvenient truth” claims that Medicare is sliding into insolvency.

The biggest saving seems to have come from cuts to Medicare providers, especially hospitals. Medicare operating margins for hospitals (as predicted and tabled by various categories by a “policy simulation model” of the Prospective Payment System) were the primary focus of my own I.T. job with Lewin-ICF from 1988 to early 1990. See the company’s page for hospital consulting here.

For many years (as when I worked there), Allen Dobson, Ph.D., was a leader of the effort to analyze hospital revenues and margins at Lewin, but now it appears that he has his own company, Dobson DaVanzo & Associates, LLC, and has a major paper published and noted online with The Commonwealth Find, for example, here (“Measuring Efficiency: The Association of Risk-Adjusted Hospital Costs and Quality of Care”, in 2009, here.

In a tangentially related matter, I got a call yesterday from a long term care insurance and supplemental (and probably Medicare Advantage) agent, who compared my monthly premium ($101) at age 67 for Medicare supplemental with United Health Care through AARP with another company (Mutual of Omaha). It seems that AARP’s rates are very close to industry norms, within 1% either way.

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