The points of this column are briefly stated:

• If you want to know which medical school applicants will become country doctors, ask them three questions.

• Medical school programs aiming to select and train students for rural careers are effective.

• Rural docs and hospitals may be much more influential than they realize, particularly if they join with other primary care interest groups.

Currently, allopathic schools, i.e., those that grant M.D. degrees, are increasing in size and number. With notable exceptions they have generally disavowed any responsibility for their graduates’ career choices — for their choice of specialty or location.

There is a lot of information on who is likely to become a country family doc scattered through the journal Academic Medicine over the last 40 years, but the April 2012 issue, with its papers and bibliographies, can get you started on the subject in a couple of evenings.

In this article, Howard Rabinowitz, who has spent a professional lifetime on rural medical education, followed up graduates of Jefferson Medical College 30 years after graduation to see who was in rural practice.

He analyzed his results on the basis of what was known at the time of admission, examining three self-reported factors. These are the three questions that a medical school could ask if it wanted to pick students who would take up a career in rural America.

1. Did the candidate grow up in a rural community?

2. Did s/he plan to practice in a rural community?

3. Did s/he plan a career in family medicine?

Each positive added 15 percent to the probability of a rural career. All three positives got you 45 percent. Twelve percent of the graduates with no positives on admission are now in rural practice; impressive, especially for a private medical school. Obviously there is a lot more to the story but these questions will do for now. The point is that all that data was available to the admissions committee.

Council of State Governments Map shows the counties that are underserved — in red or yellow for counties that are partially underserved. Long-term follow-up of the graduates of the rural programs of Jefferson, the University of Illinois at Rockford and the University of Minnesota, Duluth, suggest that about half of the graduates of dedicated medical school rural programs wind up in long-term rural practice.

That sounds pretty impressive to those of us accustomed to figures below 10 percent of graduates in rural practice for many medical schools.

When I was a brand new assistant dean going through my first accreditation review 35 years ago I asked Dr. Gus Swanson, who was in charge of the review for the Liaison Committee on Medical Education, “Why is it so hard to get schools to do what everyone knows they should do?”

He replied, “You have to understand, for practically all schools, medical students are a byproduct. The school’s main product is either referral care or research.”

Case in point: The University of Kentucky in 2011 had an overall state appropriation of $310 million dollars for everything from English to engineering to medicine. The budget of its academic medical enterprise was over $870 million. It is interesting to ponder, who is the most powerful person on campus? Realize that a sizable proportion of that medical business is referred from rural areas. The numbers are different but the pattern is similar in many schools across the country.

Case in point: Some years ago Duke University decided to abolish its Family Medicine residency or department, I can’t remember which, and it doesn’t matter. In response, the family docs around the state steered their elective referrals to other academic medical centers. Within a week the decision was reversed.

Obviously not all state universities with medical schools run under the sort of financial structure I cited, but many medical schools are big referral businesses. It is not unreasonable for those responsible for the care of rural, and for that matter, other disadvantaged people, to hold the schools responsible for the results of their offerings.

Outcome expectations should be negotiated and made explicit up to a decade in advance. This would have the additional advantage of moving the very substantial lobbying influence of the medical school toward support for primary care.

Note that I said “results.” You should be monitoring the percentages of graduates practicing what is needed, where they are needed, by your school. Realize that rural people in need of primary care and other specialties have much in common with inner city minorities. Rural and inner city people should join forces and link interests.

Don’t underestimate the difficulty of the transition. Our allopathic schools have played leading roles in shaping our anonymous, fragmented, overspecialized health care situation. Many schools are doing very well thereby.

The underlying question is whether those schools will be able to adapt to patient-centered, rather than organ-centered care, and to prepare doctors to work in it. Maybe you can help them.

Wayne Myers is a retired pediatrician and rural medical educator. He directed the federal Office of Rural Health Policy from 1998 through 2000, and was President of the National Rural Health Association in 2003. He and his wife, JoAnn, farm in rural Maine. This article first appeared in the Spring issue of Rural Monitor.

A survey of more than 100 healthcare organizations conducted by Irving, TX-based Staff Care also found that 41% of healthcare organizations are currently looking for temporary physicians.

“We have seen consistent demand for locums across the industry for five or six years now,” says Bonnie Owens, Staff Care’s senior vice president of client services. “The demand is still there. If you look at why facilities are using locums there is pretty wide variety, but they are using them mostly until they can find someone in a permanent position.”

Some of the blame for the physician shortage has been placed on the nation’s medical schools, where enrollments for many years failed to keep pace with overall population growth. This month the Association of American Medical Colleges reported that medical schools are on track to boost enrollment 30% by 2016. However, they may not have residency slots available for all of their new graduates.

“This is the tsunami that’s been waiting to happen,” Owens says. “Without those residency spots, the number of students isn’t impacting the demand like we need it to.”

Owens says 20% of the positions that Staff Care was asked to fill in 2011 were for primary care physicians. That was followed by 19% for behavioral care providers; 16% for anesthesia providers; 10% for hospitalists; and 8% for surgeons.

“We are also seeing a fusion of behavioral health and primary care,” Owens says. “We are seeing patients come in for a variety of different needs, for instance, diabetes or obesity. Some of that can be caused by depression or onset depression.”

The respondents in the survey said they liked the convenience of using locum tenens, mainly for care continuity and preventing revenue loss. However, 86% of the respondents identified the high cost of temporary help as the most significant drawback when hiring locum tenens.

Owens says the costs of any particular locum tenens physician will vary depending upon the specialty, the need, and the geographic areas. “But oftentimes hospitals are able to capture all of the expenses by billing for third-party billers, Medicare, Medicaid, or private pay,” she says. “So, the expense would come in sometimes with the travel and hotel costs of putting up a temporary person. But by and large they are able to recuperate through reimbursements the fees they charge for locums.”

Owens says the number of locum tenens physicians in the United States has grown in recent years because many physicians find the temporary work satisfying.

“More and more physicians are looking for a different lifestyle that locums provides,” she says. “If we look back just five or six years ago there were probably about 26,000 locums. Now we are estimating there are about 38,000. You think about the demands of the practice environment and doctors are trying to find more flexibility for their schedules first of all. Secondarily, they want to avoid the politics that exist in hospitals nowadays. They get to keep their hand in medicine, and not in the business of medicine.”

KHN Staff Writer

May 07, 2012

Having trouble finding a doctor?

You’re not alone.Tens of millions of adults under 65 — both those with insurance and those without — saw their access to health care dramatically worsen over the past decade, according to a study released Monday.

The findings suggest more privately insured Americans are delaying treatment due to rising out-of-pocket costs, while safety net programs for the poor and uninsured are failing to keep up with demand for care, say Urban Institute researchers who wrote the report.

Overall, the study published in the journal Health Affairs found one in five American adults under 65 had an “unmet medical need” because of costs in 2010, compared to one in eight in 2000. They also had a harder time accessing dental care, according to the analysis based on data from annual federal surveys of adults.

“For decades, Americans have been facing costs rising well above wage levels,” said Lynn Quincy, senior policy analyst for Consumers Union, a nonpartisan group. “These are real families. … It’s very concerning.”

President Barack Obama’s health law, which will expand health coverage to 30 million people starting in 2014, won’t necessarily solve all those access problems, the study says. That’s because the law, which is under review by the Supreme Court, may not alter the trend toward private insurance policies with larger deductibles and higher co-payments or address some of the barriers within public coverage. While the law does increase payments temporarily to primary care doctors who see people covered by Medicaid, it will not force more doctors into the program, or require states to provide dental coverage to adults.

Quincy noted the law does offer several new strategies such as new payment methods to control rising costs—which could help improve access, but there’s no guarantee they will work.

The study underscores what’s at stake in the law’s coverage expansion: People with private or public health insurance have significantly better access to care than the uninsured. If the law is overturned or scaled back, “we would be likely to see further deterioration in access to care for all adults — uninsured and insured alike,” it concludes.

‘Unmet Needs’ Increase For Privately Insured

The percent of adults with private insurance who reported an “unmet medical need” doubled to 10 percent from 2000 to 2010, while those who delayed seeking care due to cost rose from 4 percent to 7 percent in the same period, according to the study.

Genevieve Kenney, lead author and senior fellow at the Urban Institute, speculated that higher cost sharing and deductibles that shift more of the cost onto individuals could be driving those changes.

Several studies have found that privately insured Americans are spending a higher proportion of their income on health services, said Peter Cunningham, senior fellow at the nonpartisan Center for Studying Health System Change.

One analysis by the consulting firm Milliman showed health costs for an American family of four have more than doubled since 2002.

“As employers shift more costs onto workers, that is something we are going to continue to see,” Cunningham said.

For insured Americans, a shortage of doctors in some parts of the country was a factor, but not as important as cost, he said.

An increasing number of consumers are also facing delays finding a primary care doctor when they are sick because physicians leave less room on their schedules for walk-ins, said Arthur Kellermann, director of the research firm Rand Health. To make more money, physicians prefer to fill their days with quick turnaround type patients, such as those with chronic illnesses that need regular monitoring, he said.

‘Stressed And Worried’

Poor and uninsured adults had greater difficulties not just with health care costs, but finding doctors who would see them.

About one third of 41 million uninsured adults delayed getting care due to costs in 2010, compared to 25 percent in 2000, the study found. Nearly half the uninsured said they had an unmet medical need in 2010, up from 33 percent in 2000.

Marla Madden, 54, of Boca Raton, Fl., has gone without a Pap test to check for cervical cancer for more than a decade. She’s also years overdue for an MRI to check on her epilepsy and scoliosis.

Uninsured since her divorce in 2002, Madden said she can’t afford the tests. “You do feel a little bit helpless,” she said, adding that she’s recently gotten care through Project Access, in which doctors volunteer their time to treat those without coverage.

The uninsured who had a “usual source of care,” such as a family doctor or community health center, fell to 38 percent in 2010 from 44 percent in 2000. The finding was startling given the billions of additional federal funding to community health centers over the past decade, Cunningham said.

Toni Wolf, 45, of Roanoke, Va., says she’s put off going to the doctor for the past year, even though she has diabetes and suffers from a lung disorder that causes her to be short of breath. “It makes me feel very stressed and worried,” said Wolfe, who works as a teacher at a day care center but can’t afford the employee coverage it offers. She also recently got care through Project Access.

The study found that among adults getting care through public programs (more than two-thirds were enrolled in Medicaid, the state-federal insurance program for the poor) 26 percent said they had an unmet medical need in 2010, up from 20 percent in 2000. About 19 percent experienced delays getting care due to non-cost factors in 2010, up from 14 percent in 2000. Nearly one in four people in public programs in 2010 had an unmet dental need, up from 15 percent in 2000.

The problems indicate that too few providers are taking Medicaid and an increasing number of states are dropping dental coverage — which is an optional benefit, Kenney said.

The American Medical Association, which has backed Obama’s health law, said the study findings were not surprising. “The ability for patients to access medical care is fundamental to the success of our health care system, since without timely health care access the uninsured live sicker and die younger,” said Dr. Peter W. Carmel, association president.

Rand’s Kellermann noted that even as the nation’s total health care bill doubled in the past decade to $2.6 trillion, many Americans had difficulty getting treated.

“We’re paying more and more and getting less and less,” he said.

Asked if there was any good news in her report, Kenney said that in contrast to adults, millions more children gained access to care in the past decade, likely due to the availability of public coverage for children through Medicaid and CHIP. The study found the percent of children who had been to a doctor in the past year rose to 92 percent in 2010, from 89 percent in 2000.

Why? Because it’s still an issue, despite federal initiatives to expand rural broadband access. While urban centers are enjoying the benefit of high-speed wired and wireless access supporting every use from consumer Netflix downloads to extending the access of in-demand medical subspecialists, patients living in sparsely populated states like South Dakota still have to drive hours to receive the same care their urban counterparts enjoy. Telemedicine can bridge the gap in some patient care scenarios, but only if practitioners can get the Internet connection to support it.

In the case of the Avera McKennan Hospital network serving the Dakotas, patients drive up to five or six hours each way for care, depending on the type of specialist needed. The health system reaches patients and providers in five states, some of them small critical-access facilities a hundred miles from the next facility — and that next one might not necessarily be bigger. An acute dearth of specialists — for example, only two colorectal surgeons and five neurosurgeons cover the whole territory — compounds the issue of geographical distance.

Avera McKennan’s Donald Kosiak Jr., M.D. said that the health system is aggressively developing telemedicine initiatives in those remote regions, which includes implementing e-ICUs — intensive care units staffed remotely by physicians via video feed. But getting broadband access to those remote locations continues to be a sticky issue.

Kosiak, a practicing emergency physician and medical director of Avera eCARE, believes that in the future 4G wireless networks could potentially be the key to expanding telemedicine initiatives to the furthest outposts of Avera McKennan’s patients. Using 4G, mobile devices appear to work as fast as those using wired broadband access, he said — it’s that quick. Lack of 4G coverage is the issue. “If I’m in San Jose, I have 4G network; if I’m in Wishek, North Dakota [population: 1,002], I’m lucky to have 1G,” Kosiak said.

A recent Deloitte survey affirms that 4G mobile networks hold much potential for many business sectors, none more than health care. For now, Apple’s iPhone, while popular among physicians and consumers alike, does not have a 4G-compatible device.

Verizon, which sells both iPhones and 4G-compatible Android phones, appears to be pushing Android devices ahead of iPhones, an interesting twist for rural health care IT decision makers desperate to get more bandwidth into their practitioners’ hands: Wait on Apple, or move on with Android-based telemedicine implementations. Or, like Avera McKennan still must do with remote locations, forego wireless and patch in old-school T1 lines.

Speaking of T1 lines, Kosiak’s also warming up to another solution for getting high-speed Internet to critical access hospitals and other locations requiring video-ready throughput that’s recently been discussed: Tapping into existing wired high-speed infrastructure, specifically the dedicated T1 lines already in place in small communities by banks and other businesses. Sharing such bandwidth as a community resource could also work to enable rural telemedicine and extend physicians’ reach.

“We need to reach out to other industries that are leaps and bounds ahead of us in sharing data and pushing it back and forth,” Kosiak said. “So maybe I can just piggyback off of existing technology that’s already in rural communities — banks, high-tech industries, big mills, big meat packing plants probably have all sorts of connectivity for data, and maybe the hospital doesn’t need their own.”

Kosiak sees wired high-speed networks as the solution for health care, at least for the short term. In 18-36 months, he thinks both AT&T and Verizon’s 4G networks will blanket most of the country and revolutionize wireless data. But even then, 4G might fall short. When looking at a national map, “those little gaps in coverage are where I need to connect,” he said.

Let us know what you think about the story; email Don Fluckinger, Features Writer or contact @DonFluckinger on Twitter.

Dr. Timothy McKnight said he “spoke straight from my heart” about rural health and wellness programs at a White House meeting Tuesday.

McKnight, director of the Fit for Life program at Trinity Hospital Twin City in Dennison, was invited to the White House Rural Council Rural Health Stakeholders Meeting in Washington, D.C.

The session — conducted in the Eisenhower Executive Building and the Hubert Humphrey Building — included members of the president’s Cabinet and discussed rural health care issues and how the Affordable Care Act can help.

About 35 people attended, with discussion topics such as home health, hospice, patient safety, critical-access hospitals and dental care.

A major concern among federal officials is recruiting and retaining primary-care physicians in rural areas.

In Tuscarawas County, there are 12.7 primary-care physicians for every 10,000 people. The average per county across Ohio is 25.

“We’re under-represented,” he said.

McKnight, a board-certified family practitioner, is a primary-care physician who earned his medical degree and a master’s degree in nutrition from Ohio State University.

McKnight told how he received a scholarship from the National Health Services Corps and participated in a loan repayment program. Participants commit to one year of service in a rural area for each year of the scholarship. The same ratio applies to the loan repayment program.

“I was like most physicians in these programs, figuring that I would meet my obligation and then move to a city,” McKnight said. “Instead, I fell in love with the community and the people, and I’ve stayed. I appreciated the scholarship and loan repayment programs. As a result, I committed to educating my patients and the community about healthy lifestyles.”

After the meeting, U.S. Department of Health and Human Services Secretary Kathleen Sebelius thanked McKnight for staying in a rural area. She hosted the meeting, along with U.S. Department of Agriculture Secretary Tom Vilsack, as part of efforts by the White House Rural Council to focus on the vitality of rural America and enhancing federal programs to meet the needs of rural Americans.

The meeting included rural physicians, dentists, nurses, mental health care providers and hospital administrators from across the nation.

“I was most impressed that they were genuinely interested in listening to our concerns, and not just promoting their policies,” McKnight said. “They explained what they do, but more of the day involved listening to us. They were really engaged, and down to earth.”

Columbus Chamber of Commerce One of our projects in Columbus, NE, is to show our young people that there are good futures to be had in their hometown.

I looked this morning at the jobs available right now in Columbus, our town in east-central Nebraska. We need teachers, welders, a couple of engineers, sales professionals, accountants, various manufacturing production jobs, retail associates…and the list goes on.

For years, we have had an on-going discussion in Columbus about possible solutions to our problem of how to convince workers to move to our town.  Obviously, we haven’t found THE solution because we’re still working on it.  In fact, one of the primary “learnings” so far is that there is no one solution. The challenge is more complex than that. Instead, it will take many different pieces to complete the puzzle of providing a sufficient skilled workforce in rural America.

Let’s talk about a few of our ideas. Generally, they fall into two buckets: recruiting adults and preparing students.

One solution is to move people to where the jobs are.  As I’ve mentioned previously, we’ve found many people, even with great skill-sets, have been out of work for months or years and have used up their financial resources, leaving them unable to move.

Columbus has asked our Congressman, Rep. Adrian Smith, and others to find a way for unemployment benefits to be used so a person in an area of high unemployment could take “an advance” on their benefits for relocation to a place where they can find work. It seems all parties involved have a vested interest in getting unemployed Americans to where the work is, so there should be a legislative solution that facilitates that process.

Yes, we recognize that the “devil could be in the details” when it comes to holding people accountable and determining the regulations for a program such as this, but it’s too important not to try.  I should mention that our region isn’t suggesting that we should not bear some of the cost of this relocation program.  We would envision a “matching grant” process so that local governments and business communities are contributing as well as the federal and/or state government.

Columbus Chamber of Commerce Frankfort Square is the center of our town. Another aspect of recruiting people to a small town on the Great Plains is simply a marketing task.

How do people around the nation know where the jobs are?  There are so many jobs websites competing for attention, along with traditional media: How can we effectively communicate to people in Illinois, Arizona or Oregon about jobs in Columbus or other rural towns?

We don’t have a grand solution. Perhaps a national-level job clearinghouse sorted by career that pulls openings from other on-line and off-line sources?  While that may just be too big a job to be practical, maybe rural areas with jobs should come together to create a “ruraljobs.com” website.

While we hear all the time how “nobody wants to move to rural America” to take a job, I simply don’t think that’s true. If there were a place where those interested in this lifestyle could effectively search for jobs, we think this could be pretty effective!

The real long-term solution lies in how we educate our children.

There is a critical need to communicate better with students at a young age about opportunities in their hometowns.  For far too long, parents and communities around here have told their children that they have to leave to find opportunity. Particularly today, that just IS NOT TRUE.

Just look at a map of unemployment rates. It’s fairly easy to define the Great Plains right now as the “land of opportunity” for job seekers, more than any other part of the nation.

The other, equally important, fact that we need to communicate to our students is that there are wonderful opportunities in skilled trades.

How many American families have told their children that being a plumber, instrument technician, electrician, welder, nurse’s assistant, or maintenance tech were honorable, lucrative professions? I’d wager it’s not enough to fill the jobs that are being created in those areas.

And how many families have stressed hard work in math and science courses as the path to even more lucrative jobs in engineering? I will guarantee you it’s not enough to fill the jobs being created in engineering.

In Columbus, we’ve tried to preach that gospel through a partnership between schools and our Chamber of Commerce workforce initiative. Our schools have invested in the initiative and a strong menu of valuable programs has resulted. Here’s a sample:

• “Vehicle Day” exposes primary-grade students to local careers through fun experiences climbing on vehicles used in those jobs, like a fire truck, mail truck, or a garbage truck.

• “Reality 101” exposes middle-school students to the realities of bills and expenses so they understand the value of a good career and by extension the value of good grades.

• “University Week” planted the seed with elementary students that they should all have the expectation of going to college to enjoy a great career.

We’re also trying to share this message through teachers. Central Community College-Columbus and a number of partners have been leading “Project Shine,” a summer externship that puts teachers in every discipline into industries across Nebraska.

Columbus Chamber of Commerce The man who designed the assault boat that helped win World War II, Andrew Jackson Higgins, was born in Columbus. We have a memorial to him and a tribute to his creation. Locally, the Chamber of Commerce partnered on “Education in Industry Day,” which brought EVERY middle-school and high-school teacher in Columbus into a business and industry for a morning. These teachers got to see first-hand the realities in today’s business and manufacturing world.

In both these instances, teachers of math and English and P.E. — all subjects — are finding great value in lesson plans that incorporate real-world realities, and at the same time, they are building awareness of great careers in Nebraska!

This is a beginning.  Some of our attempts have succeeded; others have not.

We do know that there are things our region can’t do alone. They require a national or at least statewide approach.  Let’s get that conversation started and put more people to work in small-town America!

K.C. Belitz is president of the Columbus Area Chamber of Commerce.

For more information visit: www.cfra.org.

April 26, 2012, New York, NY—Noting the “unprecedented opportunity” provided under the Affordable Care Act, the Health Information Technology for Economic and Clinical Health (HITECH) Act, and other recently enacted federal laws, the Commonwealth Fund Commission on a High Performance Health System today unveiled a community-based plan to enhance health and reduce spending by improving care for chronically ill patients and targeting quality improvement efforts to conditions that can yield the greatest benefit in a relatively short time. The “Health Improvement Community” initiative proposed by the Commission has the potential to help those who most need more coordinated care and save $184 billion in health spending over the next 10 years.

In a new report, The Performance Improvement Imperative: Utilizing a Coordinated, Community-Based Approach to Enhance Care and Lower Costs for Chronically Ill Patients, the 17-member Commission of leading health care and health policy experts proposes that the U.S. Department of Health and Human Services (DHHS) and the Centers for Medicare and Medicaid Services use their new authority over the next 12 months to launch the initiative in 50 to 100 communities around the U.S. that have significant concentrations of patients with multiple chronic conditions and high medical costs, with the aim of improving their care and lowering the costs of care. Each community—defined as a city, a county, a hospital referral region, a neighborhood, or a state—would participate voluntarily.

In a Perspectives article about the plan appearing online April 25 in the New England Journal of Medicine, David Blumenthal, M.D, the Samuel O. Thier Professor of Medicine at Harvard Medical School, and Commission chair writes, “For decades the United States has seemed powerless to curb excessive health care spending and improve quality of care. It is powerless no longer.” Although the tools to achieve fundamental reform are now available, Blumenthal notes that the federal government needs “a comprehensive, disciplined implementation plan for health system improvement that takes full, thoughtful advantage of its new authorities and opportunities.”

Moving Aggressively to Improve Quality and Control Costs
As a first step, the new report says, the nation should start with a vision and specific targets for improving the health of the population and patients’ experiences with care, while lowering the growth in health care costs. One such target would be doubling to 4.6 percent the median annual rate of improvement in quality metrics tracked by the Agency for Healthcare Research and Quality by 2016, focusing on areas with the greatest potential to improve health and safety, such as preventable complications from asthma and diabetes.

The report also recommends that the nation aim to reduce the increase in per capita health care spending to the annual projected growth of the gross domestic product (GDP) plus 0.5 percentage points, or 4.4 percent, by 2016, a rate it should maintain through 2021. This would save $893 billion over the next decade.

Focusing on Chronically Ill Patients
The report notes that focusing on improving care for patients with multiple chronic conditions, such as those with coronary artery disease, diabetes, and asthma, provides substantial opportunity to improve quality of care, as these patients are more vulnerable to safety problems such as adverse drug interactions and medical mistakes. Promoting wider use of primary care, better payment incentives, and increased use of health information technology are among the tools that can be used to achieve the quality improvement and spending targets outlined in the report.

The Commission report notes that improving care for chronically ill patients is just one of many steps required to curb national health spending and foster changes in the way health care is organized and provided. Moving ahead now with this strategy “promises significant quality and efficiency gains within a short period of time…with the enactment of health reform, DHHS for the first time in its history, has the tools to promote large-scale performance improvement and to do it fast.”

“The tools in the Affordable Care Act, including new ways to pay for and deliver care, and provisions that reward health care organizations for achieving better outcomes, higher quality, and lower costs, provide us with a historic opportunity to finally move the U.S. to a high performance health system,” said Commonwealth Fund President Karen Davis. “By focusing on areas where there is the greatest need we can have the greatest impact.”

Without the Affordable Care Act, the HI Trust Fund would expire 8 years earlier, in 2016.  The law provides important tools to control costs over the long run such as changing the way Medicare pays providers to reward efficient, quality care.  These efforts to reform the healthcare delivery system are not factored into the Trustees projections as many of the initiatives are just launching.

“The Trustees Report tells us that while Medicare is stable for now, we have a lot of work ahead of us to guarantee its future,” said Acting CMS Administrator Marilyn Tavenner.  “The Affordable Care Act is giving CMS the ability to do this work, with tools to lower costs, fight fraud, and change incentives so that Medicare pays for coordinated, quality care and not the number of services.”

The report projects that the Supplementary Medical Insurance (SMI) Trust Fund is financially balanced because beneficiary premiums and general revenue financing are set to cover expected program costs.  Spending from the Part B account of the SMI trust fund grew at an average rate of 5.9 percent over the last 5 years.

SMI Part D, the Medicare prescription drug program, had an average growth rate of 7.2 percent over the last 5 years.  Cost projections for Part D are lower than in the 2011 Trustees report, due to lower spending in 2011 and greater expected use of generic drugs.

HI expenditures have exceeded income annually since 2008 and are projected to continue doing so under current law in all future years.  Trust Fund interest earnings and asset redemptions are required to cover the difference.  HI assets are projected to cover annual deficits through 2023, with asset depletion in 2024.  After asset depletion, if Congress were to take no further action, projected HI Trust Fund revenue would be adequate to cover 87 percent of estimated expenditures in 2024 and 67 percent of projected costs in 2050.  In practice, Congress has never allowed a Medicare trust fund to exhaust its assets.

The financial projections for Medicare reflect substantial cost savings resulting from the Affordable Care Act, but also show that further action is needed to address the program’s continuing cost growth.

The Medicare Trustees are Treasury Secretary and Managing Trustee Timothy F. Geithner, Health and Human Services Secretary Kathleen Sebelius, Labor Secretary Hilda L. Solis, and Social Security Commissioner Michael J. Astrue. Two other members are public representatives who are appointed by the President, subject to confirmation by the Senate. Charles P. Blahous III and Robert D. Reischauer began serving on September 17, 2010.   CMS Acting Administrator Marilyn B. Tavenner is designated as Secretary of the Board.

The report will be available at: https://www.cms.gov/ReportsTrustFunds/downloads/tr2012.pdf

Source: CMS