A Program Evaluation of the Medicare Program: Comparing Spending with Health Outcomes

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Entitlement program reform has been an ongoing discussion in the past years because of the rapid increase in beneficiaries along with changes in available government funds to support these programs. With an increasing number of baby boomers and healthcare costs rising, spending on Medicare has been a topic of interest due to the financial impacts on the entire healthcare system. Advancements in medical technology along with more awareness to healthy lifestyles, people are living longer and healthier lives, which ironically puts a strain on the current healthcare system. Per patient spending is fluctuating for a variety of reasons, one being rapid changes in the market place as well as implementation of new programs. Furthermore, physician and hospital reimbursements continue to decrease while the number of chronically ill patients is on the rise. One key question that must be raised in regards to dollar amounts being spent along with areas of coverage and physician reimbursements is; how have the spending trends on Medicare impacted health outcomes for patients? In medicine, positive health outcomes is what the system is designed to improve and should be constantly evaluated and redesigned in efforts to capitalize on available funding. With different areas of coverage such as hospital spending, private office reimbursements, and prescription drug coverage, allocations to each area need to be assessed in efforts to find which area has the most influence on patient care. With recent changes in per patient spending, health outcomes and improved health status with chronic conditions must be looked at in order to see how the adjustments in spending have impacted patient outcomes and overall health status. BACKGROUND

Historical trends of funding for the Medicare program is readily available through The Center of Medicare and Medicaid Services (CMS) and current projection models are also available, but health outcomes become more complex when evaluating different chronic conditions. Some limitations to the funding trends are both external and internal events that have caused spending too rapidly increase or decrease. One example of this would be the introduction of the Medicare Part D program, which gave participants prescription drug coverage, but also increased allocated funds by 18%. The amount of money spent on healthcare fluctuates as technology and treatment improves, along with increased competition in the market place. By using per patient spending as well as evaluated changes in budget allocations, one can assume that some programs will show more benefits than others. This would be a key finding when assessing how changes in government resources can contribute to the improvement of health outcomes with certain chronic diseases or how they could lead to digressions in patient care. In regards to evaluating health outcomes, many patients have four or more chronic conditions. As a result, health evaluations are broken down by disease state, patient demographics and are also classified by either mental or physical health. A disproportionate amount of spending is used to treat patients with multiple conditions, which is a large issue that most people coming into the Medicare program are worried about. As of 1996, CMS implemented a program called the Health Outcomes Survey (HOS), which tracks Medicare patients’ subjective health measures throughout their time in the program. The program not only evaluates physical well-being, but it also evaluates mental health which is a key outcome when attempting to improve overall quality of life. This program has been criticized by some, but due to lack of access of health records on an individual basis, the HOS will be used to evaluate the trends in mental and physical health outcomes in comparison to national trends. HOS is the first health outcomes survey that measures outcomes from Medicare patient groups in a...
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