• Data-licious heath care revenue indices

    From S&P:

    These are year-over-year changes in revenue accrued by sector/provider type. But what does it mean that Medicare went down more than others (or increased less fast, to be precise)?

    My hypotheses are (1) that seniors are more cost conscious and (2) policy change. All sectors saw a drop due to the recession, a result of cost sharing and increase in rates of uninsurance. Seniors likely cut back too, perhaps dropping supplemental coverage and forgoing the marginal prescription fill, doctor visit, or procedure. And it isn’t too much of a stretch to believe seniors have cut back more since their incomes are driven, in part, by the market (invested 401(k) and IRA holdings). Cuts to Medicare relative to trend played a role too, but I’m not sure how much that explains. I don’t have a handle (off the top of my head) as to how much was cut over the last 1.5 years.

    What’s interesting is that Medicare appears to be a leading indicator, at least on the downward slope. I don’t know what happened to cause the big dip in 2006-2009. It coincides with the roll out of the Medicare prescription drug program. Did that actually cause a big reduction in growth of Medicare spending (with small spillovers to other sectors)? Along with Part D, Medicare Advantage grew a lot over that period. Is that the cause? (If so, wow!)

    I’m sure I’m missing some other important considerations. What?

    • I would need to know more about what goes into these indices before trying to answer. Does the Medicare index include Part D, for example? Does it include Part C (Medicare Advantage), or only traditional medicare? Clicking through a couple of links to the S&P whitepaper, it seems that neither of these is included.

      Does the commercial payer index include Part C and D, then? Is pharma excluded entirely?

    • I was thinking along the same lines (@Jonathon H). Once the index basket opens up, the contents within might explain trends.

      If there is a great divergence between the Medicare beneficiaries: duals, FFS, and MA , I would feel more comfortable venturing a hypothesis. The demographics of each might explain things.

      I suppose one could speculate that the same forces driving Mcare rates down, would also mirror the commercial world, but why the delta in the slopes? Is is supply or demand side induced, and magnitude?

      Medicare policy on A and B sides not radically changed; is it the economy? Seems likely. Commercial slow to the reduction game: market consolidation in a provider strong portion of the cycle? Perhaps.


      • Right to Brad and Jonathon. I got nothing more on S&P. Was hoping someone else knew more than I did on this. Clearly Part D isn’t in there or we’d see a spike. Other than that, I got nothing. (“Data-licious” was not a compliment. It’s almost pure numbers with no context, signifying … ???)