American College of Physicians: Internal Medicine — Doctors for Adults ®

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Policy Briefs

From the November 1998 ACP-ASIM Observer, copyright 1998 by the American College of Physicians-American Society of Internal Medicine.

New initiative to help Medicare patients dropped by HMOs

To counter a rash of HMO withdrawals from Medicare, President Clinton has announced several initiatives to help keep Medicare beneficiaries in managed care plans.

In early October, he announced a policy to expedite the approval of health plans that want to enter markets where there are no Medicare HMOs. Under the president's proposal, HHS will expedite the review process for those health plans as long as they can demonstrate that they are solvent and meet certain quality standards.

The president also announced a new educational campaign to help Medicare beneficiaries enrolled in managed care plans understand their rights and options. Many beneficiaries may not know, for example, that they are automatically eligible to enroll in traditional fee-for-service Medicare if their HMO withdraws from Medicare. Those beneficiaries also have guaranteed access to Medigap policies that help fill gaps in coverage as a result of HMO withdrawals from Medicare.

The president also directed HHS to develop new legislation to protect Medicare beneficiaries from HMO withdrawals.

Health care spending on the rise

After five years of relative stability, the country's health care spending may be poised to explode.

According to HCFA data, health care spending could double to $2.1 trillion in the next decade. The analysis, which appeared in the September/October issue of Health Affairs, also predicted that spending on physician services will reach $427 billion by 2007 after rising nearly 8% a year between 2001 and 2007. HCFA economists expect those increases to reflect demand for increased access to specialists and out-of-network options.

Physician pay, however, is not expected to rise commensurately. Analysts say that compensation for nonphysician staff and other practice expenses will probably consume much of the increase in spending.

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