Just 3 percent of Medicare beneficiaries represent 25 percent of Medicare expenditures.

According to a Bloomberg BNA report on June 18, even with this sizable share of funds, the three percent, made up of the advanced illness population, isn’t properly cared for by the current health care system. Now a proposal has been made for a new payment model just for this group with the most serious illnesses.

Alternative payment models were presented to HHS Secretary Alex Azar this month, who favored options serving those in various stages of serious illnesses, but ineligible or unwilling to enroll in hospice, according to Bloomberg BNA.

“The idea of these alternative payment models is to get away from Medicare’s strict reimbursement requirements and allow for a flexible payment structure; in this case to support the different types of services needed by very sick patients and their caregivers,” reported Mindy Yochelson for Bloomberg BNA.

No formal government announcement has been made yet, but the initial reaction to the plans have been very promising. “This is the strongest response from HHS yet to a proposal,” the co-chair of Coalition to Transform Advanced Care told Yochelson.

This data point is particularly relevant when looking at a new HealthMine Medicare report, released in June.  HealthMine found 70 percent of Medicare Advantage plan members say they have one or more chronic diseases and just ten percent say health plans offer reminders about chronic conditions. In addition, only 11 percent of Medicare plan members are currently informed about how to lower health care costs, versus 47 percent who desire the information.

With a new proposal for a model that specifically benefits this 3 percent who need tiered help, a flexible payment structure to support the varied services is needed by very sick patients and their caregivers.  It will require a smarter system to anticipate the care needs.  The goal is the better outcomes and lower cost care.  Health plans can be the smart hub to cater more to plan members.

About The Number:

The Number is a timely column from HealthMine highlighting a key statistic that is pertinent to the US health care industry.