Enhancing Value in Medicare: Demonstrations and Other Initiatives to Improve the Program

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Abstract:

Medicare was designed to deal primarily with the effects of acute illness, which was seen at the time of the program's inception as the major threat to the health and financial security of the aged. While it has fulfilled this purpose reasonably well, demographic and other changes pose new challenges to Medicare and the health care system as a whole. Moreover, that system must deal with sub-par performance, both on cost and quality. This report, which examines Medicare's efforts to play a more proactive role in the purchase of appropriate, high-quality, and efficient health care for its beneficiaries, provides an overview of Medicare demonstrations, pilots, and other initiatives in two categories: chronic care and provider performance. The process of identifying, testing, evaluating, and implementing Medicare policy improvements is also discussed, and recommendations for improving that process are offered.