Through 2030, Medicare spending under certain circumstances could fall by up to $106 billion on physician services and by up to $250 billion on hospital services as a result of MACRA, according to research published by Health Affairs.
Under different circumstances, RAND researchers estimate Medicare spending on physician services could fall by $35 billion on the low end and that spending on hospital services could rise.
- Physician response to MACRA incentives, as well the design and implementation of advanced payment models (APMs), will ultimately determine the specifics of Medicare spending over the next decade or so.
MACRA intends to continue a transition from fee-for-service based care to value-based care, but it is not clear how its incentives will play out. However, physicians are likely to lose out on money they would have received if pre-MACRA policy had continued.
The effect of MACRA on spending for physician services will depend highly on the design of APMs. In a scenario where almost all physicians join APMs with strong financial incentives, spending would fall the most. While physicians would receive bonus payments, these would be offset by reduced use of services.
Hospital revenues would also be most affected under a scenario in which all physicians were in APMs with strong financial incentives. If all APMs adopted models that do not attach physician reimbursement to total cost of care, total revenue would increase by $32 billion because more physicians would be likely to join APMs.
APMs must be well-designed and accessible to physicians for MACRA to work as policymakers intended. However, healthcare professionals as a group will also have a decision to make when it comes to the success of MACRA. “Organized medicine, and individual physicians, must accept that one of their roles is to be responsible stewards of society’s resources and redesign their business model around value,” researchers wrote.
Potential changes to Medicare have been on the table since President Donald Trump took office with a Republican majority in Congress. House Speaker Paul Ryan has said Medicare has "serious problems" and he has suggested changing it to a premium support system. Healthcare reform efforts seem stalled at best, however, and Ryan's rhetoric of Medicare financial trouble has been shown to be overblown.