News briefs

Medicare increases inpatient payment rates

On July 31, the Centers for Medicare and Medicaid Services (CMS) announced that Medicare would increase its payment rates for inpatient hospital care by 2.75%. The increase for FY 2002 will affect about 4,800 acute care hospitals that are paid under Medicare’s inpatient prospective payment system. The new rate, which reflects the law’s requirements for updating Medicare payment rates, was published in a final rule in the Aug. 1 Federal Register.

Medicare law pegs the annual updates for acute care hospitals for FY 2002 to the estimated increase in the hospital marketbasket, the inflation rate for goods and services used by acute care hospitals, minus 0.55 percentage points. For FY 2002, the hospital marketbasket is projected to increase by 3.3%. The update is 2.75%. The final rule doesn’t address provisions in the proposed rule dealing with expediting the incorporation of new medical services and technologies in the inpatient prospective payment system coding and payment methodology.


Report: Mergers may save less than thought

A report commissioned by the Agency for Healthcare Research and Quality suggests that hospital mergers may produce fewer savings than previously estimated. The study, which appears in the July Health Affairs, traces changes in nearly 1,800 short-term hospitals from 1989 to 1997. Researchers compared merging hospitals in high HMO-penetration markets with their nonmerging rivals, and the merging hospitals’ average cost savings was 2.3 percentage points. The average price growth was nearly identical to nonmerging competitors, the report said. In low HMO-penetration markets, mergers appear to produce greater cost and price savings for the hospitals. To read Hospital Mergers and Savings for Consumers: Exploring New Evidence, go to: www.healthaffairs.org.


Lack of specialty care adds to diabetics’ mortality

Lack of specialty care, particularly for minority patients, is a contributing factor to the continued increase in mortality for people with diabetes, according to the American Association for Clinical Endocrinologists (AACE). "Patients with diabetes have special health needs, which they and their physicians need to address. Studies have shown that patients who receive care from endocrinologists have better health outcomes," says Rhoda H. Cobin, MD, president of AACE.

Cobin cited statistics from the Centers for Disease Control and Prevention that show deaths from diabetes and complications continue to increase. Many patients are not even aware that there are diabetes specialists, Cobin says. "Minority patients — who are disproportionately impacted by diabetes — are the least likely to seek or have access to specialty care," she adds.