Medicare financial outlook improving

Jul 22, 2014 | Healthcare Industry News

In a surprising announcement, The Wall Street Journal published that Medicare's financial situation may be improving, despite regular inflation in health care costs in recent years. A report by the Congressional Budget Office (CBO) found that Medicare's financial standing has "improved sharply" since the CBO's previous report in February.

The February report projected that if spending remained constant, Medicare would exhaust its reserves by 2025, leaving seniors and the disabled without access to affordable medical care. However, the most recent report added five years to the theoretical date, projecting that Medicare will be sustainable to 2030. 

"It's pretty great news, and what's striking is that as cost increases have come down, all the quality measures have gone up," John Rother, chief executive of the National Coalition on Health Care, a group whose members include businesses and labor unions, told the Wall Street Journal. "We are actually doing better."

Medicare spending has amounted to more than $500 billion in benefits for 54 million Americans this year, and is expected to serve more that 70 million American in 2030.

The Wall Street Journal points to the Affordable Care Act as one of many possible factors that contributed to the reign-in of spending. The ACA cut more that $700 billion in Medicare spending to offset increases in spending to expand health-insurance coverage to lower-earning Americans, according to the source.

While Medicare's trustees are expected to release an additional report in two weeks, this is some of the first positive news to surface regarding the program's finances. However, many facilities are still struggling with the lowered reimbursements in recent years from the agency. 

Those facilities struggling with medical claims processing are encourages to seek assistance through outsourcing receivable management, which can lead to a drastic increase in cash flow.