Leaders of adult day health care centers at financial risk say it's too early to know whether a Medi-Cal transition that started last week will serve as a safety net.

"I still don't know what's going to happen to us," said Kiana Bahadoran, co-owner of Advanced Adult Day Health Care Center in Simi Valley. "Worry is my other name these days. I wake up with worries, and I sleep with worries."

On Oct. 1, a long Medi-Cal transition reached culmination. Instead of being paid by a state-run agency to provide Medi-Cal care to 784 seniors and disabled people in and around Ventura County, the centers now will be paid by a managed care agency that administers the Medi-Cal insurance program locally, the Gold Coast Health Plan.

The change is rooted in a lawsuit filed after state leaders tried to eliminate California's adult day health care program to reduce costs. Client advocates said the cut would end up putting seniors who receive therapy, nursing care and other services at the centers into hospitals and nursing homes.

A settlement created a compromise program, Community Based Adult Services. Although the five Ventura County centers in the program provide the same services they did in adult day health care, Community Based Adult Services is designed to save the state money by serving fewer people and coordinating care better.

Locally, about 60 people in the old program were deemed ineligible for the new program. Nearly all of them are appealing the ruling, and even if it stands, they may still be eligible for therapy and other care based on individual needs.

On Oct. 1, Gold Coast took over managing the care and paying the bill for county residents receiving services at the health care centers. A similar transition has taken place in 29 other counties.

Leaders of some local centers say the transition is off to a smooth start.

"So far, so good," said Mark Kovalik, administrator of Among Friends Adult Day Health Care in Oxnard. "Both organizations, Gold Coast and us, have to go through a learning curve, but they've been very cooperative."

Kovalik said Among Friends is in no danger of closing. Leaders of the Oxnard Family Circle Adult Day Health Care Center say the same thing.

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Senior health care centers worry about future

In a downtown Bellevue, Wash., high-rise last week, the doors opened to a new health care joint venture formed by two of the world's largest companies: Microsoft and General Electric.

Caradigm, as the 50-50 joint venture is called, is aimed at bringing together Microsoft's strengths in developing large-scale data platforms with GE Healthcare's expertise in building health care applications.

The idea is to create a system that will allow health care organizations to better track individual patients, as well as to take advantage of the ability to bring together, and make sense of, large amounts of data from disparate sources.

The overall goal is to deliver better care at lower costs. "The premise is we'll be better together than separate," Caradigm CEO MIchael Simpson said last week of the two companies coming together. He also said a smaller joint-venture company would be able to act more nimbly than two giant companies.

Caradigm employs 600 in offices in Bellevue; Salt Lake City; Andover, Mass.; Chevy Chase, Md.; and other cities. The company is expected to employ about 750 people eventually.

The niche Caradigm aims to fill is related to the greater amounts of available electronic medical data and the drive toward interoperability - the ability for different health care systems and information from those systems to work with and relate to each other.

Those trends are happening worldwide, Simpson contends, and in the U.S. are being spurred in large part by the U.S. government. The HITECH Act of 2009, for instance, offers incentives for hospitals and physicians to use electronic health records.

But just digitizing the information led to the creation of different "silos" of data - with medical records being separate from analytical tools, for instance, or one company's offerings being unable to work with another company's.

Caradigm aims to create a layer that brings all that data together, allowing for easier data sharing and permitting clinicians to aggregate data so they can learn from it and use it strategically.

"Caradigm creates the big umbrella to bring all those silos together," Simpson said.

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Microsoft, General Electric unite to improve health care data

As governor of Massachusetts, Mitt Romney oversaw the most ambitious revamping of a health care system by any state in the country. And as a presidential candidate, he contends that's how health care reform should be handled: state by state.

Romney has provided few specifics on what the federal government would do to help states expand coverage for uninsured Americans or make the health care system more efficient.

But he has made clear he believes that competition and giving consumers the ability to choose among a variety of health plans and providers can lead to better quality at a lower cost.

"The general approach is there," said Nina Owcharenko, a policy analyst with the Heritage Foundation, a conservative policy and research organization. "But the details - I guess we will just have to wait and see."

At the same time, Romney has said he would not just repeal the Affordable Care Act but also replace it - and critics contend his campaign has provided scant information on just what would replace the law.

"They have nothing of substance to replace it with," said Robert Laszewski, a consultant and former health insurance executive who writes a respected blog, the Health Policy and Marketplace Review. "And that's the important thing to understand."

Romney's proposals contain little to expand coverage for the tens of millions of Americans who work in low-wage jobs that don't provide health benefits, who have pre-existing health conditions that prevent them from being able to buy health insurance or who have lost their jobs and health insurance.

"His proposal, to the extent that he has any details, would do very little to expand health insurance coverage and in contrast would very likely would lead to an increase in people without coverage," said Thomas Oliver, a professor at the University of Wisconsin School of Medicine and Public Health.

Recent studies by the Commonwealth Fund and Families USA - organizations that support the Affordable Care Act - projected that Romney's proposals would result in the number of people without health insurance increasing at a faster pace in the next decade, in part because of his proposal to limit future growth in federal spending on the Medicaid program.

For certain, Romney has made reducing the federal budget deficit one of his top priorities, and he has risked backing bold plans to limit future federal spending on Medicaid and eventually Medicare.

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Romney favors health care competition, gives few details

05-10-2012 11:26 During a Fairfax, Va., rally on Friday, President Obama mocked Mitt Romney for contradicting statements from his own campaign when he said his health care plan would cover Americans with preexisting conditions.

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Obama: Romney "fact-checked by his own campaign" - Video

05-10-2012 13:46 Share this: Tweet this: Mitt Romney misled Americans about his health care plan.

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Mitt Romney's Misleading Health Care Plan - Video

Doctors order more tests and consultations to protect themselves from liability, Dr. Anthony Youn says.

STORY HIGHLIGHTS

Editor's note: Dr. Anthony Youn is an assistant professor of surgery at the Oakland University/William Beaumont School of Medicine in Michigan. He is the author of "In Stitches," a memoir about growing up Asian-American and becoming a doctor.

(CNN) -- Coverage for 30 million uninsured. A ban on lifetime payout limits. No co-pays or deductibles on preventive medical services. Insurers prohibited from excluding patients based on pre-existing medical conditions.

The Patient Protection and Affordable Care Act (also known as "Obamacare") creates a massive, wide-scale overhaul of the heavily flawed and criticized health care system of the United States.

But for all of the Obama administration's work in creating this 906-page federal law, there is one glaring omission that could decrease the costs of health care and help relieve the upcoming physician shortage.

Medical liability reform.

How could the Obama administration create such a comprehensive overhaul of health care without addressing this issue? Although not a panacea for the health problems in the United States, the need for physicians to practice defensive medicine in order to avoid potential litigation has far-reaching consequences.

A 2008 survey of Massachusetts doctors found that 83% admitted to practicing defensive medicine. This study determined that 18% to 28% of tests, procedures and referrals and 13% of hospital admissions were performed for the sake of avoiding lawsuits.

In this one state alone, an estimated $281 million in unnecessary physician costs and more than $1 billion in excessive hospital costs was due to the practice of defensive medicine. Across the country, doctors are ordering tests and consultations as a way to protect themselves from potential liability.

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Health care act's glaring omission: liability reform

THE health-care-reform debate has been conveniently reduced to whether we can we afford its costs. The price of care is important. However, this debate ignores a crucial question: How much skin in the game should an individual have in managing his or her health?

Unless we ask that question, we will remain embroiled in a health care debate without any true progress.

The discussion we need to have is how to hold individuals responsible and to engage them in their own personal health. How do we get people to start eating foods that are good for them, not just convenient? How do we create communities that encourage people to walk, ride a bike, run and swim? And for people with chronic illness, what role do they have in managing their conditions?

Federal, state and local governments, in addition to creating healthier and safer communities, can play a big leadership role in creating healthy communities and rewarding personal responsibility for health.

Individual responsibility for ones health may seem radical, but King County employees, in partnership with the unions that represent them, are already doing it. As a part of King Countys nationally recognized Healthy Incentives program, each year employees take a written wellness assessment and complete an individual action plan to improve or maintain their healthy behaviors. Those who complete the wellness assessment and their individual action plan qualify to contribute less for health care cost sharing.

Under the current employee agreement for Healthy Incentives, employees are reducing costs to the public in four ways: They use health-care services less often; they pay higher co-pays; they choose less-expensive generic drugs; and more of them enroll in the Group Health plan, which his less expensive than the countys preferred provider plan KingCare.

Over the past six years, King County has saved the taxpayers tens of millions of dollars by engaging employees in their health and health-care choices. In the proposed 2013-2014 budget, the county expects to save $14 million in health-care costs.

King Countys Healthy Incentives program can be a model for engaging participants in other private- and public-employer health plans, including Medicare and Medicaid.

I want everyone to have health insurance, but those who blithely ignore the consequences of their lifestyle should not be totally subsidized by those willing to manage their illnesses, eat well and remain fit. Individuals should pay a higher price for poor decisions and personal indifference.

Personal responsibility and accountability cannot be demanded of individuals without the tools to make educated decisions, such as publicly reported data on the quality and price of health-care services. We love our doctors, but having detailed data will help individuals determine if their doctors are providing value-based care. If not, employers should have the right to ask individuals to pay more for doctors providing subpar care.

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Op-ed: Individual responsibility in managing health-care costs

MICHIGAN CITY Human resource managers from businesses throughout the region on Tuesday learned important information about how federal law will impact the insurance coverage they offer to employees.

Presented by General Insurance Services, the Northern Indiana Human Resource Management Association and Strategic Management, the two-hour lunch-time seminar touched on the basic changes employers would have to adapt to to comply with the Patient Protective and Affordable Care Act. The Supreme Court recently decided in favor of the act, which goes into effect in 2014.

The discussion was moderated by Craig Menne, the vice president of General Insurance Services. Panelists included: Mark Rafalski, chief financial officer of Indiana University La Porte Hospital; Paul Houchens, a consultant with Milliman, Inc; Mark Schmidtke, an attorney with the law firm of Ogletree, Deakins; and Bruce McFee, chairman and CEO of Sullivan-Palatek, Inc.

Menne told those who gathered in the gallery at the Lubeznik Center that the event was meant to be an interactive round table discussion about the law and what would be required of companies in the near future. Its a large law with a lot of moving parts, Menne said. The panelists, he said, were selected to give a wide range of perspectives on the act.

Other changes that apply to plans which are not grandfathered in include: no pre-authorization on emergency services, no penalty on the use of out-of-network services, coverage of preventable care and immunizations; and patient choice in most service providers.

Houchens told the crowd that there were no easy answers in how businesses will address the changes and adhere to the requirements. Its complicated because each employer is different, he said. There are different plans and different makeup of employees.

One significant push at the federal level is a change in federal poverty rate scale, which is used to determine eligibility for programs such as Medicaid. The federal government is setting the eligibility criteria at 138 percent of the federal poverty level, which is about $11,000. This change would increase the number of Americans eligible for Medicaid by as much as 50 percent, Houchens said.

Each state is given the opportunity to accept the new levels or keep a lower eligibility level. If more employees meet this level, the employees could be covered by Medicaid, which means their employer would not have to provide coverage for them. This would reduce any penalties imposed by the government for a business not complying with federal requirements under the law.

The changes will drive up costs for medical service providers, Rafalski said. Some of these costs are incurred because of a requirement to move towards electronic storage of medical records. Another cost factor is inefficiencies in the processes, he said. As an example, he said patients who move between physicians may experience duplication in services or conflicting treatment methods.

A focus on wellness and keeping employees healthy is one component of these efforts, Rafalski said. When you do that the costs go down because you are not using as much of the services.

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Health care reform: Businesses learn how new federal rules will affect plans

Calling the states health care costs artificially high, N.C. Attorney General Roy Cooper says he will examine whether to use antitrust laws or new legislation to reduce them.

Im concerned about this issue, Cooper told the Observer. Health care costs are high enough without artificial boosts that could come from lack of competition.

Coopers announcement comes in the wake of antitrust investigations into hospitals in other states. It also follows an Observer story showing large nonprofit hospitals are dramatically inflating prices on chemotherapy drugs at a time when they are cornering more of the market on cancer care.

In a joint investigation published last month, the Observer and The News & Observer of Raleigh found hospitals are routinely marking up prices on cancer drugs two to 10 times over cost. At the same time, hospitals are increasingly buying the practices of independent oncologists, then charging more for the same chemotherapy in the same office.

A previous investigation by the two newspapers, published in April, showed consolidation has given hospitals leverage to demand higher payments from insurance companies. That investigation also found North Carolina hospitals are among the most powerful interest groups in state politics, a fact that could neutralize any push for legislative reform.

Cooper said theres little question health care costs too much. The issue, he says, is whether a recent increase in consolidation has contributed to that problem. His staff will study whether antitrust laws which are designed to prohibit monopolies and other anticompetitive arrangements are the right tool for reducing costs.

Cooper said his lawyers will talk with officials from the Federal Trade Commission and with attorneys general in other states who have used antitrust laws to investigate consolidation.

A number of hospital systems in North Carolina have grown into profitable, fast-growing giants. Carolinas HealthCare System, a $7 billion chain that runs more than 30 hospitals, has built more than $2 billion in investments and owns more than $1 billion in property. Now the nations second-largest public hospital system, it has posted average annual profits of more than $300 million in the past three years.

Novant Health, which owns 13 hospitals, generates more than $3 billion in annual revenue. The two systems own all hospitals in Mecklenburg.

The newspapers April investigation found Charlotte-area hospitals generate some of the nations largest profit margins. The regions hospital prices are about 5 percent higher than the national average, and comparable to those of larger cities, according to Aetna insurance company.

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N.C. Attorney General eyes 'artificial' hospital pricing

Published: Saturday, October 6, 2012 at 11:03 p.m. Last Modified: Saturday, October 6, 2012 at 11:03 p.m.

A daily look at the constitutional amendments on the Nov. 6 ballot from the League of Women Voters of Florida Education Fund:

HEALTH CARE SERVICES

Synopsis: Amendment 1 is more of a political referendum than a meaningful change to the state constitution. Since the Supreme Court has upheld the federal government's right to impose the individual mandate, the legal standing of Amendment 1 is precarious. The passage or defeat of Amendment 1 may have no practical implications other than to send a message that a majority of Florida's voters are either for or against the individual mandate.

A vote YES on Amendment 1 would:

- Represent an attempt to opt Florida out of federal health care reform requirements.

- Add language to the Florida Constitution that could be found unconstitutional under the Supremacy Clause of the U.S. Constitution if determined by the courts to be in conflict with federal law.

- Prevent the Florida Legislature from passing health care coverage mandates independent of federal law.

A vote NO on Amendment 1 would:

- Mean that Florida should comply with federal health care reform requirements.

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Amendment 1: Health Care Services

Enlarge photo

Courtesy of VoteTipton.com

Rep. Scott Tiptons second television ad continues the theme of his first, attacking Democratic opponent Sal Paces positions on health care.

Courtesy of VoteTipton.com

Rep. Scott Tiptons second television ad continues the theme of his first, attacking Democratic opponent Sal Paces positions on health care.

Rep. Scott Tipton, R-Cortez, is out with the second television ad of his campaign, an attack on Democrat Sal Paces health-care positions.

Tiptons first ad also attacked Pace on health care.

In the new ad, a narrator calls out politician Sal Pace.

He supports the new health-care law, cutting over $700 billion from Medicare, hurting Colorado seniors, a woman says. Pace supports a single-payer government health-care system, a wholesale government takeover of health care.

Tipton has made the $700 billion claim before. It refers to President Barack Obamas health-insurance law, which limits future Medicare payments to hospitals and insurance companies.

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Tipton ad continues health-care attack

Madison - Health care is the inescapable issue in the tightly contested race to determine Wisconsin's next U.S. senator.

The issue has been at the heart of the political careers of former Gov. Tommy Thompson and U.S. Rep. Tammy Baldwin, and in this campaign the two candidates have clashed on questions of health care costs and coverage.

Thompson, a Republican, wants to repeal the health care law known as "Obamacare." Baldwin, a Democrat, voted for it and has advocated going further. The two also have opposing ideas about the future of Medicare, and they blame each other for contributing to the financial difficulties of that health care program for seniors.

Their disparate views were on display in their first debate and will likely be hammered home again in their second debate on Oct. 18.

"My opponent has been in Congress for 14 years. Has she ever introduced any legislation to fix the (Medicare) problem? No . . . Nobody solves the problem. I will. That's why I'm running," Thompson said during the Sept. 28 debate.

But the Baldwin campaign looks back on some of those same years and sees a different story because Thompson oversaw Medicare as health and human services secretary under President George W. Bush from 2001 to 2005. Citing congressional findings, the Baldwin campaign said that during the years Thompson led the agency, the projections for when Medicare would become insolvent were moved up to 2020 from 2029.

"The fact is that when he ran Medicare for four years in the Bush administration, it moved closer to going broke," Baldwin spokesman John Kraus said.

Nor is it just the two candidates' takes on their records on health care that separate them - the two also differ sharply on the country's health care future.

Thompson wants to remake Medicare so people have the option of staying in the traditional program or receiving federal money to help pay for private insurance. Baldwin wants to preserve Medicare as it currently stands, though she has not said how she would pay to do that.

Thompson wants to repeal the Affordable Care Act, the health care law often called Obamacare. Baldwin voted for the law and in the past advocated having the government pay for all health care costs.

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Health care at center of Baldwin-Thompson Senate race

03-10-2012 21:30 The president says Romney's health care plan will destroy traditional Medicare system.

Originally posted here:

Presidential Debate 2012: President Obama Warns Against Voucher Programs - Video

04-10-2012 14:56 San Francisco is a leading center of innovation in health care and biosciences in the world. The combined economic impact of hospital, biomedical research and health sciences education spending is $16.7 billion and together they generate more than 100000 jobs per year -- almost one in five jobs in the City and County of San Francisco. UCSF Chancellor Susan Desmond-Hellmann, MD, MPH, Sue Currin, RN, MSN, president of the Hospital Council of Northern California and CEO of San Francisco General Hospital and Trauma Center, and Terry Hermiston, PhD, vice president of Bayer Healthcare Pharmaceuticals and the US Innovation Center, reflect on why San Francisco has been successful in fueling the economy, ensuring the health of its citizens and conducting groundbreaking research aimed at improving health worldwide.

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San Francisco: Center of Innovation - Video

While reading Chronic Condition, the new book about Canada's troubled health care system, I came across a reference to an almost forgotten chapter of B.C. history.

"To B.C. should go the honour of being the first Canadian province where something at least approximating a serious debate about public health care occurred," wrote author Jeffrey Simpson, the national affairs columnist for the Globe and Mail.

B.C. launched the country's first of many royal commissions on health care in 1919. Then in 1936, the Liberal government of premier Duff Pattullo enacted the first health insurance legislation, a rudimentary scheme that nevertheless provided basic medical coverage to many workers, their spouses and children.

What happened to it? The question sent me to the legislature library and a trove of dusty scrapbooks full of yellowed newspaper clippings, there being no Hansard in those days.

Those scrapbooks told the story of one of the most unusual debates in legislature history, distinctive because it pitted members of the governing party against each other, amid outside pressure from the business community and the medical establishment.

One Liberal, a medical doctor, denounced the proposed Health Insurance Act as "a half-baked scheme," "an abortion," "an encephalitic monstrosity" and the product of "sob sisters."

Another Liberal, a lawyer, called it "a piece of political chicanery" and threatened to resign his seat, forcing his own government into a byelection, that in his view it was bound to lose.

At different times in the two weeks of debate, a number of Liberals either voted against the legislation or vacated the chamber, that being the method of abstention.

A cabinet minister, manoeuvring to save the legislation, twice broke ranks with his own government on procedural votes. The look from his cabinet colleagues "would have fried an egg," wrote Bruce Hutchison, the legend of Canadian journalism then covering the legislature for the Province newspaper.

Still the legislation survived, an outcome that Hutchison credited to two factors in the main.

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B.C. pioneered health insurance in Canada for brief period during '30s

We started something that would fundamentally revolutionize how health care is delivered.

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Care philosophy flourishes

By Joe Rios

CREATED 9:40 AM

KANSAS CITY, Mo. (AP) - A federal appeals court has upheld the dismissal of Missouri Lt. Gov. Peter Kinder's lawsuit challenging the federal health care law. The Kansas City Star reports a three-judge panel of the 8th U.S. Circuit Court of Appeals concluded that Kinder lacked standing to sue because the law posed no immediate threat to his legally protected interests. Thursday's ruling did not address the constitutional challenges to the health care law. The Republican lieutenant governor said in a statement Friday that he's disappointed. But he adds that "the battle is not over" and says he's looking at other options to fight the health care law. Kinder filed the lawsuit in July 2010 in his individual rather than official capacity. Several others had joined in the lawsuit as plaintiffs.

Excerpt from:

Court Rejects Health Care Challenge

ITS not news that health care costs are increasing. Yet several recent studies show that few people factor those rising costs into their retirement plans.

Consider this example from an annual report from Fidelity Investments: For a 65-year-old couple retiring this year, the cost of health care in retirement will be $240,000, 6 percent more than that same couple retiring in 2011 would pay. The report assumes that the man will live 17 years and the woman 20.Most people dont realize Medicare covers much less than traditional employer plans, Sunit Patel, senior vice president in Fidelitys benefits consulting group. The $240,000 number captures the Part B premium for physician services, Part D for prescription drugs. Then there are deductibles and coinsurance, and benefits that are not covered like vision exams, hearing aids.

Another study, this one from Nationwide Financial, found that people who were near retirement routinely and wildly overestimated the percentage of health care costs covered by Medicare. It covers only 51 percent of health care services, according to the Employee Benefit Research Institute.

Robert L. Reynolds, president and chief executive of Putnam Investments, which has its own study, bluntly summed up the situation at a recent news briefing. It makes no sense at all to talk about retirement savings or lifetime replacement income without talking about health care expenses, he said.

A calculator developed by Putnam, called the Lifetime Income Replacement Tool, shows people not only how much they have saved but also how much they need to save depending on their health (cigarette smokers with diabetes need to save the least because their life expectancy is the shortest) and where they plan to retire (Louisiana is the cheapest, Alaska the most expensive) so they can live at their same income in retirement.

Moving to cheaper and possibly warmer climates is something many retirees naturally do. But while someone may be willing to move to Florida to reduce state taxes and avoid the ice and snow of the north, most people have so little awareness about the costs of health care in retirement that those costs are probably not a driving factor.

Carol and Richard Bechtel had worked in the San Jose, Calif., area, she for Stanford University and he at various technology companies. When it came time to retire in 2006, they put a lot of thought into where they wanted to live. They picked a community in Fairfield Glade, Tenn.

Cost of living was a factor. They were able to sell their home of 37 years in San Jose, pay cash for a house on a golf course, and still have money left over to put in their retirement account. Quality of life also mattered. By their account, the Bechtels are thoroughly enjoying their new community and friends. Mr. Bechtel found a hangar close to their home for his airplane, and they are closer to their son and three granddaughters in Wisconsin.

But when it came to knowing their health care expenses in retirement, they were pretty typical: they had to check on what the exact costs were. Their premiums, between Medicare, a supplementary policy through Stanford and a dental plan, will cost them $9,058.80 this year. That is a whopping 14 percent increase from the same policies in 2011. And that number does not include any out-of-pocket medical expenses, like co-payments or the costs of over-the-counter medications.

Health premiums are probably one of our biggest expenses, Mrs. Bechtel said.

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Planning for Retirement? Don’t Forget Health Care Costs

As the 2013 open enrollment benefit season approaches, consumers say choosing health-care benefits is among the most difficult of life decisions, second only to saving for retirement, according to a recent survey.

According to Aetnas Empowered Health Index Survey, 88% of respondents blamed the information regarding their benefits being too complicated for their difficulty in choosing the right plan. Whats more, 85% say the information is conflicting and 83% of survey participants say it is difficult to know which plan is right for them.

Of the 15% of respondents who did not have health insurance, 36% reported they didnt have enough information to shop for it, and 24% are not confident in their ability to choose the right plan.

Complicated information leads to poor health-care choices which cause costly problems. The survey says many Americans continue to dip into their savings and skip recommended medical treatments to cope with the high cost of health care:

Experts claim these challenges will only become more daunting amid escalating premiums and services as consumers remain uncertain about how the presidential election will impact health-care reform.

According to the survey, slightly more Americans, 43%, have an unfavorable opinion of the Patient Protection and Affordable Care Act, (PPACA) than support it, 41%but 75% of survey respondents believe that all of PPACAs key elements are important for them, individually, and for their families.

The Aetna survey, conducted in July among 1,500 adults, also looked at a wide range of behaviors demonstrating the degree to which consumers use tools and resources to actively make health plan, physician and other medical choices.

Despite the headwinds they are facing, consumers are working to improve the situation.

The Patient Protection and Affordable Care Act requires plans to simplify their summary of benefit choices providing side-by-side comparative information for offered plans, says Mark Cesarano, managing consultant at health-care consulting firm Savitz.

Health plans are responding, and companies like Aetna are taking the lead by continually evolving and enriching their educational materials, interactive tools and resources. For example, Aetnas Plan for Your Health website provides educational articles, cost calculators and checklists. Other health insurers are also improving their websites and customer service to provide detailed, yet understandable information to customers.

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How to Pick a Health Care Plan that Fits Your Lifestyle and Budget

Hospital and nursing home managers are reaching for the aspirin again. No matter who wins on Nov.6, most Democrats and Republicans agree in principle that federal spending on Medicare and Medicaid will need to go under the knife, above and beyond the cuts written into the 2010 health-care overhaul.

Illustration by Andrew Joyce

While history suggests its hardly a sure thing that the two parties will reach a deal, even the possibility of one is a risk for institutional health-care providers. Thats because there arent a lot of other places to find savings. Congress has so far proved unwilling to slice doctors pay. Big Pharma makes for a good populist target, but prescription drugs are less than 10percent of total Medicare and Medicaid spending. That leaves hospitals and nursing homes.

Hospitals will get $450billion next year from Medicare, the program for the elderly, and Medicaid, the program for the poor. Thats almost half their total funding, according to federal projections. Nursing homes will get $89billion, equal to 55percent of their revenue. Losing any of that money will hurt bottom lines and test business models.

Illustration by Andrew Joyce

Brookdale Senior Living (BKD), Kindred Healthcare (KND), and Sun Healthcare Group (SUNH), the three largest operators of nursing and residential-care facilities by revenue, declined to answer questions about their preparations for possible future cuts. So did HCA Healthcare (HCA) and Community Health Systems (CYH), the countrys largest hospital companies. In conversations with investors, however, executives have laid out a number of possible strategies.

Hospitals in particular are about to lose as much as to 2percent of their Medicare revenue under the so-called sequestration bill, passed by Congress in return for raising the debt ceiling in 2011. Those cuts may become a dress rehearsal for dealing with further reductions down the road. At a conference hosted by Morgan Stanley (MS) in September, HCAs president of operations, Samuel Hazen, said his company would try to cope with the cuts to Medicare, which in 2011 contributed almost one-third of revenue, in part by driving harder deals with suppliers, which make up about a quarter of HCAs spending.

Those who have worked to diversify their business, like HCA, will feel less of a blow. There is a lot of activity right now in the consulting side, HCA Chief Financial Officer R. Milton Johnson said at the conference. HCAs Parallon Business Solutions subsidiary handles purchasing, payroll, IT, and other functions for other hospitals. Tenet Healthcare (THC), the third-largest U.S. hospital company, has a consulting arm that offers a similar menu of services. The unit, called Conifer Health Solutions, logged a 45percent jump in revenue in the first half of 2012, compared with the same period last year.

Nursing homes, for their part, are pursuing more options. The chief executive of Brookdale, Bill Sheriff, told investors in the companys most recent earnings call that Brookdales expansion into hospice care and outpatient services such as physical therapy has made an attractive additional contribution to revenue, in spite of governmental rate reductions. Similarly, Richard Lechleiter, chief financial officer at Kindred, said in an August earnings call that his companys home health and hospice services are continuing to grow pretty aggressively. Revenue from those lines of business tripled in the first half of 2012, to $57.3million, from a year ago.

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Hospitals and Nursing Homes Brace for Medicare Cuts