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Medicare Inhaling Lung Care Costs

Medicare has agreed to cover a new and costly therapy for people with severe emphysema that involves reducing the size of diseased lungs, despite concerns about cost–effectiveness.

The Centers for Medicare and Medicaid Services announced on Wednesday that it would cover lung volume reduction surgery (LVRS) for people with certain forms of emphysema.

"This decision follows years of research and an exhaustive evaluation of the available scientific evidence and reflects CMS' efforts to bring the latest and best medical care to its 41 million beneficiaries," said Medicare administrator Tom Scully."

Two million Americans have emphysema, a disease that affects the air sacs in the lungs and makes it hard for the body to exchange oxygen for carbon dioxide. It is incurable and often fatal, contributing to 100,000 deaths a year and costing $2.5 billion, according to The New York Times.

According to The Times, Medicare will cover the operation for people with severe emphysema in the upper part of their lungs, or people who have other types of emphysema but have very little ability to exercise. Only about 10,000 people are believed to have those forms of the disease.

People who receive the operation will also have to demonstrate that they are healthy enough to survive the procedure itself, and will be required to attend pre-operative counseling sessions to learn ways to improve survival and quality of life after the surgery.

In the operation, 25 to 30 percent of the lung might be removed as doctors cut out diseased tissue to make it easier for healthy tissue to work. It costs between $30,000 and $70,000.

According to the Fred Hutchison Cancer Research Institute, the new procedure could cost Medicare up to $300 million a year.

Until now, Medicare did not cover lung reduction surgery because its effectiveness was in doubt. However, the National Emphysema Treatment Trial that started in 1996 showed that the procedure could improve quality of life for about 25 percent of patients, according to The Times.

However, in announcing the coverage decision, Medicare acknowledged that "findings from the (recent study) suggest that the estimated three-year cost-effectiveness ratios for (the surgery) as compared to medical therapy alone are unfavorable."

"However, (Medicare) believes that the benefits of LVRS outweigh the costs and that LVRS is likely to compare favorably with other surgical procedures when additional years of data are available."

Medicare costs are a concern because, like Social Security, the program is supported by payroll taxes. As baby boomers retire, fewer workers will be supporting more Medicare recipients, posing possible financing problems. The rising cost of medical care and the increasing lifespan of retirees exacerbate those problems.

According to the Congressional Budget Office, Medicare will rise as a portion of total federal expenditures from about 2.2 percent today to 9.6 percent in 2075.

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