Thursday, August 24, 2006

Medicare - Is There a Doctor In The House?

Dear Friends and Colleagues:
Attached an interesting article from the Wall Street Journal (08/21/06) describing the increasing difficulties that seniors face finding a doctor who either still accepts new Medicare patients or is still in practice.
As predicate the diminishing Medicare reimbursement is adversely affecting the quality of care and access to medical care.
It can only get worse unless the SGR is not changed.
See you in Orlando.

Is There a Doctor in the House?
It's becoming tougher to find -- and keep -- the medical providers you need in later life, particularly in retirement hot spots. Here are some strategies to get the care you're looking for.
August 21, 2006; Page R1
Jeane McDade, a retired legal assistant in Santa Cruz, Calif., feels like her doctors are going through a "revolving door."
Since January, her internist and neurologist have left town, and two other specialists who treated her have retired. Three primary-care doctors turned down her request for an appointment, saying they weren't taking new Medicare patients.
Ms. McDade, 83 years old, finally begged an appointment with an internist who is married to one of her other doctors. As far as finding a neurologist, "I'll just have to take whoever I can get," she says.
It's a predicament that's marring retirement for older Americans in pockets dotting the country, particularly temperate, picturesque spots like Santa Cruz that are a magnet for retirees. Finding and keeping a doctor for some patients is becoming a trial, and health-care executives and patient advocates alike are concerned that the situation will only get worse as the number of retirees grows dramatically in coming years.
"Come 2011, when the baby boomers hit 'Golden Pond,' we're just not going to have enough doctors," says David Reuben, president of the American Geriatrics Society and geriatrics chief at the David Geffen School of Medicine at the University of California, Los Angeles.
Money, of course, is part of the problem. Some doctors are leaving towns like Santa Cruz because of the relatively low payments they get from Medicare, the federal health-insurance program for people 65 and older. The government reimburses doctors in Santa Cruz County using the same system that's been in place since long before the Northern California real-estate boom. That means doctors make 15% to 20% less for seeing Medicare patients there than they do in neighboring Santa Clara County.
But even in places where Medicare pays relatively well, other factors are making it tough for older patients to get face time with doctors. Demand for medical services is increasing, a reflection of advances in technology used to diagnose and treat medical problems, along with extended life spans and the resulting increase in the number of chronically ill patients. What's more, doctors are less likely than before to set up their own practices and stay put. Instead, they are forming ever-larger group practices or are going to work for hospital systems that are adding staff -- all to better negotiate with insurers. That mobility can exacerbate local physician shortages. Meanwhile, among the new wave of retirees are many doctors, who aren't necessarily being replaced in the same places or specialties.
Even when doctors can be found, patients may have to wait weeks or months for an appointment. And many patients may feel that their doctors don't set aside enough time for consultations, either during office visits or when questions arise.
So, how can you get the medical care you need in the face of predictions of worsening doctor shortages? We asked health-care experts, geriatric-care managers and patients themselves to pinpoint strategies that you can pursue. Here's their advice:
If you're planning to move in retirement, you're probably already thinking about such considerations as climate, housing costs and tax rates. Now, there's another question you should add to your list: How many of the well-regarded doctors where you want to live are accepting new Medicare patients?
"If I were the son of an elderly person moving to a retirement community," says Dr. Reuben, the Los Angeles geriatrician, "I would want to know more about what's available in terms of medical resources. You have to find out how good a payer Medicare is. There are some states where they don't want any Medicare business, it's such a poor payer."
Unfortunately -- beyond the tedium of checking with individual doctors -- there's no simple way to find out how Medicare payments in a particular locale are affecting the availability of services.
Overall, there seem to be enough doctors to go around. In fact, 73% of doctors nationwide reported accepting all new Medicare patients in 2004 and 2005; only 3% closed their practices to the group, according to a January report by the Center for Studying Health System Change in Washington.

And a July report from the Government Accountability Office found no more than 7% of Medicare patients reported problems finding a doctor from 2000 through 2004. Still, the same report says the proportion of those reporting major difficulties varied by as much as 12 percentage points from state to state.
Retirees and health-care experts we interviewed have seen doctors close their doors in pockets of states ranging from California and Idaho to Florida and Virginia -- places that are popular with retirees and where government payments to physicians haven't necessarily kept up with rising living costs.
If you find that you have choices among doctors who are accepting new patients, you may want to weigh how long each doctor has been in practice. That's because doctors who are more established in a practice are less likely to move away, health-care experts say, especially doctors who own the buildings they practice in and do their own hiring.
Dean Kashino, a family practitioner in Santa Cruz, suggests that if you're planning to relocate in retirement, you do so before you turn 65 and qualify for Medicare. "That way, you have a better chance of latching onto a physician" who will retain you as a patient after you become eligible for Medicare, he says.
In other words, don't take "no" for an answer -- and push doctors to acknowledge your request for help.
Ireta Metchik, a geriatric-care manager in Boston, says she has the most success getting patients appointments with coveted doctors, or rare spots in treatment facilities, by making personal connections and then arguing her case. For example, she recently was worried that a client with multiple physical and psychiatric issues "might die." Even though the patient had adequate financial resources, "I could not get him admitted to a good geriatric psychiatric hospital," she says.
After visiting her client at home, and finding him weak and depressed, Ms. Metchik called his primary-care doctor, clinical social worker, and the doctor's secretary "on a continual basis for two days" to enlist their help. Meanwhile, she checked out the patient's insurance so the primary-care doctor would know that the patient's hospital stay would be covered. Finally, the doctor "realized -- perhaps by sheer repetition -- the seriousness of it, and the connection I had to this man," and admitted him, she says.

Don't expect success every time you squawk. Robert Kane, a geriatrician and professor at the University of Minnesota School of Public Health in Minneapolis, organized an advocacy group called Professionals With Personal Experience in Chronic Care. The group comprises geriatricians, gerontologists and other health-care professionals who have struggled to help their own relatives get access to appropriate medical care.
"My epiphany came around 2000 when my mother had a stroke," Dr. Kane says. "I'm a geriatrician and I have written policy books, but basically I spent three frustrating years with my sister trying to organize care for my mother. If somebody who knows as much as I do and knows as many people as I do couldn't get the system to work, what chance does anyone have?"
His advice for advocating for yourself or an older family member: "First, recognize that it may take a while to find a doctor -- and it may take even longer to find a doctor who you want. Second, you need to be proactive to make the system work. Keep a very clear record of your medications. Ask a physician when he's ordering a drug if he's aware of the other drugs you're on." In other words, "you need to become your own advocate. If you can't do that, that's where your family comes in."
Many people don't realize there are professionals they can hire to help older patients get the care they need.
Geriatric-care managers, who can help assess health-care needs, arrange for medical treatment and schedule home services, can be located through an online directory at CareManager.org10, the site for the National Association of Professional Geriatric Care Managers. The site also lists questions to ask when hiring a geriatric-care manager -- an important step, since most states don't license managers. The cost of the services typically ranges from $85 to $200 an hour.
Check out your employee benefits, as well -- and your children's. Some big companies, such as Ford Motor Co., provide their employees' elderly relatives with a free or reduced-cost visit by a geriatric-care manager. The manager assesses the subject's health, writes a report detailing the findings, and develops a care plan. A few organizations, including Fannie Mae, the Washington-based mortgage agency, have hired their own elder-care case managers to help workers.
Healthy patients who are tired of fighting for a spot with an internist and are interested primarily in prevention may be able to get the screenings they need for blood pressure, blood sugar, cholesterol and so forth through local health fairs, often held at shopping malls. Medical schools typically house clinics that can meet the same needs.
If you're looking for more continuity in your care than that, you could try seeing a nurse practitioner, particularly to help manage chronic conditions. (A nurse practitioner is a registered nurse with advanced training and education.) There's a national directory at NPClinics.com11.
For minor medical problems that can be handled over the phone, TelaDoc Medical Services Inc., a round-the-clock telephone consulting service based in Dallas, charges about $4 a month for membership and $35 for each consultation. Calls are toll-free. Information on the service can be found at TelaDoc.com12.

For the frailest patients, some doctors -- particularly geriatricians -- make house calls, partly because they can get paid more by Medicare than for office visits. In most cases, this is limited to dense metropolitan areas such as Washington and New York, but a few doctors in areas like Reno, Nev., and Southern California have made a go of it. The Web site for the American Academy of Home Care Physicians (AAHCP.org13) has a listing of such doctors.
Another valuable resource outside the doctor's office is a pharmacist. If the one at your local drugstore doesn't offer enough help, you can hire a few hours of advice from a consulting pharmacist who specializes in drug interactions and in the ways that older adults react to medications.
Some pharmacists with that specialty take a test and get certified through the Commission for Certification in Geriatric Pharmacy in Alexandria, Va. There is a directory of certified geriatric pharmacists at the commission's Web site, CCGP.org14.
If you can't find a pharmacist near you or your parent who has taken the certification test, don't give up. Many pharmacists have a lot of experience counseling older customers about potential drug interactions and helping them sort things out when side effects surface.
The American Society of Consultant Pharmacists, based in Alexandria, Va., offers a directory of "senior care" pharmacists at SeniorCarePharmacist.com15.
There are several resources to consider for patients with chronic diseases.
Fledgling programs designed to manage chronic illnesses as long-term diseases, rather than to battle them like short-term crises, are often buried within the bureaucracy of big hospital systems or insurance companies, and a lot of patients who could use them don't know they exist.
Also, some large employers and health plans hire "disease management" companies to counsel employees and members, mainly by phone. Older people still working, or retirees who still have health benefits through former employers, may have access to such programs, says Molly Mettler, senior vice president of Healthwise Inc., a supplier of online and printed health information based in Boise, Idaho.
If you have a choice between traditional Medicare insurance and a Medicare managed-care plan, you may want to consider the latter to get more counseling for special health needs, says Marc Hoffing, medical director of the Oasis Independent Physician Association in Palm Springs, Calif., which contracts with managed-care plans. For the sickest patients in the Medicare managed-care plans that Mr. Hoffing's association serves, case managers are available 24 hours a day.
In Washington state, Colorado, Northern California and a few other pockets around the country, doctors who work with older people are experimenting with grouping those patients together for appointments, even if, in some cases, they suffer from different health problems.
Such visits have proved so popular at Group Health Cooperative in Seattle that the nonprofit health-care system has expanded its pilot project to 20 locations, says Martin Levine, Group Health's medical director for senior care. Patients in the groups use the emergency room less, a big cost saver, and have seen their health improve in other ways.
The group visits start with an icebreaker, then move into a 30-minute discussion about a topic the patients agreed on the previous month, such as how to manage your medications, what happens if you're traveling and get sick, how to monitor high blood pressure, how to manage vision and hearing loss, and so forth. Then the group takes a coffee break, during which the doctors check in with people individually. In the last 10 minutes, the group decides what to talk about the following month.
"The patients come in with a whole mix of problems -- diabetes, heart disease, lung disease, arthritis," says Dr. Levine. "Over time, they realize they don't need their one-on-one visits so much." The patients often benefit from hearing their doctors' advice reinforced by people their own age, he adds.
"One doctor saw someone with headaches that had no explanation for eight years," says Dr. Levine. The doctor "ran out of things to offer her and told her to go out there, stay active, go for a walk. At a group visit, one woman told her, 'I go for a walk every day. You should go for a walk.' The woman with the headaches said, 'That's a good idea,' and they traded phone numbers." The two became walking partners, and the headaches went away.

Take the time to learn about health basics like nutrition or what preventive tests are appropriate at what ages.
One basic tool: a self-help health-care manual, such as "Healthwise for Life," co-authored by Ms. Mettler of Healthwise Inc., or the "Merck Manual of Health and Aging." Forty percent of patients in one study in Southern California who were given a self-care book reported saving a trip to the doctor's office; 39% said they saved a trip to the emergency room.
You also should get copies of your medical records, either online or on paper, says Beverly Bernstein Joie, president of Elder Connections Inc., a geriatric-care-management company in suburban Philadelphia. You are entitled to your medical records by law.
For instance, when you see a specialist, such as a cardiologist, ask for a copy of your cardiogram and the report that goes to other physicians. That way, Ms. Joie says, if results and reports don't make it to other doctors, you have a backup copy and can still get the most out of future health-care appointments.
It might sound extreme, but some retirees are moving to Costa Rica, Mexico and other countries where health-care costs are appreciably lower and the quality of service, they say, is significantly better.
Several years ago, Robert Preston, an actuary in Sarasota, Fla., was frustrated with the lack of medical and custodial attention his father, the retired chief financial officer of a large pharmaceutical company, was receiving in Florida. Expenses totaled $10,000 a month for a room in a nursing home in Venice Beach, as well as personal attendants.
Mr. Preston started thinking about pursuing care for his father in another country. He settled on Costa Rica after a friend returned from a trip there, singing the praises of the country's medical services. Eventually, Mr. Preston's father settled in a private home in Costa Rica, with a house manager, chauffeur and three attendants -- all for about $3,000 a month. Instead of being confined to a nursing home, his father attended church every Sunday, took a large group to brunch afterward, went out to dinner several times a week -- and occasionally even went on a date. (Mr. Preston flew down to see his father once a month on a four-hour flight to San Jose, rather than a three-hour flight to Florida.)
Mr. Preston's father died in 2001. Since then, two of Mr. Preston's friends have moved family there.
"In Costa Rica, the medical system is excellent. My father's doctor there would call me up in Connecticut," Mr. Preston says. "I couldn't get doctors in Florida to return my phone calls."

Thursday, August 10, 2006

Caps on Noneconomic Damages

Attached a letter to the editor sent to the Miami Herald commenting on the interview with Lewis Eidson,the new president of the Association of Trial Lawyers of America published in the Miami Herald on August 7th, 2006.

"In your interview with Lewis S. Eidson(08/07/06), the new president of the Association of Trial lawyers claims that caps on medical professional liability do not affect insurance premiums. This is flatly wrong. In September 2003 voters in Texas approved Proposition 12, a constitutional amendment that caps noneconomic medical malpractice damages at $250,000. Since the passage of this amendment the state's largest provider of medical malpractice insurance reduced rates by 12 percent in 2004, 5 percent in 2005 and an additional 5 percent in 2006. This resulted in the return of $10 million in dividends to 2005 policyholders. The drastic readjustment of insurance rates allows many doctors in high-risk specialties (OBGyn, Surgery, Neurosurgery) to continue practicing medicine and guarantees access to medical care for citizens in Texas. Imagine this would happen in Florida? We would not have to struggle to retain neurosurgeons and obstetricians and lives could be saved by preventing treatment delays for patients with serious head injuries and women seeking skilled obstetricians for complicated deliveries. Mr.Eidson’s callous disregard for our citizens’ health is appalling."

Friday, August 04, 2006

Retail Clinics: The Smart Response

Retail clinics in shopping center are spreading across the US fueled by the demand for “cheap” and accessible health care. Most of them are staffed by nurse practitioners and offer treatments for minor aches and pains. Many doctors and medical organizations have expressed their concerns that such clinics may siphon of patients from their traditional medical practices thereby jeopardizing their bottom-line. Furthermore, the quality of care rendered at those clinics is being questioned, especially in the absence of licensed doctors on-site. All of the above points are justified and valid, but the fact remains that many under- or uninsured seeking an alternative to the existing system of long-waits at bursting ERs or in crowded doctor waiting rooms. We should consider adopting and changing our practices to meet their demands and needs thereby attracting those potential patients to our medical practices. Now, traditional medical providers are stepping up to the counter, driven by the threat of new competition, the opportunity to recruit new patients -- and real concerns about the quality of care. Some large regional health-care systems are starting their own clinics directly with retail partners, while other medical groups and doctors offices are signing contracts to supervise clinic staff, and striking up referral arrangements with retail clinics. If you can fight them, join them!

The New Force In Walk-In Clinics Hospitals and Doctors Seek
Slice of Burgeoning Business; Getting Referrals at ShopRite
WSJ July 26, 2006; Page D1
(See Corrections & Amplifications item below.)
With catchy slogans like "You're Sick! We're Quick!" retail health clinics are spreading fast in supermarkets, drugstores and big-box chains across the country, luring patients with walk-in treatment for minor ailments like strep throat -- at about half the cost of a typical doctor visit.
The phenomenon has been largely driven by small start-up chains, such as MinuteClinic, RediClinic and Take Care Health Systems, which run the outlets under agreement with retailers and have had few formal ties to the medical establishment.
Now, traditional medical providers are stepping up to the counter, driven by the threat of new competition, the opportunity to recruit new patients -- and real concerns about the quality of care. Some large regional health-care systems are starting their own clinics directly with retail partners, while other medical groups and doctors offices are signing contracts to supervise clinic staff, and striking up referral arrangements with retail clinics.
In southeastern New Jersey, for example, AtlantiCare, the region's largest health-care system with about 450 staff physicians and a network that includes two hospitals and a health plan, will open its first in-store HealthRite clinic next month in a Somers Point, N.J., ShopRite supermarket. It's the first of seven initially planned, and the company may also franchise to other health systems. Geisinger Health System, of Danville, Pa., with hospitals, physician practices and other health services, is opening its first CareWorks Convenient Healthcare clinic in the Weis Markets grocery chain next month, and will open as many as 75 sites throughout the region in the next five years. Memorial Baptist Health system in South Bend, Ind., is operating Medpoint express centers in local Wal-Mart Super Centers.
Staffed mainly by nurse practitioners who are licensed to treat a wide range of minor illnesses and prescribe medications, retail clinics have grown rapidly over the past five years as retailers, including CVS, Kroger, Wal-Mart Stores and Walgreen, have signed up with more than a half-dozen clinic operators. Earlier this month, CVS, with 6,100 retail outlets, agreed to acquire MinuteClinic, which currently operates 83 clinics in outlets including CVS, Bartell Drugs and QFC Foods in markets such as Baltimore; Nashville, Tenn.; and Washington, D.C., suburbs, and plans to add more than 1,000 by 2009.
By the end of the decade, the number of clinics could grow nearly tenfold to 10,000, says Peter Miller, chief executive officer of Take Care Health, which runs 16 clinics in Walgreens and Rite Aid drugstores in Portland, Ore., Kansas City, Mo., and St. Louis. Take Care plans to open 1,400 clinics by 2009. "We're offering health care on patients' terms instead of on the health-care system's terms," says Mr. Miller.
While some experts question whether the clinics can generate adequate profits for operators and retailers, by opening their own clinics or signing referral agreements, hospitals and physicians can capture a piece of the action at a time when competition for patients is a growing concern. In a new report, the California HealthCare Foundation predicts that retail clinics "could change the way many people receive routine, non-urgent medical care."
Last month, the American Medical Association and the American Academy of Family Physicians warned that retail clinics with no ties to health-care systems could lead to more fragmentation of patient care, inadequate follow-up for patients, and missed opportunities for preventive care. Both groups called on the clinic operators to ensure that clinics are supervised by doctors and to establish formal referral systems with local doctors and hospitals.
Relying on retail clinics for care does carry certain risks. The clinics typically don't have private exam rooms or physicians on site -- though state regulations require nurse practitioners to have some level of oversight by a sponsoring physician. Clinics generally don't have procedures for follow-up with repeat visits. And because they don't do comprehensive physical exams or the most sophisticated tests, doctors warn, the clinics may miss more-serious conditions.
Traditional health-care providers say that the new wave of clinics that they operate or support will have advantages over independent clinics. Larger medical facilities have more experience to provide training, and the relationships will allow greater continuity of care, including sharing of medical records. They say they will be able to quickly link patients with a doctor or hospital if need be, but their clinic charges and costs will be comparable with those of the independent clinics.
Patrick Nemechek, a Kansas City internist sought a referral arrangement with Take Care clinics near his office. "Part of the reason these clinics are doing so well is the failure of the health-care system to take care of the consumer's needs," says Dr. Nemechek. He often sends patients with "quick, simple" issues to Take Care clinics, while the clinic refers patients with more serious concerns such as a spike in blood pressure.
In St. Louis, SSM Health Care, with eight hospitals and nearly 2,000 staff physicians, recently agreed to help supervise Take Care clinics in the area and review medical records to ensure care is appropriate; Take Care will refer patients with more serious health-care issues to SSM doctors, where they can establish continuing relationships. "We see this as an opportunity to participate in an evolution of health care but also to help shape it in a way that serves patients first," says SSM regional president, Ron Levy.
When Take Care signed an agreement to open 20 Health Corner clinics in Chicago Walgreens stores this fall, it also struck a deal with Advocate Health Partners, Oak Brook, Ill., which includes more than 900 primary-care physicians and 1,800 specialists, for each to refer patients to the other. Advocate doctors will review clinic medical records and supervise nurse practitioners.
Memorial Hermann Healthcare System in Houston and Hillcrest Medical Center in Tulsa, Okla., are providing medical oversight for RediClinic, a unit of Houston-based InterFit Health, which has 75 clinics in retailers such as Duane Reade, H-E-B grocery stores, Wal-Mart and Walgreens, and plans to open 500 new units by 2009.
Some health systems see more advantages to entering the clinic market directly. "As a local health system we think it's important to provide new levels of access to health care for patients, and to compete in areas where private entrepreneurs are rushing in," says Don Parker, president of the AtlantiCare unit that is opening HealthRite clinics in ShopRite stores. While clinics may compete with AtlantiCare's own staff doctors, he says, clinics can treat minor ailments and allow doctors "to concentrate on more complex issues of care and patients with chronic conditions."
AtlantiCare clinics will offer tips for healthy grocery shopping, and AtlantiCare is talking to ShopRite about offering nutritional tours of the supermarket aisles and better labeling of foods for healthy diets.
Clinic operators say they have reached out to local physicians to supervise nurse practitioners, and sought to establish referral relationships with doctors, urgent-care centers and emergency rooms. James Woodburn, a physician who is MinuteClinic's chief medical officer, says he sends letters to physicians in each market the company enters to ask if they are accepting new patients, and if so adds them to a database for referrals.
Retail-clinic operators say that sometimes nurse practitioners do fail to recognize more-serious illness, but that nothing has given rise to any legal action (clinics generally carry some malpractice insurance). The bottom line, they say, is that retail clinics fill a need, take steps to ensure care is high-quality, and encourage patients to seek regular care from a doctor.
Uninsured patients pay cash, while insured patients are charged a co-pay that may be slightly more or less than what they have to pay at the doctor's office, depending on the clinic. Take Care clinics bill insurers 10% to 30% less than doctors do, Mr. Miller says.
Blue Cross & Blue Shield of Minnesota, which analyzed 22,956 visits by its members to MinuteClinics from June 2004 to June 2005, found the clinics cost about half an office visit -- or $43 versus $87 -- and less than half for other related costs such as lab services.
Chris Shandrow, a 29-year-old creative-arts director at a local church, sought care for a pesky sinus infection at a Walgreens clinic operated by Take Care, when he first moved to the Kansas City area with his wife and children without a primary-care doctor. He was in and out with a prescription within 10 minutes and was charged a $20 co-pay. "I know I'm going to need to get a regular doctor, but the convenience of being able to pop in there was really worth it," he says.
• Email me at informedpatient@wsj.com1.

Corrections & Amplifications:
Memorial Health System of South Bend, Ind., is operating Medpoint express health clinics in Indiana. This column incorrectly identified as Memorial Baptist Health.

Medicare and Hospital Payments

The Bush administration has decided to scale back its proposed changes in Medicare payments to hospitals including the proposed payment cuts for many complex treatments. Medicare pays more than $125 billion a year to nearly 5,000 hospitals. Federal officials had proposed sweeping changes in the classification system, to account for the severity of each patient’s illness. They wanted to replace the 526 categories with 861. They settled for more modest changes in 2007, creating 20 diagnostic groups and altering 32 others. Even though, this may appear like a victory it may have negative repercussion in our battle to stop proposed Medicare cuts for physicians. The pie does not get bigger and each of us is fighting for a larger slice. In this battle the administration plays one group against the other according to the old roman principle “divide and rule”. Instead of fighting each other e need to unite to demand for a substantial reform of the entire Medicare payment and reimbursement system.

NYT August 3, 2006
Scaling Back Changes to Medicare Payments

WASHINGTON, Aug. 2 — Under intense pressure from health care lobbyists and lawmakers, the Bush administration says it will scale back and delay proposed changes in Medicare payments to hospitals that would have created clear winners and losers.

The proposals would have cut payments by 20 percent to 30 percent for many complex treatments and new technologies. Hospitals will instead see much smaller cuts or even small increases for many of those procedures. Some of the changes will be phased in over three years.

Doctors, hospitals, consumer groups and members of Congress had said the proposed cuts would be devastating. Under the proposals, they said, patients would have had less access to some services like cardiac care.

On Tuesday night, the Bush administration issued a final rule that reaffirmed the overall goal of more accurate payments while backing away from many of the proposed changes, including a sweeping revision in the classification of patients intended to account for the severity of their illnesses.

The reaction from Wall Street analysts on Wednesday was positive.

“The final rule significantly moderates proposed cuts for cardiac procedures,’’ Citigroup said in a note to investors. Lehman Brothers described the final rule as “a win for cardiac and orthopedic device companies, specialty hospitals and general acute care hospitals.’’ The Prudential Equity Group said the final rule, which takes effect on Oct. 1, was “favorable for device manufacturers’’ like Boston Scientific, Medtronic and St. Jude Medical.

Stephen J. Ubl, president of the Advanced Medical Technology Association, which represents hundreds of device makers, said he was pleased that the Bush administration and Medicare officials had responded to the industry’s concerns.

The new rule removes “a dark cloud’’ that had been hovering over the industry, Mr. Ubl said, adding, “The worst is behind us.’’

The industry’s lobbying campaign offers a case study in how to influence the government on complex technical issues that have implications worth billions of dollars to a politically potent sector of the economy.

Rather than just filing comments on the proposed rule, the health care industry mobilized a political campaign that combined advertising and lobbying to beat back the proposed cuts. Lobbyists wrote dozens of letters to the Medicare agency, stoked concern on Capitol Hill, ran advertisements and met with White House officials including Rob Portman, the new director of the Office of Management and Budget.

Under the proposal, published in April, the basic Medicare payment for surgery to open clogged arteries, by inserting a drug-coated wire mesh stent, would have been cut by 33 percent, to $7,590. The final rule calls instead for a cut of 3 percent, so Medicare will pay about $11,000.

The payment for implanting a defibrillator, like the one used by Vice President Dick Cheney, would have been cut 23 percent under the proposal, to $22,000. The final rule calls for a cut of 2 percent, so Medicare will pay about $27,750.

Under the final rule, hospitals will receive much smaller increases than originally proposed for treating some conditions, like pneumonia and chronic obstructive pulmonary disease.

Michael O. Leavitt, the secretary of health and human services, said the current payment system was full of biases and distortions that encouraged hospitals to provide “treatments that happen to be the most profitable.’’

Federal officials said the new payments would be more accurate because they would be based on estimated hospital costs, rather than inflated charges. In revising its proposal, the government significantly modified its method of estimating costs, to include more data from high-cost hospitals. The resulting changes will be smaller than originally proposed and will be put into effect gradually over three years, rather than all at once.

Dr. Mark B. McClellan, administrator of the Centers for Medicare and Medicaid Services, said the final rule would mean “smaller changes in payment, up or down, than the proposed rule.’’

Medicare pays more than $125 billion a year to nearly 5,000 hospitals. Hospitals typically receive a fixed amount for each Medicare patient, regardless of how long the person stays in the hospital. Each patient is classified in one of 526 categories, known as diagnosis-related groups.

Federal officials had proposed sweeping changes in the classification system, to account for the severity of each patient’s illness. They wanted to replace the 526 categories with 861. They settled for more modest changes in 2007, creating 20 diagnostic groups and altering 32 others.

The severity of a patient’s illness can have a significant effect on the costs of care. In trying to account for those costs, the proposed rule relied heavily on a patient-classification system devised by 3M, the technology company based in Minnesota.

Hospitals said Medicare should not rely on a proprietary system controlled by a single company.

The Bush administration agreed to consider alternatives, to ensure that no company would have a monopoly over the software needed to manage billing and payment.