Yes.
Rationing, fewer doctors for Medicare patients without major reform.
By Grace-Marie Turner
The escalating political debate about the future of Medicare reveals a fear of change coupled with the growing recognition that change is essential to sustain the program for the future.
Medicare is facing $38 trillion in red ink. The recent Medicare Trustees report showed the program is careening toward bankruptcy and will run out of money in 2024 — five years faster than the trustees predicted just one year ago.
And to make it worse, the chief actuary for Medicare, Richard Foster, issued a dissenting opinion to the report, explaining that even those dire predictions are based upon politically unrealistic spending cuts that neither he nor anyone else expects to happen.
President Barack Obama’s health care law passed last year relies on cuts in payments to doctors, hospitals and other Medicare providers, starting with a 30 percent cut at the end of this year and further cuts year after year. Eventually, two out of five providers would either go bankrupt or be forced to stop seeing Medicare patients altogether.
Not changing Medicare is not an option. Yet the prevailing wish appears to be that politicians will simply leave Medicare alone.
But without a serious course adjustment, the program faces a steep and inevitable decline. Medicare will become a third-rate, price-controlled program that rations a lower-quality of care through waiting lines and other restrictions.
If Medicare’s antiquated, open-ended, fee-for-service model isn’t reformed, then we will continue to pour deficit-funded dollars into the program or raise taxes to levels that would topple the economy as millions of baby boomers hit retirement.
House Budget Chairman Paul Ryan, R-Wis., recognizes that reality in his proposal to begin modernizing the program, starting 10 years from now. He wants the next generation of seniors to have more choices and lower costs through competition. They would get guaranteed private coverage through a modernized Medicare program that works much like the health program members of Congress have today.
The Congressional Budget Office has shown the Ryan plan will save Medicare and keep the economy from collapsing under the weight of massive entitlement spending.
The president railed at Rep. Ryan for his plan, claiming it would leave seniors destitute. That is a false charge, and it deflects attention from the fact that the president already has led the effort to make major changes to Medicare.
The president’s health law is financed through $575 billion in Medicare spending cuts to help fund two new entitlement programs. This spring, the president proposed doubling down on those cuts by taking an additional $480 billion out of the program to lower the deficit.
If even a fraction of these cuts take place, a whopping 87 percent of doctors say they will stop seeing or will restrict the number of Medicare patients they see, further shrinking the pool of providers and further restricting access to care.
Rationing will ensue. The powerful, 15-member Independent Payment Advisory Board will try to squeeze Medicare payments into health care’s global budget in a futile attempt to use price controls to meet ever-elusive spending targets.
Access to new medicines and cutting-edge medical equipment will diminish. Payment restrictions and the politicization of medical decisions will give companies less incentive to take the huge capital risks to invest in new products. And the government is targeting drugs and devices — which often are the most cost-effective treatments overall — in its futile effort to rein in spending.
The only way to save Medicare is to change it. Voters face a clear choice.
Grace-Marie Turner is president and founder of the Galen Institute.
No.
Program’s success hurt by uncontrolled health care costs.
By John Conyers Jr.
Medicare is arguably one of the nation’s most successful and cherished public insurance programs. The program covers 47 million elderly and disabled Americans, and helps pay for hospital, physician visits and prescription drugs. It is truly hard to argue with success.
The traditional Medicare program, coupled with a supplemental private insurance policy, covers most of our seniors’ medical bills, with far less co-pays and out-of- pocket costs than private insurance.
Therefore, proposals to privatize Medicare — like Rep. Paul Ryan’s — have been met with such fierce opposition, because it was revealed in the national media that privatization meant much higher out-of-pocket costs for seniors. National polls have shown strong general support for maintaining Medicare or even increasing funding for it.
However, Medicare costs are projected to increase from $519 billion per year in 2010 to $929 billion in 2020.
The simplistic argument we often hear from conservatives is that Medicare is a costly federal government program because all federal government programs are inefficient and therefore costly. According to their line of reasoning, privatization is the only way to save money.
The truth is that there are several other ways to strengthen Medicare, but there has been a false debate in the nation regarding the rising costs of Medicare.
This may be partly due to not understanding a fundamentally key concept regarding current health-care policy — there are no effective cost-containment mechanisms in place to control the private market costs of prescription drug costs, corporate hospitals and medical technology which are the main drivers of Medicare costs.
Research by respected economist Dean Baker shows that the federal government and Medicare beneficiaries would save $600 billion between 2006 and 2013 if Medicare were allowed to directly negotiate prices with pharmaceutical manufacturers.
One study by Families USA found that the Veterans Administration was able to negotiate substantially lower prices for the top 20 drugs used by seniors, compared to private Medicare part D plans.
It would only make sense for there to be bipartisan support for Medicare to be able to use the full faith and credit of the federal government and be able to negotiate down the rising costs of prescription drugs.
According to Forbes magazine, hospital charges represent about one-third of total health-care spending — $718 billion altogether. Twenty-four hospitals in this country with more than 200 beds make an operating margin of 25 percent or more — a profit margin that compares favorably to drug giants like Pfizer, and easily beats the operating profit margin that General Electric reported in 2009.
America must transition to a non-profit improved Medicare-For-All program, if we are to have any chance of realistically containing overall health-care costs.
That’s why I have reintroduced H.R. 676, the Expanded and Improved Medicare For All Act, that would provide for a single-payer health care system, providing all Americans with health care coverage.
Japan, Taiwan and countries in Europe have been able to effectively contain their health-care costs for decades through their very successful universal health care systems — without waiting lines, rationed care and out-of-control taxes.
America can learn invaluable lessons from other nations on how to control health care costs, and the time has come to be open minded about their success and honest about our need to change course from our corporate-dominated and inefficient health care system.
Rep. John Conyers Jr., D-Mich., is the ranking member of the House Judiciary Committee.
