Sunday, December 18, 2011

The Reform Medicare Really Needs

Between now and the elections in November 2012 we're going to hear a lot about Medicare vouchers - or, in the prettied up term, "premium support." We're finally at the point where no responsible politician denies the need to curtail Medicare costs. And, in recent weeks, Democrats as well as Republicans have been floating different forms of voucher proposals for reining in Medicare costs. "Guaranteed Choices to Strengthen Medicare and Health Security for All," the hot-off-the-press proposal from Senator Ron Wyden (D-Oregon) and Representative Paul Ryan (R-Wisconsin) will get the most attention.

The Wyden-Ryan proposal opens with an on-target diagnosis of how virulent Medicare politics has led to the morass we're in:
Few issues draw more heated partisan rhetoric than the future of Medicare. Seniors are a reliable and powerful voting bloc, and both Republicans and Democrats are guilty of exploiting Medicare concerns to frighten and entice voters..In fact, the more the national conversation about the future of Medicare deteriorates into partisan attacks that our opponents will “cut Medicare” versus superficial campaign pledges to “make no changes” to a 45-year-old program, the harder it gets to have a serious debate about the best way to ensure that seniors can rely on a strengthened Medicare program for decades to come.
The debate about Wyden-Ryan and other voucher proposals is predictable. Republicans and a few Blue Dog Democrats (foreign readers - "Blue Dogs" are conservative Democrats) will fight for vouchers on the basis of free market theology of choice and competition. Yellow Dog Democrats (foreign readers - "Yellow Dogs" are so loyal they would vote for a yellow dog if it was called a Democrat) will fight to keep fee-for-service Medicare as it is, with tweaks to reduce costs.

Both positions are wrong. They ignore the two most important constituents - Medicare beneficiaries themselves and the improvement-minded clinicians who care for them.

We Medicare beneficiaries (I say "we" even though I'm only a Medicare "eligible," since I still have employer insurance) don't want to mortgage opportunity for future generations to pay for the bloated system we have now. The 77% of us with traditional Medicare like the government-run insurance program. The 23% of us with Medicare Advantage plans are happy with private insurance. But we're not happy with the discoordinated care system in which tests are repeated unnecessarily, doctors don't communicate with each other, we get readmitted to the hospital too quickly, and, at the end of life, too often die surrounded by monitors and tubes in the ICU rather than by our loved ones at home. And our physicians and nurses are frustrated by many of the same things.

To get real Medicare reform three things must happen:
  1. Medicare beneficiaries must speak out about improving care and protecting future generations by reducing costs. Politicians imagine that we're all "greedy geezers" like the folks who threaten them in the recent AARP advertisement. Some of us are, but it's a minority. Our political leaders won't get serious until they hear from us - their constituents - about what most of us believe and want.

  2. Improvement-minded physicians, nurses, other health professionals, and administrators are the ones who know how to wring the waste, estimated to be as high as 30%, out of the care system. Competition won't do it. Vouchers won't do it. Only motivated health professionals can. If you want to understand why this is so, read Don Berwick's recent address to the Institute of Health Improvement.

  3. Medicare needs a budget. Creating a budget by adding up the bills for our care won't do the job. If there's a true budget we can work with out caretakers to do what's needed within fair limits. Most of us are on fixed incomes. We know there's no pie in the sky!
For 35 years I practiced and got my own care at a not for profit HMO where clinicians and patients lived within a budget and made the system work. I'd rather see us use patient-physician collaboration as the basis for Medicare reform rather than hope that financial pressure will turn Medicare beneficiaries into health care shoppers who drive costs down. But quite apart from the prevailing conservative faith-based belief that "skin in the game" will inevitably fuel the needed reforms, it's not irrational to fear that politicians won't have the gumption to create and stick to a true budget for Medicare, or to allow CMS to apply sensible management strategies like centers of excellence instead of unbridled fee-for-service. It's that perspective that leads Democrats like Senator Wyden to take up the voucher concept.

But with or without vouchers, with or without either single payer Medicare or multiple competing insurers, the key ingredients of Medicare reform are (1) strong beneficiary demand for positive change, (2) leadership from improvement-minded clinical leaders, and (3) an overall budget for the program. Without this triad we're just whistling into the wind.


Anonymous said...

Doctor, apparently because you are only "Medicare eligible" and haven't actually signed up yet (you should at least sign up just for Part A even if you have employer insurance; and it's "free"), you are not aware of the reality for the rest of us Medicare beneficiaries. You say:

"We Medicare beneficiaries... The 77% of us with traditional Medicare like the government-run insurance program. The 23% of us with Medicare Advantage plans are happy with private insurance. But we're not happy with the discoordinated care system in which tests are repeated unnecessarily, doctors don't communicate with each other.."

Actually the percentage of fee for service "traditional Medicare" (Parts A and B) vs Part C is now 75/25. The number of people on Part C Medicare Advantage has doubled in the last five years, because more and more of us just now coming onto Medicare do not have the HMO hang up of our parents (for the reasons you described later in your post). And most of us Part C beneficiaries have our care coordinated in the same way as any HMO as you also describe (some Part C policies are PPOs). The uncoordinated comment applies only to Parts A and B in the same way it applies to any non-Medicare beneficiary on traditifonal Blue Cross/etc. at their workplace and to most Medicaid recipients.

Your characterization of "government run" vs "private" for the different Parts of Medicare is misleading for about to be Medicare beneficiaries who might read your blog. All Parts of Medicare ("traditional" A and B, as well the Part C Medicare Advantage option and the Part D drug coverage that more and more beneficiaries sign up for) are equally private and public. They are public in that they are highly regulated by CMS and the government is the single self insuring payer (just like IBM, Google, EMC, Raytheon and most large employers do for their employee plans). But all parts of Medicare -- not just C -- are private in the sense that they are administered (sign up, claims handling, etc.) by private insurers. (But I admit most insurers do not have the Social Security administration to force most premium payments.)

Most important -- and I'm guessing you will probably never experience this yourself -- most of us beneficiaries do not "like traditional government-run" Medicare. It's just that we are forced to take Parts A and B in order to get our employer's private retiree plan or a private Medigap Plan, which is how 92% of the people not on Part C really insure themselves (including those on Medicaid whose Medigap is paid for). Part A and B traditional Medicare is terrible insurance with high co-pays and deductibles, lifetime limits, no vision/dental/annual-physical-exam/drug coverage and geographic restrictions.

Thanks and as I said, if you are eligible, at least sign up for A.

-- Dennis Byron, CMS SHIP Volunteer

Jim Sabin said...

Hi Dennis -

Thank you for your thoughtful comment, especially for prodding me to sign up for Part A. My wife and I have done that even though we're both still insured by our employers, but if we hadn't your nudge would have been very therapeutic!

I hope you are correct in your suggestion that aging baby boomers and young Medicare beneficiaries understand the concept of well managed care, by which we both appear to mean coordinated, evidence-guided care. As I see it, the defects of traditional Medicare are primarily defects in the delivery system. It's not hard to communicate with your medical colleagues, and part of being a good physician is knowing what else has been done with/for/to our patients. In my own view, the optimal system of care is in not for profit group practices like Harvard Vanguard, Kaiser Permanente and Group Health Cooperative, and I'd like to see Medicare beneficiaries having that kind of option readily available.

The only point I disagree with is your comment that most beneficiaries do not like traditional Medicare. Medicare is the most popular health program we have in the U.S. But you and I agree that there's room for major improvements in quality of care to be made. And, as Don Berwick said in the December 7 talk I gave a link to, there are major savings to be made as well, which must be made if we want to avoid degrading our entire society.

Again, thank you for your thoughtful and informative comment, and especially for bringing the SHIP program to my attention!



Dennis Byron said...


You're welcome (and I'm glad to hear you got the message already on Part A).

But I think I did a poor job explaining "traditional Medicare" or you are confusing "like" with "have to have." Who could like healthcare insurance with potential bankrupting lifetime limits? "Traditional Medicare" provides exactly the opposite benefit of what most insurance of any type should provide, a budgetable cap on the purchaser's liability.

Instead of such upside protection against catastrophe at the expense of manageable upfront out of pocket costs, Medicare enshrines a cap on the payer's (that is, the government's) instead of the insured's liability at only a few hundred thousand dollars when as you know medical bills -- admittedly in very dire circumstances -- can run into the millions.

You would think the tradeoff would be lower deductibles. But instead the traditional Medicare that you think is popular "features"
-- an $8,000-plus annual in-patient hospital deductible depending on number of and timing of admissions,
-- the infamous admitted vs. observed Catch 22 of which you are probably aware
-- very limited skill nursing facility coverage (vs. what many seniors need after a knee or hip replacement)
-- high doctor/VNA visit and outpatient hospital co-pays (although such high co-pays are also increasingly becoming typical for people not yet eligible for Medicare), and
-- as I said in my first comment, no vision, dental, annual-physical-exam, and drug coverage.

If you have an emergency outside the U.S., you're out of luck. And I'm not taking about the Grand Tour of Europe. I'm talking about the guy from Buffalo running over the Peace Bridge at Niagara Falls to the casino on the Canadian side. If he gets severe chest pains and he is on traditional Medicare, he better crawl on hands and knees back to U.S. Customs office.

It's not that "traditional Medicare" is popular. It's just that you have to sign up for it in order to sign up for employee retiree insurance (almost always) as well as Medigap or Part C (always). When less than 10% of the eligible population depends on a product, as is the case for "traditional Medicare," it's pretty hard to call it popular.

-- Dennis Byron

Jim Sabin said...

Hi Dennis -

Thank you for your further comments.

I agree that unmanaged fee-for-service health care in general and in Medicare in particular has major defects. But I don't just "think" that Medicare is popular. The problem for Medicare reform has been that we beneficiaries have terrorized politicians into seeing Medicare reform as a "third rail." That's why I believe that beneficiary voice on behalf of care enhancing/cost saving reforms is a necessary ingredient for unlocking the paralysed situation we've been in.

Medicare Part C has included many terrific programs, but it isn't hasn't met the need to reduce Medicare costs. I don't think that conundrum will be solved until we have a true budget for Medicare.