- Guaranteed coverage for anyone over 65.
- Low administrative costs [Note: according to CAHI_Medicare_Admin_Final _Publication.pdf, the study shows there are hidden costs that nobody quotes, so the often mentioned 2% number is actually 5.2%, and the private sector while still higher, does not have the 20% administrative cost number; it is much lower, at 8.9%.]
- People are generally happy with their coverage.
- It's existence allows the private insurers a viable market: It does this by getting over-65-year-olds coverage and removes them from the general risk pool. This allows private insurers to make billions of dollars. However, if the high-cost "elderly" population (sorry Dad!) were included, private insurers would be less likely to enter the health insurance sales market at all, and then there would be no market, no competition, and the only choice would be single payer. Separating the two systems allows non-medicare patients lower rates than would occur otherwise. [Note: Medicaid is also a government supported health insurance, though mostly designed for the poor, and I believe this should not be separate. I think Medicaid should be dissolved into the general risk pool with the government subsidizing the premiums...but that is a topic for another blog...]
- Costs a lot, and is going to run out of money.
- Subject to the whims of legislation.
- Does not pay sufficiently, the costs of providing care for patients - thus causing more providers to refuse to see Medicare patients. And yet, Medicare overpays for prescription drugs, medical technology, and many procedures (they underpay some procedures too, i.e. appendicitis).
- Creates too much paperwork, has too many requirements, and high administrative costs for providers (many physicians are starting to practice a no-insurance, cash-only business model, that has less overhead, allows lower charges, and more time with patients to avoid these issues).
- Has a bizarre and complex reimbursement system.
- Criminalizes providers for making billing errors, even when errors of underbilling in many cases counteract overbilling, and that providers are not responsible for the bulk of Medicare fraud.
To address Medicare reform, you need to fix what is broken, which all begins with the most important item (Cost) that affects all the others:
1) High Costs: To some extent, high costs are inevitable with the elderly population. But there are ways to reduce these expenses.
A) Medical Ethics Reform: This is needed to properly address Medicare costs since the bulk of the expenses occur in the last 6 months of the patient's life. Clearly, we are not spending our dollars wisely. I can't tell you how many patients have been sent to me from a nursing home for "Emergency Care" on patients who will have no benefit in their quality (and quantity) of life. While I don't want the government deciding what is considered beneficial or not, I believe that if physicians (and nursing homes) were given strictly enforced protections from liability, they would do what is ethical and appropriate for a patient's condition. I personally don't think it is ethical to do "everything" for grandma because of family wishes, even though the living will she had put together specifically said not to do these painful procedures of questionable benefit. Without liability protections, I will continue to get 90-year-old contracted demented patients sent to me for a full stroke workup for a "change" in their behavior.
B) Medicare Experiments: There's good and bad. Home health, home peritoneal dialysis (instead of kidney dialysis), and coordinated care for chronic diseases are among a number of successful measures that dramatically decrease costs and improve health. However, the attempt to privatize Medicare has been an abject failure and the program needs to be shut down. In this case, costs went up, and quality and access went down.
C) Pharmaceutical coverage (Medicare Part D) needs to be revamped. In a perfect world (in my opinion), Medicare will now be able to negotiate prices. No reimportation will be done. Why? Some countries have lower prices for the same medicines than others, i.e. in Europe, the U.K. commonly imports medicines from lower-priced spain. Spain is simply better at leveraging it's population and negotiates better prices as a result. Medicare should be able to leverage at least as good a deal as Spain or Canada. Reimportation involves middle-men, and there is the potential for harm through similar appearing tainted medicines.
Next, all generics will be free to Medicare patients for certain categories such as: Antibiotics, Hypertension, Cholesterol, Congestive Heart Failure, Asthma and Diabetes for no extra fee. Non essential generics and non generics will be covered as part of the monthly fee Part D plan. Enrollees will no longer need to find a company to supply this (current complicated) service. Medicare will determine the montly cost of the program. The only restriction will be that medicines for which a competing generic exists will only be covered if the doctor certifies that the generic was at some point attempted and was unacceptable. The "doughnut" (or is that "donut") in coverage will be eliminated.
The reason for such easy access to medicines? Elderly patients who take their medicines will not be admitted to the hospital as often. That being said, many elderly patients are over-medicated as medicines are carried over year after year without evaluation of necessity. Under my plan, once a year, primary care physicians will re-evaluate the need for the patient's medicines (especially ones the patient has been on for years as prescribed by other the physicians preceding them).
D) Regional differences in treatment and spending: As I said in an earlier blog on SDM, there are variances in medicare spending with less spending correlating to higher quality. Most of that increased spending is due to physican preference in those areas for more invasive care, combined with increased supply and access to those more invasive treatments and specialists. Certainly SDM can help, but it only fixes a relatively small percentage of overall Medicare dollars spent unnecessarily (judged by no differences in quality improvement). It doesn't fix the supply issue (see a great paper by Dartmouth Atlas on Supply-Sensitive care).
I've seen much written about and talked about with regard to integrated care. Certainly, the Mayo clinic is an example of how this works and works well. However, to apply this and similar models would require all physicians becoming employees, and would require vast numbers of new organizational units be created - i.e. a mini bureaucracy (and we don't need more of that). Some have suggested an "illness fee" or "package price" that would cover all costs pertaining to that diagnosis, treatment and followup. Others suggest simply stop paying doctors and hospitals for high cost care that doesn't have higher benefit. But these solutions don't get at the problem - they are simply giving an aspirin for an aneurysm related headache (of course i would use a medical analogy...the aspirin may help the headache, but it won't fix the aneurysm and won't do anything to get at the core problem, and could result in a later catastrophic bursting of the aneurysm).
There is the supposition that the current fee-for-service situation is the problem. I don't completely disagree, but I don't agree with the above solutions either. I have created a whole new payment structure for physicians and hospitals to adjust payments to the desired effect - simplicity, decreased administration, improved quality, and lower costs. That will be covered in my next blog.