Robert Bennett: Medicare problems are many but solvable

Published: Monday, May 23 2011 12:00 a.m. MDT

Nancy Pelosi, leader of the House Democrats, has accused Republicans of trying to "end Medicare as we know it," and Republicans have backpedaled somewhat in the face of the voter backlash that her statement has generated.

Medicare, as a policy stating that our seniors should have health care, is one that the American people have long since embraced. Abandoning it is not on the table. On the other hand, "Medicare as we know it," the program by which that policy is carried out, should be. It has turned into a colossal mess.

It is full of perverse incentives, driving up costs without producing better care, diverting resources from promising new technologies to stagnant old ones and creating enough difficulties for doctors that more and more of them are refusing to take Medicare patients. It is decreasing, not increasing, access to health care for seniors.

That is because it was written in 1966, more than a stone age ago, when there were no MRI's, CAT scans, genetic screening or other modern treatments. Shifting Medicare payment schedules to support these new breakthroughs has been slow and uneven, in part because some of the changes have required acts of Congress. The best example of this has been Medicare's handling of drug therapy.

In 1966, drugs were very much a side issue in health care, so Medicare didn't pay for them, even as extended drug regimes that kept people well became available. However, if a senior who couldn't afford to pay for his own drugs got sick, Medicare would pay to put him in a hospital, which is more expensive than the drug therapy would have been. Congress decision to finally change that came years later than it should have.

"Medicare as we know it" penalizes good behavior. Reimbursement schedules for states where prudent lifestyles produce favorable health statistics — like Utah — are lower than they are for those where the statistics are bad — like Florida. The complexity that comes from stacks of confusing Medicare rules and regulatory procedures can prevent timely care from taking place while creating huge opportunities for fraud.

Finally, Medicare as we know it is blind to the actual situation of the dying patient. Close to 80 percent of its expenditures are made in the last 30 to 60 days of life, as Medicare incentivizes elderly patients with clearly terminal diseases to run up huge bills, extending their lives by a few weeks but doing nothing for the quality of that life. Cutting these "end of life" costs in half would make a tremendous contribution toward balancing the budget. Many hospitals try to discourage these expenditures, but others don't because, even if it makes little sense for the patient, Medicare will still pay.

The problems are many, but they are all solvable.

Ending Medicare as we know it does not mean abandoning the elderly, punishing providers or shutting down the essential research that Medicare funds. Properly done, it means preserving Medicare for future generations by making long overdue changes to improve it.

I believe that the severity of our fiscal crunch will ultimately force us to implement such changes, but we shouldn't wait. The quicker we get started on working through the details of how to do it, the sooner we can increase access for our seniors, giving them better and more modern care and starting the nation down the road toward fiscal sanity.

However, that will not happen until both parties embrace the idea of changing Medicare and compete on the way to do it, rather than denounce each other as insufficiently caring with respect to the senior vote.

Robert Bennett, former U.S. Senator from Utah, is a part-time teacher, researcher and lecturer at the University of Utah's Hinckley Institute of Politics.

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