More on Medicare

Not long ago, a reader commented, “don’t you have more important things to do than write a blog.”

I have much to do, but I enjoy writing and appreciate the comments you make. However, the person raising questions about my blog time may feel better because I haven’t posted for a while. My absence was not intentional but last week was a whirlwind. Hopefully this week will be better. I’m actually traveling for a couple of days. I’ll be in Georgia, Kansas, Utah and Nevada. Nights in hotels seem to be good for my blogging regularity.

I want to stay with a Medicare theme today. In my last posting, I mentioned a “trigger” contained in the Medicare Modernization Act of 2003 which requires Medicare Trustees to notify Congress and the President if more than 45% of the Trust Fund comes from general revenues, two years in a row. That happened last year.

The warning “triggers” provisions of law that call for the President to send Congress legislation to bring the percentage back under 45%. Last week, the President delegated that responsibility to me and I sent actual legislation to Congress, which has a duty to act within a short time.

I’m pleased the provision is there. We need to respond. While I have little optimism the Congress will act, it is important to keep the discipline of a warning voice and the expedited procedure should at least generate some debate.

The proposal is solid. I’m simply going to link you to information about it (letter transmitting legislation to speaker of the House; summary of legislation). Remember there are two problems we’re dealing with. The big one is Medicare going broke in 2019. Frankly, responding to the trigger does little about that.

The second problem is the one the trigger is focused on. The problem is we are using more and more regular tax dollars, those usually used on other parts of the budget, to pay for Medicare. So, if you worry about education, you should worry about Medicare. Because, Medicare will get its money before education does. Likewise, if you want good roads, you should worry about Medicare. If you think medical research is an important priority, you should be worried about Medicare. Health care costs paid by the federal government are eroding our capacity in other important areas.

Claims Data from Medicare

The proposal I made last week is also relevant in another way. A couple of commenters asked about a lawsuit involving the use of Medicare claims data by people outside of government.

Brian Klepper said: “On Friday the Memphis Business Journal reported you saying that we ought to have ‘a Travelocity for health care’ that would ‘give a quality grade for doctors and show how much they charge for services.’ I'm wholeheartedly with you on this. But how do you square this proposal with the fact that, though you're the nation's largest payor, you acquiesced to the AMA's interests and then refused to release physician data?

Can you please explain these discrepancies?”

Michael Millenson of Highland Park, IL agreed with Brian. He said, “It's past time for HHS to be an aggressive, whole-hearted mover towards release of more information and more timely information. Meanwhile, one easy, no-cost step would be for Secretary Leavitt to use his bully pulpit to call for states to collect ‘all payer’ data. It sounds like a technical issue, but what it will do is allow valid national comparisons of quality of care, as well as enable better state efforts. A local/nation win-win.”

I want to use Medicare claims data for this purpose. And I have been advocating the states provide their data for this purpose. However, I have a problem. A federal court in Florida, some years ago, prohibited HHS from publicly disclosing certain Medicare claims data. Specifically, HHS was prohibited from disclosing annual Medicare reimbursement rates for individually identifiable physicians.

A few months ago, another federal court — this time in D.C., ruled the opposite — that I must provide the data to a specific party. This leaves me sandwiched between two differing courts.

We are working to develop a solution. However, the real fix will need to be legislative.

In the Medicare trigger legislation I sent to Congress, I have included language that would allow HHS in a thoughtful, consistent way to enhance quality improvement efforts in our Chartered Value Exchanges with physician performance measurement results. This needs to happen. I think there is a potential for bipartisan action on at least this part of the legislation I sent up.

Michael and Brian, take a look at the legislation linked above and tell me what you think.

Dealing With Medicare

I suppose the compulsion I feel to get people’s attention on the plight of the Medicare Trust Fund can be attributed to my current close association with it. Medicare is part of HHS and I’m also a Trustee.

This week, I released our budget proposal for the next five years. Medicare makes up 56 percent of the $737 billion we spend. I said at a news conference our proposal should be viewed as a stark warning. Medicare, on its current course, is just 11 years from going broke.

Eleven years is going to fly by. Here’s a perspective builder. The Fourth of July last year seems like yesterday. In 20 times that time, left on autopilot, Medicare will be broke.

Systems as big and complex as Medicare don’t turn on a dime. We need to start dealing with this.

I’m certainly not the first person to warn of this. Part of the problem is that the entire country has been desensitized, numbed actually, by a repeated cycle of alarms and inaction.

Dire warnings on Medicare insolvency have become a seasonal occurrence in Washington. It is like the cherry blossoms blooming in April, part of life’s natural rhythm. People briefly take note, remember it’s that time of year and continue on their way.

The budget we announced Monday is admittedly aggressive. It is another type of warning. I wanted to make sure people could see with specificity the hard decisions policy makers, no matter their party, will face every year until we change the current course.

Medicare is a centrally planned, government regulated system of price fixing. Price fixing systems adjust by having government regulators decide the priorities. The tools we use are blunt and inexact.

Government makes a few thousand decisions that determine who gets treated, how much they get treated, and how much value it has. It is an inefficient way and it contributes substantially to the dilemma we face. We can’t fix Medicare without changing the way health care works in the United States.

What if, rather than government making a few thousand regulatory decisions that affect everybody, consumers made millions of personal decisions informed by transparent information about the cost and quality of various providers? What if doctors and hospitals were rewarded by having high-value care rather than high-volume care?

My view: quality will improve and costs will diminish. That is what happens when consumers are allowed to make decisions armed with reliable information.

The invisible hand of the marketplace is better at rooting out waste and finding optimal value than government regulators.