Medicare Blog 1: Drifting Toward Disaster

I want to begin a series of blog entries about the promise our nation has made to provide health care to our seniors. I am going to be critical of our current course. I don’t want to see us fail. To keep this commitment requires change.

Time is running out. Medicare is drifting toward disaster.

I am a trustee of the Medicare Trust Fund. On March 26, 2008, I attended what will likely be my last annual spring meeting of the trustees. Our primary business was to issue a report to the people on the condition of the Social Security and Medicare Trust Funds. The report is based on work by government actuaries.

In the Treasury conference room we use, there is a wall clock that has been there since 1873. At one time, the clock was actually hooked to the Western Union telegraph line, which calibrated the exact time on a regular basis.

This year, Rick Foster, the chief Medicare actuary, sat in perfect alignment between me and the clock. As Rick gave his report that the Medicare Hospital Insurance Trust Fund was projected to be insolvent in 2019, I could see time passing with each swing of the clock’s pendulum: tic, toc, tic, toc.

I’m not sure if that caused what I am going to describe to you, but as I listened I felt the weight of this responsibility pressing on me. When the report was finished, the final page of the report was passed around for our signatures.

It felt like the moment required more than just signing my name and moving on to the next appointment. This is serious business involving trillions of dollars and the lives of hundreds of millions of people.

As much as anything, the weight was a blend of responsibility and selfish panic. I realized that when the actuaries’ forecast matures—and it will—somebody is going to say to me, “Weren’t you a Trustee of the system for four years? What did you do to address the problem?” Somehow, the response “I signed the report each year,” just doesn’t feel adequate. Though the truth is, that’s about all the authority the Trustees are given.

Just before the vote to accept the report, I asked the Secretary of the Treasury, Hank Paulson, the managing Trustee, if he would keep the record of the meeting open because there were some things I felt a need to say. He agreed.

I have composed my addition to the minutes. Beginning with the paragraphs below, the contents of my blogs over the next several days will be submitted as part of the minutes for the March 26th meeting.

I have constructed a metaphor in my mind that is useful in describing our dilemma with the Medicare entitlement program, which I will share with you today.

Whitewater canoeing at the championship level is high adventure and comes with serious dangers. My friend, Matt Knot, is an instructor and guide on the Gauley River in West Virginia.

There are treacherous places in whitewater country. Canoers call them hydraulics. They are given descriptive names like “Hungry Mother” or “Lunch Counter” that dramatically communicate danger.

Hydraulics form when water pours over an obstacle such as a rock. Unwary canoeists get sucked into them and can be trapped in one place by the force of the current. They are instantly overwhelmed and dragged under by the whirlpool effect created.

Matt says when you go into a hydraulic, everything gets very dark as you are pulled deeper. Water circulates the boat back to the surface and then drags it down again, over and over. Survival depends on keeping your wits, waiting—and hoping—to be flushed out the bottom.

Some thrill-seeking river runners find the experience of navigating a hydraulic exhilarating. However, the worst hydraulics are known as “keepers.” Boaters become victims when they get sucked down into a hydraulic, and instead of being tossed about and flushed out from the bottom, they get mired in a jungle of debris.

This is an important point to remember: it is not just the hydraulic that brings fatal consequences; it is the combination of the hydraulic and debris beneath the surface.

Matt teaches students to anticipate. He calls it “scouting the river.” Scouting is more than looking ahead. It’s listening for the roar and sensing when the current is pulling you toward a dangerous place.

Here’s the second important point. Safety comes only in foresight and avoidance. Matt says, “You have to start positioning your canoe well ahead of the danger, commit to a course that avoids the dangerous area, and then paddle hard.”

I’m sure it is obvious to you that the river in my metaphor is the growing obligation our nation has to pay for the health care of our senior and disabled citizens. Medicare’s liabilities have grown from a mere trickle 40 years ago into what Matt Knot would call “Class 5 rapids.” As new streamlets merge, it is becoming a raging torrent—more demanding and dangerous with each successive day.

The Medicare Trustees Report does a good job of “scouting the rapids.” But a nation that does not act on the warnings the report contains is no different than a canoeist ignoring evidence of hydraulics in the river ahead.

Over the next several days, I want to draw on this metaphor to describe the dangerous financial realities to which our current course leads. I hope you will take the time to read the entire series.

Comments

"a nation that does not act"

What is it that you'd like the "nation" to do?

Why not call a spade a spade and say that the greedy politicians have neither the courage nor the discipline to repair the system?

Or, are you suggesting we "vote the bums out" and get a whole new congress in place that can do something.

There isn't much we can do when the politicians are firmly in the "do nothing for fear of losing an election" camp.

I'm all for letting it go broke and hoping that it turns back into the original safety net it was designed to be - for those that would be homeless without it as opposed to those that would be "Mercedes-less" without it.

Posted by: Chris Farley | June 10, 2008 at 11:50 AM

I have to agree with You, It's nice that someone is writing about health care, I think it's the most important thing, keep it up!

Posted by: Tom Kowalsky | June 11, 2008 at 06:29 AM

Mr. Secretary,
I’m grateful to you for sharing your efforts to engage Congress in solving Medicare’s imminent demise; however, I’m distressed with their apparent lack of interest. As you’re well aware, this is not a recent discovery. Trustees have reported Medicare and Social Security’s impending insolvency for many years, and yet, this results in no appreciable sense of urgency in Congress. Why is that?

Politicians seem most interested in pursuing courses that result in personal gain, be it power or money. Saving Medicare would seem to be the ultimate treasure, or is it fool’s gold? Our nation’s top economists must concur with the trustee’s reports because many agree publicly, some through their own syndicated columns and blogs. They call on Congress to act, immediately, before it’s too late, which implies that there is a point of no return, after which Medicare will fail, regardless of any efforts to save it. How can this not incentivize the members of Congress?

HMT’s ongoing research revealed no naysayers to the trustees’ conclusions: Medicare WILL fail — that is assured — unless Congress acts NOW. Your continued efforts are critical. If we can assist in any way, please don’t hesitate to contact me.

All the best,

Michael McBride, Editor-in-Chief
Health Management Technology
www.healthmgttech.com
941-966-9520

Posted by: Michael McBride | June 11, 2008 at 11:21 AM

Dear Mike;

I would love to sit in on one of these trustee meetings? Are the transcripts readily available. What goes on at these meetings other than reviewing finances? Do the trustees examine, report on and recommend internal changes?? Medicare should be a "safety net", and there should be a 'means test'
That should be the trustee's recommendatin amongst other things. How do we communicate this to our federal legislators? Do they listen?? A means test would be expensive to administrate, but I bet it would pay for itself.

Posted by: Gary Levin | June 11, 2008 at 11:36 AM

Two solutions that could help:

1. Allow Medicare beneficiaries to pay with their own money.

2. Encourage concierge practice medicine, and allow Medicare patients to pay for it from their health savings accounts if they have one.

Posted by: jeremy | June 13, 2008 at 02:48 PM

I commend your honesty. Lots of it lost here lately. My mother has diabetes and her doctor informed her that Medicare is coming in very late paying them now and she was also told that if the cut is made to pay doctors less, that it would extremely difficult to find a doctor that would even take Medicare patients. If that is the case, they can stop taking that out of our paychecks.

Posted by: Debbie Forrest | July 02, 2008 at 09:51 AM

An elderly friend (an 87 year-old stroke victim) attempted to call the Medicare hotline last year to report what she saw as fraud being committed by doctors who briefly visited her hospital room while she was a patient. She was in the hospital for several weeks and was shocked to see the number of doctors (many of them with foreign-sounding names she didn't recognize) billing Medicare for services rendered...when all they did was stop at her door to inquire how she was feeling. When she called to report the situation, she was shuffled from person to person and left on hold for long periods of time. She finally gave up since she was exhausted from being on the phone for more than an hour. What is being done about over-billing by doctors? Is this ever investigated?

Posted by: Francene Ferraro | August 05, 2008 at 05:46 PM