Medicare Bill

I was disappointed by Congress’s vote to override the President’s veto of the Medicare bill. Congress has shown an unwillingness to change the program’s path and take on the important task of entitlement reform. I wrote more about this in the following op-ed, which ran in The Washington Times:

Yesterday, the president vetoed a Medicare bill that columnist Paul Krugman calls "enormously encouraging for advocates of universal health care." The battle lines could not be clearer. Any member of Congress who believes in the free market or who takes seriously the need for entitlement reform should vote to sustain the president's veto.

The primary objective of the bill is to prevent a scheduled 10.6 percent reduction in physician payments under Medicare. No one objects to fixing this problem. We support fully reimbursing physicians at pre-reduction levels and fixing the fee schedule formula. Doing so is sensible and unobjectionable — we only wish that it didn't have to be done year in and year out.

What is not sensible or unobjectionable is the rest of the bill, which hurts both taxpayers and Medicare beneficiaries. Driven by election-year politics and a strong ideological preference for government-run health care, Democrats in Congress have loaded this bill with provisions that undermine consumer choice and, worse, pave the way to still more government control of Americans' personal health-care decisions.

First, the bill undermines the very successful Medicare Part D prescription-drug benefit. Part D works when seniors have plenty of choices so that drug plans and companies must compete for their business. Over 85 percent of Part D enrollees say they are pleased with their plans. Average monthly premiums have come in below expectations for three years running, and overall costs have been $150 billion less than originally estimated.

But the Democrats' bill would require the secretary of Health and Human Services to force Part D drug plans to cover all drugs within certain "protected classes" of drugs — for example, all statins used to control cholesterol. This would mean that drug plans could no longer use the threat of exclusion from the formulary to negotiate the lowest possible price for drugs like Lipitor and Zocor. The provision is a windfall for certain drug makers, but a hard pill to swallow for beneficiaries and taxpayers.

The provision would also give drug makers and other special interests a powerful incentive to lobby to have their drugs included in protected classes. Part D would become politicized, and government bureaucrats would begin deciding which drugs will be covered, instead of allowing the free and informed choices of American seniors and the competition of the free market to decide the matter.

Second, the bill lays the ax to the popular Medicare Advantage program, which gives seniors the option of receiving their care through private health plans. Medicare Advantage offers more choices and better care than government-run Medicare, often including preventive screenings that can save them money and help them avoid serious health problems later. It is especially popular with low-income beneficiaries. In fact, 49 percent of Medicare Advantage beneficiaries earn less than $20,000 per year, and many live in rural areas where doctors accepting Medicare patients are hard to come by.

The bill, however, would eliminate many of the options that make Medicare Advantage so popular and would force about 2.3 million Americans from their preferred private plans to the standard government-run Medicare, according to the Congressional Budget Office.

Third, the bill aborts a major money-saving reform for consumers and taxpayers — by effectively killing a new program for the purchase of durable medical equipment (DME). Since the 1980s, Medicare has been paying for DME according to a government-fixed fee schedule. The reform opens Medicare purchases up to competitive bidding. This program is already underway in 10 areas, and it's already saving Medicare and its beneficiaries 26 percent on average. Annual savings are estimated at $1 billion when fully implemented.

I can't explain why some members of Congress think that is a bad deal, except that some seem to believe it's always better to have government set a price, however high, than for the market to decide the matter. The bill would kill the contracts Medicare has already signed with DME suppliers. Adding insult to injury, it would also require my department to spend Medicare Trust Fund money to pay for any damages resulting from the cancellation of those contracts.

When Congress votes again this week on the deeply flawed bill, what is at stake is far more than whether the president's veto will be upheld. What is at stake is whether our country lives under a system focused on one-size-fits-all coverage and price-fixing, or whether it embraces free-market incentives, competitive bidding, and consumer choice.

If we want a health-care system that promotes value — that promotes the highest quality care at the lowest possible prices — Congress simply must do better.

Comments

The overriding portion of this bill had to do with the 10.0% scheduled fee reductions in line with the SGR adjustments. The rest of the details were lost...too many items in one bill with little overall strategic thinking. ..
We need system overhaul which goes far beyond fee reductions, redistribution, etc etc. Election year is not a good time to do meaningul health care reform. There are too many other issues, peace-war; terror-immigration. Economy, Energy, etc etc.

Posted by: Gary Levin | July 18, 2008 at 01:31 AM

Please accept this submission from a humble respiratory therapist working in Tennessee. I think there were several factors that precipitated what happened with this medicare house bill. I would like to thank you for working hard to help all of the patients we try to help. I must say, though that I am fearful for myself and my patients. I know, for our company, our costs have increased far more rapidly than reimbursements. I have been told that DME is a small percentage of all costs for health care dollars. I really don't know for sure. I feel that larger, more impersonal companies with greater bargaining power will benefit from absorbing patients that little companies are caring for. With costs becoming higher than reimbursements, the little "guys" will no longer be able to care for them.

This is especially true with fuel and other prices increasing. And, though I don't really know how true this is, articles are written indicating over 20,000 jobs will be lost (this might have had some miniscule effect on the vote). As a respiratory therapist, there are no reimbursement for my skills in helping my patients (I guess that makes me a cost center). I feel I would still help my patients for free if could could pay all my bills and still take care of home and family needs.

I sort of thought that it would be good to judge the effect of the competitive bidding concept prior to passing it nationwide. This would have been a better way to judge it's overall effect, not just on prices and "cost savings". To get the "big picture" so to speak.

This is just my lowly opinion. Please do continue to try to work for all of us and our patients (even us that will eventually get old enough to be patients.) If you do read this please know that I pray for all our public officials. You have a hard job.

Posted by: Bob Steele | July 18, 2008 at 03:44 PM

I agree with your post, it sounds like this bill would move us one step closer to the government controlling medical care and I disagree with Public Healthcare. Competition helps the medical field grow and new technologies or improvements to be discovered. Medicare and Medicaid badly need reform and I am not sure where officials would start, it's overwhelming. We need to advocate for our seniors and they deserve good healthcare even if they are insured through Medicaid.

Posted by: Patricia Beck | July 22, 2008 at 01:06 AM

I would like to hear how market forces and consumer choice are now going to suddenly solve the health care crisis in this country when they have only put greater and greater strain on working Americans over the past decade. Haven't these forces been working in the health care economy already? It seems as if the result has been confusion, costs increasing out of control, and people losing or being refused health insurance because of pre-existing conditions, expensive diseases, etc. That's actually not choice at all. Not to mention that lack of insurance coverage is a barrier for many people to seek and receive preventive health care, which is much cheaper and more effective than treating eventual disease. While these "market forces" may work just fine for the health insurance industry and drug companies, I don't see any evidence that they are working for average folks.

Posted by: Emily | July 22, 2008 at 04:39 PM

Mike: I read your "Face Facts about Medicare" article. I couldn't disagree with you more:
Firstly, your statement: "We should make Medicare Parts A and B more like D"? Are you kidding? Part D was written by the "Drug Companies". There is no ability for Medicare to negotiate drug prices with the Drug companies like the VA does. The only negotiations with the drug companies takes place with the PBM's who pocket the gains they make. These don't get passed down to the Medicare patients. And they get to keep the whole thing secret! Hmm, and Billy Townsend the congressman who pushed this Bill got a handsome multi-million dollar job by taking a job with "PHARMA" right after the bill got passed. And how about your Medicare Advantage plans you push? Yes, you know the plans, the ones that get an extra 12-19% per patient as opposed to what traditional Medicare pays! That's $54 Billion more the taxpayers spend per year for these private plans that give LESS choice. You can only see a participating provider. And with those plans God help you if you develop a chronic illness. The co-pays will makes them more expensive to the Medicare patient. That's why many who get sick usually switch back to traditional Medicare.

And finally you say let's create a system that rewards high quality care. Now just who is going to measure this? It will cost more to monitor this than give the care. Are you going to say, "Dr.Smith, your patient Mr. Gregory still has a high glucose level and has been to your office one too many times. NO MORE MEDICARE REIMBURSEMENT for him!" And then what? Does Dr. Smith have to offer free care to the patient? How ridiculous!!

Mr. Leavitt, you need to travel around the World. Look at Taiwan, Germany, France, England and Japan to just name a few. Take what they do best and apply it here. We are the only Western Industrialized nation where health care is a luxury. 47 million uninsured? And now you want to privatize Medicare with the costly Advantage plans that put extra money in the hands of the insurers. The insurance companies ARE the problem. The don't provide a free enterprise system. They cherry pick those under 65 and those over, they demand an extra 12-18%. We need a system that doesn't allow all those health care dollars to flow to redundant private insurers who reward CEO's with fat bonuses, spend needless dollars on underwriting, dividends to shareholders, advertising etc. Traditional Medicare has a 3% overhead while private insurers have a 24% overhead. Yes, yes, I know that they give millions in campaign contributions, but you need to look at what is important to the citizens of America.

Posted by: Jim Matthews | August 02, 2008 at 01:51 PM

I was informed that someone named Scott Swenson asked you a fair and relevant question concerning your stance on birth control. Apparently your only response was "no comment" and I visited this blog to see for myself what your reflections are on the implications of your linking birth control with abortion. You are apparently willing to remain quiet about your deeper motivations, but I will tell you that what I gather from your comments is a picture of the very reason that politicians are generally distrusted today. The thought that a woman using contraception is in any way equivalent to a woman having an abortion is so far removed from the reality of our world that it is disturbing. Someone in charge of representing the people of this country had better understand that unlike privileged politicians, the vast majority of this country has a clearer view of what it means to live, to survive in 2008. We make decisions about our bodies and morals as we grow and adapt. The last thing any of your constituents need is you working to make their lives more difficult because of your religious beliefs. Please review your job description. You are supposed to be representing us-- the people. YOUR religious beliefs should not come into play.

Posted by: Meredith Hagie | August 06, 2008 at 07:30 PM