We are talking about how to save Medicare. It’s a conversation that needs to happen in Washington, but politicians seem to be more interested in scoring political points and demonizing their opponents, than in solving this important problem.
In Part I of this series, I talked about a new book just published called Modernizing Medicare: Harnessing the power of consumer choice and market competition, edited by Robert Emmet Moffit and Marie Fishpaw. The book features a dozen top health policy experts who have come together with detailed prescriptions for Medicare’s looming bankruptcy – solutions with decades of demonstrated success.
Grace-Marie Turner, writing for Galen.org and Forbes, reviews the book and its many highly-rated healthcare policy authors. Turner says the key is competition and consumer choice in a sensibly regulated system that provides extra support for the poor and most vulnerable.
In Part I we heard comments from Doug Badger, a key architect of the Medicare Advantage and Part D Prescription Drug Benefit programs introduced in 2003. We also heard from Doug Holtz-Eakin, former CBO Director who warned us not acting is not an option. We also read comments from Brian Miller of the American Enterprise Institute and former Medicare Chief Gail Wilensky.
Today, we will read the comments of other healthcare policy experts as they discuss the alternatives. Those who believe in government rather than market control of this issue gave us the Affordable Care Act of 2010, otherwise known as ObamaCare. This plan opted for sharp cuts in payments to hospitals, physicians, and other providers – cuts that grow over time. “This will eventually endanger the financial stability of providers, “ says American Enterprise Institute’s Joe Antos.
The ACA also promoted alternative payment models. Antos writes, “including accountable care organizations (ACOs), value-based purchasing arrangements, and bundled payments for specific services within traditional Medicare. The results have been disappointing. The largest ACO initiative resulted in higher program spending at first and only began to show savings in the last few years. In 2018, savings averaged $73 per participating beneficiary.”
Chris Pope of the Manhattan Institute details the successes of a defined contribution system of coverage and care. “Competitive private health plans, governed by flexible regulation and free to innovate in payment and care delivery, have proven that they can secure better care at lower costs than the highly centralized, bureaucratically controlled, and outdated Medicare fee-for-service program.”
John Goodman of The Goodman Institute offers a range of options to build on these successes, including empowering chronically ill patients with new and better options, harnessing the power of virtual medicine, improving access to primary and preventive care, and rewarding patients for making cost-saving choices. “It is the exercise of patient choice that fueled Medicare Advantages successes, and the power of patients to make even more decisions could lead to further improvements,” he writes.
The dean of the health policy community, Wharton Prof. Mark Pauly, has been diving into the details of Medicare reform longer than any of the co-authors of this book. He concludes that current and near-beneficiaries will strongly resist cutting benefits or increasing taxes. With his usual wry sense of humor, Pauly concludes that “Premium support can thus be a better way of avoiding the doomsday scenario.”
Heritage’s Ed Haislmaier tackles the essential but in-the-weeds issue of Medicare risk adjustment in a premium support system, offering improved ways to stabilize the market and avoid gaming of the system.
He describes an approach to risk mitigation in a reformed Medicare program that “has the virtue of being simple, universally applicable, flexible, and self-correcting…using mechanisms that allow the market to smoothly and organically evolve over time.”
And Walt Francis, the guru of the Federal Employees Health Benefit Program (FEHBP), writes that the program, which launched in 1960, is now “the largest employer-sponsored health insurance program in America with about 8 million enrollees.” He says policymakers can learn from the FEHBP and use the experience to demonstrate the durability of its premium support model in maximizing choice and containing costs.
Clearly, there are many ideas for solving the Medicare insolvency problem. Now what is needed is the willingness of politicians to put the interests of their constituents first and to have the courage to fight for these needed changes, lest Medicare die for lack of trying. Furthermore, those politicians who demagogue the issue and try to bash their political rivals should be vilified by the press and punished by the electorate. One can only hope!
