Fix the Sloppy Medicare Reform

At the risk of offending advocates for senior citizens, I have to say I’m bewildered by all the trumpeting -- and now second-guessing -- that has gone into the new Medicare prescription drug law.

First it was hailed as landmark health-reform legislation. Now it’s under fire for the price tag, revised upward from $395 billion to $534 billion over 10 years. The miscalculation comes at a time when the largest-ever federal deficit looms. Not surprisingly, Congress and the Bush administration, which once jostled for credit, now are pointing accusatory fingers.

Such eye-popping bad math should raise questions. But in the search for answers, I wonder if anyone in Washington will tackle my biggest question since the drive to pass this legislation began four years ago: How can we persist in providing such piecemeal benefits for one age group when costs threaten everyone’s health security and our neediest citizens -- the medically uninsured -- go without?

I don’t mean to suggest that impoverished old people don’t exist. They do, their circumstances are dire and they should be helped. But this Medicare law benefits everyone over 65, needy or not, creating windfalls for some while squandering an opportunity to reform the health system in a way that benefits all Americans, young and old.

I became aware of the windfall side of this law when my mother showed me a letter from her health plan listing fee reductions worth more than $800 annually. The letter credited the new law; besides covering prescription drugs, the law boosts subsidies to private companies that offer plans for seniors. As a result, her monthly premium is nearly halved, while co-pays for certain office visits drop from $20 or $30 to zero -- a bargain my vigorous and financially secure mother doesn’t need.

In the meantime, 42 million Americans -- one in six people under 65 -- go without coverage. These patients pay full price not only for medicine but for doctor visits, lab tests, hospitalization, medical equipment and nursing care -- expenses most seniors have not had to worry about since Congress created Medicare in 1965. Scores of studies document the deterioration of the uninsured sick as they delay care, endure preventable suffering and die early.

The dichotomy wouldn’t be so troubling if the Medicare law actually tackled the systemic problems that price people out of coverage. But the law is disappointingly short on measures to control the underlying drivers of cost, such as technology and the inappropriate use of medical services. A relatively modest proposal to include $50 million for cost-containment research failed to make it through the appropriations process.

This doesn’t make sense, especially with polls showing widespread public anxiety about healthcare costs. The issue of affordable healthcare typically is presented as a problem of insured versus uninsured. In fact, many more people are hurting today. Those insured through their jobs are experiencing ever-larger costs as employers pass on double-digit premium increases. Retirees under 65 are seeing promised health benefits summarily eliminated. Organized-labor disputes increasingly center on health coverage.

Moreover, prospects for improvement are slim, even if the economy rebounds. The latest federal projections show health-related expenditures climbing sharply over the next decade to nearly twice current levels, from a projected $1.8 trillion, or 15.5% of the 2004 gross domestic product, to $3.4 trillion, or 18.4% of GDP, by 2013. The population-wide implications of this cost spiral are hard to miss.

However, the means to safeguard healthcare dollars exists in a growing body of cost and medical-quality research. For example, a new study of arthritis drug use found that seniors with certain kinds of drug coverage were more likely to take expensive drugs when comparable relief could be obtained from cheaper over-the-counter ones. If this insight was built into the Medicare law, might the result be a smaller cost overrun than the projected $139 billion? And might the broader benefit be improved systemwide discipline regarding drug expenditures?

The price-tag debacle offers a chance for Congress and the administration to fine-tune the Medicare law into a true instrument of reform. By incorporating the latest science on cost, quality and appropriate use, we’d have a better law, one that brings the country a step closer to affordable healthcare for all.