Boost for Medicare Reform

President Bush and Dr. Louis W. Sullivan, secretary of the Department of Health and Human Services, are giving strong leadership to reforming Medicare, the giant federal health insurance program that provides care for senior citizens. Their commitment comes at an important time.

Sullivan has given vigorous support to radical changes in compensation for physicians under Medicare, directly challenging his fellow doctors in the American Medical Assn., who are conducting a national campaign against a key element of the reform package.

And the Bush Administration has held a steady position of strong support for the new so-called catastrophic coverage of Medicare, a position all the more welcome in the face of changing evaluations of the financial status of the ambitious program. Those new estimates support the wisdom of the President’s opposition to making hasty changes in the program despite widespread complaints from many older Americans and some political panic in Congress that is inspiring moves for amendments.

With the proposed changes in physician compensation, Medicare would adopt a resource-based fee schedule that would shift compensation to pay more for primary care and less for procedures, including surgery, while capping more stringently what doctors may charge over the fixed fees. The AMA has targeted its opposition on another element of the reform that provides expenditure targets for physicians. It is a novel proposal to tame the 16% inflation in doctors’ fees that has threatened to cripple Medicare. Dr. Sullivan, writing in the Washington Post, has branded as “absolutely untrue” the AMA contention that the targets would result in reduced services to Medicare patients. We think he is correct and find it helpful that he has spoken out clearly.

New cost estimates of the prescription drug element of expanded Medicare coverage, coming into effect in two years, may ultimately require some adjustments of fees and benefits. But we agree with Bush that this is not the time. The revised estimates demonstrate all the more clearly the need for this protection against the increasing cost of prescription drugs, as Sen. John Heinz (R-Pa.) has pointed out.