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Gingrich: Today’s Medicare Will ‘Wither’ : Health care: Aide says he was describing voluntary shift away from fee-based system. Democratic leader calls it a sign of intent to ‘obliterate’ the program.

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TIMES STAFF WRITER

Despite repeated GOP assurances that it is out to “preserve, protect and strengthen” Medicare, House Speaker Newt Gingrich (R-Ga.) said this week that Republicans believe the traditional Medicare system now serving 37 million seniors will “wither on the vine” under the far-reaching reforms about to be enacted by Congress.

Gingrich’s extemporaneous comments on Medicare’s transformation came during a little-noticed appearance Tuesday before the Blue Cross/Blue Shield Assn. meeting here. A transcript of his remarks was made available to The Times Wednesday night.

Tony Blankley, a senior aide and press secretary to Gingrich, confirmed the Speaker’s remarks but downplayed their significance.

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Blankley said that Gingrich’s comments were consistent with the Republican belief that most seniors will voluntarily choose to leave the traditional Medicare fee-for-service system in favor of health maintenance organizations and other managed-care networks once they discover the benefits of the reforms that Republicans have devised.

Even so, if that shift dries up fee-for-service Medicare, it will mean the end of the system as most seniors know it. Gingrich has never publicly expressed a view that fee-for-service Medicare would end, and most other Republicans have maintained consistently that fee-for-service medicine would always remain an option under Medicare.

As word of Gingrich’s comments circulated Wednesday night on Capitol Hill, Senate Minority Leader Tom Daschle (D-S.D.) said they “confirm what we’ve said all along--that the Republicans want to obliterate Medicare [because] they believe that Medicare has outlived its usefulness and they are prepared to end it as we’ve known it.”

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Throughout this year’s contentious debate about Medicare reform, Republicans have predicted that vast numbers of seniors will join less expensive health maintenance organizations and other managed-care networks voluntarily. In exchange, those beneficiaries would, in theory, be offered additional benefits, such as eyeglasses and outpatient prescription drugs.

The extent to which seniors actually will leave fee-for-service for more restricted delivery arrangements is subject to dispute. Gingrich has estimated savings of as much as $90 billion over seven years--one-third of the total Medicare savings--from the movement into managed care.

But the independent Congressional Budget Office said that the House Medicare reform plan would produce only $34.2 billion in savings over seven years by channeling seniors into managed-care plans.

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Currently, only 9% of Medicare beneficiaries are enrolled in HMOs and managed-care systems. Under the reforms offered by the GOP, Blankley said, “rationally, people will want to go there.”

At the Blue Cross/Blue Shield meeting Tuesday, Gingrich said:

“Now, we don’t get rid of it in Round 1 because we don’t think that that’s politically smart and we don’t think that’s the right way to go through a transition.

“But we believe it’s going to wither on the vine because we think people are voluntarily going to leave it--voluntarily.”

Blankley said that the word it in each of those sentences referred to fee-for-service medicine.

Another controversial element of the GOP’s Medicare plan is a so-called “fail-safe adjustment mechanism” that would reduce payments to fee-for-service providers further if projected levels of savings are not reached under their plan.

Overall, the GOP plan is projected to yield $270 billion in Medicare savings by 2002--achieved through a reduction in the annual growth rate from the current 10% to 6.5%.

As it is, according to the CBO, the Republican plan would result in a reduction in fee-for-service payments to doctors and hospitals of $146.8 billion over seven years.

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Unlike HMOs and managed-care systems that restrict physician access, especially to specialists, Medicare beneficiaries in fee-for-service arrangements are free to see any physician.

Also Wednesday, Democratic operatives circulated a videotape containing a brief comment by Senate Majority Leader Bob Dole (R-Kan.) that they hoped would provide arguments against the GOP Medicare plan. In remarks to the American Conservative Union, Dole is shown and quoted as boasting: “I was there, fighting the fight, voting against Medicare . . . because we knew it wouldn’t work.”

Dole’s office had no comment.

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