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Now, Be Serious on Medicare

In 1997, the Congressional Budget Office warned legislators that America’s graying population and rising medical costs would put Medicare in bankruptcy in a decade unless they began prioritizing care and boosting spending. Fearing that voters would recoil like a child from bitter medicine, legislators instead assigned the dirty work of Medicare cost-cutting to a commission. On Tuesday, the commission disbanded without outlining any clear plan to ensure the solvency of the basic health insurance system for America’s elderly and disabled.

So now Medicare, the hottest political potato in Washington, has been passed back to Congress and the Clinton administration. That’s where the game should end and the reforms that have been delayed too long should begin.

* Prioritizing care. Medicare now is essentially a giant check-writing machine, spending $200 billion each year, much of it on treatments whose medical efficacy hasn’t been assessed since the program began more than three decades ago. If the government wants to get the most bang for its limited Medicare bucks, it first needs to determine which treatments help patients the most.

A bill by surgeon-turned-senator Bill Frist (R-Tenn.) that Senate leaders hope to debate today would allow the government to develop such an assessment system. Frist’s legislation would authorize a 50% funding increase for the federal government’s Agency for Health Care Policy and Research. That funding would help Medicare begin questioning ineffective treatments and encouraging the greater use of effective ones. No payments for prescription drugs should be promised without a mechanism for funding and cost containment.

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* Boosting spending. In his State of the Union address, President Clinton proposed committing about 15% of future budget surpluses to Medicare. Medicare clearly needs some infusion from the surplus, as a broad range of health care economists and the Congressional Budget Office have pointed out.

Clinton was right to cast doubt this week on the Medicare Commission’s nebulous proposal to reduce Medicare costs through allowing managed care middlemen to negotiate fees with doctors and find other “efficiencies.” California health plans did just that beginning in 1996 and now face a solvency crisis.

In many ways Medicare has been a good deal, helping the nation lead the world in life expectancy for people 80 years old and older. If overseen properly through plans like Frist’s, it can continue to address crucial health needs.


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