Consider Medicare a force for health care solutions

Jun 5, 2011 Issues: Health Care

Consider Medicare a force for health care solutions 

The Republicans' Medicare proposal fundamentally misses the mark -- and not just because it destroys a program that has proved vital to expanding and improving health care for seniors.

The privatization proposal overlooks the fact that when it comes to rising health costs, Medicare is part of the solution, not the problem.

The inefficiencies in our health system have been well catalogued, and they are not unique to Medicare. Too often we have paid doctors for doing more, even when it may not benefit a patient's health. We have sent people to multiple specialists, who duplicate services and tests because health records can't be shared. We have focused too little on preventing illnesses, integrating care and streamlining services. All of this unnecessarily increases costs without improving the quality of care that patients receive.

Together with health care reform, Medicare can be the driver of innovation due to its sheer market share. Medicare covers more than 46 million Americans, nearly one person in every six. By 2050, that number is expected to double to 92 million, and nearly one in four Americans will be in the program.

History serves as a useful guide. In 1983, Medicare transformed health care by adopting the inpatient hospital prospective payment system. This landmark reform moved hospital payments away from individual charges for each inpatient service and instead created lump-sum payments to encompass the entire hospital stay. Doing so lowered costs and improved care by rewarding efficient providers and giving inefficient providers a financial incentive to change.

Private insurers quickly followed Medicare's lead. Then, Medicare instituted similar payment reforms for other providers and outpatient services.

Now, Medicare is leading system-wide improvement by encouraging the widespread use of electronic health records. This will dramatically reduce medical errors and unnecessary tests. It will also combat waste, fraud and abuse.
The health reform law we passed last year harnesses this power by giving Medicare even more tools to innovate, while putting patients at the center of treatment. The new law includes every cost-containment provision policy analysts have considered useful, including a new Independent Payment Advisory Board that constrains excess health spending.
Patient medical homes put one doctor in charge of coordinating care for all of a patient's chronic illnesses, rather than making patients and their families run from doctor to doctor. Accountable Care Organizations bring together all the different physicians and hospitals that care for a patient to focus on one outcome: good health.

These reforms discourage unnecessary procedures, reward quality and reduce costs. Other cost-saving concepts will come from the new Center for Medicare and Medicaid Innovation, which is testing payment incentives to encourage more patient-centered care and reduce overuse and waste.

In seeking to tear apart Medicare, Republicans not only lose sight of Medicare's success in providing universal access to care for seniors, but also its power to bring about change in this country's health care system.

The future of American health care must build on Medicare's proven record of innovation, support its universal coverage guarantee, encourage testing of reforms and adopt what works.