WASHINGTON — Congress and President Clinton are agreed on the need for senior citizens to have access to affordable prescription drugs. But tacking an expensive new universal drug benefit onto the existing Medicare program would be like tossing lead weights into a sinking boat. Medicare’s commitments to tomorrow’s beneficiaries far exceed the program’s financial resources. Adding a new out- patient drug benefit will inevitably cost more than the $160 billion the president anticipates over 10 years. Cost overruns will inevitably lead to rationing and restrictions.
Further, requiring the federal government to oversee payment for an additional 700 to 900 million pharmaceutical transactions every year will swamp the system administratively.
Addressing the prescription drug issue with a patchwork approach will only add to the problems of the price- controlled, micromanaged Medicare program already governed by 132,000 pages of regulations.
Despite Medicare’s popularity, it is remarkably outdated. It is a Swiss cheese program that pays only 53 percent of the medical expenses of seniors. Beneficiaries are forced to seek supplementary coverage to fill the holes.
Today, two-thirds of seniors have supplementary coverage that covers prescription drugs, but one-third must pay for their medications out of pocket — or worse, go without essential medicines.
Lawmakers contemplating how to create a prescription drug benefit for Medicare recipients would do well to examine how drug benefits are managed in other federal health programs in the United States, such as the Veterans Affairs health program. These programs, which use an array of price controls and restrictions on patient choice to save costs, demonstrate how government- enforced benefits can actually deny patients the best medicine.
For example, VA patients with pancreatic cancer are not allowed to receive Gemzar, the newest drug for that disease when they are first diagnosed. They must “fail” on other drugs first.
Several studies have demonstrated that VA patients suffering from schizophrenia have a better quality of life under clozapine. Yet haldol — an older drug — is on the VA’s list of approved drugs while clozapine and newer drugs, such as risperdal and olanzapine, are not. If Congress passes a stand- alone drug benefit for Medicare, supply-limiting price controls and rationing are sure to follow.
Drug treatments are not only more humane, but they often are the most cost-effective way of treating medical problems. New medications for congestive heart disease, ulcers and mental illness, for example, have led to dramatic reductions in costs for hospitalization and surgery.
v Sens. Bill Frist, R-Tenn., and John Breaux, D-La., have introduced legislation that would give Medicare beneficiaries the option of selecting from a range of private health plans offering benefits, including drug coverage, that would be much more comprehensive and cost effective than today’s Medicare.
In the interim before Medicare reform is fully implemented, Congress could vote to provide immediately a supplementary payment to low-income senior citizens without drug coverage to enable them to purchase either private Medigap plans or directly supplement their drug costs. This supplementary payment then could sunset when Medicare reform is implemented in 2003, at which time the Breaux-Frist legislation would provide full coverage of all benefits (core benefits and drugs) at no cost for low income beneficiaries.
There is a strong commitment in the Senate to act this year, but the House, burned from the 1996 Medicare fight, will be reluctant to move forward. President Clinton could embellish his legacy by providing the leadership to implement courageous, visionary change in an election year, something that few, if any, of his predecessors have done.
Medicare reform provides that opportunity to move forward with the right and responsible approach to truly solving the problem for today’s and tomorrow’s beneficiaries.
Grace-Marie Arnett is president of the Galen Institute, a public policy research organization based in Alexandria, Virginia. She is the editor of Empowering Health Care Consumers through Tax Reform, published in 1999 by the University of Michigan Press.