Two Visions of Medicare Reform

As we enter the 21st century, the United States is poised to lead the world in the next battle for freedom, to chart a new frontier in the search for miracle drugs unlike any we have ever hoped for, dreamed of, or even imagined. Medical researchers are mapping the entire genetic DNA code and hunting down the silent, hidden killers within the human body. We have the chance to make the world anew. Will we seize the moment? Or will history say of us that we vanquished evil empires, tore down Berlin Walls, and liberated the human spirit around the globe, but dared not conquer the human suffering and sickness within our own midst?

This is one of the great challenges facing the next American President, a challenge which is reflected in the different Medicare prescription drug plans offered by Democrat Al Gore and Republican George W. Bush. The real issue is: Whose vision offer greater hope for the medical miracles of the new millennium? The outcome of the high-stakes presidential election will determine whether we meet or turn away from these challenges.

It is here that we find the major presidential contenders offering two starkly different visions of medicine and health care delivery.

On one side of the chasm is Mr. Gore, who views government as a better manager of health care delivery, after helping President and Mrs. Clinton attempt a government take-over of the U.S. health care system early in their administration. He is part of an administration that also thwarted the efforts of the National Bipartisan Commission on the Future of Medicare to modernize the program by adding an integrated prescription drug benefit and giving beneficiaries greater choice of plans.

On the other side of the chasm is Mr. Bush, who believes doctors and patients should have control over health care delivery and that a government take-over would threaten the future of medical research. He believes Medicare’s 110,000 pages of rules and regulations make the system less effective, not more, and supports the recommendations of the majority of the members of the bipartisan Medicare commission.

In his speech last week on prescription drugs, Bush took the courageous stance of speaking the truth even though it is politically risky. He recognizes said the pharmaceutical industry must have the freedom to conduct research without constraints of price controls and restrictive government formularies so there will be an army of men and women devoting their lives to medical research and development who can continue the war on cancer, diabetes, heart disease and other life threatening illnesses.

This sharp difference of vision matters. Forbes magazine recently reported on exciting new research in cancer biology that would trigger the switch inside cancer cells that tells them to die. This is revolutionary research that could support and even replace radiation, chemotherapy, and surgery and make them seem as barbaric tomorrow as blood leeching does to us today. But this and other breakthroughs won’t come to fruition if the pharmaceutical industry’s $26 billion in annual research investment is choked off by a poorly conceived prescription drug benefit.

France provides a chilling example. France strictly regulates both manufactures’ prices and retail margins. It is no coincidence that of the drugs developed globally between 1975 and 1994, France is at the bottom of the list with only 3%. By contrast, the United States with its free market system can claim 45% of new drugs. We must not now follow France’s example as we seek to reform our Medicare system.

As anyone who has dealt with it knows, Medicare is already a bureaucratic morass. Rather than pursuing fundamental reform, however, Mr. Gore would simply add a drug benefit to its already bloated, ineffective structure. The government would pay a portion of all beneficiaries’ drug costs regardless of their need. It is inevitable that Medicare would control the availability of drugs just as it now controls when, where, and how seniors can obtain other health care services. It would determine when a drug could be covered, and which drug. It would develop complex lists of permitted drugs. Expensive drugs probably would be excluded. Eventually, Medicare would impose limits on how much it would pay for the drugs. It is inevitable that if a drug benefit is tacked onto the current structure, it will lead quickly to price controls on drugs-regardless of the particular euphemism used to camouflage the controls. To take such a road would be a terrible mistake.

The right kind of Medicare reform must have broad bi-partisan support if it is going to move forward. Gov. Bush bases his initiative on a reform plan that was developed by the majority of the bipartisan commission led by Democratic Senator John Breaux and Republican Congressman Bill Thomas. Gov. Bush offers a chance to re-start the bipartisan process and to build on the solid foundation the majority of the commission established.

Gov. Bush’s recognizes that seniors need help now with prescription drug costs while the debate over overall Medicare reform moves forward. His benefit is targeted to those who need help the most. One-third of seniors have no drug coverage. The ones who need help the most are lower-income seniors, especially those with high drug costs. The plan would target money to them immediately.

Gov. Bush also would provide coverage for all prescription drug costs in excess of $6000 in a year for all seniors. This provides coverage where it is most needed-large, unmanageable costs. He does this in a way that provides flexibility for beneficiaries and would not impede drug company research.

Gov. Bush would deliver the benefit quickly through various state programs. At least 23 states already have programs to help seniors obtain medicines. Gov. Bush would provide money immediately to build on these and encourage states that don’t have them to quickly create them.

The bottom line: Gov. Bush has outlined a uniquely American cure for this public policy problem that can be implemented without crippling research or robbing seniors of choice and the benefits of a competitive marketplace.

What a mistake it would be if the “Greatest Generation” that won World War II and the Cold War were to leave us with a legacy of a new government-run drug benefit program that dries up the research that has given them added years of life.

If we want this new century’s medical miracles to be discovered, the private research industry needs to be supported and not attacked by government. Policy initiatives must look to the future with a vision for what is possible in saving lives through medical miracles. These miracles will not come without hard work, risk, and protections of intellectual property. Without this, future patients will not know what treatments they have been deprived of. It is impossible to know that one does not have the benefit of a drug that does not exist.

Will we take the seemingly easy course of a misguided drug benefit that trades tomorrow’s medical miracles for the illusion of cheaper medicines today? Or will we see the importance of commonsense reforms that encourage investment in tomorrow’s cures, free from political intrusion and price controls and which protect seniors’ freedom? Voters do have a choice.


Grace-Marie Arnett is president of the Galen Institute, a not-for-profit research organization in Alexandria, VA, that focuses on health policy. John S. Hoff is an attorney in Washington, D.C., specializing in health care.

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