Patient-Centered Program

Medicare is an antiquated program desperately in need of reform. Its fee-for-service design leads to uncoordinated and often duplicative care, it is facing $30 trillion in unfunded liabilities, and there are so many gaps in coverage that most senior citizens are forced to obtain supplemental insurance.

Retiree health coverage and Medigap plans help those fortunate enough to have them. For more than 10 million people, many of modest means, private Medicare Advantage plans provide access to more comprehensive care at little or no extra cost. The fact that nearly one in four seniors has voluntarily enrolled in Medicare Advantage shows that senior citizens are seeking out this more comprehensive coverage from health plans that are better able to provide coordinated care.

A system of premium support, as Representative Paul Ryan, Republican of Wisconsin is proposing, would begin to transform Medicare on this model into a more patient-centered program with private plans competing to provide quality care and offer the best value in health coverage. This same concept already is at work in the Medicare Part D program, where private companies compete to offer prescription drug benefits. Created in 2003, this program provides a range of choices and a subsidy that works much like the proposed premium support, allowing people to select the plan that best suits their needs. And because plans are competing on both benefit design and price, the Part D program is costing taxpayers 30 percent less than projected.

This is a model for the rest of Medicare. Premium support would create a path for more integrated health coverage for senior citizens, it would force plans to focus on value and price, and it would put Medicare on a path to sustainability. The concept was endorsed by a majority of the members of the National Bipartisan Commission on the Future of Medicare in the 1990s and by the Bipartisan Policy Center’s Task Force on Debt Reduction last year.

The other option — built into the Affordable Care Act — is to see Medicare hollowed out through deep cuts in provider payments that will make it increasingly difficult for senior citizens to find providers who can afford to treat them. And it will lead to a future of care rationing through a plethora of government agencies, including the Independent Payment Advisory Board. This inevitably will lead, as it has in other countries with similar programs, to restrictions on access to newer and better medicines and technologies.

We have the choice of two futures, and those who refuse to acknowledge Medicare’s failures will doom the program and the millions of people who rely on it to a future of lower quality care and more restrictions on access while taxpayers are forced to shore up an increasingly expensive and antiquated program.

Published in The New York Times: Room for Debate, April 5, 2011.

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