I am delighted to announce that The Century Foundation has created a working group to look at Medicare Reform.  I’ll be directing it. We’re going to do the work online, communicating with each other on a closed list-serve. In this way, we’ll be able to get a lot done without wasting time traveling to meetings. In the end, we’ll issue a report, and then we’ll get together and host a conference with keynote speakers and panels. (See our Press Release below for more information). 

We’ll be looking at many of the issues I have been discussing on this blog: how physicians are paid; the secretive panel, dominated by specialists, that sets fees; the need to reward providers for quality, not volume; over-paying for Medicare Advantage; overpaying for drugs; unwarranted regional variations in how much Medicare spends in different parts of the country; the need to squeeze the hazardous waste out of the system; the need for a comparative effectiveness institute that is truly insulated from Congress and lobbyists; the need to co-ordinate care; and the need for health IT.

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In my recent post on the issue of quality in health care, I spoke a little about how public opinion can be a poor guide when it comes to understanding the full scope of our health care problems. I noted that, according to Gallup polls, 85 percent of Americans report being satisfied with the quality of care they receive—despite the fact that patients get, on average, just 55 percent of the care that experts recommend for most major medical conditions. The lesson here is clear: if you really want to improve health care in the U.S., you need to look beyond superficial preferences and into the nitty-gritty of how health care is delivered in our system.

This holds true for the issue that Americans care about the most when it comes to health care: making their own care more affordable. But it’s not the public that’s at fault here; when it comes to questions of cost and affordability, people just aren’t being asked the right questions.

Consider the Gallup poll mentioned above, which asked how people felt about the cost and quality of health care. 45 percent of those polled said they were dissatisfied with our health care system’s performance in terms of quality; just 15 percent said the same of their personal experience. In contrast, a whopping 80 percent of respondents said they were dissatisfied with the system’s performance in terms of cost, and 40 percent said the same of their personal experience. Simple enough, right?

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Thanks the unbridled rise in healthcare prices, Medicare is going broke. As I mentioned in a recent post, four years ago the Medicare trust fund that pays for hospital stays started to run out of money.  In 2004 the fund began paying out more than it takes in through payroll taxes.

Since then, the balance in the fund, combined with interest income on that balance, has kept the fund solvent. But in just 11 years, it will be exhausted,” the Medicare Payment Commission reported in its March. “Revenues from payroll taxes collected in that year will cover only 79 percent of projected benefit expenditures.” And each year after 2019, the shortfall will grow larger.

Make no mistake: this is not an example of an inefficient government program spending hand-over-fist without caring whether it is getting a bang for the taxpayer’s buck.  As I discussed in that earlier post, health care prices have been climbing—without a concomitant improvement in patient outcomes or patient satisfaction—in the private sector as well.

Medicare Reform Could Pave the Way for National Reform

Before trying to roll out national health insurance, the next administration needs to address the structural problems that undermine the laissez-faire chaos that we euphemistically refer to as our health care “system.” Otherwise, we run the risk of winding up with a larger version of the dysfunctional, unsustainable system that we have today. Ideally, the administration should make Medicare reform a demonstration project for high quality, affordable universal coverage.

Let me be clear: Medicare reform does not preclude national health reform. To the contrary, by starting with Medicare, and showing what can be done, reformers enhance their chances of winning the larger war.

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The ever-insightful Commonwealth Fund has just released its 2008 National Scorecard on Health System Performance, and reports that “the U.S. health system continues to fall far short of what is attainable, especially given the resources invested. Across 37 core indicators of performance, the U.S. achieves an overall score of 65 out of a possible 100 when comparing national averages with U.S. and international performance benchmarks.” According to Commonwealth’s metrics, overall performance has not improved since 2006.

As we mentioned recently, measuring performance in health care is a tough proposition, so it’s worth discussing Commonwealth’s rating system. The Scorecard looks at five components of what we might call "high-performance health care": healthy lives (preventable mortality & disability), quality (whether care is effective, coordinated, safe, and timely), access, efficiency (waste, appropriateness of care, administrative costs), and equity (disparities of care).

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Over at the” Blog That Ate Manhattan “a NYC physician discusses “Doctors Dropping Medicare: TheDomino Effect” ( http://theblogthatatemanhattan.blogspot.com/)

“When the docs in my area began dropping Medicare, their patients had no where to go but to the docs like me who still participate in the plan.

“And so, over the past year or so, I began seeing more and more new older patients in my practice. The shift in my practice demographic was almost palpable as these new Medicare patients began filling my appointment book months in advance for routine annual visits. Add in a few retiring docs, and the influx of older women became too much to ignore.

“On the day I saw seven new Medicare patients, all coming from the practices that had stopped taking Medicare, I knew that I had to do something.

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It’s safe to say that Americans realize our health care system is in trouble. In polls, people cite paying for health care costs as one of their three most serious economic problems and consistently rank it as a top national priority behind the general economy, gas prices, and Iraq.  Earlier this month a Harris Interactive Survey found that a full one-third of Americans want to rebuild their health care system from scratch, a greater proportion than any European country. Finally, it seems that the American people have disabused themselves of the notion that the U.S. has the best health care in the world.

Or have they? While people may agree that too many Americans are uninsured and that health care costs too much, they still tend to think that the quality of care people receive—regardless how many people actually get it –is top-notch. This is a misconception that goes more or less unaddressed in the mainstream health care debate. That’s a sad omission: if we don’t talk about quality as a separate variable—and understand the reality of our system’s poor performance—we’re going to miss out on a big piece of the health care puzzle.

In May, the New England Journal of Medicine
(NEJM) printed a graphical representation of two Gallup polls from
November 2006 and 2007. The poll results show a deep “split between
public dissatisfaction with the overall system’s performance and
patients’ satisfaction with personal health care. (See below).

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Over at  Our Own System, Drew reports:

“The last month has brought news of plans for new hospitals including this one, this one, this one, this one, this one, and this one.  There are more to be sure.

“Aging hospitals, demographic shifts, increasing use of technology, and the evolution of patient care have spawned the need for new buildings.

“Another story of new hospital construction is particularly intriguing: ‘An expansion at the University of Iowa Hospitals and Clinics will result in an increase in patient costs, but officials said they don’t yet know how much.’"

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This post was written by Niko Karvounis and Maggie Mahar

At a health care forum held last year in Las Vegas, then-presidential candidate Hillary Clinton declared that she was intent on "taking money away from people who make out really well right now” in order to fund health care reform. When asked exactly which fat cats she was referring to, Clinton responded: “well, let’s start with the insurance companies.”

Clinton’s sentiment—that private insurers are making out like bandits while our health care system crumbles—is part of the received wisdom these days, especially amongst progressives who believe that for-profit health insurance doesn’t add much value to our health care system. But the reality is that in recent years, private insurers haven’t been doing so well financially.

Consider United Health Care (UHC), the nation’s biggest private insurer. Joe Paduda of Managed Care Matters reports that UHC will be cutting 4,000 jobs as part of a restructuring plan that includes eliminating Uniprise, one of its major brands. Since last fall, UHC stock has plummeted from $53 to $22 a share. WellPoint, another huge private insurer, has watched its stock drop from $82 a share in 2007 to $49 a share in June.

As Robert Laszewski wrote on the Health Care Policy and Marketplace Review in April,  “Wall Street finally seems to be figuring out that the health insurance business is, and has been for years, on a long walk off a short pier. What’s sustainable about a business whose costs have continually exploded at 2-3 times the growth rate of the rest of the economy or the wage rate? Just where did Wall Street think this business was headed all those years the sector has been the darling of Wall Street?”

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When friend or relative is in an accident and lands in the hospital…what do you do?

Your first impulse may be to buy flowers, visit the patient, call friends and let them know what has happened –so that they can visit too.

“Block that impulse!” says Lisa Lindell, a reader and author of 108 Days, the harrowing story of what happened to her husband, Curtis, after he suffered second and third degree burns over 35 percent of his body in a work-related accident.

Curtis would spend 108 days in the hospital, and Lisa details the predictable but completely unacceptable chaos that followed: a lack of communication among doctors, dangerous errors, Mean Nurses, infections, battles with hospital administrators—all at one of the finest burn units West of the Mississippi. Unfortunately, this won’t come as a surprise to many readers. In too many cases, hospitals don’t have enough nurses. Doctors who are called in to “consult” don’t consult with each other. The lack of electronic medical records leads to mistakes.

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Everyone understands why Congress was so reluctant to cut physicians’ fees. Reimbursements for primary care physicians are very low—so low that 30 percent of Medicare recipients who are looking for a new medical home can’t find one. Cut fees, and fewer doctors will take Medicare patients. The AMA, seniors and the AARP are all up-in-arms. Few politicians like to disappoint this trio.

But why are so many Congressmen willing to cut Medicare Advantage? After all, one out of five seniors is in the program: Won’t they be upset?

The truth is that, as many seniors have discovered, Medicare Advantage fee-for-service (the plan Congress has now voted to phase out by 2011) is not turning out to be an advantage for them.

Here is what David Fillman, an International Vice President of the American Federation of State, County and Municipal Employees (AFSCME), which represents some 1.4 million workers, had to say about MA’s fee-for-service insurance when he testified before Congress in January:

“Insurance companies have targeted our employers for the hard sell, including offers to pass through some of the federal subsidies to state and local governments.” 

Fillman rightly calls the subsidies a “windfall” –Medicare pays fee-for-service Medicare Advantage 17 percent more than Medicare would spend if it delivered the services itself.

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