How to Save Medicare (and America)
The conservative, market-oriented chairman of the Federal Reserve Bank, Alan Greenspan, stated on his retirement that his greatest fear for America was the cost of the Medicare program. With 78 million baby boomers becoming over 65, twice the number as today, the unfunded Medicare mandate for this generation is estimated at $67 trillion! What is a trillion dollars? To put that into perspective, one million seconds ago was last week. One billion seconds ago was the early 1970s when Nixon left the White House. One trillion seconds ago was 30,000 BCE! The current federal deficit is approaching $10 trillion. A doubling of the Medicare population, and business as usual, will certainly bankrupt America for our children.
Medicare is already in crisis. Current estimates show that Medicare will run out of money in 2019, just 11 years from now. Reimbursement cuts are being proposed, a mindless method of reducing costs that will certainly be counterproductive. Most hospitals are already losing money on patients that only have Medicare. Physicians are in the same situation and are fleeing from taking Medicare patients. Further reimbursement cuts will make this access even worse as emergency rooms, not equipped to manage the chronic diseases of seniors, face further overcrowding.
Healthcare researchers estimate that medical waste makes up 30-35 percent of healthcare costs. Price Waterhouse Coopers recently estimated this at 50 percent! Medical waste is expenditures that provide no benefit to the patient. Even using the lower 30 percent figure, for the $500 billion Medicare program, the waste is $150 billion! Add the $300 billion Medicaid program, and we have about $250 billion of taxpayer-funded medical waste in this country. Saving the Medicare program should begin with reducing medical waste. How much money will we keep borrowing to pay for unnecessary and overpriced tests, procedures, and medications?
Medical care is a dance among people, the medical profession, and the overall healthcare system. This dance has become overly expensive as we have medicalized normal parts of living, such as aging and death, and have made common health problems overly expensive. When a third party pays the bills, what happens in the patient-physician relationship becomes unrestrained. Restraint must come before we bankrupt America and leave a problem for our children that is beyond solution.
In 1981 when Ronald Reagan took office, he appointed the 34-year-old David Stockman as federal budget director. Stockman's job was to apply "tough love" to the federal budget and reduce spending by 30 percent. The government should only pay for socially necessary programs. No frills, no fat, and no payment to compensate for poor human behavior. Stockman did just that, although what finally passed Congress were lesser savings. Unfortunately, Medicare was considered untouchable during the Reagan years, and the escalation in costs rivaled the rate of today and the federal deficit tripled.
Will Durant in his 11-volume Story of Civilization states that one factor in the decline of ancient Egypt was that healthcare became "overspecialized." The Greek and Roman civilizations declined in part due to slothful human behavior and a sense of entitlement to its maintenance. America is already the most overweight developed country in the world, and Medicare is planning for three million bariatric surgeries a year! I know about the cost effectiveness data supporting bariatric surgery, but come on, would entitlement to this procedure using taxpayer dollars pass a voter referendum?
It is time to apply "tough love" to Medicare. If we provided only healthcare that was evidence-based, cost effective and necessary for health, we would save hundreds of billions of dollars. We could provide that for everyone, the foundation of a healthcare system, and let people pay for or buy supplemental insurance for everything else they want.
None of the candidates for president is expressing anything close to this bold vision for fixing Medicare. They only want to tweak our current failing system. Cut reimbursement but still provide for almost everything under the sun. How stupid. This is a recipe for continued social decline. The richest country in the world with the best medical schools and higher education can do better. We can provide necessary healthcare for all Americans, not just the seniors and disabled, be affordable, and have the best healthcare in the world. Right now we need to focus primarily on reducing the waste in the system and a lot of tough love.