Medicare Costs Are The Most Important Issue In Long-Term Deficit Reduction

The least solvable part of our long-term deficit crisis is the infinite demand for medical services committed to the baby boom generation through the Medicare Program.

Social Security long term financial stability can be achieved through mathematical and actuarial adjustments. Continue to increase the full benefit age, increase income subject to the FICA tax, and make minor downward adjustments to benefit payments and viola, Social Security can be fixed for most of the 21st century.

But Medicare…Bernanke and Greenspan have gingerly mentioned that Medicare costs are the real long-term threat to our Nation, but they haven’t really been as explicit as will be necessary to change our thinking about Medicare.

Ah, Medicare. That great financial commitment created when it seemed like a good idea to implement a social contract that essentially said: “if you are eligible for this benefit, you are entitled to the best state of the art medical care available, essentially unlimited, for however long you live.”

Although the Medicare social commitment was made before the following now common but very costly procedures became ubiquitous:

Coronary artery bypass grafts, hip, knee, and shoulder replacements, implantable electronic defibrillators, biologically engineered drug therapies, bone marrow transplants, heart, liver, lung, cornea, kidney transplants, etc. etc.

We accept, as a society, that wealthy people ‘get better stuff’ than the rest of us. Mercedes automobiles are the safest cars on the road. We accept, however, that not everyone can afford the most expensive and safest car. A small segment of the population can afford the level of safety that a Mercedes provides, while everyone else that can afford to drive, drives cars that aren’t as safe. But when it comes to health care, our standard is essentially: everyone gets everything they want, regardless of its’ expense or its’ actual improvement in the quality of the ‘covered persons’ life.

With 25% to 35% of Medicare dollars being spent on the last six months of life, it is difficult to make the case that we’re getting much value from a huge proportion of program costs. Yet when the common-sense idea of paying physicians to discuss end-of-life care desires with their patients was proposed as a part of health insurance reform, the idea was torpedoed by ‘fiscally conservative’ Republicans as ‘Death Panels.’

Until we come to terms with the idea that we can’t afford to pay the costs of giving everyone the best of everything (in terms of medical care), we won’t ever begin to confront the menace that Medicare costs are to our survival as a Nation.

35 million people are today enrolled in a program that has an unsustainable growth rate in costs. But over the next 20 years, that 35 million people will become 80 million people as the baby boom age cohort enters the Medicare entitlement social contract.

The ‘adult conversation’ that politicians keep talking about having with the American People needs to be focused on this: We can’t afford to give everyone the best of everything with regard to Medicare benefits. Wealthy people will be able to get whatever they want, but the rest of us are going to have to get by with some limits on what resources are spent on their care.

If we don’t accept limits to Medicare costs, which means everyone won’t get the best of everything, then we are financially doomed…

Future posts will include some ideas as to equitable ways of implementing limits, but if we don’t accept the basic idea that limits need to be set, then there’s no point in seeking out ethical methods to determine how to best allocate the available resources.

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About Benjamin D. Zelman

www.zelmanandcompany.com
This entry was posted in The Health Care Cost Crisis and tagged , , , . Bookmark the permalink.

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