Posted on February 26, 2008

Bush's privatization agenda for Medicare


Sacramento Bee
Wednesday, February 13, 2008

The Bush administration is eating away at the heart of Medicare.

The first assault was the Medicare Modernization Act of 2003. And the second assault is the budget that President Bush just submitted to Congress.

Before looking at these two, we should recognize that Medicare is one of our nation’s most efficient, successful and popular public programs. Under this single-payer program for the elderly, people report less hassle, easier access, lower out-of-pocket expenses and more satisfaction than those with private insurance.

Let’s face it: Medicare is a public oasis in the private desert that is the health care marketplace in America. We spend more than twice as much on health care, on average, as other developed nations, all of which provide universal coverage through predominantly public financing. What’s more, their health outcomes are usually superior to ours.

Market-based health care is a minefield of “perverse incentives:” Procedures are rewarded over prevention and administrative costs are enormous. It is estimated that one-third to one-fifth of U.S. medical expense outlays don’t improve health.

As a doctor, I know that my time with patients is at the core of a humanistic practice of medicine. And it’s also the most cost-effective way to deliver primary care. It is, however, the least reimbursable of all medical events. Physicians are more likely to order questionable tests and specialty referrals when in a rush. It provides a sense of thoroughness, a hedge of bets and, frankly, a patient-pleasing way to close the visit when the lines are getting too long. But it adds immensely to the costs of health care.

The waste and inefficiency are, well, un-American.

In a triumph of ideology over fiscal sobriety, of special interests over public health, the Bush administration is trying to privatize Medicare rather than expand it.

The Medicare Modernization Act of 2003 offered prescription drug coverage, but exclusively through private companies. Bizarrely, it prohibited the government from negotiating price discounts from the drug companies. As a result, Medicare Part D drug prices are more than 80 percent higher than the prices negotiated by Medicaid and Veterans Affairs.

One important but obscure component of the Medicare Modernization Act will soon come to haunt us. And that is the creation of an arbitrary 45 percent general revenue cap, which, when reached, will trigger program cutbacks, higher premiums or further privatization. Medicare financing comes from various sources including general revenue, payroll taxes, trust fund interest, and beneficiary premiums. The cap has yet to kick in, but the drug company giveaway was funded mostly through general revenue, so it will come soon.

Then there’s the current Bush budget. It proposes reducing payments to doctors and hospitals while preserving subsidies to inefficient and sometimes corrupt private insurance middlemen, who offer plans through the Medicare Advantage program. These middlemen cost up to 19 percent more per beneficiary than traditional Medicare despite selective enrollment of the healthy.

Fiscal sobriety and public health demand that Medicare be kept affordable by getting rid of inefficient subsidies and giveaways to industry, which add cost but not value to health care.

Don’t let the Bush Administration fool you: We can afford Medicare. The $6 billion it would cut next year from public Medicare is less than the cost of two weeks of the war in Iraq.

Medicare is the proud kernel of a single-payer America, where health care is a right and not a commodity, and everyone has the same health care coverage as their president.

We can’t let the Bush administration continue to gouge it.

About the writer: Dr. Laura S. Boylan is an assistant professor of neurology at New York University and a board member of Physicians for a National Health Program (