Posted on August 7, 2009

Medicare points the way to genuine health care reform


By John Geyman and Deborah Burger
July 30, 2009

Medicare, which turns 44 this week, has taught us many valuable lessons, perhaps none more valuable than this: the more we let private, for-profit insurance companies muscle into our publicly financed health care programs, the worse the outcome for patients, doctors and nurses.

We know this from firsthand experience. We know this from the statistics. Our lawmakers in Washington would do well to take heed as they consider the options for reform.

As a single-payer public financing system covering some 43 million Americans 65 years of age and older, as well as about 2 million disabled people, today’s Medicare is the only solid rock in a sea of deteriorating health insurance coverage. Many millions of middle-age Americans, sick or not, look forward anxiously to their 65th birthday for the relief that Medicare brings when it kicks in.

For those advocating a “uniquely American” reform, you couldn’t find a system more American, signed into law by President Lyndon Johnson in Independence, Mo., under the gleeful eyes of its first two enrollees, Harry, the former president, and Bess Truman.

Our made-in-America Medicare system is a model of success, especially compared with the rapidly unraveling mess created by the private insurance system.

By comparison, Medicare’s strengths are clear. A comprehensive set of predicable benefits; universal access for those who qualify by age or disability, regardless of pre-existing conditions; free choice of physician, other providers, and hospitals anywhere in the country; simplified administration costing only about 3 percent in overhead (compared to overhead five to nine times higher for private insurers); and a binding social contract that people can count on.

Medicare’s record is one that private insurers can only envy — as numerous studies attest, including recent ones from the Commonwealth Fund, printed in the prestigious journal Health Affairs, and from the Department of Health and Human Services.

The Commonwealth Fund/Health Affairs study compared the experiences of elderly Medicare beneficiaries with those of people under age 65 with employer-based, private health insurance from 2001 to 2007.

Even though Medicare beneficiaries were older and sicker, their experiences were better across the board, with better access, higher-rated quality of care, fewer problems with medical bills, and higher satisfaction with coverage at lower cost.

The HHS-commissioned survey in June also cited substantially higher satisfaction among Medicare patients than among those with private insurance — 56 percent of enrollees in traditional Medicare give Medicare a rating of 9 or 10 on a 0-10 scale, compared to only 40 percent of Americans in private plans.

Medicare also has its problems, of course, some of which were wired into the program at its beginning as a result of political compromises with its opponents, such as the insurance industry. For example, Blue Cross, as the lead private intermediary under contract to Medicare to deal with providers, was allowed to set rules and reimbursement rates favorable to providers when the program was launched.

Another example is the Medicare prescription drug legislation of 2003 in which Congress expressly forbade Medicare from negotiating prices with the pharmaceutical companies. In contrast, the Veterans Administration has been able to negotiate drug prices down to about 58 percent of regular costs. Similarly, the 2003 bill expanded private Medicare Advantage plans, which receive government subsidies of about 13 percent more than in traditional Medicare — even though studies show the private plans offer less choice, are less reliable, are less efficient and involve higher cost-sharing.

As Congress and the administration close in on new national legislation, those lessons should be recalled. We simply can’t trust the insurance and drug companies to change their pricing practices or control costs, as Massachusetts lawmakers, who are now capping enrollment and cutting services, have learned.

The most effective and sustainable way to contain costs and make health care more affordable for all Americans would be to enact a single-payer system based on a non-privatized and improved Medicare model.

John Geyman is a physician and past president of Physicians for a National Health Program ( Deborah Burger, a registered nurse, is co-president of the California Nurses Association/National Nurses Organizing Committee (