June 28, 2011--With the 2012 election fast coming into
focus, Congress is unlikely to alter
seniors' beloved Medicare in any fundamental
way. But Congress can, and should, take
small but important steps now to lower the
cost of the program, says Robert Berenson, a
physician, health policy researcher and
former Medicare official.
Medicare, which covers 47 million seniors
and disabled people, has become a flashpoint
in the current federal budget debate. And,
while there is general agreement about the
need to rein in Medicare spending, which
consumed 15 percent of the federal budget in
2010, Democrats and Republicans are at odds
over how much to cut, and how to do it.
Already, Republican proposals in the
House-passed budget resolution have proven
unpopular with seniors -- a voting bloc that
neither party wants to anger.
In a recent interview with KHN reporter
Marilyn Werber Serafini, Berenson outlined
several ideas for reducing Medicare spending
that don't involve full restructuring of the
program but would, he says, help hold at bay
the "dire projections" for Medicare's future
and buy enough time to figure out how to
make accountable care organizations work.
His list includes making Medicare more
evidence-based in terms of the treatments it
covers and determining whether some
physician specialties could be paid less.
Edited excerpts follow.
Q: Does lowering Medicare spending have to
mean fewer benefits and larger costs for
seniors and the disabled?
A: There's plenty to do in Medicare that is
not about rationing. It's about identifying
areas where the program is being abused and
going after them. So that means looking at
places that spend 10 times more than the
average on home health care or hospice care.
In some cases, the providers might be
innocent, and in some cases, I'm sure it is
fraudulent behavior. The Government
Accountability Office has identified all
kinds of opportunities in that area alone.
Video: Berenson On Controlling Medicare
The Urban Institute's Robert Berenson talk
about controlling Medicare costs.
Q: Should physicians be paid less?
A: Some physicians in Medicare are paid
$450,000. A lot of [them] would like to
[earn] $500,000, so they are not happy to
see payment cuts. But if we have a difficult
budget problem, do we want to fundamentally
change Medicare or do we want to identify
some specialties that perhaps could get a
little bit less?
Q: Should Congress be charged with making
these decisions, as they do now?
A: A major problem is that every time you
cut somebody's spending or adopt a new
approach to identify overspending, you get
somebody who's upset and we have not had a
political system that can accommodate that.
That's why there is an independent
commission or independent board in the law
with the view that the Congress is not
really able to support those kinds of
decisions on its own.
Q: You have said that Medicare spends too
much on some services that utilize new
technology. Are cutbacks merited?
A: Medicare approves coverage of new
technology and pays for it often without any
evidence that the new technology is helpful
to anybody [or] is better than what already
exists. And yet [treatments] frequently --
largely politically driven -- get approved
into the program. Not everybody should get a
$50,000 cardiac defibrillator. It has
specific clinical indications for people who
would actually benefit from it. There's a
recent article in the Journal of the
American Medical Association showing that,
about 20 percent of the time, beneficiaries
and patients are getting those
defibrillators who don't benefit from them.
Medicare doesn't have the staff to identify
those instances. I know that there's a lot
of concern about interfering with doctors'
decision-making, but if it's done right,
having some requirements that [doctors]
follow evidence in treating patients would
actually help patients. But right now the
Congress doesn't permit Medicare to do much
about it all.
Q: The health law encourages the adoption of
accountable care organizations, a health
care model which would offer financial
incentives for doctors, hospitals and other
medical providers to better coordinate care.
Are they the solution to keeping costs down?
A: We need 10 years to figure out how to
make these things work. In the meantime,
we've got these other areas. There is plenty
of low hanging fruit that can buy us five to
10 years. … If we were able to reduce by 1
percent the growth rate of Medicare
spending, all of the dire projections of
Medicare eating up the entire budget would
have to be redone.
We could go after the fraud, identify
services that aren't benefiting patients and
not pay for those, or pay a lower rate, and
[also] work on the accountable care
organizations, which is a long-term reform.
There are still a lot of design issues, and
ultimately it means a change in the business
model and the culture of an organization.
That takes longer than a couple of years to
We want to hear from you: Contact
Kaiser Health News