2002 National Health Policy Conference: RESOURCE GUIDE

Medicare Reform

Featured Article

Berenson, RA. Medicare+Choice: Doubling or Disappearing? Health Affairs. Web Exclusive. 2001 November 28. Available at www.healthaffairs.org.
Although the changes in the program created by the Balanced Budget Act are often viewed as the reason for the current instability in the Medicare+Choice (M+C) program, in fact, health plans are having difficulties in all of their markets, not just in Medicare. It may be time to reconsider the purpose of the program and to fundamentally redesign how payments are made to managed care organizations contracting with Medicare. Two alternative approaches are suggested: treating M+C like another provider type by severing the payment linkage to spending under the traditional Medicare program, and overhauling the program by creating a value-based purchasing orientation focused on rewarding plans that provide higher-quality care to beneficiaries with chronic diseases.

Other Articles

Milbank Memorial Fund. Value Purchasers in Health Care: Seven Case Studies. Milbank Memorial Fund. 2001.
The Fund commissioned case studies of what has come to be called value purchasing-efforts to maximize the benefits of our health care system at a reasonable cost-to gain a better understanding of what has been accomplished, including how it has been done and with what effect, and of the barriers that stand in the way of additional progress. The case studies present several types of private- and public-sector organizations that exemplify some of the significant efforts in this field. The organizations studied are as follows: Central Florida Health Care Coalition; Buyers Health Care Action Group (Minnesota); General Electric; The Alliance (Denver); Massachusetts Medicaid; U.S. Department of Defense; and Medicare. An introduction by David A. Kindig, a program officer of the Fund, presents an analysis of the cases as a group by leaders of each of the organizations studied.

Vladeck B. Learn Nothing, Forget Nothing - The Medicare Redux. New England Journal of Medicine. 2001 August 9; 345(6): 456-458.
Vladeck looks back on the recommendations proposed by the now defunct National Bipartisan Commission on the Future of Medicare's co-chairs, Senator John Breaux (D-La.) and Representative Bill Thomas (R-Calif.) which are currently favored by President Bush. Vladeck, who was a member of the commission, argues that Medicare has seen drastic changes since 1997 that leave the co-chair's recommendations very out-dated. Vladeck cites data that shows a great improvement in the financial prospects for Medicare to the extent that the program is in the best financial shape it has been in since its inception. The relative tax burden on taxpayers is predicted to remain level for the next 50 years under mildly optimistic economic assumptions. A recent RAND study examined the utilization of services by beneficiaries of Medicare's fee-for-service program and found an underuse of every single service except one. Also, as premiums for HMOs and other private insurance plans have undergone double-digit annual increases, the per-beneficiary costs of Medicare have essentially not grown at all. During the economic boom that has so enriched the Medicare trust fund, Medicare beneficiaries, because of a variety of factors, have not seen a rise in their income. As such, they are unable to keep up with the costs of those health services that Medicare does not cover. Vladeck argues that under these circumstances Medicare reform should be viewed not as an attempt to solidify its financial footing but to expand coverage to its needy beneficiaries.

Ward SO. What Is Unique About Public Purchasing? National Health Care Purchasing Institute Monograph. 2001 March. Available at www.nhcpi.net.
The paper describes the unique environment in which public purchasers operate, analyzes the attributes of health care purchasing among different purchaser types and evaluates their differences, and identifies opportunities for the public sector to effectively engage in value-based purchasing.

Wilensky G. Medicare Reform--Now Is the Time. New England Journal of Medicine. 2001 August 9; 345(6): 458-461.
Medicare reform is consistently a topic on the congressional agenda, especially when reports indicate the program's future solvency is in jeopardy. In this article, Wilensky argues that Medicare should be re-modeled after the Federal Employees Health Benefits Program-or what is now generically referred to as a premium-support program. The Federal Employees Health Benefits Program successfully provides coverage for about 9 million federal workers, including many retirees, with far less frustration for its enrollees than most other insurance plans.

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		Medicare Reform Featured Article Berenson, RA. Medicare+Choice: Doubling or Disappearing? Health Affairs. Web Exclusive. 2001 November 28. Available at www.healthaffairs.org. Although the changes in the program created by the Balanced Budget Act are often viewed as the reason for the current instability in the Medicare+Choice (M+C) program, in fact, health plans are having difficulties in all of their markets, not just in Medicare. It may be time to reconsider the purpose of the program and to fundamentally redesign how payments are made to managed care organizations contracting with Medicare. Two alternative approaches are suggested: treating M+C like another provider type by severing the payment linkage to spending under the traditional Medicare program, and overhauling the program by creating a value-based purchasing orientation focused on rewarding plans that provide higher-quality care to beneficiaries with chronic diseases. Other Articles Milbank Memorial Fund. Value Purchasers in Health Care: Seven Case Studies. Milbank Memorial Fund. 2001. The Fund commissioned case studies of what has come to be called value purchasing-efforts to maximize the benefits of our health care system at a reasonable cost-to gain a better understanding of what has been accomplished, including how it has been done and with what effect, and of the barriers that stand in the way of additional progress. The case studies present several types of private- and public-sector organizations that exemplify some of the significant efforts in this field. The organizations studied are as follows: Central Florida Health Care Coalition; Buyers Health Care Action Group (Minnesota); General Electric; The Alliance (Denver); Massachusetts Medicaid; U.S. Department of Defense; and Medicare. An introduction by David A. Kindig, a program officer of the Fund, presents an analysis of the cases as a group by leaders of each of the organizations studied. Vladeck B. Learn Nothing, Forget Nothing - The Medicare Redux. New England Journal of Medicine. 2001 August 9; 345(6): 456-458. Vladeck looks back on the recommendations proposed by the now defunct National Bipartisan Commission on the Future of Medicare's co-chairs, Senator John Breaux (D-La.) and Representative Bill Thomas (R-Calif.) which are currently favored by President Bush. Vladeck, who was a member of the commission, argues that Medicare has seen drastic changes since 1997 that leave the co-chair's recommendations very out-dated. Vladeck cites data that shows a great improvement in the financial prospects for Medicare to the extent that the program is in the best financial shape it has been in since its inception. The relative tax burden on taxpayers is predicted to remain level for the next 50 years under mildly optimistic economic assumptions. A recent RAND study examined the utilization of services by beneficiaries of Medicare's fee-for-service program and found an underuse of every single service except one. Also, as premiums for HMOs and other private insurance plans have undergone double-digit annual increases, the per-beneficiary costs of Medicare have essentially not grown at all. During the economic boom that has so enriched the Medicare trust fund, Medicare beneficiaries, because of a variety of factors, have not seen a rise in their income. As such, they are unable to keep up with the costs of those health services that Medicare does not cover. Vladeck argues that under these circumstances Medicare reform should be viewed not as an attempt to solidify its financial footing but to expand coverage to its needy beneficiaries. Ward SO. What Is Unique About Public Purchasing? National Health Care Purchasing Institute Monograph. 2001 March. Available at www.nhcpi.net. The paper describes the unique environment in which public purchasers operate, analyzes the attributes of health care purchasing among different purchaser types and evaluates their differences, and identifies opportunities for the public sector to effectively engage in value-based purchasing. Wilensky G. Medicare Reform--Now Is the Time. New England Journal of Medicine. 2001 August 9; 345(6): 458-461. Medicare reform is consistently a topic on the congressional agenda, especially when reports indicate the program's future solvency is in jeopardy. In this article, Wilensky argues that Medicare should be re-modeled after the Federal Employees Health Benefits Program-or what is now generically referred to as a premium-support program. The Federal Employees Health Benefits Program successfully provides coverage for about 9 million federal workers, including many retirees, with far less frustration for its enrollees than most other insurance plans. Continue to: The Bush Administration's Health Policy Agenda Critical Health Issues for States A Reforming Governor's Perspective Disaster Preparedness and Response: The New York State Experience How Can We Prepare? Responding to the Threat of Bioterrorism Managing the Use of Prescription Drugs Future Trends in Employer and Individual Insurance Markets Health System Response to Terrorism The Human Genome Project: Implications for Health Care and Society The Public's Perception The Congressional Health Policy Agenda The Economy, Health Costs, and the Future Implications of HIPAA Privacy Regulations Medicare Reform Critical Issues for States Looking Back: Reflections from Seasoned CEOs Return to Resource Guide Table of Contents