News & Observer | newsobserver.com | Politics

Published: Mar 03, 2008 12:30 AM
Modified: Mar 03, 2008 06:36 AM

Health plans going broke

Next president faces soaring Medicare, Medicaid costs

 

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BY THE NUMBERS

$7,400

Amount per person spent by U.S. health care system in 2007

44 million

Number of Medicare beneficiaries today

49 million

Number of Medicare beneficiaries in first term of next president

55 million

Number of Medicare beneficiaries in 2017

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Medicare has generally not taken costs into account in deciding which services to cover.

Location counts

Researchers at Dartmouth Medical School have found large variations in the amount of hospital care and other services that people with the same condition receive in different parts of the country. In some regions, where doctors favor more intensive treatments, Medicare spends much more without getting better results for patients.

This research "suggests that about 20 percent of Medicare spending could be eliminated with no adverse effects on health," said Professor David M. Cutler of Harvard, an adviser to the Obama campaign. Identifying that 20 percent would be "very difficult," he acknowledged.

President Bush says high-income people should pay higher premiums for the Medicare drug benefit, and at least some liberals are willing to discuss the idea.

"We can go further in setting Medicare premiums at higher levels for affluent beneficiaries without unraveling the universal nature of the program," said Robert Greenstein of the Center on Budget and Policy Priorities. But, he insists, "we should also eliminate billions of dollars in overpayments to private Medicare plans."

$7,400 per person

The Democratic candidates do think they can wring savings out of an inefficient healthcare system that spent an average of $7,400 a person last year, far more than any other country.

Obama says his plan can achieve "tremendous savings" by making the health-care system more efficient. Clinton says her plan will save more than $50 billion a year with "efficiency reforms."

To this end, Democrats and some Republicans are coalescing behind proposals intended to improve care while lowering costs. These proposals call for greater use of health information technology, including electronic medical records, programs to manage the care of people with multiple chronic diseases and research to compare the effectiveness of different treatments.

Sen. John McCain of Arizona, the presumptive Republican nominee, describes Medicare as a "fiscal train wreck." He voted against adding a prescription drug benefit to Medicare in 2003 because, he said, it added huge costs to a program going broke.

McCain says he, too, wants to cover more people. But he has not explicitly embraced the goal of universal coverage, saying he worries more about costs.


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