Medicare

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Medicare, one of the central topics for debate in the 2004 presidential election, promises to continue to be controversial in future elections.


Leadership

2006 Proposed Plan Changes and a Conflict of Interest

"The Bush administration says it plans sweeping changes in Medicare payments to hospitals that could cut payments by 20 percent to 30 percent for many complex treatments and new technologies," Robert Pear reported in the July 17, 2006, New York Times.

"The changes, the biggest since the current payment system was adopted in 1983, are meant to improve the accuracy of payment rates," Pear wrote. "But doctors, hospitals and patient groups say the effects could be devastating."

Michael O. Leavitt, Secretary of Health and Human Services, "said the new system would be more accurate because payments would be based on hospital costs, rather than on charges, and would be adjusted to reflect the severity of a patient’s illness. A hospital now receives the same amount for a patient with a particular condition, like pneumonia, regardless of whether the illness is mild or severe."

"Dr. Alan D. Guerci, president of St. Francis Hospital in Roslyn, N.Y., said the new formula would cut Medicare payments to his hospital by $21 million, or 12 percent. 'It will significantly reduce payments for cardiac care and will force many hospitals to reduce the number of cardiac procedures they perform,' Dr. Guerci said.

"A coalition of patient organizations, including the Parkinson's Action Network and the Society for Women's Health Research, told the government in a letter that the new system 'could have a devastating impact on payment for critical treatments for seriously ill patients, with reimbursement for some essential procedures cut as much as 30 percent'," Pear wrote.

Additionally, Pear reported that both hospitals and members of Congress are "also complaining about the role of a government contractor", 3M Health Information Systems, a unit of the Minnesota-based technology company 3M, "that helped develop the new payment system and now stands to profit from it. ... In July 2005, the Bush administration awarded a 'sole source contract' to 3M, to analyze whether it was feasible for Medicare to use a payment system modeled on the 3M product. The company said yes.

"Influential members of Congress, including Senator Charles E. Grassley, Republican of Iowa, the chairman of the Finance Committee, have objected to Medicare’s reliance on a proprietary system controlled by a single company.

"A competing company, Ingenix, said, 'The contract was awarded to 3M without the solicitation of competitive bids.' Moreover, Richard H. Anderson, chief executive of Ingenix, a unit of UnitedHealth Group, said that 3M had a conflict of interest because it was evaluating its own proprietary software as the basis for a new Medicare payment system. ...

"In recent weeks, 3M has sent out marketing materials that urge hospitals to buy 3M software and use 3M experts to help them 'make a successful transition' to the new Medicare payment system," Pear reported.

2004 Medicare Reform Backfire

Ralph Z. Hallow wrote in the February 18, 2004, Washington Times that medicare reform backfired on President George W. Bush.

  • A Gallup poll found public disapproval of Bush's "handling of health care" increased 13% since 2003 and the January 19-February 1, 2004 "survey found 57 percent of the 1,001 Americans surveyed" disapproved of "Bush's health care policies, compared to 35 percent of voters who approve[d]."
  • Democrats said Bush's Medicare plan didn't "do enough to defray prescription expenses for retirees" and "Republican critics" called the "drug benefit an unprincipled bid to buy votes in November."
  • Critics accused the Bush administration "of lying about the bill's cost to taxpayers. While pushing the Medicare bill on Capitol Hill, the White House estimated the new drug benefit would cost $400 billion over the next 10 years. But when Mr. Bush released his fiscal 2005 budget earlier [in February 2004], that cost was estimated at $534 billion."

"Where the White House saw hope for a political edge, many in the GOP saw a shameless sellout," Hallow wrote.

2003 "means test"

One "hot issue" in 2003 was the matter of a "means test" for Medicare benefits. According to the October 16, 2003 issue of the Washington Post:

"According to several sources familiar with the negotiations, the core group of lawmakers trying to resolve separate House and Senate versions of the Medicare legislation has reached consensus on the basic strategy of charging higher insurance premiums to recipients with comparatively high incomes.
"The negotiators, however, have not worked out crucial questions such as how many of Medicare's 40 million recipients would pay such a surcharge, when it would begin and how the government would administer it. 'The details are still very much up in the air,' said one source, although negotiators have reached a 'general consensus.'"

Quotes

Related SourceWatch Resources

External links

Medicare Bill, 2003

2004

2005

2006

2010