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  • friend_of_the_deceased friend_of_the_deceased Jun 7, 2000 2:37 PM Flag

    wsj editorial pt1

    Medicare's Salami

    Every once in a while,
    in the governments's slow takeover of health care,
    one of the slices threatens to jump back and reattach
    itself to the salami. Republicans thought they had
    achieved just that a few years ago with a program to let
    seniors opt for an HMO-type insurance policy rather than
    Medicare's basic fee-for-service coverage.

    Every
    sensible person realizes this is the best future for
    Medicare, getting it out of the business of setting
    reimbursements rates for thousands of procedures, from a routine
    check-up to a heart-lung transplant, adjusted for some
    bureaucrat's idea of how medical prices should vary between
    New York City and the third valley over from Possum
    Hollow (and yes, that's precisely what they do). The
    parade of those advocating that Medicare let private
    insurers take over the job of allocating medical resources
    (hardly a revolution, since millions of federal employees
    have essentially the same program) includes Bill
    Clinton's 1999 Medicare commission.

    Naturally,
    frustrating such a design has become the focus of national
    Democrats, beginning with Mr. Clinton deep-sixing his own
    commission's report. Another mark of their triumph is the
    wholesale flight of insurance companies from the Medicare
    HMO business. Latest to take a powder this past week
    is Cigna, dumping 104,000 patients back into
    Medicare's old-style fee-for-service
    pool.

    Admittedly, managed care companies were probably spending too
    much time in their own medicine cabinets ever to
    believe they would be compensated adequately. By bringing
    their cost-saving techniques to federal health
    programs, they thought they were going to be Uncle Sam's
    hero. For little or no extra cost, some insurers even
    went out on the limb to offer prescription drugs not
    covered by conventional Medicare and other options. With
    Medicare saving money and seniors delighted with the new
    benefits, health care CEOs figured politicians would begin
    to see the merit in managed care techniques and call
    off the holy war on private HMOs.

    Wrong. In
    state after state, Medicare has made it a point not to
    reimburse HMOs enough to cover their costs. Meanwhile, HMOs
    have been squeezed from both ends, with cost-control
    under assault in the courts, state legislatures and the
    U.S. Congress. Typical is a Florida rule allowing HMO
    patients to run straight to the dermatologist, skipping
    their primary-care physician. Medicare launched its HMO
    option precisely to liberate the program from such
    costly micro-management temptations.

    Perhaps the
    worst is Washington's slippery attempt to drive down
    what Medicare would pay for HMO patients in rural
    regions, where the average premium is half what Medicare
    pays in a big city. Washington is always afraid that
    somebody somewhere might be making money on Medicare, so
    there has been much bleating about ensuring the
    taxpayer doesn't "overpay."

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    • This is penny-foolish. You want your suppliers to
      have healthy profits, or they aren't going to be there
      when you need them. Medicare's false economies through
      the years have already starved the hospital industry
      of the funds needed to modernize, and now its
      short-sighted desire to milk insurers has driven them to drop
      730,000 HMO seniors in the past 17 months.

      The
      urge to meddle is also reflected in the use of
      "risk-adjusted" premiums to punish insurers for signing up
      healthy seniors. Aside from a desire to move the
      costliest patients off its own books, Medicare has a hard
      time explaining why it wants to tilt the private
      insurance pool this way. Managed care's real strength is
      keeping people healthy by using "disease management"
      techniques, such as screening and preventive medicine and
      drug therapy for conditions that might otherwise get
      worse.

      Part of the HMO problem is that Medicare was
      ratcheting down reimbursements just as new and expensive
      drugs were being introduced to treat the ravages of old
      age. So now the failure of Medicare+Choice (as the
      managed care option is known) has gotten mixed up in the
      Clinton-Gore scheme to bring the drug industry under control
      of the government-run medical system.

      The
      salami slicers figure once they have drug benefits under
      Medicare, the next move is to take a program for the old
      and extend it to everybody -- presto, national
      health! And the failure of the private insurance option
      is necessary to this end.

      We'd love to think
      this was just a policy fight, but experience suggests
      the Clinton-Gore motive is mainly politics; what's on
      their minds is expanding the pool of unionized, mostly
      public health care workers, who then become lockstep
      Democratic votes unto eternity.

      As Gail Wilensky, one
      of Washington's savviest health care policymakers,
      noted last week, whether legislation is enacted to save
      the experimental Medicare HMO program "depends on the
      party controlling the White House and the party
      controlling Congress" after the November
      elections.

      Translation: It's up to Republicans to save this experiment by
      paying realistic premiums. Otherwise, the salami slicers
      are a big step closer to their goal of quashing an
      enlightened alternative to a creeping government takeover of
      health care.

 
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