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."
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.