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.