This NY Times article reports on the Medicare trustees’ report today that Medicare will need to dip into its trust fund this year to pay increasing expenditures and that the program will become insolvent by 2019 unless changes are made in the program. The 2019 go-broke date for the Medicare trust fund is seven years sooner than what the trustees projected last year.
Here is a copy of the entire report.
The trustees report that Medicare’s deteriorating financial condition is largely the result of the new Medicare prescription drug law that will increase costs by more than $500 billion over the next 10 years. The trustees also noted that projected lower tax receipts devoted to the program and higher expenditures for inpatient hospital care also are contributing to the growing financial problem.
Thomas Saving, a distinguished economics professor at Texas A&M University is one of the Medicare trustees who figures prominently in the report.
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The only surprise about this report is that it is going to take until 2019 for Medicare to go broke.
Medicare fraud is a real, but realistically a small part of cost overruns.
Waste from excessive and repetitive testing is a major factor in terms of eating up Medicare dollars. The excuse of “CYA” against malpractice litigation is only a minor player here. Tort reform will not likely have much of an impact in this type of ingrained ordering practices.
A more concrete reason for waste is the relative lack of data sharing, due to the antiquated way that data is managed in hospital systems. If Ms. Jones goes to Hospital A, gets a series of tests, and then is transferred to Hospital B, many times those tests done at A are repeated at B. Some of this is due to confidentiality issues related to the HIPAA legislation. Some of it is that we tend to just be lazy.
Part of the process of Medicare cost overruns involves the overbilling of all third party payors, in an effort to gain reimbursement for the expense of providing care for those who are uninsured. When you pay $5 for a couple of Tylenol in the hospital, you are paying for your Tylenol…and for the Tylenol given to the guy down the hall who doesn’t have any insurance. If you say that you are against universal health care coverage, you need to realize that this is a hidden tax already in place to help cover the cost of health care for the under- and the un-insured.
Until the whole process of how we pay for health care in this country is overhauled, the only way I know to save Medicare as it currently exists is to apply means testing to the receipt of Medicare benefits, including provision of prescription drugs.
I wonder if the Professor Walt Kirkendall, would have been accepting of this benefit. It would have been enlightening to see him weigh the ethical position of his profession and the greater societal good against his famous fiscal conservativism (read penny-pinching)…..