[Congressional Record Volume 141, Number 123 (Thursday, July 27, 1995)]
[Senate]
[Pages S10785-S10788]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      MEDICARE'S 30TH ANNIVERSARY

  Mr. WELLSTONE. Mr. President, on July 30, 1965, President Lyndon 
Baines Johnson traveled to Independence, MO, and he signed Medicare 
into law. That simple ceremony marked the beginning of a new era of 
health and economic security for America's seniors.
  Prior to Medicare, only half of America's elderly had health 
insurance. Today, more than 36 million elderly and disabled Americans, 
including more than 630,000 Minnesotans, are protected by Medicare. Mr. 
President, Medicare is a program with overwhelming support in Minnesota 
among seniors, their children, their grandchildren, and all 
Minnesotans.
  Many of us remember what it was like for seniors before Medicare. 
Many seniors lost everything paying for necessary health care, and many 
others simply went without it.
  Mr. President, the Medicare Program, imperfections and all, made the 
United States of America a better country. Prior to Medicare, what 
often happened was that as people became elderly and no longer worked, 
they then lost their health care coverage. Many people could not afford 
good health care.
  This was a program, along with Medicaid, that made our country more 
compassionate. It made our country a fairer country. It made our 
country a more just country.
  I can say, Mr. President, having had two parents with Parkinson's 
disease--and the Presiding Officer and I have talked about Parkinson's 
disease before, and we both have a very strong interest and support for 
people who are struggling; I think the Presiding Officer has a family 
connection also with Parkinson's disease--for my mother and father, 
neither of whom are alive, Leon and Minnie, the Medicare Program, I 
think, was the difference at the end of their lives between dignity and 
just economic disaster. It is a terribly important program.
  Mr. President, Medicare also is important to Minnesotans because we, 
as a State, I think, have had a great deal to do with its creation. 
Hubert Humphrey, Walter Mondale, and Don Fraser, among others, worked 
tirelessly on its creation.
  This was a project of countless Minnesotans, advocates for seniors 
from all across our State, our universities, our communities, all came 
together during the early part of the decade of the 1960's, and finally 
culminating in 1965 

[[Page S 10786]]
on July 30, when we passed this hallmark legislation.
  In many ways, I argue today on the floor of the Senate, Medicare is a 
product of Minnesota. It reflects Minnesotans' values. It reflects the 
tradition of my State: A tradition of respect for seniors and a 
commitment to those members of our community who need a helping hand. 
As Hubert Humphrey, a great Senator, said in support of Medicare, ``Our 
country's strength is in the health of our people.'' That was the 
premise of the Medicare Program.
  This year, the 30th anniversary of the Medicare Program, all too many 
Republicans have resolved to cut the program by $270 billion over the 
next 6 years. While the budget deficit clearly needs to be reduced, the 
Republican proposal to finance a tax cut to the tune of $245 billion--
most of it going to high-income and wealthy people--and at the same 
time putting into effect severe and, I think, draconian cuts in the 
Medicare Program, a program which has played such a central role in 
improving both access to and quality of health care services for our 
country's elderly and disabled, is unacceptable, I argue--and we will 
have a debate about this, as time goes on--and unconscionable.
  Mr. President, while I believe the Medicare Program could and should 
be improved, I want to be quite clear that I do not think that this 
program will be improved by cutting $270 billion over the next 6 years.
  Mr. President, a dramatic restructuring of Medicare not based on 
sound public policy would be a grave mistake. A dramatic restructuring 
of Medicare of the kind that has been proposed now by too many 
Republicans, not based on sound policy, would not be a step forward for 
Medicare beneficiaries in Minnesota or across the country, but would be 
a huge step backward.
  Republicans have proposed, Mr. President, to fundamentally change the 
program from universal health insurance for seniors to a fixed amount 
of cash which each Medicare beneficiary could use to purchase coverage 
in the marketplace. This would effectively transfer the risk of 
Medicare inflation and medical inflation to the elderly, in order to 
relieve the Government from bearing the risk.
  Mr. President, seniors would be expected to pay the difference 
between the cost of a health plan and the Medicare voucher amount. The 
elderly in our country, Mr. President, already pay four times more out-
of-pocket expenses for medical costs than those under 65 years of age. 
This does not include the enormous cost of nursing homes, which is now 
nearly $40,000 a year.
  While Republicans claim that they want to use a voucher system to 
emulate the health care cost containment successes of the private 
sector, they neglect to mention that their budget cuts will only allow 
Medicare costs to grow at a rate of less than 5 percent per person, 
while private health care costs are projected to grow at a rate of 7 
percent per person. Those are exactly the figures. That is exactly the 
information.
  Mr. President, that means that even if the Medicare Program, which 
cares for the sickest and the frailest members of our society--the same 
members, I might add, Mr. President, who have been systematically 
excluded by the insurance companies from coverage because of 
preexisting conditions--even if Medicare can capture all of the 
efficiencies of the private sector, there still would not be enough 
money to cover the costs of this program.
  Mr. President, Minnesotan providers have already suffered from 
inadequate payments for Medicare. For example, Minnesota's HMO's are 
currently offered inadequate payments for the Medicare population. As a 
result, many of our HMO's have declined to participate in the Medicare 
Program on a capitated basis. Minnesota, compared to California, 
compared to New York, compared to Florida, sometimes only receives half 
of the reimbursement per person.
  Mr. President, what I am saying is that we, in Minnesota, have kept 
the inefficiencies out of the system. We have already cut the fat. If 
these payments come to Minnesota, capitated at a fixed amount way under 
the cost of providing care to beneficiaries under a voucher-type 
scenario, seniors will be forced either to pay more out of pocket--and 
we are not talking about a high-income population when we talk about 
the elderly in Minnesota or in our country--or they will have to go 
without coverage.
  Mr. President, beyond the impact of Medicare cuts felt by seniors and 
the disabled community, we will all pay the costs of Medicare 
indirectly. We will pay it in one of two ways: Either as children or 
grandchildren, we will have to help pay the costs of our elderly 
parents or grandparents.
  Many families are already under a tremendous amount of economic 
pressure. The bottom 70 percent of the population has been losing 
ground economically over the last 15 years. I think it is rather naive 
to believe that families will have a lot of extra income to pay this 
additional cost.
  Or, when the hospitals, clinics, and doctors are in a position to do 
so, and I do not blame them for this, they will just shift the costs. 
It is like Jell-O. Put your finger in one part of the Jell-O and it 
just shifts. What they will do, since the Medicare reimbursement will 
be significantly under the cost of providing care--that is already the 
case in Minnesota--these cuts will not work in my State, I tell Members 
now. This slash-and-burn approach will not work in Minnesota. It will 
not only hurt Medicare beneficiaries. It will also hurt care givers and 
providers and, in addition, those care givers and providers in the 
metro area, if they can, will shift the cost of private health 
insurance. Then the premiums will go up, then the employers will have a 
difficult time carrying insurance, and more will be dropped from 
coverage.
  This is crazy public policy that some people are advocating around 
here.
  Mr. President, Medicare Dependent Hospitals, which have a Medicare 
load of 60 percent or more----
  The PRESIDING OFFICER (Mr. Abraham). I inform the Senator his 10 
minutes has expired.
  Mr. WELLSTONE. Mr. President, I ask unanimous consent for 5 extra 
minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WELLSTONE. Mr. President, Medicare dependent hospitals--and the 
definition of a Medicare dependent hospital is a hospital that has 
Medicare patient loads of 60 percent or more--have significantly lower 
overall margins than other hospitals, and will face two choices: Either 
those hospitals will close down or they will have to reduce services.
  Minnesota has four Medicare dependent hospitals in the urban areas, 
and we have 40 of those Medicare dependent hospitals in the rural 
areas. In addition, 43 percent of Minnesota's hospitals currently lose 
money on Medicare patients. If the proposed Medicare cuts are enacted, 
67 percent of Minnesota's hospitals would lose money on Medicare 
patients.
  Small, isolated rural hospitals require a stable funding source in 
order to provide care. I will tell you right now, in many of our 
smaller communities, in many of our greater Minnesota communities, in 
many of the communities in rural America, what is going to happen is 
that those hospitals with a Medicare patient mix of sometimes up to 80 
percent are simply not going to be able to make it. And when those 
clinics and hospitals close, that means not just Medicare recipients 
but other citizens as well do not receive the care that they need.
  Medicare has come to symbolize this Nation's commitment to health and 
financial security for our elderly citizens and their families. It is a 
successful program that has played a central role in improving both 
access to and quality of health care services, not only for our 
country's elderly and disabled, but for all of us. We are talking about 
our parents and our grandparents.
  Mr. President, I will, as we go to the 30th anniversary of Medicare, 
vigorously oppose all efforts or any effort to dismantle a Medicare 
system in order to give a tax cut that will disproportionately benefit 
those people who need it the least.
  Let me repeat that. I will resist any effort to dismantle the 
Medicare Program in this country in order to give tax cuts to those 
citizens who, in fact, least need the financial assistance.
  Thirty years ago, Medicare was part of a Democratic vision for a 
better America. Mr. President, today it still is. I come from a State 
that has made 

[[Page S 10787]]
an enormous contribution to our Nation. I come from a State that has 
made a contribution through a great Senator and a great Vice President, 
Hubert Humphrey--Hubert Humphrey and Walter Mondale and Don Fraser--and 
Minnesota had a lot to do with the beginning of the Medicare Program 
and with support for this program, which has made such a positive 
difference in the lives of people, our senior citizens around this 
country. I intend to fight hard to make sure that we keep this as a 
high quality program.
  My mother and father depended on this program. They are no longer 
alive, but for them, if not for Medicare it would have been financial 
disaster. So I do not intend to see this program dismantled--not on my 
watch as a Senator from Minnesota. And the more we get into this 
debate, the more people in Minnesota and all across this country are 
going to say: Senators, whether you are Democrats or Republicans, this 
is unacceptable and unconscionable. Do not be cutting Medicare, do not 
be cutting Medicare and quality of services for elderly people in our 
country, all for the sake of tax cuts for wealthy people in our 
country. There is no standard of fairness to that.
  Mr. President, I ask unanimous consent that an article by Ted Marmor 
titled ``Medicare and How It Grew--To Be Confused and Misjudged'' be 
printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Boston Sunday Globe, May 7, 1995]
         Medicare and How It Grew--To Be Confused and Misjudged


       confusion about the program's past is clouding its future

                    (By Ted Marmor and Julie Berlin)

       Medicare, budget deficits and the race for the presidency 
     have once again come into intense and very public conflict. 
     On Monday, President Clinton publicly rejected the suggestion 
     by House Speaker Newt Gingrich that Medicare's forecasted 
     budget be reduced substantially (some $250 billion) so as to 
     ``save'' the valued, but beleaguered program. On Wednesday, 
     the president reiterated his ``defense'' of Medicare before 
     the White House Conference on Aging, rejecting both the 
     Gingrich diagnosis and the remedy of a bipartisan national 
     commission proposed by Senate Majority Leader Bob Dole, an 
     announced contender for the Republican presidential 
     nomination. By the end of the week, Republicans were on the 
     defensive, repeatedly referring to the recent report by 
     Medicare's trustees that, without cost control, the program's 
     hospital ``trust fund'' will run out of money by 2002.
       The Republicans find themselves caught among conflicting 
     promises: to balance the budget, to enact tax cuts and to 
     protect both Medicare and Social Security. The country finds 
     itself in the midst of a bewildering mix of crisis talk, 
     fact-throwing and ideological name-calling.
       To make sense of this debate requires historical 
     perspective on what Medicare was expected to accomplish, some 
     understanding of what its 30-year history has wrought and 
     some realistic discussion of what its real problems are and 
     what can be done about them.
       Medicare, enacted in 1965 and fully operational in 1966, 
     has historical origins that are difficult to understand in 
     the political environment of the 1990s. Perhaps the best way 
     to understand Medicare is to appreciate how peculiar the 
     program is from an international perspective. The United 
     States is the only industrial democracy that has compulsory 
     health insurance for just its elderly citizens. Even those 
     countries that started national health insurance programs 
     with one group of beneficiaries did not start with the 
     elderly. Almost all other nations began with coverage of 
     their work force or, as in the case of Canada, went from 
     special programs for the poor to universal programs for one 
     service (hospitals) and then to another (physicians).
       This means that peculiarly U.S. circumstances, rather than 
     some common feature of modern societies, explain why it is 
     that compulsory government health insurance
      began in the United States with the recipients of Social 
     Security cash pensions.
       The roots of this particular history lie in the United 
     States' distinctive rejection of national health insurance in 
     the 20th century. First discussed before World War I, the 
     idea fell out of favor in the 1920s. When the Great 
     Depression made economic insecurity a pressing concern, the 
     Social Security blueprint of 1935 broached both health and 
     disability insurance as controversial items of social 
     insurance that should be included in a more complete scheme 
     of protection. From 1936 to the late 1940s, liberals called 
     for incorporating universal health insurance within the 
     emerging welfare state. But the conservative coalition in 
     Congress defeated this attempt at expansion, despite its 
     great public popularity.
       The original leaders of Social Security, well aware of this 
     frustrating opposition, reassessed their strategy during 
     President Truman's second term. By 1952, they had formulated 
     a plan for incremental expansion of government health 
     insurance. Looking back to the 1942 proposal that medical 
     insurance be extended to Social Security contributors, the 
     proponents of what became known as Medicare shifted the 
     category of beneficiaries while retaining the link to social 
     insurance.
       Medicare became a proposal to provide retirees with limited 
     hospitalization insurance--a partial plan for the segment of 
     the population whose financial fears of illness were as well-
     grounded as their difficulty in purchasing health insurance 
     at modest cost. With this, the long battle to turn a proposal 
     acceptable to the nation into one passable in Congress began.
       These origins have much to do with the initial design of 
     the Medicare program and the expectations of how it was to 
     develop over time. The incrementalist strategy assumed that 
     hospitalization coverage was the first step in benefits and 
     that more would follow under a common pattern of Social 
     Security financing. Likewise, the strategy's proponents 
     assumed that eligibility would be gradually expanded. 
     Eventually, they believed, it would take in most if not all 
     of the population, extending first, perhaps, to children and 
     pregnant women.
       All the Medicare enthusiasts took for granted that the 
     rhetoric of enactment should emphasize the expansion of 
     access, not the regulation and overhand of US medicine. The 
     clear aim was to reduce the risks of financial disaster for 
     the elderly and their families, and the clear understanding 
     was that Congress would demand a largely hands-off posture 
     toward the doctors and hospitals providing the care that 
     Medicare would finance. Thirty years later, that vision seems 
     odd. It is now taken for granted that how one pays for it 
     affects the care given. But in the buildup to enactment in 
     1965, no such presumption existed.
       The incrementalist strategy of the '50s and early '60s 
     assumed not only that most of the nation was concerned with 
     the health insurance problems of the aged. But it also
      took for granted that social insurance programs enjoyed 
     vastly greater public acceptance than did means-tested 
     assistance programs. Social insurance in the United States 
     was acceptable to the extent that it sharply 
     differentiated its programs from the demeaning world of 
     public assistance. ``On welfare,'' in American parlance, 
     is a form of failure, and the leaders in the Social 
     Security administration made sure that Medicare fell 
     firmly within the tradition of benefits ``earned,'' not 
     given. The aged could be presumed to be both needy and 
     deserving because, through no fault of their own, they had 
     lower earning capacity and higher medical expenses than 
     any other age group. The Medicare proposal avoided a means 
     test by restricting eligibility to persons over 65 (and 
     their spouses) who had contributed to the Social Security 
     system during their working life. The initial plan limited 
     benefits to 60 days of hospital care; physician services 
     were originally excluded in hopes of softening the medical 
     profession's hostility to the program.
       The form adopted--Social Security financing and eligibility 
     for hospital care and premiums plus general revenues for 
     physician expenses--had a political explanation, not a 
     philosophical rationale. Viewed as a first step, of course, 
     the Medicare strategy made sense. But after 30 years, with 
     essentially no serious restructuring of the benefits, 
     Medicare seems philosophically, and practically, at sea.
       The main outline of Medicare's operational experience can 
     be summarized in three chronological periods.
       The first--roughly from 1966 to 1971--was one of 
     accommodations to US medicine, rather than of efforts to 
     change it. To ease the program's implementation in the face 
     of heated resistance from organized medicine, Medicare's 
     first administrators resisted radical changes. They adopted 
     benefits and payment arrangements that exerted inflationary 
     pressure and hindered the government's ability to control 
     increases in program costs over time. For example, paying 
     hospitals their ``reasonable costs'' and physicians their 
     ``reasonable charges'' proved to be significant loopholes 
     that prompted energetic gaming strategies on the part of 
     doctors and hospitals. Unusually generous allowances for 
     depreciation and capital costs were a further built-in 
     inflationary impetus. The use of private insurance companies 
     as financial intermediaries provided a buffer between the 
     government and physicians and hospitals but it weakened the 
     capacity of government to control reimbursement.
       The truth is that in the early years, the program's leaders 
     were not disposed to face the confrontations necessary to 
     restrain costs. They felt they needed the cooperation of all 
     parties for Medicare's implementation to proceed smoothly. 
     Medicare's designers, fully aware of the need for cost 
     control, were initially reluctant to make strong efforts for 
     fear of enraging Medicare's providers.
       With the benefit of hindsight, it is easy to criticize 
     this. At the time of its enactment, however, Medicare's 
     legislative mandate was to protect the elderly from the 
     economic burdens of illness without interfering significantly 
     with the traditional organization of American medicine. It 
     was with this aim in mind that Medicare's leaders were 
     accommodating so as to ensure a smooth, speedy start to the 
     program. It was not until the 1980s that Medicare came to be 
     seen as a powerful means to control the costs and delivery of 
     medical care.

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       The results were quite predictable: efficient 
     administration of a program with inflation built in. The 
     average annual rate of growth in the daily service charge of 
     US hospitals between 1956 and 1971 was 13 percent. Medicare's 
     definition of reasonable charges paved the way for steep 
     increases in physicians' fees as well. In the first five 
     years of Medicare's operation, total expenditures rose over 
     70 percent, total expenditures rose over 70 percent, from 
     $4.6 billion in 1967 to $7.9 billion in 1971. Over the
      same period, the number insured by Medicare rose only 6 
     percent (19.5 to 20.7 million people).
       By 1970, there was broad agreement that health inflation 
     had become a genuinely serious problem. Criticism of Medicare 
     was part of this dialogue, and, for some, Medicare was the 
     cause of what became a pattern of medical prices rising at 
     twice the rate of general consumer prices. Throughout most of 
     the 1970s, however, adjustments of Medicare took a 
     subordinate political position to nationwide medical change. 
     That does not mean Medicare was inert. But it does mean that 
     its changes--experimentation with different reimbursement 
     techniques in the early 1970s; the 1972 expansion of Medicare 
     to the disabled and those suffering from kidney failure; 
     administrative reorganization in the late 1970s that took 
     Medicare out of Social Security into the newly created Health 
     Care Financing Administration--all became the subject of 
     intense but low-visibility interest-group politics. This 
     polities, followed closely by the nation's burgeoning medical 
     care industry, elderly pressure groups and specialized 
     congressional committees, was not the stuff of Medicare's 
     original legislative fight or of the ideological battle over 
     national health insurance.
       By the end of the 1970s, alarm had grown over both the 
     troubles of medical care generally and the costs of Medicare 
     specifically. The struggle over national health insurance 
     ended in stalemate by 1975 and the effort to enact national 
     cost controls over hospitals had also failed by 1979. This 
     meant that Medicare, like American medicine as a whole, was 
     consuming a larger and larger piece of the nation's economic 
     pie, seeming to crowd out savings on other goods and 
     services. US health expenditures in 1980 represented 9.4 
     percent of GNP, up from 7.6 percent in 1970. Medicare alone 
     amounted to some 15 percent of the total health bill in 1980, 
     up from 10 percent a decade earlier.
       For the past 15 years, the politics of the federal deficit 
     have driven Medicare. This has had two consequences. The 
     first is that Medicare is no longer an intermittent subject 
     of policy makers' attention, but has become a constant target 
     of the annual battles over the federal budget. Second, 
     concerns over Medicare's effect on the deficit have enabled 
     far-reaching changes in the ways it pays medical providers. 
     In contrast to the accommodationist policies of Medicare's 
     early years, federal policy makers have implemented 
     aggressive measures to hold down Medicare expenditures. They 
     gave priority to the government's budgetary problems over the 
     interests of hospitals and physicians. The result of these 
     changes was a considerable slowdown in the rate of growth in 
     Medicare expenditures that did not compromise the program's 
     universality.
       Ironically, these changes in Medicare payment policy 
     received almost no public attention. There has been little 
     recognition of the effectiveness of the 1980s federal cost-
     containment measures. As a result, the public has a distorted 
     sense of Medicare's experience of inflation, viewing it as 
     inevitable. The experiences of the past decade demonstrate 
     that Medicare costs can actually be restrained through 
     regulatory adjustments, and that these savings do not require 
     a departure from Medicare's basic design as a social 
     insurance program open to beneficiaries regardless of income.
       While the changes in Medicare payment policy did not 
     receive widespread public attention, a concurrent expansion 
     of benefits did. For a brief period in the late 1980s, the 
     addition of so-called catastrophic protection to Medicare 
     coverage became a topic of media interest. The passage and 
     repeal of the catastrophic health insurance bill was a 
     searing experience for Washington insiders, but it left 
     little lasting impact on the nation's citizenry. What 
     remained from the
      1980s was a large federal deficit, and it was fiscal 
     politics (along with presidential politicking), not 
     Medicare's performance, that has controlled the pace and 
     character of attention Medicare has received.
       Before turning to how to cope with Medicare's problems, 
     critical attention should be given to two claims in the 
     recent debate. One is the mistaken view that because Medicare 
     faces financial strain, the program requires dramatic 
     transformation. The experience of the 1980s showed that 
     Medicare administrators, when permitted, can in fact limit 
     the pace of increase in the program's costs. The second 
     misleading notion has to do with the very language used to 
     define the financial problems Medicare faces. Republican 
     critics (and some Democrats) continue to use fearful language 
     of insolvency to express dread of a future in which 
     Medicare's trust fund will be ``out of money.'' This language 
     represents the triumph of metaphor over thought. Government, 
     unlike private households, can adjust its pattern of spending 
     and raising revenues. The ``trust fund'' is an accounting 
     term of art, a convention for describing earmarked revenue 
     and spending both in the present and estimated for the 
     future. The Congress can change the tax schedule for Medicare 
     if it has the will. Likewise, it can change the benefits and 
     reimbursement provisions of the program. Or it can do some of 
     both. Channeling the consequences through something called a 
     ``trust fund'' changes nothing in the real political economy. 
     Thinking so is the cause of much muddle, unwarranted 
     fearfulness and misdirected energy.
       To view the crisis-ridden debate about Medicare's finances 
     as misleading is not to suggest that the program is free of 
     problems. But it is important to understand that Medicare can 
     be adjusted in ways that fully preserve the national 
     commitment to health insurance and the elderly and disabled.
       What should be done? One place to start is reduction of the 
     growing gap between the benefits Medicare offers and the 
     obvious needs of its beneficiaries. What Medicare pays for 
     should be widened to include the burdens of chronic illness; 
     that means incorporating prescription drugs and long-term 
     care into the program, which is precisely what the Clinton 
     administration hoped to do in connection with its ill-fated 
     health insurance overhaul.
       Widening the benefit package does not mean, contrary to 
     what many claim, that total expenditures must rise 
     proportionately. Expenditures represent both the volume of 
     services and their prices. Many other nations have not only 
     universal coverage and wider benefits than Medicare, but 
     spend less per capita than we do for their elderly. Canada, 
     for example, is able to do this because they pay their 
     medical providers less, spend less on administration and use 
     expensive technology less often. Medicare's expenditures 
     should be restrained below the current projected growth rate 
     of 10 percent a year. There is no reason that the program's 
     outlays need rise at twice the rate of general inflation--or 
     more. What has to be changed is the amount of income medical 
     providers of all sorts receive from the Medicare program.
       Medicare's financing also could use some overhauling. 
     Raising payroll taxes will have to be part of the answer. 
     This option appears to be ruled out of the current debate, a 
     good example of fearfulness defeating common sense. But, the 
     breadth of public support for Medicare suggests it is 
     possible to mobilize popular backing for a tax increase to 
     support the program where the problem is clearly defined and 
     the justification convincingly offered. As for beneficiaries, 
     it is time to reconsider the idea of charging wealthier 
     beneficiaries more for Medicare's physician insurance 
     program, another idea likely, if explained, to have popular 
     support.
       We need a debate as well over how Medicare should be 
     improved. What we do not need is one that scares the country 
     about Medicare's future by disseminating false claims about 
     its affordability. It would indeed be a ``crisis'' if we 
     concluded that the legitimate health costs of our aged and 
     disabled were unaffordable. What is 
     unsustainable is the pattern of 
     increasing health expenditures at twice the rate at which our 
     national income rises.
       Medicare's early implementation stressed accommodation to 
     the medical world of the 1960s. Its objective was to keep the 
     economic burden of illness from overwhelming the aged or 
     their children. Thirty years later, the setting is radically 
     different. The difficulties of Medicare are those of American 
     medicine generally. We pay too much for some procedures and 
     we do too many things that either do some harm or do little 
     good in relation to their costs. In the world of private 
     health insurance, cost control has arrived with a vengeance. 
     Medicare is unsettled and is likely to remain so in the 
     context of budget-deficit politics unless we accept that 
     containing what we spend on Medicare need not mean 
     transforming the program. It will mean, necessarily, that the 
     burdens of cost control will have to be borne. Our suggestion 
     is that they should be borne by those whose incomes are 
     higher, both payers and payees.
     

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