[Congressional Record Volume 141, Number 199 (Thursday, December 14, 1995)]
[Extensions of Remarks]
[Page E2368]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                MEDICARE AND THE ILLUSIONS OF PROTECTION

                                 ______


                         HON. J. DENNIS HASTERT

                              of illinois

                    in the house of representatives

                      Thursday, December 14, 1995

  Mr. HASTERT. Mr. Speaker, the following article by Robert Goldberg 
ran in the Washington Times on December 6, 1995. Mr. Goldberg does an 
excellent job of explaining why the current Medicare system is in dire 
need of an injection of quality-based competition and incentives. As 
the Medicare debate continues, I commend this article to my colleagues:

                Medicare and the Illusions of Protection

                        (By Robert M. Goldberg)

       For all the rhetoric about how the Republican plan will 
     bring misery and financial hardship to millions of Medicare 
     beneficiaries, the fact is you couldn't design a better 
     system than the current one to achieve that goal.
       Medicare's financial problems are largely the direct result 
     of its subpar treatment of the chronically ill. In 
     particular, seniors bear an unnecessary financial and medical 
     burden in the form of higher out-of-pocket expenses and 
     costly supplemental health insurance.
       Worse, because Medicare pays for all care regardless of its 
     quality and outcome, the elderly--thinking that Medicare 
     offers them health security--are actually spending billions 
     on health care services that add nothing to their well-being. 
     Those who are fighting Medicare reforms are perpetuating a 
     system that makes the elderly sicker than they have to be for 
     longer periods of time than they should.
       At the heart of the problem are Medicare's price controls 
     which get people out of hospitals quicker (so providers can 
     keep the difference between what they spend and what Medicare 
     pays for), but leaves them sicker as a result. For example, a 
     University of California at Los Angeles medical school study 
     of seniors hospitalized for depression found that Medicare's 
     price controls led to more care without any additional 
     benefit to patients. The income doctors and hospitals lost 
     because of price controls was made up by increasing the 
     volume of services provided.
       Similarly, sub-optimal care has contributed to the 20-
     percent-a-year growth in home health services under Medicare. 
     For instance, studies show that Medicare regulations increase 
     the number of elderly with hip fractures that were discharged 
     before they were fully well. As a result, more people had to 
     rely on home health care or be sent to nursing homes for 
     longer periods of time after the fracture. And a Rand Corp. 
     study found that Medicare's regulations increased by 50 
     percent the chances that patients will be sent home in an 
     unstable condition. The number of patients remaining in 
     nursing homes one year after the fracture suggests that their 
     quality of care had deteriorated. Overall, a study of a 
     national sample of Medicare patients found that patients are 
     more likely to be sick or die after discharge than they were 
     before the current set of Medicare regulations were imposed.
       In fact, because premiums and deductibles have not 
     increased for more than a decade, Medicare only provided the 
     illusion of protection. And, the elderly pay a hidden tax in 
     the form of higher out-of-pocket expenses and supplemental 
     insurance coverage called Medigap, due to Medicare's 
     mismanagement of medicine.
       There is a little evidence that the additional coverage 
     increases well-being. Seniors with Medigap spend up to 70 
     percent more on health care than seniors with Medicare 
     coverage alone, regardless of their health status. These are 
     the dirty little secrets that defenders of the current 
     Medicare system will never reveal to America's seniors.
       Medicare can be and is being made less expensive with 
     medical innovations that make it more humane and more 
     responsive. One such effect is the Healthy Seniors Program, 
     created by The Carondolet Health Plan, in Tucson, Ariz. Gerry 
     Lamb, the director of the program notes it is designed for 
     the ``elderly with serious chronic illness, those who 
     constitute the highest costs, fastest growing health service 
     group.'' Healthy Seniors provides examinations, service and 
     individual assistance to reduce the incidence of serious and 
     expensive episodes of illness. The result is dramatic: 
     Participation in the Healthy Seniors program use fewer 
     medical services than those who do not, saving nearly $6,000 
     per patient each year. Notes Mr. Lamb, who is a nurse 
     practitioner: ``There are huge dollars to be saved from 
     dealing with chronic illness early, rather than in the 
     hospital and emergency rooms''.
       In fact, the proposition that better care saves money is 
     the foundation for transforming entire private sector health 
     care system. The Business Heath Care Action Group (BHCAG), a 
     coalition of 21 of the largest employers in Minnesota, 
     provides a dramatic example of such initiatives. Starting in 
     1997, BHCAG's 1.5 million employees and retirees will be 
     given vouchers that will be used to purchase health care from 
     different groups. Medical providers will have to furnish 
     consumers with patient-level information on how they improve 
     the health of people with chronic conditions which afflict 
     the elderly most such as stroke, hip fractures, heart disease 
     and arthritis. BCHAG projects that with a greater investment 
     in quality, the voucher system will be able to reduce the 
     rate of spending 5 percent to 15 percent each year compared 
     to other managed care approaches.
       Rhetoric and emotion aside, quality-based competition and 
     incentives are at the heart of the GOP plan. Such quality-
     driven reductions in spending are possible if Medicare is 
     dramatically changes. Providers need to be placed at risk for 
     making such savings while at the same time they are required 
     to compete for business in terms of the quality of care they 
     can offer. The Republican Medicare plan isn't perfect, but it 
     does take health care for seniors in this direction.
       As for Democratic and federally funded senior group efforts 
     to save Medicare as we know it, they condemn this generation 
     of elderly and the next to substandard care. House speaker 
     Newt Gingrich is right: The faster the government-run 
     Medicare program withers on the vine, the sooner it will stop 
     taking dollars out of the pockets of seniors in order to prop 
     up an obsolete health plan that undermines their quality of 
     life.

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