Medicare at 60: Successes, Failures

Medscape

2 days ago

Sixty years ago, Congress passed legislation that created Medicare . In 1966, its first year of implementation, there were 19.1 million enrollees. Almost a decade later, enrollment had grown to 22.5 million. Today, 68.8 million Americans have Medicare coverage, with about half enrolled in Advantage plans. The original idea for this insurance program was even bigger, with President Harry Truman endorsing universal coverage in 1945. As Medicare turns 60, Medscape convened an expert panel to discuss the successes — and shortcomings — of this landmark insurance program.
Jen Brull, MD: What do you all think the impact will be of the coming Medicaid cuts in the budget bill? For people who are dual eligible, who need help with shared costs, how do you think physicians might be affected if those patients lose access to Medicaid copays?
Claudia M. Fegan, MD: The problem is that a lot of people think Medicaid cuts don't really affect me; I have private insurance. But as Norm alluded, there are going to be a lot of hospitals that close, especially rural hospitals.
And as he said, when hospitals close, it puts stress on all the other hospitals that remain. And whether it's emergency room services or just services in general — women not having places to deliver babies — all of these things are going to have a tremendous impact.
As for the dual-eligible patients, they are not the sharp edge of the point, right? Dual-eligible patients will have some challenges because of the amount that they can't pay. That 20% of healthcare costs is a lot of money to come up with, and it is going to be a problem in terms of being able to access their routine care and everyday care. But I think the more dramatic impact is going to be on services that are available in communities.
I think even some outpatient facilities will close as a result. It's going to have a greater impact on the healthcare of everyone because it's going to be an access issue.
Nursing Home Care
Norman Ornstein, PhD: We have an enormous misunderstanding of what Medicaid is. People think it's a program for poor people, but it's far more than that. The single largest component is nursing home care. You make these cuts and nursing homes, many of which are also struggling, what are they going to do? Some will close. Others are going to cut back on the number of people serving their patients, and they're going to cut the rates at which they pay people.
We are going to have people making the minimum wage, and we are going to see more and more elderly with bed sores, with abuse, and with other problems. Or we are going to see not just the elderly who use up their assets and have Medicaid to allow them to go into nursing homes, but the nightmare that families are going to have when the nursing home isn't there, and they will have to take their elderly parents or grandparents into their own homes and can't be reimbursed for any of the costs that they have or the stresses that it puts on their lives.
We have a lot of issues here: the hospitals, the nursing homes. Also, we were talking before about the problems in Medicare Advantage, with prior authorization for an awful lot of people. I think it's not quite the same, but it's a little bit like these work requirements in Medicaid. The number of able-bodied people who are sitting back, cracking open a beer, and watching TV and taking their Medicaid because it doesn't cost them anything is, at best, a trace element. The tiny number of people — 3% or so — able-bodied people who are not working are taking care of other family members, or they have big health issues of their own.
These work requirements are designed not to get those people working, but to take people off the Medicaid rolls because they're so complicated that people can't fill them out. They don't know what to do about them. This is going to have a devastating impact on a large number of Americans, and not just the poor.
Jonathan Gruber, PhD: Let me just confirm what's been said and emphasize that three-quarters of Medicaid spending is for the elderly and disabled. Republicans want to pitch it as a program for undeserving minorities. That's not true. Almost everyone who gets Medicaid deserves it. It's a program for our moms and dads and everyone we know. We need to recognize that when Medicaid gets cut, everyone suffers.
Ornstein: I just want to add one other thing that I think is important. I recently saw a documentary about the advent of the Americans with Disabilities Act, which was one of the most significant pieces of legislation to help people in this country. And it is now under siege. Jon had said, and Claudia said, disabled people are going to be devastated by this. Just yesterday [July 14] , the Supreme Court bizarrely allowed the President to go forward and cut the heart out of the Department of Education, which provides almost all of the support for students with special needs in the country.
The people who are going to suffer more than anybody else in the country, other than many of the immigrants, are the disabled. And that's a problem for humanity. It is basic decency here that is under assault. That's true with a lot of these cuts in Medicaid. It's true that there will be a broader assault on people who can't care for themselves.
Medicare's Influence on Independent Practice
Brull: Dr Gruber, a survey of doctors by the American Medical Association in 2022 found that roughly 46% were working in practices wholly owned by physicians. The figure had fallen from 60% a decade prior. Dr Fegan, you referenced this earlier. In what ways has Medicare affected physicians' ability to remain independently owned?
Gruber: I'm not sure that's been the primary driver. At the end of the day, the primary driver has been essentially the rise of the profit motivation in medicine. There's more money to be made by consolidating doctors into larger groups and specializing.
That's not obviously bad; there are pros and cons of that movement, but I wouldn't say Medicare's really been a primary driver. I think the primary driver's been the fact that there's money to be made to this consolidation. The one thing to which Medicare has contributed is what I said before, which is that Medicare probably overpays subspecialists and underpays primary care. By combining them into one group, you can take advantage of that mismatch to have a more profitable overall group.
Financial Uncertainty
Brull: Dr Ornstein, back in 1999, the American Enterprise Institute wrote that analysts projected Medicare would reach insolvency in the following two decades, which would be now. But you also said that the first estimation of this came in the 1970s. A more recent projection from the board of trustees is 2036, so we kicked the can down a little bit. What do you think of this, and do you think it'll actually happen in the next 60 years?
Ornstein: This program is so popular, for all the reasons that we know, that I just do not see Medicare becoming insolvent unless there's a deliberate attempt by those in government who want to undermine it to force insolvency. Otherwise, the closer you get, the more we're going to see fixes to make sure that the program can continue.
We have seen efforts to eliminate Medicare, but they haven't gotten anywhere because of the enormous popularity of the program, for all the right reasons. So, we have to worry about it, but I'm not worried about it in the foreseeable future.
Brull: Which aspects of Medicare's original mission do you think have either succeeded or fallen short, and why? Let's start with you, Dr Ornstein.
Ornstein: I think the main reality here is that Medicare has saved enormous numbers of lives. It has made this country better all the way across the board. If there were no Medicare, we would have a hellscape for a large number of people — not just the elderly, but their children and their grandchildren.
I would say it's also managed to deliver care pretty damned efficiently, more efficiently in many instances than the private system of insurance. There are gaps here. I think we have seen, and we continue to see, fraud because we haven't put enough resources into dealing with it, mostly on the provider side.
I will just give you one very quick story. My wife has gotten from Medicare several times now a claim for a device she had nothing to do with, from a company. She spent hours on the phone with Medicare and they said, 'We know this company, it's horrible, we're going to take care of it.' Then 3 months later, we get it again and we get it a third time. We need to find more efficiencies.
Gruber: I think the pros could not have been stated better by Norm. I mean, basically we would have a significantly more financially insecure country and less healthy country if Medicare didn't exist.
As for the con, I would say that Medicare has not done enough to take advantage of its position as the dominant payer. There's fascinating economic research which shows that private payers often just follow what Medicare does.
Pushing Health and Private Insurers Forward
Gruber: Everybody talks about how the private sector is innovating, but in fact, all the innovation in medical compensation over the past 50 years has been by Medicare, and the private sector just copies them and pays X% of Medicare.
I feel like Medicare could be much more innovative. Like I said, the physician reimbursement system is largely broken. Medicare could have invested a lot more — and should invest a lot more — in thinking about answering some of the hard questions we've raised today about what is the appropriate use of prior authorization, what are the appropriate rates to pay? These are important topics that Medicare should be taking the lead on understanding, experimenting with through CMMI [the Center for Medicare and Medicaid Innovation], which can run pilots, and actually trying to be much more innovative in how it sets payment policy.
Fegan: I agree with both of the previous speakers. Medicare has succeeded in providing access to care to a very vulnerable population and has succeeded in providing assured compensation for the providers who take care of that population. It's one of the reasons why I've spent the past 30 years advocating for a Medicare for All that we could afford, to take care of the entire population with the program, with some improvements that we've alluded to during the discussion today.
But Medicare has been a success. What it set out to do, which was to offer care and ensure that care would provide compensation for the people who delivered it — I think that we are a better society because of that.
We certainly spend enough on healthcare in this country; we just fail to provide care to everyone who needs it. We allow too many people who are not engaged in the delivery of care to take profit from it. There's a lot of opportunity to address the fraud and abuse, and we just fail to do so.
Part of the problem is because we have three healthcare lobbyists for every single member of Congress. Congress tends to hear those lobbyists over the cries of the public, which would really benefit from a universal healthcare system.
Brull: Thank you all for joining us today and for such a productive discussion. We appreciate your time and expertise.