A Wish List For Medicare

If you could make one change to Medicare, what would it be? Ask three former directors of the program and you’ll get plenty of ideas.

Bruce Vladeck, who was head of what was then known as the Health Care Financing Administration, or HCFA, for former President Bill Clinton, wants more market-based competition and less pricing set by Congress.

“I would like to move all of Medicare drug purchasing, whether through Part D or Part B, all of [durable medical equipment] and related services – almost everything other than hospitals, docs and managed care plans — to a real market-based purchasing model,” he said.  Give the  administrator of the Centers for Medicare & Medicaid Services the authority to negotiate prices “starting with the federal supply schedule for the 20 or 25 percent of Medicare outlays that are creating windfalls for various producers that we don’t talk about so much because it’s only 20 or 25 percent of outlays,” he said.

Gail Wilensky, who ran HCFA for President George H.W. Bush, would urge lawmakers to adopt a competitively bid premium support model that includes the current traditional fee-for-service plan and the payments beneficiaries receive would vary by income and health risk.

Mark McClellan, who ran CMS for George W. Bush, wants to see Medicare make more progress on reducing the growth of costs.  The program, which serves 50 million elderly and disabled Americans, “is nowhere near done with those kinds of steps, nowhere near the private sector” on cost control.   “Reducing overall spending growth while still insuring access to care and improvements in innovation” are key, he said.

The three experts want to see a permanent fix for the payment formula for doctors. That formula, called the sustainable growth rate, or SGR, has threatened large payment cuts nearly every year since being implemented and Congress has repeatedly stepped in to stop it. And all said it’s high time Congress confirms a CMS administrator. (President Barack Obama nominated acting CMS chief Marilyn Tavenner for the post last year after his first choice, Dr. Donald Berwick, failed to gain Senate confirmation and served as a recess appointee.)

Vladeck, Wilensky and McClellan made their remarks as part of a panel discussion Wednesday sponsored by the Kaiser Family Foundation that was focused on Medicare’s role in the debate over debt reduction.  The foundation released a new report that examines a variety of proposals, such as gradually raising Medicare’s eligibility age from 65 to 67 or increasing beneficiary cost sharing, that have the potential to produce Medicare savings. (KHN is an editorially independent program of the foundation.)

“At 15 percent of the budget and a growing share of the economy,  Medicare is always a part of budget and deficit reduction discussions….,” said Tricia Neuman, senior vice president and director of the foundation’s Program on Medicare Policy.  “This report is intended to frame the debate.”

This article was produced by Kaiser Health News with support from The SCAN Foundation.