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Saturday, Aug. 14, 2010 | 2:01 a.m.
About two weeks ago, Medicare celebrated its 45th birthday. Last week, its annual checkup showed that its financial health is improving thanks primarily to the health care reform law signed by President Barack Obama this year.
As members of Medicare’s board of trustees, we’re required to produce an annual report with long-term projections about Medicare’s future. This year’s report contains some very good news: As a result of reforms in the new health care law, the life of the Medicare Part A Trust Fund has been extended by 12 years to 2029. And we achieved this progress while protecting guaranteed benefits for seniors and offering higher-quality care at a lower cost.
This news is a turnaround from recent years. Just as skyrocketing health care costs have put increasing pressure on America’s families and businesses, they have also threatened Medicare’s solvency. The new projections show that Medicare is moving from a previously shaky foundation back toward solid ground, although there is still work to be done.
One important goal that we, the stewards of the Medicare Trust Funds, must remain focused on is making Medicare more productive and efficient. Medicare has often been a leader in the health care system. Private plans often follow Medicare’s physician fee schedule. When Medicare stopped paying for “never events” — such as when surgeons accidentally operate on the wrong body part — private insurers did so too.
This suggests that savings in Medicare could eventually lead to savings in the rest of our health care system. That’s crucial because we all feel the burden of rising health care costs, whether it’s families watching health care premiums take bigger cuts out of their paychecks or businesses competing with foreign companies that pay half as much for health care — or less.
To achieve these savings, we need to work steadily to identify solutions that deliver better care at a better price, promoting efficiency and solvency. Many of these solutions can be found in the Affordable Care Act.
Some of the reforms will shift resources from low-quality to high-quality care. With many of these reforms, like reducing preventable hospital readmissions and surgical errors, the gains for seniors covered by Medicare are twofold. They’ll see safer, more effective treatments that save money.
Other reforms go after fraud, giving us new tools to identify, prosecute and deter criminals who steal from Medicare by filing false or unnecessary claims. Under President Obama’s leadership, we are turning up the heat on these criminals, with returns to the Medicare trust fund up 29 percent to over $2.5 billion last year thanks to a new coordinated effort between the Justice Department and the Centers for Medicare and Medicaid Services.
The Affordable Care Act builds on these efforts by giving law enforcement new tools such as tougher screenings of new providers and better access to claims data that will help us achieve the president’s goal of cutting improper payments in original Medicare in half by 2012.
Combined, these reforms will give us a stronger Medicare for today and tomorrow.
The trustees’ report also shows that we have work left to do. For the benefits of these reforms to be realized, the reforms must be allowed to work. Congress, this administration and future policymakers will have to stick with them. To strengthen Medicare’s foundation even further, we must continue to look for new ways to promote quality and efficiency, and attack waste, fraud and abuse. Work has begun at the Health and Human Services Department to get the best minds in the country thinking about how to do this and will be expanded under the Affordable Care Act with the creation of a new Innovation Center at the Centers for Medicare and Medicaid Services.
But we should take a moment to appreciate the recent good news. At a time when many Americans are still living paycheck to paycheck, trying to pay their bills and put food on the table as we recover from the worst recession since the Great Depression, we came together to help secure the promise of Medicare for future generations.
At a moment in our history when pundits have argued that our political system is no longer capable of coming up with solutions to our biggest challenges, we have taken a big step toward addressing the issue that many people have called the greatest threat to our long-term prosperity.
We have a long way left to go, but the recent report shows we are heading in the right direction.
Kathleen Sebelius is secretary of the U.S. Health and Human Services Department and Hilda L. Solis is secretary of the U.S. Labor Department.
It was right for the Obama administration to try to reform heath care. It represents almost 17% of the econcony. I believe if we just "concentrated on the economy" we would have been playing into the machinations of the rich elites. These reforms help the poor and whats left of the middle class.
This is a ridiculously false and misleading article by Sebelius. Are you kidding me? Medicare Advantage premiums are going up significantly because of the cuts Reid voted for in Medicare Advantage reimbursements to insurance companies to pay claims(folks if insurance companies administering Medicare Advantage have less money to pay claims, guess what, your premiums go up and/or your benefits go down to make up the difference) And Reid, despite these outrageous cuts to Medicare Advantage, has the gall to say Angle is the threat to Medicare, not him. Please. ObamaCare also calls for a 21% cut in Doctor's fees under Medicare. This will lead to a further shortage of doctor's accepting Medicare(by the way there already is a shortage and ObamaCare will make this shortage worse). Further, the entire solvency of Medicare long term is threatened by ObamaCare(which cuts $500 billion from Medicare and which by its gargantuan deficit busting spending pushes us closer and closer to the circumstances such as exist in Greece---where the government there can no longer deliver on giveaways because it is broke as a result of reckless deficits and spending). Further, under Berwick(and under Obama), CMS has grown increasingly dictatorial(resulting in all sorts of additional administrative costs heaped unnecessarily on insurance companies(which guess what folks---results in increased premiums and/or less benefits for you seniors). This article is a total joke and is reason alone to reject Sebelius(and Reid).
The "good news" is also based on a fake, government propaganda report created by Obama's cronies. So Sebelius is basically saying, "look at our fake self prepared report, why we are doing an excellent job".
Sebelius of course hides the conclusions of her own actuary which say exactly the opposite of what she says. As is indicated in the following excerpt from a Wall Street Journal article, the White House spin ignores the extraordinary companion analysis by chief Medicare actuary Richard Foster that repudiates Sebelius's conclusion. Democrats "savings" from Medicare have been used to fund their new health-care entitlement program. It's akin to paying off one credit card with another--while still being deeply in debt on the first.
The report's final appendix is where Mr. Foster disowns the previous 280-odd pages. Mr. Foster has been Medicare's chief actuary for 15 years, and as such he is required to evaluate the law as written. But as he notes in his appendix, the law as written bears little if any relation to the real world--and thus, he says, the trustee estimates "do not represent a reasonable expectation for actual program operations in either the short range . . . or the long range." Mr. Foster directs readers to a separate "alternative scenario" that his office drew up using more realistic assumptions.
Mr. Foster shows that the Medicare "cuts" that Democrats wrote into ObamaCare exist only on paper and were written so they could pretend to reduce the deficit and perform the miracles the trustees dutifully outlined. With the exception of cuts in Medicare Advantage, those reductions will never happen in practice.
One of the fictions Mr. Foster highlights is the 30% cut in physician payments over the next three years that Democrats have already promised to disallow.
Another chunk of ObamaCare "savings" are due to cranking down Medicare's price controls for hospitals and other providers that Mr. Foster says are also "extremely unlikely to occur." In the absence of "substantial and transformational changes in health-care practices"--in other words, a productivity revolution in medicine that has never happened--costs will simply rise for private patients, or hospitals will refuse to treat seniors insured by Medicare. Congress will never allow that to happen either.
In other words, under ObamaCare the "cost curve" will not be bent as the White House has advertised.
Under his more plausible outlook, Mr. Foster notes that Medicare's share of the economy will rise 60% between now and 2040, while under the trustees report that Democrats are crowing about it would "only" rise by 35%. Reid and other Democratic politicians have deliberately written the ObamaCare rules so the real costs are disguised and hard for taxpayers to figure out.