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July 23, 2014

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Health care law benefiting Medicare

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.

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