Talking (and worrying) about Medicare

The past, present and future of Medicare grabbed health care’s center stage during the Thanksgiving break.

The recent flurry of news about the federal program began with changes at the top, with the resignation of Dr. Donald Berwick, the administrator of the Centers for Medicare and Medicaid Services.

Then a New York Times article Nov. 24 pointed to increasing support – including from Democrats – for a major restructuring of the Medicare program. One feature of such an overhaul would have beneficiaries get a fixed amount of money to purchase coverage from competing health insurance plans.

And finally, physicians again are facing the possibility of a big cut in their Medicare reimbursements starting Jan. 1, after the failure of the congressional supercommittee to reach a deal on the deficit.

Medicare covers about 48 million Americans, including more than 1 million Georgians. Expenditures for the program for people 65 and older and the disabled surpassed the $500 billion mark in 2010, and are expected to reach nearly $1 trillion by 2010. So Medicare savings are an important part of any plan to reduce the federal deficit.

Berwick, a pediatrician, was known as a ‘‘big idea’’ person, especially on improving quality of care in Medicare and the rest of the health care system. He has promoted the concept of hospitals and physicians working together as ‘‘accountable care organizations’’ as a way to save money and improve care. He helped lead the rolling out of insurance changes passed under the 2010 health reform law.

But Berwick was serving temporarily, under a recess appointment, because he was never able to gain Senate confirmation. Republicans, pointing to favorable comments that Berwick once made about the British health system, regarded him as an advocate of a British-style system and the concept of ‘‘rationing.’’ His defenders said the comments were taken out of context.

His resignation was expected. Berwick’s recess appointment would have run out at the end of the year, the Washington Post noted, and months ago, 42 Senate Republicans signed onto a pledge to block his confirmation.

Sen. John Barrasso, a Wyoming Republican, said, “It was a disservice to Dr. Berwick and to the American people for the president to make a recess appointment, rather than requiring Dr. Berwick to come before Congress to explain his opinions on Medicare, Medicaid and the new health care law.’’

Berwick’s successor is Marilyn Tavenner, a nurse who was an executive with HCA, the hospital chain, and was secretary of Virginia’s Health and Human Services agency. Tavenner will go through the Senate confirmation process.

Movement on cost controls?

Meanwhile, the New York Times story by Robert Pear outlined what could be a huge shift in Medicare policy to bring costs under control.

‘‘Members of both parties told the [deficit reduction supercommittee] panel that Medicare should offer a fixed amount of money to each beneficiary to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government,’’ the article said.

Many Democrats have opposed this concept, commonly referred to as ‘‘premium support,’’ saying that older Americans would wind up paying more under the change.

The article, though, noted that Medicare is likely to stay at the center of the nation’s long-term debt crisis for many years as the program balloons with beneficiaries.

Alice Rivlin, who served as budget director for President Bill Clinton, urged the deficit panel to establish an insurance exchange for Medicare beneficiaries, the Times reported.

“Private plans would compete with the traditional Medicare program and would have to provide at least the same benefits. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare,’’ the Times reported as the substance of the Rivlin proposal.

Democrats had vehemently opposed a similar plan from House Republicans. But that GOP plan, the Times article notes, would eliminate traditional Medicare as an option.

The idea of competing health plans resembles the insurance exchanges under the 2010 health reform law for the privately insured.

Notably, competition among private insurers has produced savings in Medicare’s prescription drug program.

The perennial pay cut threat

If the issue of cutting Medicare pay for doctors sounds familiar, that’s because it is. It has come up repeatedly, with reimbursement cuts blocked several times in recent years, including last November.

The supercommittee’s failure to arrive at a plan has put the ‘‘doc fix’’ back on the congressional table for 2011.

The doctor pay formula stems from a 1997 budget-balancing law that requires physicians’ reimbursement rates from Medicare to be adjusted every year, in order to keep the program fiscally sound.

Now, unless Congress comes up with a financial solution, physicians face a 27 percent cut in their reimbursements for treating Medicare patients. Last year’s cut, which was averted, was scheduled to be 25 percent.

Congress must come up with about $22 billion in savings for a one-year fix, and $35 billion for a two-year solution on the physician fee issue.

Congressional leaders of both parties say the doctor pay cuts won’t occur, the Associated Press reported.

Still, an Iowa family physician, Dr. Don Klitgaard, whose practice consists of about 45 percent Medicare patients, speaks in the AP article of his frustration with pay cut threats, which come up year after year around the holidays.

“I don’t see how primary care doctors could take anywhere near  . . .  a 27 percent pay cut and continue to function,” said Klitgaard. “I assume there’s going to be a temporary fix, because the health care system is going to implode without it.”