Medicare Reform – Pharmacy Benefit Program
What Must Be Done – A Clinician's Point of View
The varying estimates on the Medicare Pharmacy Benefit Program only reveal the hazards of projecting any entitlement program. Once implemented, all government programs increase and the costs are nearly impossible to control. The additional costs to the Medicare Program are not sustainable—even in the short term. Therefore, it is urgent that the program be modified before enrollment starts next month.
When Medicare was implemented in 1965, there was a nominal deductible on hospital and outpatient benefits, with an additional copayment of 20 percent for all physician and outpatient services. Had the deductibles and the copayment remained a responsibility of the patient, Medicare would not have experienced a spiral increase, as is the case today. For instance, if every $80 doctor's office visit required a 20 percent or $16 copayment, only necessary office visits would be made. The copayment, a market restraint, would control utilization and thus costs. Oversight programs to watch and control every Medicare expense would not be necessary. External controls are never patient sensitive; while they reduce one patient’s excessive costs, they also eliminate another patient's critical test for diagnosis or treatment.
Unfortunately, the insurance industry came to the "rescue" and provided coverage for the deductibles and copayment. This totally removed Medicare from the Medical MarketPlace environment. When patients pay for expensive health care with taxpayers’ dollars, there is no longer a disincentive to overuse. The lack of market-based discipline increases utilization dramatically and costs continue to spiral upwards.
To read the entire OpED, go to http://www.delmeyer.net/hmc2005.htm
In Summary: Reinstate the annual deductibles and the 20 percent copayment for all outpatient Medicare benefits. Eliminate Medicare-HMO or MediGap insurance for those beneficiaries that desire a pharmaceutical benefit at 30 percent copayment. (Since many Medicare-HMOs are leaving certain geographic areas, this should be politically possible to implement.) Cancel the current Medicare Drug Benefit Program before it's implemented in 2006 and over the next decade save the $720 billion (or $1.2 trillion by other projectionis). This will save Medicare for our grandchildren also.
Del Meyer, MD, Pulmonologist, Sacramento
Founder and Editor, MedicalTuesday Newsletter
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