Paul Ryan (R) and Ron Wyden (D) Suggest Limits on Medicare Spending

The Background

For more than the 33 years, since I was elected to the U.S. Senate, members of Congress have been working to bend the national health care cost curve. Mainly by changing how the Medicare program pays health care providers. In 1993, President Clinton focused not just on Medicare, but sought to change other policies to reduce the impact of other cost drivers in health care. Part of his effort to expand insurance coverage to every American. He was defeated in this effort by Republicans, led principally by House GOP leader Newt Gingrich, who went on to become Speaker when Republicans won the House in the 1994 election.

Democrats in Congress and President Obama were more successful in 2010. They passed the Affordable Care Act (ACA) which, besides targeting the cost drivers in health care and accountability in Medicare payment policy, expanded coverage and set important national policy goals. Healthy people, health communities, and a reformed health care payment and delivery system. As they did in 1993, Republicans opposed the ACA and have unanimously sworn to repeal and replace it should they win the Presidency in 2012.

So it’s news that a House Republican and Senate Democrat who are both health policy aficionados, have agreed to work jointly on a plan to privatize the Medicare program. And to limit the amount of federal spending on Medicare, the health insurance program on which 46 million aged and disabled Americans have come to depend. Because they have paid into it all their working lives.

Proposals to privatize Medicare are not new. Medicare piloted them successfully with risk-bearing HMOs starting in 1985. In regions of the country with integrated care systems the HMO was successful in reducing Medicare spending substantially –from 15% to 17% in Minneapolis-St. Paul and Rochester in just two years – and in bending the cost curve for non-Medicare patients as well.

Unfortunately, most of the country didn’t know what an HMO was. Doctors, hospitals, and insurers resisted getting to know them because they were doing just fine under traditional Medicare’s fee for service system. Plus the AMA had been fighting HMOs for decades in their historic battle against “corporate medicine”. Private Medicare (like Medicare Advantage today) has continued parallel with traditional Medicare. But the new national corporate insurers insisted on getting paid more than traditional Medicare or they wouldn’t compete.

They fought efforts in 1997 by a Republican House to require them to bid competitively for Medicare business. Congress caved to the entreaties of the medical markets that threatened bankruptcy under the new GOP payment policy. And health care costs went back to rising uncontrolled by any sensible payment policy.

The Medicare Reform Proposal

The passage of Obamacare, the realities of expanded insurance market opportunities, and the fact that health care delivery systems are getting religion on the need to improve quality and lower costs, has changed all that. Both medical providers and medical insurers want it to succeed in achieving its goals. In parts of the country the corporate goals of both traditional hospital and clinic systems and health insurers is to become “health companies,” focused on building life-long relationships that deliver patient-centered care with every experience and involve informed patients in health and health therapy decisions.

The problem with the Ryan-Wyden, or the Wyden-Ryan policy change has little, but enough of significance, to do with the policy. And everything to do with the Politics of Polarization. The my-way-or-the-highway view of health policy taken by Republicans. And that includes Mr. Ryan. Starting with the blood-oath to repeal the ACA/Obamacare.

Then to replace it with a market-based theory that consumers, armed with taxpayer subsidies and high deductible insurance, will make all the decisions necessary to make health care costs – and taxes – and the federal budget deficit – affordable to everyone in this country. Without rationing access to needed health, health care, and long-term services for Americans.

Dr. Donald Berwick served 20 years as founding director of the Institute for Healthcare Improvement, before President Obama made him the administrator of the Medicare and Medicaid program. And Republicans in the Senate made him a whipping boy for Obamacare. On December 7 – a week after leaving CMS – Berwick returned to IHI to share the lessons learned in 17 months in public service. He referred to it as the honor of a lifetime to serve in government with 5,000 people who gave every day of their lives to make the health care system better.

He made it clear that the U.S., if it chose to do so, could create over time the highest quality, best value health system in the world. We could do it for somewhere between 12 and 15% of our GDP. Instead of the escalating 17% of GDP system we have today. Then he spelled out exactly what we and they needed to do after we get our policy makers, Republican and Democrat, to agree to such and audacious goal.

Getting one Republican and one Democrat to agree limit public spending on a public/private version of Medicare was not on his list as the place to start.