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Showdown for Medicare reforms
The leading edge THE LANCET
Oncology Showdown for Medicare reforms On a tour of Africa last month (July 8–12, 2003), President Bush pledged US$15bn of aid over 5 years to help combat HIV/AIDS. Although this is a welcome initiative, procrastination back in his home country leaves many Americans without adequate healthcare. US citizens with similarly chronic, potentially fatal diseases such as cancer, are being forced to pay large medical bills they can ill-afford because of inadequate health insurance. In an attempt to address this problem, the Senate and the House of Representatives approved separate bills on June 27, 2003, to provide prescription drug coverage under Medicare—the state-run insurance for senior citizens, people with disabilities, and individuals with permanent kidney failure—but both bills now face a series of difficult negotiations to draw up a compromise statute acceptable to both houses of Congress. 35 million Americans depend on Medicare and many are struggling to pay sizeable medical bills despite paying monthly insurance premiums and, during their working lives, taxes towards retirement healthcare. Indeed, prescription costs for many drugs have risen by more than three times the rate of inflation since last year and elderly patients now spend about 22% of their income on costs not covered by Medicare and, to save money, one-fifth of senior citizens skip repeat prescriptions or miss doses to make their prescriptions last longer. And people enrolled in an alternative insurance programme launched in 1997 that enabled Health Maintenance Organisations (HMOs) to manage Medicare plans and offer enrolees additional benefits such as prescription cover, are fairing no better. HMOs receive a federal payment for each person enrolled into a Medicare plan but the US government has only increased its annual payments by 2% while health-care inflation has averaged around 10% per year. Consequently, HMOs are reducing drug coverage to offset the 8% shortfall and many senior citizens are facing everincreasing costs towards their treatments. For example, a patient with cancer who once paid $25–30 per treatment is now paying 20% towards the cost of chemotherapy, which can translate into hundreds of dollars. Although the two congressional bills should be applauded for attempting to address the failings of health-care funding under Medicare, both measures contain considerable flaws. First, the proposals are based on private insurance that is susceptible to commercially driven decisions, which could result in cover being withdrawn if the company decides it is not making enough profit. For patients living in regions of the country with no alternative insurance provider this could be life-threating. Equally, considering that HMO THE LANCET Oncology Vol 4 August 2003
managed Medicare plans are still unavailable in 15 states, presumably private drug-only insurance would also have erratic coverage across the USA. Although the Senate’s proposal includes provision for regional government-administered schemes if private policies are unavailable, it is unclear if this provision will be retained in the compromise bill. Furthermore, the proposed reform could introduce competition between Medicare and private health plans, resulting in premiums being set by market forces. This would destabilise the cost of premiums and the government would have limited power to intervene. It could also lead to selective enrollment in which eligibility for a private plan preferentially favoured people in good health leaving the sickest in Medicare; which would negatively affect government attempts to keep federal health expenditure under control in the future. A second flaw in the new proposals is the level of complexity and the associated problems people would have in understanding how much money they would have to pay towards their final bill. Undoubtedly, the proposals would introduce complicated administration adding layers of additional bureaucracy to an already overburdened system, and patients and doctors would be forced to make decisions affecting quality of care based on a patient’s ability to pay. Clearly, Congress hopes a public–private partnership will bail them out of a national problem. But these measures do not offer the solution most Americans want—a federally administered drug benefit policy through Medicare. And they certainly don’t offer what lawmakers would be happy with themselves. Earlier this year, President Bush said that people with Medicare insurance should not accept anything less than what lawmakers receive, yet just days after the congressional votes, Republicans in both houses of Congress tabled new legislation to shore-up their own already comprehensive retirement drug benefits. In a clear case of hypocrisy, this new statute aims to ensure that benefits for civilian federal retirees are not reduced to the level proposed for Medicare, inferring that lawmakers believe the proposed Medicare reform is a poor solution. Although most lawmakers concede that Medicare is inadequate and needs reform, the urgency of the situation has become lost to political wrangling and apathy. The inability to find a solution to health-care financing for a vulnerable group of society is a sad indictment on social policy and the real losers are those patients who are finding themselves saddled with debt in their attempts to gain access to life-saving medication. The Lancet Oncology
http://oncology.thelancet.com
For personal use. Only reproduce with permission from The Lancet.
451
Oncology Showdown for Medicare reforms On a tour of Africa last month (July 8–12, 2003), President Bush pledged US$15bn of aid over 5 years to help combat HIV/AIDS. Although this is a welcome initiative, procrastination back in his home country leaves many Americans without adequate healthcare. US citizens with similarly chronic, potentially fatal diseases such as cancer, are being forced to pay large medical bills they can ill-afford because of inadequate health insurance. In an attempt to address this problem, the Senate and the House of Representatives approved separate bills on June 27, 2003, to provide prescription drug coverage under Medicare—the state-run insurance for senior citizens, people with disabilities, and individuals with permanent kidney failure—but both bills now face a series of difficult negotiations to draw up a compromise statute acceptable to both houses of Congress. 35 million Americans depend on Medicare and many are struggling to pay sizeable medical bills despite paying monthly insurance premiums and, during their working lives, taxes towards retirement healthcare. Indeed, prescription costs for many drugs have risen by more than three times the rate of inflation since last year and elderly patients now spend about 22% of their income on costs not covered by Medicare and, to save money, one-fifth of senior citizens skip repeat prescriptions or miss doses to make their prescriptions last longer. And people enrolled in an alternative insurance programme launched in 1997 that enabled Health Maintenance Organisations (HMOs) to manage Medicare plans and offer enrolees additional benefits such as prescription cover, are fairing no better. HMOs receive a federal payment for each person enrolled into a Medicare plan but the US government has only increased its annual payments by 2% while health-care inflation has averaged around 10% per year. Consequently, HMOs are reducing drug coverage to offset the 8% shortfall and many senior citizens are facing everincreasing costs towards their treatments. For example, a patient with cancer who once paid $25–30 per treatment is now paying 20% towards the cost of chemotherapy, which can translate into hundreds of dollars. Although the two congressional bills should be applauded for attempting to address the failings of health-care funding under Medicare, both measures contain considerable flaws. First, the proposals are based on private insurance that is susceptible to commercially driven decisions, which could result in cover being withdrawn if the company decides it is not making enough profit. For patients living in regions of the country with no alternative insurance provider this could be life-threating. Equally, considering that HMO THE LANCET Oncology Vol 4 August 2003
managed Medicare plans are still unavailable in 15 states, presumably private drug-only insurance would also have erratic coverage across the USA. Although the Senate’s proposal includes provision for regional government-administered schemes if private policies are unavailable, it is unclear if this provision will be retained in the compromise bill. Furthermore, the proposed reform could introduce competition between Medicare and private health plans, resulting in premiums being set by market forces. This would destabilise the cost of premiums and the government would have limited power to intervene. It could also lead to selective enrollment in which eligibility for a private plan preferentially favoured people in good health leaving the sickest in Medicare; which would negatively affect government attempts to keep federal health expenditure under control in the future. A second flaw in the new proposals is the level of complexity and the associated problems people would have in understanding how much money they would have to pay towards their final bill. Undoubtedly, the proposals would introduce complicated administration adding layers of additional bureaucracy to an already overburdened system, and patients and doctors would be forced to make decisions affecting quality of care based on a patient’s ability to pay. Clearly, Congress hopes a public–private partnership will bail them out of a national problem. But these measures do not offer the solution most Americans want—a federally administered drug benefit policy through Medicare. And they certainly don’t offer what lawmakers would be happy with themselves. Earlier this year, President Bush said that people with Medicare insurance should not accept anything less than what lawmakers receive, yet just days after the congressional votes, Republicans in both houses of Congress tabled new legislation to shore-up their own already comprehensive retirement drug benefits. In a clear case of hypocrisy, this new statute aims to ensure that benefits for civilian federal retirees are not reduced to the level proposed for Medicare, inferring that lawmakers believe the proposed Medicare reform is a poor solution. Although most lawmakers concede that Medicare is inadequate and needs reform, the urgency of the situation has become lost to political wrangling and apathy. The inability to find a solution to health-care financing for a vulnerable group of society is a sad indictment on social policy and the real losers are those patients who are finding themselves saddled with debt in their attempts to gain access to life-saving medication. The Lancet Oncology
http://oncology.thelancet.com
For personal use. Only reproduce with permission from The Lancet.
451