Glass Half Full on Medicare Reform Prospects

Former CMS Administrator and friend of the firm Gail Wilensky, MD is out with a great op-ed piece in the New England Journal of Medicine today on directions for bipartisan Medicare reform.  She echoes many of our recent thoughts on the improving prospects for Medicare reform, not in this hotly-contested election year, but as part of deficit reduction in 2013.  Her piece covers the gathering momentum behind the Ryan/Wyden reform proposal, as well as structural changes previously thought unthinkable, such as increasing the eligibility age for the program, further means testing, and a targeted growth rate for our favorite entitlement program.  We can thank both President Obama and Speaker Boehner for enabling discussion of these reforms since broaching them during the disastrous debt-ceiling debate last summer.

I thought the most compelling part of Dr. Wilensky’s argument is her assertion that we have turned the corner on recognizing that the traditional fee-for-service paradigm of Medicare is unsustainable.  She notes “growing agreement that a fee-for-service system like Medicare’s, which reimburses physicians for some 7000 discrete services, is inconsistent with achieving the care coordination needed by seniors with multiple chronic conditions or complex acute care needs. To me, this growing disillusionment with the incentives and rewards of fee-for-service medicine is the most surprising evolution in thinking of the past quarter century and offers the greatest promise for success in developing a replacement, whatever its parameters.”

We agree, and would add that the experience of Medicare Advantage and Part D show the only true path to securing the fiscal solvency of the program is through capitation and care coordination of the chronically ill.  It’s encouraging to hear a policy luminary like Gail point out that we’re closer than we may think to some consensus on new approaches to preserving Medicare for the long haul.