As the deficit reduction debate in Washington, D.C., kicks into full gear, policymakers are on the cusp of making unprecedented fiscal decisions that, regardless of one’s viewpoint, stand to affect millions of Americans.
Time is not on Congress’ side. In just three weeks, the Joint Committee on Deficit Reduction will vote on a report that will be sent to Senate and House leaders, as well as the president and vice president. Shortly thereafter, Congress will vote on the final report and determine the outcome of a months-long debate that, in many ways, has paralyzed the policymaking process.
By most accounts, Medicare (2011 budget: $468 billion) will bear the brunt of the cuts. After Social Security (2011 budget: $761 billion), it’s the second-largest source of domestic spending, with 10,000 baby boomers turning 65 every day. Within the context of a tough economy, high expectations and a contentious election cycle, any measures put forward by the deficit committee will set the tone heading into next year.
Conventional wisdom dictates that expediency should rule the day. However, this sentiment does not grant Congress carte blanche, especially within the context of 2012 politics. When it comes to Medicare, any significant changes will be immediately questioned by seniors. The expectation will be that all appropriate steps be taken to eliminate unnecessary and wasteful spending before embracing higher beneficiary costs or across-the-board cuts.
Nowhere is there a more practical and politically sensible route than taking a big bite out of the rampant waste, fraud and abuse that exists throughout the Medicare system.
In fiscal 2010 alone, the federal government made more than $50 billion in improper Medicare payments. When combined with Medicaid, the number rises to at least $70 billion. Many estimate that a full 10 percent of Medicare and Medicaid dollars are lost to waste, fraud and abuse every year.
So what can — and should — be done? First, as part of the discussions, Congress and the administration should support a bipartisan initiative to root out waste, fraud and abuse. Politically speaking, in lieu of straight cuts, it’s a no-brainer: A recent poll by Greenberg Quinlan Rosner and Fabrizio Ward found that 90 percent of likely voters support measures to eliminate fraud and abuse, including increased penalties for those who commit it. Perfect timing for the upcoming campaign season.
Second, the deficit committee should solicit and embrace specific provisions that will reduce the prevalence of waste, fraud and abuse in the short term. Every provider group bears a special responsibility to help; fortunately, some already are. For example, the home health care community has been crisscrossing Capitol Hill with a common-sense reform package that includes tough conditions for participation, the removal of therapy thresholds, an end to inappropriate payments and a novel value-based purchasing program.
Third, it’s time to put the focus squarely on quality of care. Far too often, Medicare payment policy rewards quantity, regardless of effectiveness. We can and must do better. The home health care proposal serves as a good example here, too. By including an initiative that can significantly reduce the number of hospitalizations, it will enable Medicare to continue providing high-quality care to millions of beneficiaries — but at a much more sustainable cost.
While it seems insurmountable, the task facing the Joint Committee on Deficit Reduction shouldn’t hinder necessary reforms to Medicare. On the contrary, the current debate presents a window to implement significant changes that produce huge financial savings.
The easiest path forward typically isn’t the best one, especially with seniors willing to make Medicare a vote-driving issue. For a divided Congress facing a tense electorate, the opportunity to act is very real. Prioritizing waste, fraud and abuse will show that Washington understands this.
Former Sen. John Breaux (D-La.) is senior counsel for Patton Boggs LLP.