Over the last decade, the discussion about reforming our health care system has focused on changing from a “sick” care to a “well” care system — or in other words being less reactive and more preventive in our approach to medicine. If we can prevent illnesses, such as diabetes, heart disease, or even cancer, we have the potential to make millions of people healthier and reduce the cost of treating these diseases. However, making this change requires an up-front investment that may not yield a return for some time. This does not make the idea unacceptable, but in order to gain support, it must be fully understood.
Medicare, which turned 49 on July 30, is in a similar position. Evidence indicates the program will ultimately suffer from the “disease” of financial insolvency if there is no intervention. And like medical illness, the longer this disease goes untreated, the more expensive it is to cure. Unfortunately, our legislators are hesitant to invest in preventing this disease because they do not perceive an immediate problem. Or in familiar terms: Why stop bad habits, such as an unhealthy diet, if we feel fine right now? We may contract heart disease in 20 years, but that’s far away.
Since we celebrated Medicare’s last birthday, approximately 1.3 million Americans have newly enrolled in the program, but little else has changed. Our bad habits remain. There has been no action sufficient to make the program sustainable and as a result, in just 16 years, the program will develop its expected “disease” and go bankrupt, just in time for its own 65th birthday.
How will this happen? Over the next two decades, enrollment in Medicare is projected to increase sharply as baby boomers hit retirement. By 2030, Medicare enrollment is estimated to reach 81.5 million, approximately 30 million more people than are enrolled in the program today. Beneficiaries today are not the same who entered the program in 1965. They live longer and often suffer from multiple chronic diseases-in 2010, 69 percent of Medicare beneficiaries had at least two chronic conditions, accounting for 93 percent of program spending. In short, without a preventive solution, Medicare is unsustainable.
Despite lack of action this year, some in Congress are at least trying to invest in the prevention of insolvency. Three congressional committees — House Committee on Ways and Means, House Energy and Commerce Committee, and Senate Committee on Finance — introduced historic, bipartisan legislation to repeal Medicare’s flawed sustainable growth rate (SGR) formula, which determines payments for doctors, and replace it with a more modern, effective system. While ultimately failing to pass legislation due to disagreement on how to pay for the up-front investment to change the system, Congress’ work in the last year shows virtually unanimous agreement that Medicare’s traditional fee-for-service payment system is not working, and that the program needs to move toward a more coordinated, cost-conscious payment system that rewards quality over quantity. Members of Congress on both sides of the aisle also voiced concerns in the last year about continued cuts to Medicare Advantage, the one segment of the Medicare program that utilizes modern payment methods and promotes coordinated care.
While these developments represent important steps forward for the Medicare program, they are not enough. Bipartisan support for Medicare reform continues to mount, yet the program remains in the same position as the year before. If substantive reform to the Medicare program is ever to pass, Congress will need to not only agree on ideas and policies, but also overcome political barriers to actually get them passed. Just like the rest of us when it comes to our health, Congress needs to follow the doctor’s advice and act now to prevent a serious illness in the future.
We have reached a critical turning point. Dramatic spikes in enrollment and the sky-high cost of care for beneficiaries with chronic conditions will inevitably lead Medicare, a program that our seniors rely on, to develop a fatal disease and collapse. We cannot continue to ignore reality. The bold efforts to pass reform and prevent this occurrence are encouraging, but we are still left with the status quo. As Medicare blows out its birthday candles and envisions the year ahead, we have the exact same wish as last year-that Medicare makes it to 65 and beyond.
Douglas Holtz-Eakin, president of the American Action Forum, and Kenneth Thorpe, the Robert W. Woodruff professor and chairman of the Department of Health Policy and Management at Emory University, are co-chairs of the Partnership for the Future of Medicare, a bipartisan organization focused on ensuring the long-term security of Medicare.