From our May special report: Jonathan Cohn argues that introducing universal health care would also salve the cost crisis facing Medicare:
But if privatizing and pruning Medicare won't save the program from financial turmoil, what will? The answer lies in understanding the real reason why Medicare costs keep going up. Surprisingly, the prime cause is not the aging of the population. If aging were the only factor driving up Medicare costs, the Congressional Budget Office predicts that the program would grow from a little less than 3 percent of gross domestic product today to a little less than 5 percent in 2080. That's serious money but a relatively small portion of the projected overall cost increase.Read the rest and comment here. And subscribe to our RSS feed to receive our articles as soon as they're published.The real reason Medicare is expected to grow so fast is that all medical spending, for both the elderly and non-elderly, is going up. The reason for that is a combination of newly available technology and an unchecked demand to use it. And this is where Medicare's real problem -- and that of the whole system -- comes into view.
Historically, Medicare, like private insurers, has rewarded doctors and hospitals for performing more procedures. (While the payment reforms of the 1980s, so called "diagnosis related groups," helped mitigate that problem, they didn't eliminate it.) But patients don't actually seem to be better off for the extra attention. The proof of this lies in the now-famous work of John Wenn-berg and his colleagues at Dartmouth Medical School. As they and their disciples have repeatedly demonstrated, Medicare currently underwrites vastly different levels of care in different parts of the country. Seniors in South Florida, for example, get a lot more medical care than seniors in Minneapolis -- apparently because South Florida has a great many more doctors (who often overtreat their patients). But statistically, South Florida seniors don't seem better off for the extra care. That means Medicare must be paying for a lot of unnecessary or counterproductive treatments.
--The Editors
